October 4, 2022

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Last Updated: September 19, 2022 / 08:34 AM IST

A ‘Wealt’hy Bet On D-Street

India’s IPO market has seen a rather lacklustre phase in recent months after the storm of IPOs launched during the previous fiscal. However, slowly and steadily, buzz of a revival in the primary market is now starting to pick up and we are told that a diversified financial services company which shares its name with an alpine plant is all set to list its wealth management business on the bourses. The Mumbai-based company had earlier announced that it might look at this option sometime during the current fiscal with the aim to unlock shareholder value and also raise funds to expand its existing portfolio. Keep a watch on this space, folks.

The Lure Of Bond Street
The bond market is abuzz with activity and investors have never been happier, grabbing deals with both hands. From drugmakers to tyre companies and even telecom firms, everyone has been stamping on the bond street. But all roads are not paved with bonds, we hear. One big participant has stayed away and is unlikely to return to the bond market. In fact, it severed off its connection with the bond market completely recently by stopping issuance of a longstanding tax-free bond. Instead, this public sector entity would rather explore more structured finance and alternative investment options. But investors need not feel disillusioned as this one dealmaker told us. Structured or otherwise, the entity cannot ignore the fixed income market completely. “Alternative investments and trusts are just a detour to the bond market eventually. It is too good to ignore right now. No matter how long and meandering the buffet is, everyone comes for the dessert eventually,” he says. Maybe all roads lead to the bond street after all!

Black Magic Inc!
Is there a mad rush among corporates to resort to black magic? The answer is in the affirmative. Specialised tantriks are being requisitioned from Uttar Pradesh, Assam, Bengal, and Kerala to do special prayers—including voodoo—at as many as 25 hidden outlets in the Indian capital. Bulk of those offering such special prayers are corporate captains saddled with billion-dollar cases, industrialists serving terms in jail, and corporate honchos fighting multiple battles with the country’s investigating agencies. There are some who are not in India and hiding abroad but are in regular touch with their lawyers who, in turn, are organising such special prayers.

Not So Fast
Word in corporate corridors is that there are high chances that a diversified conglomerate may eventually exit the diamond mines in an Indian state as the group does not want to take on the green warriors. We hear the likely move has rattled the government, which has asked the group to reconsider its decision because the mine could meet a huge chunk of India’s diamond needs. An industry body which is a subsidiary of a key ministry wants the group to take the plunge but looks like that won’t happen for the time being.

Realty Check For This Trade Union
Even after a top southern firm took over the management, we are picking up that this news agency’s troubles haven’t ended. It has lost almost 80 percent of its subscribers, and a top infrastructure conglomerate almost signed a deal to take a stake in the land which houses the headquarters in the capital. And guess what? It backed out at the last moment because of unrealistic demands from the trade union. And now, salaries have dried up because the courts have frozen accounts after the union filed a case against the present management. The trade union leaders are now back to the negotiating table and want that conglomerate to renegotiate the deal. But the corporate ain’t keen. Ouch!

A Carcinogenic Tale?
The government last week released a new list of essential medicines that bring certain drugs under direct price capping. The list also saw a commonly used medicine for acidity being dropped from the list. This medicine was banned in several countries including the US a couple of years back after traces of a known cancer-causing agent were found in it. A pharma company in India whose major sales revenue comes from selling the molecule, however, got deeply troubled after some reports appeared in the media as some government sources revealed why it has been removed from the list. The company was first planning to issue a statement against the reports but later decided against it after being advised that an effort in defence may result in more negative publicity!

Peeved PEs
The private equity industry expressed its annoyance with certain regulations pertaining to foreign direct investments with the securities market regulator at a recently held closed door industry event. The industry’s gripe was around the so-called ‘press note 3’ issued by the government that effectively barred countries sharing land borders with India from acquisitions or takeovers of local companies. A little birdie tells us that a senior corporate lawyer requested the regulator’s help in convincing the government to moderate its stance as the ‘press note 3’ is currently the “number 1” gripe among big ticket foreign investment funds. We hope a common ground is found but the prospects look rather slim. What do you think?

Risky Moneybags?
Sponsoring sports league games is no child’s play. It involves spending at least tens of crores. That’s why a few event sellers are puzzled how unknown entities are showing up as sponsors. These are companies whose business models are vague, whose brands aren’t recognised by those in the field, and whose websites look like a Myspace page of a bored teenager. After sentiment towards Chinese companies soured, sponsorships had become hard to come by and that’s the space these new companies seem to be occupying. The event sellers would love to get their funds but some are concerned about what aligning with such brands would mean for them in the future. For example, what if the sponsor is later named in some kind of a shady operation?

Covid-19 Did What Robo-Advisors Couldn’t
One of the earliest online investment platforms in India, iFast Financial India Ltd, has signed an MoU to sell its India advisory business. iFast India was part of the Singapore-based iFAST Financial. While it sold its mutual fund distribution business to Prudent Corporate Advisory, its Registered Investment Advisory (RIA) and Persons Associated with Investment Advice (PAIA) got acquired by Asit C Mehta Financial Services, a well-known and one of India’s oldest portfolio managers. Consolidation has begun in the distribution and advisory space. In February 2020, Mumbai-based mutual fund distributors Roopa Venkatakrishnan and Dhruv Mehta merged their practices with Sapient Wealth, a large Pune-based wealth advisor. Last month, Moneycontrol reported that Bengaluru-based Scripbox, one of India’s largest wealth managers, entered into a strategic partnership with Wealth Managers (India), a Pune-based wealth management firm. That was Scripbox’s 10th acquisition of an independent financial advisor (IFA) or an RIA over the past year and a half. Its first acquisition came in December 2020, when it acquired Bengaluru-based Mitraz Financial, a boutique RIA firm. Experts say that more such mergers and acquisitions in the digital space will happen over the next few years. While many in the financial products’ distribution space were expecting robo-advisors to disrupt the market, Covid-19 turned out to be the real disruptor. Those advisors who adopted technology were able to reach newer customers across the country, without requiring a physical presence. Investors, on the other hand, also adapted to technology to invest, amongst many things. Even veteran advisors, who’ve enjoyed a loyal customer base, have realised that investors have grown more finicky. A physical meeting to deliver the forms might be too late, and the customer might just change her mind. Technology enables prompt execution, as soon as the advice is delivered.

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