Mystery behind Mistry, Varun Beverages IPO, Next phase of Privatisation- Weekly Digest #20

Monday- 24th October 2016

  • TATA Sons sacked their chairman Cyrus Mistry as Ratan TATA takes the position as interim chairman while the replacement is announced. Cyrus Mistry had held this position for four years. The new chairman to be announced within four months.
  • Everstone Capital has invested INR 220 crore in contract research and drug-delivery company Rubicon Research, the latest investment by the mid-market private equity firm.
  • The share price of software player Mindtree hit a 52-week low at INR 452.70 as the Q2 results failed to shine. The revenue shrank by 3%, as there has been a delay in spending decisions by the clients.
  • Varun beverages to launch its IPO to raise an amount of INR 1,100 crores from the primary market. 60% of the issue will be a fresh issue and 40% as an offer for sale
  • Idea cellular Q2 results disappointed the stakeholders, as the net income shrank by 88%. It reported a net income of INR 90 crores, against last year’s income of INR 758 crores.


Tuesday-25th October 2016

  • In response to being sacked as the chairman of TATA Sons, Cyrus Mistry retaliated by calling this move “unparalleled in the annals of corporate history” and that it had left him “shocked beyond words”. He also called his termination as invalid and illegal.
  • Textiles firm Arvind has raised INR 740 crore by selling 10% stake in its retail arm to Multiples, a private equity firm, in an effort to pare debt.
  • Bharti Airtel’s Q2 profit slipped by 5 %, as its voice business faced heavy competition by the entry of Reliance Jio in the market and heightened volatility that followed.
  • Stocks of TATA group companies shed by 1%-5% in the market due to the surprising removal of the chairman of TATA Sons, Cyrus Mistry. Tata Metaliks fell 5% , Indian Hotels declined 3.2% and Tata Steel dropped 2.5%.
  • The government has allowed 100% foreign direct investment (FDI) in `other financial services’ carried out by non-banking finance companies (NBFCs).


Wednesday- 26th October 2016

  • Apple’s iPhone sales in India surged more than 50% in the year ended September. This news comes as a silver lining since the company recently reported its first annual sales and profit decline in 15 years.
  • Hero MotoCorp reported a record net profit of INR 1,004 crore for the second quarter. Goos results have been attributed to strong sales and improved operational performance.
  • Alibaba Group’s global managing director K Guru Gowrappan has joined Paytm as additional director, becoming the third top-level executive to join the e-commerce and payments company in the last one week.
  • HDFC Property Fund has made an exit worth over INR 1,500 crore from Lodha Group’s high-end residential project, World Towers, at Lower Parel in Mumbai. This happens to be this year’s  largest private equity real estate exit.
  • HDFC on Wednesday reported a 14% jump in its net profit for the quarter ended September 30 at INR 1,827 crores, attributing to a significant fall in tax outgo.


Thursday- 27th October 2016

  • Within days of removal of Cyrus Mistry, the Tata Group has lost over INR 26,000 crores in the market capitalization.
  • The government approved an ambitious plan to sell loss-making state-owned companies, subsidiaries and select manufacturing plants to strategic buyers, setting the stage for the return of privatization after more than a decade.
  • Hero MotoCorp has invested an amount of INR 205 crores in electric automotive startup Ather Energy for a 26-30% stake in one of the biggest deals in the nascent sector.
  • Maruti Suzuki beat market expectations with a record quarterly profit of INR 2,398 crore for the second quarter. This has been attributed to a strong demand for its new models, better utilisation of its factories and reduced discounts.
  • ONGC reported a 6.3% rise in its Q2 net profit on the back of lower write-offs, even as it announced a bonus share to increase liquidity ahead of government disinvestment.


Friday- 28th October 2016

  • Amazon reported a significant increase in its losses for the overall international business for the Q2, mainly due to its aggressive stance on claiming leadership in Indian online retail market. The reported loss for Q2 is $541 million.
  • Amazon has bought out Tata Group’s publishing business Westland for an amount of INR 39.8 crores.
  • The Rs 1,100-crore initial public offering (IPO) of Varun Beverages, the world’s second largest PepsiCo bottler, ended with the issue being subscribed 1.84 times.


Source: The Economic Times


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