The FPI holding in India's top 100 companies, which are part of the Nifty 100 index, declined to 24.23 per cent on average at the end of March this year, from a high of 27.5 per cent at the end of March 2021. This is the lowest FPI holdings in India's top listed companies in at least three years. A general sell-off by FPIs has weighed on stock prices and the benchmark S&P BSE Sensex is down 8.5 per cent, from its 52-week high made in October 2021. Most analysts expect FPI flows to remain weak in FY23 as well, given rising bond yields in the US and an expected earnings slowdown in India due to high inflation and commodity prices.
The number of times public sector undertakings (PSUs) have held conference calls with investors, their capital management, and debt financing are among the parameters that the Centre will use to judge their performance for the first time, a senior official in the know said. The government will evaluate PSUs for FY22 based on new parameters that were finalised by the Department of Public Enterprises (DPE) in consultation with the Department of Investment and Public Asset Management (DIPAM) last year, the official said. The government had included more conditions in the memorandum of understandings (MoUs) - used to set annual targets - that public sector enterprises sign with the DPE every year. These included a consistent dividend policy, which seeks to transfer dividends by PSUs every quarter; and market capitalisation or share price improvement over the sectoral index on an annual average basis for listed companies.
The much-talked-about sale of Ambuja Cement and ACC by Holcim Group will see the single-biggest outflow of foreign capital from the country if the two cement firms are acquired by Indian investors. The deal, valued at nearly $10.35 billion, will put in the shade Cairn Energy Plc's exit from India in 2010, when it sold Cairn India to Vedanta Group for $4.48 billion. According to various reports, big business groups such as AV Birla, JSW Group, and Adani Group are in the fray to acquire Holcim's assets in India.
The early bird results for the January-March 2022 quarter (Q4FY22) hint at a slowdown in corporate sector growth in the upcoming quarters. The combined net sales of the 81 early bird companies in the Business Standard sample were up 15.1 per cent year-on-year in Q4FY22; this was less than the 15.9 per cent YoY jump reported in Q3FY22. The slowdown could be much stronger for the domestic market-focused companies, including those in the banking, finance, and insurance (BFSI) space.
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When Life Insurance Corporation (LIC) of India gets listed on the bourses next month, it will be among the biggest listed life insurers globally in terms of market capitalisation (m-cap), assets, and revenue, but will also be among the least profitable and capitalised among its peer group. A big gap between LIC's m-cap, profits, and networth (shareholder capital) will make it one of the priciest insurers globally, in terms of price-to-earnings (P/E) multiple and price-to-book value (P/B) ratio. LIC also lags behind its Indian listed peers in terms of profit and networth.
The possible acquisition of Holcim India business will be one of the biggest inbound corporate deals in the country. Currently, Walmart Inc.'s $16-billion acquisition of Flipkart Online Services in 2018 remains the biggest acquisition of an Indian asset by any acquirer, followed by BP plc acquisition of 30 per cent stake in Reliance Industries' 23 oil and gas production blocks in 2011 for $7.2 billion. Bloomberg reported late on Wednesday night that Holcim - the world's biggest cement maker - is considering a potential sale of its India business and gauging interest in its controlling stake in Ambuja Cement.
Global investors have cited the ongoing war and high valuations of Indian equity markets as a reason to skip the IPO.
Despite Covid downturn, CEO salaries went up by an average of 19% in FY21.
For the initial public offering (IPO) of the Life Insurance Corporation of India (LIC), the Centre has shortlisted 50-60 anchor investors, which include BlackRock, Sands Capital, Fidelity Investments, Standard Life, and JP Morgan, and will soon finalise its anchor book. The feedback from anchor investors has led to price discovery in LIC shares, valuing India's largest insurer at around Rs 7 trillion, said an official aware of the development. The "attractive valuation" is seen widening the investor base by providing an opportunity to more of them to participate in the IPO, the official added.
The Centre is unlikely to reduce its shareholding in Life Insurance Corporation of India (LIC) for at least 2 years following the insurer's listing because such a move could affect returns for investors participating in the mega initial public offering (IPO). The government's stance was communicated to prospective investors during roadshows after many of them sought clarity on the Centre's plan for lowering its shareholding in the insurer to meet the minimum public shareholding norms. To this, the Centre maintained its stand that it would not look at any equity dilution in the insurer for at least two years to avoid downward pressure on LIC's shares.
