Month: August 2021

Tension palpable at Assam-Mizoram border; central forces on vigil

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Tension was palpable at the Assam-Mizoram border on Sunday as the restrictions on the movement of vehicles, including trucks carrying essential supplies, entered the sixth day, officials said. The situation in and around Lailapur, which was rocked by deadly violence, along the interstate border remained calm with a large number of CRPF troops patrolling the National Highway-306, they said.

An all-party delegation, led by Assam Chief Minister’s Political Secretary Jayanta Malla Baruah, visited the house of one slain Assam Police personnel and praised the valour of the force in handling the situation on Monday. Officials in Assam’s Barak Valley said the vehicular movement has totally been stopped even though there is no bar on travelling from one state to the other.

Dozens of trucks with essential supplies, including COVID-19 materials, are waiting at the Kabuganj-Dholai stretch in the Cachar district. “The organised blockade on roads leading to Mizoram were lifted and no group is now on the streets to stop trucks or other vehicles. But aggrieved civilians are now stopping vehicles. Also, trucks and other commercial vehicles are not taking any risk and they themselves are not trying to move,” an official said.

Vehicles from Mizoram side are also not entering Assam and only official, and security vehicles are plying on the road, he said. After the fierce gun battle between the two police forces on Monday on a disputed border forest tract, various groups in the Barak Valley had enforced the blockade, drawing sharp protests from the neighbouring state.

Seven people from Assam, including six police personnel, were killed and more than 50 others were injured in the violence. Assam’s Barak Valley districts of Cachar, Karimganj and Hailakandi share a 164.6 km long border with Mizoram’s three districts of Aizawl, Kolasib and Mamit.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Excl: Meet Ogilvy’s global CEO Andy Main, ‘outsider’ scripting legacy ad agency’s transformation

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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“The one thing I did when I walked in (to make some friends in Ogilvy because I didn’t have any), was give everyone, all 15,000 employees, my WhatsApp number. And I just went on a listening tour,” says Andy Main. From his home in Colorado, US, the global chief executive officer of Ogilvy, shares his experience of stepping into traditional ad agency territory, at exactly this time last year.

In the thick of a pandemic, in 2020, the Scottish-born executive took the topmost job at WPP Group-owned Ogilvy after over two decades with management consultancy giant Deloitte. In short, Main was what advertising insiders call ‘an outsider’. In his last role, he was chief executive of Deloitte Digital where, through key acquisitions, he brought in creative firepower that the firm needed to take on the big ad holding companies, namely WPP, Omnicom, IPG, Dentsu and Publicis Groupe.

Many saw Main’s arrival in Ogilvy as evidence of the seriousness of WPP and its CEO Mark Read’s intent to transform the legacy agency into a future-fit organisation. In an exclusive interaction with Storyboard, Main tells us why and how he’s shaking things up.

(Edited for length and clarity.)

You took over the reins of Ogilvy at an extraordinary time. Tell us how that went for you and how Ogilvy’s transformation agenda looks in action?

My focus has been on ensuring we take the best of Ogilvy, protect it and build on it. That means keeping creativity at the centre of everything we do, and enabling our creativity to spread its wings, particularly into technology and data. So that’s been the essence of the last year at the helm of Ogilvy.

Our aspiration is to be the world’s leading creative partner and platform for growth and impact for our clients’ businesses. To do that we structured Ogilvy around five business groups — Growth & Innovation, Advertising, PR & Influence, Experience and Health. And we practice what’s called borderless creativity. It doesn’t really matter where you happen to be or how you happen to think, let’s make the world borderless to advance growth and impact for our clients.

A lot of people go around talking about integration. Agencies and consultancies have integration departments and disciplines. But we have a different perspective. We talk about the intersections. Integration means you’re putting together something that is fixed and known. But when you think about intersections, it talks about how you bring talent and capabilities to explore and discover value at intersections of many different topics. That is allowing our minds to be free and when you map that with creativity you get an amazing Ogilvy in the marketplace. That’s really what we brought to market very quickly. To have accomplished that feels very exciting to me, personally.

The last few years have been difficult for advertising companies across the board, a situation made worse by the pandemic. How did Ogilvy fare this past year in terms of business? How did you deal with losing the American Express account, which was an over half-century old creative relationship with Ogilvy?

