Anchor investors buy Rs 56.2 billion worth of LIC shares ahead of IPO
Life Insurance Corporation of India’s initial public offering has received a strong response from institutional investors, with Rs 56.2 billion worth of shares reserved for anchor investors getting fully subscribed. Investors, including Norwegian wealth fund Norges Bank Investment Management and Singapore sovereign wealth fund GIC, were allocated shares of LIC before the sale opens to the public on 4 May.
Why it’s important: The government expects to raise Rs 210 billion from the initial share sale at the upper end of the price band. The IPO will be India’s largest and key to the government’s asset sale target for 2022-23.
Supply disruption of product parts to impact automakers, electronic goods
Shortage of components due to the Ukraine war and Covid-induced curbs in China are impacting production of automobiles and electronic products in the June quarter. Automobile and electronics companies could not manufacture about 5-10 percent of their planned output in April, and the impact will be bigger in May-June.
Why it’s important: Industry executives expect the tight situation to continue for the entire year, which will hurt sales. To compound the situation, input costs were at lifetime highs and consumers will have to brace for price hikes.
Adani, JSW submit non-binding bids for Ambuja
Adani and JSW groups have put in non-binding bids to acquire Ambuja Cements. Both conglomerates have tied in their funding with a clutch of private equities and offered timelines to close the transaction at the earliest. Aditya Birla Group’s UltraTech Cement has also entered the race but its offer could be delayed on regulatory approvals.
Why it’s important: Swiss parent Holcim has indicated that it wants to close the sale transaction of Ambuja Cements early and pick a winner. Once a non-binding bid is accepted, Holcim will enter into exclusive talks and give the winner access to the data room.
Dalmia may enter race to buy Holcim’s India business
Dalmia Bharat is set to bid for Holcim’s India businesses, joining a hotly contested race that has garnered interest from Adani, JSW and Aditya Birla groups. Dalmia Bharat, one of India’s oldest cement makers, is talking to banks to stitch together the financing for its bid.
Why it’s important: The strong interest in buying Holcim’s cement assets in India is because the potential bidders expect the acquisition will give them economies of scale and pricing power in a rapidly growing but fragmented market.
Manufacturing activity increases in India despite inflationary pressures
Factory activity picked up in April from a six-month low in March as new orders and production expanded at a faster pace despite increased price pressures due to geopolitical tensions, according to the S&P Global India Manufacturing Purchasing Managers Index. The gauge improved to 54.7 points in April from 54 points in the previous month. A reading of above 50 indicates expansion.
Why it’s important: The easing of pandemic restrictions is supporting demand, which could however be impacted if firms pass on the additional cost burden to consumers if prices keep rising.
Amazon may make Reliance party to Future Retail lawsuit
Amazon may implead Reliance Industries in the legal battle with Future Group after Reliance seized control of 950-odd Big Bazaar supermarkets, a move the US e-commerce giant claims will prevent it from keeping Future Retail afloat and lenders from recovering their dues.
Why it’s important: Amazon’s argument hinges on restoring the ownership of the Big Bazaar stores so that Future Retail can continue its business, repay dues banks, and find an appropriate buyer. Reliance seized control of the supermarkets on nonpayment of rent.
India sees 100 unicorns as fintech startup Open joins the club
The countdown for 100 unicorns in the country began early in the year, but the Ukraine war had paused the startups’ rush to touch the $ 1 billion valuation. Neo-banking fintech Open, founded by Anish Achuthan, has now entered the club, making it a ton, according to Inc42’s unicorn tracker.
Why it’s important: The startup ecosystem has become quite robust in India as overseas investors amell high returns from these new enterprises. Some of these will possibly make public offers in the current financial year to March 2023.
Indian economy will hit $ 5 trillion not before 2028-29
The wait for India to become a $ 5 trillion economy by 2024-25 is going to take longer than what the finance ministry had originally intended, according to the International Monetary Fund. The target will instead be achieved in 2028-29, reveals the IMF data, indicating a four-year delay.
Why it’s important: The $ 5 trillion target will also depend on the real economic growth rate, inflation rate, and the exchange rate. It will not be easy to achieve.
Two-wheeler sales rise in April but recovery unlikely to sustain
Motorcycle and scooter dispatches rose in April for the first time in 10 months, according to sales data released by manufacturers. It was aided by an early harvest and pent-up demand from the wedding and festive seasons. Last year’s low base added made the performance look more impressive.
Why it’s important: The sales growth is not likely to continue as the automobile sector struggles with higher input costs and a persistent shortage in semiconductor chips.
Corporate job opening go past pre-Covid levels in April
The white-collar job market in India is recovering, according to data collated from LinkedIn and top company job boards by staffing firm Xpheno. The number of active job openings in April was 305,000, up 53 percent from a year earlier. It was also higher than the pre-Covid monthly average vacancies of 230,000-240,000 and almost at the same level as March jobs number of 310,000.
Why it’s important: If business activity continue to pick up and attrition levels rise, companies would have to ramp up hiring, which is good news for those seeking white-collar employment.
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