OYO on Friday announced that it has raised a TLB (Term Loan B) funding of $660 million from global institutional investors.
A company statement said that the offer was oversubscribed by 1.7 times and the company received commitments of close to $1 billion from leading institutional investors.
The deal was upsized and increased by 10 per cent to $660 million as the company's fundamentals yielded strong interest from investors despite the virus surge.
The interest margin rate was also lowered by 25 basis points from the Initial Pricing Guidance to LIBOR+825 basis points.
The company will utilise these funds to retire its past debts, strengthen the balance sheet and other business purposes including investment in product technology, it said.
OYO is the first Indian startup to be publicly rated by Moody's and Fitch, two of the leading international rating agencies.
Fitch and Moody's rated OYO's senior secured loan B and B3 (stable outlook), respectively, on the back of the company's sound business model and resilient financial profile with significant potential upside.
This is a milestone transaction as OYO is the first Indian company to raise capital through the TLB route
Abhishek Gupta, Group Chief Financial Officer, OYO, said: "We are delighted by the response to OYO's maiden TLB capital raise that was oversubscribed by leading global institutional investors. We are thankful for the trust that they have placed in OYO's mission of creating value for owners and operators of hotels and homes across the globe.
"This is a testament to the strength and success of OYO's products at scale, our strong fundamentals and high-value potential. OYO is well capitalized and on the path of achieving profitability. Our two largest markets have demonstrated profitability at the slightest signs of industry recovery from the COVID-19 pandemic".
JP Morgan, Deutsche Bank, and Mizuho Securities served as the lead arrangers for this financing.
Rising retail participation in the stock market can enable to create a larger resource pool for financing India's infrastructure requirements, according to an SBI Ecowrap report.
It further said that in case retail investments in the stock market increases to 1 per cent of GDP and further even if half of this can be tapped and channelised into infrastructure spending, then it can cover around 24 per cent of the IBER (other than railways) of the government in FY22.
"Other option for financing infrastructure that is also being explored is the InvIT (Infrastructure Investment Trusts). Government owned Financial Institutions like PFC, REC etc. are setting up InvITs and providing equity capital for new projects. These are all positive developments in the long term financing story of India," said the report authored by Soumya Kanti Ghosh, Group Chief Economic Adviser, State Bank of India.
The report noted that with the onset of pandemic and subsequent lockdown, household financial savings had initially showed a significant jump in Q1 FY21, and then a sharp moderation in Q2 FY21. However, the data shows that currency in circulation again increased in Q3 and Q4 FY21.
Furthermore, the markets have progressively improved with Sensex increasing from 28,265 at the beginning of April 2020 to above 52,000 now, it said. This has led to increased investment in stocks and mutual funds in H2 FY21 and this higher retail participation in stock markets may become more of a self-fulfilling prophecy.
The number of individual investors in the market has increased by a whopping 142 lakh in FY21, with 122.5 lakh new accounts at CDSL and 19.7 lakh in NSDL. Furthermore, another 44.7 lakh retails investor accounts have been added during the two months of this fiscal.
Also, the share of individual investors in total turnover on stock exchange has risen to 45 per cent from 39 per cent in March 2020, as shown, by NSE data.
Within retail, maximum allocation has been to financials, followed by consumer staples, energy and IT. Globally, there has been significant increase in the market capitalization in stock markets across the world in the last one year.
However, in India it has been higher than other major countries. The market capitalization of Sensex has increased by 1.8 times its value one year ago. However, sector-wise 1-year return in Indian stock markets indicates that IT and Materials have performed better and IT.
"This clearly indicates the movement in Indian stock markets is increasingly being clearly interlinked with a supposed infrastructure power play in coming days."
There is also a renewed interest in healthcare stocks and of course financial stocks with stories of Indian financial ecosystem being effectively acting as a conduit of large liquidity finding investment avenues.
Lower rate in other saving avenues amidst the low interest rate regime has led to greater interest by individuals in the stock market.
Another reason could be the significant increase in global liquidity, it noted. Additionally, the pandemic which has resulted in people spending more time in their homes might also be another reason for individuals' tilt towards the stock market trading.
The Ecowrap report, however, said it is yet to be seen if this increasing retail participation is transitory or the beginning of long-term behavioural change. Additionally, the rise in stock market without significant development in real economy may raise issue of financial stability which as per our financial stability index shows modest improvement in April 2021, but lower than the peak witnessed in December 2020.
However, it is expected to have declined in May 2021.
