The US President Joe Biden nominated Ajay Banga for the post of president of World Bank. According to Biden, Ajay Banga was uniquely equipped for the top job at World Bank to response to climate change and other pressing challenges facing developing nations. Typically, the US being the largest shareholder of World Bank, nominates its president. Banga was formerly the CEO of Mastercard International and currently the vice chairperson of private equity investor, General Atlantic. He was also praised by Yellen.
It is not the best of times for Zee. After the Mumbai Bench of NCLT admitted insolvency resolution against Zee Entertainment, the stock was tanked and has also been removed from the list of F&O stocks. Now, the managing director and CEO, Punit Goenka, has moved the NCLT Appellate Tribunal seeking relief from this order. IndusInd Bank had proposed NCLT resolution after the merger deal with Sony was getting delayed almost interminably. Lawyers apprehend that this insolvency process could delay merger process.
Axis Bank has informed the stock exchanges that its recently signed deal to acquire Citibank India’s consumer business and NBFC business would be fully consummated by 01st March 2023. The requisite approvals from boards customers and regulatory stakeholders were almost done. That would still mean that the merger gets completed within the stipulated 12 month time frame committed. Under the deal, all clients, employees and assets of Citi will be transferred to Axis, for a consideration of Rs12,325 crore.
In the second estimate of Q4 growth released by the US Bureau of Economic Analysis (BEA), the real GDP growth has come in lower at 2.7%. This is 20 bps lower than the first Q4 estimate of 2.9% and 50 bps lower than the 3.2% growth recorded in the Q32022 period. The lower growth was largely on account of weak consumer spending. The annualized growth for 2022 is pegged at 2.1%. The inflation-adjusted final sales to private domestic purchasers rose just 0.1%, which is the weakest since the start of the COVID pandemic.
Amidst the crash in the stocks of the Adani group, the yields on the overseas bonds also continued to rise. It may be recollected that on 24th January, the Hindenburg report had flagged concerns over high debt levels of the Adani group as well as alleged accounting irregularities. Bond yields on Adani Electricity is up from 7.2451% to 9.2261% while bond yields on Adani Green Energy is up from 7.4802% to 19.9714%. Late in January, Adani Enterprises also had to scrap its proposed FPO amidst a sharp fall in the stock prices.
Byju’s may now look to shut down its subsidiary WhiteHatJr, a coding platform it acquired two years back for $300 million. However, now Byju’s feels that this high profile acquisition may have lost the potential it once had. Amidst a sharp drop in sales conversions post the reopening of schools post-Covid, the customer acquisition cost (CAC) of WhiteHatJr is disproportionate to the revenues. Byju’s is also under a lot of pressure to cut costs amidst a funding winter for edtech. WhiteHatJr is a coding platform for kids.
The government has now called for LIC to appoint a professional CIO (chief investment officer), especially in the light of its investments coming under the lens due to its exposure to the Adani group. For an AUM of Rs42 trillion (larger than the entire mutual fund industry in India), LIC did not have a CIO. LIC has an exposure of over Rs30,000 crore to the Adani group. One more reason for the pressure also comes from the fact that post the IPO of LIC in May 2022, it is 37% below issue price, causing a lot of negative press.
Carlyle Aviation, the major aircraft lessor of SpiceJet, will pick up a 5% equity stake in lieu of its outstanding lease rentals. In addition, SpiceJet will issue convertible debentures in its logistics arm, SpiceXpress, which Carlyle would be able to convert into equity in future. While this will dilute equity, it will also deleverage its balance sheet. The board of SpiceJet may allot equity or preference shares to Carlyle Aviation, but will also look at fresh fund raising from the market. SpiceJet has the best PLF among Indian airline companies.