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Adani’s Dollar bonds decline on US probe

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US prosecutors have widened their probe of the port-to-power conglomerate to focus on whether it may have engaged in bribery.

Several of Adani Group’s dollar bonds fell the most in more than half a year, after news that US prosecutors have widened their probe of the port-to power conglomerate to focus on whether it may have engaged in bribery. The group’s shares were trading lower in pre-market trade. A note from unit Adani Ports & Special Economic Zone Ltd. due in 2041 slid 2.4 cents, the most since August, to 79.1 cents.

Another bond from subsidiary Adani Renewable Energy RJ Ltd. due 2039 fell 2.3 cents to 83 cents, the worst drop since February 2023. That pares gains in recent months that sent the securities to their highest levels since 2022. Shares of all 10 companies related to the Adani Group were lower in early trading in Mumbai.

US investigators are digging into whether an Adani entity, or people linked to the company including Gautam Adani, were involved in paying officials in India for favourable treatment on an energy project, according to people with direct knowledge of the matter. The probe, which is also looking at Indian renewable energy company Azure Power Global Ltd., is being handled by the US Attorney’s Office for the Eastern District of New York and the Justice Department’s fraud unit in Washington, said people familiar with the matter. “We are not aware of any investigation against our chairman,” Adani Group said in an emailed statement. “As a business group that operates with the highest standards of governance, we are subject to and fully compliant with anti-corruption and anti-bribery laws in India and other countries.”

Gautam Adani, his company and Azure haven’t been charged with wrongdoing by the Justice Department, and investigations don’t always lead to prosecutions. Adani’s sprawling empire was rocked early last year by claims from short-seller Hindenburg Research that the conglomerate manipulated its stock price and committed accounting fraud.

The group has vigorously denied those allegations and the shares have largely climbed back from their initial plunge. Still, the report prompted the Justice Department, as well as the Securities and Exchange Commission, to look into some of the claims, reported last year. While the probe from US prosecutors will cast a shadow on the group, investor sentiment toward its firms has continued to improve in recent weeks as it trimmed debt, pared founders’ share pledges and successfully sold a dollar bond earlier this month.

The combined market value of Adani Group’s listed firms has more than doubled to $190 billion since their nadir early last year. They are still more than $40 billion short of the level seen prior to Hindenburg Research’s wide-ranging allegations last year. “Adani stocks have been ferociously reacting to news flow related to the group, and there is a possibility of a knee-jerk reaction,” said Kranthi Bathini, a strategist with Mumbai-based WealthMills Securities Pvt. Markets in India have been consolidating in recent weeks, dragged by a selloff in small-cap shares, and high-beta stocks such as Adani Group firms, tend to move sharply in such situations, he added.

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EU, India to jointly promote start-ups in battery recycling technologies for EVs

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As part of a broader effort to promote sustainable agenda, foster innovation and forge stronger economic relations between the European Union and India, the EU and India on Tuesday launched an expression of interest (EoI) for start-ups working in the area of battery recycling technologies for electric vehicles (EVs). The collaboration aims to enhance the cooperation between European and Indian small and medium-sized enterprises (SMEs) and startups in the clean and green technologies sector.

The intended exchange of knowledge and expertise will be instrumental in advancing the circularity of rare materials and transitioning towards carbon-neutrality in both India and the EU. This initiative takes place under the India-EU Trade & Technology Council (TTC) announced by Prime Minister Narendra Modi and Ursula von der Leyen, President of the European Commission, at their meeting in New Delhi on April 2022.

The initiative provides a platform for Indian and EU startups in the field of EV battery recycling technologies to pitch their innovative solutions and engage with Indian/European venture capitalists and solution adopters. Twelve startups, six each from India and the EU will be selected and get a pitching opportunity during the matchmaking event, scheduled during June 2024. Six finalists (three from the EU and three from India) will be selected following their pitching presentations and awarded the possibility to visit India and the EU, respectively.