In yet another acquisition for Tata Steel under the Insolvency and Bankruptcy Code, its wholly owned subsidiary, the Committee of Creditors (CoC) of Rohit-Ferro Tech Ltd has declared Tata Steel Mining as the successful resolution applicant for the insolvent ferro alloy manufacturing company.
The National Company Law Tribunal (NCLT) will have to next approve the resolution proposal.
"Tata Steel Mining Limited (TSML), a wholly owned subsidiary of Tata Steel Limited has been declared as the successful resolution applicant by the Committee of Creditors for acquisition of Rohit Ferro-Tech Limited ('RFT') on June 5, 2021, subject to it obtaining necessary regulatory approvals including approval from the National Company Law Tribunal (NCLT)," Tata Steel said in a regulatory filing.
TSML has accepted the Letter of Intent (LoI) for acquisition of RFT under the Corporate Insolvency Resolution Process (CIRP) of the IBC.
Around 11 a.m., shares of Tata Steel on the BSE were at Rs 1,136.10, higher by Rs 16.20 or 1.45 per cent from its previous close.
The resurgence of Covid-19 will adversely impact the occupancy rates of India's hotel industry for another two-three months, ratings agency ICRA said.
The pandemic's second wave has plunged the sequential occupancy rates of the industry.
Accordingly, the occupancy rate had sequentially dipped from 45 per cent in March 2021 to 32-34 per cent in April 2021 and further to about 25-27 per cent in May 2021.
The occupancy rate had fallen to lows of 13-15 per cent during the first few months of FY2021 and demand was largely limited to Vande Bharat repatriation travelers, medical or other frontline workers, stranded travelers and work-from-hotel guests.
After hotels reopened gradually from Q2 FY2021, demand came from staycations, drive-to-leisure and wedding 'Meetings, Incentives, Conferences, and Exhibitions' (MICE) and occupancies inched closer to 50 per cent in Q4 FY2021 providing a healthy dose of optimism to the industry.
As per ICRA, the recently expanded scope of ECGLS has come as a relief for larger hotel companies.
Under the expanded scope of the scheme, Centre has recently removed Rs 500 crore ceiling cap on loan outstanding for eligibility under the ECLGS 3.0, subject to a maximum assistance of Rs 200 crore or 40 per cent of the borrowings whichever is lower.
Centre had launched the ECLGS in May 2020 to protect the MSME sector from the massive economic upheaval caused by the pandemic.
"About 70 per cent of ICRA's hospitality portfolio applied for moratorium during the first wave," said Vinutaa S, Assistant Vice President and Sector Head, ICRA Ratings.
"Subsequently, most companies availed debt under ECLGS 1.0 and 2.0, and through other long-term debt to shore up their liquidity for meeting operational and financial commitments. Some companies also resorted to equity fund raising from investors and promoters."
According to ICRA, the recent expansion is a welcome move and is expected to benefit larger hospitality companies.
"About 32 per cent of ICRA rated debt is incrementally eligible for loan availment because of the cap removal."
Besides, a severe impact of the pandemic has resulted in a sharp increase in downgrades.
"About 70 per cent of the entities are on negative credit outlook, compared to 92% of the entities with stable outlook in January 2020," ICRA said.
"The industry credit profile is expected to weaken with the second wave derailing the recovery momentum and this could result in more negative rating actions."
Currently, ICRA expects the occupancy and 'RevPAR' to be adversely impacted, at least over the next two-three months because of the second wave.
"The industry 'RevPARs' would be tied to the pandemic timelines, although widespread vaccination rollout would ease the situation to an extent."
"The situation is still evolving and remains a monitorable. Recovery to pre-Covid levels is still at least two years away."
Mumbai, May 12 (IANS) Over 7,400 office space leases spanning around 90 million square feet area will come up for renewal in 2021 across the top six cities -- Bengaluru, Mumbai, Pune, Chennai, Gurugram and Noida, as per the Anarock data.
Data further reveals that 2021 has the highest lease expiry pipeline when compared to the next two years, 2022 and 2023.
The next year will see nearly 7,000 leases for around 78 million square feet come up for renewal and around 4,200 leases for over 55 million square feet in 2023.
Out of the around 7,400 leases expiring in 2021, Mumbai has the highest share at about 44 per cent, followed by Pune with a 17 per cent share. These two cities have been among the worst-affected by the second wave. The impact on leasing activity there over the year bears watching.
The total number of leases coming up for renewal in 2021 account for 90 million square metres area. In terms of area, Bengaluru has the largest share at about 37 per cent, with Mumbai coming in a distant second with a share of about 19 per cent.
