| Question of the Week Afghanistan may be a resource-starved country, but it has bigger reserves of a key metal, hugely in demand from the electrical industry worldwide than India. Name the metal. |
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|  | 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 havefor you here. | Good Morning | The News in Summary A promoter entity of the Adani group bought over 2% of its flagship firm, Adani Enterprises, even as markets regulator Securities and Exchange Board of India (Sebi) said it had completed its investigations into allegations against the group. Elsewhere, Qatar's sovereign wealth fund became the latest global investor to buy a stake in Reliance's retail arm, Reliance Retail Ventures Ltd (RRVL), while Hong Kong-based investment firm BPEA EQT sold off its entire 26.63% stake in Coforge Ltd (formerly NIIT Technologies) for Rs 7,684 crore valuing the company at nearly $3.5 billion. Meanwhile, the Murugappa group finally reached an out-of-court settlement with Valli Arunachalam, daughter of its former chairman M.V. Murugappan, and Vedanta agreed to a settlement with the Zambian government over its Konkola Copper Mines in the country. | | Adani Shores Up Stake in Flagship in Sign of Growing Confidence Kempas Trade and Investment Ltd, a promoter entity of the Adani group promoters, bought a 2.22% stake worth nearly Rs 6,348.12 crore in its flagship firm, Adani Enterprises Ltd (AEL), from the open market. With this, Kempas Trade and Investment's stake in AEL has risen to 69.87% from 67.65%. This reverses the months-long trend of the group's promoters raising funds through stake dilutions in group firms following US short-seller Hindenburg Research's damaging report in January this year. In a further sign of returning confidence, a credit report released by the power-to-port conglomerate last week reported that its cash flow generated from business operations and balances stood at Rs 77,890 crore ($9.4 billion) by the end of March, which provides enough liquidity for the company to cover debts that will mature within a year. It remains to be seen if the group's insistence that there has never been any wrongdoing, as alleged by Hindenburg, is upheld by Sebi, which said it had concluded 22 of the 24 investigations into the Adani group, a process that began in March. | | | Reliance Retail Continues to Attract Big-Ticket Investors With sovereign wealth fund Qatar Investment Authority (QIA) agreeing to invest Rs 8,278 crore ($1 billion) into its retail arm, there was ample recompense for the Reliance group after the lacklustre debut of Jio Financial Services, its demerged financial services arm, whose share price hit the lower circuit of 5% repeatedly last week. QIA's investment, translating into a 0.99% stake, values Reliance Retail Ventures Ltd (RRVL) at Rs 8.28 trillion or $100 billion, twice its Rs 4.21 trillion valuation in 2021 when it raised Rs 47,265 crore from global investors, including Abu Dhabi-based sovereign wealth fund Mubadala, private equity firm General Atlantic, Silver Lake Partners and investment firm TPG Capital. The valuation is in line with the $100 billion estimated by equity researcher Bernstein just last month for RIL's retail business. Investor interest in the business has been high given its encouraging performance, with news reports suggesting that ahead of the proposed IPO of RRVL, the group is planning to sell an additional 8-10% stake in the retail unit, which reported revenue of Rs 2.6 trillion and a profit of Rs 9,181 crore for the year ended 31 March 2023. | |  | | |
| | | PE Firm Cashes Out of Coforge With Bumper Returns Hong Kong-based investment firm BPEA EQT has sold its entire 26.63% stake in Coforge Ltd (formerly NIIT Technologies) for Rs 7,684 crore to multiple investors, including SBI Mutual Fund, Aditya Birla Mutual Fund, Capital Group, Kotak Mahindra Group, ICICI Prudential Life Insurance and Societe Generale through a series of bulk deals. While the shares were sold at a 4% discount to Coforge's closing price for the previous day, the transaction sent the shares soaring 10% as investors saw a huge positive in the presence of a number of mutual funds on its board. Having acquired a stake in Coforge in 2019, the deal brings exponential returns of 240% for BPEA. With this, the software services firm, which started out in 1981 as a computer training institute and closed the year ended March 2023 with revenue of Rs 4,230 crore and a net profit of Rs 732 crore, will be without a promoter and the first of its kind to be entirely owned by public investors. | | | Murugappa Group Smokes Peace Pipe with Warring Family Member An out-of-court settlement finally ended the family feud at Murugappa Group three years after Valli Arunachalam, daughter of the group's former chairman M.V. Murugappan, had gone to court alleging gender discrimination by the boards of the group's firms in keeping her out. While the terms of the agreement remain unknown, the group said that the family members have committed to "undertaking the necessary transactions to effect the family arrangement within the next 90 days." Following the death of her father in 2017, Valli Arunachalam had asked for a non-executive board berth in the group's holding firm Ambadi Investments Ltd as the natural successor to her father's board position and in consonance with the 8.23% stake held in the holding company by her along with her mother and sister. However, the all-male board of Ambadi rejected her request, as well as her offer of a financial settlement, forcing her to seek legal help. Despite the family feud, Murugappa group stocks have been outperforming the benchmark, with share prices of companies like Carborundum Universal, Coromandel Engineering Co, E I D-Parry (India) Ltd and Tube Investments of India all posting hefty increases. | | Vedanta Edges Close to a Settlement Over Zambia Copper Mines  Three years after Zambia's former president Edgar Lungu seized control of the Konkola Copper Mines owned by Vedanta Resources Ltd, after accusing it of paying too little tax and lying about its expansion plans, Anil Agarwal's company has agreed to pay $250 million owed to its creditors after it resumes control over them. This follows current President Hakainde Hichilema's efforts to resolve the issue amicably after the mines had been placed under provisional liquidation in 2019. Agarwal, in turn, has said he will invest $1 billion in Konkola to double production from the plant, which produces copper that generates 70% of the country's export earnings. The issue has been simmering over the last few years, and a settlement is important for Vedanta, which has a record $2 billion of bonds due in 2024, with a $1.1 billion repayment due in January. Its under-pressure chairman, Anil Agarwal, has said that the company is considering separately listing all or some of its businesses. | | |  | | | Last Word Two chip makers were in the news last week, their contrasting fortunes leaving a question mark over India's desperate quest for local manufacturing of the prized commodity. Nvidia beat market forecasts with stellar second-quarter sales and profit and an upbeat forecast for the coming months, all of which combined to send its stock price soaring. Significantly, its performance was driven by sales of its AI chips, as companies like Alphabet, Amazon and Meta grabbed its next-generation processors, raising hopes that the promise of AI may soon start translating into performance. Meanwhile, another chip maker, Arm Holding, which has designed the architecture of chips that are found in 99% of all smartphones in use across the world, filed for its IPO. The worry for potential investors came from its falling revenue and narrowing profits as well as the 24% of its revenue that comes from China, a country which US president Joe Biden just dubbed a "ticking time bomb". | | | With Arm preparing to launch the biggest IPO of the year, this Bloomberg video examines its prospects, which could have a significant bearing on the fortunes of its majority owner, Softbank. | | | Answer to the Question The metal is copper, of which Afghanistan has reserves of 60 million tonnes as compared to India's 46 million metric tons of reserves. However, given the logistical and security challenges of mining in the country, these reserves remain largely untapped. |
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