We are a growing business and we’ve actually won lots of new accounts. For example, Absolut, Hyatt, Enterprise Holdings, TCS, Pernod Ricard and Deutsche Bahn. Our teams in India played a huge role in making that happen. Our wins have actually outnumbered our losses. We did extremely well at Cannes Lions with one Titanium, eight Grand Prix, and a raft of gold, silver and bronze. The creative spirit and DNA of our business is alive and well.

I have transformed and will continue to transform Ogilvy into a growth-oriented business with a growth mindset. This industry is making an amazing comeback and Ogilvy is very well positioned to capture more than its fair share of the market as it comes back in full force.

You are really shaking things up in global leadership. You brought in Liz Taylor from Leo Burnett as global chief creative officer, a position Piyush Pandey held till recently. Now he is chairman global creative, in addition to his role as executive chairman of Ogilvy India. Devika Bulchandani is running the North American operations. Stacey Ryan Cornelius is global CFO and Kim Johnson is the new global CEO of Health. Tell us what was going on in your head when you reconfigured Ogilvy’s leadership.

I had to change certain members of the Ogilvy global leadership team. That’s, quite honestly, why I was brought in. We’re doing what we’re doing to transform the business in a positive way. But it was very important to me to have diversity at the top.

We have more women and people of colour at Ogilvy’s leadership than ever before. (Liz Taylor is the first woman to hold Ogilvy’s top creative position.) Because we have that dynamic leadership, the thinking and the decisions we make and the mindset we have basically ripples throughout our organisation to all levels.

I’ve also been careful to make sure that many leaders from the last several years are also part of our global leadership team because we couldn’t have had that much change in our business. That would be very risky. We’ve got a solid balance of new leadership and leadership that has been around for several years. This blend is helping Ogilvy be super-duper competitive.

You spent 21 years at Deloitte before joining Ogilvy last year. Traditional agencies, typically, get their leaders within the family. WPP flipped the script this time. What do you think the move signalled to clients, competition and the industry, in general?

That creativity is the source of innovation. I came from a wonderful and successful business. But when you come to Ogilvy, it’s clear the creativity is there for everyone to see. My move was basically an indication that it is much harder to scale creativity than it is to scale technology. I can acquire a lot of technology to accompany an already scaled creative business. That, in a summary, is the message that was delivered to the market with that move.

We actually operate in a unique space between consultancies and agencies. When you compare us to consultancies, we have so much more creative prowess. When you compare us to other agencies, we’ve got much more substance, insights and industry knowledge. It’s such a powerful combination. We’ve got great creativity and amazing speed to value. That’s really our secret sauce.

But the consultants can just buy great creativity. You did that at Deloitte with the Heat acquisition. Accenture Interactive acquired Droga5. So what happens to the USP of the likes of Ogilvy?

Quite honestly, there’s been a slowdown in the consultants’ focus on creativity in the last few years. In many cases, there’s tissue rejection of the creative assets using the already in place consulting assets because you have a creative mindset meets a consulting mindset. It’s like riptides in the ocean, where there’s competing forces in play. It creates a lot of swirl and unnecessary energy.

If I had to put my point of view on it, I just don’t think the consulting businesses have scaled creativity nearly fast enough to compete against the likes of Ogilvy on the creative scale. It’s just a really hard thing to do to scale creativity and it’s an easier thing to do to scale technology. Ogilvy is going to do both. That’s what we’re out to accomplish.

Let’s dial back to July 2020. Did you feel like an outsider at all when you joined the agency?

I honestly didn’t. I think my feeling of not feeling like an outsider started from the very first day I learned about the Ogilvy opportunity. I’ve had great admiration and love for the Ogilvy brand over many years. I don’t want to say, even for a minute, that I am comparable to David Ogilvy, but, in many ways, I feel a spirit connection to him.

David Ogilvy was also born in the UK and moved to the United States. He has Scottish heritage. I was born and raised in Scotland. I think he used to sell gas stoves around the doors in Scotland, as one of his first jobs. I used to sell potatoes around the doors in Scotland, as one of my first jobs. (Laughs)

If I had a chance to have a Scotch with him – he was quite fond of Scotch, so am I – I think we’d have a bond around just being curious people, being inventive and wanting to take things to the next level and not being satisfied with what you’ve got.

