| Trouble viewing this email? View in web browser |  | | Tuesday, 10 May 2022 | | | Company Outsider | | A weekly newsletter that keeps track of the business of companies | |  | | By Sundeep Khanna | | | | Question of the Week The Oberoi brand extends across 33 hotels, two Nile cruisers and a motor vessel in the backwaters of Kerala. However, its beginnings were modest. Name the hotel where the Oberoi journey began and in which city? | | |  | Here's a great value proposition A digital subscription to Mint plus WSJ can be yours at just ₹292 per month. Check out the convenient and affordable plans we have for you here. | | Good Morning Prefer audio? Now you can listen to your favourite newsletter. | | The News in Summary The country's biggest IPO, the share sale of Life Insurance Corp. of India, went off smoothly with an enthusiastic response from retail investors, compensating for the somewhat muted response from institutional investors. The Adani group, whose companies have been soaring on the bourses, is eyeing the healthcare business even as it put in a bid for the cement assets of Holcim in India. In the meantime, the Future-Amazon imbroglio doesn't appear to be ending soon, with the US MNC now considering impleading RIL in its legal battle with its erstwhile partner. Finally, Biki Oberoi, the doyen among hoteliers in India, retired as chairman of the Oberoi group, while Tata Steel brought more joy to the markets by announcing a stock split. | | | | In LIC shares, we trust  The mega IPO of LIC got off to a promising start after it received a robust response from institutional investors, with Rs 5,620 crore worth of shares reserved for anchor investors getting fully subscribed by investors such as Norges Bank Investment Management and GIC, who were allocated shares ahead of the sale to the public. Despite a rate hike by the RBI, which spooked the markets, there was strong support for the IPO, with retail investors placing bids for nearly two-thirds of the life insurer's shares on offer on the first day. Policyholders led the way with the portion of the sale reserved for them getting subscribed 1.99 times. By the second day, with another three days to go, the share sale was fully subscribed as the attractive pricing and discounts to policyholders seemed to have spurred demand from retail investors. By the close of day four of the bidding, the IPO had been subscribed 1.66 times, with the retail segment subscribed 1.46 times. However, with a day to go for its close, the qualified institutional buyers (QIBs) segment was subscribed 0.67 times. LIC shares will list on the stock exchanges on 17 May. | | | | For decades, the LIC agent was an integral part of Indian society. This song, from the movie Kala Aadmi, sung by Md. Rafi, captures that spirit beautifully: |  | | | | Adani to Turn Healer to the Nation The Adani group, already pursuing a clutch of new businesses ranging from green energy to cement, is lining up large investments for the healthcare sector, which could fund the acquisition of hospitals, diagnostic chains, and offline and digital pharmacies. Group executives recently met several foreign banks and global private equity investors to raise up to $4 billion in a mix of debt and equity that it has earmarked for the sector. The group is also in discussions with global healthcare companies for a possible tie-up in India. India's underserved healthcare sector presents several growth opportunities with abysmally low penetration of hospital beds, a growing number of people aged above 60, a large middle-class population, and a surge in lifestyle diseases. Adani's interest in the sector comes at a time when its group firm Adani Wilmar Ltd became the country's largest FMCG company with FY22 revenue of Rs 54,214 crore. | | |  | | | | | | | | No End to Future-Amazon-Reliance Conundrum Barely weeks after Reliance Industries called off a pending deal to acquire the assets of debt-laden Future Group, the issue may be back on the boil. Amazon.com Inc. is considering impleading RIL in its legal battle with Future after the energy-to-retail conglomerate seized control of 950-odd Big Bazaar stores, a move the US e-commerce giant claims will prevent it from keeping Future Retail afloat and lenders from recovering their dues. The loss of its stores denies Future Retail the income it needs to pay off its lenders, with even the Delhi high court asking counsels of Amazon and Future last week why RIL couldn't be made a party to the case. Amazon's plea to the court is to restore the ownership of the 950-odd Big Bazaar stores so that Future Retail can carry on with its business, repay banks and find an appropriate buyer. | | |  | | | | Biki Oberoi Hangs Up His Boots at Oberoi  Twenty years after he took over as chairman of the Oberoi group, Prithviraj Oberoi, better known as Biki Oberoi, stepped down as chairman of EIH, the group's holding company. His nephew, Arjun Singh Oberoi, the son of his elder brother Tilak Raj Oberoi who passed away prematurely in 1984, was appointed in his place as executive chairman with immediate effect. The 93-year-old son of the legendary Rai Bahadur M.S. Oberoi, who founded the group in 1934, Biki Oberoi was instrumental in growing the business which presently operates 33 hotels, two Nile cruisers and a motor vessel in the backwaters of Kerala. While the last two years have been rough for the hotel industry, which suffered the most from the pandemic-induced lockdowns and the work from home trend, Oberois remains the marquee hotel brand in the country and outside it. For his successors, though, the big challenge will be holding out against two powerful shareholders, rival ITC, which has a 16% stake in EIH and Reliance Industries Ltd, which owns 18%. | | | | Tata Steel is On a Song Following buoyant fourth-quarter numbers, Tata Steel Ltd approved a proposal to split its shares in 10-to-1 ratio. The steel major posted a 47% rise in consolidated net profit for the three months ended March on the back of a 38% rise in revenue from operations, capping a year in which the company achieved its highest-ever annual crude steel production of 19.06 million tonnes. The stock split in the shares of the Tata Group's top performer, which made more money last fiscal than Tata Consultancy Services Ltd, is expected to make Tata Steel's shares more accessible to retail investors. The company also announced it would complete its Rs 12,100 crore acquisition of Neelachal Ispat Nigam Ltd by the end of the current quarter. The integration of the Odisha-based steel maker is critical to driving the expansion of the company's high-value retail business. | | | | Last Word Inflation finally caught up with rural demand as consumer product companies like Dabur and Marico showed the strain of consumers downgrading to cheaper packs and brands in categories such as toothpaste, hair oil and shampoos in their latest quarterly sales. For Dabur, which draws 47% of its domestic business from the hinterland, a slowdown in rural demand directly impacts profitability. According to industry data, FMCG volumes declined 4.1% in the March quarter, largely on account of the high prices of all products ranging from soaps to fuel. With real wages declining amid rising inflation, India's rural economy is showing signs of distress. In its latest monetary policy statement, RBI acknowledged that "weakness persists in rural demand". FMCG majors such as Hindustan Unilever have been steadily raising product prices to cope with cost pressures. Is this the beginning of the summer of rural discontent? | | | | Answer to the Question The group founder, the legendary Mohan Singh Oberoi, started his business by buying Clarkes Hotel in Shimla in 1934 from its British owners, who were moving back to England. | | | Do you have any questions? Send in your queries to sundeepkkhanna@gmail.com Were you forwarded this email? Did you stumble upon it online? Sign up here. | Please share your feedback with us What do you think about this newsletter? | | Written by Sundeep Khanna. 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