According to Citigroup, equities and other risk assets could take a hit as central banks withdraw $800 billion of stimulus. Central banks have infused trillions of dollars into the global economy to aid the post-COVID recovery. While the US Fed had started to cut its balance sheet size, it had propped up another $440 billion post the recent banking crisis. If these unwind rapidly, as is likely, it could create a shortage of liquidity in the system. That could typically hit the passive portfolio flows to emerging markets globally.
As per the latest shareholding statement filed with the stock exchanges by Paytm for the fourth quarter ended March 2023, there has been a hike in institutional holdings. Domestic institutional holdings in Paytm grew from 1.9% in Q3 to 3.2% in Q4. Among domestic funds, Mirae was the biggest buyer into Paytm in March quarter. Interestingly, even the foreign portfolio investors (FPIs) saw their holdings in Paytm jump from 6.7% to 11.5%. FDI came down from 66% to 60%, largely due to the stake sale by Alibaba.
India’s sugar output for the Sugar Year 2022-23 (October to September) is expected to fall by 9% to 32.5 million tonnes (MT). It was 35.9 MT in SY2021-22. This is largely due to lower yield in key sugar producing states like Maharashtra and Karnataka, where the crop was affected by adverse weather conditions. As a result, sugar prices are expected to increase. In the current season, nearly 5MT of sugar will go into the blending of ethanol. Retail inflation for sugar stood at just 0.52% in March 2023 due to subdued demand.
The mega IPO of Mankind Pharma has been priced in the band of Rs1,026 to Rs1,080. While the IPO size is Rs4,326 crore, the IPO is being done at an enterprise valuation of $5.26 billion. The IPO is set to open on April 25th and close on April 27th. It is entirely an offer for sale (OFS) and Mankind Pharma is known for its popular brands like Manforce and Prega News. Mankind is a domestic focused pharma company with nearly 97% of its revenues coming from India. Promoters and early investors are selling in the OFS.
GQG Partners, the fund that famous for its $2 billion bet on the Adani group last month, has also increased its stake in ITC Ltd to 1.44% in the March 2023 quarter, from 1.29% in the previous quarter. GQG has been steadily hiking its stake in ITC Ltd over the last few quarters. Overall, the stake of FPIs in ITC has gone up from 12.51% to 12.86% on a sequential basis. The stock of ITC has recently touched a high of Rs400 and most investors are making heavy bets on ITC on stability in cigarette business and growth in FMCG vertical.
Good times appear to be back for the Indian hospitality industry on the back of a rebounding economy and rising tourist flows. The average room rates (ARRs) are all poised to grow 10-15% this year from a high base last fiscal. In addition, the occupancy is likely to remain high at around 73%, resulting in a sharp boost to the hotel industry margins in FY24. Also, events like the IPL, G-20 Sumit and the ICC World Cup are all likely to drive substantial tourist flows in India, with the hotels likely to benefit the most from this trend.
ICICI Securities, the brokerage arm of the ICICI group, reported 23% lower net profits for the March 2023 quarter at Rs263 crore. Retail revenues grew by a marginal 5% to Rs778 crore. Overall revenues fell by 1% to Rs885 crore in Q4FY23 due to weak capital markets and tepid investment banking earnings. Volatility in markets also impacted volumes and its bread-and-butter cash market volumes have fallen sharply at a market level. For Q4FY23, equity revenues were down, distribution was higher and wealth was totally flat.
In what could be classified as a dubious distinction, India has officially become the most populous country in the world. India’s population at 142.86 crore has just overtaken China at 142.57 crore. These are based on the estimates put out by the UN world population dashboard. India’s population has grown by more than 1 billion since 1950. In contrast, China saw contraction in population in 2022. China is facing a sharp fall in birth rates and an aging population, even as India hopes to capitalize on the demographic dividends.