Tag: finance

Adani-Hidenburg Dispute: Supreme Court to Pronounce Judgment Today

The Supreme Court is set to deliver its verdict today on the dispute between Adani Group and Hindenburg Research, a US-based short-seller firm, over the allegations of financial fraud and manipulation by the Indian conglomerate. The apex court had reserved its judgment on December 15, 2020, after hearing the arguments of both parties.

What is the Adani-Hidenburg Dispute?

The Adani-Hidenburg dispute is a legal and financial battle that erupted in June 2020, when Hindenburg Research published a report titled “Adani: The House of Cards”, which accused Adani Group of inflating its assets, revenues, and profits, and of siphoning off funds through a complex web of shell companies and offshore entities. The report also claimed that Adani Group was involved in various scams and controversies, such as the coal import scam, the SEZ scam, the Mundra port scam, and environmental violations.

The report caused a sharp fall in the share prices of Adani Group companies, and also attracted the scrutiny of the regulators, such as the Securities and Exchange Board of India (SEBI), the Ministry of Corporate Affairs (MCA), and the Directorate of Revenue Intelligence (DRI). Adani Group denied the allegations, and termed the report as “malicious, false, and baseless”. Adani Group also filed a defamation suit against Hidenburg Research in the Bombay High Court, seeking ₹5,000 crore in damages, and an injunction to restrain the firm from publishing any further reports or statements against the group.

What are the Issues Before the Supreme Court?

The Supreme Court is hearing an appeal filed by Hidenburg Research, challenging the order of the Bombay High Court, which had granted an interim injunction in favour of Adani Group, and had restrained Hidenburg Research from publishing any further reports or statements against the group. Hidenburg Research contended that the order of the Bombay High Court was erroneous, and that it violated its right to free speech and expression, as guaranteed by Article 19(1)(a) of the Constitution. Hidenburg Research also argued that its report was based on credible and verifiable sources, and that it was in the public interest to expose the alleged fraud and manipulation by Adani Group.

Adani Group opposed the appeal, and defended the order of the Bombay High Court, stating that it was necessary to protect its reputation and goodwill, which were being tarnished by the false and defamatory allegations of Hidenburg Research. Adani Group also contended that Hidenburg Research had ulterior motives, and that it was acting at the behest of its competitors and rivals, who wanted to sabotage the growth and success of Adani Group.

The Supreme Court, after hearing the submissions of both the parties, had reserved its judgment on December 15, 2020. The judgment is expected to have a significant impact on the stock market, the regulatory framework, and the corporate governance standards in India.

How to retire early using 555 mantra

Do you dream of retiring early and enjoying a stress-free and fulfilling life? If yes, then you need to start planning and saving for your retirement as soon as possible. One of the ways to achieve this goal is to follow the 555 formula, which is a simple and effective strategy to build a retirement corpus. In this article, we will explain what the 555 formula is, how it works, and how you can use it to retire early in 2024.

What is the 555 Formula?

The 555 formula is a retirement planning method that involves saving 55% of your income, investing 5% of your income, and living on the remaining 40% of your income. The idea is to save and invest as much as you can, while maintaining a frugal and minimalist lifestyle. By following this formula, you can accumulate enough wealth to retire early and live off your investments.

How Does the 555 Formula Work?

The 555 formula works on the principle of compound interest, which means that your money grows exponentially over time. The more you save and invest, the more interest you earn, and the faster you reach your retirement goal. The 555 formula also helps you reduce your expenses and increase your savings rate, which are the key factors for retiring early.

To illustrate how the 555 formula works, let us take an example of a person who earns ₹1 lakh per month and follows the 555 formula. Here is how their monthly budget would look like:

  • Savings: 55% of ₹1 lakh = ₹55,000
  • Investments: 5% of ₹1 lakh = ₹5,000
  • Expenses: 40% of ₹1 lakh = ₹40,000

Assuming that they save ₹55,000 in a high-interest savings account that offers 6% interest per annum, and invest ₹5,000 in a mutual fund that offers 12% returns per annum, here is how their retirement corpus would grow over time:

  • After 1 year: Savings = ₹6.63 lakh, Investments = ₹0.62 lakh, Total = ₹7.25 lakh
  • After 5 years: Savings = ₹36.75 lakh, Investments = ₹4.32 lakh, Total = ₹41.07 lakh
  • After 10 years: Savings = ₹86.06 lakh, Investments = ₹12.57 lakh, Total = ₹98.63 lakh
  • After 15 years: Savings = ₹1.51 crore, Investments = ₹29.34 lakh, Total = ₹1.8 crore
  • After 20 years: Savings = ₹2.38 crore, Investments = ₹60.67 lakh, Total = ₹2.99 crore

As you can see, by following the 555 formula, the person can accumulate nearly ₹3 crore in 20 years, which is enough to retire early and live comfortably.

