Stock Market Investment Shot, 5th January 2023

Stock Market Investment Shot, 19th January 2023

Stock Market Investment Shot, 19th January 2023

Avenue Supermarts, owner of D-Mart chain, reported 24.7% growth in standalone revenues for Q3FY23 at Rs11,305 crore. The total number of stores of D-Mart as of December 2022 stood at 306 stores. The company has been among the highest valued retail company but due to its focus on costs and value delivery, the company has managed to maintain these valuations. Its key markets include Maharashtra, Gujarat, Andhra Pradesh, Madhya Pradesh, Karnataka, Telangana, Chhattisgarh, NCR and TN and Punjab.

Byju Raveendran, founder of Byju’s, plans to enhance his stake in Byju’s to 40% to give confidence to the investors. He is currently in talks with banks and financers to bank roll the stake hike. He would be hiking his stake by 15% in the company. In its latest round of funding, Byju’s was valued at $22 billion but the buyback is likely to happen at lower valuations. Some of the marquee investors in Byju’s include Sequoia, Chan Zuckerberg Initiative, Blackrock and Silver Lake. Till date, Byju’s has already raised over $5 billion.

In a major setback for Google, the NCLAT refused to grant interim stay on the CCI order directing Google to change its business model in India. While NCLAT admitted the appeal, it asked Google to deposit 10% of the penalty amount of Rs133 crore immediately. Google has 3 months to comply with the CCI order, which ends on 19th January 2023. From that date, Google must start uninstalling its pre-loaded apps from Android phones. Google will now be forced to change its core architecture of the Android O/S ecosystem.

Union Cabinet approved an initial outlay of Rs19,744 crore for National Hydrogen Mission. The aim of the Mission is to enhance domestic production of green hydrogen and boost manufacture of electrolysers; a key component for making green hydrogen. The annual target is to first produce 5 million tonnes of green hydrogen. There would also be 2 financial incentive schemes for domestic manufacture of electrolysers and for the production of green hydrogen. It will also support pilot projects in emerging end-use sectors.

Year 2022 may have been challenging for the Indian IT sector, but JP Morgan sees this pressure sustaining. JPM expects revenue growth of IT companies to fall to 6-8% from mid-teens. This would be largely due to shrinking tech budgets and pricing pressures. Growth in the Indian IT sector has averaged 22% in the last 5 years. The pricing pressure is also likely to squeeze margin pressures, although cost pressures should also come down gradually. Travel, automobiles, healthcare and energy verticals are likely to outperform.

Experts have called for rehauling the income tax structure in India. They are looking at rationalization of rates and limits but a gradual reduction in the number of exemptions and rebates. Some likely changes include raising basic exemption limit to Rs5 lakhs, reduction in the peak tax slab rates, higher limits for the various exemptions etc. There are also likely changes to the simplified tax regime with some critical exemptions like HRA and insurance exemptions being extended. It is to be seen what gets actually done.

Contentious tax bills are back and the government has sent a tax bill of close to $1 billion to Wal-Mart and other PhonePe shareholders. This was after PhonePe shifted its headquarters to India. Wal-Mart got the control of PhonePe through its acquisition of the parent, Flipkart. PhonePe has been raising funds at total valuation of $12 billion. India has over 26,000 start-ups and is the world’s third-largest start-up ecosystem as per the ADB. More than 100 of these start-ups are currently valued at $1 billion, making them Unicorns.

Government-backed NARCL is likely to buy 2 stressed entities of the SREI after it put in bids with highest NPV of Rs5,555 crore. This would include a cash pay-out of Rs3,200 crore. Authum Investment and Infrastructure is another bidder in the fray for SREI assets. This is based on a challenge mechanism process wherein the existing bid can be bettered by another party. The overall resolution plan for SREI group will be worth Rs14,000 crore. Its total bank exposure is to the tune of Rs32,000 crore and haircut may be 56%.

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