Let’s begin. Adani Group on Thursday said pre-tax profit or EBITDA of its portfolio companies that span from apples to airports soared 34 per cent to Rs 79,000 crore in the 12-month period ended December 2023 – 2.5x of EBITDA in financial year 2021. EBITDA of Rs 78,823 crore in 2023 is compared with Rs 58,653 crore pre-tax profit in the previous year, it said in a statement. It said that the growth was powered by the highly stable core infrastructure platform. Growing at 35.5 per cent, it generated Rs 66,208 crore (USD 8 billion) – 84 per cent of portfolio EBITDA. Domestic and international rating agencies, including S&P Global and Moody’s have upgraded or positively revised the outlook for all key portfolio companies.
Meanwhile, The Union Cabinet this week approved semiconductor projects worth Rs 1.26 trillion, including the country’s first Rs 91,000 crore semiconductor fabrication proposal by Tata Electronics in partnership with Taiwan-based Power Semiconductor Manufacturing Corp. Including the Micron project which was approved last year, the total value of projects as on date stands at Rs 1.49 trillion. The other major project to be approved on Thursday was also by the Tata Group – the Rs 27,000-crore assembly, test, marking, and packaging project by Tata Semiconductor Assembly and Test. The third, which carries an investment of Rs 7,600 crore was of CG Power in partnership with Japan-based Renesas Electronics and Thailand’s Stars Microelectronics.
Over to money matters. The government kick-started the process for additional stake sale in General Insurance Corporation, with roadshows in key global financial hubs including New York, Singapore, Hong Kong, Dubai and London. According to an official source, the outreach elicited “quite positive response” from global investors, in what would give a fillip to the offer for sale. Currently, the government owns 85.78% of GIC Re and needs to reduce its stake by 10.78 percentage points to 75% by August to meet the minimum public shareholding (MPS) of 25% in the company. The current market value of the government’s 10.78% stake was worth Rs 7,341 crore. If the norms are unmet by August, the government will have to extend the time for another year.
On to market. Reliance Industries shares gained up to 1.7% to Rs 2,958 in intraday trades before settling at Rs 2,930 on Thursday this week. On Wednesday, the company informed the exchanges that it had signed an $8.5 billion deal to form a joint venture with Disney to combine their media businesses. While RIL’s shares reacted positively to the developments, other media companies from the group witnessed a decline in share prices. The share price of Network18 Media and Investments and TV18 Broadcast fell 5% each. The shares of other media and entertainment companies also recorded declines, including Balaji Telefilms, Eros International Media, Saregama India, and NDTV among others.
Moving on. Sebi’s recent nudge to the mutual fund industry body, the Association of Mutual Fund in India, to sensitise fund houses to be cautious about mid and small-cap schemes comes at a time when stocks in both these segment have been rising steadily and valuations have also gone up significantly. For instance, the current price-to-earnings P/E ratio of the mid-cap index is 32.39x, higher than the ten-year trailing average of 31.05x. However, it is lower than the five-year average of 32.80x. The small-cap index’s P/E ratio, on the other hand, is at 28.41x, way below the 10-year average of 44.24x. But it is significantly higher than the five-year average of 19.29x. Hence the market regulator’s worries are justified.
Next up, industry. Coal India and Bharat Heavy Electricals Ltd this week announced the signing of a joint venture agreement for setting up of an ammonium nitrate plant as a part of its coal gasification project. The joint venture will initiate the ‘coal to chemicals’ business by first setting up a 2,000 tonnes per day ammonium nitrate plant and will use Pressurized Fluidized Bed Gasification technology developed by BHEL, the company said in an exchange filing. Coal India will own 51% stake in the joint venture with BHEL acquiring the remaining 49%. The JV will be registered in Odisha, and incorporated as a “private limited” company with an initial paid-up share capital of Rs 1 lakh.
Lastly, some exciting news from the auto sector. Build Your Dreams has officially announced the opening of bookings for the highly anticipated Seal EV in India. The all-electric coupe sedan is set to make its debut in the country on 5 March 2024. The Chinese brand is also offering an attractive opportunity for early buyers to witness a UEFA Euro 2024 match. Customers who book the BYD Seal by April 30 will have the opportunity to participate in an exclusive scheme organised by the carmaker. A limited number of winners will be selected to receive a complimentary UEFA match ticket and round-trip flight ticket from India to the match city.