Month: August 2022

Adani Transmission on Tuesday entered the top 10 list of most valuable companies. Gautam Adani-led power transmission firm became the 8th most valued firm by market capitalisation. Adani Transmission’s market cap stood at Rs 4.4 lakh crore today morning at about 10.30 am, BSE data showed. Adani Transmission m-cap surpassed that of Housing Development Finance Corporation (HDFC) (Rs 4.31 lakh crore), LIC (Life Insurance Corporation of India) (Rs 4.27 lakh crore), Bajaj Finance (Rs 4.33 lakh crore), and Bharti Airtel (Rs 4.12 lakh crore). In the past one week, Adani Transmission share price has rallied over 10%, as compared to 0.19 per cent decline in the NSE Nifty 50. On the other hand, HDFC, LIC, Bajaj Finance and Bharti Airtel were down 1-2% during the same period.

In the past one month, the stock price of Adani Transmission soared 27 per cent, as against 1.6 per cent rise in the S&P BSE Sensex. So far this year, Adani Transmission share price has more than doubled, rising 128% YTD, as against 04% decline in the Nifty index. With Adani Transmission’s m-cap rise, Life Insurance Corporation lost its spot on the list of India’s 10 most valued companies by market capitalisation. LIC stock was trading at Rs 674 on BSE, up 0.6% from its previous close, with the market cap at Rs 4.27 lakh crore.

LIC shares have fallen 30 per cent from issue price of Rs 949, eroding Rs 1.75 lakh crore of value. The nation’s largest insurer had launched a Rs 20,500 crore initial public offering in early May before listing on 17 May. LIC now ranks eleventh in terms of m-cap value. The top 10 most valued firms of India now are Reliance Industries, Tata Consultancy Services, HDFC Bank, Infosys, Hindustan Unilever, ICICI Bank, State Bank of India, HDFC, Bajaj Finance, and Adani Transmission.

Adani Transmission is India’s largest private transmission company with a cumulative transmission network of around 18,795 circuit km (ckm), out of which around 14,651 ckm is operational and around 4,064 ckm is at various stages of construction. The Adani Group firm also operates a distribution business serving over 12 million consumers of Mumbai and Mundra SEZ. The transmission company has completed Rs 3,850 crore primary equity transactions with International Holding Company (IHC) for 1.4% stake. Earlier in April, the company’s board had approved a transaction for the issue of 15.68 million equity shares of face value of Rs 10 each of the company to Green Transmission Investment Holding RSC on a preferential basis.

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Sebi on Monday overhauled the pricing norms for preferential allotment of units by Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs). Under the new framework, the pricing formula for allotment of units under preferential issue would be the Volume-Weighted Average Price (VWAP) of weekly highs and lows for 90 trading days or 10 trading days, whichever is higher.

At present, the pricing formula in a preferential allotment is the VWAP of the last two weeks or the last 26 weeks, whichever is higher. The preferential issue of units to “institutional investors” not exceeding five will have to be made at a price not less than the 10 trading days’ VWAP of the related units quoted on a stock exchange preceding the relevant date, according to two separate circulars.

The regulator said the preferential issue of units would not be made to any person who has sold or transferred any units of the issuer during the 90 trading days preceding the relevant date. At the present, the limit is six months.In case any person belonging to the sponsor has sold or transferred their units of the issuer during the 90 days preceding the relevant date, all sponsors would be ineligible for allotment of units on the preferential basis.

However, the restriction would not apply to a sponsor, in case any asset is being acquired by the REIT or InvIT from that sponsor, and that the preferential issue of units is being made to that sponsor, as full consideration for the acquisition of such asset. Also, the regulator has defined frequently traded units as the units of REIT or InvIT. Those are units in which the traded turnover on a stock exchange during the 240 trading days preceding the relevant date is at least 10 per cent of the total number of issued and outstanding units.

Post allotment, the REIT or InvIT concerned would have to make an application for listing of the units and the same would be listed within two working days from the date of allotment. Currently, the time period is seven days.In case the REITs or InvIT conerned fail to list the units within the specified time, the money received would be refunded through verifiable means within four working days from the date of the allotment.

Further, if the money is not repaid within the specified time, then the REIT or InvIT, manager of such units, and its director or partner would be jointly liable to repay that money with an annual interest rate of 15 per cent from the expiry of the fourth working day.

In November 2019, the regulator came out with guidelines for preferential issue as well as institutional placement of units by REITs and InvITs. REITs and InvITs are relatively new investment instruments in the Indian context but are extremely popular in global markets. While a REIT comprises a portfolio of commercial real assets, a major portion of which is already leased out, InvITs comprise a portfolio of infrastructure assets such as highways, and power transmission assets.

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LIC has diluted its stake in Nagpur Power & Industries by over 2 per cent through open market sales, bringing down its stake to 8.33 per cent. The government-owned life insurance behemoth in a regulatory filing on Thursday said its shareholding in Nagpur Power & Industries has diluted from 10.56 per cent (13,82,743 shares) to 8.33 per cent (10,90,747 shares) of the paid-up capital of the company.

