The trade data for October 2021 released by Ministry of Commerce shows exports rising to $35.65 billion for the 11th consecutive month. Exports were 43% higher yoy. Export demand was robust for engineering goods, petroleum products, gems and jewellery plus organic and inorganic chemicals. However, imports were elevated in October at $55.38 billion resulting in a trade deficit of $19.73 billion in Oct-21.Out of the total imports, non-petroleum & non-jewellery imports were $32 billion. Overall deficit widened in Oct-21.
Apollo Tyres is planning a price hike in the range of 3-5% for Indian markets to offset some of the impact of rising commodity prices. Till Sep-21 this year, Apollo had already hiked prices by 9% on an average. Apollo continues to under-recover even at higher prices. Most of the inputs have been under tremendous inflationary strain due to supply chain bottlenecks. In Q2, the raw material costs had spiked by 61.9% yoy. However, Apollo Tyres confirmed that demand for tyres was robust in the OEM and replacement market.
Macrotech Developers announced a Qualified Institutional Placement (QIP) of up to Rs.4,000 core via share sale, diluting equity by around 7.5%. The base price has been set at Rs.1,184.70 per share and being a QIP, only institutions can participate. Macrotech had gone public in April 2021 and the stock has gained more than 100% despite a tepid response to the IPO. The company plans to become a zero-debt company and focus on middle-income, affordable housing as well as the lucrative industrial and logistics segment.
The Zomato stock was trading 5% higher and it has gained more than 20% in last 3 treading sessions. The trigger came from the recent announcement by MSCI that Zomato would be included in the MSCI India index. This would result in a rush of passive money into Zomato with index funds and ETFs buying Zomato as part of portfolio rebalancing. Zomato has focused more on top line growth than on profits and that has struck the right chord with analysts and investors. Price targets are in the range of Rs.180-220 for Zomato.
The Finance Ministry and SEBI are working to bring digital gold and crypto assets under regulatory ambit. There have been concerns over unregulated growth of these asset classes. Unlike gold bonds or gold ETFs, which are regulated by RBI and SEBI, digital gold is not regulated by either of them. That makes digital gold open to counterparty risk. In this context, one solution would be classify digital gold as a security by modifying the SEBI Act and SCRA. SEBI has already barred registered brokers from dealing in digital gold.
Indian corporates witnessed a total of 221 deals worth $9.2 billion in Oct-21, hinting that deal street was back in action. There were a total of 61 M&A transactions in October 2021 worth $3.3 billion. Domestic consolidation accounted for 79% of M&A volumes. The biggest deal in the month was the $2.4 billion deal by Tata Sons to absorb Air India. Private equity flow in Indian companies stood at $5.9 billion across 160 deals. The biggest PE deal was the $1 billion TPG stake in TAMO EV business. Hospitality deals led the way.
Phoenix Mills and Canada Pension Fund (CPP Investments) entered into a JV to develop an office-led, mixed-use asset in the Lower Parel area of Mumbai. This property is part of Phoenix Palladium in Mumbai. The project will be completed by 2026. CPP Investments will invest Rs.1,350 crore in tranches for a 49% stake in the property. It will help to develop office space with potential leasable area of 1 million SFT and retail space of 0.20 million SFT. Cumulatively, CPP Investments has committed Rs.4,100 crore to Phoenix.
WPI inflation, which is the best proxy for producer inflation, spiked to a 5-month high of 12.54% in Oct-21. The triggers were fuel and manufacturing prices. This is indicative of sustained cost push inflation impacting profit margins of Indian companies. WPI inflation was just 10.66% in Sep-21. While the CPI inflation focuses more on consumer prices, WPI gives an idea of producer prices. For Oct-21, wholesale fuel and power prices rose 37.18% while manufacturing inflation was 12.04% triggering input cost spikes.