How to Use the 555 Formula to Retire Early in 2024?

If you want to use the 555 formula to retire early in 2024, you need to start following it from now. Here are some tips to help you implement the 555 formula successfully:

  • Track your income and expenses: The first step is to know how much you earn and spend every month. You can use a budgeting app or a spreadsheet to track your income and expenses. This will help you identify your savings and investment potential, as well as your spending habits and areas where you can cut costs.
  • Automate your savings and investments: The second step is to automate your savings and investments, so that you don’t have to think about them every month. You can set up a standing instruction or a SIP to transfer a fixed amount of money from your salary account to your savings account and your investment account every month. This will ensure that you save and invest before you spend, and avoid the temptation to splurge.
  • Increase your income and savings rate: The third step is to increase your income and savings rate, so that you can accelerate your retirement goal. You can do this by finding ways to earn more money, such as taking up a side hustle, freelancing, or switching to a higher-paying job. You can also increase your savings rate by reducing your expenses, such as living in a smaller house, using public transport, cooking at home, or shopping less.
  • Review and adjust your plan: The fourth step is to review and adjust your plan regularly, to make sure that you are on track to retire early. You can do this by monitoring your income, expenses, savings, investments, and returns, and making changes as per your situation and goals. You can also use a retirement calculator to estimate how much money you need to retire early, and how long it will take you to reach that amount.

By following these tips, you can use the 555 formula to retire early in 2024, and enjoy a life of freedom and happiness

Ola Electric IPO: Revolutionizing the Electric Vehicle Industry

Introduction

The Indian electric vehicle (EV) industry is set to witness a groundbreaking moment as Ola Electric, backed by SoftBank Group and Temasek, filed its preliminary draft papers on December 22, with the Securities and Exchange Board of India (SEBI) to raise Rs5,500 crore through an initial public offering (IPO) 1. This IPO will mark a significant milestone as it will be the first IPO by an Indian EV maker and the first by a two-wheeler maker in India since 2008 . With a mission to revolutionize the EV industry, Ola Electric aims to create sustainable and accessible mobility solutions for the Indian market.

The Ola Electric IPO Details

The Ola Electric IPO proposes a fresh issue of equity shares worth up to ₹5,500 crore and an offer for sale (OFS) of 95,191,195 equity shares at a face value of ₹10 1. The founder of Ola Electric, Bhavish Aggarwal, plans to sell up to 47.4 million shares in the IPO 2. The IPO dates and the offer price have not been announced yet, but reports suggest that the public issue may open in early 2024.

Allocation for Each Category of Investor

The IPO process follows a book-building approach, with specific allocations for different categories of investors 1. The allocation is as follows:

  • 75% of the issue for qualified institutional buyers (QIBs)
  • Up to 15% for non-institutional investors (NIIs)
  • Not more than 10% for retail individual bidders

Use of Funds

The net proceeds from the IPO will be allocated for various purposes, as stated in the Draft Red Herring Prospectus (DRHP) :

  • ₹1,226.4 crore for Ola Cell Technologies’ Gigafactory project
  • ₹1,600 crore for research and development (R&D) investments
  • ₹350 crore for organic growth initiatives and general corporate purposes
  • ₹800 crore to repay/pre-pay debts of Ola Electric Technologies (OET)

Ola Electric’s Business Model and Financials

Business Model

Ola Electric’s business model is built on three key scalable platforms :

  1. R&D and technology platform: Ola Electric has in-house design and development capabilities across EV technologies and components.
  2. Adaptable manufacturing and supply chain platform: The company has established a robust manufacturing and supply chain infrastructure.
  3. D2C omnichannel distribution platform: Ola Electric has 935 experience centers across India, including service centers, providing a direct-to-consumer distribution model.

Revenue Surge and Product Portfolio

In the fiscal year 2023, Ola Electric witnessed a substantial increase in revenue from operations, reaching ₹2,630.93 crore compared to ₹373.42 crore in the previous year . The company’s revenue from operations for the quarter ended June 30, 2023, was reported at ₹1,242.75 crore . Ola Electric introduced its first EV model, the S1 Pro, in August 2021, and currently has a portfolio of five scooter models .

Losses and Risk Factors

While Ola Electric has experienced revenue growth, it has also incurred losses. In FY23, the company reported a net loss of ₹1,472 crore, compared to ₹784.1 crore in the previous fiscal year . The IPO carries certain risk factors, including the company’s limited operating history and the potential for continued losses in the near term .