Anarock Property Consultants Director & Head of Research Prashant Thakur said: "The office market has been under strain since the pandemic came in. However, the IT/ITeS sectors have been on a hiring spree in 2020 and 2021 due to massive business accruals.
"To accommodate these employees in a future when we see a gradual return of employees and adoption of hybrid workplace practices by infotech giants, office space demand will grow."
"Office demand also is expected to gather momentum from 2022 in the wake of robust hiring by large corporates. These big corporates will definitely renew their leases, though some of the smaller companies may consider rationalising space," he added.
"The leases coming up for renewal in 2021 were entered into at much lower rentals - at rates that prevailed 3 to 5 years ago - since office leases are usually signed for the long-term. There is some room for rental escalation in many of these leases," he added.
The price gap between ready-to-move-in and under construction homes has declined to just 3-5 per cent in the first quarter of 2021, according to a report by Anarock Property Consultants.
It noted that the price gap between ready and 'off plan' or under-construction housing has been narrowing on year-on-year basis since 2017 across the top seven cities.
In 2017, the difference between the two categories was anywhere between 9 per cent to 12 per cent across cities, while in 2018 it was 5-8 per cent.
The National Capital Region (NCR) and Mumbai Metropolitan Region (MMR) recorded the least price difference between ready-to-move-in and under construction homes at 3 per cent.
The average prices of RTM homes in NCR were Rs 4,650 per square feet while for under construction homes it was Rs 4,500 per square feet and in MMR it stood at Rs 10,700 per sqaure feet and Rs 10,350 per square feet respectively.
Pune, Hyderabad and Chennai have the highest RTM/UC price difference at around 5 per cent. In Bengaluru and Kolkata, the difference is just 4 per cent.
"Previously, buyers of under-construction homes had one major advantage," said Anuj Puri, Chairman of Anarock Property Consultants, adding that "their patience and willingness to court construction risk were rewarded by notably lower prices."
However, construction delays and stalled projects had a predictable outcome and risk-aversion set in, with demand tilted heavily towards ready properties. While the fact that RTM homes do not attract GST has been an added attraction, even the price gap between RTM and UC homes has eroded substantially, from 9-12 per cent in 2017 to just 3-5 per cent by Q1 2021, Puri said.
The shrunk price gap works well for end-users as well as investors. End-users can see what they buy and save rent by moving in immediately, while investors focused on steady rentals can start earning right away, said the report.
In the past four years, developers have been reluctant to increase the prices of ready homes as they need to clear their inventory. "Not surprisingly, ready homes are the 'in' thing," it said.
Amid revival in housing demand, the residential segment witnessed private equity (PE) investments worth $234 million in Q1 2021 which was 64 per cent of that witnessed during the entire 2020, said a Knight Frank India report.
It noted that in terms of the number of deals, the investment activity touched 100 per cent of 2020 levels and 39 per cent of 2019 levels in the first three months of 2021.
The report titled 'Investments in Real Estate - Trends in PE Investment (Q1 2021 update)' said that Indian real estate attracted private equity (debt and equity) investments ($3.24 billion) across 19 deals in Q1 2021 (January - March) period.
In the first quarter of 2021, the investment in the sector has grown by 16 times compared to $199 million in Q1 2020.
The investments in Q1 2021 in value terms were 80 per cent of that witnessed in full year 2020 and 48 per cent of full year 2019.The strong momentum in Q1 2021 was predominantly driven by two major factors, spillover of certain deals from 2020 and the rise in investor confidence due to the drop in Covid-19 infections during early parts of Q1 2021, which had created some ripples of positivity in the economy, it said.
The sustainability of this momentum in investors' sentiments will therefore depend on how soon the second wave of infection subsides and also the pace of vaccination, as per the Knight Frank India.
Out of the total PE investments in real estate, the office segment attracted 71 per cent share, followed by retail at 15 per cent, residential and warehousing with 7 per cent each respectively.
Shishir Baijal, Chairman and Managing Director, Knight Frank India said: "The deal street market of Indian real estate witnessed an impressive surge in both value and volume of private equity investments in the first quarter of 2021, when compared to the entire year of 2020."
He said that office assets continue to be the preferred segment attracting over 70 per cent of PE investments Q1 2021 as the segment moves towards maturity which includes sustained demand, stability in rental income and change in ownership profile over long -term. Investors are expecting demand to recuperate faster as the pace of vaccination increases.
