- Sona Comstar’s ₹5,550 crore IPO subscribed 27% on day 2. At a price band of ₹285-291, the IPO of the company is roughly valued at 76 times one-year forward earnings, making it one of the most expensive issues to hit the primary market in recent times. Analysts said Sona BLW is a play on the electric vehicle theme. They said while the IPO valuation appears rich but the auto component maker is a consistent performer. They are bullish on the counter.
- Ruchi Soya said that it has acquired the biscuits business from Patanjali for ₹60 crores and under the agreement, it is required to pay the balance 75 percent of the consideration for acquiring the business to its promoters within three months from the sale that took place in May. Ruchi Soya is aiming to raise ₹4,300 crores from a follow-on public offer. The company plans to use ₹2,663 crores for repayment of the company’s borrowings and ₹593.4 crores for working capital. The remainder of the proceeds will be used by the company for general corporate purposes.
- India’s exports rose by 69.35% to USD 32.27 billion in May, driven by healthy growth in sectors such as engineering, petroleum products, and gems and jewellery, even as the trade deficit widened to USD 6.28 billion, the lowest in 8 months. Imports in May were up 73.64% year-on-year to $38.55 billion. Exports to USA, UAE & Singapore recorded the highest jumps. Exports of engineering, petroleum & gems & jewelry were worth $8.64 billion, $5.33 billion & $2.96 billion respectively.
- The Pension Fund Regulatory and Development Authority (PFRDA) also increased the maximum age of entry into the National Pension System (NPS) from 65 to 70. The exit age limit has also been extended to 75 years. The regulator has allowed subscribers to withdraw the entire accumulated pension wealth without purchasing an annuity if the pension corpus is less than ₹5 lakh. Currently, NPS subscribers having a corpus of over ₹2 lakh at the time of retirement or attaining the age of 60 years need to buy an annuity, offered by insurance companies, on a mandatory basis.
- Tata Motors Limited announced on Monday that it will raise ₹500 crores by offering 5,000 Non Convertible Debentures (NCDs). The face value of the security is ₹10 lakh each. The date of redemption for these NCDs is May 29, 2026, with the period of maturity being 1,808 days. The interest will be payable annually and on redemption. These will be offered on a private placement basis and are rated, listed, unsecured and redeemable.
- Reliance Jio has commenced 5G trials in Mumbai as it races with rival Bharti Airtel to introduce mobile technology in India. While Jio’s trials in Mumbai are being carried out using indigenously developed technology, the company has tied up with multinational vendors, including Ericsson, Nokia, and Samsung for trials in Delhi, Pune, and Gujarat.
- The annual retail inflation rate rose 6.30% year-on-year in May, up from 4.29% in April and sharply above analysts’ estimate of 5.30%. The wholesale price inflation rate rose 12.94%, its highest in at least two decades. India’s economy grew 1.6% in the March quarter compared with the same period a year earlier, but that was before a massive second wave of infections hit the country which prompted fairly stringent lockdowns across most states causing another round of job losses and a significant dent to demand.
- ICICI Bank raises ₹2,827 crores by issuing bonds on a private placement basis. The bonds carry a coupon of 6.45% per annum payable annually and were issued at par. The allotment date is June 15, 2021. The redemption date of the bonds is June 15, 2028.
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RailTel IPO grey market premium plunges
RailTel Corporation of India’s Rs 820 crore initial public offer (IPO), which has been seeing strong retail participation at bids totaling 11 times the issue size so far, closes for subscription on Thursday. Till the end of Day 2 of the IPO, the issue was subscribed 6.55 times with the retail quota getting bids for 10.55 times the limit. The qualified institutional buyers’ quota was subscribed 2.97 times and the non-institutional investor category 2.63 times the limit. The portion reserved for employees was subscribed 1.85 times. The grey market premium still suggests a 13-15 percent upside over the upper limit of the IPO price band.
SIPs back in limelight even as MF outflow continues
With the equity market scaling record highs, new SIP account registration has risen to a record of 16.4 lakh in January 2021, the data from the Association of the mutual fund of India (AMFI) show. This is the second month in a row when SIP registrations hit a record level. The previous peak was in January 2018 at 12.9 lakh accounts. The two-month rolling average of new SIP registration reached 30.7 lakh accounts compared with an average of 18 lakh in the past four and half years.
What’s in Joe Biden’s sweeping immigration bill being rolled out in Congress?
An eight-year path to citizenship would be provided for millions of people who were living in the United States unlawfully on Jan 1, 2021. They would receive a permanent residency card, commonly referred to as a “green card,” after five years if they pass certain requirements including background checks and could then apply for citizenship after three years. President Joe Biden’s proposed legislative overhaul of the U.S. immigration system, due to be formally introduced in Congress on Thursday, would be the largest in decades, but it faces steep odds.
Vodafone Idea lost 2.7 million users in October
Vodafone Idea Ltd slipped further behind its main rivals in terms of subscriber base as it net lost 2.7 million mobile subscribers in October. Data from the Telecom Regulatory Authority of India showed. In contrast, its rivals Reliance Jio Infocomm Ltd and Bharti Airtel Ltd saw an increase in their subscriber base by 2.2 million and 3.7 million respectively, which helped them further consolidate their position as the largest and second-largest operators in the country. Reliance Jio had 406 million subscribers as of October end, while Bharti Airtel had 330 million. Vodafone Idea, which was once the largest operator in India, slipped further behind its rivals at 293 million.
Should depositors worry about co-operative banks?
It is a financial entity engaged in the business of collecting deposits and lending – like any other commercial bank. But they function on the principle of cooperation and sharing profits with members. They offer services essentially to members who are shareholders of the bank. A co-operative bank also offers many high-tech products and services like any commercial bank. But their business jurisdiction in most cases is localized.
