Month: October 2024

 HDB Financial Services – the non-banking lending arm of HDFC Bank – has filed the Draft Red Herring Prospectus (DRHP) with Sebi for an initial public offering of up to Rs 12,500 crore ($1.49 billion), the bank informed exchanges on October 31.

The DRHP was filed on Wednesday, and the IPO remains subject to necessary regulatory approvals and market conditions, the bank said.

The Initial Public Offering comprises of fresh issue of shares aggregating up to Rs 2,500 crore, and an offer for sale of shares aggregating up to Rs 1,000 crore by existing shareholders of the company. HDFC Bank holds 94.6% stake in the lender, and will sell shares worth up to Rs 10,000 crore through the OFS route.

HDB Financial has said that plans to use the IPO sale proceeds for capital requirements, including onwards lending.

Last month, HDFC Bank approved the unit’s IPO, marking the group’s first public float in six years as it aims to meet the financial regulator’s deadline that “upper layer” non-banking financial companies (NBFCs), based on their size, activity and perceived risk levels, be listed by September 2025.

Post-IPO, HDB Financial Services will remain a subsidiary of HDFC Bank, complying with relevant regulations.

HDB Financial Services has engaged four investment banks as advisors for its proposed big-bang initial public offering (IPO), namely Jefferies, JM Financial, Morgan Stanley & Nomura.

Fundraising through initial public offerings (IPOs) has hit a new high in 2024, exceeding the previous record set in 2021, with two months still remaining in the year. So far, total funds raised through IPOs have reached over Rs 1.22 lakh crore, surpassing the Rs 1.18 lakh crore record of 2021. Approximately 70% of this record-breaking amount has been generated since August.

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 Tata Power Co. Ltd announced their July to September quarter results on Wednesday, October 30. The company announced a 7.4 per cent hike in net profits to ₹1,093.08 crore in the second quarter of the financial year 2024-25, compared to ₹1,017.41 crore in the same quarter the previous year, as per the consolidated financial statements, according to Tata Power’s BSE filing.

Tata Power Co. Ltd shares closed 0.42 per cent higher at ₹427.15 after Wednesday’s trading session, compared to ₹425.35 at the previous market close. The company released the second-quarter results after market operating hours on Wednesday. 

The company’s profits rose as the expenses for the quarter ended September 2024 dropped 4.55 per cent to ₹14,082.46 crore, compared to ₹14,754.76 crore in the same period the previous year.

The company also witnessed a 19.64 per cent fall in its fuel cost, which was ₹2,871.69 crore as of the end of the second quarter, compared to ₹3,573.62 crore a year ago.

Tata Power’s revenue from operations also fell 0.25 per cent to ₹15,697.67 crore in the July to September quarter, compared to ₹15,738.03 crore in the same quarter the previous year. 

The company’s revenue from power generation through hydroelectric and thermal sources dropped 13.35 per cent to ₹4,309.24 crore in the second quarter, compared to ₹4,973.22 in the same period the previous year.

The Transmission and Distribution business witnessed a 7.97 per cent rise to ₹10,207.10 crore, compared to ₹9,453.43 crore a year ago.

The Board of Directors approved the 1000 MW Pumped Storage Hydro Project investment in Bhivpuri, Maharashtra, as the company eyes existing capacity addition.

According to the company statement, it will take 44 months or over three and a half years to add the capacity proposed. The company will finance this ₹5,666 crore investment through 75 per cent debt and 25 per cent equity.

The power company also announced that the Board of Directors has decided to grant 35,26,090 or 35.26 lakh employee stock options (ESOP) with a face value of Re 1 per share, each fully paid up, to eligible Tata Power Co. Ltd employees, according to its exchange filing before releasing the second-quarter results on Wednesday. 

The company also disclosed about a fire incident that occurred at the Cable Vault and subsequently the Control Room of the Trombay Plant, they have filed an insurance claim of nearly ₹221 crore for the damages. 

