Stock Market Investment Shot, 11th April 2023

Stock Market Investment Shot, 11th April 2023

Stock Market Investment Shot, 11th April 2023

Adani group has raised strong objections to the report in the Financial Times, London; which says that half of the FDI flows into Adani group were from connected offshore entities. Adani group has called the FT report mendacious and has called on FT to take down the article. As per the report, out of the $5.70 bn of FDI into Adani group since 2017, nearly 45% came from such connected offshore entities. Hindenburg Research had earlier had issued a scathing report on Adani group, after which market cap fell $120 billion.

Government is scouting for merchant bankers for its proposed 25% stake sale in the Indian Renewable Energy Development Agency (IREDA). The book running lead managers (BRLM) will advise the government and the DIPAM on the timing and modalities of the IPO, as well as undertake due diligence and generate investor interest in the stock. For the fiscal year ended FY22, IREDA had net worth of Rs5,268 crore and the net profits of Rs634 crore. The issue would entirely by way of an Offer for Sale (OFS) by government.

FPIs have been net buyers in the equity market for the last 6 days in a row, infusing Rs4,738 crore. FPIs have been buying into autos, capital goods and metals while selling IT and hydrocarbons. Most traders expect sustained FPI selling to come to an end. The next big trigger for FPI inflows will be influenced by the Q4FY23 earnings starting this week. In FY22, FPIs had net sold equities worth Rs140,010 crore while in FY23, the net selling was Rs37,632 crore. Indian stock valuations have also turned relatively reasonable.

Godrej Properties reported 56% higher sales bookings in FY23 at a record Rs12,232 crore. This was on the back of strong demand for residential properties. Nearly one-third of the bookings were recorded in the March 2023 quarter itself. Godrej Properties admitted that it had sold Rs2,000 crore of real estate in each of its 4 focus markets of Mumbai, NCR, Bengaluru, and Pune. Sales volumes in FY23 grew 40% to 15.21 million SFT, while cash collections were up 41% at Rs8,991 crore. FY23 sales were 22% above the guidance.

Speciality Restaurants Ltd, which owns franchises like Mainland China and O’ Calcutta will clock revenues of Rs1,000 crore in the next 5 years. The sharp recovery post-pandemic has permitted rapid growth. The company is leveraging artificial intelligence (AI) to enhance customer experience. It targets EBITDA margin target of 25% per year. It will also ramp up delivery through cloud kitchens to cater to the fast growing demand for at-home dining. Its outlets in Dubai and London are also performing extremely well this year.

A slew of 49 business entities; including the Adani group and the Mukesh Ambani group are in the fray to pick up a stake in Future Retail Ltd. The company has been struggling under a pile of debt. Incidentally, the entire retail franchise of Future group was to be sold to Reliance group, but had to shelved after the plan got inordinately delayed after Amazon raised objections. Future Retail was once India’s No.2 retailer, but was dragged into bankruptcy proceedings by banks after it defaulted on loans and creditor payments.

According to Skymet, the private sector weather forecaster, India is likely to see “below normal” monsoon rains in 2023. It expects the El Nino effect to play truant with monsoons. The rain shortfall is likely to be most acute in the agricultural bowl states of Punjab, Haryana, Rajasthan, and UP. Skymet expects deficit rainfall in Northern and Western India. The IMD (Indian Meteorological Department) will also announce its first estimates for monsoon shortly. Kharif crops like rice, corn, cane, and cotton are rain dependent.

Ronnie Screwvala, co-founder of UpGrad, has cautioned that stretched valuations of a handful of edtech players could distort the perception of the entire industry. He expects overall valuations in edtech to temper. UpGrad is currently valued at $2.25 billion, which is lower than $3 billion for Unacademy and Eruditus and a whopping $22 billion for Byju’s. Most edtech players are struggling to raise fresh capital due to stretched valuations. UpGrad has 31 offices across India, the US, UK, Middle East, and Singapore.

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