Even as Indian markets remained closed on 01-March, Brent crude surged 8% to $105.80/bbl, scaling the highest level since August 2014. Members of the IEA will release about 60 million barrels of oil from the strategic petroleum reserves (SPR) to cool oil prices that have shot up amidst the Ukraine stand-off. OPEC is unlikely to hike beyond 400,000 bpd so pressure will remain. Global oil markets are also worried about how Russia would react to the tough sanctions. Meanwhile, BP and Shell plan to exit Russia completely.
With the rising global uncertainty and the consistent selling by FPIs amidst risk-off sentiments, India may take a relook at the timing of the LIC IPO. The government was expected to announce LIC IPO opening on 11th March, but that looks doubtful now. Considering the size and the prestige attached to the issue, the government may not want to take a chance in these difficult times. LIC was supposed to raise close to Rs.66,000 crore and help the government meet its divestment target for FY22. Now it may move to FY23.
With Q3 GDP growth coming in at 5.4% and the second advance estimates (AE) pegging India’s FY22 GDP growth 30 bps lower at 8.9%, economists have also started lowering their full year GDP estimates for FY22. RBI had forecast 6.6% for Q3. Most economies are pegging some dampening of economic activity in Q4 on account of Omicron variant. In addition, a combination of factors like higher crude prices, higher bond yields and supply chain constraints caused by the Ukraine war were also likely to impact FY22 GDP.
The markets may be tentative but the equity cult is not. One of the finest indicators is CDSL crossing the 6 crore demat accounts mark. Incidentally, CDSL moved from 5 crore demat accounts to 6 crore accounts in just 3 months flat. According to CDSL, the focus of fresh demat account registrations has shifted sharply from the urban centres to the semi-urban and rural areas, which are now contributing the bulk of fresh demat accounts. However, with a population of over 135 crore, the potential to grow is still phenomenal.
It may be a setback to the revival plans of Air India and to the Tata group as Ilker Ayci, former chairman of Turkish Airlines, declined the offer to be the CEO of Air India. In the last few days, sections of the media had tried to give a different colour to his appointment. Ilker Ayci is a former advisor to Turkish President, Tayyip Erdogan, who is a staunch ally of Pakistan. The Swadeshi Jagran Manch had highlighted this aspect on the grounds of national security. Ayci felt it was not feasible to accept the offer in these circumstances.
Elin Electronics received SEBI approval for its Rs.760 crore IPO. Elin operates in Electronic Manufacturing Services (EMS) and outsources design and manufacturing. Its IPO will comprise of a fresh issue of Rs.175 crore and an OFS of Rs.585 crore. Proceeds from the fresh issue will be used to repay debt as well as to fund working capital and the expansion of existing plants. The key products in its EMS business vertical include LED lighting, fans and switches, small appliances, fractional horsepower and other EMS products.
Biocon Biologicals, which just paid $3.3 billion to buy the biosimilars business of Viatris, plans to launch an IPO in the next 2 years. This was confirmed by Kiran Mazumdar-Shaw. It will include a cash payment of $2 billion. However, the street did not react very positively to this expensive deal as the stock fell 11.5% on Monday. Analysts are worried since Biocon paid nearly 16 times EBITDA, which is on the higher side. Biocon Biologics was valued at $4.9 billion in its last financing round and this deal could take it $8 billion.
Madhabi Puri Buch become the first lady and also the first person from the private sector to be appointed the chairperson of SEBI. She replaces Ashok Tyagi. Madhabi gets a tenure of 3 years. She has been the whole time member (WTM) of SEBI for last 4 years. As WTM, Madhabi handled surveillance, mutual funds, and collective investment schemes. She assumes charge at a time when the markets are extremely jittery amidst geopolitical risk. SEBI will also have to ensure that the mega LIC IPO is steered without any hassles.
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