The problems for Byju’s could just be getting louder. In a rather surprising statement, one of the key shareholders of Byju’s, Peak XV, has red-flagged serious corporate governance issues at the edtech start-up. According to Peak XV, the decision of GV Ravishankar nominated by the PE Fund from the board of Byju’s was prompted by the lack of transparency. Peak XV further added that a director nominated by a PE fund had fiduciary responsibilities towards the shareholders, which was tough with so much opacity.
Apart from announcing a stellar 47% growth in net profits, L&T also announced a Rs10,000 crore buyback of shares. The board of L&T has approved the buyback of 3.33 crore shares at a price of Rs3,000 per share, which is a 17% premium to the current market price. The buyback will represent 2.4% of the total shares outstanding of L&T. The buyback is subject to SEBI approval. It may be recollected that in 2019 the L&T buyback of Rs9,000 crore had been rejected by SEBI due to high levels of debt in the L&T group companies.
On a day when Tata Motors announce a sharp turnaround to profits, it also announced plans to convert its DVR (differential voting rights) shares into regular equity. The DVRs are called “A” ordinary shares and carry one-tenth the voting rights but 500 bps higher dividends. Tata Motors will issue 7 ordinary shares for every 10 “A” ordinary shares held. As a result of this conversion, the outstanding equity of Tata Motors will narrow by 4.2%, boosting EPS and valuations. DVR shares currently trade at 43% discount to market.
The decision of the ITC board to demerge its hotels business looked like a good piece of effort at improving the SOTP valuations of ITC. However, there are two concerns that have cropped up. Firstly, the ITC shareholders will only get 60% of the shares from demerger while ITC Ltd gets 40%. Secondly, one of the main reasons for the demerger was that the exit of the hotels business would improve the ROCE. But, the question that now arises is how the capital expenditure plans of ITC Hotels would be financed by them.
In its latest updated to the World Economic Outlook, the IMF has upped its forecast for India GDP growth for 2023 by 20 bps to 6.1%. In the first quarter update in April, IMF had pegged India’s GDP growth had bene pegged at 5.9%. This upgrade reflects the stronger than expected growth in GDP in the March 2023 quarter as well as the gains seeping into the economy due to lower input costs. Even for global economy, the IMF has raised the growth forecast for 2023 from 2.8% to 3.0%. Rising rates have been red-flagged.
Yatharth Hospitals raised Rs206 crore from anchor investors just a day ahead of the issue opening. The anchor portion represents 30% of the total issue size and the same will be reduced from the QIB portion in the IPO. The investments came from domestic funds like ICICI Prudential, HDFC MF, Nippon Life AMC, Aditya Birla Sun Life AMC and Bandhan AMC. Domestic mutual funds accounted for 34% of anchor portion with the insurance companies also active. A total of 68.66 lakh shares were allotted to 18 anchor investors.
Bajaj Auto reported stellar net profit growth of 41.4% at Rs1.644 crore. The top line revenues grew 29.4% in the quarter to 10,663 crore. The volumes of vehicles sold in the quarter went up by 10% to 10,27,091 units. Net profits were up on a yoy basis but were marginally lower on sequential basis, which led to the stock falling by 1% after the results announcement. Bajaj Auto has more than half of its sales coming from the international export market and that has been slightly ambivalent, even as India sales were robust.
It was all about decorative paints once again for Asian Paints as it reported 52% growth in Q1FY24 profits at Rs1,575 crore. The volumes in the decorative paints business grew in double digits and led the top line and bottom line growth for the company. Sales for the quarter were up 6.7% yoy at Rs9,182 crore. EBITDA margins of Asian paints remained at robust levels of 23.1%. The bath fittings business also saw sharp growth but it was on a much smaller base. International sales grew by 1.4% in tough demand conditions.
