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  • Week in 5 charts: Sensex, Nifty gain amid weak domestic data, firm global cues; rupee extends gains
    2019-12-14, By: System Administrator

    The BSE mid-cap index rose 1.11 percent, and the BSE large-cap index added 1.35 percent in the past week.

    Indian benchmark indices added more than 1 percent in the week ended December 13 amid weak domestic data but positive global cues pushed the indices near the all-time highs.

    The market remained range-bound during the week amid domestic and global cues including IIP, CPI data, the UK election and the US-China trade deal ahead of the December 15 deadline.

    On the domestic front, rising food prices pushed up retail inflation in November to an over three-year high of 5.54 percent. The industrial sector output contracted by 3.8 percent in October, for the third month in a row, against a 4.3 percent contraction in September.

    On the global front, UK Prime Minister Boris Johnson registered a big win that would deliver a swift Brexit.

    Earlier in the week, the US Federal Reserve, held interest rates steady in the range of 1.5 percent to 1.7 percent. However, the United States and China announced an initial trade agreement, cooling trade tensions between the two big economies.

    "Nifty as per weekly timeframe formed a long bull candle with lower shadow. This candle pattern was formed immediately after the formation of a bearish engulfing type pattern in the last week. This is a positive indication and one may expect further upside in the short term. A sustainable move above 12,158 levels could nullify the negative implication of bearish engulfing," said Nagaraj Shetti – Technical & Derivative Analyst, HDFC securities.

    In the past week, the Sensex rose 564.56 points (1.39 percent) to end at 41,009.71, while the Nifty added 166.2 points (1.38 percent) to end at 12,086.7.

    Foreign Institutional Investors (FIIs) remained net buyers the past week as they bought equities worth Rs 129.71 crore, while Domestic Institutional Investors (DIIs) bought equities worth of Rs 1,848.35 crore.

    The Indian rupee continued its upward momentum as it ended higher by 39 paise at 70.81 on December 13 versus the December 6 closing of 71.20.

    "The recent developments on the global front have subsided the fear of prolonged crisis and that cheered the participants across the world markets including ours. And, we feel the positive momentum to extend further in the coming week too," said Ajit Mishra, VP - Research, Religare Broking.

    The BSE mid-cap index rose 1.11 percent, and the BSE large-cap index added 1.35 percent in the past week.

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  • New highs? 11-year data suggest Sensex belongs to the bulls in December
    2019-12-06, By: System Administrator

    The Indian market trading at near-record highs is likely to pick up momentum, as anecdotal evidence of the past 11 years suggests that December belongs to the bulls.

    The Sensex and the Nifty hit a record high of 41,163 and 12,158, respectively, on November 28, and are less than a percent away from breaking into a new territory.

    Data suggest that the Sensex closed in the green in the month of December in seven of these 11 years.

    The Sensex saw its worst fall in 2011 when it fell by over 6 percent, followed by 2014 when it declined 3.7 percent, and in 2018, the index fell by 0.48 percent.

    The index rose in seven of the last 11 years. It rose over 9 percent in 2008, followed by a 3.7 percent rally in 2017 and 3.3 percent gain in 2010, data from AceEquity shows.

    With the Reserve Bank of India policy out of the way, all eyes will now be on the trade negotiations between the US and China. Hence record highs are possible, which could be followed by some consolidation, experts say.

    “The markets made a new record high last month but the bias was largely on the consolidation side. This month, too, weak macroeconomic data combined with not so encouraging global cues have triggered marginal profit-taking of late and indications are pointing towards further consolidation in the index,” Ajit

    The outcome of RBI monetary policy may result in a further up move but upside seems capped, considering hurdle at 12,300 in the Nifty. Besides, signals are mixed from the global front. In such a scenario, it is likely that markets may conclude the month marginally higher.”

  • Reliance Industries hits Rs 10 lakh crore market capitalisation, a first by an Indian company
    2019-11-28, By: System Administrator

    In dollar terms, its mcap stood at $140 billion, higher than Total SA's $127.96 billion and way higher compared to BP's $99.57 billion

    Oil-retail-to-telecom major Reliance Industries (RIL) became the first company among listed entities to hit a market capitalisation (mcap) of Rs 10 lakh crore on November 28. The stock gained 0.74 percent intraday and touched a record high of Rs 1,581.25 on the BSE.

    The company has become so big that its current mcap is similar to 19 Nifty companies, or 35 PSUs and banks, or all constituents in the Nifty Smallcap 250 list.

    In dollar terms, its mcap stood at $140 billion, higher than Total

    SA's $127.96 billion and way higher compared to BP's $99.57 billion. ($1= Rs 71.46)

    The stock has been one of biggest gainers among the top 10 Nifty companies, rising 10 percent in the last one month, 24 percent in three months and 40 percent in last one year.

    IL was quoting at Rs 1,579, up Rs 9.25, or 0.59 percent on the BSE at 1012 hours IST.

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    RIL is India's largest and most profitable private sector company and continues to remain a significant player in the integrated energy value chain globally.

    The major reasons behind the stock's rally are its debt reduction plan, likely hike in tariffs and increasing focus on its consumer businesses.

    Last month, RIL had approved the formation of a wholly-owned subsidiary

    (WOS) for Digital Platform initiatives and said Reliance Jio Infocomm (Jio) would become virtually net debt free company by FY20-end, with exception of spectrum-related liabilities.

    Its retail business has grown phenomenally, registering a seven-fold increase in revenue and a 14-fold increase in profit in the last six years.

    Jio has already become the largest operator in India and still signing up more than 10 million new customers each month. On November 19, it said it would raise the tariffs and data charges in the next few weeks.

  • What should be your strategy, buy largecaps or chose from mid & smallcaps?
    2019-11-21, By: System Administrator

    The recent correction seen in the midcaps, which now trade at 5 percent discount to largecaps, will open a window for smart money to move into this space, say experts.

    Indian market created history yet again on November 20 when the Sensex hit a new high of 40,816, while the Nifty had a touch-and-go moment with 12,000, just 120 points shy of its best-ever performance of 12,103.

    So, what should be the trading strategy? Is it time to buy the fear in the small and mid-cap space or stay with steady large-cap stocks?

    The answer lies in your risk-taking ability. Even though the market valuations look stretched, largecaps could still be in favour. However, value buying could be seen in select mid and small-cap stocks, say experts.

    The market is at record highs and valuations have been stretched since the last quarter. The broader markets are still significantly lower from their highs as Small and Midcap indices are still down by about 20

    Valuations of Indian equities are near their long-period averages. The Nifty trades at a 12-month forward P/E of 18.8x, just a 4% premium to its long-period average of 18.0x. The Nifty’s P/B of 2.7x is also near its historical average,” Motilal Oswal said in a report.

    “At the current trailing P/E of 23x and forward P/E of 18.8x, we see limited triggers for further re-rating unless accompanied by a material surprise in earnings.”

    The rally on D-Street is largely hope based, as things on the ground have not moved much. But, recent measures introduced by the government to support the economy and boost consumption will go a long way.

    “The divergence between largecap and small/mid-cap is on account of many of the large-cap companies reporting inline or better than expected results. Corporate tax cuts have positively impacted the earnings and even at the operational front ie on sales and EBITA, numbers did not completely disappoint

    “The September quarter earnings failed to show any significant recovery in midcap/small-cap companies. So largecap will attract investors’ attention and value buying can be seen in midcap/small-cap stocks,” he said.

    Data suggests that the Nifty is trading at 12-month-forward RoE of 14.2 percent, which is closer to its long-term average of 14.5 percent. The market-cap-to-GDP ratio is at 75 percent, based on FY20E GDP, is almost at its long-term average of 76 percent.

    If we look at the broader market, notably over the past 12 months, midcaps were down 2.2 percent, as against the Nifty’s rise of 14.4 percent in the same period. The Nifty Midcap100 P/E ratio has corrected from 19.8x in Oct’18 to 17.9x currently.

    Experts feel that the recent correction in the midcaps, now trading at 5 percent discount to largecaps, will open a window for smart money to move into this space.

    “We are advising investors to increase exposure in mid & smallcaps, value stocks, and companies which are highly integrated into domestic cyclical. This is in anticipation of a better economy in the coming years. We are also very positive on the banking sector, asset management, insurance, and green energy,” Vinod Nair, Head of Research at Geojit Financial Services told Moneycontrol.

    Economic growth revival is essential for the markets where valuations are stretched. There has to be more broad-based participation (even amongst the largecaps) for the rally to continue, say experts.

    They do not see a runaway rally but selective buying could continue, while benchmark indices are exposed to consolidation in the short-term after the recent run-up.

    “Considering the current scenario wherein the Indian markets are hovering near to peak levels and with economic growth slowing down, investors should maintain cautious approach,” Ajit Mishra, Vice President, Research, Religare Broking Ltd, told Moneycontrol.

    “It would be prudent to stick with quality names with sound fundamentals, strong corporate governance, and healthy growth prospects. Further, we would recommend investors to buy stocks in a staggered manner,” he said.

  • Nomura bullish on these 2 infrastructure stocks, sees more than 45% upside
    2019-11-15, By: System Administrator

    PNC's consolidated profit in first half of FY20 increased sharply by 129 percent year-on-year to Rs 392 crore on revenue of Rs 2,866 crore which grew by 75 percent YoY.

    PNC Infratech share prices gained 7.4 percent, and KNR Constructions 3 percent intraday on November 15 as Japanese brokerage firm Nomura remained bullish on the stock after their September quarter earnings.

    The research house maintained buy call on PNC Infratech with a target price of Rs 267, implying 45.5 percent potential upside from current levels as July-September quarter results were above its estimates at all levels.

    The revenue was a beat, signifying robust execution even in the monsoon quarter, the brokerage said, adding the company was on track to beat its revenue guidance of Rs 4,500 crore for FY20 and would maintain lower gearing levels for FY20.

    PNC Infratech reported healthy earnings growth across parameters with consolidated profit rising 300 percent year-on-year (YoY) to Rs 214.08 crore and the revenue increasing 85 percent YoY to Rs 1,341 crore in the quarter ended in September.

    Consolidated earnings before interest, tax, depreciation and amortisation (EBITDA) grew by 85 percent to Rs 383.71 crore compared to year-ago with flat margin YoY.

    ICICI Securities also likes PNC Infratech given its strong orderbook position, execution capabilities and strong balance sheet position.

    The company reported higher other income of Rs 44.7 crore in Q2FY20 which includes Rs 35.6 crore interest on arbitration claim received for Hapur-Moradabad project. Adjusting for one-offs associated with claims at operating level as well as other income level, operational PBT grew by 1.3x YoY to Rs 101.3 crore in Q2FY20.

    PNC's consolidated profit in first half of FY20 increased sharply by 129 percent year-on-year to Rs 392 crore on revenue of Rs 2,866 crore which grew by 75 percent YoY. EBITDA in first half of FY20 shot up 50.6 percent to Rs 735 crore YoY.

    PNC stock rallied more than 32 percent in the last nine months and was quoting at Rs 184.70, up Rs 1.25, or 0.68 percent, on the BSE at 11:49 hours IST.

    Nomura has also maintained buy call on KNR Constructions with a target price at Rs 363 which implies 47.8 percent potential upside from current levels.

    "There was a strong pick-up in execution during July-September period after a weak April-June period. Asset sale to Cube Highways is a key positive," the brokerage said.

    ICICI Securities prefers KNR Constructions as well, given its strong orderbook position, execution capabilities, strong balance sheet position and the company focusing on monetising its under construction HAM projects.

    KNR also delivered a strong set of earnings for the quarter ended in September with profit rising 121.2 percent YoY to Rs 85.9 crore, and the revenue grew by 30.3 percent to Rs 587.07 crore compared to the year-ago period.

    EBITDA during the quarter increased 53 percent to Rs 158.24 crore, and the margin expanded by massive 401bps to 26.95 percent compared to the same period in 2018.

