Stock Market Investment Shot, 26th June 2023

Adani group is looking to grow EBITDA to Rs90,000 crore over next 2-3 years after it completed its loan repayment program. The company had faced a trial of trust after the scathing Hindenburg report had put up some serious questions about the future of the group. Adani group is look at airports, cement, renewables, solar panels, transportation, logistics, and power to drive its growth in the future. An EBITDA of Rs90,000 crore envisages a 20% growth yoy. Airports and renewables are showing improved cash flows.

SBI plans to revamp its wealth management business, with assets currently at Rs2.95 trillion. It will also hire a consultant to help strategize premier banking services for HNIs. Some of the key players in the wealth management space in India include Axis Bank, Nuvama Wealth, IIFL Wealth and Anand Rathi Wealth. While SBI has traditionally been a bank focused on big cities and serving older people, the scene is changing with digital platforms. Customers in Tier-2 and Tier-3 cities also need wealth services from SBI.

Jio Satellite Communications has favoured auction for allocation of spectrum. However, other players like Bharti Airtel, have opposed this formula. Even SpaceX, owned by Elon Musk, prefers the auction route to spectrum in the form of a percentage of annual revenue as spectrum value fee. Jio has written to TRAI saying auctions would be the best method to allocate radio-wave frequencies. Auction-based assignment provides equal opportunity to all service providers and gives regulatory certainty as well as predictability.

Foreign portfolio investors (FPIs) infused Rs30,600 crore into equities in June 2023 and could scale the May level of Rs43,838 crore with one week still to go. However, FPIs sold in debt markets in the latest week after the hawkishness shown by the Bank of England. FPI flows also got a boost after the Fed pressed the pause button. For the year 2023 so far, FPIs have already infused more than $7 billion into equity and debt combined. This is rather encouraging after the FPIs actually withdrew $4 billion in the first 2 months.

Bharat Petroleum Corporation (BPCL) plans to shortly launch a rights issues of Rs17,000 crore, for its growth related investments. The fund raising is likely to happen in tranches. Government will bring in Rs9,000 crore in sync with its stake. BPCL board will meet on June 28, 2023 to consider the capital infusion with the main purpose being energy transition and net zero objectives. Government owns 52.98% in BPCL. The equity support by the government will be given out for BPCL and also for IOCL as committed in Budget.

UPI transactions could account for 90% of overall retail digital transaction volumes in next 5 years, as per the latest RBI Bulletin. Currently, the share of UPI stands at 75.6% of volumes. In May 2023, a total of 9.4 billion UPI transactions were recorded; a yoy surge of 143%. Even person-to-merchant (P2M) payments have gained prominence and now comprise 57% of total transaction volumes. With linking of RuPay cards to UPI, the share of P2M transactions in value terms is anticipated to rise further, with higher ticket size.

For the week ended June 23, 2023, a total of 6 out of the 10 most valuable Indian companies saw value erosion of Rs102,281 crore. Reliance Industries lost Rs40,695 crore in market value. Other value losers were Hindustan Unilever Rs17,223 crore, SBI Rs14,815 crore, Infosys Rs11,205 crore, ITC Rs10,626 crore and ICICI Bank Rs7,717 crore. Among gainers, HDFC Bank added Rs23,526 crore TCS added Rs15,441 crore, HDFC Ltd added Rs13,822 crore and Bharti Airtel added Rs11,298 crore. HDFC twins held sway in the week.

After Deloitte resigned as the statutory auditors of Byju’s, the company has committed to investors to file audited earnings for FY-2022 by September and FY-2023 by December. However, Byju’s has made such tall promises even in the past. Apart from the auditors, several directors representing major PE funds also resigned from the board over differences with Byju Raveendran. In the recent past, the company has also defaulted on its loan tranche, delayed filing results, lost key directors and there is MCA inquiry going on.

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