Top headlines: Zomato's IPO impact; early bird firms' net profit up 71%

Business Standard brings to you the top headlines on Monday

Zomato's market capitalisation breached the Rs 1-trillion mark, overtaking some of India's biggest companies. The blockbuster listing that led to this milestone will pave the way for other food tech firms, such as Swiggy, to go on a similar road. Read more on this and other top headlines for the day.

'Zomato's stellar IPO to have positive impact on foodtech firms' valuation'

The blockbuster listing of online food delivery company Zomato is expected to set the stage for many food technology (foodtech) firms, including Swiggy, to follow suit. The stellar listing is expected to have a positive impact on their valuations if they plan to list or raise funds, said analysts and experts.

Zomato, the Gurugram-based company, is operating in a nascent industry. However, its Rs 9,375-crore maiden offering is now considered a test case for other foodtech start-ups planning to go public.

Zomato’s initial public offering (IPO) drew bids worth Rs 2.1 trillion - it was subscribed 40x. On Friday, the stock ended with a gain of 66 per cent. Read more

Q1 results: 230 early bird companies report 71% jump in net profit

The companies in cyclical sectors are likely to drive corporate earnings in the June 2021 quarter, too. The combined net profit of 230 early bird companies in Q1FY22 is up 70.6 per cent year-on-year (YoY), because of a favourable base and strong showing by firms in cyclical sectors, such as banking, metals & mining, cement, and oil & gas.

The combined net sales were up 35.2 per cent YoY to Rs 5.25 trillion in the June 2021 quarter, though the figure was down 5 per cent over Q4FY21. These companies’ net sales were down 21.7 per cent and their net profit had shrunk 19.8 per cent a year ago. Read more

Bajaj Auto takes a different road from Ola in its electric vehicle journey

Tech giant Ola Electric wants to disrupt the two-wheeler market by offering electric scooters for the price of a 125cc ICE-powered model. Its ambitious target is to get half of the 21 million two-wheeler buyers to move from ICE to electric in a few years as it builds the world’s largest two-wheeler factory in Tamil Nadu. To be fully operational by 2022, it will churn out 10 million units per annum.

If Ola succeeds in pulling this off, it should worry any existing two-wheeler company. But executives at Bajaj Auto are unfazed. Last week, the company announced that it is setting up a 100 per cent subsidiary (the first in its 75-year history), which will tap the growth in the electric vehicle (EV) and hybrid market across two-, three- and even four-wheelers. “The subsidiary,” explains Bajaj Auto Executive Director Rakesh Sharma, “has been set up to give undivided attention to the electric business, and be nimble to work with other stakeholders.” Read more

Private sector to step up Covid-19 vaccination drive in towns, villages

The private sector is planning to step up Covid vaccination drive — especially in towns and villages — with more vaccination camps and community engagement initiatives even as it is concerned about procurement and supply.

Private hospitals have also seen a fall in demand for paid jabs, when the free option is available at government centres. With the government raising concerns over poor show by the private sector, in terms of the vaccination drive, companies believe they are doing their bit. However, many feel the government is better equipped in reaching out to the hinterland, especially to tackle vaccine hesitancy challenges. Read more

Status quo likely in September review of Nifty but not for long

The composition of the Nifty50 index is unlikely to change during the semi-annual review, slated for September. The two key stocks in contention — Info Edge and Avenue Supermarts — are yet to fulfil the inclusion criteria, even as the cutoff date of July 30 nears. This despite the Nifty positions of state-owned Indian Oil and Coal India — the lowest-ranked index constituents, in terms of free-float market capitalisation — appear in danger. Read more