    The stock gained more than 20 percent in last nine months and was quoting at Rs 246.80, up Rs 1.15, or 0.47 percent, at 11:49 hours IST.

  • Economic data disappoints: Did you make a mistake in investing when Nifty50 hit 12K?
    2019-11-13, By: System Administrator

    The market is on track to hit fresh record highs and the rally could well extend towards 12200 to 12600 on the Nifty which translates into a gain of nearly 6 percent from Monday’s closing of 11,913.

    There is a big divergence between how the stock market is and the economy is faring. One seems to be hitting all-time highs while the other is hitting lower levels with each passing month.

    In this ease, growth slowdown has deepened as IIP performance for the second consecutive month points to a deep slump in economic activity. Industrial production data contracted for the second month in a row to 4.3 percent in September, its lowest level in almost 8 years.

    In terms of markets – the S&P BSE Sensex, which has risen over 11 percent so far in the year 2019, hit a fresh record high of 40,749 on November 8, while the Nifty50 also reclaimed 12,000 levels in the week gone by.

    Equity markets are inching towards record high, but the economy seems to be struggling, which puts investors’ in doubt about investing at record highs. We spoke to experts to help us understand the dichotomy and if investors did the right thing investing in markets at record highs.

    Investing when the market is at a record high is not recommended by experts, but if someone is planning to do so, then they recommended waiting for a dip as the strength is still intact and most of the quality stocks are still trading at attractive valuations when compared to historical averages.

    “There is an economic slowdown and earnings growth is subdued. While the government has been doing its bit on the economic revival, it will take time for the recovery to happen,” Siddharth Mehta, Founder & CIO at Bay Capital told Moneycontrol.

    “These times of a slow down are the best time as an investor to analyse which businesses are doing the right things for the long term, which businesses are strengthening their franchises and will come out stronger,” he said.

    Based on the current scenario, the government has been addressing plenty of issues that plague the banking sector and hinders the investment cycle. But, the effect of the same will take some time, and when it starts to reflect, the sentiment will also reverse.

    The current slowdown is not India-specific, but is global in nature. Hence, investors should remain patient as wealth creation might take some time. But the prices at which stocks are available are still attractive if someone has an investment horizon of 3-5 years.

    “At present, each country is facing the problem of recession. In such a type of scenario, if the government brings necessary changes and reforms to boost the economy then the upside for the market would be un-imaginable,” Shrikant Chouhan, SVP, Technical Research, Kotak Securities told Moneycontrol.

    “More than this, we feel that investors can start investing at any level as nobody can perfectly tell you the perfect time or right level to invest in the market. However, investing in strong companies is the simplest formula to earn returns from funds deployed in the stock market,” he said.

    Chouhan further added that those who are ready to take more risk can invest in mid-cap funds or stocks to multiply their returns. However, in such type of investments, the exit is more important than the entry where a lot of people get stuck.

    Trading strategy:

    Experts are of the view that the positive trend in the market is likely to continue, and investors will be better off putting money into markets on dips amid global and domestic headwinds.

    The market is on track to hit fresh record highs, and the rally could well extend towards 12,200 to 1,2600 on the Nifty, which translates into a gain of nearly 6 percent from November 11 closing of 11,913.

    “We could have hiccups in the short-term due to the premium valuation of blue-chips, fiscal deficits, and slowdown in the trend of Q2 result which is at the last phase of the announcement. We had a target of 12,600 for Nifty50 which we are maintaining,” Vinod Nair, Head of Research at Geojit Financial Services told Moneycontrol.

    “It is at a good time to consider investing in mid and small caps which are available at reasonable valuation and ownership of institution has reduced in the last two years. We expect such stocks to outperform in the future as the economy improves and systematic risk reduces,” he said.

    Vishal Wagh, Research Head at Bonanza Portfolio is of the view that every dip into the market is a buying opportunity if one looks at outperforming sectors of stocks.

    “Market may test 12,200 levels in the coming few months. The investor should buy outperforming stocks only in a staggered manner. Keep booking profits at regular intervals and keep a risk management principle with high priority,” he said.

  • Yes Bank Q2 result: Higher provisions lead to Rs 600 cr loss; sharp increase in NPAs
    2019-11-01, By: System Administrator

    Net interest income during the quarter declined 9.6 percent year-on-year to Rs 2,185.91 crore with 6 percent YoY loan degrowth.

    Private sector lender Yes Bank posted a loss of Rs 600.08 crore during July-September period, dented by higher provisions with a sharp increase in non-performing assets.

    The bank had reported a profit of Rs 964.70 crore in the year-ago period and Rs 113.76 crore in the June-ended quarter.

    Net interest income during the quarter declined 9.6 percent year-on-year to Rs 2,185.91 crore with 6 percent YoY loan degrowth.

    Asset quality deteriorated further with gross non-performing assets (NPA) as a percentage of gross advances 238bps sequentially to 7.39 percent while net NPA as a percentage of net advances increased 144 bps QoQ to 4.35 percent in the quarter ended September 2019.
     

  • Rakesh Jhunjhunwala raises stake in 5 stocks which fell up to 40% in 2019
    2019-10-23, By: System Administrator

    Billionaire investor Rakesh Jhunjhunwala rejigged his stake in 10 companies in September while keeping his stake constant in 15, data collated on October 18 shows.

    Jhunjhunwala increased his stake in five companies which include names like Federal BankVIP IndustriesAgro Tech FoodsNCC and TV18 Broadcast. These stocks have fallen 9-40 percent so far in 2019, according to data collated from AceEquity.

    As of October 18, 25 companies in Jhunjhunwala’s portfolio have released their shareholding data for Q2FY20. Of these, 80 percent of the stocks have given negative returns on a year-to-date (YTD) basis.

    Shares of DHFL plunged more than 90 percent, followed by The Mandhana Retail (65 percent), Autoline Industries (60 percent), and Edelweiss Financial Services which plunged 52 percent so far in the year 2019.

    Table: 25 companies in Rakesh Jhunjhunwala portfolio that have released shareholding data by October 18. Please note that this may or may not be an exhaustive list of Rakesh Jhunjhunwala’s portfolio but only a list of companies in which he holds over a 1 percent stake.

    Jhunjhunwala also reduced his stake in five companies including CRISILLupinFirstsource SolutionsTitan Company, and Ion Exchange.

    The regulatory filing shows Rakesh Jhunjhunwala and his wife together held 5,77,51,220 shares at the end of September in Titan Company, which is 7.82 percent lower than 6,26,51,220 shares held at the end of June.

    The company's jewellery sales declined sharply in July, as gold became costlier and the consumption sentiment in most parts of India remained subdued, thus resulting in lower discretionary spends on high-value products.

    Some green shoots were visible in August and September. During these months, retail (secondary) sales grew 15 percent year-on-year (YoY) due to increased impetus towards advertising. On the flip side, experts say this would impact margins.

    Incidentally, Jhunjhunwala kept his stake constant in as many as 15 companies which include names like Fortis Healthcare, Escorts, Aptech, Geojit Financial Services, Edelweiss Financial Services, DHFL, among others.

  • Bharti's Sunil Mittal and Hero Group's Sunil Munjal eye stake in Yes Bank: Report
    2019-10-16, By: System Administrator

    Their interest is at the preliminary stage and if the deal does takes place, Mittal and Munjal would be acquiring the stake in their private capacity, which could be up to five percent

    Prominent industrialists Sunil Mittal and Sunil Munjal have envisaged interest in acquiring stake in Yes Bank, reports ET Now.

    Their interest is at the preliminary stage and if the deal does takes place, Mittal and Munjal would be acquiring the stake in their private capacity, which could be up to five percent, the report stated.

    Another five percent may be sold to private equity investors.

    Yes Bank said it continues to be in regular conversation with the Reserve Bank of India (RBI) on its fund raising drive.

    In response, a Bharti spokesperson stated,“We strongly deny these baseless rumors. Mr. Sunil Bharti Mittal has no plans to make any investment in Yes Bank.”

  • September quarter earnings: 10 stocks likely to more than double PAT on YoY basis
    2019-10-10, By: System Administrator

    Auto, corporate banks, telecom, and metals are likely to post profit contraction or losses. There is likely to be a sharp slowdown in IT, say experts.

    September earnings are likely to be a replay of the June quarter--tepid and uneventful, as some analysts put it.

    A demand slowdown in the domestic economy and weak global commodity prices are expected to take a toll on the earnings, with few bright spots.

    “It is important to look at this quarter’s numbers from a PBT perspective, as the reduction in the corporate tax rates will result in several adjustments in this quarter’s tax numbers (eg large corporate banks will make deferred tax adjustments),” Motilal Oswal said in a report.

    September earnings are likely to be a replay of the June quarter--tepid and uneventful, as some analysts put it.

    A demand slowdown in the domestic economy and weak global commodity prices are expected to take a toll on the earnings, with few bright spots.

    “It is important to look at this quarter’s numbers from a PBT perspective, as the reduction in the corporate tax rates will result in several adjustments in this quarter’s tax numbers (eg large corporate banks will make deferred tax adjustments),” Motilal Oswal said in a report.

    Edelweiss Securities expects retail banks, OMCs and consumer discretionary to post 25 percent-plus growth. However, auto, corporate banks, telecom, and metals are likely to either post profit contraction or even losses. There is likely to be a sharp slowdown in IT and industrial earnings growth to sub-5%.

    We have collated a list of ten stocks from various brokerage firms that are likely to more than double their net profit year on year:

    Brokerage Firm: Reliance Securities

    India Cement: PAT likely to grow by 586% YoY

    Reliance Securities is of the view that India Cement is likely to report nearly 600 percent rise in net profit YoY to Rs 9.8 crore for the quarter ended September, despite fall in volumes and marginal impact on net revenues due to slowdown in infra projects in the South.

    Somany Ceramics: PAT likely to grow by 185% YoY
     

    Somany Ceramics is likely to report nearly 200 percent rise in net profit YoY to Rs 13.1 crore in the September quarter, despite dismal growth in volumes due to moderate demand environment. Soft fuel prices and favourable product mix will result in strong operational performance.

    JK Lakshmi Cement: PAT likely to grow by 230% YoY
     

    JK Lakshmi Cement is likely to report over a 200 percent rise in net profit on a YoY basis to Rs 25.8 crore for the September quarter despite a muted demand environment.

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    The company’s Q1FY20 realisation and cost benefits would lead to strong YoY operating profit. Low clinker sales and steady North realisation are likely to aid YoY pricing.

    Brokerage Firm: Motilal Oswal

    Sanghi Industries: PAT likely to grow by 670% YoY

    Motilal Oswal expects Sanghi Industries to report an over 600 percent growth in net profit on YoY basis for the September quarter despite fall in volumes. The stock trades at a P/E of 10.9x (FY20E) and 14.2x (FY21E), EV/EBITDA of 8.7x (FY20E) and 6.7x (FY21E), and EV/t of USD47 (FY20E) and USD37.3 (FY21E).

    Brokerage Firm: Edelweiss Securities Ltd

    Federal Bank: PAT likely to rise by nearly 100% YoY
     

    Federal Bank will likely see its net profit rise by 96 percent YoY to Rs 520 crore during the September quarter. The business momentum is likely to be steady.

    But, asset quality volatility is something that investors should watch out for, given the system-wide rise in stressed assets.

    Titagarh Wagons: PAT likely to rise by 122% YoY
     

    Titagarh Wagons’ net profit will likely rise 122 percent on a YoY basis to Rs 11.6 crore. Increased order intake from the Indian Railways, increased momentum in private sector ordering and ramp-up in execution are the key monitorables for Titagarh Wagons.

    Amber Enterprises: PAT likely to rise by 327% YoY
     

    The standalone net profit of Amber Enterprises is expected to rise by 327 percent on a YoY basis to Rs 4 crore for the quarter ended September.