When I was introduced to the Ogilvy team over a year ago, I promised to future-proof the business over the next few years. That was one of my commitments to the team. Ogilvy is an amazing heritage brand and a business that has not been merged with any others. So it’s like a thoroughbred brand and that’s just a wonderful thing to be able to represent.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

RBI likely to maintain status quo on interest rate

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Amid fears of a third wave of coronavirus pandemic and hardening of retail inflation, the Reserve Bank is likely to maintain status quo on interest rate and watch the developing macroeconomic situation for some more time before taking any decisive action on monetary policy. The RBI is scheduled to announce its bi-monthly monetary policy review on August 6 at the end of the three-day meeting — August 4-6 — of the Monetary Policy Committee (MPC). The RBI Governor-headed six-member MPC decides on the key policy rates. The panel had left the rates unchanged last time citing concerns on inflation. “Higher commodity prices and rising global prices post the robust recovery in a few industrial countries will have implications on production costs. We expect the RBI to be in a wait-and-watch mode as it has limited elbow room to manoeuvre monetary policies,” opined Rumki Majumdar, Economist, Deloitte India.

Shriram Transport Finance Managing Director and CEO Umesh Revankar too said the central bank will keep the repo rate at the present level despite higher inflation. “The rise in inflation is because of the fuel prices, which will get normalise (in sometime), and the inflation pressure will ease,” Revankar said.

The Reserve Bank, which mainly factors in the retail inflation while arriving at its monetary policy, has been mandated by the government to keep Consumer Price Index (CPI) based inflation at 4 per cent with a margin of 2 per cent on either side. Inflation ruled above the tolerance band during June-November 2020 and has again moved above the upper tolerance threshold in May and June 2021. The sense is that inflation will persist at these elevated levels for some months before easing in the third quarter of 2021-22 when the kharif harvest arrives in markets, a recent RBI article said. Ranen Banerjee, Leader – Economic Advisory Services, PwC India said that given the status quo stance taken by the US FOMC as well as other major monetary authorities with the inflation being viewed as transitory, “we can expect a similar status quo announcement by the MPC too”. Growth concerns and weak demand conditions owing to impact of second wave of Covid on employment and declining labour force participation rate combined with nervousness of a possible third wave, puts constraints on any change in stance by the MPC, he said. Further, tranches of GSAPs and OMOs can be expected to keep the yield on G-Secs from rising as there is a constant upward pressure on it owing to higher borrowing programme of government and inflationary pressures, Banerjee said.

A BofA Global Research report said: “We expect the RBI MPC to look through the transitory hump in inflation and stick with a unanimous dovish pause in the upcoming August 6 policy. The MPC is likely to revise up its FY22 average CPI inflation forecast slightly from the previous 5.1 per cent and flag potential upside risks.” As per a research report by Radhika Rao, Economist at DBS Group Research, the six-member monetary policy committee will adopt a wait-and-watch mode in August. “Policy commentary is likely to draw confidence from the turnaround in recent data but express caution over a potential third Covid wave,” it said. The CPI-based retail inflation was 6.26 per cent in June and 6.3 per cent in the previous month. After the June MPC meet, the Reserve Bank of India had left the benchmark interest rate unchanged at 4 per cent. It was for the sixth time in a row that the MPC maintained status quo on interest rate.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Companies spending on COVID jabs for individuals except staff to be considered CSR activity

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Companies spending funds on COVID vaccination for individuals other than employees and their families will be considered as a CSR expenditure. The corporate affairs ministry, which is implementing the Companies Act, 2013, has issued a clarification in this regard.

In March 2020, the ministry had said that spending on COVID-19 would be considered as a Corporate Social Responsibility (CSR) activity. “… it is further clarified that spending of CSR funds for COVID-19 vaccination for persons other than the employees and their families, is an eligible CSR activity,” the ministry said in a circular on July 30.

The activity is eligible to be considered as a CSR work under Section VII of the Act relating to promotion of healthcare, including preventive healthcare and pertaining to disaster management. “The companies may undertake the aforesaid activity subject to fulfillment of Companies (CSR Policy) Rules, 2014 and the circulars related to CSR issued by this ministry from time to time,” the circular said.

Under the Act, certain class of profitable companies are required to spend at least two per cent of their three-year average net profit towards CSR activities in a particular financial year.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

FMCG weekly wrap: Cos report strong volume growth in Q1, but high input costs weigh on profits

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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With restrictions easing across the country post the second wave, every industry is talking about a recovery yet again after the months of April and May hit industries. But from the perspective of the fast-moving consumer goods (FMCG) sector, it’s not a recovery, but the reverse, says K Ramakrishnan, MD – South Asia of global consumer intelligence firm Kantar Worldpanel.