The objective is to identify, support and promote startups dedicated to advancing the field of battery recycling technologies for EV and facilitate cooperation, potential trade avenues and, customer relations and exploring investment avenues for the shortlisted startups. This will, under India-EU TTC Working Group 2, offer Indian startups/SMEs an exclusive platform to demonstrate their expertise in battery recycling technologies. It provides a chance for Indian innovators to establish strategic alliances with their counterparts in the EU, accelerating the development of advanced battery recycling techniques focused on waste minimization and resource sustainability.

It will also harmonise efforts with EU innovators to jointly develop battery recycling solutions that drive industry expansion. The TTC was first announced by European Commission President, Ursula von der Leyen, and Modi in April 2022 and established on 6 February 2023, allowing both sides to tackle challenges at the nexus of trade, trusted technology, security and deepen cooperation in these fields. Establishing India-EU TTC is a key step towards a strengthened strategic partnership for the benefit of all people in India and the EU.

The TTC is a key forum to deepen the strategic partnership on trade and technology between the two partners. The TTC will help increase EU-India bilateral trade, which is at historical highs, with €120 billion worth of goods traded in 2022. In 2022, €17 billion of digital products and services were traded.

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Expectation of better demand conditions in Q1 FY25 lifts manufacturers’ sentiments

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The business expectations index of the survey remains firmly in growth terrain at 127.2 in Q1 of 2024-25.

The Indian manufacturing sector is optimistic on demand conditions in the April-June (Q1) of the new financial year 2024-25, with a strong community of the industry reporting better demand conditions in their assessment of production, order books, capacity utilisation and overall business situation for Q4 (January-March) of FY24.

This is despite expectation that cost pressures from raw materials and salary outgo are likely to persist during April-June 2024. Though respondents expected some moderation in growth of selling prices and profit margins in synchrony with their expectations for demand conditions, according to a recent Reserve Bank of India’s Industrial Outlook Survey of the Manufacturing Sector for Q4 (January-March) of 2023-24.

In all, 1,354 companies responded in this round of the survey, which was conducted during January-March 2024. While there was improvement in employment situation vis-à-vis the previous quarter, input cost pressures increased during Q4 FY24 but the pace of rise in remuneration, however, moderated. Sentiments on overall financial situation and availability of finance remained positive, with some improvement vis-à-vis the previous survey round.

The manufacturers polled lower rise in selling prices and assessed some deterioration in profit margins. The business assessment index for the manufacturing sector increased marginally to 114.2 in Q4 FY 2023-24 from 113.9 in the previous quarter. The business expectations index of the survey remains firmly in growth terrain at 127.2 in Q1 of 2024-25. For the July-September (Q2) of FY2024-25, manufacturers remain optimistic on production, capacity utilisation, order books, employment conditions and overall business situation even as input cost pressures are expected to continue till end-2024 and selling price is anticipated to uphold during Q2 and Q3 of 2024-25.

The RBI’s survey of the quarterly order books, inventories and capacity utilisation (OBICUS), conducted during Q4 FY 2023-24 and covering 813 manufacturing companies shows that at the aggregate level, the capacity utilisation (CU) in the manufacturing sector increased to 74.7 per cent in Q3 FY24 from 74.0 per cent in the previous quarter.

The value of new orders received by the responding companies during Q3 FY24 remained close to that in the previous quarter. On an annual (y-o-y) basis, however, the value of new orders increased by nearly 10 per cent. The finished goods inventory to sales ratio increased marginally in Q3 FY24 from its level in the previous quarter while the raw material inventory to sales ratio remained stable.

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Realme targets top spot in Rs 15-25k segment with P series launch

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Realme India aims to garner the highest share in the Rs 15,000-25,000 mobile phone segment this year with the launch of a new portfolio of devices under the P series, a senior company official said.

While sharing the plans on the P series, Realme India’s business strategy lead, Tarini Prasad Das, told reporters that in 2024, the company aims to achieve 50 million smartphone sales cumulatively under its partnership with Flipkart.

