Stock Market Investment Shot,3rd November 2022

Stock Market Investment Shot, 27th December 2022

Stock Market Investment Shot, 27th December 2022

RBI confirmed that it will not immediately release details of its special MPC meeting on 03rd November. The meeting had been called after RBI had failed to contain inflation. Not only did the inflation breach the median inflation target for 34 months, but also the upper limit for 3 quarters in a row. The RBI apparently does not have the authority to release the report, and the prerogative is of the government. Das hinted that they could have started rate hikes earlier, but that would have exerted too much pressure on growth.

Air Asia has finally decided to call it quits on India, a move that was long expected. The Malaysia based Air Asia group will sell its balance 16.67% stake in Air Asia India to Air India for Rs155.64 crore. Air India is now part of the Tata group, which has been looking to consolidate its airline interests. Air India will create a single low-cost subsidiary combining Parts of Vistara and Air Asia. The India operations of Air Asia has been consistently in losses since 2014. It will focus on Malaysia, Thailand, Indonesia and the Philippines.

The IPO of DCX Systems closed on Wednesday with subscription of 69.79 times. While the institutional portion was subscribed 84.32 times, the HNI / NII portion was subscribed 43.97 times and retail portion around 61.77 times. The price band was Rs197 to Rs207 and looking at the response, it looks likely to be priced at the upper end of the band. The Rs500 crore IPO will comprise of Rs400 crore fresh issue and Rs100 crore offer for sale. Fresh issue proceeds will fund repayment of debt and capex of its subsidiary.

The stock of LIC Housing Finance plunged 13% on Wednesday to Rs349 accompanied with a spike in volumes. This was after disappointing results in Q2FY23. In fact, average trading volumes jumped 5-fold with over 1 crore shares changing hands. While NII fell by 1.8% yoy, the net interest margin (NIM) tapered to just about 1.8%. Despite these numbers, the net profits of LIC Housing grew 23% yoy to Rs305 crore on the back of a sharp fall in provisions. However, markets were unhappy with the NII and NIM for Q2FY23.

Indian defence exports have been growing at a rapid pace. For instance, India recorded defence exports of Rs8,000 crore in FY22. That has been achieved in the first 6 months of FY23 itself. India is broadly on target to touch annual defence exports of Rs35,000 crore by FY25. The focus on indigenization appears to have done the trick, especially the Make in India program. FDI via automatic route is already allowed up to 74% and it has generated FDI worth Rs494 crore. How India leverages this edge remains to be watched.

Global Health Ltd (Medanta) mopped up Rs661.67 crore from anchor investors on 02nd November, a day ahead of the IPO opening. A total of 52 investors subscribed to the anchor book. A total of 1.96 crore will be allotted to anchor investors at a price of Rs336 per share. Some of the key investors in the anchor book include Monetary Authority of Singapore, Government of Singapore, Nomura Trust, Ontario Teachers’ Pensions, Polar Capital, Norwegian Pension Fund, HDFC MF, SBI MF, ICICI Pru MF, Axis MF, SBI Life etc.

Byju’s plans to list its subsidiary, Aakash Education Services, in H1-2024. The modalities are to be finalized. While Aakash will look at an India listing, Byju’s has plans to simultaneously list in the US and India. The IPO size of Aakash could be in the range of $3.$5-4.0 billion. The plans come at a time when digital stocks have been under strain with Nykaa and Delhivery also correcting sharply in the last few weeks. It may be recollected that Byju’s had acquired Aakash in April 2021 in a cash and stock deal for a sum of $950 million.

The Registrar of Companies (ROC) started its inquiry into the affairs of MG Motor India. The top brass of MG Motors India has already been summoned by the ROC, along with their statutory auditors. ROC inquiry is more than routine information seeking but below a full-fledged investigation. ROC suspects financial irregularities and has asked the company to explain why it made operating losses in FY20. MG Motors has justified the operating loss on the grounds that there was a lot of front loading of capex in a tight market.

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