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Food delivery aggregator Swiggy’s early investors will see returns as high as up to 35x as the company lists on the Indian bourses. 

According to the draft red herring prospectus (DRHP), early backers of the company will see gains in the range of 3x-35x. 

“Early investors are making anywhere between 25 and 35 times returns. That is, if you look at the weighted average cost of their acquisition. Some of them may look at taking some of the chips off the table. Some earlier investors like Accel reinvested in our latest round through their other fund,” said Raul Bothra, chief financial officer (CFO), Swiggy.

He was responding to the question why some investors have not opted to exit during the initial public offering (IPO). 

Accel India, one of the early backers of the company, and which is offloading shares worth Rs 412 crore, will see a gain of 34.9 times. The acquisition cost for Accel when it invested in Swiggy was Rs 11.17 per share. 

Similarly, Elevation Capital will witness 34 times gain for its investment in the company, where the acquisition cost was Rs 11.44 per share.

 Norwest Venture, which had invested in Swiggy in its Series B round in 2015, will make gains up to 26 times. Its acquisition cost of Swiggy’s share was Rs 14.82.

Prosus, the company’s largest shareholder, also reduced the number of shares it is selling, as Swiggy increased the primary issue offer. 

Prosus’ total shareholding in the company is 30.95 per cent, and the firm is selling 109.1 million shares. This is down from the earlier 118.2 million shares.

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India’s smartphone volume grew by three per cent year-on-year (Y-o-Y) in the third quarter (Q3) of calendar year 2024, while its value surged by 12 per cent Y-o-Y, reaching a record high for a single quarter, according to a report by research firm Counterpoint. 

The value growth was driven by a premiumisation trend, while the volume increase stemmed from an earlier start to the festival season compared to last year. 

Original equipment manufacturers (OEMs) proactively stocked channels, ensuring that retailers were prepared for a surge in festive sales. However, the report noted that festive sales commenced at a slower pace than last year. 

During the quarter, 5G smartphones reached their highest-ever share of 81 per cent in total shipments, rising to 93 per cent in the Rs 10,000-15,000 ($120-240) segment. 

“The market is increasingly shifting toward value growth, fuelled by premiumisation, supported by aggressive equated monthly instalment (EMI) offers and trade-ins,” said Prachir Singh, senior research analyst at Counterpoint. 

Samsung, prioritising its flagship Galaxy S series and enhancing its value-driven portfolio, led the market by value with a 23 per cent share. The brand is integrating Galaxy AI features into its mid-range and affordable premium A series models, encouraging consumers to upgrade to higher price segments. 

Apple followed closely with a 22 per cent value share, expanding into smaller cities. Strong shipments of the iPhone 15 and iPhone 16 ahead of the festive season boosted Apple’s performance.

“During Q3 2024, multiple sales events were hosted by both OEMs and channels, including offline campaigns that helped clear existing inventory. This allowed OEMs to restock channels with new launches ahead of the festive season,” said research analyst Shubham Singh. 

Vivo maintained healthy inventory levels throughout the year, helping it reclaim the top spot in the Indian smartphone market by volume with 26 per cent Y-o-Y growth. 

Xiaomi secured second position with a three per cent Y-o-Y growth, maintaining a balanced focus across both online and offline channels. Oppo, with a 41 per cent Y-o-Y growth, emerged as the fastest-growing brand among the top five. 

Meanwhile, newcomer Nothing recorded an impressive 510 per cent Y-o-Y growth in Q3 shipments, becoming the fastest-growing brand for the third consecutive quarter and entering the top 10 for the first time. 

Indian smartphone maker Motorola saw an 87 per cent Y-o-Y growth in the quarter, driven by the success of budget-friendly models emphasising colour, material, and finish (CMF), rising demand from smaller cities, and an expanding market footprint.

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Google parent Alphabet reported third-quarter earnings that beat on top and bottom lines with strong revenue growth from the company’s cloud unit.

