Stock Market Investment Shot, 20th June 2023

The best ai stocks for long-term investments and high returns in India.

In what could go down as one of the biggest aviation orders in history, Indigo Airlines has placed order for 500 Airbus A320 Family aircraft on Day-1 of the Paris Airshow. These deliveries will continue all the way to 2035. The engine selection is expected to be done in due course as will be the mix of A320 and A321 aircraft. Currently, Indigo has 300 aircraft operating and another 480 orders yet to be delivered. If this latest order for 500 planes is also included, then the order book of Indigo stands at close to 1,000 plances.

If the month of May has seen a surge in AUM to an all-time high of Rs43.2 trillion, it also saw a 37% spike in redemptions to Rs31,100 crore. Investors were clearly booking profits in a rising market. Due to the surge in redemptions in equity funds, the net flows were limited to just Rs3,240 crore in May 2023. Net of NFO inflows, the fund flows have been falling rapidly. It fell from Rs16,693 crore in March to Rs4,868 crore in April and further to Rs3,066 crore in May 2023. Spike in AUM was more due to value accretion.

HDFC Ltd has signed a definitely agreement to divest nearly 90% stake in HDFC Credila, the education loan subsidiary of HDFC Ltd. The sale will be worth Rs9,000 crore and will be bought by a consortium comprising of BPEA EQT and ChrysCapital. The sale of HDFC Credila was part of the merger deal. Valuations were in line with expectations. However, with a 10% stake, HDFC will still have the right to nominate 1 non-executive director to the board of Credila. For FY23, HDFC Credila reported net revenues of Rs1,352 crore.

UK-based Aberdeen Investment Management is likely to sell its entire 10.2% stake in HDFC AMC at an estimated Rs3,920 crore through block deals. The deal is likely to be done at a price of around Rs1,892 per share. Aberdeen will sell a total of 2.18 crore shares. Aberdeen had last sold 5.58% stake in HDFC AMC for Rs2,300 crore. HDFC AMC is a joint venture between HDFC and Aberdeen Investment Management Ltd. The ownership of HDFC AMC also passes on from HDFC Ltd to HDFC Bank post the ongoing merger.

Tata Power will double its capex for FY24 to Rs12,000 crore with a predominant focus on renewables, distribution, transmission, and solar equipment manufacturing. That is double the capex of FY23. As part of the capex, Tata Power will invest in the upcoming 4 GW manufacturing plant, apart from renewable projects, transmission and distribution businesses in Odisha, Delhi, and Mumbai. The capex will be almost entirely funded by internal accruals. It has successful track record of turning around state-owned Discoms.

Indian IT companies are up against a new challenge as emerging technologies like Generative AI and Low Code are posing a challenge to the traditional Indian IT outsourcing model. Last week, Transamerica ended its $2 billion 10-year deal with TCS 2 years ahead of schedule and will now reduce its reliance on third party IT vendors.  AI technologies permit automating a lot of IT work, which will reduce the need for such outsourced IT vendors. This will allow the company in question to retail most of the productivity gains.

The problems at Byju’s appear to continue as it has laid off over 1,000 employees in the latest round. This will impact around 2% of the company’s workforce; and this comes on top of 3,000 job cuts last year. The layoffs were across the platform, brand, marketing, business, product, and tech teams. Despite such heavy layoffs, the total employee strength of Byju’s is over 50,000. The company was valued at $22 billion at one point in 2021, but has since got embroiled in a major debt repudiation in the US, which is sub-judice.

Adani Transmission secured approval of shareholders to raise Rs8,500 crore through equity issue via QIP. The funds will be used for growth and expansion of the company. Nearly 98.64%, votes were in favour of the resolution. In the last few days, the stock of Adani Transmission has seen a sharp uptick over positive reports on its Mumbai power project. The group has seen a sharp recovery after the Hindenburg fiasco. The Hindenburg report had raised questions about the debt levels and governance in the Adani group.

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