Addressing the chiefs of Indian banks, the RBI governor, noted that there are still banks that did not reveal their two financial position in the books of accounts. Das was referring to the real status of stressed loans by banks. He specifically pointed to corporate governance gaps that still existed in reporting by banks. He referred to the risks of mispricing of products on the credit and deposit side, concentration, and profile mismatch in banks. He suggested banks make suitable adjustments to over-aggressive growth targets.
CRISIL expects the net debt-to-EBITDA ratio of Indian steel manufacturers to stay below 2X in FY24. This ratio was at 1.7X in FY23. This is despite the capex that they intend to undertake in this fiscal. That is much lower than the average leverage of 3.5X seen in the previous five years. Also, the project risks are expected to be low due to brownfield nature of upcoming capacity additions. Growth in steel demand in the coming years is likely to be driven by government push to infrastructure, which have a 70% steel usage intensity.
There is interest building for lithium mines in India. As per reports, Mitsubishi, Tesla, and Ola Electric are the top contenders to win the bid on lithium found in the Jammu and Kashmir region. As is well known, lithium is a non-ferrous metal and is used in manufacturing batteries for electronic items like laptops, phones, and pacemakers. It is a key growth driver for making batteries for electric vehicles. India had recently announced the discovery of lithium deposits in Rajasthan and J&K, which can secure the supply.
Private equity giant, Warburg Pincus, has acquired a controlling stake in Vistaar Finance, an MSME-lending NBFC. Warburg Pincus, bought 90% stake in Vistaar Finance for $250 million. It is one of the biggest PE deals in the financial services sector in India. Avijit Saha, formerly of ICICI Bank, will take over as the CEO of the company post the deal. FY23 was a good year for the microfinance sector with 21% disbursements growth and improved asset quality. Vistaar Finance AUM is at Rs3,150 crore and capital adequacy at 37%.
IRCTC posted 30.4% higher net profits for Q4FY23 at Rs279 crore. Revenues from operations were up 39.7% yoy at Rs965.02 crore. For the March 2023 quarter, IRCTC reported 16.5% higher EBITDA at Rs325 crore. The board has also announced final dividend of Rs2 per share taking the full year dividend to Rs5.50 per share. IRCTC posted healthy growth across ticketing, catering, and Rail Neer. Its tourism segment also clocked 150% growth in revenues yoy. IRCTC is the monopoly supply of key services to Indian Railways.
SEBI has rejigged the Intermediary Advisory committee by including new age broking chiefs of Zerodha and Groww. The committee will be chaired by Ravindran Jain, former ED of SEBI. This committee advises on matters pertaining to changes in legal framework and enhancing transparency. Nithin Kamath of Zerodha and Lalit Keshre of Groww, both fast growing new age brokers, will be part of the committee. CEOs of the two stock exchanges as well as the president of CPAI and ANMI are also part of the committee.
Adani Transmission earned net profits of Rs389.45 crore in Q4FY23 on consolidated basis; up 69.6% on yoy basis. However, PAT was lower by 17.96% sequentially. The company also reported 28% higher cash profits at Rs977 crore in the quarter. There was a one-time regulatory gain of Rs148 crore in the quarter, which may not be sustainable. Sales revenues for the quarter were up 5% at Rs3,201 crore in Q4FY23. Adani Transmission is a leader in the transmission and distribution space in efficiency and in performance.
Former RBI governor, Raghuram Rajan, expressed concerns over India’s booming mobile phone exports. He cautioned that India’s mobile exports were being driven by assembly rather than local manufacturing. He even pointed to a flaw in the flagship Production Linked Incentive Scheme (PLI) scheme. The subsidy is paid for finishing the phone in India, not based on value addition. Effectively, much of the mobile phone is imported as knocked down kits and assembled here. The PLI scheme offers 6% subsidy on invoice price.