The reason is that post the pandemic, Ramakrishnan says, the household demand for FMCG products has been higher than the pre-pandemic period, especially on account of households now adding new product categories like health and hygiene into their FMCG basket. This would include sanitizers, immunity-boosting products, and other hygiene and home cleaning products that one may not have bought at all, or given much attention to earlier. In addition, in-home consumption has also led to an increase in packaged foods and snacks, thus helping FMCG majors improve volume and value growth in the past 12-15 months.

This has reflected in their earnings, too, with FMCG majors all reporting healthy volume growth even in a quarter (April-June) that saw the second wave at its peak, and despite a high base from last year when there was stocking up the frenzy. There was an impact last year also due to disruption in the supply chain during the nationwide lockdown. But FMCG majors have learnt lessons from the past year and have augmented their supply chains, improved their distribution, leading to little or no disruption in Q1 of FY22.

This was articulated by FMCG major Marico while reporting its Q1 numbers. The company said that even though the pandemic affected deeper pockets of the country unlike the first wave, business was not as disrupted as in the last year given that supply chains were able to weather localized and staggered lockdowns and retail stores operated for a certain number of hours during the day.

Marico added that traditional trade continued to perform well with rural and urban growth in tandem, while e-commerce also continued its accelerated growth trajectory.

Despite a high base, Marico reported volume growth of 21 percent. But high input costs continue to burden FMCG majors. Marico’s consolidated net profit fell 5.9 percent to Rs 365 crore from Rs 388 crore profit recorded in the same quarter last year, on the back of high input costs, especially that of palm oil.

Britannia also had a strong show with its domestic volume growth coming in at one percent as against estimates of an 8-10 percent decline. While consolidated sales and Net Profit declined 1 percent and 29 percent respectively as against the same quarter last year on a higher base.

Britannia’s MD Varun Berry added that the impact on the supply chain was not as severe as the first wave of the pandemic, which means that the company’s brands were back on air and the full range of products available in the market.

Britannia, too, saw an impact of the rising palm oil and crude prices but was cautious on pricing in light of the second wave impact on consumers. Britannia is now expected to take calibrated price increases as things normalize.

A similar performance was seen with Nestle as well, which saw total sales and domestic sales for the quarter increased by 13.8 percent and 13.7 percent respectively, on a base impacted by lockdowns with production disruptions across factories but saw profit decline by 10.5 percent.

Nestle’s key products such as Maggi noodles, Kitkat, Nestle Munch, Maggi sauces posted double-digit growth, thanks to increased in-home consumption. And like other FMCG majors that are increasing their digital focus, Nestle saw a 105 percent sequential growth from its e-commerce business with the revenue contribution increasing to 6.4 percent.

And rural growth continues to drive demand for the sector as evidenced not just by companies themselves, but also Kantar’s annual survey of over 82,000 households.

The survey between June 2020-May 2021 indicated that rural India was not only buying more than urban, but they are also buying more branded products and has been driving growth in many categories like grooming, noodles, beverages, among others.

The data shows that rural India saw volume growth of 4.4 percent as against 3.3 percent growth in urban and value growth of 11.6 percent as against 10.2 percent in urban markets.

And it’s not just companies that continue to sound upbeat about FMCG growth going ahead. Earlier in the week, a Crisil Rating report said that revenue growth of the FMCG sector will double to 10-12 percent in FY22 over the growth of 5-6 percent in FY21, which would be the highest in the last three financial years. Crisil attributed this to a host of factors – price hikes to offset the impact of high raw material prices, volume growth of about 5-6 percent, and recovery in discretionary products as the demand sentiment revives on the back of reduced COVID cases and increasing vaccination.

