CPI inflation for Jun-21 was marginally lower at 6.26%. While core inflation fell from 6.55% to 6.19%, food inflation spiked from 5.01% to 5.15% due to delayed monsoons. Fuel inflation spiked further to 12.68% while transport inflation came in at 11.56% on consistent spike in diesel and petrol prices. Meanwhile, the IIP growth for May-21 came in at 29.3% yoy, but in sequential terms the IIP growth was down -8%, clearly indicating that COVID 2.0 was taking a bigger toll than expected. Manufacturing IIP was up 34.5% yoy.
MobiKwik Systems filed the draft red herring prospectus or DRHP with SEBI for its proposed Rs.1,900 crore IPO. This IPO will comprise of a fresh issuance of Rs.1,500 crore and an offer for sale of Rs.400 crore. The company is also likely to consider a pre-IPO placement worth approximately Rs.400 crore. Proceeds of the fresh issue portion will be used towards funding organic and inorganic growth initiatives. MobiKwik is largely focused on addressing the unmet credit needs of online transactors under liberal credit terms.
Equitas Holdings and Ujjivan Financial Services rallied up to 20% after the RBI allowed small finance banks or SFBs and its holding companies to apply for the Amalgamation scheme. This would largely do away with the need to reduce the stake of the holdings companies from the current 82% to below 40%. In addition, the holding companies will not be subject to the regular holding company discount any longer. Both the SFB stocks of Ujjivan and Equitas were up sharply. This is subject to approval of the RBI.
Realty stocks were in focus on 12 July as the BSE Realty Index touched a 10-year high. This was on the back of hints of demand recovery in residential real estate after unsold inventory fell sharply in the Jun-21 quarter. Among individual stocks, IBREL was up 14% while Macrotech was up 6% on Monday. Even the stock of Mahindra Lifespace Developers rallied 11% even as other players like Suntech Realty and Godrej Properties also saw smart gains. Consolidation is also helping the realty sector to become more efficient.
Paytm Money, one of India‘s top digital brokers and distributors, announced an innovative feature which allows IPO applications before the IPO opening. It is expected to significantly increase the participation of retail users in IPOs. Paytm Money will inaugurate this facility with the Zomato IPO, clearly targeting a common digital audience. This will ensure that interested IPO investors never miss out on an IPO. Of course, the order will be sent to the exchange only when IPO processing opens, but it is a huge progress.
CCI approved a proposed deal involving SoftBank investing in Swiggy. Incidentally, Swiggy is one of the biggest competitors to Zomato in India. Softbank will look to invest $450 million in Swiggy marking its first wager on the foodtech sector in India. The stake will be taken in Bundl Technologies, which owns and operates the Swiggy platform. This is familiar territory for Softbank, which already owns 22% in global food delivery firm, DoorDash. Softbank was also an investor in Uber Eats, which sold to Zomato in Jan-20.
Maruti Suzuki hiked prices of Swift and all CNG variants to compensate for higher input costs. This is likely to impact the ex-showroom price by nearly Rs.15,000 in Delhi. Maruti also hinted that there would be price increases across models, which will be intimated accordingly. Cost of cars have been adversely impacted by the sharp spike in input costs. Earlier, Maruti had raised prices for different car models in April for the same reason. Even in January, Maruti had cited a spike in input costs and hiked car prices.
A recent proposal by lenders to RCOM suggesting to seek fresh bids despite selecting UVARCL resolution plan, is likely to result in prolonged litigation. This was necessitated after another plan by UVARCL for Aircel was not approved by the RBI, despite being approved by NCLT. Under the IBC, there is no provision for calling for a rebid once the plan is approved by the lenders. COC can only call for fresh bids in the event of failure or withdrawal of a resolution plan. In case of rebidding, the COC will again need NCLT approval.