In a span of just 2 days, the Sensex gained over 2,000 points adding to investor wealth by Rs.7.50 trillion in the process. The markets got a boost from the RBI decision to maintain status quo on repo rates and the accommodative stance of the policy. Also, news flows indicated that the Omicron was unlikely to be too lethal in its impact. There were gainers on the Nifty and Sensex across the board with even the Advance / Decline ratio deeply favourable. Markets are also betting the FPI flows would return in 2022.
The RBI monetary policy on 08-December was largely along expected lines and actually more dovish than anticipated. The RBI held the repo rates at 4% and the reverse rates at 3.35%. The MPC members also voted 5:1 in favour of holding the accommodative stance of the monetary policy. The RBI maintained its growth forecast at 9.5% real GDP growth for FY22 but downsized the growth targets for Q3 and Q4 of FY22 due to the lag effect of the Omicron. However, the inflation target was kept static at 5.3% for FY22.
Gold loans are getting cheaper as the competition is heating up between banks and NBFCs. Meanwhile, the demand for gold loans has surged with the revival in the economy overall. In the last few years, NBFCs like Muthoot and Manappuram grabbed a chunk of the gold loan business and now the banks are getting aggressive in this space. Gold loan has also got a boost from the sustained uptrend in rural demand and the unorganised sector getting back to growth. Median gold loan cost has fallen from 18% to around 14%.
IPO-bound Delhivery, the digital logistics unicorn, acquired Transition Robotics of the US. This California-based company focuses on developing unmanned aerial system platforms. The size of the deal was not disclosed. Delhivery looks at UAV delivery as a long term investment in its logistics front-end. Delhivery has already filed documents with SEBI for its proposed Rs.7,500 crore IPO, and is expecting regulatory approval soon. Delhivery fulfilled over 1 billion shipments since inception and services 21,000 customers.
One of the most prolific inorganic digital education growth stories, Byju’s, acquired GeoGebra based in Austria. Byju’s already has over 11.5 crore students on its learning platform and the GeoGebra offering will add value to the offering of Byju’s. GeoGebra offers an interactive mathematics learning tool and it will continue to operate as an independent entity. GeoGebra has a community of over 100 million learners on its platform. In last few years, Byju’s acquired K-12, Tynker, Epic, Akash Learning, TutorVista etc.
Star Health, India’s leading health insurer with a 15.8% market share, cut the size of its IPO from Rs.7,249 crore to Rs.6,400 crore. The IPO failed to get fully subscribed and got just 79% subscription in the non-anchor portion with the HNI portion getting grossly undersubscribed. Star Health is incidentally backed by the redoubtable Rakesh Jhunjhunwala but that that did not enthuse too many investors to put their money in the IPO. The big test will be the IPO listing on 10-December as it is already at a GMP discount.
Devyani International, which had listed recently, has hit an all-time high of Rs.182 on the back of volumes. Devyani also got a boost from MSCI including the company in the MSCI India Domestic Small Cap Index. It may be recollected that Devyani International is the largest franchisee of Yum Brands that includes marquee names like KFC, Pizza Hut and Costa Coffee. It turned around to report a profit of Rs.46.6 crore in the Sep-21 quarter. QSR as an industry has been seeing consistent upgrades to its earnings estimates.
Reliance BP Mobility, the joint venture between Reliance Industries and BP, signed a non-binding MOU with Mahindra Group, to explore creation of EV products and services as well as looking for areas of collaboration in low-carbon and conventional fuels. The deal will also evaluate charging solutions by Jio-BP for Mahindra vehicles. Mahindra will also set up Jio-BP Mobility Stations as well as EV charging and swapping points. They will explore models like Mobility as a Service (MaaS) and Battery as a Service (BaaS).