Stock Market Investment Shot, 27th June 2023

Lenders of Go First have approved an interim funding of $55 million or nearly Rs450 crore to support the resumption of services by the airline. The airline is currently under voluntary bankruptcy protection with the NCLT. It will be without collateral but will get priority over other settlements at the NCLT. The airline owes nearly Rs6,500 crore to the Indian banks and this is apart from the lease rental outstanding to the global aircraft lessors. The promoters of Go First will not be infusing additional funds into the company.

The assets under management (AUM) of funds tracking the Nifty has crossed Rs5 trillion, which is nearly 12% of the overall MF AUM in India. There are 251 funds in India that are tracking the Nifty 50 index. However, if one looked at the overall domestic passive fund segment, it is more than Rs7 trillion as there are funds tracking other equity and even debt indices in India. Passive funds have seen a sharp rise for 2 reasons. Firstly, active funds have struggled to beat the market and passive funds are lower on TER costs.

Amidst the growing chaos, Byju Raveendran is still confident that the company is worth $22 billion, but that enthusiasm is not shared by other global investors who have already written down the investment in Byju’s to an enterprise value of less than $10 billion. Recently, Byju’s saw its auditor Deloitte resigning and 3 non-family directors stepping down citing differences with the CEO. Raveendran tried to convince the 75 shareholders of Byju’s that revenues were robust despite past mistakes and assured skin in the game.

Infosys has signed a $454 million deal with Danske Bank of Denmark to acquire its India IT centre. Infosys will help Danske accelerate its digital transformation initiatives and use artificial intelligence (AI) to add more value to customers. This deal will include the acquisition of the India IT centre. Infosys will deploy its Topaz AI suite for Danske. Generative AI will be one of the applications that the company will focus on. The next generation solutions will help Danske Bank to achieve and deliver better customer experience.

Tata Chemicals has laid out a massive Rs8,000 crore capex plan. The idea is to increase its global soda ash capacity to 2.3 MT and its India capacity to 1.8 MT. These investments will be undertaken over the next 2 to 3 years. Overall, the soda ash capacity will go up from 4.3 MT to 5.3MT. its speciality silica capacity will also be enhanced by 5X. Tata Chemicals is one of the major silica players in the world. It is also taking steps to deleverage its global operations so as to make it financial smooth and enable its robust growth.

The stock of Shree Cements had cracked sharply on Monday after reports of evasion of taxes to the tune of Rs23,000 crore. These findings were reportedly based on investigations conducted by the Income Tax Department at different locations in Rajasthan. However, the company dismissed such media reports as being baseless. The stock of Shree Cements has been under pressure due to the entry of Adani group in the cement business, which has already emerged as the second largest cement player in Indian market.

According to the latest report by the IMD, Monsoons have now covered 80% of India. However, the IMD observed that the onset of monsoons showed a different pattern this year. The speedy advance of the rains was helped by low pressure over the Bay of Bengal. Also, for the first time since 1961, the monsoon onset dates of Mumbai and Delhi overlapped. In the next few days, the rains are expected to advance to the states of Madhya Pradesh, Gujarat, Rajasthan, Haryana, and Punjab; all being major Kharif centres.

The Securities Appellate Tribunal (SAT) will hear the plea by Subhash Chandra and Punit Goenka on June 27, 2023. It may be recollected that SEBI had earlier passed an order barring both promoters of the Essel group from holding any KMP position in listed companies for allegedly indulging in round tripping of funds. SAT had refused to annul that order and will go through the normal hearing process. Meanwhile, SEBI had told the SAT that the charges against the promoters were serious and the decision must not be delayed.

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