Business News at 09:30 am on 30th November 2023

Let’s begin. Technology investor Prosus has marked down the value of its stake in Byju’s further to less than $3 billion. This is a decline of 86% from the valuation of $22 billion when Byju’s last went for a funding round of $250 million in October 2022. This is the second time in a year that Prosus has marked down Byju’s valuation. In November last year, Prosus had slashed the fair value of Byju’s to $5.97 billion. Prosus holds a stake of around 10% in Byju’s. Ervin Tu, interim CEO of Prosus, who took over from Bob van Dijk in September commented on Byju’s valuation in an earnings call, after disclosing Prosus’s half-yearly results up to September.
On to market. Shares of Tata Motors crossed Rs 700 for the first time on Wednesday, closing at Rs 712.15 on the BSE and Rs 711.50 on the NSE, in anticipation of a stellar debut by subsidiary Tata Technologies, which had witnessed a near-70x subscription to its initial public offering in the previous week. Reports on Wednesday suggested Tata Technologies could list at a premium of 70-80%. According to market experts, the listing premium is justified mainly on the back of the Tata parentage tag that enjoys first preference among the investor community and its unique, well-established global business model, which has been generating healthy margins across sectors where it has presence.
Meanwhile, Running the Pradhan Mantri Garib Kalyan Anna Yojana or free ration scheme in the current form for the next five years would cost the exchequer Rs 11.8 trillion. The statement followed Wednesday’s Cabinet approval for extending the scheme for five years starting January 1, 2024. Information and Broadcasting minister Anurag Thakur said there will be no shortage of funds to run the scheme. Neither would there be issues with procurement on account of extending the PMGKAY, the minister added. An official told FE that the estimate of the cost of PMGKAY was made after taking into consideration a projected increase of 7%-8% in the MSP of the relevant crops – rice and wheat and coarse grains– annually, and other costs such as transportation, storage and incidentals.
Moving on. Public sector lender Bank of India is expecting a 40 basis points moderation in its capital to risk weighted assets ratio due to the Reserve Bank of India’s circular on the rise in risk weights across personal loans, credit cards, and bank loans to non-banking finance companies, MD & CEO Rajneesh Karnatak told FE. The bank’s CRAR stood at 15.63% as of September 30. He said, quote, “As per our ballpark calculation, our CRAR may get impacted by 40 bps only as we do not have a large personal loan and NBFC loan book,” unquote. As on September 30, Bank of India’s personal loan and credit card loan book stood at around Rs 8,500 crore, which is 1.5% of its overall global advances.
In some more banking news. Growing demand for Commercial Vehicles and construction equipment will drive infrastructure financing for Kotak Mahindra Bank in the second half of the current fiscal. The private lender managed to grow its construction equipment and commercial vehicle advances grew by 26% to reach Rs 31,000 crore at the end of first half and the bank plans to maintain this growth momentum in the second half. Amit Mohan, President – Logistics and Infrastructure, Kotak Mahindra Bank told FE that the overall macroeconomic environment and government’s focus on infrastructure has really helped improve the demand for construction equipment and commercial vehicles. This has boosted the demand for loans for commercial vehicles and construction equipment.
Over to economy. Rural consumption rose just 0.5% on year in Q2FY24, the slowest pace in eight quarters, according to an analysis by Motilal Oswal Financial Services. Urban consumption, however, grew 7.4% in July-September 2023, the sharpest pace in four quarters. The tepid consumption scenario in rural areas was mainly led by sharply deteriorating reservoir level, the first fall in two-wheeler sales in six quarters, and first contraction in fertilizer sales in seven quarters, it added. Besides, tractor sales shrank for the second successive quarter and that too, at a faster pace, and real farm exports fell for the fourth consecutive quarter in Q2 FY24, said MOFSL in a report.
Lastly, let’s look at some of the stocks that you need to watch out today. These include Tata Technologies, ICICI Bank, Fedbank Financial Services, Gangadhar Oil Refinery, and UltraTech Cement among others. The shares of Tata Tech are scheduled to make their debut on the bourses today. On the other hand, the shares of Gandhar Oil are scheduled for listing on the stock exchanges today. Shares of Fedbank Financial Services will also be listed on the stock exchanges today. ICRA has re-affirmed Dixon Technologies’ ratings and revised the outlook on the long term rating to Positive from Stable.