    On standalone levels, Amber is expected to post a 19 percent growth in revenue in a seasonally weak quarter, driven by a 25 percent growth in revenues from AC (on a low base - 23% drop in Q2FY19).

    The near doubling of EBITDA margin is on a low base quarter (Q2FY19 was impacted by negative operating leverage due to slow growth).

    ABB Ltd: PAT likely to rise by 185% YoY
     

    ABB Ltd’s net profit is likely to rise by 185 percent to Rs 103 crore in the September quarter.

    ABB expects 15 percent growth in continued businesses, mainly driven by industrial automation. Order inflow remains a key monitorable.

    Gujarat Gas: PAT likely to rise by 259% YoY
     

    The net profit of Gujarat Gas is expected to rise by 259 percent on a YoY basis to Rs 196 crore for the September quarter.

    Volumes at Gujarat Gas will decline slightly (-2.0% QoQ) due to lower volumes from Morbi. Edelweiss Securities expects Gujarat Gas to have cut prices sharply to support volumes, resulting in EBITDA margins declining to INR 4.5/scm (-19.4% QoQ).

    Fortis Healthcare Ltd: PAT likely to rise by 156% YoY

    Fortis Healthcare Ltd could see its net profit rise by 156 percent on a YoY basis to Rs 42 crore for the quarter ended September.

    Edelweiss estimates the top line to grow by 11 percent on a YoY basis – hospital business is estimated to grow at 10 percent and SRL at 10 percent.

    This is accompanied by EBITDA growth (pre-Ind AS 116) of 15 percent YoY on account of cost efficiencies through improved lab efficiencies and vendor negotiations.

  • RBI Policy outcome: Rate sensitives plunge on rate cut; banks worst hit
    2019-10-05, By: System Administrator

    Yes Bank, Kotak Mahindra Bank, BPCL, SBI and Indiabulls Housing are the most active shares on the BSE.

    Indian markets gave up all its morning gains and ended near day's level on the back of selling seen in the banking, auto, metal and infra stocks after Reserve Bank of India (RBI) cut its repo rate by 25 basis points in its bi-monthly review meeting.

    The Sensex was down 433.56 points or 1.14 percent at 37673.31, while Nifty was down 139.20 points or 1.23 percent at 11174.80.

    The Reserve Bank of India (RBI) has cut its repo rate by 25 basis points to 5.15 percent in a bid to boost the flow of credit and support economic growth.

    The central bank also decided to continue with an accommodative stance “as long as it is necessary” to revive growth, while ensuring inflation remains within the target.

    The rate sensitive stocks came under pressure post the outcome of the RBI meeting.

    Among banking names, Federal Bank, HDFC Bank, ICICI Bank, Kotak Mahindra Bank, Yes Bank and RBL Bank are trading 1-3 percent lower.

    Real estate stocks are also trading under pressure led by the HDIL, Prestige Estate, Sobha, Sunteck Realty and Unitech.

    Motherson Sumi, Tata Motors, TVS Motor, Exide Industries, Bosch, Bharat Forge and Amara Raja Batteries are some of the losers among auto stocks.

    Yes Bank, Kotak Mahindra Bank, BPCL, SBI and Indiabulls Housing are the most active shares on the BSE.

    Infosys, Birlasoft, Oracle Financial, Tech Mahindra, Wipro and TCS are among major gainers in the IT space.

  • RBI to pick up slack as India stimulus measures to fall short: Economists
    2019-10-01, By: System Administrator

    To revive the ailing economy, the government in September announced a steep cut in the corporate tax rate - to 22% from 30% - triggering the biggest intraday gain in Indian stocks in more than a decade.

    Recent stimulus measures announced by the Indian government will be insufficient to boost economic growth significantly, said a majority of economists in a Reuters poll who predicted two more interest rate cuts this year, in October and December.

    To revive the ailing economy, the government in September announced a steep cut in the corporate tax rate - to 22% from 30% - triggering the biggest intraday gain in Indian stocks in more than a decade.

    That along with other measures, including a rollback of a higher surcharge on foreign portfolio investment - introduced in the budget in July - led international investors to become net buyers of Indian assets in September.

    But nearly 60% of around 50 economists who answered an additional question said those stimulus measures were unlikely to have a notable impact on the economy.

    "While the cut in corporate taxes is sharp, its actual impact on growth is uncertain. Given that the current problem is of weak demand, a demand augmenting measure would have been more productive," said Rini Sen, India economist at ANZ.

    Although the economy is expected to have recovered last quarter from the sharp slowdown in the three months prior, economists downgraded their growth outlook for this fiscal year and next from three months ago.

    The Sept. 24-30 poll of over 50 economists predicted gross domestic product growth to average 6.1% this fiscal year, the lowest since polling began for the period in April last year.

    If realised, that would mark the slowest pace of growth in seven years.

    The economy was then expected to expand 6.8% next fiscal year, a downgrade from 7.2% predicted in the

    "While the cut in corporate taxes is sharp, its actual impact on growth is uncertain. Given that the current problem is of weak demand, a demand augmenting measure would have been more productive," said Rini Sen, India economist at ANZ.

    Although the economy is expected to have recovered last quarter from the sharp slowdown in the three months prior, economists downgraded their growth outlook for this fiscal year and next from three months ago.

    The Sept. 24-30 poll of over 50 economists predicted gross domestic product growth to average 6.1% this fiscal year, the lowest since polling began for the period in April last year.

    If realised, that would mark the slowest pace of growth in seven years.

    The economy was then expected to expand 6.8% next fiscal year, a downgrade from 7.2% predicted in the

    The Reserve Bank of India (RBI) has already eased policy by a cumulative 110 basis points this year.

    It is now expected to cut its repo rate by 25 basis points on Friday, making it the fifth meeting in a row of easing, and is then predicted to follow that up by with another 15 basis points slice in December, taking the key rate to 5.0%.

    But the RBI is then forecast to keep rates unchanged until 2021 at least.

    "It looks like the authorities - both the government and the central bank - are firing up all cylinders to provide stimulus to the economy...with stimulus announced so far should start to revive growth going forward," said Prakash Sakpal, Asia economist at ING.

    When asked how many more rate cuts it would take to boost growth significantly, nearly 45% of economists said cumulative rate cuts up to 50 basis points will be needed.

    Eleven said between 50 and 100 basis points would do the trick, while two said over a percentage point.

    The outlook for further policy easing was also backed by subdued inflation, which is not expected to breach

    the central bank's medium-term target of 4% until the fourth quarter of 2020.

    "With inflation remaining under control, monetary stimulus in combination with the recent fiscal measures are likely to be growth supportive," said Shashank Mendiratta, economist at IBM.

    But not everyone agreed with that view.

    Nearly 30% of respondents said boosting economic growth significantly is beyond the RBI's immediate control.

    "Not only monetary policy but also short-term measures that the government has taken so far, are used to sugar-coat the wrong policy trajectory from a structural point of view," said Hugo Erken, head of international economics at Rabobank.

    "Because what India really needs is a large-scale reform package on several fronts."

    A weak growth outlook, ongoing concerns about the U.S.-China trade war and the prospect of further RBI easing are all expected to hurt the Indian rupee in coming months.

    After rallying as much as 3% against the dollar in September, the rupee is forecast to reverse most of those gains to trade at 72.50 per dollar in a year, compared to 70.70 on Monday.

    "Despite the fact that both monetary and fiscal levers are now being deployed to prop up growth, a material recovery is still elusive," added ANZ's Sen.

    "We therefore see limited scope for the current (rupee) rally to last unless demand sharply recovers. In addition, global risks including worsening in trade uncertainties or an oil price surge could add to rupee volatility."

  • Fiscal stimulus, with one stroke, changes narrative for India as an investment hotspot
    2019-09-20, By: System Administrator

    Highlights
    - So far, easier monetary policy alone was expected to do the heavy lifting
    - By cutting corporate tax rate from 30% to 22%, a fiscal stimulus is added
    - Brings India at par with some of the major Asian countries
    - These steps can help India capitalise on the opportunities from the trade war
    - Can re-energise private capex cycle and Make in India initiative

     

    Unprecedented times demand special measures. India’s economic growth has been faltering and has dropped to multi-year lows due to tighter funding conditions, a sharp decline in consumer confidence as well as global headwinds.

    The policy response to mitigate the current slowdown has been mainly through monetary policy, with interest rates reduced four times by a total of 110 bps from August last year till date. But so far, the government exercised restraint in easing fiscal policy. Despite the slowing economy, the FY20 Budget did not envisage any additional stimulus through the reported fiscal deficit figures, with the FY20 targeted fiscal deficit almost flat at 3.3 percent of GDP, compared to 3.4 percent for FY19.

    Today, the Government finally bit the bullet and announced corporate tax rate cuts for all manufacturing companies from 30% to 22% in an attempt to battle the economic slowdown.

    Since corporate taxes account for around one-third of total tax collections, the reduction will adversely impact the fiscal math. But since corporate profits as a percentage of GDP are at a decadal low, the timing of the move seems  perfect and it can kick-start the flagging private investment cycle.

     Corporate profit to GDP trend

     

    India moves to a more attractive tax regime

    Most countries are moving towards lower corporate tax rates. The average corporate tax rate globally is around 23%. As per KPMG, the average Asian tax rate declined from 29.42 percent in 2003 to 23.03 percent currently. So today’s reduction will bring India at par with the prevailing corporate taxation rate for some of the major Asian countries.

    It will help India become more competitive vis-ŕ-vis its Asian counterparts and help attract more investment into the country. Note that earlier this month, Indonesia announced plans to lower its corporate tax to 20 percent by 2021 from the existing 25 percent. In fact, the Indonesian authorities also said that companies listing their shares may be subjected to a lower rate of 17% for a period of five years.

    The ongoing China-US trade war has led MNCs to look for an alternative to China as far as their supply chain is concerned. As of now, a few Asian nations such as Vietnam, Indonesia and Thailand have been ahead of India in benefiting from this trade and investment shift.

    Now, the competitive taxation rate and ongoing efforts towards ease of doing business should help in India becoming a manufacturing destination of choice.

    Make in India gets a leg-up

    The announcement that a domestic company incorporated on or after 1st October 2019 will pay income tax at the rate of 15 percent is especially welcome. This comes with a rider that production commences before 31st March 2023. This can hasten the private capex cycle with timely execution. We see investment in the

    31st March 2023. This can hasten the private capex cycle with timely execution. We see investment in the chemical and Pharma APIs business lines as they position for import substitution strategies.

    This comes as a major boost to the “Make in India” theme which got some support during the last Union Budget. The finance minister had then proposed changes in customs duties on a range of imported goods. The increase in duties on items such as optical fibres, cables, CCTVs, roof tiles, PVC etc is anticipated to benefit multiple sectors ranging from chemicals to consumer durables and electrical goods.

    Now, the reduction in tax rates gives a further fillip to domestic manufacturers. The move could also boost exporters as the lowering of tax rate would make products more competitive from a price perspective.

  • Will US Fed cut rates? How important is it for Indian market?
    2019-09-18, By: System Administrator

    All eyes are set on the underway meeting of the Federal Open Markets Committee (FOMC) of the US Federal Reserve which concludes on September 18.

    Even though the US Fed is broadly expected to announce a rate cut of at least 25 basis point to prop up slowing economic growth, the market is assessing the possibility of any surprise, thanks to cooling fears of a recession and signs of improvement in the macroeconomic environment of the

    views, the commentary of the Federal Reserve is more important than the rate cut itself as it will set the tone for the further rate cuts.

    "We need to see what road the US Fed choses to tread. A dovish Fed will be positive for the emerging markets, including India," he said.

    Ashish Nanda, EVP & Business Head-PCG, Commodities and Currency Business at Kotak Securities, has said the concerns of recession in the US still looms which is a compelling factor for the central bank to cut rates. He also believes the commentary is more significant than the rate cut.

