In this edition, we talk about the record level of remittances India is receiving from Indians working overseas. We also talk about the record set by India’s mutual fund industry, the return of big-ticket IPOs, and a couple of significant deals in the healthcare sector.
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In December last year, the superstar Shahrukh Khan’s comedy-drama film ‘Dunki’ put the spotlight on the illegal ‘donkey’ routes that desperate Indians often take to smuggle their way into countries such as the UK and US.
Coincidentally, around the time the Rajkumar Hirani-directed movie was playing in theatres, French authorities grounded an aircraft from India on suspicions of human trafficking. The flight was on its way to Nicaragua, from where the passengers would have allegedly tried to sneak into the US. These passengers, who allegedly together paid millions of dollars for the flight in the hope of moving to the land of their dreams, were eventually sent back to India.
While the two incidents highlight the darker aspects of emigration from India, the week gone by has brought into focus a rather positive development. You see, Indians have been migrating—legally (well, mostly)—to countries in the Middle East, Europe, Americas, and Australia for many years. And they send plane-loads of money back to their families in India.
This week, a report by the United Nations’ migration agency showed that India topped the list of countries receiving remittances from its citizens working overseas. So, how much did Indians send back home? Almost $111.22 billion in 2022 alone, per the World Migration Report 2024 by the International Organization for Migration.
In fact, India has become the first country ever to surpass the $100-billion mark, the report noted.
The report shows that remittances to low- and middle-income countries, such as India, have risen steadily between 2000 and 2022, barring a minor drop during the 2008-2009 global economic crisis. Remittances in 2022 even exceeded foreign direct investments. Indeed, Indian government data show that the country received FDI inflows of a tad more than $52 billion in 2022 from foreign investors. That’s less than half of the remittances the country received from its own citizens.
The UN report also had several other interesting highlights. For instance, remittances to India have been consistently rising over the years, from $53.48 billion in 2010 to $68.91 billion in 2015 and then to $83.15 in 2020—the year the Covid-19 pandemic engulfed much of the world. India is also the origin of the largest number of international migrants in the world (nearly 18 million), with large diasporas living in countries such as the UAE, the US, and Saudi Arabia.
Where did other countries stand? India was followed by Mexico, China, the Philippines, and France. Pakistan, Egypt, Bangladesh, Nigeria, and Germany round up the top 10. Globally, migrants sent around $831 billion in remittances during 2022, up from $791 billion in 2021 and $717 billion in 2020, the UN report showed.
By the way, what do Indians who receive remittances from their family members do with the money? Well, studies have shown that a significant portion of the money sent by blue-collar workers is often used for daily consumption of goods, including food, and to improve their living conditions. Money sent by the more affluent NRIs is also invested in building or buying land or houses. And some of this money ends up in bank deposits and even in the stock market.
Are you a recipient of such remittances? Well, if you are, do spend it wisely. And do save and invest a little for the rainy day, too.
Mutual fund milestone
Talking about setting new records, here’s another one. The net assets under management (AUM) of India’s equity mutual funds crossed Rs 57 trillion for the first time ever during April, per data from the Association of Mutual Funds in India (AMFI).
This milestone seems even more significant if we take a look at how the industry reached here. It took India’s MF industry almost five decades to build the first Rs 10 trillion of AUM. But it required only one year for AUM to jump from Rs 40 trillion to Rs 50 trillion. And the last Rs 7 trillion has been added in just four months!
The industry set one more record in April with contributions into systematic investment plans (SIPs) hitting a new high of Rs 20,371 crore. This shows how retail investors have really taken to SIPs to channel their savings into capital markets.
Meanwhile, net equity mutual fund inflows were Rs 18,917 crore in April, down 16.4% from March and the lowest since December 2023 as stock markets remain at elevated levels, AMFI data showed. Equity mutual funds have recorded net inflows every month since February 2021. This has helped the NSE Nifty 50 index rise by about 56%.
During April, inflows into small-cap funds rose to Rs 2,209 crore. The category had recorded outflows in March for the first time in two-and-a-half years. Inflows into mid-cap funds soared 76% to Rs 1,793 crore while large-cap funds recorded an 83% drop to Rs 358 crore. This reflects in the performance of the respective indexes. The small-cap index climbed more than 11% in April while the mid-cap index rose 5.8%. The Nifty 50, however, eked out a gain of only about 1.25% in April.
IPO Street
Staying with the stock market, the week gone by saw the return of some big action on the IPO street.
Primary market activity in India has remained robust over the past couple of years, with dozens of companies floating initial public offerings. Most of this action, however, has happened on the SME platforms of the NSE and the BSE. In 2024, for instance, more than 100 companies have launched their IPOs but three-fourths of those have been on the SME exchanges.
Even among the companies that went public on the main boards of the NSE and the BSE, only five companies launched IPOs bigger than Rs 1,000 crore before this week. These companies are Jyoti CNC Automation, Medi Assist Healthcare Services, Entero Healthcare, Juniper Hotels, and Bharti Hexacom, which takes the credit for the biggest IPO so far this year with an offering of more than Rs 4,000 crore.
This week, three companies came out with IPOs bigger than Rs 1,000 crore. These are life sciences company Indegene Ltd, mortgage lender Aadhar Housing Finance Ltd and travel-technology company TBO Tek Ltd. Incidentally, all three companies are backed by private equity investors, who sold part of their stakes in the IPOs.
Indegene, backed by Carlyle and Infosys co-founder NS Raghavan’s family office, recorded subscription of nearly 70 times for its IPO of Rs 1,841.76 crore. Institutional investors bid for almost 198 times the portion reserved for them while non-institutional investors placed bids for 54.67 times their quota. The retail investors’ portion was covered 7.61 times.
