In a boost for the spread of corporate governance in India, the recommendations of the Kotak Committee on corporate governance will go live on April 01st this year. There will be an emphasis on the independence and diversity of boards, expansion of shareholder information and rights, focus on the actions of promoters in ensuring corporate governance and timely and material reporting of key data points. In the last year, several companies like Yes Bank, IndusInd Bank, Infibeam Avenues, PC Jewellers and Manpasand Beverages came under the radar of poor corporate governance.
Indian investors finally have a new asset class to invest in. The Embassy REITs IPO will officially open for subscription on May 18th, 2019. The Rs.4750 crore REITs IPO will be the first in India and will entail issue of 15.83 crore units at a price of Rs.300 per unit. The minimum lot size will be 800 units which entail a minimum investment of Rs.2.40 lakhs. REITs are the real estate equivalent of mutual funds and they collect money from the public to issue proportionate real estate units. REITs also provide monetization and exit routes for realty developers, something most developers are desperately looking for.
The coming week could be interesting with a number of crucial data points coming up. Nifty and Sensex look to the impact of FII inflows and Rupee strength. With over Rs.24,000 crore flowing from FIIs into equity in the month of March and over Rs.35,000 crore since February 20th, the Nifty and the Sensex are close to their all-time highs. The rupee has also strengthened by nearly 2.50/$ to the 69/levels in the last couple of weeks. There is also the all-important Fed meet coming up later the week, which will be an overhang on markets. Oil tempered over the weekend but that will also be in focus.
Nearly 9 months after its first default, IL&FS is likely to get the first set of bids under asset monetization on March 18th. This monetization bid will be part of the resolution process put in place by the new board that has taken over IL&FS. The infrastructure financier started defaulting in June 2018 and creditors were left standing with nearly Rs.94,000 crore worth of debt securities. The company will now be selling its assets and participation share in various infrastructure projects across verticals including roads, education, renewable energy, and broking. It is currently under external management.
Anti-Trust officials raided the India offices of Glencore over pulses pricing and cartelization way back in 2015 and 2016. Apart from Glencore, the anti-trust officials also raided the offices of Africa Export Trading and Edelweiss Group in this regard. Years 2015 and 2016 represented the aftermath of drought years and there was an acute shortage of pulses locally during this period. Interestingly, Edelweiss had sold its commodity trading business in late 2016. Glencore has been in financial trouble globally. The government had been investigating the possibility of a handful of commodity traders who had cornered pulses during that period. It may be recollected that during this period the prices of pulses had shot up sharply due to artificial shortages created by Glencore and others in connivance.
After Ericsson, RCOM has a new problem in the form of BSNL which has decided to approach the NCLT to recover Rs.700 crores. The amount of Rs.700 crore is owed by RCOM to BSNL after BSNL had already invoked an Rs.100 crore bank guarantee given by RCOM. Anil Ambani faces a prison term if he is not able to pay the balance Rs.453 crore to Ericsson and SBI has already refused to release the tax refund money to RCOM. Operating creditors are worried that once RCOM goes to NCLT it will be in the hands of the Committee of Creditors (COC) and the financial creditors may get the first preference.