“We aim to lead the Rs 15,000-25,000 smartphone segment this year overall with the launch of the P series. The P series itself is expected to lead the segment,” Das said.

Realme is among the top five smartphone brands in terms of volume market share. The company had a 12 percent market share in 2023.

The company plans to launch the P series in the second week of April in the sub-Rs 20,000 price range.

Das said that both offline and online sales contribute equally to the overall business of Realme, and the company is looking to consolidate its leadership in the Rs 15,000-25,000 segment with the P series.

Without revealing the specifications of P series smartphones, Das said that it will focus on performance, design, better display, and charging facility in the target segment.

“We have exclusively partnered with Flipkart for the P series. We aim to achieve the 50 million sales milestone on Flipkart with the launch of the new P series this year,” Das said.

Realme captured the top spot on Flipkart in the price band of Rs 20,000-30,000 in February 2024 with a 29.2 percent share, as per the Counterpoint February 2024 trend report.

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Modest growth of 3.14 % in retail sales, PVs dip 6 %, 2W & 3Wsoar: FADA

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In FY24, auto retail sales saw sector-wide growth, leading to a 10 per cent yoy growth, with the 2W segment registering growth rate of 9 per cent, 3W segment growing by 49 per cent, PVs by 8.45 per cent, tractors by 8 per cent and commercial vehicles by 5 per cent respectively.

Despite election uncertainties, economic concerns and intense competition, the two wheeler and 3W segments showcased positive sentiment in March retail sales, especially in the premium and EV segments even as the Indian auto retail sector posted a modest growth of 3.14 per cent yoy in March 2024, with passenger vehicles sales showing a decline of 6 per cent, tractors showing a decline of 3 per cent and commercial vehicles facing a slump of 6 per cent respectively. However, in FY24, auto retail sales saw sector-wide growth, leading to a 10 per cent yoy growth, with the 2W segment registering growth rate of 9 per cent, 3W segment growing by 49 per cent, PVs by 8.45 per cent, tractors by 8 per cent and commercial vehicles by 5 per cent respectively, the Federation of Automobile Dealers Associations (FADA) said on Monday.

Heading into FY’25, FADA projects growth amidst a mix of optimism and challenges. The vehicle retail data of FADA for March’24 and FY’24 shows a surge in electric vehicle sales amidst expiration of the FAME 2 subsidy on 31 March with the 2W electric vehicles share jumping to 9.12 per cent for the first time. There was positive sentiment in 3W segment which demonstrated growth driven by the increasing acceptance of EVs, showing an optimistic trend despite potential challenges from election uncertainties and policy changes. Manish Raj Singhania, notes that the 2W segment demonstrated resilience and adaptability, with EV sales surging due to the expiration of the FAME 2 subsidy on March 31st. “This led to a notable boost in the 2W-EV market share to 9.12 per cent. “Positive market sentiment was supported by seasonal events, improved vehicle supply, and financial incentives. Despite facing market volatility and intense competition, the industry is strategically evolving, particularly in the premium and EV categories, signalling a bright future.” said Singhania.

In FY24, auto retail sales saw sector-wide growth, leading to a 10 per cent yoy growth, with the 2W segment registering growth rate of 9 per cent, 3W segment growing by 49 per cent, PVs by 8.45 per cent, tractors by 8 per cent and commercial vehicles by 5 per cent respectively. The 2W segment benefited by enhanced model availability, the introduction of new products and a positive market sentiment, alongside the burgeoning EV market and strategic premium segment launches. The growth in the 3W segment was driven by the introduction of cost-effective CNG fuel options, new EV models, expanding city landscapes, demand in last mile mobility in urban centres resulting in strong demand, marking a new industry benchmark. The PV segment’s growth was propelled by improved vehicle availability, a compelling model mix and significant contributions from the SUV segment, which now claims 50 per cent market share.

