Stock Market Investment Shot, 3rd March 2023

Stock Market Investment Shot, 3rd March 2023

Stock Market Investment Shot, 3rd March 2023

In a swift move, the promoters of Adani Group sold shares worth Rs15,446 crore (or just under $2 billion) in 4 listed entities to GQG Partners. This is the fund floated by former Vontobel CIO, Rajiv Jain. Adani group will use the proceeds to retire debt. Promoters sold shares worth Rs5,460 crore in Adani Enterprises. Rs5,282 crore in Adani Ports, Rs2,806 crore of shares in Adani Green Energy and Rs1,898 crore of shares in Adani Transmission. GQG already has substantial stakes in Indian companies like ITC and ICICI Bank.

Reliance group is now foraying into genetic mapping with its $145 genome sequencing test. The product has been developed by Strand Life Sciences, and Reliance now owns 80% of the company. This genome test will be 86% cheaper than similar offerings. Genome sequencing can be used to detect whether any person has predisposition to cancers, cardiac and neuro-degenerative ailments. The idea is to make genome sequencing affordable to Indians. Global genetic testing market will touch $21.3 billion by 2027.

The Supreme Court formed an expert committee of 5 members headed by a retired judge (AM Sapre) to probe into the regulatory response to the Adani Hindenburg issue. review regulatory mechanisms and protect investor interests in the light of the report by American short-seller Hindenburg Research against the Adani Group of companies. The regulatory body must also probe whether there has been a failure to disclose related party transactions. Sebi will file status report on its probe before the Court in 2 months.

SBI plans to lower its stake in Yes Bank after the lock-in period ends on 06th March 2023. However, SBI will be trimming its stake in Yes Bank in tranches. SBI had acquired 49% of Yes Bank and now holds 26.14% stake as of 31st December filings.  Among other banks; ICICI Bank held 2.61%, Axis Bank 1.57% and IDFC Bank 1% in Yes Bank. In addition, LIC holds 4.34% in Yes Bank while HDFC holds 3.48%. SBI will first need the approval of its board and that has to be followed with RBI approval. Yes Bank trades at Rs18.07/share.

Reliance Industries and Tata Power are among bidders for $2.4 billion of financial incentives that India is offering to expand domestic manufacture of solar panels and curb imports. Others like First Solar Inc, JSW Energy, Avaada Group and ReNew Energy have also evinced interest in availing this incentive. This gels with the Make in India campaign undertaken by the government. India is trying hard to reduce its excess dependence on China, especially in the light of the geopolitical challenges it has on the Indo-China border.

With a view to protecting their margins, FMCG companies are aggressively cutting spending on advertising and promotions. Ad spends for the top 10 companies stood at 7% of sales in Q3FY22, compared to over 10% in FY20 and the pre-pandemic period. While price hikes in the last two years enabled the FMCG names to beat input cost inflation, that is not a viable option when competition is tight and consumers are getting more cost conscious. Sluggish rural markets have also hit volume growth of FMCG companies.

The plan by Vedanta to sell two of its subsidiaries to Hindustan Zinc may face a roadblock after the Indian government wrote to SEBI opposing the deal. Reuters reported that the Ministry of Mines had been kept in the dark about the deal. Government is not comfortable with HZL paying $2.98 billion for zinc assets owned by Vedanta. Currently Vedanta holds 64.9% in HZL  with the government of India being the second largest shareholder. GOI was to sell the residual stake in HZL this year, but that may now be put on hold.

India’s state owned hydropower giant, NHPC, paid an interim dividend of Rs998 crore to the government for FY23. The Board, in its meeting held on 07th February 2023, declared an interim dividend of Rs1.40 per share. The total dividend payout for 2022-23, including the FY22 final dividend, works out to Rs1406 crore. Under DIPAM guidelines, each CPSU has to pay minimum annual dividend of 30% of PAT or 5% of Net worth; whichever is higher. However, for investors, dividends are now taxed at the peak rate of tax.

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