For the month of April 2024, In the stock market even as the headline inflation stayed almost flat at 4.83%, the food inflation came in higher at 8.7%, showing that pressure on food prices is still on. The pressure came from the core food basket of vegetables, cereals, and pulses. However, fuel inflation and core inflation continued to remain subdued. The RBI has been closely tracking the inflation date to take a view on rate cuts, post the full budget presentation. This data comes a day after IIP growth for March 2024 came in tad lower at 4.9%.
The new fund offerings (NFOs) by Indian mutual funds are slated to hit a new high during the year. In 2024 so far, the mutual funds have already launched 67 new schemes with more than 7 months still to go in this year. Between 2021 and 2023, the number of equity and hybrid fund NFOs crossed 100 mark in each of the years. There have been a large number of passive fund that have also been launched in this space, and that is largely thanks to the slew of new indices launched by the NSE and the BSE in the last one year.
Piramal Pharma, part of the Piramal Group, will push ahead with brownfield expansion combined with lowering of debt. Subsequently, it will also take up inorganic growth through mergers and acquisitions, as part of its growth strategy. In the FY24, Piramal Pharma cut its total debt from Rs4,781 crore to Rs3,932 crore, resulting in the net debt to EBITDA ratio falling from 5.6X to just 2.9X. The company also plans to invest over Rs700 crore in brownfield expansion during fiscal year FY25. Stock price is up sharply in 2024.
Novelis, the Canadian subsidiary of Hindalco Ltd, filed with SEC for its proposed IPO. The price band and other details are yet to be decided. Morgan Stanley, BOFA Securities and Citigroup will act as the book running lead manages (BRLMs) to the issue. The IPO size is expected to be $1.2 billion and the IPO will be done at a valuation of $18 billion. Novelis is the world’s largest producer of flat rolled aluminium products, with applications from automobiles to beverage cans. Hindalco acquired Novelis in a mega deal in 2007.
DLF, India’s leading real estate company, reported 61.5% growth in net profits to Rs921 crore for the fourth quarter ended March 2024. For the financial year FY24, the net profits were up 33% at Rs2,733 crore. For the fourth quarter, the net revenues were up 47% at Rs2,135 crore, while the full year revenues for FY24 stood at Rs6,958 crore. DLF also reported a 90% jump in EBITDA at Rs755 crore while the EBITDA margins for Q4FY24 expanded by 790 bps to 37.3%. DLF Ltd recommended a dividend of Rs5 per share.
UPL Ltd, the beleaguered specialty chemicals company, will file DRHP soon to raise $500 million or Rs4,200 crore via rights issue. Board approval has been received and the rights issue is expected to happen around the third quarter of FY24. Out of the $500 million raised, nearly $210 million will be allocated for capital expenditure, of which nearly 40% will be towards addition of tangible capacity. The capex will also be used for its seeds and crop protection business, and specialty chemicals business. Some part is for intangibles.
Shriram Finance plans to sell Shriram Housing Finance to Warburg Pincus for a consideration of Rs4,630 crore. The deal will be consummated through the issue of equity and convertibles in Shriram Housing to Warburg Pincus. Earlier, Shriram Finance had plans to unlock value in Shriram Housing, but has now opted to sell a controlling stake. Currently, Shriram Finance holds 84.82% in Shriram Housing while Valiant Cap of the US holds 14.94%. Valiant will also be fully divesting its stake in Shriram Housing as part of the deal.
Amidst volatile commodity markets and impending debt repayments, Vedanta is planning an FPO / rights issue to raise fresh funds. It targets to reduce its net debt by $3 billion over the next 3 years. Vedanta still sits on a massive debt pile of Rs56,338 crore and needs to urgently wind down its debt to improve its cash flow and solvency ratios. The impact was felt in the latest quarter when the net profits fell by 27% on account of surging finance costs. Of course, weak prices zinc, copper and aluminium were also key factors