"While Q1 2021 has been an encouraging quarter for PE investments, however, the upward trajectory can be impacted by the rising second wave of Covid-19 infections in India which started in the month of April 2021. The sustainability of revival in investor sentiments will therefore depend on how soon the second wave of infection subsides and the pace of vaccination," Baijal said.
The Centre proposes to prod states to initiate asset monetisation of state public sector enterprises (PSEs) by setting up specialised asset management (AMC) and asset reconstruction companies (ARC).
The idea is to expand the scope of government's asset monetisation exercise and enable state entities to unlock value for the next round of the investment that will help generate growth and employment.
AMC and ARC or a bad bank has been proposed for the banking sector in Budget 2021-22 to acquire, manage and turnaround bad loans. The Budget also talked about asset monetisation to unlock the true value of assets lying with government entities.
The plan now is to create a special purpose vehicle (SPV) under the government route that could take the shape of an AMC/ARC and help to maximise value of assets of PSEs. Similarly, exercise is now being thought as state level, where state specific AMC/ARC could do the same thing for local enterprises.
As per the plan being finalised by the Centre, assets may first be transferred to the proposed SPV which will then devise a plan to improve it before finding a strategic buyer and completing the transaction.
Earlier speaking to IANS, disinvestment department DIPAM secretary Tuhin Kanta Pandey had said that the SPV could look at monetising non-core assets of PSEs that are unable to undertake the work on their own and help them realise better value for assets that are unutilised or underutilised or are just lying idle without generating any revenue.
This would also mean that states, which are unable to undertake asset monetisation on its own, could consider taking the help of the Central SPV. In any case, both central and state SPV are proposed to work in close coordination to see that state assets get maximum value.
Asset monetisation is the process of creating new sources of revenue for the government and its entities by unlocking the economic value of unutilised or underutilised public assets. A public asset can be any property owned by a public body, roads, airports, railways, stations, pipelines, mobile towers, transmission lines, etc. or even land that remains unutilised.
The disinvestment department DIPAM has already asked all government bodies and PSEs to identify a list of assets that needs to be monetised. These would then be transferred to the SPV that will help improve the assets so that to maximise its value in the monetisation exercise.
With regard to land to be under monetisation, the plan is to create a central portal that could act as a land bank housing information about all such assets that have been lined up for utilisation by strategic investors.
Sources said, the AMC/ARC model for asset monetisation would work as it can help in maximising value of public assets thereby giving better returns to government and the PSEs. Certain assets may need to be improved before putting it up for auction. This work can be taken up by the AMC that can then put assets up for sale and complete the transaction.
It is envisaged that only non-core assets may be taken over by the proposed SPV and it would basically support smaller PSEs or those with inadequate infrastructure to undertake monetisation on their own. Larger entities like the Railways or other PSEs can continue on their own to monetise assets.
Though asset monetisation in plan in bits have been undertaken in the past and few PSEs have initiated exercise on this front, the government has given importance to this plan this year in the Budget and is actively looking to create a vast pool state asset that would be sold off.
Bucking the pandemic private equity (PE) investments into the India real estate sector rose around 19 per cent in FY 2020-21 to over $6.27 billion, according to an Anarock report.
During the previous financial year, PE investments into the realty sector stood at $5.8 billion.
Indian real estate recorded its highest-ever private equity investments since in the last fiscal, since FY16, noted the Anarock Capital's 'Flux - FY20-21 Market Monitor for Capital Flows'.
Unlike earlier, FY21 saw private equity investors focus majorly on portfolio deals across multiple cities and assets, rather on specific projects or cities. Such portfolio deals constituted 73 per cent of the overall investments, with around $4.58 billion invested through portfolio deals in multiple cities.
The average ticket size of PE deals rose by 62 per cent from $110 million in FY20 to $178 million in FY21. Both structured debt and equity witnessed strong growth during the year at 84 per cent and 15 per cent respectively, said the report.
Structured debt was largely towards portfolio deals instead of project-level assets, it said.
Though FY21 was an unprecedented year due to the pandemic, foreign PE funds showed much optimism for India. As much as 93 per cent of the total PE investments pumped into Indian real estate were by foreign investors.
Investments by foreign PE funds almost doubled from $3 billion to $5.8 billion in FY21. In contrast, domestic PE funds invested merely $300 million compared to $420 million in FY20.
Shobhit Agarwal, MD & CEO of Anarock Capital said: "Foreign funds are evidently very upbeat about India. High-grade rental-generating assets have attracted foreign investors in a big way during the year."
Moreover, India has a strong underlying demand for office space with quality workforce and average rentals available at less than a dollar per square feet per month, he said.
"Alongside, the successful REIT listings have provided a good monetising option for PE investors, leading to a stronger demand for good quality rental earning office and retail assets," Agarwal said.
S&P Dow Jones Indices have decided to remove Adani Ports and Special Economic Zone Limited from Dow Jones Sustainability Indices due to the reported commercial relationship of the company with Myanmar's military.
The change will come into effect prior to the opening of the indices on Thursday.
In a statement, S&P Dow Jones Indices said that the decision was taken after an analysis was conducted on the company post the news reports over its alleged commercial link with the Myanmar military.
"Adani Ports and Special Economic Zone will be removed from the Dow Jones Sustainability Indices following a Media & Stakeholder Analysis triggered by recent news events pointing to heightened risks to the company regarding their commercial relationship with Myanmar's military, who are alleged to have committed serious human rights abuses under international law," said the statement.
On March 31, the company had said in a statement that media reports were misrepresenting the Adani Group's investments in Myanmar.
It noted that in 2020, APSEZ won the Yangon International Terminal project through a globally competitive bid.
The project fully owned and developed by APSEZ is an independent container terminal with no joint venture partners.
The statement said that the land acquisition for the project was facilitated by the Myanmar Investments Commission led by U Thaung Tun, its Chairman and Minister of Investment and Foreign Economic Relations under former State Counsellor Aung San Suu Kyi's National League for Democracy government.
"As a responsible corporate our intention is to create investment-friendly opportunities in Myanmar through trade and commerce which will have a multiplier effect on job creation for the local communities and contribute towards the nation's economic and social development goals," it said.
"We condemn violations of the fundamental rights of all people and would continue to work with our partners and stakeholders, including business leaders, government and non-government organisations, to foster a business environment that respects human rights."
It also said that it is working with independent think tanks to ensure mitigation of human rights violations risks and building equal opportunity platform through sustainable value creations powered by critical port infrastructure.
Buyers in Gurugram now will have to spend extra money while purchasing properties in upscale condominiums, licensed colonies and builder floors at the Haryana Shahari Vikas Pradhikaran (HSVP) sectors. The district administration has increased the circle rates for 2021-22, which come into force from Thursday.
The rate of an upscale condominium like DLF Aralias, Magnolias and Camellias on Golf course Road has seen the steepest increase which have been increased by 25 per cent from Rs 20,000 to Rs 25,000 per square feet. At the same time, the rate of flats of more than a dozen multi-storey societies at Sohna Road, MG Road and Golf course Road have also been increased from Rs 8,000 to Rs 9,000 per square feet.
In the licensed colonies and independent floors in Haryana Shahari Vikas Pradhikaran (HSVP) sectors, the circle rate was increased by about 20 per cent from Rs 5,500 to Rs 6,500 per square feet. The rate of flats in Group Housing Cooperative Societies of HSVP sectors was hiked from Rs 3,600 to Rs 7,500 per square foot.
However, there is no increase in the rates of plots in the licensed colonies and HSVP sectors.
The flat rate of group housing societies of licensed colonies from Sector-15, 27, 28, 30, 3, 32A, 39, 40, 41, 42, 43, 45, 46, 50, 51, 52, 53, 54, 55, 56 and 57 has been increased from Rs 5,000 to Rs 7,000 per square feet. Similarly, the circle rate of flats in the Licensed Group Housing Society in Sector 58 to 63A has been increased from Rs 3,500 to Rs 5,000 per square feet.
"We have uploaded the proposed circle rates for the 2021-2022 fiscal year on our website. These rates will be implemented from April 8, 2021. Registry happening from Thursday will have to be done as per the new circle rate," said Basti Ram, the district revenue officer (DRO).
Meanwhile, the rates of industrial and IT sectors have not been changed. Apart from this, there has not been any change in the rates of licensed commercial buildings and markets. The rate of residential plots at Chandan Nagar and the Silokhera village in Gurugram has been increased from Rs 18,000 to Rs 42,000 and Saini Khera village from Rs 20,000 to Rs 30,000 per square yard.
"Amid corona the Delhi government reduced circle rates by 20 per cent and in Maharashtra by 4-5 per cent, but the Haryana government increased the maximum registry floor by 20 per cent. The group housing society rates have also been increased. The government and district administration should reconsider these rates," Ramesh Singla, president of Gurugram Home Developers & Plot Holders Association said.