Reliance Industries is in talks with lenders for a foreign-currency loan of $2 billion to bankroll its expansion plans. Reliance plans to use the ECB route to raise funds with a maturity of 3 to 5 years. The proceeds of the ECB are likely to be used for capex and loan refinancing. They are negotiating with banks like BOFA, Citigroup and Standard Chartered. It may be recollected that Reliance Industries at its AGM two years back had even committed to invest $75 billion in renewable energy over 15 years. It also as Asia 5G plans.
The Securities Appellate Tribunal (SAT) refused to grant any immediate relief to the promoters of Zee against the interim order passed by SEBI. The order was over fund diversion from ZEEL to private entities owned by Subhash Chandra and Punit Goenka. Both have been barred from holding KMP in any listed entity in India. The SAT has asked SEBI to file reply in 48 hours and put the matter for disposal on 19-Jun. Zee counsel was trying to get a stay on SEBI’s interim order, but the SAT did not find merit in the request.
The Ministry of Corporate Affairs (MCA) ordered an investigation into Hero MotoCorp’s relationship with a third-party vendor. This refers to a case related to alleged diversion of funds. The investigation was ordered in public interest to probe the holding structure of Hero MotoCorp and to verify whether it had direct or indirect control over the third-party vendor. Hero MotoCorp is India’s largest manufacturer of motorcycles. There has not been much further communication either from Hero MotoCorp or the MCA.
For May 2023, India’s merchandise trade deficit touched a 6-month high of $22.12 billion. This is sharply higher than the April 2023 trade deficit of $15.24 billion. In May 2023, the merchandise imports fell sharply by 6.6% to $57.1 billion on weak global demand amid a global demand slowdown. For the month of May 2023, the services trade surplus stood at $11.77 billion, with services exports at $25.30 billion. Unlike April, the services surplus has not been able to cover the merchandise trade deficit in May 2023.
For the month of May 2023, India’s domestic air traffic increased by 36% on a yoy basis. The domestic airlines carried a total of 1.32 crore passengers in May, as per data released by the DGCA. Domestic air traffic also grew 2.5% over April 2023. The air traffic has now risen above the pre-COVID levels. Indigo is still the dominant player with 61.3% market share. The Tatas cornered over 20% of the market across Air India, Vistara and Air Asia. Among others, SpiceJet had a market share of 5.4% and Akasa Air took up 4.8%.
June 16, 2023 is the record date for the Wipro buyback worth Rs12,000 crore. That is when Wipro will determine the buyback entitlement. Wipro will buyback 26.97 crore equity shares at Rs445 per share, aggregating to Rs12,000 crore. The buyback floor price is at a 14.4% premium to the market price. The promoters of Wipro will also participate in the buyback. The buyback is seen as a more tax efficient way of distributing the surplus cash to shareholders. Nearly 15% of the buyback is reserved for small investors.
Moody’s has stated in a note that debt affordability could be a significant factor for the Indian economy. According to Moody’s, as long as nominal GDP growth holds, India’s debt burden will be stable. The nominal GDP is expected to grow at 11% per annum, which is essential to avoid debt becoming a burden on the economy. Countries with India level ratings normally pay around 8.4% of revenues as debt servicing costs while in the case of India it is 26%. India has sovereign credit rating at the lowest investment grade.
Three PSU banks and LIC have appointed SBI Capital Markets as the merchant banker for the stake sale in UTI AMC. It will be completed in the next 3-6 months. PNB, BOB and SBI; along with LIC own 45.13% of UTI AMC. Among other major shareholders, Oppenheimer owns about 26% in UTI AMC. In fact, Tata group has been in talks to buy a majority stake in UTI AMC to expand its mutual funds business to the next level of growth. UTI AMC is a listed company and has been one of the AMCs to perform very well post listing.