The auto is projecting an optimistic outlook in FY’25, focusing on new product launches, especially in EVs and leveraging economic growth, favourable government policies and expectation of good monsoon to fuel demand, despite facing challenges like competition and the need for strategic market engagement. The 3W segment showed an encouraging sales trend hitting an all-time high retail, driven by the growing acceptance of EVs. The introduction of EV autos and loaders positively impacted the retail environment. Although faced with election-related uncertainties and concerns over policy changes, such as free bus travel for women, the overall outlook for the sector remains upbeat, supported by the quality of vehicles and strong market demand.

The PV sector encountered challenges, with a m-o-m decrease of 2 per cent and a yoy fall of 6 per cent The downturn was influenced by heavy discounting and selective financing further affected by economic worries and the electoral climate. Nonetheless, positives such as improved vehicle availability, increased stock levels and new model launches did stimulate demand in certain areas. The impact of election activities and changes in festival dates also played a role in sales dynamics. The near-term outlook of FADA notes concern over decline in consumer sentiment among urban Indians and warns that the automotive sector faces a nuanced challenge. Given the continued inflationary trend without any relief in finance rates, these prospective buyers may continue to hesitate. Heading into FY’25, the auto industry is poised for growth amidst a mix of optimism and challenges.

The excitement around new product launches, particularly electric vehicles, sets a forward-looking tone. Manufacturers are gearing up with better supply chains and an array of models to meet diverse consumer demands. Economic growth, favourable government policies and an anticipated good monsoon are expected to fuel demand, especially in rural areas and the commercial vehicle sector, which is closely linked to infrastructure projects and economic activity.

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4 of top-10 valued firms add Rs 1.71 lakh crore to mcap; HDFC Bank, LIC lead gainers

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Four of the top 10 most valued firms witnessed a notable surge in their market capitalization, collectively adding Rs 1,71,309.28 crore. Leading this upward trend were HDFC Bank and the Life Insurance Corporation of India (LIC), emerging as the top gainers in line with the overall positive sentiment in the equity market. Conversely, six companies within the top 10 pack experienced a combined decrease of Rs 78,127.48 crore in their market valuation, with Reliance Industries being the primary contributor to these losses.

During the week, the BSE benchmark index climbed by 596.87 points or 0.81 percent, reaching an all-time high of 74,501.73 on April 4. Among the gainers from the top 10 firms were Tata Consultancy Services (TCS), HDFC Bank, State Bank of India, and LIC. Meanwhile, Reliance Industries, ICICI Bank, Bharti Airtel, Infosys, ITC, and Hindustan Unilever faced declines in their market valuation.

HDFC Bank witnessed a significant increase of Rs 76,880.74 crore, reaching a valuation of Rs 11,77,065.34 crore, while LIC added Rs 49,208.48 crore, bringing its valuation to Rs 6,27,692.77 crore. TCS observed a rise of Rs 34,733.64 crore, reaching Rs 14,39,836.02 crore in market capitalization, and State Bank of India’s valuation increased by Rs 10,486.42 crore, reaching Rs 6,82,152.71 crore.

On the other hand, Reliance Industries experienced a decline of Rs 38,462.95 crore, reaching Rs 19,75,547.68 crore in valuation. Bharti Airtel saw a decrease of Rs 21,206.58 crore, reaching Rs 6,73,831.90 crore, and ICICI Bank’s valuation dropped by Rs 9,458.25 crore, reaching Rs 7,60,084.40 crore. Infosys’ market valuation declined by Rs 7,996.54 crore to Rs 6,14,120.84 crore, ITC’s valuation dipped by Rs 873.93 crore to Rs 5,34,158.81 crore, and Hindustan Unilever’s mcap decreased by Rs 129.23 crore to Rs 5,32,816.81 crore.

Reliance Industries maintained its position as the most valued domestic firm by market valuation, followed by TCS, HDFC Bank, ICICI Bank, State Bank of India, Bharti Airtel, LIC, Infosys, ITC, and Hindustan Unilever.

