LIC is likely to offer discount of around 5% to its policyholders when it files its DRHP later this week. Tuhin Kant Pandey indicated that LIC may file its DRHP on 10-February. Even the retail bidders and employees of LIC are likely to get a concessional price in the IPO. While the embedded value of LIC has not been announced, it is estimated to be well above Rs.5 trillion. LIC IPO will be a mix of fresh issue and OFS. The government is likely to sell 5-7% in the IPO, to raise around Rs.65,000to Rs.75,000 crore from the issue.
National Aluminium Company reported strong quarterly results in line with most of the metal companies in the quarter. In fact, NALCO profits surged more than 3 times at Rs.830.67 crore in the Dec-21 quarter. For Q3, the quarterly total sales came in at Rs.3,845 crore up 59% on yoy basis. NALCO declared a final dividend of Rs.1 per share taking the total dividend per share for the year to Rs.3.50 per share. Like most of the aluminium companies across India, NALCO also gained from robust volumes and high metal prices.
The government decided to cancel the bond auctions on Feb-11 following a sharp spike in the 10-year benchmark yields to 6.9%. In the Union Budget 2022, the government had pencilled in a sharp spike in total borrowings for FY23 at Rs.14.95 trillion which is nearly 25% higher on a yoy basis. The yields on 10-year bonds had spiked after that announcement. The RBI will announce the last monetary policy of FY22 on 10-Feb. Several bond auctions in the past had to be dropped due to the high yields demanded by banks.
Moody’s Investor Service expects the acquisition of Neelachal Ispat by an arm of Tata Steel to be credit positive as it will increase Tata Steel’s long-steel production capacity as well as its iron ore reserves. In Jan-22, Tata Steel had won the bid for a 93.71% stake in Neelachal Ispat for a sum of Rs.12,100 crore. NINL has long steel producing capacity of 1.1 MTPA plus iron ore reserves of 100 million tonnes. However, NINI is loss-making and it is hoped that roping in Tata Steel will give them traction with a bigger balance sheet.
Ground reports from dealers on passenger vehicle sales is not encouraging. FADA reported 10.12% fall in passenger vehicle (PV) sales to 258,329 units for the previous month. While the demand is not the issue at this point of time, the constraints come from the supply side wherein the shortage of microchips globally has forced many auto companies to cut down on production. Even two-wheeler sales last month fell by 13.44% to 10,17,785 units in January 2022. Rural distress has been a key reason for weak demand.
It looks like Indian blockchain companies may have finally arrived. Blockchain start-up, Polygon, has raised $450 million at a valuation of around $10 billion. This is the biggest funding round in emerging digital tech. Funding was raised by a private sale of its native Matic token and the funding round was led by Sequoia, Softbank and Tiger Global. Polygon is an Ethereum scaling platform. This platform enables developers to build scalable and decentralised apps with extremely low transaction fees without sacrificing on security.
CDSL, India’s largest depository in terms of number of accounts and second largest by custody value, reported stellar numbers for Q3. Net profits were up 55% at Rs.83 crore while the total income for the quarter was up 58% at Rs.163 crore, ensuring a healthy net margin of over 33%. CDSL had already crossed the 5 crore demat accounts mark few months back. The major shareholders of CDSL include BSE, Standard Bank, HDFC Bank and LIC. The stock has been a top performer; appreciating by 3-fold in the last one year.
RBI is in discussions to allow select NBFCs to issue credit cards on a standalone basis. However, NBFCs will only be allowed to issue co-branded credit cards with banks. RBI is also likely to stipulate additional conditions for the same. In the previous year, nearly 44% of Fintech funding had gone to digital lending start-ups. NBFCs already account for 20-30% of overall credit so it is only logical. While 550 million people in India have documented credit history, there are 67 million credit cards against 944 million debit cards.