In a letter to shareholders, Uday Kotak expressed his decision to step down from his executive role as of December 2023. However, he would continue as the non-executive chairman of the company and also as a strategic investors. Uday Kotak currently holds 26% stake in Kotak Bank, one of the highest promoter holdings, outside of the government owned banks. Incidentally, an investor who had invested Rs10,000 in Kotak Mahindra at inception in 1985, would be currently sitting on a whopping wealth of Rs300 crore.
Tata Steel will explore opportunities in lithium and other battery minerals. It has already signed a deal with the Gujarat government to set up a Rs13,000 crore plant for a lithium ion factory. This deal has been inked by the natural resources vertical of Tata Steel. The renowned consulting engineering company, MN Dastur & Company, is already working with the Tata group on feasibility studies. The initial manufacturing capacity of Gujarat lithium ion factory would be 20 gigawatt hours (GWH). Currently lithium is imported.
As the IPO markets pick up, Flair Writing Industries, the manufacturer of the popular Flair pens, has filed with SEBI for a Rs745 crore IPO. Flair already has a 9% market share in the writing products business. The IPO will comprise of a fresh issue of Rs365 crore and an offer for sale of Rs380 crore by the promoters and the promoter group entities. Currently, the promoters hold 100% stake in the company. The fresh funds will be used to set up a manufacturing facility at Valsad, Gujarat, funding capex and for repaying the loans.
FPIs continued to be positive on India infusing Rs30,600 crore into Indian equities in the first half of July 2023. Debt flows were relatively tepid at Rs1,076 crore in the fortnight. At this rate, the FPI flows look all set to beat the inflows of May and June. Till date in calendar year 2023, the FPIs have already infused Rs1.07 trillion into Indian equities and a total of Rs1.21 trillion into equity and debt combined. This is after offsetting heavy selling by FPIs in January and February. For now, it looks like a Sell China, Buy India trade.
The good news is that the gap in Kharif sowing has now reduced to 4% with the paddy deficit down to 10%, but still inflationary. The problem with paddy is that key paddy growing states like Jharkhand, Odisha, West Bengal, Bihar, and Telangana are still reporting substantial rainfall deficits. The normal Kharif sowing area is 109 MH and as of date about 49% sowing is down. The gap is expected to be filled up in the next 2 weeks. Pulses like tur, urad and moong are down while sugarcane, maize, bajra and ragi are sharply up .
The big IT numbers from TCS, Wipro and HCL Tech were disappointing in the previous week with Infosys set to announce during the current week. Early numbers suggest that the top line growth is tapering while the profits and margins are getting hit by higher manpower costs in the quarter. In fact, TCS saw its OPM tapering by 130 bps on a sequential basis. Top line outlook is not great as most clients are setting new priorities and focusing only on mission critical tasks. HCL Tech missed street estimates on sales and profits.
Celesta, which has invested in Ideaforge Technology Ltd is now looking at investing in 10-15 start-ups. Celesta has four funds managing $1 billion between them, out of which two funds are focused on India. The focus would be on semiconductors and on other deep technologies like generative AI. The average ticket size that Celesta is looking at would in the range of $10 million to $15 million. However, Celesta will focus less on the early stage start-ups and more on later stage funding. It has 15% of its exposure to India.
Elon Musk admitted that the cash flows of Twitter were still negative as ad revenues had dropped by 50%. Musk has been cutting costs ruthlessly, but that alone is not enough. However, Musk expects Twitter to turn cash flow positive by June next year. He has pruned staff to cut the non-debt expenditure from $4.5 billion to $1.5 billion. However, revenues are expected to fall to $3 billion in 2023 from $5 billion in 2021. Many of the advertisers left due to lax content moderation as they not want to risk their company image.