And while rural has been leading the show, Crisil says this trend would reverse this year and outpace rural revenue growth. Urban markets have been impacted over the past year due to stricter curbs in terms of opening hours of stores. In the absence of a third wave and continuation of unlock across India, as indicated by Crisil, urban could see a strong recovery in FY22.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

GST collection at over Rs 1.16 lakh cr in July, 33% higher YoY

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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GST revenue for the month of July stood at over Rs 1.16 lakh crore, 33 percent higher than the collection in the same month of 2020, indicating that the economy is recovering at a fast pace, the finance ministry said on Sunday. Goods and Services Tax (GST) collection in July 2020 was Rs 87,422 crore, Sequentially, it was Rs 92,849 crore in June this year. The gross GST revenue collected in the month of July 2021 is Rs 1,16,393 crore of which Central GST is Rs 22,197 crore, State GST Rs 28,541 crore, Integrated GST Rs 57,864 crore (including Rs 27,900 crore collected on import of goods) and cess is Rs 7,790 crore (including Rs 815 crore collected on import of goods). The revenues for the month of July 2021 are 33 per cent higher than GST collected in the same month last year and include GST returns filed between July 1-31 as well as IGST and cess collected from imports for the same period.

During the month, revenues from import of goods were 36 per cent higher and the collection from domestic transactions (including import of services) were 32 per cent higher than the revenues from these sources during the same month last year. “GST collection, after posting above Rs 1 lakh crore mark for eight months in a row, dropped below Rs 1 lakh crore in June 2021 as the collections during the month of June 2021 predominantly related to the month of May 2021…,” the finance ministry said.

During May 2021, most of the states/union territories were under either complete or partial lockdown due to COVID, it said. “With the easing out of COVID restrictions, GST collection for July 2021 has again crossed Rs 1 lakh crore, which clearly indicates that the economy is recovering at a fast pace. The robust GST revenues are likely to continue in the coming months too,” the ministry said in a statement.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

India’s power consumption returns to pre-COVID level in July; up nearly 12% to 125.51 bn units

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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India’s power consumption grew nearly 12 per cent in July to 125.51 billion units (BU) and returned to pre-pandemic level mainly due to easing of lockdown curbs and delayed monsoon, according to power ministry data. In July 2020, power consumption stood at 112.14 BU, lower than 116.48 BU in the same month of 2019 (pre-pandemic level). Thus, consumption of power has not only grown year-on-year but also returned to pre-pandemic level.

Experts say recovery in power demand and consumption in July 2021 is mainly due to delayed monsoon and surge in economic activities amid easing of lockdown restrictions by states. They said power demand as well as consumption returned to pre-COVID levels in July and a strong recovery is expected in coming months.

The commercial and industrial power demand and consumption got affected April onwards this year due to lockdown restrictions imposed by states. Experts said that amid decline in the number of daily COVID-19 positive cases across the country and easing of lockdown restriction by the states, the commercial and industrial demand for power would definitely rise from July onwards.

Peak power demand met or the highest supply in a day touched an all-time high of 200.57 GW in July (recorded on July 7, 2021). Daily power consumption also touched an all-time high of 4,508 million units on July 7, 2021. Peak power demand met for the entire month of July 2020 was 170.40 GW. Therefore, peak power demand met recorded growth of nearly 18 per cent in July 2021, compared to 170.40 GW (recorded on July 2, 2020).

The peak power demand met was recorded at 175.12 GW in July 2019. Last year, the government had imposed a lockdown on March 25, to contain the spread of coronavirus. The lockdown was eased in a phased manner, but it had hit the economic and commercial activities and resulted in lower commercial and industrial demand for electricity in the country. Power consumption in April 2021 saw year-on-year growth of nearly 38.5 per cent.

The second wave of COVID-19 started in the middle of April this year and affected the recovery in commercial and industrial power demand as states started imposing restrictions in the latter part of the month. Power consumption in the country witnessed 6.6 per cent year-on-year growth in May at 108.80 BU despite a low base of 102.08 BU in the same month of 2020.

As per the latest data, power consumption in June grew nearly 9 per cent to 114.48 BU, compared to 105.08 BU in the same month last year. Power consumption in February this year was recorded at 103.25 BU, compared to 103.81 BU a year ago. In March this year, power consumption grew nearly 22 per cent to 120.63 BU, compared to 98.95 BU in the same month of 2020.

After a gap of six months, power consumption had recorded 4.6 per cent year-on-year growth in September 2020, and 11.6 per cent in October 2020. In November, power consumption growth slowed to 3.12 per cent, mainly due to early onset of winters.

In December, it grew 4.5 per cent, while this was 4.4 per cent higher in January 2021.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Devyani International Rs 1,838 crore IPO to open on Aug 4; sets price band at Rs 86-90/share

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Devyani International, the largest franchisee of Pizza Hut, KFC, and Costa Coffee in India, on Friday fixed a price band of Rs 86-90 a share for its Rs 1,838-crore initial share sale. The three-day initial public offering (IPO) will open for subscription on August 4, and conclude on August 6, the company announced in a virtual press conference.

