Retail CPI inflation for November 2022 turned in sharply lower at 5.88%, backed by a sharp fall in food inflation. However, core inflation showed a minor bounced from 5.9% to 6.0% in November. MOM, the retail inflation has fallen by 89 bps. This is nearly 50 bps lower than the Bloomberg consensus estimate. This is the first time in 11 months that the CPI inflation actually fell below the 6% mark, which is the outer tolerance limit for the RBI. This is likely to induce the RBI to now halt rate hikes and focus on GDP growth.
On a day when inflation flattered the street with a sharp fall, IIP disappointed by dipping into negative zone. IIP growth for October came in at -4.0% as manufacturing came under a lot of stress due to global headwinds, higher rates, weak consumer demand and tepid exports. Manufacturing sector dipped by -5.6% in November 2022. However, mining and electricity growth remained positive in the month. High frequency data shows that the manufacturing sector weakened sharply on a month-on-month basis too.
In a rather surprising move, LIC stock gained over 4% to hit Rs695.85 on Monday. This is the highest price level for the stock of LIC since mid-August. The stock rallied on news that the government planned to have a private sector executive to head LIC. Since its IPO in May this year, the stock has consistently performed below market. with a lot of its own money in LIC, the government is keen to improve the valuations of the insurer so that it can monetize in other ways too. November business addition data also favours LIC story.
General Atlantic Partners, which is the principal owner and promoter of KFIN Technologies, plans to launch its public offer on 19th December. KFIN Technologies, formerly Karvy Computershare, is a leading registrar to companies and mutual funds. The anchor book will open on 16th December. The company is apparently targeting valuations of Rs6,300 crore and the entire issue is likely to be an OFS. The issue will be managed by I-Sec, Kotak, Jefferies, IIFL Securities and JP Morgan. Competitor CAMS is already listed.
Mega IPOs may be dropping out of the race, but smaller IPOs are seeing good demand. The result is that November 2022 is likely to see record 9 IPO listings. This makes November the best month in 2022 and the fourth best in the last 10 years. Prior to November a total of 32 IPOs had hit the market in 2022. But, November has been a big gamechanger for the IPO markets. However, some of the big IPOs like MobiKwik, Snapdeal, Macleods Pharma and Go Air have decided to shelve their IPO. Clearly, it is working both ways.
In a sign of further consolidation in cement sector, Jaiprakash Associates will sell its cement, clinker and power plants to Dalmia Cements at an enterprise value of Rs5,666 crore. The deal will help Dalmia Cement to add 9.4 MTPA of cement with clinker capacity of 6.7 MTPA. The thermal power capacity is worth 280 MW. Jaiprakash group will use these funds to largely repay loans. Earlier, Jaiprakash group had sold nearly 20 MTPA of cement capacity to Ultratech Cements. Dalmia is among the Top-5 cement players in India.
The board of Tata Motors has given in-principle approval for partial divestment of its stake in Tata Technologies. This will be down through next few quarters. This will be the first IPO from the Tata group since its last TCS IPO in 2004. Tata Motors is targeting near net-Zero automotive debt by FY24. Tata Tech has seen a sharp bounce in revenues post the pandemic. However, it will have to retain its focus of having Tata Technologies as an ideas incubation centre and also as a key player in fast growing areas like EVs.
According to the Finance Ministry, net direct tax collection rose 24% to Rs8.77 trillion in the first 8 months of FY23. That accounts for nearly 61.79% of full-year Budget Estimates for direct tax collections. The amount of Rs8.77 trillion is net of refunds. Due to strong growth in output, the direct tax collection were expected to exceed the budget estimate by nearly Rs4 trillion. With GST collections stabilizing around Rs1.50 trillion monthly, most of the incremental tax revenues will have to come from the direct tax front.