    "Rate cut is more likely and market participants have been betting on it since July 2019. However, commentary from the Fed chief is more crucial and has kept everyone waiting. If it is dovish then further rate cuts would help emerging markets," Nanda said.

    Some analysts believe the recent drone attacks on Saudi Arabia oil facilities can work as a catalyst for the US central bank to go for a rate cut.

    "We expect the US Fed to reduce the rates by 25 basis points on the back of slowing growth concerns and fears of an upcoming recession. The rate cut could be even higher given the recent surge in crude oil pric

    after the drone attack on Saudi Arabia over the last weekend," said Amit Gupta, co-founder and CEO of TradingBells.

    Impact on the Indian market

    Market experts think that the rate cut will be a comforting point for the Indian market as it is likely to result into more fund flow to the Indian equities and debt.

    "If rate cut happens, then dollar would correct that would minimise the downside for our currency. At the same time, it would also minimise outflow from FPIs," said Nanda of Kotak Securities.

    Another positive is that it will give cues to the Indian central bank for deciding the trajectory of rates.

    "In my view, Fed rate cut will give us comfort in terms of the kind of quantum of rate cuts which we can look to do," Pandey of ICICI Securities said.

    But, what if the Us Fed goes against the widespread expectations?

    "It would disappoint the equity markets around the world, as well as dollar strengthening further against other currencies," Nanda said.

    It will be more detrimental at a time when the country is facing a double whammy in terms of rising crude prices and fall in Indian rupee.

    However, analysts highlight that, even though the Fed rate cut is important for the market, domestic factors will remain the main trigger that will decide the course of the foreign fund flow.

    "Earlier the Indian market was closely looking at the US Fed but now it has changed. The market is looking more inward now. Domestic factors are more important now than the Fed rates. While the rate cut will be marginally positive, the market will not be much disappointed if there is no rate cut," said Chokkalingam of Equinomics Research & Advisory.

     

     

  • In the fast lane: Compact SUVs beat slowdown, overtake compact sedan numbers for 1st time ever
    2019-09-17, By: System Administrator

    The compact SUV segment is the only one to have grown this fiscal.

    Buoyed by two new launches, compact sports utility vehicles (SUV) have emerged as a stand-out segment in India’s domestic car market, even as each of the other segments has borne the brunt of the worst auto slowdown in decades.

    For the first time ever, the segment, which includes the likes of Mahindra XUV 300, Maruti Suzuki Brezza and Tata Nexon, has outsold the compact sedan segment, which has cars like Maruti Suzuki Dzire, Honda

    Amaze, Hyundai Xcent and Tata Tigor.

    At an average sales of 27,000 units a month, the compact SUV segment has overtaken the compact sedan segment, which clocked an average of 24,600 units during the five months period of April-August.

    Compact SUVs have clocked a growth in each month of the April-August period as compared to a fall of 30-60 percent in other segments including hatchbacks, compact and executive sedans.

    Compact SUVs are fast gaining ground in India, thanks to being more spacious and having high seating stance, better ingress and egress abilities and better driving capabilities on potholed or flood-hit streets. Several of the recently-launched SUVs are also armed with new, interactive and tech-powered features, compact SUVs are fast gaining ground in India.

    These offerings seem to have clicked with customers, despite the higher price point -- the average compact SUV is costlier than the compact sedan by about Rs 80,000-Rs 1.2 lakh.

    The cumulative growth during the April-August period for the compact SUV segment stood at 17 percent.

    With volumes of compact sedans comprising models like Maruti Suzuki Dzire, Honda Amaze, Hyundai Xcent and Tata Tigor halved during the April-August period, the buying pattern is indicative of the consumer shift to compact SUVs.

    Compact sedan sales may have further taken a hit from a slowdown in buying for the Ola and Uber fleet, which were heavy purchasers of such cars. About 12-15 percent of the stock of a particular compact sedan used to go to the commercial buyer. With the market slowdown, the share of the commercial fleet buyers has dropped to 4-5 percent.

    The launch of Hyundai Venue and Mahindra XUV 300 in recent months also helped boost the compact SUV segment. Pressure from the new launches also drove hefty discounts on older models such as Maruti Suzuki Brezza and Tata Nexon which helped bring in consumers. Ford Ecosport and Mahindra TUV 300 are the other models in the segment.

    Despite the broader slowdown in the market, Hyundai has managed to keep its production rate to the maximum, thanks to two bestselling SUVs: the compact SUV Venue and the midsize SUV Creta.

  • Why cars like Hyundai Venue, Kia Seltos and MG Hector are beating the slowdown
    2019-09-12, By: System Administrator

    While overall, the auto sector is slowing down, there are a pockets where the slowdown didn't seem to affect the sales. Newer, more technologically advanced cars seem to be beating whatever is happening in the auto market and coming out unscathed.

    It's no secret that the auto sector in India has been slowing down with this year's numbers turning out to be the worst the sector has seen over the past few years.

    Combined auto sales in the passenger segment was down 23.54 percent in the April-August period when compared to the same last year. Sales in the passenger vehicle segment fell by 29.41 percent while utility vehicles and vans declined by 6.27 percent and 34.04 percent respectively over the same period.

    However, while overall, the auto sector is slowing down, there are pockets where the slowdown didn't seem to affect the sales. Newer, more technologically advanced cars seem to be beating whatever is happening in

    the auto market and coming out unscathed. This may not be true for the company as a whole itself, but it does show that there is some resilience somewhere in the market.

    For example, the MG Hector which was launched in India on June 4, had already garnered up to 10,000 bookings by that time. Over the next few months, bookings soared to as much as 28,000 units with over 11,000 customers on priority waiting lists.

    In July, MG managed to sell 1,508 units and in August alone, 2,018 units of the Hector were sold. Now, the company plans to speed up production to 3,000 units in September. Bookings are again set to resume in the month of October after MG closed bookings because of the low production capacity.

    Another car that is beating the slowdown is the Kia Seltos. Its sales far outdo even that of the MG Hector. Launched only in August, the Kia Seltos had already racked up more than 32,000 bookings. The same month saw Kia selling 6,200 units. Of course, a substantially lower price point than the MG Hector did help with the Seltos' sales, but the car also falls in a slightly different class of SUV.

    Then we have the Hyundai Venue. Clocking in over 9,000 units in both July and August, the sub-compact SUV was probably one of the primary reasons why Hyundai managed to grab a little over 19 percent of the market share despite their overall (domestic + export) 9.54 percent drop on a year-on-year basis.

    These numbers may still not amount to much but where older cars seem to be losing traction, the demand for these cars does not really seem to be diminishing. This could be signalling an underlying trend that states the Indian consumer is probably ready to pay a slightly higher price for more premium cars. The fact that all of these cars come loaded with features and internet connectivity could also point to that trend.

    All three of the above mentioned cars come with internet and safety features that allow for the use of a smartphone even from outside of the car. They are constantly connected to the internet by using an integrated simcard with 4G connectivity while the software itself is 5G-ready.

    Perhaps it isn't time that car makers should start cutting prices. It may not be that people do not have the financial capability to buy new cars. Maybe people are just bored with what's available in the market right now, especially millennials. Ola and Uber probably have nothing to do with it.

    Manufacturers need to spruce up their offerings. Sure, the budget car will always be needed, but with the growing advancement in technology and the growing need for safety, it shouldn't be difficult to provide an excellent vehicle at a slightly higher price or maybe even at the same cost.

  • Closing bell: Sensex climbs 793 pts on relief measures, likely US-China trade talks
    2019-08-26, By: System Administrator

    All sectoral indices ended in green barring Metals that fell 1 percent.

    Technical Outlook

    "After a super volatile session index closed a day at 11,058 with strong gains of 229 points and formed bullish pin bar candle on daily chart. Index managed to close above strong hurdle of 11,000 mark hinting bulls are trying to grab a grip from lower end, now index has immediate hurdle near 11,100-11,180 zone any decisive break above 11,180 can push index towards 11,350 zone in near term and support for index is coming near 11,000-10,930 zone

  • Closing bell: Sensex climbs 793 pts on relief measures, likely US-China trade talks
    2019-08-26, By: System Administrator

    All sectoral indices ended in green barring Metals that fell 1 percent.

    Technical Outlook

    "After a super volatile session index closed a day at 11,058 with strong gains of 229 points and formed bullish pin bar candle on daily chart. Index managed to close above strong hurdle of 11,000 mark hinting bulls are trying to grab a grip from lower end, now index has immediate hurdle near 11,100-11,180 zone any decisive break above 11,180 can push index towards 11,350 zone in near term and support for index is coming near 11,000-10,930 zone

  • PSUs owe Rs 48,000 crore to MSMEs; industry seeks time-bound payment
    2019-08-21, By: System Administrator

    Micro, Small & Medium Enterprises (MSMEs), in a recent meeting with Finance Minister Nirmala Sitharaman, raised the issue of the nearly Rs 48,000 crore of their payments stuck with PSUs.

    Sitharaman assured stakeholders that the payments would be released in a time-bound manner. While the MSMEs sought the release of payments within the next 45 days, Sitharaman did not state a particular timeline.

    Anil Bhardwaj, Secretary General, FISME said a timeframe would have been better since it would allow MSMEs to get a bank discount or guarantee against the said payment. The delay in payments has led to working capital issues.

    In 2012, the Centre implemented the Public Procurement Policy to encourage MSMEs. Under this policy, it is mandatory for PSUs to acquire a certain percentage directly from MSMEs.

    The key sectors where public procurement takes place is railways and electricity board and aeronautics. The railways are a huge buyer from MSMEs with demands for carpets, fabrics and consumables. Bhardwaj says there is a delay of 4-5 months in payment from railways. The main issue is of process-related delays due to bureaucracy which in turn results in delayed payments.

    Since the payments are in small amounts, the government may not be empathetic to the problem of suppliers.

    The electricity board acquires transformers and cables in huge quantities from MSMEs. Payments are made usually six months to a year after procurement.

    S.K Gagroo, Secretary General, CISME said it is easier to receive payments from the Centre. However, payment due from state governments takes time as they seem to have a genuine fund constraint.

    While there are some payments withheld due to litigation, Bhardwaj said the Finance Minister directed concerned departments to start the pending payments with no disputes.

  • Slowdown blues: JSW Steel may cut production, outlook remains bleak
    2019-08-20, By: System Administrator

    If the slump continues, the steelmaker may cut production in this quarter, or the next, says Jt MD & Group CFO Seshagiri Rao.

    JSW Steel, the leading steelmaker in India, may be forced to cut production in the coming months as economic slowdown has dampened demand from clients in infrastructure and auto sectors.

    While the auto sector has seen one of the sharpest drops in sales, government spending in infrastructure projects hasn't reached desired levels.

    If this was bad enough, steelmakers are also facing an unusual situation: even as steel prices have gone south, rates of raw materials like iron ore and coking coal remain high. This has kept cost of production elevated, even as margins have come under pressure.

    Due to these factors - and unless there is a stimulus from the government - it is unlikely that demand will pick up in the near future, said a senior official from JSW Steel.

    "If you look the four sectors that reflect economic activity - capital goods, infrastructure, oil & gas and metals and mining - none of them is talking about investments...it is looking difficult for steel companies to make money in such circumstances," JSW Steel's Jt Managing Director & Group CFO Seshagiri Rao, told Moneycontrol.

    "A production cut could be the answer. If not in this quarter, in the next quarter we could see a big cut in supply, all the variables remaining the same," said Rao.

    JSW Steel last cut production in 2011, when a mining ban in Karnataka led to a severe shortage of iron ore, a key raw material in steel making.

    In 2008 too, the steel company had closed its blast furnace for about a month as demand from auto and infrastructure sectors slumped.

    This time too, conditions have been tough for steelmakers. In the first quarter, JSW Steel saw its profit plummet by a half. Likewise, Tata Steel's net profit tanked 64 percent.