The company’s shares rose as much as 6% in after-hours trading.

Here are the results:

• Earnings per share: $2.12 vs. $1.85 expected by LSEG
• Revenue: $88.27 billion vs. $86.30 billion expected by LSEG

Here are other numbers Wall Street was watching:

• YouTube advertising revenue: $8.92 billion vs. $8.89 billion, according to StreetAccount
• Google Cloud revenue: $11.35 billion vs. $10.88 billion, according to StreetAccount
• Traffic acquisition costs (TAC): $13.72 billion vs. $13.53 billion, according to StreetAccount

Alphabet’s revenue grew 15% year over year, which is stronger than the same quarter last year.

The company reported blowout cloud revenue at $11.35 billion, up nearly 35% from the $8.41 billion a year ago. The company attributed its strong cloud results to its artificial intelligence offerings, which include subscriptions for enterprise customers.

Alphabet CEO Sundar Pichai opened his call with investors saying the company’s “full stack” of AI products is now operating at scale and being used by Google’s billions of users and “creating a virtuous cycle.”

The search company’s strong quarter kicks off a big week of earnings for tech’s megacap companies. Meta and Microsoft report on Wednesday, followed by Apple and Amazon on Thursday.

Alphabet’s net income increased to $26.3 billion, or $2.12 per share, compared to $19.7 billion, or $1.55 per share, in the year-ago quarter.

Google’s search business generated $49.4 billion in revenue. That was up 12.3% from a year ago, and the search business remains the largest contributor to revenue growth for the company, said Alphabet Chief Financial Officer Anat Ashkenazi on the call.

Alphabet plans to build on existing cost-cutting efforts around using AI to streamline workflow and manage headcount and the company’s physical footprint, Ashkenazi said.

“I plan to build on these efforts but also evaluate where we might be able to accelerate work and where we might need to pivot to free up capital for more attractive opportunities,” said Ashkenazi, who joined the company in June after 23 years at drugmaker Eli Lilly.

Alphabet reported advertising revenue of $65.85 billion. That was up from $59.65 billion a year ago, showing that Google’s advertising business continues to grow, though at a slower pace than in the second quarter.

YouTube ad revenue just beat analysts’ expectations, showing better growth than last quarter. The Google-owned company faces increased pressure from other advertiser options such as Netflix, TikTok and Amazon.

AI is improving YouTube recommendations, Chief Business Officer Philipp Schindler said on the call with investors. The company’s AI language model Gemini has given YouTube the ability to “recommend more relevant, fresher and personalized content to the viewer.”

Google Workspace, the company’s collection of cloud computing and productivity suite, saw strong growth during the third quarter, Ashkenazi said. Google Cloud Platform, the company’s data management and AI suite, saw growth that outpaced the cloud unit’s growth during the quarter, Ashkenazi added.

Other Bets, which includes the company’s life sciences unit Verily and self-driving car unit Waymo, reported revenue of $388 million in the third quarter. That is up from $297 million a year ago.

Last week, Waymo closed a $5.6 billion funding round to expand its robotaxi service in Los Angeles, San Francisco and Phoenix and to more cities.

Google Lens, the company’s image recognition product that uses mobile cameras and photos, is now used for more than 20 billion visual searches per month, Pichai said. It is one of the fastest-growing search products and is used often for shopping, he added.

Alphabet’s third quarter was filled with shake-ups externally and internally, including at its most senior ranks and its most important business.

Earlier this month, the company replaced Prabhakar Raghavan, the company’s search and ads boss since 2018, with Nick Fox, a longtime executive known for his role in Google’s Assistant unit. Additionally, the team working on the Gemini app, which includes the company’s artificial intelligence direct-to-consumer products, will join Google DeepMind under head Demis Hassabis.

The company on Tuesday announced it is evaluating how this reorganization will affect its segment operating results.

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