Daily Market Update Feb 16

unnamed Daily Market Update Feb 16

After Amazon opted to approach the Supreme Court to stall the FRL-RRIL merger worth Rs.24,700 crore, the Future group has confirmed that it will fight the case legally and ruled out any compromise on the matter. Future Group had also mentioned in a recent interview that Amazon had demanded that Future Retail pay up $40 million to Amazon for forfeiting the right of first refusal. The scheme of arrangement between FRL and RRIL has already secured approval from the courts, the NCLT and SEBI. Amazon had approached the Supreme Court after the high court had ruled in favor of the Reliance / FRL merger.

The trade data that was announced for the month of Jan-21 reported merchandise trade deficit of $14.54 billion. This is slightly lower than the trade deficit of $15.45 billion reported in the month of Dec-20. While the total merchandise exports stood at $27.45 billion, the total merchandise imports for Jan-21 stood at $41.99 billion. The sharp spike in crude prices to beyond $62/bbl was one of the key reasons for the sustained elevated levels of trade deficit since India relies on imports for 80% of its daily crude requirement. The overall trade deficit including services has finally slipped into an overall deficit in Jan-21. This is likely to add to the pressures on the current account deficit for the fiscal year. On a yoy basis, the imports were up just above 2.03% while exports grew more than 6.16% in the month of Jan-21.

Arohan Financial, an NBFC, has filed to raise Rs.1,800 crore through the IPO route. Nearly half of the total amount will be in the form of fresh issue while the balance will be by way of offer for sale or OFS, wherein the promoters and early investors will partially exit their stake in Arohan via the OFS. The IPO will include 2.71 crore shares offered by way of the OFS by a list of marquee investors. The fresh issue component of the IPO will be used to augment the capital base of the company with a view to meeting their future capex requirements. The price band and other details of the IPO will be finalized shortly.

The beleaguered Jet Airways reported net loss of Rs.2,841 crore for the financial year 2019-20 on total income of Rs.354 crore. In fiscal 2018-19, Jet Airways had reported total income of Rs.5,536 crore, but it had been grounded for the full financial year 2019-20 due to consistent losses and a major liquidity crunch. Jet has been under insolvency proceedings since the last 2 years with few global investors having evinced interest to take over the airline and commence operations all over again. However, it is still not too clear as to when the operations will actually start for Jet Airways and its financial model.

In one of the biggest acquisitions in the EdTech sectors, South-based Byju’s will acquire rival Toppr for a consideration of $150 million. Toppr provides online learning material for students between the classes 5 and 12 and is backed by SAIF Partners and Helion Ventures. Earlier in January 2021, Byju’s paid close to $1 billion to take over Aakash Education Services. Byju’s is already the leading EdTech Company in India with indicative valuation at $11 billion. Toppr has 16 million registered students for its content, although paid subscribers are quite low. The contours of the deal are expected to be announced shortly.

NASSCOM expects the Indian IT industry to grow at 2.3% to $194 billion in the financial year 2020-21 despite a fall in tech spending. NASSCOM underlined that through the pandemic, IT industry had been a net hirer adding 138,000 jobs taking the total people employed by the IT industry to 4.47 million. This is in spite of the fact that global GDP for 2020 calendar year dipped by 3.5% and the tech spending dipped by 3.2%. NASSCOM also disclosed that the overall deal pipelines of the major listed IT companies in India stood at a whopping $15 billion, which is an assurance of the business flows in the coming financial years. However, NASCOM is confident that industry IT spends should improve in the next financial year in tandem with the global economy recovery that is expected. NASSCOM is the IT representative body.

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