HDFC Mutual Fund has finally got the nod for its proposed IPO. It will now be the second mutual fund AMC after Reliance Mutual Fund to come out with an IPO. Currently, 58% stake is with HDFC while 38% is with Standard Life of UK. The IPO may be launched around the last week of July. The IPO will entirely in the form of an offer-for-sale wherein HDFC will offload 4% while Standard Life will offload 8% stake. HDFC AMC manages over Rs.3 trillion (Rs.3 lakh crore) and has the second highest AUM in India behind ICICI Prudential AMC. The IPO size is expected to be around Rs.3,800 crore.
The shares of Idea tanked by over 7% after it became evident that the Vodafone merger may be delayed by another quarter. The merger approvals were expected to be completed by June 30th. However, the Telecom Department has raised a fresh demand of Rs.4700 crore on Vodafone pertaining to the unpaid spectrum dues when they merged group companies in India. At that point of time, Vodafone had only paid Rs.2000 crore out of its total purported liability of Rs.6,700 crore. The department is demanding the balance now. Vodafone will have to either clear the dues or furnish bank guarantee.
P-Note investments dipped to a 9-month low level of Rs.93,497 crore for the 3 classes of equity, debt and derivatives combined. This was necessitated after SEBI tightened norms pertaining to P-Notes to prevent the risk of money laundering and round tripping of funds. The regulator has become doubly cautious after allegations that defaulters like Vijay Mallya and Nirav Modi may have used the P-Note route to launder money outside India. P-Notes are issued by registered foreign portfolio investors (FPIs) to their clients who want to participate in Indian markets but do not want to register here.
Tata Motors owned JLR has raised spending in a bid to offer electric cars to the public. It proposes to produce 3 versions of the electric car by the year 2025. JLR proposes to invest a massive £13.50 billion into this project which is expected to be the next big trend in the auto sector. JLR admitted that demand for diesel cars was slightly subdued as people were unwilling to commit too much to diesel cars for two reasons. Firstly, there was the sentiment loaded against diesel and secondly, there is this big emerging trend of electric cars. JLR sales and profit growth faltered for the year to March 2018.
Even as the sabre-rattling over trade wars gets strident, China is now asking itself if it is ready for a full-fledged trade war. China is among the world’s largest exporters and it runs a trade surplus of $376 billion with the US. Obviously, the thinking in the US now is that it can ill afford a trade war spreading around the world as more countries tighten their entry points. Economists in China are increasingly sceptical if China can survive a prolonged trade slump and also feel that negotiating and giving concessions to the US may be the right strategy ahead. Currently, both the US and China have decided to impact $50 billion of trade either ways, but China may stand to lose a lot more as it is an export driven economy. Even the Dow was sharply down on Monday.
It now appears that SEBI may prefer adjudication proceedings against ICICI Bank and its CEO, Chanda Kochhar, in the conflict of interest case pertaining to the Videocon loan issue. While Chanda may be fined Rs.1 crore for lapses, SEBI may impose a penalty of Rs.25 crore on ICICI Bank for procedural lapses. It may be recollected that the ICICI Board has already sent Ms. Kochhar on indefinite leave as an independent inquiry by a committee headed by Justice Srikrishna goes on. Last week, Sandeep Bakshi had taken over as the interim CEO of ICICI Bank pending completion of inquiry.