The Centre has completed asset monetisation worth Rs 96,000 crore during FY22, surpassing the target of Rs 88,000 crore. For FY23, it has set itself a goal of Rs 1.62 trillion, and already has a pipeline of assets worth Rs 1.6 trillion under advanced stages of implementation, an official said. Union Finance Minister Nirmala Sitharaman on Tuesday reviewed the progress made by several ministries and nudged departments to achieve the targets set for them, the official added.
Consumer stocks remain the biggest laggard on the bourses. The Nify50 weighting of FMCG stocks declined to a decade low of 9.9 per cent at the end of March this year, down 150 basis points from 11.4 per cent a year ago. At their peak in March 2013, major FMCG stocks, such as Hindustan Unilever, ITC, and Asian Paints, together accounted for 15 per cent of the Nifty50. But now together with automobile stocks, the consumer goods sector accounts for only 14.7 per cent of the index, down 200 basis points in the past 12 months and 37 per cent from the record high weighting of 23.4 per cent at the end of March 2014.
The ruble has recouped most of its losses and become the top-performing currency globally. It continues to gain and is up 60 per cent against the US dollar from its lows in the first week of March. The ruble appreciated to 83 to the dollar intraday on Tuesday against a record low of 139 on March 7.
The Centre's decision to not reduce the face value of shares of India's Crown Jewel - Life Insurance Corporation (LIC) - was taken to make shareholders feel they are acquiring something 'precious'. The face value of LIC's shares was retained at Rs 10, quoted in the draft prospectus, as it would also align the insurer's shares with those of its private sector peers. Even as the LIC Act was amended to "consolidate or reduce the nominal or face value of the shares", with the Centre's approval, it was decided to stick to the current face value of shares at Rs 10 without splitting the existing 6.32 billion shares.
Actor Amitabh Bachchan has paid up GST of Rs 1.09 crore on sale of non-fungible tokens (NFTs) worth Rs 7.15 crore following a notice by the Directorate General of Goods and Services Tax Intelligence (DGGI), people aware of the matter said. Though Bachchan has deposited the amount, investigations by tax authorities continue, they said. Bachchan had entered into an agreement with Rhiti Entertainment Pte. Ltd, Singapore, for conversion of his content into NFTs by way of an auction.
Tata Consultancy Services (TCS) - the largest information technology (IT) services provider in India and the second-largest globally - recently set an ambitious goal of $50 billion in revenue by 2030. The growth required to reach this goal, however, is lower than the company's own standards. In the past decade, TCS revenues, or net sales in US dollar terms, have grown at a compound annual growth rate (CAGR) of 9.5 per cent, from $10.2 in 2011-12, to an expected $25.3 billion during 2021-22 (FY22), based on its revenue trend in the first nine months of FY22.
The government may have to rework the valuation of Life Insurance Corporation of India (LIC) for its initial public offering (IPO) if the listing is pushed beyond May, an official said. The current embedded value of LIC, pegged at Rs 5.4 trillion as of September 30 and for the six-month period ended September, will have to be re-evaluated if the issue is pushed beyond May 12, as approved by the Securities and Exchange Board of India (Sebi). This would impact the market value of LIC, that is currently being internally estimated at 3-4 times of the embedded value.
The Centre is considering relaxing some norms that led to the failure in attracting bids for assets of Bharat Sanchar Nigam (BSNL) and Mahanagar Telephone Nigam (MTNL) as they look to restart the auction for their non-core assets. The Department of Investment and Public Asset Management (DIPAM) had listed six properties of BSNL and MTNL for sale through its new e-bidding portal, developed by state-run MSTC, but the auction failed to garner an adequate interest. DIPAM had asked government-appointed property consultants to identify issues in the bidding criteria for resolution.
A sharp sell-off in the Indian equities markets after a spike in crude oil prices should not be surprising. Historically there is a negative correlation between stock valuations in India and the price of Brent crude oil, which is the benchmark for the Indian crude oil basket. Between 2011 and 2014, crude oil traded above $100 a barrel for an extended period, the Sensex-trailing price/earnings (P/E) was 18X, on average, during the period, nearly 22 per cent lower than the current index P/E of 23X.
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