The sage of PE funds investing in Jio Platforms continued this week with TPG and L. Catterton taking a
stake in Jio Platforms. While TPG will take a 0.93% stake in Jio Platforms for $598 million, Catterton will
take a 0.39% stake for $249 million. Both the investments value Jio Platforms at $65 billion, the
approximate valuation at which all the other PE and sovereign funds have invested in Jio Platforms. With
this investment closed out, Reliance has now placed 22.32% stake in Jio Platforms with a clutch of 9
global investors for an overall consideration of Rs.1,04,000 crore in a step towards going debt free.
India’s maiden natural gas exchange will be inaugurated on Monday 15 June. It is based on the
membership model and the exchange will offer the option of trading as well as of taking delivery of
natural gas. The charges for delivery transactions will be higher than normal transactions. To begin with,
a total of 6 trader members and over 100 clients have already been boarded to start trading in power
contracts. IGX will offer spot and forward contracts at Dahej, Hazira and Kakinada. It still not clear if the
gas produced in domestic fields on nomination basis will be traded or not. Clarity is awaited.
FPIs have invested a total of Rs.20,574 crore into equities in the first half of June 2020. As of date, the
foreign portfolio investors had infused Rs.22,840 crore into equities but had taken out Rs.2266 crore
from debt. The first week of June saw heavy buying in equities on the back of some major block deals in
Kotak Bank and HDFC Life, although FPIs did turn net sellers in equities in the second week. Prior to June
FPIs had been net sellers for 3 months in a row. They had sold Rs.7366 crore in May, Rs.15,403 crore in
April and Rs.115,000 crore in March. Fed giving a weak outlook on growth also dampened spirits.
A total of seven out of the top ten Nifty companies actually ended up losing Rs.78,127 crore in market
value during the week. HDFC Bank took the big hit losing Rs.28,392 crore during the week in value. Apart
from HDFC Bank, other players like Bharti Airtel, Kotak Bank, ITC and ICICI Bank lost another Rs.41,000
crore between them. However, there were some exceptional gainers too during the week. Stocks like
Reliance, HDFC and Hindustan Unilever closed the week with gains. Towards the end of the week, IT
stocks came under pressure on lower IT spending worries and the H1-B visa fiasco.
The Coronavirus syndrome may have another casualty in the form of the privatization of PSU banks. PSU
banks are expected to face increased stress once the EMI moratorium period gets over towards the end
of August and the real repayment stress starts to show. The government is also worried that the
valuations are extremely low due to very poor investor sentiments and the valuations may defeat the
very purpose of monetizing the government stake in these PSU banks. Most of the PSU banks are still
under PCA or prompt correction action. That means; these banks face restrictions in terms of dividend
payment, loan book expansion and top level compensation. That would discourage private banks from
taking a stake in them. Government stake has gone above 75% in most banks due to capital infusion.
Former chairman of Tata Sons Cyrus Mistry, who was ousted in October 2016, has claimed that his
questions over Tata Group investments in Nano Car and in Tata Steel Europe have been vindicated.
Mistry is the largest shareholder in Tata Sons and is seeking proportionate representation in the board.
Some of the questions raised by Mistry pertained to the Rs.60,000 crore loss in Tata Tele and the
continuation of the Mundra project of Tata Power, which had yielded nothing despite investing
Rs.18,000 crore. Mistry feels that recent developments had ratified most concerns expressed by him.