India Achieves A Successful Moon Landing
Chandrayaan-3 successfully demonstrated a safe and soft landing on the lunar surface, and will follow with its other mission objectives to demonstrate its rover roving on the Moon, and to conduct in-situ scientific experiments.
Our Top Reports For Today
- <00:56> Qatar Investment Authority to invest Rs 8,278 crore in Reliance Retail Ventures
- <03:07> Indian markets overvalued say some analysts, by how much, with Ambareesh Baliga
- <08:31> Remittances out of India are up 50% in the last quarter to $6.1 billion, FDI slows down
- <16:03> India is seeing record power demand
- <17:17> And India achieves a successful moon landing
NOTE: This transcript contains only the host's monologue and does not include any interviews or discussions that might be within the podcast. Please refer to the episode audio if you wish to quote the people interviewed. Email [email protected] for any queries.
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Reliance Retail Ventures Limited (“RRVL”) said today that Qatar Investment Authority (“QIA”), through a wholly-owned subsidiary, will invest ₹ 8,278 crore into RRVL, a subsidiary of Reliance Industries, valuing the company around $100 billion, or a pre-money equity value of ₹ 8.278 lakh crore.
This deal and these contours of it were first reported by the Financial Times, London a month ago in the context of oil rich Gulf funds increasing their bets on the Indian market.
Reliance Retail claims 267 million loyalty customers with an integrated omni-channel network of over 18,500 stores and digital commerce platforms across grocery, consumer electronics, fashion & lifestyle, and pharma consumption baskets.
QIA’s investment will translate into a minority equity stake of 0.99% in RRVL on a fully-diluted basis.
Reliance Retail raised around Rs 47,000 crore in 2020 at a pre-money equity value of ₹ 4.21 lakh crore or roughly half of what it is now. The last raises were at the peak of the Covid19 pandemic, all of which of course appears quite distant now.
Isha Ambani, Director, Reliance Retail said the investment by QIA is a strong endorsement of a positive outlook towards the Indian economy and Reliance’s retail business model, strategy and execution capabilities.”
Mansoor Ebrahim Al-Mahmoud, CEO, QIA, said, “QIA is committed to supporting innovative companies with high-growth potential in India’s fast growing retail market.
QIA invests in a diverse range of businesses, in the last 6 months, its investments have ranged from sports and entertainment franchise companies to electric battery makers to biotech, electronics and marketing platforms in the commerce space.
Earlier QIA acquired a stake in Adani Green Energy Ltd totalling more than 2.5% for over USD 500 million, according to news reports.
Morgan Stanley, Goldman Sachs, Cyril Amarchand Mangaldas and Davis Polk & Wardwell acted as advisors and legal counsels to the transaction. AZB and Cleary Gottlieb acted as legal counsel to QIA.
Markets
Elsewhere, in the Reliance Group, the Jio Financial stock got pounded again to the 5% lower circuit on Wednesday, making it the third day in succession.
The Sensex itself closed 213 points, or 0.33 per cent, higher at 65,433.30 while the Nifty ended at 19,444, up 48 points, or 0.25 per cent.
The markets seem to be on a plateau right now for various reasons. While the long term bullishness is intact, the short term is a little hazy.
To understand how and why the markets were, well, range bound right now and seemingly directionless, I reached out to Ambereesh Baliga, veteran market analyst and began by asking him why the markets were in this current holding pattern
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Speaking of investments, while some FDI is coming in like the deal we just spoke of and more on FDI in a moment, flow of funds from individuals out of the country is only increasing.
Outward remittances under the Government’s liberalised remittance scheme which of course is set to become less liberal in coming months was up 50% to $9.1 billion in the April to June quarter of 2023-24 or the current financial year.
This was mostly driven by investments in equity and debt instruments, purchase of immovable properties, deposits and international travel. For last year, the figure stood at $6.05 billion.
The gift segment rose to $1.3 billion from $770 million. And maintenance of close relatives was upto $1.8 billion, up 78%.
The Business Standard reports that purchase of immovable property saw a 122% jump to around $90 million.
Equity and debt almost doubled to $503 million from $223 million. Deposits overseas were also up, 62% to $430 million.
International travel went upto to $4 billion, up 39% from $2.9 billion last year.
A new tax collected at source regime with higher tax deductions - albeit refundable later - is set to kick in on October 1 and Indians are believed to be using this window as much as possible.
The studies abroad category was the only one which was down, around 6% annually to $694 million.
To understand the base trends that are driving this I spoke with Achin Bhardwaj, Executive DIrector of Asset Allocation at Wealth Management firm Client Associates.
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While outflows are increasing, inflows are decreasing, in this case foreign direct investment.
AK Bhattacharya, columnist in the Business Standard has pointed out that there is a disconcerting trend in the pace of foreign direct investments into the country.
For the first time since 2012-13, or 10 years, gross FDI in 2022-23 declined by 16% to $71 billion.
This, he says, has continued into the first quarter of the current financial year 2023-24 with FDI falling 22% to $18 billion.
Foreign equity investments, which of course have a different ebb and flow have also fallen in the last and same quarter by 33%.
Adverse economic conditions have affected not just India’s export of merchandise goods but also FDI inflows he points out.
Meanwhile in China...
Global investors have been shedding China’s blue-chip stocks during the longest stretch of outflows on record, Bloomberg News is reporting.
Overseas funds have been fleeing the mainland market, offloading the equivalent of $10.7 billion in a thirteen-day run of withdrawals through Wednesday, the longest since Bloomberg began tracking the data in 2016.
What is also interesting is that one of the largest foreign investor holding and sale was of China’s largest liquor maker, Kweichow Moutai Co which was the most heavily sold stock via trading links with Hong Kong. Foreign investors sold $851 million of the liquor major.
This was followed by selling in leading renewables stock LONGi Green Energy Technology Co. and lender China Merchants Bank Co., according to the latest data on individual stocks available on Bloomberg.
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Back home, the power ministry has directed imported coal-based power units to run at full capacity further till October in the backdrop of record electricity demand in August, the Economic Times is reporting.
The ministry had in February directed the imported coal-based plants to run optimally till June 15 starting March 16, under section 11 of the Electricity Act in anticipation of higher demand in summer. It was then extended till September end.
However, electricity demand met in India reached record highs this month touching 234 GW on August 17. In contrast, May recorded 'maximum demand met' at 221.7 GW while in June it reached 223 GW.
The unexpected demand has been attributed to a rise in irrigation needs in some parts of the country and humid weather. Lower wind power generation has also put some pressure on thermal capacities, they told the Economic Times.
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The Chandrayaan-3 mission was launched on July 14 from Sriharikota.
The mission objectives of Chandrayaan-3 where to demonstrate a safe and soft landing on the lunar surface, to demonstrate rover roving on the Moon, and to conduct in-situ scientific experiments.
That’s it from me for today. Have a great day ahead and see you tomorrow. Do write to us with what you would like us to do a special thanks to many of you who have been writing in with your feedback!
