For the week ended June 09, 2023, six out of the ten most valuable companies by market cap on NSE saw combined erosion of Rs83,638 crore. TCS took the biggest hit. In terms of top losers for the week, TCS gave up Rs35,694 crore in market value, Hindustan Unilever Rs18,949 crore, Infosys Rs13,549 crore, SBI Rs7,675 crore, ITC Rs5,903 crore and Bharti Airtel Rs1,867 crore. There were some gainers too with Reliance adding Rs18,233 crore, HDFC Bank Rs2,459 crore and HDFC Ltd Rs1,055 crore amid FPI buying.
IIFL Finance plans to raise close to Rs20,000 crore in FY24 through various routes. These would include bank loans, bonds, and external commercial borrowings (ECBs). To quote Nirmal Jain, some of the debt will go towards repaying earlier loans from banks, while some would be used to replenish bonds. As of March 2023, total borrowings of IIFL Finance stood at Rs39,604 crore, with average cost of borrowing at 8.8%. IIFL Finance is expected to disburse loans of Rs16,000 crore in FY24 with NIM of between 6% to 7%.
The India arm Sequoia Capital plans to offload 10% stake in Go Fashion (India) worth Rs 625 crore via block deals. The floor price for the deal has been set at Rs135 per share and JM Financial will act as the broker for the transaction. Sequoia has $9.2 billion invested in India across more than 400 companies. It may be recollected that just last week, as part of a major restructuring of Sequoia worldwide, the company had been restructured into 3 independent entities, to bring more focus and skill sets to regional businesses.
In a surprising move, Venkat Jagannathan, the founder of Star Health and Allied Insurance Company, has decided to step down. In less than 16 years, he had built Star Health Insurance into a Rs30,100 crore giant, in a sense repeating a similar turnaround he had scripted many years earlier at United India. Today Star Health has the largest network of 13,000 hospitals accredited. As Jagannathan hangs up his boots, Star Health reported FY23 net profits of Rs618 crore and underwriting profits of Rs204 crore from across India.
The insolvency proceedings against Go First once again turn the focus on whether third-party assets held by a company on lease can form part of the resolution process. Go First had filed with NCLT for voluntary liquidation. NCLT had admitted the petition and granted a moratorium on payments pending resolution. Now aircraft lessors are demanding their planes back and have approached the Delhi High Court. One view is that leased assets not owned by the airline cannot be part of the bankruptcy resolution process.
Indian corporates posted healthy order book positions as of FY23 end on the back of increase in capex spends. The total order book position of 25 large companies across infrastructure, power and capital goods rose 9.6% to Rs10.27 trillion. Most companies reported record order book as of FY23 close. There have been strong order inflows in segments like roads, power transmission & distribution, water etc. A lot of these orders are government spending led. L&T topped the charts with order book of Rs4 trillion.
FPIs pumped in Rs9,788 crore into Indian equities in the first week of June 2023. This comes after a huge inflow of Rs43,838 crore into equities in May 2023. With RBI hinting at topping out of rates, Q4FY23 results better than expected and macros improving, FPIs are turning positive on India. However, valuations could become a concern going ahead, considering many of the Asian economies are trading at much lower P/Es. With the US debt ceiling issue being resolved, many of the FPIs have turned risk on and allocating to EMs.
L&T Finance aims to maintain 25% CAGR growth with focus on retail financing as a long-term strategy. Their current retail portfolio is estimated to touch Rs1 trillion by FY26. L&T Finance started off as a whole-sale book, but retail is likely to touch 80% of the book in 2 years. As part of focusing on the retail lending book, L&T Finance had recently hived off its mutual funds business. A number of NBFCs belonging to the industrial houses have been increasingly looking to diversify from wholesale book to retail lending book.