| | | Question of the Week Last August, Le Monde, the influential French daily, ran a damning report on a Russian joint venture of Adani group partner, TotalEnergies. What was the accusation all about? | | |  | Here's a great value proposition A digital subscription to Mint premium can be yours at just ₹213 per month. Check out the convenient and affordable plans we have for you here. | | Good Morning | | The News in Summary After the banks, it was the turn of a major index provider, MSCI, and joint venture partner TotalEnergies, to turn cautious on Adani group companies which continued to bleed on the bourses. At another large Indian conglomerate, the Aditya Birla group, its chairman Kumar Mangalam Birla’s children were appointed as directors on the board of flagship Grasim, a sign of a succession plan at work. Meanwhile, even the insolvency proceedings of troubled Future Group are mired in controversy with the resolution professional complaining of non-cooperation by the promoters and the auditors. Elsewhere, private equity heavyweight Blackstone is looking to sell off most of its 44% stake in SAAS provider IBS Software while brokerage firms have a positive spin on the December quarter numbers of Paytm and Zomato. | | | | No Respite for Adani as Multiple Agencies Censure Group  Despite a short two-day respite when stocks of flagship Adani Enterprises clawed back some of the previous losses, it continued to be a tough week for the Gautam Adani-led conglomerate. Its French partner TotalEnergies put on hold a planned additional investment in the group’s $50 billion hydrogen project pending the results of an audit. Total’s decision, though, is merely a temporary pause. It has already put in $3.1 billion, and its CEO Patrick Pouyanné said it was “happy” with those investments as both Adani Green and Adani Total Gas are performing well. A day later, index provider MSCI cut the free-float designations of four securities of the Adani group, Adani Enterprises, Adani Total Gas, Adani Transmission and ACC. This could mean an outflow of millions of dollars from these stocks. Nathan Anderson, the founder of Hindenburg, whose original report started the slide, called the MSCI move a validation of the firm’s findings on offshore stock parking by Adani. Simultaneously, Norway’s $1.35 trillion wealth fund announced that it had divested virtually all its holdings in Adani Total Gas, Adani Ports and Special Economic Zones and Adani Green Energy. The sustained pressure of bad news further drove down the market cap of Adani group stocks which have now lost almost $100 billion in value since the Hindenburg report first emerged. | | | | Birla Scions Join Board of Group Flagship Grasim Barely weeks after they were inducted on the board of Aditya Birla Fashion and Retail Ltd, Ananya Birla and Aryaman Vikram Birla, two of Aditya Birla group chairman Kumar Mangalam Birla’s three children, were also named as directors in its flagship company Grasim Industries Ltd. With this, the ongoing succession plan at one of India’s most storied business families is in motion. The move comes at a time when the vast conglomerate, which is into multiple businesses ranging from textiles to cement and aluminium, is trying to kickstart new-age businesses. Kumar Mangalam Birla noted that the appointments were made as the company embarks on creating two new “growth engines”, paints and B2B e-commerce for building materials, though observers are seeing this as an effort to groom the next generation of the Birlas. Ananya and Aryaman are already on the board of Aditya Birla Management Corp. Pvt. Ltd, the apex body for all the group’s businesses. | | | | Hopefully, corporate responsibilities will not come in the way of Ananya Birla’s musical career. As this song shows, the young lady is Unstoppable. | | |  | | | | | | | | Future Group Insolvency Proceedings Hit by Complaints The curtain refuses to come down on the bankruptcy of Future Retail Ltd, with The National Company Law Tribunal (NCLT) asking the company’s statutory auditors to respond to a charge by Vijaykumar V. Iyer, the resolution professional managing the insolvency proceedings, alleging a lack of cooperation from the company’s promoters and statutory auditors. The counsel for RP had earlier filed an application under Section 19(2) of the Insolvency and Bankruptcy Code seeking the court’s intervention in getting relevant documents from Future Group’s erstwhile promoters and auditors. The court has asked the auditor to file a reply in two weeks and posted the matter for further hearing on 21 February. Last month, Future Group founder Kishore Biyani stepped down from the position of executive chairman and director of Future Retail, stating he had completed all the required hand-holding within his capacity for the RP to take over the entire control of the company and its assets. | | | | Blackstone Looks to Exit IBS Software Private equity giant Blackstone has hired investment bank JP Morgan to sell at least 40% of its total 44% stake in the travel and hospitality software provider IBS Software for about $1 billion. The development comes six months after IBS Software’s plans for a US listing failed to materialize. Blackstone acquired a minority stake in the 23-year-old SaaS solutions provider in 2015 for approximately $170 million from General Atlantic and other shareholders. The company, which reported global revenues of $145 million in fiscal 2019, provides solutions for the aviation, travel and hospitality verticals. In June 2022, it made a confidential filing for a US listing, seeking to raise $500 million at a valuation of $2 billion. But the plan appears to have been dropped with market conditions for software companies turning adverse. | | |  | | | | Brokerages Like Paytm & Zomato After Q3 Results Global brokerages, including Macquarie, have upgraded the rating of the Paytm stock while raising its target price after the company reported healthy Q3 numbers. In a report, Macquarie said it was “positively surprised by the distribution of financial services revenue by a wide margin” and the fact that the company “has also managed to control overall expenses and charges.” The positive commentary came after Paytm’s net loss in the quarter through December narrowed to Rs 392 crore as compared to Rs 779 crore a year earlier, while its revenue from operations rose 42% to Rs 2,062 crore. The company also reported its first-ever adjusted Ebitda profitability, well ahead of its guidance. Meanwhile, one of Paytm’s backers, Alibaba, exited the company and India after selling its remaining 3.4% stake in the digital payments firm. In what turned out to be one of the best weeks yet for newly listed Indian startups, brokerages like Jefferies and Morgan Stanley were equally bullish on the prospects of Zomato even though the company’s quarterly loss widened more than fivefold from a year earlier, primarily because of a decline in food ordering after Diwali. | | | | Last Word When the elephants wrestle, it is the grass that gets trampled. In the ongoing battle between the Adani group and short seller Hindenburg, the shares of Life Insurance Corp. of India are down nearly 12%, while those of State Bank of India has dropped 7%, seemingly as a lack of confidence in their investments in the group. LIC, in particular, has some reason to feel aggrieved - the insurer posted a sharp rise in its consolidated net profit for the third quarter and moved Rs 5,670 crore to its shareholders’ fund to shore up its net worth. That should have pleased the markets. Instead, with its investment in the group under the scanner, its chairman M.R. Kumar said that the LIC management would meet Adani’s top management soon to seek clarification about the crisis being faced by the conglomerate. Better late than never. | | |  | | | | Answer to the Question According to the Le Monde report, TotalEnergies had a 49% stake in a Russian company Terneftegaz, which manages a gas field in Russia whose product, once transformed into kerosene, was being used to fuel Russian fighter planes engaged in the war in Ukraine. Following the report, Total announced it would unload its stake in the Russian company. | | | 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. | | Written by Sundeep Khanna. Edited by Saikat Chatterjee. Produced by Sukoon Wadhawan. 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