S&P affirmed India’s sovereign rating at “BBB-”, which is the lowest investment grade rating. However, S&P maintained a stable outlook on macroeconomic recovery hopes. S&P expressed confidence that the recovery would improve the credit profile, although they did warn about too much of fiscal looseness, in the light of the burgeoning fiscal deficit. S&P appreciated India’s external buffers as well as the 34% boost to capital spending in the 2021 Union Budget. S&P noted that India needs to move towards rapid reforms.
Adani group announced that it had taken over management and control of MIAL from the GVK Group. Meanwhile, Gautam Adani promised to build an airport ecosystem of the future for business, leisure and entertainment, apart from creating thousands of local jobs. Additionally, Adani will also commence the construction of the Navi Mumbai International Airport from Aug-21. The new airport will be functional in 2024. With MIAL, AAHL will now control 33% of India’s air cargo traffic. In 2019, Adani had won 6 airports.
The last mutual fund NFO to create a storm was Reliance Natural Resources Fund in 2007, which saw unprecedented collections. The latest NFO, ICICI Prudential Flexi Cap, which closed on 12 July, mobilized Rs.9,700 crore. This is the highest mobilization by an actively managed open-end equity fund. ICICI Pru confirmed that over 4 lakh retail investors had invested in the NFO while 15,000 distributors had been engaged in selling the NFO. The fund will have a flexible allocation to large caps, mid-caps and small caps.
Bank of Maharashtra fixed a floor price of Rs.24.89 a share for its proposed QIP worth Rs.2,000 crore. BOM is likely to offer a 5% discount on the floor price at its discretion. The base size of the issue is Rs.1,000 crore with Greenshoe option of another Rs.1,000 crore. This issue will reduce the government stake in BOM from 94% to below 85%, while capital adequacy will improve to 18%. BOM will use the funds for expanding its loan book at a rapid clip of 16-18% in FY22. Gross NPAs have fallen from 18.64% to 7.23%.
Mindtree, now part of L&T group, reported 61% growth in net profit at Rs.343.40 crore for the Jun-21 quarter. Profits were also up sequentially. In dollar terms, revenues grew 7.7% sequentially. The company gets maximum revenues from the CMT vertical followed by the technology vertical and then from BFSI. In terms of geographical spread, North America still accounts for 77% of revenues. The company also saw its order book touching $504 million with a strong digital franchise. EBITDA margins stood at 20.3%.
On the PNB Housing equity placement issue, the SAT said that SEBI was trying to pre-empt the outcome of the PNB Housing EGM. The SAT was of the view that SEBI should have ideally waited for the completion of the EGM to pass the order. Sebi, on its part, justified its action saying that the proposed allotment will have impacted minority shareholders. The PNB Housing preferential allotment to Carlyle was objected to by proxy firms on grounds of propriety, corporate governance and the absence of control premium.
A day ahead of its IPO, Zomato allotted shares worth Rs.4,196 crore to anchor investors. A total of 55.22 crore shares were allotted to 200 foreign and domestic investors. The allotment was done at Rs.76 per share, which is the upper end of the band. Marquee participants in the anchor placement included Tiger Global, BlackRock, Axis MF, SBI MF and HDFC MF. The anchor book is estimated to have been subscribed more than 30 times with total interest worth more than Rs.100,000 crore. The issue size is Rs.9,375 crore.
Telecom subscriber numbers for April showed some impact of the lockdown, although Vodafone came under a lot of pressure. According to TRAI, net subscriber addition in Apr-21 was tepid at just 2.2 million. This is in contrast to monthly average additions of close to 5.4 million in the previous 6 months. While Jio added 4.8 million subscribers in Apr-21, Airtel added 0.5 million Vodafone lost 1.8 million subscribers. This means that any tariff hike may not happen for now, which is not encouraging news for Vodafone Idea.