GST collections for March 2023 came in at an impressive Rs160,122 crore. With that, FY23 GST collections have crossed Rs18 trillion. This is nearly 13% higher on MOM basis and also the second highest collection ever. For FY23, the average GST collections (gross) stood at Rs1.51 trillion. Out of the total GST inflows, CGST accounted for Rs29,546 crore, SGST Rs37,314 crore, IGST Rs82,907 crore and cess Rs10,355 crore. Nearly half of IGST was import duties. This is attributed to higher activity and also much better compliance.
Defence exports are really picking with Rs15,920 crore of defence exports reported from India in FY23. In FY17, defence exports were just Rs1,521 crore, so that is a 10-fold increase in 6 years, albeit on a low base. India currently exports defence products to over 85 countries. The target is to reach Rs25,000 crore of defence exports by FY25, which looks achievable in the current run. There is growing global demand for LCA-Tejas, Light Combat Helicopters, aircraft carrier and MRO (maintenance, repair, overhaul) services.
Oravel Stays, the parent of OYO Hotels, has again filed its Draft Red Herring Prospectus (DRHP) with SEBI. It has reduced the issue size to almost half and it would be in the range of $400 million to $600 million. The fresh funds would be largely used to repay debt. The IPO is slated around November 2023, but would depend on how the appetite for new-age digital stocks shape up. The DRHP was filed under confidential route, which was introduced by SEBI in November 2022. Valuations are also expected to be toned down.
For the December 2022 quarter, India’s current account deficit (CAD) narrowed sequentially to $18.2 billion; or 2.2 per cent of GDP. The overall current account deficit for the September 2022 quarter was also lowered from $36.4 billion to $30.9 billion. The narrowing of the CAD in the December 2022 quarter can be largely attributed to the sharp narrowing of the merchandise trade deficit as well as a boost to the services trade surplus. The full year CAD also looks to be pegged under 3% of GDP, which is manageable.
Unified Payments Interface (UPI) has always been a big hit in India but now it is growing at a supersonic pace. For March 2023, a total of 8.7 billion UPI transactions were processed on the NPCI platform, which is the highest ever since inception. The value of these transactions stood at an impressive Rs14.05 trillion.
UPI transactions in March 2023 were 60% higher in volume terms and 46% higher in value terms yoy. The UPI platform was launched in India only in 2016 and owes its growth to the post demonetization period.
There is an impressive IPO pipeline for FY24. Already, a total of 54 Indian companies are looking to raise Rs76,189 crore. This includes SEBI approval too. In addition, there are also 19 IPOs worth Rs32,940 crore awaiting the go-ahead from SEBI. Out of these 73 proposed IPO candidates, only 4 are new age digital companies. FY23 was a rather disappointing year with 37 IPOs raising just about Rs52,116 crore on the main board; less than half the IPO raising in FY22. However, the banking crisis could keep IPOs subdued.
UltraTech Cements, India’s largest cement manufacturer, reported 12.4% higher volumes of 105.7 MMT for FY23. Domestic sales at 101.70 MMT accounted for a bulk of sales. UltraTech has consolidated capacity of 132.35 million tonnes per annum (MTPA) of grey cement. This capacity is spread across a total of 23 integrated manufacturing units, 29 grinding units, 1 clinker unit and 8 Bulk Packaging Terminals. Ultratech is the world’s third largest cement producer ex-China. It is facing tough competition from Adani group.
Valuation markdowns are not a signal of valuation but it is a conservative provision made by investors in their own books. But it does give a broad idea. For instance, BlackRock cut Byju’s valuation in its books from $22 billion to $11.5 billion. At the same time, Invesco has marked down Swiggy valuation from $10.7 billion to $8 billion. In the past Softbank has been quite aggressive in cutting valuation estimates of their digital holdings. For Byju’s and Swiggy, this could impact funding flows as well as its future IPO valuations.