Axis MF added most folios in FY21; followed by ICICI, whereas HDFC loses client base
The Axis Mutual Fund beat the top three mutual funds in the industry to record its largest addition to new folios in FY-21. It added 20,42,150 new folios in FY-21 whereas ICICI added 20,42,016 new folios. In this, ICICI remained the winner in the top three which include HDFC Mutual fund & SBI Mutual fund. Mirae AMC also managed to add another 8.26 lacs new folios in this similar period, whereas ABSL AMC lost 1.20 lacs folios.
The increasing investor awareness along with the right asset allocation since years helped Axis Mutual fund to come up as a leader for the said period, whereas, for ICICI AMC, sectoral funds where it has dominance in the IT & Pharma sector funds might have played a pivotal role in the performance of the AMC, whereas acc. to the ICICI AMC’s MD & CEO, Mr. Nimesh Shah, delivering good returns throughout all market cycles with zero default rate for nearly two decades helped them throughout.
The story of IPOs to look out for
The Ed-Tech Startup Byju’s is planning to go public before April 2023. On April 5, the startup acquired Aakash Educational Services Ltd. cracking a deal worth $1 Billion (7300 Cr.) marking its biggest acquisition to date. Byju’s, the most valued ed-tech startup in the country, is backed by marquee investors like Mary Meeker, Yuri Milner, Chan-Zuckerberg Initiative, Tencent, Sequoia Capital, Tiger Global and others. It is estimated to have raised over USD 2 billion in funding to date.
As the Pandemic situation has enticed the educational systems all over the world to restructure the way they work, Byju’s should be an interesting IPO to watch out for. While the current valuation of Byju’s is $16.5 Billion which is amongst the highest globally whereas that of Unacademy stands at $2 Billion.
Vedanta gets a nod to acquire Videocon
The Bankruptcy court of India gave a nod to Anil Agarwal’s Twin Star Technologies (a part of the Vedanta Group) to acquire Videocon Industries Ltd. The company will put up 5 billion rupees within 90 days and the rest as non-convertible debentures over a period of time.
Videocon’s debt stood at over 635 billion rupees in 2019, out of which, 574 billion rupees was owed to over three dozen banks and other financial creditors.
Paytm IPO moves an inch ahead
Recently Paytm came up with a draft red herring prospectus that gives the employees of the company the option to sell their shares ahead of the IPO. The company, whose investors include Berkshire Hathaway Inc., SoftBank Group Corp., and Ant Group Co., is seeking to raise about 218 billion rupees ($3 billion) at a valuation of around $25 billion to $30 billion.
Paytm’s public market debut will include a mix of new and existing shares to meet regulatory obligations in India. The country’s regulations require that 10% of shares are floated within two years and 25% within five years. Paytm Is Said to Target $3 Billion IPO, Largest Yet in India.
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Positive Start of Financial Market for FY-22
- The FY 2021-22 came up with a ray of hope and positivity as the Financial Markets regained Momentum and the Indian Economy witnessed Traction in the Manufacturing & Other Economic Activity, despite the rising cases of COVID amidst the splurge of Second-wave in the Country.
- The IMF (International Monetary Fund) projected the GDP Growth of India to be 12.5% for the coming Fiscal Year, which is the highest amongst the Emerging Economies.
- The DII’s were the Drivers in the First month of FY- 2021-22 as they Invested Approx. 9,900 Cr. In the Indian Markets, whereas amidst the Rising tensions amidst the second wave of COVID and negative sentiments, the FPIs pulled out their money from the markets after a brief period of nearly 6 months.
- Fearing the second wave, the Promoters of many companies look to file an Asset Protection Trust that would provide a cushion against investigations, in case of defaults & bankruptcy.
- View- This move will enable the Lenders to cushion their Contingency Reserves & allow them to tackle adverse situations arising out of Defaults, once they come out of the ‘Moratorium Mode’.
Outlook on Sectors to be affected
- The Hospitality Industry which includes Restaurants, Aviation, Travel & Transport will yet again be affected due to the Local Restrictions from the State Governments in order to curb the Second wave of Covid.
- Aviation Industry is likely to be affected worse even than the first wave, as the DGCA has Extended the Ban on International Travel till 31st May’21. The Airlines have declared that the Bookings have declined by nearly 50% which will also result in further decline in the Passenger flying & Air traffic.
- As India produces over 70% of the Global Vaccines for COVID, the recent spike of second wave & shortages in Vaccination would lead to a lowering of Exports of Pharmaceutical Products which will hamper the economic activities in the Short term at least.
Growth Drivers for the Indian Economy in coming Quarters
- Despite the Rising infections, the Rapid pace of Vaccination has helped lower the Death rate amongst the affected once, and as we proceed further with Providing vaccination to the Youth of the country, the Economic activities are likely to normalize steadily.
- The Manufacturing industry revived at a Good pace led by the key sectors like Cement, Metal & Mining & Automobiles who were coping with the Pent-up demand. It is expected that as the supply chains have lesser restrictions in certain regions, this will help in the growth of economic activity further.
- As per the Analysts, Private Investments in the Markets will increase in the coming 2 Years as the Manufacturing activities will be incentivized by the government which will add as a boost for the sector and further lead to Higher Valuations for the companies.
- The Government is also likely to carry the Divestment process for reducing the Fiscal Deficit in the coming years, as it will also be a Major Contributor in providing aids to the affected industries.
- India will remain to be the Hot Market for Investors globally as they look at China + 1 Alternative for various activities, the Broader Outlook for the next 3 Years looks Attractive & Positive.