    An unusual cycle

    This is the fifth down cycle that Rao is seeing in his 32-year career in the steel sector.

    There was one in 1989, followed by the Asian financial crisis in 1997, and the third in 2008. JSW Steel faced a slowdown in 2011 because of the raw material crunch. And now, in 2019, another down cycle is impacting the industry.

    But it is an unusual one, says the veteran.

    "In almost all the cycles, raw material and steel prices moved in the same direction, even if not in the same proportion. If steel prices fell, iron ore and coking coal rates would also come down. But not this time," says Rao.

    So even as steel price corrected to $480 a ton, iron ore prices headed north. Similar was the trend in coking coal prices. But there was no supply adjustment, except in Europe. ArcelorMittal had cut production in 

    many of its units in Europe.

    But in rest of the steel market, including in India, producers have refrained from cutting production.

    While prices of iron ore and coking coal have in the last month corrected, the general belief is that there is room for much more. And that is because the slide in price of steel products has been steeper.

    Business Standard report pointed out that since the beginning of the year, price of TMT bars and billets have fallen by up to 21 percent. Industry players have called for a cut in iron ore prices.

    "A correction in iron ore is possible," says Rao.

    Financialisation in steel sector

    Explaining how the sector has evolved since 2008, Rao underlined that the circumstances have become more volatile.

    "And that is because raw material contracts were earlier set, yearly. With the raw material price known, the steel rates would also move in similar range," recounts Rao.

    But raw material contracts later became half-yearly, quarterly, monthly and are now indexed. "Funds entered, invested and any small disruption - actual or potential - led to changes in prices. With this financialisation, the movement in steel prices has become too volatile," says Rao.

    On the other hand, the financialisation didn't happen in the steel side. Things remained the same when it came to fixing steel contracts. Even today, clients of JSW Steel prefer fixed price when awarding contracts. Some, like in auto, take into account price trend of the previous six months while deciding on the contract. But others, especially in infrastructure, don't.

    "So adjusting to this kind of a situation itself is a challenge", says Rao.

     

     

  • This week in Auto: Maruti Suzuki lays off 3,000 workers; Bajaj Pulsar going the Discover way?
    2019-08-17, By: System Administrator

    Maruti Suzuki retrenched 3,000 temp workers

    Over 3,000 temporary employees have lost jobs with the country's largest carmaker Maruti Suzuki India(MSI) due to the ongoing slump in the automobile industry, a top company executive said.

    MSI Chairman R C Bhargava said contracts of the temporary workers were not renewed due to the slowdown while he asserted that permanent workers had not been impacted.

  • The Market Podcast | Hope rally briefly pulls market up, but a global currency war looms
    2019-08-10, By: System Administrator

    The week (August 5-9) began with a bearish outlook, but the market improved in two successive sessions, due to a technical rally.

    While there is speculation that the government could come up with a stimulus to spur economic growth, investors are expecting the government to dilute surcharge on FPIs.

    The auto and NBFC crisis continues to drag the market, a "currency war" triggered by the devaluation of Chinese currency has put the rupee under pressure, which is not a good sign for foreign investors.

    RELATED NEWS

    In this episode of The Market Podcast, Moneycontrol's Jerome Anthony gets in 

    conversation with Editor Santosh Nair to find out what happened in the market this past week and how the ongoing Kashmir issue could effect the market.

    Tune in to The Market podcast for more.

    You can also listen to our exclusive mid-week market podcast, where Nair talks in detail about the commentary following the RBI policy meeting.

  • Radhakishan Damani completes sale of 62.3 lakh shares in D-Mart operator Avenue Supermarts
    2019-08-10, By: System Administrator

    Avenue Supermarts, the operator of D-Mart retail chain August 9 said Founder Radhakishan Shivkishan Damani has completed the sale of 0.998 percent stake in the open market to adhere to minimum public shareholding norms.

    The stock closed at Rs 1,452.85, up Rs 22.55, or 1.58 percent on the BSE on Friday.

    "Promoter, Radhakishan Shivkishan Damani, has completed sale of 62.3 lakh equity shares of the company (constituting 0.998 percent of the paid-up equity share capital), on August 9, in compliance with the requirements of SEBI regulations in the process of achieving minimum public shareholding," the company said in its BSE filing.

    As per the minimum public shareholding rule, every company has to have at least 25 percent public shareholding.

    Of the sale, 64 percent could have been offloaded through a single block deal.

    As per bulk deals data available on the BSE on August 9, Damani sold 40 lakh shares of Avenue at Rs 1,404.10 per share, translating it into a Rs 561.64 crore transaction.

    The stake sale was as per the letter issued on August 6, the company said.

    Avenue Supermarts, on August 6, had said Damani had proposed to divest up to 0.998 percent stake between August 8 to September 14 or the actual date of completion of the sale of all equity shares

    As of June 2019, promoter and promoter group held 81.20 percent stake in the company, including Radhakishan Shivkishan Damani who directly owned 38.41 percent shareholding.

    With today's sale, Damani's stake has reduced to 37.41 percent and the total promoter group stake to 80.202 percent.

  • Affle India IPO subscribed over 86 times, retail portion sees strong response
    2019-07-31, By: System Administrator

    The IPO consists of a fresh issue of Rs 90 crore and an offer for sale of 49,53,020 equity shares, including anchor portion of 27,72,483 equity shares.

    The initial public offer of mobile marketing firm Affle India has received overwhelming response from investors on July 31, the last day for subscription.

    The Rs 459-crore public issue has received bids for 29.20 crore equity shares against IPO size of 33.78 lakh shares (excluding anchor investors' book) as per data available on exchanges.

    The initial public offer has been oversubscribed 86.46 times.

    The reserved portion of qualified institutional investors was subscribed 55.3 times and non-institutional investors 199 times while retail portion saw 10.81 times subscription.

    The IPO consists of a fresh issue of Rs 90 crore and an offer for sale of 49,53,020 equity shares, including anchor portion of 27,72,483 equity shares. The price range for the public offer, which opened for bidding on July 29, been fixed at Rs 740-745 per share.

    Affle India, on July 26, already raised about Rs 206.55 crore from 15 anchor investors.

    "We like Affle's unique business model with asset-light growth strategies and debt-free status. Considering Affle's presence in the high growth advertising market globally as well as India, we believe Affle is well placed in the mobile-only advertising approach to tap the growth. It has a globally well-diversified clientele base in which nearly 70 percent of the revenue comes from global and the rest from domestic markets," Mehta Equities said.

    The brokerage further said on valuation parse at higher price band of Rs 745 per share Affle commands Rs 1,899 crore market cap with P/E of 37x on its FY19 earnings and higher ROCE due to high growth business model which proposes a long term investment opportunity.

    Looking at its high growth market with substantial barriers to entry, low-cost business model built on an asset light, automated and scalable business platform we are optimistic and investors may consider applying in the IPO for both listing as well as long term investment, the brokerage advised.

    Affle India is a decade old global technology company with a proprietary consumer intelligence platform that delivers consumer acquisitions, engagements and transactions through relevant mobile advertising. This platform aims to enhance returns on marketing spend through delivering contextual mobile ads and reducing digital ad fraud, while proactively addressing consumer privacy expectations. This platform is used by (B2C) companies across industries, including e-commerce, fin-tech, telecom, media, retail and FMCG companies, both directly and indirectly through their advertising agencies.

    Microsoft has a 6.48 percent stake in the Singapore based Affle Holdings. Affle, as at FY18 on a proforma basis, had approximately 1.18 billion consumer profiles and it accumulated over 140 billion data points over the preceding 12 months, which power its prediction and recommendation algorithm.

  • After smartphones, the Chinese are now looking to capture India's auto sector
    2019-07-08, By: System Administrator

    These China-headquartered companies manufacture e-scooters, e-bikes, electric three-wheelers, petrol-powered performance bikes, SUVs, luxury cars, buses and construction equipment

    India’s burgeoning automotive demand and a sustained push by the government towards electric mobility has led to nearly a dozen Chinese companies entering India over the last three-to-four years.

    While some of these companies are tying up with Indian entities, others have entered on their own and are setting up manufacturing facilities and R&D centres.

    These China-headquartered companies manufacture e-scooters, e-bikes, electric three-wheelers, petrol-powered performance bikes, SUVs, luxury cars, buses and construction equipment.

    Lesser known Chinese entities such as Benling, CFMOTO, SUNRA, Gemopai Electric, Evoke Motorcycles to name a few have already entered India. Zhejiang Rongda Industry & Trade, Jiangsu Kingbon Vehicle and Zhejiang Linghang Electronics have partnered Indian companies to jointly produce vehicles.

    Some of these companies manufacture fully electric vehicles, an area where the Indian government is taking new strides. Benling India Energy and Technology, a direct subsidiary of Guangdong Sheng-based Dongguan Benling Vehicle Technology Co, for instance has invested Rs 10 crore to set up an assembly unit in Manesar for rolling out low-speed electric scooters.

    Other more widely known brands like Volvo Cars (owned by Zhejiang Geely Holding Group), MG Motors (owned by SAIC Motor Corporation), Benelli (owned by Zhejiang Qianjiang Motorcycle Group Co), Great Wall Motors Company and Sany Heavy Industry Co have established manufacturing facilities and R&D operations.

    There is a clear desperation by the Chinese companies to enter India. For instance CFMOTO, a $400 million Hangzhou, China-based company, has tied up with AMW Motorcycles, which is part of the now defunct and debt-ridden AMW Motors that produces medium and heavy trucks.

    Revolt Intellicorp, promoted by Micromax Mobiles founder Rahul Sharma, showcased electric bikes in June that were based on bikes produced by Shanghai-headquartered SOCO. The Revolt RV400 looks identical to the Super SOCO TS1200R.

    An aggressive lot

    Market watchers, however, say that the current breed of Chinese companies have a different but aggressive approach towards the Indian market compared to the earlier flock.

    “Earlier companies like Lifan and Beiqi Foton tried to find their footing in India. But bad product quality and corporate indecision led to their quiet exit from India. Today’s Chinese companies are different, they are much more ambitious and serious about having a slice of the Indian automotive pie,” said a senior executive who provides consultancy services to auto companies.

    The Brihanmumbai Municipal Corporation (BMC) procured and ran several units of air-conditioned King Long buses. The BEST undertaking was forced to blacklist the company after multiple instances of the buses catching fire or breaking down. Till date many associate the buses with Chinese make, thanks to the misinformation spread by the BEST, while the buses were actually built in Punjab by JCBL. The damage to the brand, however, was done.

    The Lifan Group, which had tied up with Delhi-based Monto Motors for launching cheap motorcycles in India, was partly responsible for eroding the brand image of Chinese products. Their 100cc and 125cc bikes had several quality issues leading to their eventual exit from India.

    But to beat this poor brand recall, Chinese companies devised new ways. SAIC, China’s largest car maker, decided to invoke MG Motors, a 90-year old British brand that laid in slumber for most part of the last few decades. MG (Morris Garages) recently launched its first SUV Hector (Rs 12.18 lakh) in India, which is based on the Baojun 530: an SUV sold in China.

    Goldstone Infratech, an Indo-China joint venture company comprising BYD of China, changed its name to Olectra Greentech last year. Goldstone was accused by India truck and bus makers of offering buses at very low prices, backed by subsidy from the Chinese government. Goldstone emerged as one of the largest bidders for supplying electric buses to Indian cities.

    It remains to be seen if the latest entrants are more successful than their predecessors.

  • 'FII inflows for 6 months after election results could be around Rs 60,000-70,000 crore'
    2019-06-15, By: System Administrator

    It has been three weeks of trading since the Lok Sabha elections results were announced. BJP returned to power with a bigger mandate than 2014, adding more stability to the political scenario in the country, much to the delight of the foreign investors.

    The foreign investors took this very positively especially when domestic investors were waiting for correction even before the elections. The week from May 24, 2019, till June 13, 2019, Nifty saw a return of 1.4 percent that was supported by inflows in FIIs via ETFs primarily.

