Daliy Market Update

unnamed Daliy Market Update


Future Retail managed to avert a default by paying the interest of $14 million or approximately Rs.100 crore on its dollar denominated debt. The 30-day grace period was getting completed on 24 August and by paying by the end of the grace period, the company managed to avoid being declared defaulter and a downgrade in its rating. The company had raised $500 million via dollar denominated bonds in Jan-20 at 5.6% but ran into trouble after the lockdown brought its operations to a virtual standstill. Apparently, the group had received interim funding from a bank on assurance of an early stake sale.

Kalyan Jewellers has filed for an Rs.1750 crore IPO, the largest by a jewellery company in India. Out of the total issue size, Rs.1000 crore will be by way of a fresh issue while the balance Rs.750 crore will be by way of an offer for sale or OFS. The promoter Mr. Kalyanaraman and Warburg Pincus will participate and tender part of their shares in the IPO. The Rs.1000 crore of fresh funds raised will be used for funding working capital and for general corporate purposes. Kalyan is 27 years old and currently has 107 stores across 21 Indian states. In addition, it also has 30 showrooms located in the lucrative Middle East.

Rupee appreciated sharply by 52 paisa to Rs.74.32/$ on Monday taking the rupee to a 5-month high. The sharp appreciation in the rupee was led by the sharp capital flows into India. NSDL reported that foreign portfolio investors or FPIs had pumped in Rs.42,000 crore into India in the first 3 weeks of the month. Banks have also confirmed that NRI deposit and remittance flows were once again picking up steam. This has largely helped to overcome concerns about the forex flow situation. Also, the likes of Foxconn and Samsung promise huge FDI flows in the coming years, adding heft to the rupee.

Axis Bank has agreed to tweak its deal with Max Life to make it more acceptable to the regulators, IRDAI. Now, Axis Bank will buy only 17% in Max Life instead of 29% as originally stated. Post the deal, the Axis stake in Max Life will go up from 1% to 18%. It may be recollected that the IRDAI had raised objections to the agreement allowing Axis Bank the sold power to appoint an auditor. IRDAI has also been uncomfortable with the idea of an insurance company being held by a listed NBFC. There was also objection over the nature of the JV, but clearly, these look to have been resolved to IRDA stipulations.

There are some big plans that Saudi Aramco has in mind in view of the falling crude prices. Above all, Aramco is going all out to woo Reliance to get back to its O2C or oil to chemicals sale. Last year, Aramco had agreed to take a 20% stake in the O2C business of RIL at $15 billion, valuing the overall O2C business at $75 billion. However, the plan did not materialize because oil prices crashed during this period and both could not agree upon a new price. However, in the meantime, RIL managed to monetize Jio Platforms towards its zero-debt plans. This has put Aramco on the defensive as it sees its value falling value in the oil crisis. Now, Aramco is even willing to put its refinery plans in India on hold and prioritize closing out the deal with Reliance for its O2C business. Aramco also needs to sustain dividends.

The Kerala Assembly has passed a resolution against the leasing of the Thiruvananthapuram airport to the Adani Group. The resolution was moved by the chief minister, Pinnarayi Vijayan. Instead, the assembly has called for the airport to be handed over to a special purpose vehicle or SPV in which the state of Kerala is also a partner. The chief minister of Kerala has already written to the prime minister asking him to withdraw the centre’s decision. Adani had earned the rights to run and manage 6 airports across India via competitive bidding process via PPP model in the year 2019.

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