During the emergency meeting of the Federal Reserve, the FDIC and the Fed decided to create a fund that allows regulators to backstop more deposits facing a run like SVB Financial. Such a vehicle would also reassure depositors and prevent the spread of panic. Post the collapse of SVB Financial due to a combination of higher yields and weak start-up ecosystem, there are concerns that other smaller banks could follow suit. Most smaller banking shares dropped sharply in Friday after the SVB Financial collapse.
For the week ended 10th March 2023, 8 of the 10 most valuable listed companies on the NSE by market cap, faced combined value erosion of Rs103,732 crore. Reliance and ICICI Bank were the worst hit. Among major losers; Reliance lost Rs41,878 crore in market value, ICICI Bank Rs18,135 crore, HDFC Bank Rs15,008 crore, SBI Rs12,361 crore, HDFC Rs6,893 crore, TCS Rs4,281 crore, Infosys Rs3,556 crore and HUL Rs1,621 crore. Bharti Airtel added Rs5,072 crore while ITC added Rs4,036 crore. Nifty fell by over 1% in the week.
IDFC Mutual Fund has rebranded itself as Bandhan Mutual Fund and all schemes will reflect the change from 13th March. The fund has also unveiled a new logo. Each scheme of the AMC will also be accordingly renamed. IDFC mutual fund was acquired by Bandhan Financial Holdings from IDFC in April 2022. Bandhan MF will leverage its pan-India branch network as well as its strong microfinance network to sell mutual fund products to small investors in tier-2 and tier-3 cities. It will be among the top-10 MFs based on AUM.
Tata Technologies Ltd, a subsidiary of Tata Motors, filed draft papers with SEBI for its proposed IPO. The 100% OFS will see Tata Motors and other investors selling 95.7 million shares. Tata Technologies counts Airbus, McLaren, Honda Motors, and Ford Motors among prime clients, apart from Tata Motors and JLR. There will be no fresh sale of shares in the IPO. JM Financial, Citigroup and BOFA Securities are the lead managers. Interestingly, this will be the first IPO from the Tata group in 19 years after the TCS IPO in 2004.
Foreign portfolio investors infused Rs13,540 crore or $1.64 billion into Indian equities in March 2023 so far. This was largely led by the $1.87 billion investments by GQG Partners in Adani Group. This comes as a relief after net equity outflows of Rs5,294 crore in February and Rs28,852 crore in January 2023. Going ahead, the SVB Financial crisis is likely to make FPIs cautious of Indian financials, which have a 37% weight in the Nifty. Most of the FPI deals came through big block deals. In 2023, FPIs were sellers in debt also.
It looks like the semiconductor shortage, despite easing, has led to record order backlogs for the auto manufacturers. PV manufacturers are sitting on 800,000 bookings, yet to be delivered. Auto companies need to invest in capacity, but they are unlikely to do it till there is clarity on chip shortage. Mid-sized cars, sedans and SUVs are seeing demand far in excess of supply resulting in huge order backlogs. Bookings have picked up amidst revenge buying by Indian consumers after the prolonged lull of COVID pandemic.
In another case of senior level moves in the IT industry, Mohit Joshi of Infosys moves to take over as the CEO of Tech Mahindra. CP Gurnani has been its MD and CEO since 2009 and will retire in December. The time till December will allow sufficient transition time. The evaluations were done by the Nominations and Remunerations Committee (NRC) of Tech Mahindra. Joshi headed the global financial services vertical at Infosys and his notice period will be completed in June. Mohit was also NASSCOM chairman in 2016.
Tata Group reached an agreement with Lockheed Martin for fighter wing production. It will made at the joint venture’s plant located in Hyderabad. According to the MOU, the deal covers production of 29 fighter wing shipsets, with option of additional shipsets and will be delivered from 2025. Tatas have a JV with Lockheed Martin; TLMAL. Lockheed Martin plans to boost the relationship beyond the current F-21 offering. Tata Advanced Systems, a subsidiary of Tata Sons, focuses on aerospace and defence solutions.