Wednesday, 17th November 2021

CLSA is of the view that the RBI would sustain low interest rates to boost demand in the economy for some more time. The logic is that even if the RBI tightens, rates were so low that lending rates would take some time to react. CLSA expects the RBI to retain accommodative stance but continue to soak surplus liquidity. They are also of the view that the reduction in central and state tax on fuel plus a good harvest should help keep inflation in check. However, CLSA sees 100 bps rate hike happening in fiscal 2022-23.

Akasa Air, backed by Rakesh Jhunjhunwala, has placed orders for 72 Boeing 737 Max aircraft. The new ultra-low cost airline is expected to be launched in mid-2022. The deal is valued at $9 billion and will be one of the biggest orders that Boeing has got from the fast growing Indian market. India’s largest airline, Indigo, continues to be a loyal customer of Airbus. Akasa plans to induct 20 aircraft in the next one year. It is in talks with lessors for a sale and leaseback arrangement, which is common in the airline industry. 

Like Moody’s, Fitch also maintained India’s rating in the “BBB+” grade. However, unlike Moody’s, Fitch did not raise the outlook for India and has maintained the outlook as Negative. Fitch did admit that the sharp recovery from COVID-19 and COVID 2.0 had raised the medium term growth outlook for India. The negative outlook is due to the highest level of fiscal deficit and the consequent medium term trajectory of debt. Fitch has pegged GDP growth at 8.7% for FY22 and 10% for FY23. Fitch still sees downside risks.

Go Fashion placed a total of 66,10,492 shares with anchor investors a day ahead of the IPO opening. The placement was done at the upper end of the price band at Rs.690 valuing the total anchor placement at Rs.456 crore. The QIB component will be reduced proportionately. Big investors in the anchor placement included Government of Singapore, Monetary Authority of Singapore, ADIA, Fidelity, Neuberger Berman, University of Notre Dame, SBI MF, HDFC MF, ICICI Prudential MF, Axis MF, Birla MF, SBI Life and others.

PB Fintech, the holding company of Policybazaar and Paisabazaar, has had a solid performance post listing on the bourses. After a strong debut on Monday, PB Fintech rallied further to Rs.1,397 and gained up to 43% from the issue price of Rs.980. The market cap of PB Fintech scaled Rs.60,842 crore placing the stock in the top-100 in India in terms of market cap. Policybazaar is India’s largest digital insurance marketplace, with a market share of over 93%. It sold 20.7 million policies on its platform to 10 million unique clients. 

The LIC IPO may finally see a DRHP filing in early December 2022. Investment bankers are expected to start reaching out to potential anchor investors from the coming week to gauge interest and demand. LIC is likely to be the biggest share sale in Indian history. Depending on whether the government decides to sell 5% or 10%, the issue size could be anywhere between Rs.60,000 crore and Rs.100,000 crore. DIPAM is pushing to complete the IPO process before March 2022. The IPO will be led by 10 investment bankers.

CA Hull Investments, a unit of Carlyle, and Viyash Life Sciences have established an integrated generic pharmaceutical platform in India. Viyash is a manufacturer of active pharma ingredients or APIs and has a strategy to consolidate other pharma intermediates, API and formulation assets to create an integrated platform for large generics customers. The two promoters of Viyash were formerly in senior positions in Mylan Laboratories and Laurus Labs. Viyash has 10 manufacturing facilities in India and 1 unit in the US. 

Indian Overseas Bank has reported gross NPA divergence of Rs.700 crore for the year ending March 2021. While IOB had reported gross NPAs of Rs.16,323 crore, RBI had assessed the actual gross NPAs at Rs.17,023 crore. IOB has also stated that the divergence in provisioning was to the tune of Rs.185 crore and if that higher cost is factored in, then the revised net profit would stand at Rs.646 crore. While IOB had assessed its net NPAs at Rs.4,578 crore, the RBI assessment of net NPAs came in at Rs.5,278 crore.

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