Business News at 09:30 am on 25th May 2023

The Adani Group’s plans to raise funds may not face any hurdle as a clutch of marquee investors, both foreign and domestic, have shown interest. The group is planning to raise about $2.5-3 billion by offloading shares through qualified institutional placements or other modes. The funds would be utilised to reduce debt and for capital expenditure plans. While foreign investors like Abu Dhabi-based International Holding Company, Abu Dhabi Investment Authority and GQG Partners are keen to pick up stakes in the company, domestic names like LIC and SBI seem to be interested too, sources close to the development said. Besides general insurance companies and financial firms, investment arms of Indian conglomerates are also keen to participate, they added. Adani Group stocks had a mixed day at the bourses, with Adani Enterprises falling the most at 5.90%. Out of the 10 listed entities, 7 fell while the rest three – NDTV, Adani Transmission and Adani Total Gas – rose 5% each.

Moving on. Tata Group has stepped up its ambitions in the electric vehicle space with the formation of a new company that will make batteries and cells. Sources said that the new company, Agratas Energy Solutions, is directly managed by Tata Sons — the principal investment holding company of the Tata Group. Tata Motors’ two top executives — PB Balaji, chief financial officer, and Thomas Flack, chief procurement officer — are the directors on the new company’s board. A mail sent to Tata Sons seeking details of the new company’s business plans remained unanswered. A top executive from one of the Tata Group companies, however, confirmed the creation of the new company. An EV battery cell manufacturing plant augurs well for Tata Motors as this will eliminate the company’s dependence on third-party suppliers based in China and South Korea. These are often exposed to geopolitical tensions, supply chain disruptions and demand spikes by competition. Last year, Tata Chemicals, the company which experts tracking the group believed would lead the EV battery plans, said it was not interested in entering this space.

Now some news from fintech sector. ZestMoney is on track to hit profitability within 3-6 months and will raise funds through an internal round from existing investors in the next few weeks, a top executive said. “Once we hit profitability, the need for funds will not arise. We will then be sustainable like any other company and will be completely on our own,” Mandar Satpute, chief banking officer, ZestMoney, told FE. The funding will be purely an equity round and will not have any convertible structures. The fintech firm is said to be finalising a new investment round from its existing shareholders, including Quona Capital, Zip, Omidyar Network India, Flourish VC and Scarlet Digital. To ensure business continuity, ZestMoney plans to operate as a lending service provider partnering with banks and NBFCs to write out loans rather than lending directly from its balance sheet, Satpute added.

In other news, the government on Wednesday launched the next phase of its regional air connectivity scheme UDAN which is expected to further enhance the connectivity in remote areas through helicopters. FE was the first to report earlier this week that the government will soon come out with the next phase of UDAN. “Greater helicopter penetration through such efforts will help boost tourism, hospitality, and thus, our local economies,” civil aviation minister Jyotiraditya Scindia said. “UDAN 5.1 heralds a new dawn not just for civil aviation, but also for India’s remote and unserved regions,” he added. The new phase is expected to promote chopper usage and grow the existing number of helicopters in India. At present, there are only around 280 civilian choppers in India which are used in various sectors.

Meanwhile, the finance ministry has agreed to allow highway developers to replace their existing bank guarantees with insurance surety bonds, road transport and highways minister Nitin Gadkari said Wednesday. This would help unlock capital and speed up projects. Over 4,000 bank guarantees worth Rs 2 trillion are lying with the NHAI itself. Many developers have been seeking the option to convert the guarantees. Insurance Surety Bonds, allowed by Insurance Regulatory and Development Authority in April 2022, have been brought as a replacement for bank guarantees. Five insurance companies have already launched ISB products; however, the market for these bonds is yet to take off.

And finally, here’s what pre-opening cues say about trade today. LIC, Adani Enterprises, Nykaa, Vodafone Idea, and Infosys are some of the stocks to watch in trade. The SGX Nifty hinted that domestic indices NSE Nifty 50 and BSE Sensex might open in the red. Nifty futures were 46 points lower on the Singaporean exchange at 18,237. Benchmark indices NSE Nifty 50 and BSE Sensex ended Wednesday’s session in the red.