There is a decrease of 2 per cent in holding during the period from September 30, 2021, to August 24, 2022, at an average cost of Rs 58.94, LIC said.

Listed companies are required to disclose the shareholding where there is a change of 2 per cent or more. Calculated at the average price of Rs 58.94 per share, the sale is valued at Rs 1.72 crore. Nagpur Power & Industries has a market capitalisation of Rs 87.74 crore.

The company was primarily in the metal recovery business, producing low Ferro manganese. However, it disposed of the recovery plant and entered the electrical sector a few years ago through its subsidiary. Shares of LIC were trading at Rs 681.00 apiece on BSE, up 0.67 per cent from the previous close.

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Parag Milk Foods Ltd on Wednesday announced that it has raised a total of Rs 131 crore through preferential allotment from marquee investors and promoters. In a regulatory filing, the company said investors have invested Rs 113 crore and promoters about Rs 18.75 crore looking at the promising growth strategy.

“The current proceeds of preferential shares and warrants would be utilised to fund our long-term capital requirements and to enhance the working capital needs,” Parag Milk Foods chairman Devendra Shah said. This will aid in further strengthening the company’s balance sheet and drive the company for accelerated growth ahead, he said.

According to the company, this fundraise comes at an opportune time to enable the company to meet its expanded working capital need to capitalise on demand potential and pave the way for a profitable business ahead. Ahead of festive season, the demand momentum for dairy products continues to accelerate and all its brands are witnessing a surge in the overall offtake, it said.

The company has posted a robust Q1 performance with 57.6 per cent year-on-year increase in revenue; surpassing the internal growth targets both in terms of volume and value, it added. Parag Milk Foods, which sells under the brand name “Pride of Cows”, has its own manufacturing facilities at Manchar in Maharashtra, Palamaner in Andhra Pradesh and Sonipat in Haryana.

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The ever-rising carbon footprint will damage the world permanently, and what’s even more concerning is that India stands 3rd on the list of ‘Top 10 Polluting Countries’ after China and the US. The after-effects of pollution can already be felt in the air and our bodies. As we all know, the climate crisis is on top of the list for many nations. This has also been the driving force behind India’s electric mobility commitment toward a net-zero emissions economy by 2070.

The electric future is inevitable for the betterment of the environment around us. Electric mobility is a more extensive discussion only because the emissions and congestion caused by vehicles negatively affect the climate. Our dependency on crude oil creates permanent damage, and we must correct it. The need of the hour is renewable energy, and India is making a swift move.

Car manufacturers in India are firm on bringing newer and affordable models. The adoption rate of EVs also supports the car makers in building supporting structures like charging stations and renewable energy production. With this massive transition, we can already see a wide array of options in two-wheelers and four-wheelers in the country today. Most brands in India have their own EV variant. Research has pointed out that one-third of vehicle manufacturers will abandon internal combustion engines in favour of going electric by 2025. This figure will further rise to 40% by 2040. This only indicates a massive underlying opportunity in EVs and EV-related industries in India.

To push the EV transition, both central and state governments offer various incentives to buyers and manufacturers. In September last year, the government approved a production-linked incentive scheme (PLI) worth Rs 26,000 crore to accelerate the manufacturing of fuel cell vehicles and drones. This scheme is expected to drive a fresh investment of around Rs 42,000 crore in the auto industry over the next five years. There’s also the vehicle scrappage policy that aims to phase out unfit and polluting vehicles. It is set to be implemented for private vehicles in 2024. Along with this, state governments are also encouraging EV adoption.

We can also see a big move in the stock market these days. The auto sector that hit rock bottom in 2020 is now in demand. Meanwhile, India’s largest conglomerate, Reliance Industries, is shifting towards renewable energy. Reliance stands as a pioneer in the plastics and petrochemicals industry, but the conglomerate is in support of creating a green ecosystem. The company has proposed to invest over $50 billion in Gujarat over 10-15 years to set up a 100-gigawatt renewable energy power plant.

As we all know, Adani Group had already ventured into the clean energy space. Gautam Adani, Chairman of Adani Group, has already declared to invest $20 billion in renewable energy over the next decade. Primarily into power generation from solar and wind energy, a small part would go to hydrogen power. When you see India’s two largest conglomerates betting big in the renewable energy space, others follow the lead too.

That’s what is happening in the stock market. It has become an exciting place to be. Investors are upping their stake in the auto and energy space. Adani Group’s stocks have risen over 100% in share price since the last year. While auto stocks like Tata Motors, Maruti Suzuki, Hero MotoCorp etc., have increased investors’ wealth by nearly 50%, Reliance Industries’ share price has also increased by over 20% in the last year.

Dalal Street’s focus has shifted towards sectors that are getting into clean energy. Earlier everyone bet heavily on banks, IT and FMCG sectors, but now the larger picture includes sectors diving for a better tomorrow. So, it’s expected that many industries will change their operations in the coming years, and investors will bet highly on clean energy companies, so keep a close eye.

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