In its latest classification of companies by market cap, the AMFI upgraded Policybazaar, Zomato, Nykaa and Paytm, apart from 9 other stocks to the large cap category. The others to be included in the large cap category include Mindtree, SRF, IRCTC, Tata Power, Mphasis, Godrej Properties, Macrotech Developers, Bharat Electronics and JSW Energy. At the same time, 20 companies were lowered from large caps to mid-caps. This is likely to see some fresh inflows from the large cap and diversified mutual funds in India.
In a positive move for the sugar industry, the Government issued guidelines for restructuring loans taken by sugar mills; including a 2-year moratorium and repayment time of five years. This is subject to the sugar companies meeting basic criteria and pertain to loans taken from the sugar development fund (SDF). The total outstanding default is Rs.3,100 crore. The rate of interest will be the prevailing bank rate on the date of approval of rehabilitation package. This is likely to help in substantial reduction of debt burden for mills.
In a surprising U-turn, a 2-judge bench of the Delhi High Court stayed the Amazon-Future arbitration over the Rs.24,500 crore merger deal between Future Group and Reliance. Just a couple of days back, a single-judge bench of the same High Court had refused to interfere with the process at the Singapore International Arbitration Centre (SIAC). Their argument was that if the stay was not granted to Future group, it could cause irreparable loss to them. Amazon has accused FRL of violating their mutual contract.
The stock of Greaves Cotton was up 11% at Rs.171 supported by heavy volumes. Greaves Electric Mobility plans to double its production capacity to cater to the growing EV demand in India. Greaves is a leading manufacturer of eco-friendly 2 and 3-wheelers and had sold over 10,000 units in Dec-21. Greaves Electric Mobility is currently working on a new array of products, including a high-speed electric scooter and an electric three-wheeler cargo vehicle. This will give them a strong hold on the last mile delivery space.
Tata Communications is another stock that has rallied sharply in the last few days and recently touched an all-time high price of Rs.1,542. On 31-December, the stock was added to F&O. The rally in the stock intensified after Tata Communications won a deal from Zain KSA to fuel digital transformation of private and government organisations in the Kingdom of Saudi Arabia (KSA). Tata Communications will provide KSA with sophisticated technologies like IOT, 5G, Managed Security Services, SDWAN and many others.
With the rise in Omicron cases in India, economists are already look at the sunny side of the pandemic. They expect that the uncertainty created by the new variant may dissuade the RBI from opting for a hawkish policy in February. RBI may end up delaying the normalisation of liquidity and rates. It is believed that the MPC may prefer to err on the side of caution as the Omicron is already likely to impact the output in the Mar-22 quarter. Economists expected reverse rate repo hike in February, but that may be put off.
The one thing the pandemic has underlined is the need to skilfully and innovatively use technology. One change that is visible is the higher allocation to R&D. Tata Elxsi has been aggressively investing in R&D to enhance its electronics packaging, AI and data analytics offerings. HAL has used R&D to grow its order book to a formidably Rs.80,600 crore. In good old pharma, Lupin enhanced its R&D as a share of net sales from 8% in 2013 to 11.5% in 2021. Finally, there is Tejas Networks spending 23% of revenues on R&D.
Delhivery, the digital logistics company that is planning to launch its mega IPO soon, invested in Falcon Autotech, a logistics automation solutions provider. The synergy will come in the form of future-ready hardware solutions. Falcon provides logistics automation, sortation systems and warehousing systems. For Delhivery, this would mean greater speed, precision, and efficiency in service delivery. Delhivery runs 20 automated sortation centres, 124 gateways and 83 fulfilment centres providing integrated logistics.
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