    Within the ETF segment, the two largest funds tracking MSCI EM did not receive any inflows as India weight is reduced in the index due to the addition of new countries.

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    But the two largest funds (I Share India & Wisdom Tree) tracking MSCI/FTSE India received inflows worth $264 million on AUM of $5.45 billion, which is almost 4.84 percent of AUM, the largest in recent times.

    This is in line with the historical trend that witnesses an influx of 1.3-2 times of FIIs post-election as compared to pre-election. Six months prior to Lok Sabha 2019 election FIIs bought in a total of Rs 38,800 crore. Keeping this in mind, we expect post elections six months inflows around Rs 60,000-70,000 crore, which would increase the Nifty return in a short duration.

    These inflows are based on the mandate that the new government will bring in more radical measures to push the economy out of its current slump and the issues faced by the financial sector will be addressed in a much better fashion. The inflows might spread unevenly through this period as the ground data movement will also be integral to the pace at which these inflows are attracted.

    We believe that as the inflows from FIIs push the Nifty returns higher, the DIIs will start adding to MF inflows, in later stages, as it takes only three to five months for retail investors to gather faith in the movement of economy and markets. Thus, DIIs participation would only come at a later stage.

    Overall we believe, as of now, FIIs would continue to take Nifty at higher levels only via select stocks and there might be some inflows in select midcaps by HNIs.

    (The author is Founder at Target Investing.)

    Disclaimer: The views and investment tips expressed by investment expert on moneycontrol.com are his own and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

  • RBI may cut repo rate by 25 bps: Analysts
    2019-05-31, By: System Administrator

    The Reserve Bank will announce its second bi-monthly monetary policy for the current fiscal on June 6. This will be the first policy meet of the central bank after the Lok Sabha elections 2019.

  • ITC Chairman YC Deveshwar dies at 72
    2019-05-11, By: System Administrator

    ITC Chairman YC Deveshwar died early on May 11 after prolonged illness, CNBC TV 18 reported. He is survived by his wife and son. He was 72.

    Born in Lahore on February 4, 1947, Deveshwar is an alumnus of the Indian Institute of Technology (IIT) Delhi and Harvard Business School. 

    He joined ITC in 1968.

    He was appointed as a director on the board of the company on April 11, 1984, and became the chief executive and chairman of the board on January 1, 1996.

    He was one of India's longest-serving corporate chiefs with over two decades at the helm as the executive chairman and chief executive officer at ITC until February 4, 2017.

    After the company split the role of the executive chairman between chairman and chief executive officer on February 5, 2017, Deveshwar agreed to continue as chairman in a non-executive capacity at the request of the nomination and compensation committee and the board. He also played the role of a mentor to the 

    executive management.

    Between 1991 and 1994, he led Air India as Chairman and Managing Director.

  • Donald Trump orders raising tariffs on essentially all remaining imports from China
    2019-05-11, By: System Administrator

    United States President Donald Trump has ordered his top officials to begin the process to raise tariffs on almost all the imports from China, US Trade Representative Robert Lighthizer said on May 10.

    This amounts to about $300 billion. This is in addition to the Chinese imports worth $200 billion on which Trump increased the import duty from 10 percent to 25 percent, beginning Friday.

    "Earlier today, at the direction of the President, the United States increased the level of tariffs from 10 percent to 25 percent on approximately $200 billion worth of Chinese imports," Lighthizer said.

    "The President also ordered us to begin the process of raising tariffs on essentially all remaining imports from China, which are valued at approximately $300 billion," he said.

    The process for public notice and comment will be published shortly in the Federal Register. "The details will be on the USTR website on Monday as we begin the process prior to a final decision on these tariffs," Lighthizer said.

    Expected to escalate trade war between US and China, the latest Trump move came as the Chinese Vice Premier concluded his two days of trade talks with the US team led by Lighthizer.

    In a series of tweets, Trump described the talks as candid and constructive, but indicated taking a tough approach against massive imbalance of trade with China.

    "Over the course of the past two days, the United States and China have held candid and constructive conversations on the status of the trade relationship between both countries," he said.

    "The relationship between President Xi and myself remains a very strong one, and conversations into the future will continue," he added.

    "In the meantime, the United States has imposed Tariffs on China, which may or may not be removed depending on what happens with respect to future negotiations!" Trump said.

    Tariffs will bring in "far more" wealth to the United States than even a phenomenal deal of the traditional kind. "Also, much easier & quicker to do. Our Farmers will do better, faster, and starving nations can now be helped. Waivers on some products will be granted, or go to new source!" he said in another tweet.

    "If we bought 15 Billion Dollars of Agriculture from our Farmers, far more than China buys now, we would have more than 85 Billion Dollars left over for new Infrastructure, Healthcare, or anything else. China would greatly slow down, and we would automatically speed up!" Trump said.

    Referring to his latest direction, Trump said that the process has begun to place additional Tariffs at 25 percent on the remaining 325 Billion Dollars. "The US only sells China approximately 100 Billion Dollars of goods and products, a very big imbalance," he said.

    "With the over 100 Billion Dollars in Tariffs that we take in, we will buy agricultural products from our Great Farmers, in larger amounts than China ever did, and ship it to poor & starving countries in the form of humanitarian assistance. In the meantime, we will continue to negotiate with China in the hopes that they do not again try to redo deal!" said the US President.

    Trump said he is in no rush to conclude trade talks with China.

    "Talks with China continue in a very congenial manner - there is absolutely no need to rush - as Tariffs are NOW being paid to the United States by China of 25 percent on 250 Billion Dollars worth of goods & products. These massive payments go directly to the Treasury of the U.S....," he said.

    "We have lost 500 Billion Dollars a year, for many years, on Crazy Trade with China. NO MORE!" Trump said.

  • Iraq continues to be India's top oil supplier, imports from US rises 4-folds
    2019-05-01, By: System Administrator

    row become India's top crude oil supplier, meeting more than a fifth of the country's oil needs in 2018-19 fiscal year.

    According to data sourced from the Directorate General of Commercial Intelligence and Statistics, Iraq sold 46.61 million tonne of crude oil to India during April 2018 and March 2019, 2 percent more than 45.74 million tonne it had supplied in 2017-18 fiscal.

  • Essel Propack gains 2% as Blackstone eyes majority stake in company
    2019-04-25, By: System Administrator

    hares of Essel Propack added 2.4 percent in the early trade on Tuesday after Private equity player Blackstone announced the acquisition of  majority stake in company.

    Blackstone is going to buy 51 percent from promoters of Essel Propack for Rs 134 per share and to make an open offer for 26 percent stake for Rs 139.19 per share, company said in BSE filing.

    The value of the total transaction will come anywhere between Rs 2,157-3,211 crore.

    Ashok Goel Trust and its affiliates currently hold around 57 percent of company.

  • Axis Bank posts Rs 1,505-cr Q4 profit as provisions fall sharply, asset quality improves
    2019-04-25, By: System Administrator

    Axis Bank posted profit of Rs 1,505 crore for the quarter ended March 2019, as provisions fell sharply and asset quality improved with a decline in slippages.

    The bank had posted a loss of Rs 2,188.74 crore in the corresponding period last year. Higher NII, other income and operating income also supported profitability during the quarter.

    Net interest income in Q4 grew by 21 percent year-on-year to Rs 5,705.6 crore with credit growth at 18 percent.

    Other income or non-interest income increased 26 percent to Rs 3,526.3 crore and operating income shot up 37 percent to Rs 5,014.4 crore compared to year-ago.

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    Asset quality of the bank improved considerably during March quarter. Gross non-performing assets as a percentage of gross advances dipped to 5.26 percent against 5.75 percent in the previous quarter and net NPA declined to 2.06 percent against 2.36 percent in Q3, which were on expected lines.

    In absolute term, gross NPAs were lower by 13 percent at Rs 29,789.44 crore and net NPAs by 32 percent to Rs 11,275.6 crore compared to the previous quarter.

    Slippages for the quarter at Rs 3,012 crore were lower than Rs 3,746 crore reported in the previous quarter and significantly lower than Rs 16,535 crore reported in March quarter 2018.

  • RIL Q4 profit up 9.8% at Rs 10,362 crore; Jio FY19 profit jumps 300% to Rs 2,964 crore
    2019-04-20, By: System Administrator

    Reliance Industries, India's number one company by market capitalisation, reported a 9.8 percent growth in fourth quarter consolidated net profit to Rs 10,362 crore. This was driven by a 19.4 percent increase in quarterly revenue to Rs 1.54 lakh crore.

    The company attributed the robust revenue performance to strong growth in its retail and digital services businesses which grew by 51.6 percent and 61.6 percent, respectively. Higher petrochemical volumes also contributed to growth in revenue, the company said.

    Quarterly EBITDA was at Rs 20,832 crore, up 12.7 percent YoY, and operating margin stood at 15.02 percent. The company said the growth in operating profit was led by strong performance in the petrochemicals, retail and digital businesses.

    The company's board has recommended a dividend of Rs 6.50 per equity share of Rs 10 each for the financial year ended March 31, 2019.

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    Q4 revenue from the petrochemicals segment increased 11.3% YoY to Rs 42,414 crore ($6.1 billion) mainly due to the increase in price realizations and volumes in PTA, PP, and Paraxylene.

    Petrochemicals segment EBIT came in at Rs 7,975 crore, up 23.9% YoY as compared to Rs 6,435 crore in the corresponding quarter last year.

    Petrochemical segment recorded EBIT margin of 18.8% as against 16.9% in Q4FY18 aided by strength in PX margins.

    The company's Q4 gross refining margin (GRM) came in at $8.2/bbl against $8.8 a barrel reported in the December quarter of FY19, and $11/bbl in Q4FY18.

    Retail segment revenue for Q4 grew by 51.6 percent to Rs 36,663 crore as against Rs 24,183 crore in the corresponding period of the previous year.

    Retail business PBDIT for Q4 FY19 grew by 77.1 percent to Rs 1,923 crore as against Rs 1,086 crore in the corresponding period of the previous year.

    Reliance Jio's fourth-quarter net profit increased 64.7 percent year-on-year to Rs 840 from Rs 510 in the same quarter last year on standalone revenue of Rs 11,106 crore as compared to Rs 7,128 crore in Q4FY18, a jump of 55.8%.

    For the full year, Reliance Jio's FY19 net profit was up 309 percent YoY to Rs 2,964 crore from Rs 723 crore.

    Reliance Jio’s subscriber base has crossed 300 million, which is the fastest operator globally to reach this milestone.

    Mukesh D. Ambani, Chairman and Managing Director, Reliance Industries said, “During FY 2018-19, we achieved several milestones and made significant strides in building Reliance of the future. Reliance Retail crossed Rs 100,000 crore revenue milestone, Jio now serves over 300 million consumers and our petrochemicals business delivered its highest ever earnings."

  • India's growth trajectory holds immense potential for global stakeholders: Ashish Sinha
    2019-04-20, By: System Administrator

    India's growth trajectory holds immense potential for global stakeholders to establish energy, infrastructure and technology collaboration with the country, a UN forum here has been told.

    Counsellor in India's Permanent Mission to the UN Ashish Sinha stressed on Wednesday at the ECOSOC Forum on Financing for Development Follow Up that India wanted to use growth as a mechanism to pull the maximum number of people out of poverty and improve quality of life in an inclusive manner.

    "India has retained its position as the world's fastest growing major economy. Indian economy has been growing over 7 percent for several years and the forecast for the future is equally robust," he said.

    Sinha noted that India improved its ranking by 23 positions in the World Bank's Ease of Doing Business rankings last year.

  • India's services exports rise 5.5% to $15.6 bn in February; imports down 3.3%
    2019-04-16, By: System Administrator

    India's services exports rose 5.5 per cent to USD 16.58 billion in February 2018-19 from USD 15.71 billion in the same month a year ago, data from the Reserve Bank showed Monday.

