Oil prices slipped sharply to around $87.11/bbl in the Brent Crude market. while supply fears receded, there were also concerns over demand from China amidst tighter COVID restrictions and dollar strength. Meanwhile, the WTI crude dipped below $80/bbl and both the contracts are currently at a 2-month low. Crude had crossed $130/bbl during the peak of the Russia-Ukraine crisis. While China remains a major importer of crude, the dollar strength impacts oil prices since oil is officially denominated in US dollars.
Adani group has announced that its open offer to acquire additional 26% stake in NDTV would open on 22nd November. The offer to buy 1.67 crore shares at Rs294 per share is worth Rs493 crore and the offer will close on 05th December. However, the open offer price is at a 23% discount to the market price of the stock. Adani group already owns 29.18% in NDTV through its buyout of VCPL, which holds a stake in NDTV’s holding company, RRPR Holdings Private Ltd. Prannoy Roy and Radhika Roy jointly hold over 32%.
The stock of Escorts Kubota surged 6% to Rs2,157; very close to its all-time high price. This buoyancy was visible despite weak markets. Escorts is a major player across 3 verticals; agri-machinery, construction equipment and railway equipment. The revenues are expected to grow 3-fold to Rs22,700 crore in FY28, which will include ramping up its domestic and exports business. By FY28, the ROE is also expected to expand significantly from 12% to 18%. The Nanda group outfit was recently taken over by Kubota of Japan.
There has been a 50% spike in outward remittances under the Liberalised Remittance Scheme (LRS) of the RBI at $13.4 billion in H1FY23. In H1FY22, the outwards remittances stood at $8.9 billion. Indian residents are allowed to send abroad up to $250,000 each year under the LRS, which can be used to fund foreign education or even for global investments. In terms of market share, travel remittances was the highest followed by education and maintenance remittances. In FY22, remittances touched a record $19.6 billion.
CII has urged the central government to ensure that fiscal deficit did not spill beyond 6.4%, considering the robust revenue flows during the year. CII has suggested aggressive disinvestments to enhance the revenue pie. CII also suggested that, in the interest of rupee stability and maintaining its sovereign rating, India should progress to 6% fiscal deficit in FY24. This was part of the pre-budget discussions with the FM. While tax revenues have been buoyant this year, subsidy cost has been high and divestments very tepid.
Essar Group of the Ruia brothers has finally become debt-free. They have reportedly settled the remainder of its $25 billion debt after it sold 2 ports and a power plant to ArcelorMittal Nippon Steel. To settle its debt, Essar group had also sold assets across telecom, oil refining and steel over the years. Its steel plant, ports and power plants were all sold to the Arcelor Mittal consortium. Back in the early 1990s, Essar was ranked at par with big groups like Reliance, Tatas and Birla; before it got into trouble under a pile of debt.
According to ICRA, India’s real GDP is expected to grow at a slower rate of 6.5% in Q2FY23. The second quarter GDP growth will be announced by MOSPI on 30th November. Growth is likely to be impacted by the spike in input costs and weak export demand. That would be less than half the growth rate of 13.5% recorded in the first quarter. ICRA noted that among services, travel and tourism had recorded growth on the back of post-COVID recovery. Government capex has also helped. Manufacturing could grow at 1.4%.
The slew of incentive schemes is likely to give a big push to textile exports out of India. Care Edge Ratings expects the mix of incentives and trade agreements to propel textile export growth by 13% CAGR to $30 billion by FY27. India has already set an ambitious target of $100 billion for textile exports by 2030. For RMG segment, the US, EU, UK, Japan, Canada and South Korea account for 60% of total global imports. Textile exports are dominated by China, Bangladesh and Vietnam; with China alone accounting for 33%.