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Wheat prices hit a fresh record high following a delay in a stock release by the government

Indian wheat prices hit a fresh record high on Monday, following a delay in releasing extra stocks by the government to boost supplies and calm the domestic market reeling from shortages triggered by last year’s lower crop, dealers and farmers said. India, the world’s second-biggest producer of wheat, banned exports in May 2022 after a sudden rise in temperatures clipped output, even as exports picked up to meet the global shortfall triggered by Russia’s invasion of Ukraine.

Record-high wheat prices despite the export ban indicate a far bigger drop in last year’s output, traders say. According to government estimates, wheat output fell to 106.84 million tonnes in 2022 from 109.59 million tonnes a year earlier. “Farmers have sold their crop, traders’ are running out of stocks, but demand is robust,” said Gopaldas Agarwal, a trader based in the central Indian city of Indore. “Demand-supply mismatch is pushing up prices, and prices will remain firm until supplies start from the new season crop.”

Farmers plant wheat in October and November, with harvests from March.

Wheat prices in the Indore market – a benchmark – jumped to a record 29,375 rupees ($361.09) a tonne, up nearly 7 per cent so far this month after rising 37 per cent in 2022. In New Delhi, wheat prices rose almost 2 per cent on Monday to a record 31,508 rupees. Local wheat prices could rise by another 5 per cent to 6 per cent unless the government releases stocks in the next 15 days, said a dealer with a global trading firm. He did not wish to be named in line with his company’s policy.

“Even bulk consumers like wheat flour millers are struggling with lower supplies and higher prices,” said Rajesh Paharia Jain, a New Delhi-based trader. “Clearly, for the government, there is no time for procrastination.” Authorities have repeatedly said the government would offer 2 to 3 million tonnes of wheat from its reserves to help flour millers and biscuit makers to cool record-high prices.

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Gautam Adani plans on IPOs for at least five companies between 2026 and 2028

Asia’s richest man, Gautam Adani, plans to sell shares to the public in at least five companies between 2026 and 2028, helping the port-to-power conglomerate improve debt ratios and broaden its investor base. “At least five units will be ready to go to the market in the next three to five years,” Jugeshinder Singh, Adani Group’s chief financial officer said in an interview. He said Adani New Industries Ltd., Adani Airport Holdings Ltd., Adani Road Transport Ltd., AdaniConnex Pvt Ltd. and the group’s metals and mining units would become independent units.

Singh said businesses such as the airport operator are consumer platforms servicing nearly 300 million customers and need to operate on their own and manage their capital requirements for further growth. He said the businesses would need to show they can clear the basic tests of independent execution, operations and capital management before a formal demerger can be implemented. “Scale is already there for the five units,” Singh said. The “airport business is already independent, while Adani New Industries is going strong on the green energy side. Adani Road is demonstrating new build-operate-transfer models to the nation, while the data centre business will grow further. Metals and mining would cover our aluminium, copper and mining services.”

Billionaire Adani has faced criticism over the group’s rapid expansion from a traditional port operator to a sprawling conglomerate with assets including media, cement and green energy that some say has increased debt and financial complexity. Research firm CreditSights red-flagged the Adani Group’s “elevated” leverage last year. The group pushed back against the report, calling leverage ratios “healthy.”

Blistering Rally

Most of the tycoon’s companies have seen a blistering stock rally in the past few years, vaulting Adani up the wealth rankings past Jeff Bezos and Bill Gates to a net worth of almost $121 billion, according to the Bloomberg Billionaires Index. Flagship Adani Enterprises Ltd. has surged more than 1,300 per cent since early 2020, Adani Total Gas Ltd. by more than 2,100 per cent, Adani Green Energy Ltd. has jumped more than 900 per cent while Adani Transmission Ltd. by 725 per cent, data compiled by Bloomberg show.

Adani Enterprises is slated to sell new shares at a discount and allow payments in three instalments when it rolls out a $2.5 billion follow-on offer later this month — an unusual move for one of the country’s major stocks that are designed to attract domestic mom-and-pop investors. A diversified shareholder base would help make the thinly traded stock more liquid and provide funds to pay down debt. The follow-on offering “is a good first step,” said Chakri Lokapriya, Mumbai-based managing director at TCG Asset Management. “And the proceeds of IPOs of five or six companies can be used to further cut debt.”

Adani Group has consistently aligned itself to support Prime Minister Narendra Modi’s agenda. It has pledged more than $70 billion to help India pivot from being a fossil fuel importer to a generator of renewable energy. “These demergers will result in massive cash flow and make the conglomerate a more valuable platform globally showcasing India’s prowess of infrastructure,” Singh said.

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Gold jumps Rs 433; silver zooms Rs 990 amid strong global trends

Gold prices jumped by Rs 433 to Rs 57,025 per 10 grams on Friday amid a rally in the metal in the global markets, according to HDFC Securities.

In the previous trade, the precious metal had ended at Rs 56,592 per 10 grams. Silver also zoomed Rs 990 to Rs 69,208 per kg.

“Spot gold prices in the Delhi markets traded at Rs 57,025 per 10 grams, up Rs 433 per 10 grams,” said an analyst at HDFC Securities.

In the overseas markets, gold and silver were trading in green at USD 1,932 per ounce and USD 24.02 per ounce, respectively.

Comex gold prices traded up in Asian hours on Friday supported by safe-haven demand as weak US economic readings and hawkish comments from Federal Reserve members fuelled recession worries, the analyst said.

“Market participants are anticipating a 25 bps rate hike in the February meet, lower than the previous meetings, this is weighing on the US yields as well as supporting bullion,” said Navneet Damani, Senior VP – Commodity Research at Motilal Oswal Financial Services.

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