Wednesday, 11th May 2022

The month of Apr-22 saw a resurgence in flows into debt funds but equity fund flows tapered to Rs.15,890 crore, as investors became cautious amidst volatility. The persistent selling by foreign portfolio investors (FPIs) on Fed hawkishness is also a reason why equity flows have been tepid. SIP flows fell to Rs.11,863 crore in April. However, SIP folios saw robust growth to 5.39 crore. The hybrid funds flows were driven by arbitrage funds while passive funds saw inflows across index funds, index ETFs, debt funds and gold ETFs.

Vodafone Idea reported narrowing of losses to Rs-6,563 crore in Q4 FY2022. Overall revenues for the fourth quarter increased by 6.5% to Rs.10,239 crore while EBITDA for the quarter was up 5.4% at Rs.4,649 crore. Average revenues per user (ARPU) was up 7.5% sequentially at Rs.124, which is still relatively lower than competition. What should hurt the company is that it lost 34 lakh subscribers as its user base fell to 24.4 crore. Vodafone explained that 4G customer had continued to grow on voice and data experience.

We may be see another spike in retail inflation when MOSPI announces the April CPI number on Thursday 12th May. In Mar-22, consumer inflation was 6.95%, which is now expected to spike to 7.5%. This is likely to be led by a combination of higher energy and food prices. While 7.5% is the consensus estimate of Reuters economists, the actual worst case inflation could go all the way to 7.85%. Most of the economists surveyed expect core inflation to have also spiked sharply, paving the way for more rate hikes by the RBI.

Delhivery Ltd managed to place Rs.2,400 crore worth of shares with anchor investors on 10th May, a day ahead of the IPO opening. Anchors included 64 investors, with some top notch FPIs also participating. Some of the FPI participants included GIC Singapore, Tiger Global, Steadview Capital, Schroeder Fund and Goldman Sachs. Many of the leading mutual funds in India were also part of the anchor list. The reduced size of the IPO of Delhivery is Rs.5,235 crore. The fresh issue is Rs.4,000 crore and OFS is Rs.1,235 crore. 

For the March 2022 quarter, Asian Paints reported flat growth in net profits at Rs.874 crore. The bottom line took a hard hit on higher raw material costs, a trend visible for last two quarters. There was also an exceptional loss of Rs.53.7 crore due to loss on their Sri Lanka business. Sales revenues were up 21% to Rs.7,890 crore in Q4FY22. Asian Paints board has recommended final dividend of Rs.15.50 per share. The good news came from the international business which delivered double-digit revenue growth in Q4FY22. 

The stock of Adani Wilmar fell for the eighth straight session to Rs.583. The stock has already fallen 34% from its recent high price of Rs.878. Markets were relatively disappointed by the quarterly numbers. It may be recollected that the stock currently trades in the T2T segment, where only delivery is permitted. Adani Wilmar is a JV between Adani group and Wilmar of Singapore. For FY22, its sales crossed that of Hindustan Unilever, making it the largest FMCG company in India. Post IPO rally has been tad too frenetic.

The listing of Rainbow Children’s Medicare was tepid as the stock listed at a 7% discount at Rs.506 against its IPO price of Rs.542. During the day, the stock touched a high of Rs.517.90 and a low of Rs.421.65. The stock closed the day at Rs.450 on the NSE, a discount of 16.97% to the issue price. This can be largely attributed to negative market sentiments. The issue had been subscribed more than 12 times with the institutional portion being subscribed nearly 39 times. The funds will be used to redeem the NCDs early.

The USFDA problems are back for Sun Pharma. On Tuesday, the stock was 2% lower after the company received 10 observations from the USFDA after inspection of its Halol plant. The stock has already fallen quite sharply after touching its high recently. The re-inspection had been delayed due to the COVID pandemic. Now Sun Pharma is required to submit a detailed response to the FDA on the ten observations. The Halol plant, which manufactures complex drugs for the US market, has been in trouble since 2015.

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