Street Signs: Adani Group shares, Exchange-traded funds surface, and more

Finding its moorings: Fundraise plan may buoy Adani Group shares

Shares of Adani Group companies may possibly get a leg-up from its Rs 21,000-crore fundraising plan. Over the weekend, Adani Enterprises and Adani Transmission announced plans of raising Rs 12,500 crore and Rs 8,500 crore, respectively, through the qualified institutional placement route. This will be a fresh shot at raising capital from the public by the Gautam Adani-led ports-to-power conglomerate. In January, it had to abort its Rs 20,000-crore follow-on public offer, following a scathing report by US-based short-seller Hindenburg Research that battered investor confidence and drove share prices of the group down. “The fresh fundraising proposal in less than four months of the January report will send the right signal to the market. It shows the group is confident enough to access the markets again and has received some degree of commitment from marquee investors,” observes an analyst.

Hotel stocks may book extended stay in investor portfolio

A combination of revenue growth and big-ticket events this year is seen to benefit hospitality stocks. According to analysts, the average room rates, which in calendar year (CY) 2022 was at Rs 6,100, is estimated to touch Rs 7,106 in 2023 and Rs 7,639 in 2024. Further, the medium-term demand-supply dynamics remains healthy for the Indian hospitality sector. According to industry estimates, the total room supply is expected to grow at a compound annual growth rate of 6 per cent between 2022 and 2025. Moreover, there are demand drivers, such as the Government of India’s intent to leverage the Group of Twenty summit as a launchpad to encourage inbound tourism, together with sporting events like the 2023 ICC ODI World Cup to be hosted by India from October 23 through November 24 this CY.

Retail investors barely scratch ETF surface

Exchange-traded funds (ETFs) have grown multifold since the pandemic breakout. But retail participation leaves a lot to be desired. ETFs held by retail investors account for a mere 0.6 per cent of the retail assets under management (AUM) of the mutual fund (MF) industry, reveals a Motilal Oswal report. The share has remained around 0.5 per cent since March 2018, even though retail ETF AUM has doubled since in absolute terms, from Rs 2,900 crore to Rs 6,000 crore in March 2023. In the same period, the ETF AUM of high networth individuals (HNIs) has grown exponentially, from Rs 2,800 crore to Rs 31,300 crore, showing the rising traction of ETFs among India’s rich. As of March 2023, the ETF AUM of HNIs was 2.3 per cent of their total MF AUM.