Stock Market Investment Shot, 31st March 2023

Stock Market Investment Shot, 31st March 2023

Stock Market Investment Shot, 31st March 2023

The decision to demerge the financial services arm of Reliance Industries is expected to be taken when the board meets on 02nd May 2023. Lenders and shareholders of RIL will be part of that meet. The resultant NBFC will have a net worth of Rs25,851 crore. The merged entity will be called Jio Financial Services and RIL shareholders will get proportionate shares in the demerged entity. Reliance is betting big on consumer financing as a logical extension to its consumer facing businesses and to expand the market.

JSW Energy completed the acquisition of 1,753 MW renewable energy assets from Mytrah Energy (India) for over Rs10,000 crore. The transaction values the Mytrah energy portfolio at Rs10,150 crore after NCA adjustment. The Mytrah portfolio comprises of 1,331 MW wind energy and 422 MW solar capacity. The projects have an operational track record and long term PPA for its remaining life of 17 years. It will boost the current power capacity of JSW Energy by 36% from 4,811 MW to 6,564 MW over the next 18 months.

Adani Group top brass met with leading US based investors like Blackrock, Blackstone, and PIMCO to sell bonds at a reasonable pricing. Adani group plans to raise $1 billion in two tranches through this route. This is part of the global roadshow by the Adani top brass across New York, Boston, Los Angeles, and San Francisco in the US. Adani group saw $150 billion of market value wiped out after the Hindenburg report was published. Hindenburg Research alleged stock manipulation, accounting fraud and weak compliance.

Nestle of Switzerland has reached the final stage to acquire India’s Capital Foods Private Limited. Nestle is looking to boost its presence in the fast-growing Indianized Chinese foods. The target company, Capital Foods, makes the higher popular Ching’s Secret brand of spicy noodles and fusion chutneys infused. These are called Desi Chinese flavours and are extremely popular. Nestle may pay close to $1 billion if the bid is successful. Capital Food has marquee investors like General Atlantic, which bought a stake in year 2018.

Unacademy, one of India’s leading Edtech firms, plans to lay off 12% of its staff or about 350 employees as the funding crunch gets tighter. The company is looking to focus on operational turnaround by keeping costs in check. In April last year, Unacademy had cut its workforce by 10%. Today, the global economy is in a state of recession and that has crimped demand. Above all that, the biggest reason is the funding winter for edtech and ecommerce players, which has not only impacted fund flows but also valuations.

Tata Power Solar Systems (TPSSL), a 100% subsidiary of Tata Power, won a Rs1,755-crore solar project from NLC India Ltd. Incidentally, NLC was formerly called the Neyveli Lignite Corporation. TPSSL will set up a 300 MW engineering, procurement, and construction (EPC) project for NLC India at Bikaner in Rajasthan. The project will generate over 750 million units of solar power and reduce 6 trillion tonnes CO2 annually. TPSSL will handle from designing to commissioning and evacuation system up to delivery point.  

FY23 was a dull year for IPOs with 37 companies raising just Rs52,116 crore on mainboard IPOs. This is less than half of FY22, which saw IPO collections of Rs111,547 crore, helped by the digital and start-up boom. FY23 was lacklustre despite LIC and Delhivery accounting for nearly half of the fund raising in the year. Even number of companies launching IPOs, at 53, was lower than the last year. The average size of the IPOs was Rs1,409 crore. The months of May, November and December dominated IPO sweepstakes.

Three PE firms; CVC Capital, Advent International and Bain Capital, are among the bidders evincing a keen interest in acquiring Porus Laboratories. Porus is seeking Rs2,500 crore for the transaction and has appointed JP Morgan to broker the deal. Hyderabad based Porus Labs is into pharma intermediates and specialty chemicals. Advent is building a platform for pharmaceuticals and specialty chemicals. For FY22, Porus had posted net sales of Rs678 crore and EBITDA of Rs123 crore. India is expected to overtake China.

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