It looks like the deal between Reliance and Disney to take over the Disney business in India could happen as early as next week. They are expected to sign a non-binding agreement to merge their media operations in India in a cash-and-stock deal. Reliance will infuse cash into the Disney business to hold at least 51% of the merged entity. Disney will hold the rest of the stake. The due diligence will start after that. It deepens the reach of Reliance Group in the media space and takes on Netflix and Amazon in the competitive OTT space.
The Indian manufacturing sector has the potential to scale to $1 trillion by FY26 based on the massive growth in investments. For most global companies, India is already emerging as the preferred manufacturing place in the world. Make in India and the Production-Linked Incentive (PLI) scheme have played a big role in this shift; especially in sectors like automobiles, electronics, defence, and textiles. The share of the manufacturing sector in Indian GDP is expected to grow from 16% to 21% in 6 years. Apple has been a classic case study.
Public-sector Manganese Ore India Ltd (MOIL) announced a strategic partnership with GMDC for mining of manganese ore in the state of Gujarat. It will be a 51:49 joint venture between MOIL and GMDC. In fact, MOIL has also approved the agreement between MOIL and Madhya Pradesh State Mining Corp. for manganese ore mining in the state of Madhya Pradesh. Earlier this month, MOIL had posted a 43% rise in manganese ore production at 10.88 lakh tonnes till November of FY24. That is 35% growth in output year on year.
Mirae Asset Securities, the Indian parent of the Mirae group of South Korea, announced it will acquire the 100% stake in Sharekhan from BNP Paribas. This would be subject to due diligence and necessary statutory approvals. Sharekhan was established in year 2000 and is one of the big retain broking names in India with over 30 lakh accounts and over 4,000 business partners. It also has a huge physical and digital POS presence. Mirae already has its own retail broking platform M.Stock with more than 5.8 lakh customers.
In a relief for markets and brokers, SEBI revised its framework for transfer of client funds from broker accounts to address the operational challenges to brokers. SEBI removed one layer of fund movement and also relaxed the strict cutoff time of 6 PM. This request for modification had been presented to SEBI by the brokers, in consultation with the MIIs (market infrastructure institutions). The revised framework allows brokers to transfer to downstream accounts directly without involving clearing agency for payout.
Venture capitalists are sitting on a tidy $20 billion of loose cash to invest in Indian start-ups , according to Rajiv Anandan, Managing Director, Peak XV Partners. According to Anandan, artificial intelligence (AI) is top on the priority list for VCs and PE investors. In the next 15-20 years, India is likely to have at lease 50 $1 billion plus companies solving problems for the large companies in the world, and AI will be one of the major solutions in focus. The pendulum of VCs and PE funds is already swinging in favour of AI players.
Inox India Ltd, the cryogenic tank manufacturer, has raised Rs438 crore from anchor investors, a day ahead of the opening of its IPO. The company raised Rs438 crore via the allotment of 66,33,298 shares to 41 anchor investors at the upper IPO price band of Rs660 per share. The anchor investors included top FPIs, mutual funds and insurance players in India. The anchor portion accounts for 30% of the IPO size of Inox India Ltd and the anchor shares will be reduced from the QIB quota. I-Sec and Axis Capital are BRLMs.
Paytm stock (One97 Communications) fell by another 3% to Rs596; the lowest level since March 2023. The stock was under pressure after it announce that it will scale down small-ticket size loans in sync with RBI guidelines. These refer to loans below the denomination of Rs50,000. The stock has already fallen by 38% from its recent 52-week high and it looks like déjà vu all over again. Paytm will focus on bigger ticket unsecured loans. While it is a prudential measure, major brokers downgraded the stock after this decision.
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