A recent note circulated by Nomura has pointed that Indian Mutual funds hold 20% of all AT-1 and Tier-2 bonds issued by banks. That means; out of a total issue of Rs.350,000 crore, mutual funds hold nearly 70,000 crore, equally distributed between AT-1 bonds and Tier-2 bonds. This data assumes importance in the light of the objections by the banks and the mutual funds to the change in rules pertaining to AT1 bond provisioning proposed by SEBI. The regulator had wanted to prescribe a mandatory 100-year tenure for AT-1 bonds and also restrict exposure of any particular AMC to a bond to not more than 10% of AUM.
For the month of Feb-21, India’s merchandise exports rose 0.67% to $27.93 billion resulting in the trade deficit narrowing on a sequential basis to $12.62 billion. On a yoy basis, the merchandise imports were up 6.96% at $40.54 billion. For the 11-month period from Apr-20 to Feb-21, exports were cumulatively lower by 12.23% at $256.18 billion, while the merchandise imports for the 11-month period were lower by 23.11% at $340.80 billion. In terms of export growth, segments like cereals, oil meals, iron ore, rice, carpets, spices and pharmaceuticals were the major growth drivers. However, exports of products like oilseeds, leather, petroleum products and cashew were down on a yoy basis. The total trade value measured as a sum of imports and exports has been steady over the last 3 months at around $69 billion
The bank strike may have resulted in cheques worth Rs.16,500 crore stuck on Monday but that hardly dented the enthusiasm for the Laxmi Organic Industries IPO. By the close of the first day of the issue, Laxmi Organic had seen 1.88 times subscription. Normally the HNI and QIB subscriptions tend to get bunched on the last day of the issue. Laxmi IPO comprises Rs.300 crore fresh issue and Rs.300 crore by way of OFS. The issue is priced in the band of Rs.129-130. Meanwhile, MTAR Technologies, based out of Hyderabad, saw 88% premium on listing on 15 March. The stock closed 2.5% above the listing price.
Natco Pharma will shortly launch its first green label Pheromone product. This agrochemicals is used to manage the Pink Bollworm in cotton crop during Kharif season. It may be recollected that Hyderabad based generic drug manufacturer, Natco Pharma, had diversified into agrochemicals just 2 years back. This is the first pheromone based indigenous product for mating disruption to prevent proliferation of the Pink Bollworm, which posed a major challenge to cotton farmers in the last few years. The Natmate PBW will help farmers and seed producers develop an Insect Resistance Management or IRM Plan for cotton.
In a rare instance, Kesoram Industries plans to raise as much as Rs.1,604 crore via the issue of rupee-denominated junk bonds maturing in Feb-26. These bonds have an escalating coupon with yields as high as 21% and has been rated “D” by CRISIL. Kesoram had defaulted on debt and the intense competition in the cement sector has worsened its finances. The proceeds from the issue of these junk bonds will be used to partially repay existing loans and overdue liabilities. The company has defaulted on Rs.4,600 crore worth of debt as of Dec-20. Kesoram is more than 100 years old and is part of the Birla group.
Kotak Investment Advisors or KIAL, an alternate assets investor, and Allianz Investment Management announced a partnership for investing in the Indian private credit market. Allianz also made its maiden credit investment of $150 million in KIAL’s 11th Real Estate Debt Fund, which focuses on early and late-stage real estate projects across India. While Allianz will bankroll the partnership, Kotak brings its deep expertise in tapping the right investment opportunities in India. The idea of the partnership is to participate in the best private debt opportunities in India and play the post-pandemic recovery. KIAL is a subsidiary of Kotak Bank and was established in 2005 to focus on alternate assets. KIAL has raised a total sum of $4.6 billion via PE funds, real estate Funds, Special Situations Fund, Listed Strategies etc.