The IPO consists of a fresh issue of equity shares worth Rs 440 crore and an offer-for-sale of up to 155,333,330 equity shares by the promoter and existing shareholders. Under the offer-for-sale, Dunearn Investments (Mauritius) Pte Ltd, a wholly-owned subsidiary of Temasek Holdings, will offload 6,53,33,330 shares and promoter RJ Corp will sell 9 crore shares.

The offer includes a reservation of up to 5.50 lakh equity shares for the company’s employees. Also, 75 percent of the issue size has been reserved for qualified institutional buyers (QIBs), 15 percent for non-institutional buyers, and the remaining 10 percent for retail investors.

Investors can bid for a minimum of 165 equity shares and in multiples of 165 equity shares thereafter. At the upper end of the price band, the IPO is expected to fetch Rs 1,838 crore.

Proceeds from the fresh issue will be used to retire debt and general corporate purposes. Devyani International is an associate company of RJ Corp, the largest bottling partner of food and beverages (F&B) major Pepsico, and has interests in the Indian retail F&B sector.

The company is the largest franchisee of Yum Brands, operating core brands such as Pizza Hut, KFC, Costa Coffee besides its own brands such as Vaango, Food Street, Masala Twist, Ile Bar, Amreli and Ckrussh Juice Bar. It currently operates 297 Pizza Hut stores, 264 KFC stores, and 44 Costa Coffee as of March 2021 in India.

Devyani International is led by Ravi Kant Jaipuria, promoter of RJ Corp and Virag Joshi, President and CEO, who have been key strategists of the expansion efforts by the company. Kotak Mahindra Capital Company, CLSA India, Edelweiss Financial Services, and Motilal Oswal Investment Advisors are the book running lead managers to the issue.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Smaller stocks in limelight; give higher returns to investors this fiscal

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Smaller stocks have rewarded investors with high returns as the smallcap index jumped by 29.72 percent so far this fiscal, outshining its bigger benchmark gauge. An analysis of the performance of smaller stocks in the first four months of the ongoing fiscal revealed that the BSE smallcap index has zoomed 6,137.29 points or 29.72 percent, while the midcap index has jumped 2,905.91 points or 14.39 percent.

In comparison, the 30-share BSE benchmark Sensex has gained 3,077.69 points or 6.21 percent. “The sheer variety across themes and sectors aided by a low-base effect made them low hanging fruits as valuations vis-a-vis growth made a case in their favour,” said S Ranganathan, Head of Research at LKP Securities.

The midcap index zoomed to its record high of 23,207.51 on July 23, and the smallcap index reached its all-time high of 26,895.93 on July 30. The BSE benchmark had reached its lifetime high of 53,290.81 on July 16. VK Vijayakumar, Cheif Investment Strategist at Geojit Financial Services said, “Market performance has been incredible. In fact, the broader market has done much better than the benchmark indices. The outperformance is stunning, giving excellent returns to investors in the broader market.” Analysts said that pickup in economic activities and ramp-up of vaccination have also helped the market rally.

Last fiscal, the BSE smallcap index zoomed 11,040.41 points or 114.89 per cent, while the midcap jumped 9,611.38 points or 90.93 percent. In comparison, the BSE benchmark clocked 20,040.66 points or 68 percent gain last fiscal. According to market analysts, smaller stocks are generally bought by local investors while overseas investors focus on bluechips or large firms.

The midcap index tracks companies with a market value that is, on average, one-fifth of blue-chips or large firms. Smallcap firms are almost a tenth of that.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

IPOs fundraise tops Rs 27,000 cr in Apr-July; public issues worth Rs 70,000 cr in pipeline

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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As many as 12 firms have raised a staggering Rs 27,000 crore through the IPO route in the first four months of the ongoing fiscal, and the pipeline is pretty strong for the remaining part of the year too. Further to this, initial share sales of four other companies Devyani International, Windlas Biotech, Krsnna Diagnostics and Exxaro Tiles are scheduled to open on August 4.

Hemang Kapasi, Head of Equities at Sanctum Wealth Management, said that as many as 40 initial public offers (IPOs) are lined up for the rest of the year looking to raise Rs 70,000 crore. Further, a lot of retail investors associated brands are going to list on the Indian bourses.