    However, the exports during February 2019 were lower than January's USD 17.75 billion.

    Services imports in February 2018-19 declined by 3.3 per cent to USD 9.81 billion, compared to USD 10.14 billion in the year-ago month, as per the RBI data on 'India's International Trade in Services: February 2019'.

    The imports stood at USD 11.3 billion during January this year.

  • Rallis India Q4 PAT may dip 14.3% YoY to Rs. 16.8 cr
    2019-04-16, By: System Administrator

    Net Sales are expected to increase by 7.6 percent Y-o-Y (down 4.4 percent Q-o-Q) to Rs. 399.2 crore,

  • Retail inflation at 2.89% in March: Up but benign
    2019-04-13, By: System Administrator

    Retail inflation inched up to 2.9 percent in Mar'19, the second successive month of hardening. Food inflation turned positive after 5 months. Core inflation, however, is at the lowest since Oct'17.

  • TCS profit, revenue beat estimates Q4 results
    2019-04-13, By: System Administrator

    Tata Consultancy Services (TCS) reported healthy net profit growth for March quarter on April 12 which was higher than analyst estimates. The company reported a beat on net profit and revenues while it missed estimates in terms of EBIT as well as margins.

    TCS closed 0.26 percent lower at Rs 2,013 on Friday on the BSE.

  • RBI Sets Up Bimal Jalan-Led Panel On Economic Capital Framework.
    2018-12-27, By: System Administrator

    The Reserve Bank of India, in consultation with the government, constituted a committee led by the central bank's former Governor Bimal Jalan to look into its Economic Capital Framework.

    The committee also comprises former RBI Deputy Governor Rakesh Mohan, central board members Bharat Doshi and Sudhir Mankad, Economic Affairs Secretary Subhash Chandra Garg and RBI Deputy Governor NS Vishwanathan, according to a statement on the RBI's website. It is expected to submit its report within 90 days of its first meeting.

    The panel would review the status, need and justification of various provisions, reserves and buffers held by the RBI. It would suggest an adequate level of provisioning that the RBI needs to maintain. It would also determine whether the RBI is holding provisions, reserves and buffers in surplus or deficit of said levels, and would propose a suitable profit distribution policy taking into account all the likely situations.(Source : Bloomberg)

  • ONGC Approves Rs 4,022-Crore Share Buyback.
    2018-12-20, By: System Administrator

    State-owned Oil and Natural Gas Corporation Ltd. will buy back shares worth Rs 4,022 crore as the government seeks payouts from cash-rich public sector units to bridge fiscal deficit.

    India's largest oil and gas explorer will repurchase up to 25 crore shares, representing 2.35 percent stake, at Rs 159 apiece, according to its exchange filing. It set Jan.4 as the record or cut-off date to ascertain which shareholders will be eligible.

    The government, which owns 67.48 percent in ONGC, may get Rs 2,714 crore from the buyback, according to BloombergQuint's calculations. It has identified at least 11 state-run entities to raise funds through buyback to bridge the budget gap. In all, it has a target to mop up Rs 80,000 crore this financial year through divestments.

    Shares of ONGC briefly fell after the announcement but recovered to trade 0.3 percent higher at 3:15 p.m. compared with a 0.1 percent decline in the benchmark Nifty 50 Index.(Source : Bloomberg).

  • Bombay HC Refuses Interim Relief For Kotak Mahindra Bank On RBI Deadline To Cut Promoter Stake
    2018-12-17, By: System Administrator

    The Bombay High Court denied interim relief to Kotak Mahindra Bank Ltd. regarding the Reserve Bank of India's direction to dilute its promoter shareholding.

    The case has been adjourned till Jan. 17 and the RBI will have to respond with its submission before that. As per RBI's timeline, Uday Kotak needs to bring down his stake in the bank to 20 percent from 29.73 percent by Dec. 31.

    Kotak's counsel urged the court to prevent the RBI from taking any coercive regulatory action till the next hearing. The banking regulator had changed its stance in an Aug. 13 letter to the lender and asked it to reduce promoter holding as percentage of "paid-up equity voting capital" from an earlier communication that mentioned "paid up capital", he said. The new RBI governor should be allowed to consider the matter and respond to the bank's September letters which explained its position, the counsel said.

    The Bombay High Court bench, led by Justice BP Dharmadhikari, held that the RBI is a "responsible regulatory body" and the decision will be left to it on whether a regulatory action should be taken if the bank doesn't comply with its direction to reduce promoter holding to 20 percent by Dec. 31.(Source : Bloomberg)

  • Urjit Patel Resigns As RBI Governor
    2018-12-10, By: System Administrator

    Reserve Bank of India Governor Urjit Patel has resigned from his post, making him the first governor since 1990 to step down before his term ends. Patel's three-year term was to end in September 2019.

    "On account of personal reasons, I have decided to step down from my current position effective immediately. It has been my privilege and honour to serve in the Reserve Bank of India in various capacities over the years. The support and hard work of RBI staff, officers and management has been the proximate driver of the Bank's considerable accomplishments in recent years. I take this opportunity to express gratitude to my colleagues and Directors of the RBI Central Board, and wish them all the best for the future."

    Speculation of Patel's exit had picked up after differences between the RBI and the government spilled out in the open. This first happened when RBI Deputy Governor Viral Acharya delivered a hard hitting speech on the need to ensure the independence of the central bank. The speech was delivered with the backing of Patel, suggested the footnotes in Acharya's speech.(Source : Bloomberg)

  • RBI Policy: MPC keeps repo rate unchanged at 6.50%; cuts SLR by 25 bps.
    2018-12-05, By: System Administrator

    RBI's monetary policy committee keeps the repo rate unchanged at 6.50% in line with market expectations, and retained its 'calibrated tightening' stance. Here are the latest updates on the RBI monetary policy review meeting

    The Reserve Bank of India (RBI) at its monetary policy review meeting on Wednesday kept its repo rate unchanged, citing benign inflation outlook and improved investment activity. The six-member monetary policy committee (MPC) voted unanimously to keep the repo rate at 6.5%, but voted 5-1 in favour of maintaining the policy stance as "calibrated tightening". The MPC also lowered its inflation projection sharply to 2.7-3.2% from 3.9-4.5% for the second half of 2018-19.(Source : Mint)

  • Hindustan Unilever to merge with GSK Consumer Healthcare.
    2018-12-03, By: System Administrator

    In its biggest step in the deals space yet, Hindustan Unilever Ltd on Monday said that it will merge with GSK's healthcare business in India. The transaction values the total business at Rs.31,700 crore. The merger includes the totality of operations within GSK Consumer Healthcare India Ltd, including a consignment selling contract to distribute GSK Consumer's over-the-counter and oral health products in India, the company said in a statement.

    GSK Consumer Healthcare India is the market leader in the health food category, with iconic brands such as Horlicks and Boost, and a product portfolio supported by strong nutritional claims. This portfolio has a long history in India with Horlicks having originally been introduced in the 1930s.

    The merger of GSK Consumer with HUL will be on a basis of a share swap ratio of 4.39 HUL shares for each GSK Consumer share, implying a total equity value of ?31,700 crore for 100% of the latter. Following the issue of new HUL shares, Unilever's holding in HUL will be diluted from 67.2% to 61.9%, the company said.(Source : Mint).

  • GDP Growth Drops To 7.1% In The Second Quarter.
    2018-11-30, By: System Administrator

    After peaking in the first quarter of the current year, growth in the Indian economy moderated in the July-September period, as agriculture and industry slowed.

    Gross domestic product grew by 7.1 percent in the second quarter of the financial year compared to 6.3 percent in the same quarter last year, showed data released by the Central Statistics Office on Friday. GDP grew at a stronger clip of 8.2 percent in the first quarter of the year, helped partly by a strong base effect.

    In gross value added terms, the economy grew at 6.9 percent in the July-September period. This, too, was a moderation compared to the 8 percent GVA growth reported in the first quarter.
    For the full year, the Reserve Bank of India expects GDP growth at 7.4 percent. The data released today may lend itself to a downside bias to those growth expectations.(Source : Bloomberg).

  • Centre moves SC seeking Rs 2,940 crore RCom bank guarantee over spectrum.
    2018-11-26, By: System Administrator

    The Supreme Court on Monday agreed to hear the Centre's plea for Rs 2,940 crore bank guarantee from Reliance Communication arising from outstanding spectrum dues. The case was brought before a bench headed by Justice A.K. Sikri who said it would be heard tomorrow.

    Seeking that the bank guarantee be furnished, Additional Solicitor General P. S. Narasimha appearing for the Centre told the court that it was looking for some kind of securement. Reliance Communication Ltd, on the other hand, through its counsel Kapil Sibal, said the company was not in a position to make the payment.

    "I can't give a bank guarantee. Banks are secured creditors. They will be in jeopardy and the deal will fall through," Sibal said.

    On 1 October, the telecom tribunal had permitted the debt laden RCom to go ahead with its spectrum sale to Reliance Jio Infocomm (Jio). The Anil Ambani-led RCom had challenged the "unjustly sought security for the alleged demands" by the telecom department with regard to spectrum usage charges.
    Thereafter, RCom was given time by the apex court till 15 December to clear the pending payment of Rs.550 crore towards telecom equipment manufacturer Ericsson India Pvt. Ltd. Delayed payment was to attract an interest of 12% per annum.

    The apex court's ruling had come on a contempt plea by Ericsson for non-payment of ?550 crore by RCom by the 30 September deadline.(Source : Mint).

  • Q2 results: DHFL profit rises to Rs 439 crore.
    2018-11-21, By: System Administrator

    Dewan Housing Finance Corporation Ltd (DHFL) on Wednesday posted a net profit of Rs 439 crore during the July-September quarter against a net profit of Rs 288 crore in the same quarter last year.

    Revenue from operations stood at Rs 3,516 crore, compared with Rs 2,628 crore last year.

    The company also approved issue of non-convertible secured/unsecured redeemable debentures for up to Rs 10,000 crore, and non-convertible perpetual unsecured debentures, up to Rs 1000 crore.

    DHFL recently repaid commercial paper worth Rs 1,775 crore.

    The company is in the process of raising much more resources to increase the liquidity level so that the company continues to remain well-equipped to meet all the financial obligations. DHFL's borrowings are diversified with a banking consortium of 31 banks, NCDs, CPs, ECB, masala bonds and retail public deposits.(Source : Mint)

  • Binani Cement Insolvency: Dalmia Bharat Moves Supreme Court Against NCLAT Nod To UltraTech's Bid.
    2018-11-15, By: System Administrator

    The Dalmia Group moved the Supreme Court challenging the National Company Law Appellate Tribunal's approval for the sale of Binani Cement Ltd. to UltraTech Cement Ltd.

    A three-judge bench headed by Chief Justice Ranjan Gogoi agreed to Dalmia's plea for an early hearing, and listed the case for Nov. 19, Bloomberg reported. The group is confident of getting a favourable verdict from the apex court, Dalmia Bharat's Group Chief Executive Officer Mahendra Singhi told BloombergQuint in an interview. Singhi, however, refused to share details of the grounds on which the group challenged the NCLAT's order, saying that that matter was sub judice.

    On Wednesday, the appellate tribunal approved UltraTech Cement's plan to acquire debt-laden Binani Cement, holding that the rival bid by Dalmia Group was "discriminatory" to creditors of the stressed cement maker.Dalmia Bharat-led Rajputana Properties had initially emerged as the top bidder for acquisition of assets of Binani Cement. Later, UltraTech, the second highest bidder, came back with a higher offer, backed by the original promoters of Binani Cement. (Source : bloomberg)

  • Q2 Results: Sun Pharma Posts Surprise Loss Due To Anti-Litigation Provision
    2018-11-13, By: System Administrator

    Sun Pharmaceutical Industries Ltd. reported an unexpected loss for the quarter ended September due to a one-off anti-trust litigation provision.

