Thursday, 20th May 2021

Indian Oil Corporation posted record consolidated net profit of Rs.21,762 crore for the FY21 in contrast to a net loss of Rs.1,876 crore in FY20. The spike in profits came from inventory gains and an expansion in the sale of high-margin petrochemical products. For FY21, IOCL reported refining throughput of 62.351 MT. For FY21, the gross refining margins or GRM were at $5.64/bbl against just $0.08/bbl in FY20.For Mar-21 quarter, IOCL reported net profit of Rs.9,144 crore against net loss of Rs.8565 crore in Mar-20 quarter. 

Royal Enfield Motors, owned by Eicher Ltd, will recall nearly 236,966 motorcycles across a plethora of models due to defects in ignition coil which could result in misfiring. In extreme cases, it could also result in short circuit and pose a risk to the driver. The recall will apply to Meteor, Classic and the Bullet models which are extensively sold in India, Thailand, Indonesia, Philippines, Australia and Malaysia. The defect has been identified to specific batches of materials source from one of the external ancillary suppliers.

The proposed Rs.4,000-crore share sale in Axis Bank by the SUUTI got subscribed more than twice. The OFS issue was for 522.7 shares but bids were received for 1350 lakh shares from non-retail investors. In fact, most of the bids came at Rs.701, which is a premium of Rs.21 to the floor price of Rs.680. There are about 58 lakh shares that are reserved for retail investors and they will auctioned on Thursday. After this OFS, the SUUTI stake in Axis Bank will drop from 3.45% to 1.50%. SUUTI had sold 0.88% in December 2020.

To assuage the farmers, the central government increased its share of subsidy for Di-Ammonia Phosphate or DAP from Rs.500/bag to Rs.1200/bag. This rolls back the 58% hike in prices announced by fertilizer companies since Apr-21. This higher subsidy will allow fertilizer manufacturers to sell DAP at the old rate of Rs.1200/bag instead of Rs.1,900/bag. This will mean additional fertilizer subsidy of Rs.14,775 crore in FY22. DAP rates were hiked after international prices of phosphoric acid and ammonia spiked by 70%.

Baring Private Equity Asia sold 5.12% stake in Coforge, formerly NIIT Technologies, for Rs.1,008 crore. The sale was done by Hulst BV, an entity controlled by Baring. A total of 31 lakh shares were sold at an average price of Rs.3,250.58 per share in open market transactions. Hulst BV held close to 64% or 3.88 crore shares in Coforge prior to this stake sale. Just in the previous week, Hulst BV had sold another 3.14% stake in Coforge in the market for Rs.616 crore. Coforge net profits were up 17% in Mar-21 quarter at Rs.133 crore. 

Adani Green Energy, will buy SB Energy in an all cash deal for about $625 million. SB Energy is currently owned by Softbank of Japan and Bharti Enterprises. SB Energy is one of the bigger solar power producers. Adani Green has already entered into share purchase agreement with Softbank and Bharti Global to acquire 100% stake in SB Energy. While Softbank holds 80% in SB Energy, Bharti Enterprises holds 20%. Earlier, Softbank had almost closed the deal with Canadian Pension Fund, which eventually fell through.  

Biological-E will produce the Johnson & Johnson COVID-19 vaccine alongside its own candidate. This is likely to substantially boost India’s overall supplies amid a major shortage. Managing Director of Biological E has affirmed that infrastructure and plants would be entirely different for the two product lines. The company could contract-manufacture nearly 600 million doses of the J&J vaccine. Apart from this, the company will additionally produce about 75 million doses of its own vaccine each month starting Aug-21. 

Tata Motors dipped 6% on Wednesday after the huge exceptional write-off to the tune of Rs.14,994 crore triggered profit booking on the counter. Tata Motors reported strong operating performance in the JLR subsidiary and the domestic passenger car and CV business. Despite the net loss in Mar-21 quarter narrowing, the markets were a jittery about write-offs pertaining to asset write-downs and restructuring costs. Tata Motors hopes to gain from macro recovery, volume-margin drivers and higher free cash flows.

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