Petrol prices all time high
Petrol and Diesel prices have been on the rise once again. The price of a litre of Petrol breached the Rs.100 mark yesterday in Rajasthan. Elsewhere in the country, it’s the same story, albeit not as drastic and it’s upsetting a lot of people. Including the Prime Minister, who recently lamented about India’s dependency on foreign oil. India is most certainly dependent on foreign oil. Back in 2015, the government had outlined plans to reduce India’s import dependency – from 77% in 2013–2014 to 67% by 2022. Because the central government saw an opportunity to make some money here. After all, tax collections were abysmal. They were already borrowing too much. And they were desperately looking to fund their expenditure through any means necessary. So the central government increased excise by a record ₹10 per litre on petrol and ₹13 per litre on diesel, planning to raise a ₹1.6 lakh crores. States meanwhile got in on the act as well. They bumped up taxes in tandem and together these extra charges alone make up 55–60% of the final retail price today.
Reliance Jio, Bharti Airtel & Vodafone Idea apply to bid in spectrum auctions:
- Telecom Market leaders Reliance Jio, Bharti Airtel and Vodafone Idea have filed applications for participation in the upcoming 4G spectrum auctions which are due to start on March 1, 2021. The auction for over 2300 MHz of airwaves, valued at Rs 3.92 lakh crore at base price, though is likely to see limited bidding intensity for spectrum worth less than Rs 48,000 crore, with Jio and Airtel expected to be the main players.
- The Department of Telecommunications (DoT) is not auctioning the expensive 5G airwaves in this tranche, bulking up the existing 4G spectrum will allow Telcos to launch 5G services immediately in those bands, without waiting for the sale of airwaves in the 3300-3600 MHz bands earmarked for the next-generation technology. It is estimated that the two telcos would spend 15-20% on additional 4G airwaves, and this investment will go in select bands in the metro and category A circles, where 4G spectrum assets can now be deployed for future 5G use quickly. The upcoming spectrum auction could help Jio and Bharti fortify their 5G positioning by acquiring good magnitude of 1800 and 2300 MHz (bands that could be used for 5G), while Vodafone Idea seems to hold a meager chance to hold a position to bid for 5G bands given its weak balance sheet.
Retail investors continue to exit from equity Mutual Funds:
- Retail investors have continued to book profits in equity mutual funds, at every rise in the shares. Investor’s selling spree in the equity market has continued for the seventh consecutive month with the overall tally reaching the value of Rs. 42,256 crores. Even the debt mutual funds have witnessed a high amount of outflows, especially liquid funds. The majority profit booking has been witnessed among large-cap funds, followed by smallcap and midcap funds. This has been a good opportunity for the investors to exit from the funds not performing well.
- The skepticism regarding the corrections in some time, investors are preferring to continue to stay invested through systematic investment route (SIP), to strike a balance between utilizing the growth opportunities, and realization of high profits. Investors have been continuously investing into the equity markets through systematic investment routes especially into midcap funds, thematic funds, index funds, international funds, and balanced advantage funds to take advantage of diversification opportunities. In such markets, it is a better strategy to stay invested in the staggered manner to cash-in on the opportunities in the equity markets as well as maintaining risk mitigation measures.
Government committee recommends banning all cryptocurrencies, except those issued by state:
- With the recent saga over the cryptocurrency, further propelled by Tesla’s big bet on Bitcoin, the Indian investors having exposure in the cryptocurrencies traded overseas are in a fuss, due to the government’s stance on banning such cryptocurrencies, which has led to these investors rushing to seek legal aid over these investment’s fate in the county. The finance minister, Nirmala Sitharaman constituted a high-level Inter-Ministerial Committee (IMC) under the Chairmanship of Secretary (Economic Affairs) that has suggested that all the private cryptocurrencies, except any virtual currencies issued by the state, will be prohibited in India.
- The central government will take a decision on the recommendation of IMC and legislative proposal if any would be introduced in the Parliament following the due process. In 2018, the RBI had banned banks from processing transactions relating to cryptocurrency. While, in March 2020, the Supreme Court had overturned the ban.
- The government is exploring the use of blockchain technology proactively for ushering in the digital economy, and a cryptocurrency bill is being finalized and which is expected to be sent to the cabinet soon. The cryptocurrency bill is the pressing need of the hour since the existing regulatory bodies in the country like RBI and SEBI too do not have a legal framework to directly regulate cryptocurrencies as they are neither currencies nor assets or securities or commodities issued by an identifiable user.
LIC Policyholders will have a quota in the IPO:
- The initial public offering of Life Insurance Corporation (LIC) would be launched in the next financial year. The LIC Amendment Act has been made part of the Finance Bill, thereby bringing the required legislative amendment for launching IPO of the country’s largest life insurer.
- In the Finance Bill 2021-22, it has been proposed to have a reservation on a competitive basis, to an extent of up to 10 percent of the issue size, in favour of the life insurance policyholders of LIC, while the government will remain the majority shareholder and will continue to retain management control safeguarding the interest of policyholders. This could provide a good opportunity to the existing LIC policyholders, but the guidelines for allotment are yet to be laid out in public.
IndiGo pays Rs 2.1 crore to settle case with SEBI:
- The co-founder of InterGlobe Aviation, Rakesh Gangwal, alleged several violations of corporate governance norms, RPT norms, disclosure norms, and misrepresentation in the IPO document in October 2015 at the company. Based on its investigation, SEBI issued a show-cause in November 2020 to InterGlobe, seeking an explanation for several violations, while in December 2020, InterGlobe filed a settlement application with Sebi to settle the matter, without admitting or denying the findings of fact. Interglobe Aviation has settled a pending dispute with SEBI by agreeing to settle charges of Rs 2.1 crore, through a consent order.