Ola Electric’s Impact and Future Plans

Sales Highlights and Market Share

Ola Electric has made significant strides in the Indian EV market. In November 2023, the company achieved its highest-ever sales, reaching 30,000 units and capturing a 35% market share 1. Since its launch in December 2021, Ola Electric has sold over 300,000 electric vehicles, with 9,841 e-scooters sold in December alone .

Ola Electric’s Vision for the Future

Ola Electric aims to expand its presence in the international market by exploring opportunities to export EVs . The company plans to leverage its R&D capabilities and manufacturing infrastructure to develop new EV models and technologies, contributing to the growth and adoption of electric mobility in India and beyond.

Conclusion

The Ola Electric IPO represents a significant milestone in the Indian EV industry. With its innovative business model, impressive revenue growth, and commitment to sustainability, Ola Electric is poised to reshape the future of mobility. As the company continues to invest in R&D, expand its product portfolio, and capture a larger market share, it is well-positioned to drive the transition to electric mobility in India and make a lasting impact on the global stage.

 

Disclaimer: This is not a financial advice and do your own research before making any investment decision.

Credo Brands IPO: A Fashionable Investment Opportunity?

Credo Brands Marketing Limited, the company behind the popular men’s casual wear brand Mufti, is launching its initial public offering (IPO) on December 19, 2023. The IPO aims to raise Rs 550 crore through an offer for sale (OFS) of 1.96 crore shares by the promoters and other shareholders. The price band for the IPO is set at Rs 266-280 per share.

About Credo Brands and Mufti

 

Image credit-eseuro

 

Credo Brands was established in 1999 by Kamal Khushlani, who envisioned Mufti as a brand that would redefine menswear in India. Mufti offers a wide range of products, such as shirts, t-shirts, jeans, chinos, jackets, blazers, and sweaters, catering to various categories, such as relaxed holiday casuals, authentic daily casuals, urban casuals, party wear, and athleisure. Mufti’s products are designed to provide a youthful and stylish appearance while keeping up with the latest fashion trends.

Mufti has a pan-India presence, with 1,807 touchpoints across 591 cities, comprising of 404 exclusive brand outlets (EBOs), 71 large format stores (LFSs), and 1,332 multi-brand outlets (MBOs). Mufti also sells its products through its website and other e-commerce platforms.

Financial Performance and Valuation

Credo Brands has shown a strong financial performance in the last three fiscal years, with its revenue growing at a compound annual growth rate (CAGR) of 29.8%, from Rs 261.15 crore in FY21 to Rs 509.32 crore in FY23. Its net profit also increased at a CAGR of 374.6%, from Rs 0.57 crore in FY21 to Rs 77.51 crore in FY23. Its earnings before interest, tax, depreciation, and amortization (EBITDA) margin improved from 26.7% in FY21 to 35.1% in FY23, while its return on net worth (RONW) improved from 0.4% in FY21 to 43.8% in FY23.

At the upper end of the price band, Credo Brands is valued at Rs 1,802.49 crore, which translates to a price-to-earnings (PE) ratio of 23.2, based on its FY23 earnings. This is lower than the industry average PE ratio of 33.6, as per the red herring prospectus (RHP). The company also has a healthy balance sheet, with no debt and a cash balance of Rs 64.5 crore as of September 30, 2023.

Strengths and Risks

Some of the key strengths of Credo Brands are:

  • A well-established and recognized brand in the men’s casual wear segment
  • A diversified and innovative product portfolio that caters to various customer preferences and occasions
  • A wide and efficient distribution network that ensures high visibility and accessibility
  • A strong and experienced management team with a proven track record
  • A robust financial performance and attractive valuation

Some of the key risks that investors should be aware of are:

  • The company’s business is dependent on the performance and popularity of its Mufti brand, which may be affected by changing consumer preferences, fashion trends, and competition
  • The company’s business is subject to seasonal fluctuations and may be adversely affected by factors such as weather conditions, festivals, and holidays
  • The company’s business is exposed to various operational risks, such as inventory management, quality control, supply chain disruptions, and regulatory compliance
  • The company’s business is vulnerable to the impact of the COVID-19 pandemic and any other public health emergencies that may affect the demand and supply of its products

Conclusion

Credo Brands IPO is a good opportunity for investors who are looking for a well-established and profitable company in the men’s casual wear segment, which has a strong brand, a diversified product portfolio, a wide distribution network, and an attractive valuation. However, investors should also consider the risks and uncertainties associated with the company’s business and the industry, and make an informed decision based on their risk appetite and investment objectives.

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