On Monday, the rupee weakened sharply by nearly 53 paisa from Rs81.35/$ to Rs81.88/$. The rupee is perilously close to the 82/$ mark and is expected to break through sooner rather than later. The trigger for the sharp fall in the rupee on Monday came from OPEC cutting crude supply. However, the real worry in the markets is that India may not be included in the global bond indices in 2022. That would result in unwinding of the flows that had come in anticipation. That actually triggered the panic in forex markets.
It was a bad day for the Adani group stocks as some of the group stocks fell as much as 10% on Monday. Adani Enterprises was down for seventh day in succession, having lost more than 20% from peak levels. Adani Total Gas hit 10% lower circuit. But these corrections came after a very strong rally. Even Adani Green fell by 9% and the stock is now a good 32% below its recent high. Even Adani Wilmar and Adani Power were locked in 5% lower circuit. There were no real triggers except debt worries and profit booking.
Nykaa, the brand owned by FSN E-commerce, surged by 11% after it announced a bonus of 5 shares of every 1 share held (5:1). This will grow the shareholding five-fold and cut the price to nearly one-fifth. Normally, bonus issues are value neutral but in the case of high priced stocks, it helps to bring the stock into a more popular range. The record date for the bonus will be November 03rd, 2022. In last 6 months, Nykaa has fallen 20%, although it still trades above the IPO price. The IPO was priced at Rs1,125 per share.
Tracxn Technologies IPO will open on 10th October and close for subscription on 12th October. The entire IPO of Tracxn will be an offer for sale (OFS) of 38.67 million shares. While the co-founders will sell up to 7.66 million shares each, even early investors Binny and Sachin Bansal of Flipkart will sell 1.26 million shares each. IIFL Securities is the sole book-running lead manager for the IPO. While the promoters hold 25.46% in Tracxn, Elevation Capital holds over 21%. Tracxn offers private company data for deal sourcing.
According to a recent report by CRISIL, India’s corporate credit quality continues to be strong in H1-FY23. The corporate credit ratio (upgrades vs downgrades) was robust at 5.52X in H1-FY23. It has improved from 5.04X in H2-FY22. CRISIL’s outlook is that upgrades will far outnumber the downgrades in FY23. According to CRISIL, the 3 reasons for this robust corporate credit ratio are strengthening domestic demand, better realisations and debt-light balance sheets. Interestingly, nearly 35% of upgrades were from infrastructure.
PayU Payments, a subsidiary of Prosus NV, called off the $4.7 billion deal to buy BillDesk. While the CCI approval had come through, Prosus said some conditions were not met, which led to the deal being called off. BillDesk is one of the oldest payment franchises in India and has been around for over 22 years. The idea of the deal was to create a digital payments giant with total volume of $147 billion. Prosus is a unit of Naspers, which has apparently invested close to $6 billion in Indian tech companies since the year 2005.
PhonePe, the phone payment service provider owned by Walmart, has completed moving its domicile from Singapore to India. This move is planned ahead of its proposed IPO. Apart from the payment services business, PhonePe also has an insurance broking and wealth broking business in India. PhonePe plans to go public once its core businesses turn profitable, which they are confident of achieving by 2023. PhonePe has been recently giving Paytm a run for its money by installing vendor sound boxes at much lower rates.
Reliance Jio Infocomm has confirmed that it would simultaneously focus on 5G consumer and enterprise businesses. This is in contrast to its traditional focus purely on the consumer mobility business. As part of its 5G rollout strategy, Jio plans to target 35-50 million MSMEs and at least 100 million homes. Jio also added that their first focus would be on adoption and next would be on tariff. Jio has promised to offer the most affordable 5G services globally. Jio was the only telco to buy 700MHz airwaves at the auction.