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Adani Group to invest Rs 2.3 Lakh Crore in renewable energy

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The Adani Group is set to inject approximately Rs 2.3 trillion into India’s most ambitious renewable energy expansion and manufacturing capacity for solar and wind energy by 2030. This investment surge comes despite a recent short-seller attack, showcasing the group’s steadfast commitment to its rapid growth objectives.

Adani Green Energy Ltd, the country’s largest renewable energy firm, will channel around Rs 1.5 trillion to ramp up its solar and wind power generation capacity at Khavda in Gujarat’s Kutch region from the current 2 GW to an impressive 30 GW. An additional Rs 50,000 crore will be allocated to replicate similar projects across the country. Meanwhile, Adani New Industries Ltd (ANIL), a unit within Adani Enterprises Ltd, will contribute nearly Rs 30,000 crore towards expanding solar cell and wind turbine manufacturing capacities at Mundra in Gujarat.

AGEL, which currently has an operating portfolio of 10,934 megawatts (10.93 GW), is targeting 45 GW of renewable energy capacity by 2030. 30 GW of this will come up at just one location at Khavda – the world’s largest renewable energy project. “We have just now commissioned 2,000 MW (2 GW) of capacity at Khavda and plan to add 4 GW in the current fiscal (financial year ending March 2025) and 5 GW every year thereafter,” said Vneet S Jaain, Managing Director, AGEL.

To support these plans as well as meet requirements of other domestic renewable players and the export market, ANIL plans to expand its cell and module manufacturing facility at Mundra to 10 GW by 2026-27 from the current 4 GW. Jaain, who is also a director on the board of ANIL, said crystalline silicon is turned into cells capable of converting sun rays into electric current and mounted on modules before being placed in high radiation areas such as Khavda. Electricity thus generated is wired to the transmission grid for onward movement to customers. Besides solar manufacturing, ANIL is also doubling capacity to make windmills that generate electricity from wind, to 5 GW in three-and-a-half years, he said.

The Adani Group, which spans from seaports to electricity generation and transmission, natural gas distribution, mining, copper production, airports, data centers, and commodities business, has a capital expenditure outlay of Rs 1.2 trillion for the 2024-25 fiscal year (April 2024 to March 2025). The group’s renewable energy plans are the most ambitious by any corporate in the country, which is targeting to generate 500 GW of electricity from non-fossil sources by 2030 as part of a broader plan of achieving net-zero emissions by 2070.

Khavda, spread over 538 square kilometers which is the equivalent of five times the area that the city of Paris does, will at peak generate 81 billion units that can power entire nations such as Belgium, Chile, and Switzerland. AGEL’s other project sites are in Rajasthan and Tamil Nadu. The massive clean power generation park is located in barren land close to the border with Pakistan.

Jaain said the 30 GW planned at Khavda would comprise 26 GW of solar and 4 GW of wind capacity. AGEL’s existing operational portfolio comprises 7,393 MW solar, 1,401 MW wind, and 2,140 MW wind-solar hybrid capacity. Its current portfolio of 10,934 MW, which will power more than 5.8 million homes and avoid about 21 million tonnes of carbon dioxide emissions annually, represents around 11 percent of India’s installed utility-scale solar and wind capacity, contributing over 15 percent of the nation’s utility-scale solar installations.

The renewable energy push comes as the conglomerate shrugs off the impact of Hindenburg Research that in January last year published allegations that Adani companies had engaged in share price manipulation and accounting fraud. The group has refuted all allegations, which caused the combined market capitalization of its listed companies to fall by USD 150 billion at their worst point. Its chairman Gautam Adani has in recent months stated that the group’s balance sheet was “healthier than ever before”.

In the immediate aftermath of the short-seller report, Adani reassured investors and bondholders by slowing some investment plans, paying down share-backed debt, and selling stakes to outside backers, including Florida-based investment firm GQG Partners. But now it is back to its breakneck speed expansion, switching back-to-back deals, including one with Reliance Industries Ltd of rival billionaire Mukesh Ambani.

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