The Rs.18,000-crore share buyback program of TCS has already been oversubscribed 5.5 times, with one more day to go for the closure of the buyback. This is the fourth buyback that TCS has conducted in the last five years to return wealth to shareholders in a tax-efficient manner. Against the company’s intended buyback of 40 million shares, applications for 220 million shares have already been tendered by investors. The buyback is being done at Rs.4,500 per share; 21% premium to CMP. Acceptance ratio could be 14.3%.
Nitin Gadkari underlined that disruptive technologies in the area of green fuels would reduce the cost of electric automobiles. It was likely to come at par with petrol-run vehicles in next 2 years. Nitin Gadkari has been urging Members of Parliament adopt cost-effective indigenous fuels to bring down pollution levels. Gadkari also underlined that hydrogen would soon be the cheapest alternate fuel and called for rapid adoption of hydrogen technologies for transport. Prices of lithium-ion battery are also coming down.
Deepinder Goyal, the CEO of Zomato, who had recent announced the pilot launch of “Zomato Instant” in Gurugram, has come for a lot of criticism on social media. The idea of Zomato Instant is to deliver food orders in 10 minutes flat. Most critics pointed to the traffic hazards it would create and the consequent risk to lives. The new approach was to focus on densely located network of food “finishing stations”. As of now, the model is still work in progress and perhaps the trolls were trying to simply jump the gun.
Bombay High Court has allowed an appeal filed by Invesco against the order granting interim injunction on holding EGM to remove the CEO, Punit Goenka. Invesco has been trying to exercise its rights as the largest shareholder of Zee Entertainment. The bench concluded that the requisition notice sent by Invesco to Zee was not illegal. However, the status quo will be maintained for 3 weeks. Back in Sep-21, Invesco had requisitioned the Zee Board to hold an EGM to remove 3 directors of Zee, including Punit Goenka.
Leading global rating agency, Fitch Ratings, slashed India’s GDP growth forecast For FY23 from 10.3% to 8.5%. This GDP downgrade had been driven by sharply higher energy prices. Fitch noted that subsiding of the Omicron wave had set the stage for a pick-up in GDP growth momentum. However, the Ukraine war and the surge in oil prices had come as a nasty surprise. Fitch also revised GDP for FY22 to 8.7%. Fitch has pointed out that post-pandemic recovery was hit by supply shock, reducing growth and boosting inflation.
S&P has warned that Vedanta Resources could face problems in refinancing its upcoming debt maturities of more than $2 billion over next 6 months. S&P noted that given tightening conditions in capital markets, it could be a tough challenge. The maturities during this period include the $1 billion bond issue due in Jul-22. S&P Global Ratings has assigned “B-“ rating on Vedanta Resources with stable outlook. Vedanta Resources is counting heavily on dividends paid out by Vedanta Ltd to service large part of its debt burden.
Shares of Equitas Holdings and its subsidiary, Equitas SFB, gained more than 10% after their respective boards approved their merger. Under the scheme, Equitas Holdings will amalgamate into Equitas SFB without winding up the transferor company. As per the scheme of amalgamation, equity shareholders of Equitas Holdings will be allotted 231 shares for every 100 shares of Equitas SFB. Post SEBI approval, other regulatory approvals, including NCLT, may take up to additional 6 months more. It is a long term positive.
FMCG companies were under immense pressure with most frontline stocks down 4-5% on growth and input cost concerns. Most of the leading stocks like HUL, GCPL, Dabur, Marico, Nestle and Britannia saw pressure of 2% to 4% on Tuesday. Meanwhile, the spike in raw material prices continues to play havoc on the gross margins of FMCG companies. In most cases, the impact has been between 250 bps and 400 bps. The cost spike has also impacted rural volumes as rural consumers switched to cheaper, inferior brands.