The initial share sales of Paytm, Mobikwik, Policy Bazaar, CarTrade Tech, Delhivery and Nykaa will keep investors busy in the current fiscal, Kaushlendra Singh Sengar, founder and CEO at INVEST19, said. He added the main reason behind opting for the IPO route is the recent bull run in the Indian markets. The bull market has facilitated companies to raise funds from the equity market at high valuations. The companies are diluting their stakes at higher valuations which pushed promoters to file their preliminary papers with capital markets regulator Sebi, he added.

Sandeep Matta, founder, TRADEIT Investment Advisor, said “exuberant equity bull run, higher participation of first-time investors, the expectation of quick money, rewarding exit for existing investors, access to unconditional money are the major reasons behind companies going public”.

According to an analysis of data available with the stock exchanges, 12 companies have raised Rs 27,052 crore through IPOs in the first four months (April-July) of the current fiscal 2021-22. Apart from these, PowerGrid InvIT, the infrastructure investment trust (InvIT) sponsored by the Power Grid Corporation of India, mopped up Rs 7,735 crore through its IPO. This comes following fundraising of Rs 31,277 crore by 30 firms in the entire 2020-21. The fundraise numbers look high compared to the last couple of financial years when capital markets were subdued. In 2019-20, a total of 13 companies collected Rs 20,352 crore through IPOs, while 14 firms had floated IPOs in 2018-19 to raise Rs 14,719 crore. The financial year 2017-18 saw 45 main-board IPOs collectively mobilising Rs 82,109 crore.

Adding depth to the IPO markets, companies from diverse sectors like technology, specialty chemicals, dairy, pharmaceutical have made their way to the IPO space during the period under review. Also, many tech startups are opting for the IPO route, which is a great thing for the industry, because it sets a benchmark, Prateek Singh, founder and CEO of LearnApp.com, said. “Right from seed funding to an IPO is a full cycle for a startup and it is very encouraging to see that kind of growth. It also goes to show that startups are a great place to invest and grow your wealth which is an encouraging sign,” he added.

Sengar of INVEST19 believes that investors have started considering IPOs as an asset class that generates bumper returns on listing if they are lucky enough to get allotment. Therefore, initial share sales are receiving tremendous applications from the investors and IPOs have been subscribing multifold times. This has pushed companies to raise funds through IPO, he added.

Companies like Tatva Chintan Pharma Chem, Rolex Rings, GR Infraprojects, Clean Science and Technology, Shyam Metalics and Energy, India Pesticides, Dodla Dairy, Glenmark Life Sciences and Zomato subscribed in the range of 29 times to 180 times. Interestingly, the ongoing financial year saw most of the IPOs opening with a premium over the issue price suggesting a strong investors appetite.

In fact, all the companies, which got listed in the current fiscal, are trading above their issue price, giving smart returns in the range of 14 to 110 percent, since listing, to investors. Of the total Rs 27,000 crore mopped up during the period under review, digital food-delivery platforms contributed immensely. A total of Rs 9,375 crore raised by Zomato claims almost 35 percent of the total funds garnered.

Other big-ticket IPOs were — Sona BLW Precision Forgings, which collected Rs 5,550 crore, Macrotech Developers (Rs 2,500 crore), and Krishna Institute of Medical Sciences (Rs 2,144 crore). Milan Desai, the Lead Equity Analyst, Angel Broking, said the current trend in the fundraising environment is extremely supportive. Apart from the companies with solid fundamentals that would usually hit the market, those who would have had a hard time launching the IPO in a tougher environment are also witnessing success owing to a better demand environment, he added.

Going forward, Desai expects the IPO environment to remain buzzing during FY22. Unless there is an adverse economic event or a third wave of COVID, “we are likely to see a robust IPO season”, Subramanya SV, CEO and Co-founder of Fisdom, said. According to Angel Broking’s Desai, some small finance bank IPOs that are mandated to get listed would capitalise on the opportunity and augment their Tier-I capital base.

Also, many tech startups are expected to go public as Sebi, earlier this year, eased norms for startups companies coming for listing, Sanctum Wealth Management’s Kapasi said. “Large part of the offerings (both primary and offer for sell) are likely to be from new tech startups which have lined up for public offerings post a successful listing of Zomato,” he added.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow