MOSL: Morning India (23/April/20): 1. Reliance Industries (The big handshake); 2. NTPC (Regulatory structure provides demand insulation); 3. EcoScope; 4. Expert Speak (Auto)
MOrning India (23/April/20):
Today’s top research idea
Reliance Industries: The big handshake
** In India's biggest tech deal, Facebook acquired a ~10% stake in Jio Platforms, a wholly-owned subsidiary of Reliance Industries Limited, for INR436b. This deal could have far-reaching benefits for Jio Platforms, presenting a plethora of opportunities in its fiber and digital business endeavors.
** Pre-money, the deal is valued at an enterprise/equity value of INR4.62t/INR4.21t. Of the total cash received, Jio Platforms would get ~INR150b, leaving net debt of just ~INR260b in the company.
** The partnership would accelerate RJio's digital monetization drive; management's renewed focus on digital ecosystem would open up multiple new e-commerce opportunities as the company plans to leverage JioMart and WhatsApp to enable small Indian kirana stores to transact digitally with their customers.
** We have revised RJio's equity value/share to INR750 from INR500 earlier, on account of the capital reorganization of ~INR180/share transferred to RIL and additional gains from the deal, as well as deleveraging through internal sources.
Piping hot news
Stimulus in spotlight as finance commission meet starts today
A key economic advisory council of the Union government will meet this week to brainstorm the public spending needed to revive the economy amid mounting demands for a fiscal stimulus. The council, led by Fifteenth Finance Commission chairman N.K. Singh, will over two days, starting Thursday, deliberate on the impact of the covid-19 pandemic on economic growth in this fiscal year and the next, and possible assumptions for tax buoyancy and revenue during the period.
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