Stock Market Investment Shot,2nd December 2022

Stock Market Investment Shot,20th December 2022

GST collections for November 2022 stood slightly lower at Rs1.45 trillion compared to Rs1.52 trillion in October 2022. However, GST revenues were still up 11% on yoy basis. This could be largely due to impact of festive demand in October. Even e-way bill generation was lower 76.8 million compared to 84 million in the previous month. The break up was CGST Rs25,681 crore, SGST Rs32,651 crore, IGST Rs77,103 crore and cess Rs10,433 crore. To an extent, it looks like recession fears has also impacted the economic activity.

Tata Play became the first company to take the pre-filing route for its proposed IPO. The DTH platform, formerly known as Tata Sky, filed its draft red herring prospectus (DRHP) confidentially with SEBI on 29th November. Confidential filing is quite popular in the US but had been introduced in India only last month. Here, the unlisted company can keep its offer document private until it firms up the IPO plan. Tata Play is apparently eying an IPO of Rs3,000 crore, through a combination of fresh issue and an offer for sale (OFS).

In a recent report by Colliers India, data centres received investments of $10 billion, or Rs81,200 crore, since 2020. Demand for data centres have grown rapidly since 2020 amidst a very sharp growth in data consumption. India has a current data centre stock of 10.5 million SFT, which is likely to nearly double to 20 million SFT by 2025. The current data centre capacity is 770 MW. Growth in data centres has been driven by incentives like subsidised land and stamp duty exemptions. Mumbai accounts for 49% capacity.

Russia is not overtly worried about a possible price cap on crude oil proposed by the West and has decided to directly negotiate with buyers like India and China. Russia has held that price cannot be determined by a third party. The price caps by the EU will go live from 05th December, although the EU nations are yet to agree upon the actual figure. The touted figure is $65 to $70/bbl, but the apprehension is that such a rate may not impact Russian supplies at all. EU, being the largest consumer of Russian oil, holds the key.

Auto sales in November 2022 were buoyant as PV and CV dispatches were buoyant, even as two-wheeler sales improved marginally. Maruti Suzuki reported 14.3% growth in dispatches at 159,044 units for month of November, with domestic sales growing 18% yoy. Hyundai Motors also reported 29.7% growth in auto volumes in November at 48,003 units. Among other domestic players, Tata Motors saw 27% growth in auto sales at 73,467 units while M&M saw marginal growth at 58,303 units. Supply chains are improving.

City gas distribution (CGD) companies are likely to benefit the most if recommendations of the Kirit Parikh committee on gas pricing are implemented. Submitting its report, the committee suggested a floor price of $4/MMBUT and a cap of $6.50/MMBUT for gas produced from legacy fields. This would come as a big blessing for CGD companies like Indraprastha Gas and Mahanagar Gas, as it would bring down their input costs substantially. For CGD companies the cost benefit would be between 18% and 24%, a big boost.

RBI accorded conditional approval to PE investors Carlyle Group and Advent International to buy 9.99% each in Yes Bank. This will be done through the issue of equity shares and warrants. Any stake sale in a bank of 5% and above needs prior RBI approval. This will enable Yes Bank to boost its capital ratios. The PE funds have to pay 25% of the price of each warrant at the time of allotment and balance 75% at the time of issue of shares. Both investors will be allowed to nominate a non-executive director to the board.

Britannia Industries expects its cheese business to grow 5-fold to Rs1,250 crore in the next five years helped by its recent joint venture with French cheese maker Bel. The JV will allow offering cheese products for the Indian market through Britannia Bel Foods Private Limited. Cheese products will be co-branded and sold under the Britannia and Laughing Cow trademarks. India is a rapidly growing cheese market and Britannia wants to capitalize on that. India per capita cheese consumption is very low and is a big market.

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