Stock Market Investment Shot, 1st March 2023

Stock Market Investment Shot, 21st April 2023

Stock Market Investment Shot, 21st April 2023

On 28th February, the MOSPI announced the Q3 final GDP growth figure and also the second advance estimate of full year FY23 GDP growth. GDP growth for Q3FY23 came in at a subdued 4.4%. However, the full year growth for GDP has been retained at 7%, in line with the RBI estimates.  This is the same as the MOSPI estimates in the first advance estimates in early January 2023. Q3 GDP was expected to fall, due to higher base and also due to global headwinds like falling demand and exports amid recession concerns.

Core sector growth for January 2023 came in sharply higher at 7.8%, led by sharp growth in coal output, electricity and fertilizers. Seven out of the eight core sectors showed positive growth in January 2023 with only crude oil showing negative growth. Even on a sequential basis, the core sector growth at 2.95% was in the positive for the fourth month in a row. Cumulative core sector growth for the first 10 months of FY23 stood at 79%, which is extremely impressive coming on top of 10.4% growth in the fiscal year FY22.

Adani Group will prepay loans worth $790 million backed by pledge of shares by end March 2023. This is an effort to boost its credit profile. Since 24th January, Adani group has been under a lot of pressure due to the heavy selling seen in the counter after the rather scathing Hindenburg report. The top management is currently in Hong Kong meeting up with key bond holders ahead of several debt repayments coming up in the next one year. However, the Adani group CFO underlined they were not looking to refinance debt.

SEBI has finally come down heavily on insider trading at Axis Bank. It has barred the former chief dealer of Axis Mutual Fund and 20 others in a front running case. SEBI has identified Rs30.50 core of wrongful gains accruing due to front-running activities which has been ordered to be impounded. The scheme was that the chief dealer would take personal positions in stocks ahead of deals to be put in by the mutual fund. He was also operating a fraudulent scheme involving other brokers and fund managers in the loop.

Softbank Group, the global PE giant owned by Masayoshi Son, will sell shares worth Rs600 crore in logistics player, Delhivery. The bloc deals for the same are expected to be executed on 01st March 2023. Softbank may even look to upsize the deal, based on demand. Citigroup will be the broker for the deal. Softbank currently owns 18.42% in Delhivery; making it one of the largest public shareholders in the company. Just last week, Tiger Global had offloaded 1.7% stake in Delhivery. The stock has fallen sharply since its listing.

DIPAM has confirmed that the privatisation of IDBI Bank will begin after Holi. KPMG is expected to hand over the relevant documents to the RBI by then. RBI has to certify the bidders as being “fit and proper”, before they can be considered eligible to bid for IDBI Bank. The data room will be opened up only after the vetting by RBI and Union Home Ministry. Both the government of India and LIC will jointly sell about 60.72% stake in IDBI Bank to strategic buyers. To sweeten the deal SEBI has already extended forbearance.

A long-time critic of the Adani group, Aswath Damodaran, has underlined that his problem with Adani was not on it being a con job but on the valuations front. It was more about bad business practices. Damodaran is globally regarded as the guru of valuations. According to Damodaran, the Adani group had about 3X debt compared to what it should ideally have and that was the crux of the problem. That would mean, once the debt levels were toned down, the entire narrative on Adani would change. We must wait.

Paytm is attracting a lot of domestic mutual fund buying interest even as global investors are still very wary of the India digital stories. Paytm just completed its Rs850 crore share buyback program. It had repurchased 15.57 million shares at Rs545.93 per share, representing 2.4% of total outstanding shares. Domestic mutual funds and AIFs have raised their holdings by 1.11% while FPIs, including the PE funds, have been aggressively cutting exposure to Paytm. Alibaba and the Ant Group have already exited Paytm.

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