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Petrol sales rebound in India, jump 5.8% in August, diesel lags on fall in consumption

Petrol sales in India rebounded in August but diesel continued to show a decline over the previous month as rains in several parts chipped away demand in some sectors, preliminary industry data showed. Petrol sales, which had dipped 5 per cent in July, increased 5.8 per cent to 2.81 million tonnes in August when compared with 2.66 million tonnes of demand in the previous month.

The consumption was almost 16 per cent higher than August 2021 and 31.7 per cent more than 2.14 million tonnes in the same month in 2020. It was 20.6 per cent higher than the pre-pandemic demand of 2.33 million tonnes in August 2019. Diesel, the most widely used fuel in the country, saw consumption drop 4.9 per cent to 6.11 million tonnes from 6.42 million tonnes in July.

The monsoon rains weigh heavily on diesel demand in the country and consumption traditionally is lower in July-September than in April-June. Rains restrict mobility and demand from the farm sector, which uses diesel in irrigation pumps and trucking. Diesel demand had dipped 13.1 per cent in July.

Consumption of diesel in August was, however, 23.5 per cent higher year-on-year, supported by strong economic growth and a relatively low baseline for the same period in 2021 when the second wave of COVID-19 had impacted the economy.Diesel demand was 43.4 per cent higher than the 4.26 million tonnes demand during August 2020 and 11.6 per cent more than the pre-COVID sale of 5.48 million tonnes in August 2019, the data showed.

The decline in auto fuel sales in July and August came after a surge in June that was supported by increased summer travel to colder areas of the country to escape from the heat and vacations during annual breaks at educational institutions.As the aviation sector opened up, India’s overall passenger traffic (both domestic and international) at airports inched closer to pre-COVID-19 levels.

Accordingly, jet fuel (ATF) demand more than doubled to 541,000 tonnes during August when compared to the previous month. It was 51.4 per cent higher than last year and 118.9 per cent more than August 2020. It, however, was 14.3 per cent lower than pre-COVID August 2019.

With strong economic growth of 7.1 per cent, India’s oil demand has been rising steadily since the country eased pandemic lockdowns. Cooking gas LPG sales were up 5 per cent year-on-year at 2.44 million tonnes in August. LPG consumption was 7 per cent higher than in August 2020 and 2.5 per cent more than in August 2019. Month-on-month, the demand slipped 1 per cent when compared to 2.46 million tonnes of LPG consumption during July, the data showed.

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Adani Transmission beats LIC, HDFC in m-cap to enter top 10 stocks; shares rally this much YTD

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 overhauls preferential allotment rules for REITs, InvITs

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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