Blackstone-owned Aadhar Housing’s Rs 3,000-crore IPO was covered 22 times by late after Friday, before bidding closed. Institutional investors bid for almost 62 times their quota while non-institutional investors bid for 16 times. The IPO comprises a Rs 1,000-crore issue of fresh shares and a Rs 2,000-crore offer for sale by Blackstone, the world’s biggest PE firm.
TBO Tek’s Rs 1,550-crore IPO was subscribed more than 81 times by late afternoon Friday, before bidding closed. Institutional investors bid for almost 118 times their quota while non-institutional investors bid for nearly 50 times.
TBO Tek is backed by PE firms General Atlantic and Affirma Capital. The IPO comprised a fresh issue of shares to raise Rs 400 crore and an offer of sale of 12.51 million shares by its promoters as well as Affirma.
Deal Street
While Blackstone, Carlyle and Affirma cashed out some money from their India investments, the week also saw a couple of new big-ticket deals by private equity firms in India.
US-based PE firm KKR & Co. struck a deal to buy Indian medical devices maker Healthium from UK-based Apax Partners. While financial terms of the deal were not disclosed, several media reports pegged the value around Rs 7,000 crore.
PE firm Apax had bought Healthium, which makes products for surgical, post-surgical, and chronic care procedures, in 2018. KKR has previously invested in several Indian healthcare companies. It still retains a controlling stake in Mumbai-listed drugmaker JB Chemicals and Pharmaceuticals, and previously backed Max Healthcare as well as Gland Pharma.
In another significant deal in the healthcare sector, PE firm Quadria Capital bought a minority stake in NephroPlus, one of India’s biggest dialysis chains, for Rs 850 crore.
Foreign private equity firms have poured millions of dollars into Indian healthcare companies over the past four years, seeking to tap into growing opportunities in the sector after the Covid-19 pandemic.
Up in the Air
Tata Group’s aviation business hit another air pocket this week.
In April, the group’s full-service airline Vistara had to cancel more than 125 flights after its crew called in sick to protest the merger with Air India, the carrier that the Tatas bought from the government two years ago.
This week, the group’s low-cost airline Air India Express met the same fate. Air India Express cancelled at least 175 flights this week and several others delayed after more than 100 crew members went on sick leave.
Air India Express, which is being merged with AirAsia India, did manage to resolve the crisis. It initially issued termination letters to several employees and withdrew the letters after the crew rejoined work.
Market Wrap
Indian stock markets clocked losses this week, likely because of election-related concerns. Benchmark indices Sensex and Nifty 50 fell the most in three months on Thursday before bouncing back a little on Friday. For the week, the 30-stock Sensex dropped 1.6% while the Nifty 50 slumped 1.9%.
Nearly three dozen of the Nifty’s 50 stocks ended in the red this week. The biggest Nifty loser this week was Shriram Finance, which lost over 9%. Dr Reddy’s Labs, Titan, Adani Enterprises, Larsen & Toubro, Cipla, state-run ONGC, Asian Paints, HDFC Bank, and Coal India cracked more than 5% each. IndusInd Bank, Adani Ports, Bajaj Finance and its twin Bajaj Finserv, and Aditya Birla Group companies Grasim, UltraTech and Hindalco were the other prominent losers.
Only about a dozen stocks defied the broader trend and managed to stay in the green. These included banks, automakers, FMCG companies and IT stocks. Hero MotoCorp was the biggest gainer, zooming almost 7% after reporting strong quarterly earnings.
Britannia and Hindustan Unilever climbed 6% each while Kotak Mahindra Bank rebounded over 5%. Tata Motors and Maruti Suzuki also ended higher, as did Bharti Airtel and Nestle.
Earnings snapshot
- Kingfisher beer maker United Breweries’ Q4 profit soars to Rs 80.84 crore (nearly $10 million) from Rs 9.73 crore
- Fevicol maker Pidilite’s Q4 profit rises 6.4% to Rs 301 crore, revenue up 7.9%
- L&T Q4 profit up 10% at Rs 4,396 crore, tops estimate
- Hero MotoCorp Q4 profit rises 18.3% to Rs 1,016 crore, to set up two-wheeler unit in Brazil
- TVS Motor Q4 profit climbs 18% to Rs 485 crore, misses forecasts
- Dr Reddy’s Labs tops estimates as Q4 consolidated net profit jumps 36.5% to Rs 1,310 crore
- Policybazaar parent PB Fintech swings to consolidated net profit of Rs 60.6 crore from a loss of Rs 8.95 crore
- Voltas misses estimates as consolidated net profit falls 19% to Rs 116 crore
- JSW Energy reports 29.1% jump in profit to Rs 351 crore; plans to raise Rs 10,000 crore
- Lupin Q4 consolidated profit surges 52% to Rs 359 crore but misses estimates
- Godrej Consumer Products Q4 adjusted profit rises 20% to Rs 691 crore
- Marico posts 5.3% rise in Q4 profit to Rs 318 crore, lags forecasts
Other Headlines
- SEBI rejects NSE proposal to extend trading hours for index futures and options
- RBI lifts ban on Bank of Baroda adding customers on mobile app
- RBI proposes to tighten rules for infrastructure project loans; banks plan to appeal
- India’s services growth slows in April with Purchasing Managers’ Index falling to 60.8 from 61.2 in March
- Adani Green signs 20-year deal to sell power to Sri Lanka
- Hindalco plans to raise $1.2 billion in IPO of US unit Novelis
- Air India Express flights disrupted after cabin crew goes on sudden sick leave
- Paytm President and COO Bhavesh Gupta to resign from company
- Facebook, Instagram parent Meta to expand AI image generation offerings for ads
That’s all for this week. Until next week, happy investing!
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