COVID-19 vaccine woes, adequate oxygen supply, and ABSL AMC IPO: Three things investors should know on April 20, 2021
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India's Vaccine Woes

The vaccine production in India has taken a severe hit in the absence of key ingredients. The issue has magnified ever since the United States has imposed restrictions on the export of key ingredients.

The United States has invoked the war-time Defence Production Act (DPA). It forces US-based companies to prioritize the supply of raw materials to domestic companies only. The US has so far expressed concerns over India's plight. But little has materialized on the ground.

The war-time Defence Production Act continues to remain enforced in the US. It has created a shortage of key ingredients impacting the production of vaccines and Personal Protective Equipment (PPE) kits in India.

Earlier, Adar Poonawala, CEO of Serum Institute, had also urged the US to allow the export of key raw materials to India.

Enough Oxygen, As of Now

Siddharth Jain, CEO of Inox Air Products, believes that India is unlikely to face a supply gut of oxygen. He said that the country currently has enough production capacity to meet the demand.

In a recent interview with Moneycontrol, he suggested that India can currently produce 7,200 metric tonnes per day (MTPD) of oxygen for medical use. The current demand is 5,000 MTPD only.

Demand for medical oxygen has shot up by many folds in recent months. Many states have even reported the shortage of supply and asked the central government to ensure adequate supply.

Inox Air Products has a ~50% market share of the medical oxygen market in India. In this context, its positive assessment of oxygen supply has come as a huge relief.

ABSL AMC Set for an IPO

​Aditya Birla Sun Life AMC Limited (ABSL AMC) has filed a Draft Red Herring Prospectus (DRHP) with the SEBI. With this, the company has taken the first step towards launching the IPO of one of its key subsidiaries on the bourses.

​ABSL AMC is the subsidiary of Aditya Birla Capital. It has approved the sale of up to 28,50,880 equity shares of the face value of Rs 5 each held in ABSL AMC. Sun Life (India), the joint venture partner, will also sell a part of its stake in ABSL AMC through the IPO.​

The sale of equity shares in the IPO will constitute up to 13.50% of the paid-up share capital of Aditya Birla Sun Life AMC. Both the partners - Aditya Birla Capital and Sun Life (India) - are set to sell a part of their stake through this offer.

AMC business is one of the strongest subsidiaries of Aditya Birla Capital. And this minor stake sale is expected to unlock the value for the shareholders of Aditya Birla Capital.

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