    The company posted a net loss of Rs 219 crore against the Rs 912 crore profit reported in the year-ago period, the country's largest drugmaker said in an exchange filing. The company posted a one-time loss of Rs 1,217 crore for the estimated settlement amount payable to all the remaining plaintiffs an antitrust litigation related to sleep apnea drug Modafinil in the U.S.

    Revenue in the July-September period rose 4 percent to Rs 6,938 crore year-on-year lower than the Rs 7,600 crore estimated by analysts.Operating income or the earnings before interest, tax, depreciation and amortisation rose 11 percent to Rs 1,531 crore. The operating margin expanded 180 basis points to 22.5 percent. (Source : Bloomberg)

  • Ashok Leyland Q2 net rises 37%, CEO Vinod Dasari resigns.
    2018-11-13, By: System Administrator

    Net profit came in at Rs 460 crore in the quarter ended 30 September, compared with Rs 334 crore a year earlier. Dheeraj Hinduja to step in as executive chairman
    Ashok Leyland Ltd posted a lower-than-expected 37.5% rise in second-quarter profit on Tuesday due to higher raw material costs.

    Profit was Rs 460 crore in the quarter ended 30 September, compared with Rs 334 crore a year earlier, the company said.

    Analysts on average had expected a profit of Rs 513 crore, according to IBES data from Refinitiv.

    Revenue from operations grew 25.2% to Rs 7,608 crore. However, cost of materials jumped 52.5%, pushing total expenses 23.2% higher to Rs 6,960 crore.

    Chief executive officer Vinod K. Dasari resigned after nearly 14 years with the company, the truckmaker said in a separate statement. Dheeraj Hinduja will step in as executive chairman with immediate effect. (Source : Mint)

  • RBI Calls Next Board Meet On Nov. 19 Amid Tensions With Finance Ministry.
    2018-11-01, By: System Administrator

    The Reserve Bank of India has called for the next meeting of the central board on Nov. 19, three people familiar with the matter told BloombergQuint on condition of anonymity. The suggestion of the next date of the board meet went out on Wednesday, people cited above confirmed. This, even as government officials maintained that the issues between the RBI and the government must be seen in 'larger public interest.'

    Earlier in the day, the government had issued a statement in light of the public spat that has broken out between the RBI and the Finance Ministry. 'The autonomy for the Central Bank, within the framework of the RBI Act, is an essential and accepted governance requirement," said the government in its statement. "Both the Government and the Central Bank, in their functioning, have to be guided by public interest and the requirements of the Indian economy," the statement said.

    The RBI's board meeting call came within hours of that statement being put out and could be seen as a sign of easing tensions between the two sides, although there is no formal indicator of a consensus emerging on any of the contentious issues.(Source : Bloomberg)

  • Q2 Results: ICICI Bank Returns To Profitability As Provisions Fall.
    2018-10-26, By: System Administrator

    ICICI Bank Ltd. returned to profitability in the July-September quarter due to lower provisioning for bad loans and higher interest income.

    The private lender reported a Rs 909-crore profit, about 56 percent lower than in the same quarter last year, according to its stock exchange filing. Analysts tracked by Bloomberg had expected a profit of Rs 950 crore. In previous quarter ended June, ICICI Bank had reported its first loss at least since 2001 as it set aside more money to cover for bad loans.

    Net interest income, or the core income of the bank, rose 12.4 percent to Rs 6,418 crore in the three months to September. That was higher than the estimated Rs 6,163 crore.

    ICICI Bank's asset quality also improved during the quarter. Gross non performing loans as a ratio to the total advances fell 35 basis points sequentially to 9.3 percent. Net NPA ratio also fell to 4.05 percent from the previous quarter's 4.67 percent . Provisions stood at Rs 3,994 crore, nearly 33 percent lower than the April-June period.

    > Net interest margin stood at 3.33 percent compared with 3.24 percent last quarter.

    > Loan book grew 13 percent, an 11-quarter high, over the last year.

    > Retail loans grew 20 percent year-on-year and formed about 57 percent of its total loan portfolio.

    > Provision coverage ratio rose 330 basis points 69.4 percent.

    (Source : Bloomberg)

  • RBI says Equitas, Ujjivan have to list their small bank units.
    2018-10-26, By: System Administrator

    The Reserve Bank of India (RBI) has asked Chennai-headquartered Equitas Holdings Ltd and Bengaluru-headquartered Ujjivan Financial Services Ltd to comply with its small bank licence norms that require them to list banking subsidiaries within three years of start of operations.

    At the same time, the promoter companies need to maintain the promoter shareholding in the banks at least 40 per cent, for a period of five years from the date of commencement of business of their SFBs. Both the small finance banks (SFBs) have been advised to comply with all the requirements of the RBI Guidelines for Licensing of Small Finance Banks dated November 27, 2014.

    As per the RBI guidelines, Equitas SFB has to be listed by September 4, 2019 and the promoter has to maintain their shareholding in the bank at least 40 per cent, for a period of five years from its date of commencement of business, i.e., by September 4, 2021.

    Ujjivan SFB has to list by January 31, 2020 and the promoter has to maintain its shareholding in the bank at least 40 per cent, for a period of five years from the bank's date of commencement of business, i.e., until January 31, 2022. Equitas Holdings Ltd and Ujjivan Financial Services were trading down 19.5 per cent and 15.5 per cent, respectively, at the time of writing this story. Market players say these companies are attracting holding company discount. Equitas Holdings said it will approach the RBI for an approval to merge with the bank at appropriate time, post the lock-in period of five-years.

    Ujjivan Financial Services said subsequent to the listing of its bank and closer to January 2022, the company will approach RBI to consider its merger with the bank.(Source : The Hindu).

  • RBI allows banks to lend more to some NBFCs
    2018-10-19, By: System Administrator

    RBI allows banks to use government securities equal to their incremental outstanding credit to NBFCs, over and above their outstanding credit to them as on October 19, to be used to meet liquidity coverage ratio requirements
    The Reserve Bank Friday announced more measures to increase liquidity flows to the non-banking financial companies. The RBI permitted banks to use government securities equal to their incremental outstanding credit to NBFCs, over and above their outstanding credit to them as on October 19, to be used to meet liquidity coverage ratio requirements.

    The move will help provide liquidity to housing finance companies (HFCs) and non-banking finance companies (NBFCs) which have come under pressure following series of default by IL&FS group companies." banks will be permitted to also reckon Government securities held by them up to an amount equal to their incremental outstanding credit to NBFCs and HFCs, over and above the amount of credit to NBFCs and HFCs outstanding on their books as on October 19, 2018, as Level 1 HQLA under FALLCR within the mandatory SLR requirement," RBI said in a notification.

    This will be in addition to the existing FALLCR of 13 per cent of total deposits, and limited to 0.5 per cent of the bank's total deposits. Liquidity coverage ratio refers to highly liquid assets that financial institutions need to hold in order to meet short-term obligations.

  • Q2 Results: TCS Profit Rises After Margin Hits Seven-Quarter High
    2018-10-11, By: System Administrator

    TCS net profit rose 3.4% to $1.1 bn in the Sept quarter from $1.08 bn in the preceding three months, while operating margin jumped 150 basis points to 26.5% from 25% in the April-June period

    Tata Consultancy Services Ltd (TCS) kicked off the fiscal second-quarter earnings season by reporting its fastest sequential growth in over four years.

    In constant currency terms, TCS's September quarter revenue rose 3.7% from the preceding three months. It grew 10% from a year earlier. Currency fluctuations, however, took some sheen off the company's growth as dollar revenue increased at a slower 3.2% pace to $5.21 billion in the quarter ended 30 September from the preceding three months.

    Net profit rose 3.4% to $1.1 billion in the September quarter from $1.08 billion in the preceding three months, while operating margin jumped 150 basis points to 26.5% from 25% in the April-June period.

  • Reserve Bank of India (RBI) on Friday kept interest rates unchanged.
    2018-10-05, By: System Administrator

    The six-member monetary policy committee led by Governor Urjit Patel voted 5-1 to keep the repo rate at 6.50%.

    India's monetary policy committee surprised markets by keeping interest rates unchanged, as it awaits for greater clarity on the evolving growth-inflation scenario in the economy. The six-member panel, however, changed its stance from 'neutral' to 'calibrated tightening', suggesting more rate hikes lie ahead.

    Separately and importantly, in a measure which seemed to be aimed at curbing currency volatility, the Reserve Bank of India proposed a 'voluntary retention scheme' for foreign portfolio investors. The scheme offers increased investment flexibility to investors who choose to retain a portion of their investments in India for a time period of their choosing.(Source : Bloomberg)

    Key Takeaways

    • MPC keeps repo rate unchanged at 6.5 percent
    • MPC changes stance from neutral to 'calibrated tightening'
    • Repo rate kept unchanged by a 5-1 vote; Chetan Ghate voted for a rate hike
    • Stance changed by a vote of 5-1; Ravindra Dholakia voted for a neutral stance
    • RBI proposes voluntary retention route for FPIs in debt markets
    • Inflation projected at 3.9-4.5 percent in H2 and 4.8 percent in Q1 of financial year 2019-20
    • GDP growth seen at 7.4% in FY19 & 7.6% in FY20
  • Chanda Kochhar quits as CEO of ICICI Bank, Sandeep Bakhshi to take over
    2018-10-04, By: System Administrator

    Chanda Kochhar has quit as CEO of ICICI Bank with immediate effect. The private lender has appointed Sandeep Bakhshi as managing director & chief executive officer for five years

    Facing enquiry over charges of conflict of interest, ICICI Bank managing director and CEO Chanda Kochhar today quit the bank. India's third largest lender by assets, ICICI Bank Ltd, has appointed Sandeep Bakhshi as chief executive for a term of five years, replacing Chanda Kochhar, who sought early retirement, the bank said today. The former head of the bank's life insurance arm, Bakhshi took the helm on an interim basis in June, when Kochhar went on leave during an inquiry into an alleged conflict of interest that triggered months of controversy.

    "The enquiry instituted by the board will remain unaffected by this and certain benefits will be subject to the outcome." the bank said in a statement after a board meeting. Kochhar, 56, who had headed ICICI Bank since May 2009, is also stepping down from the board of directors of its units, the bank added. Bakhshi will lead ICICI for five years, subject to regulatory approval, while other conditions of his appointment remain unchanged, the bank said. (Source : Mint)

  • RBI Places Restrictions On Bandhan Bank
    2018-09-28, By: System Administrator

    The central bank placed some restrictions on Bandhan Bank Ltd's operations as one of India's youngest lenders failed to lower promoter holding within the cap prescribed by the regulator.

    The Reserve Bank of India stopped Bandhan Bank from opening new branches unless it takes its approval each time, the microlender-turned-universal bank informed exchanges. The RBI also froze the remuneration to Managing Director and Chief Executive Officer Chandra Shekhar Ghosh at the current level till further notice.

    Bandhan Bank was unable to bring down the shareholding of the non-operative financial holding company to 40 percent within three years of starting operations. The condition was mentioned in the RBI's February 2013 licensing guidelines. The bank was granted in-principle approval in April 2014 and began operations a few months later.

    Moreover, it has to lower the holding company's stake to 20 percent within 10 years of starting the business and to 15 percent within 12 years.

    Bandhan Bank is the second lender to face RBI action over promoter holding. The regulator last month rejected the tool used by the Kotak Mahindra Bank to reduce promoter Uday Kotak's stake within the RBI-mandated limits. The bank decided to issue perpetual non-cumulative preference shares to bring down his holding to 20 percent of the paid-up equity capital. Yet, the stake would have stayed at 30 percent of post-equity issue capital. The RBI has mandated Kotak to pare holding to 20 percent by December this year and 15 percent by March 2020.(Source : Bloomberg)

  • RBI eases cash reserve rules amid credit crunch fears.
    2018-09-27, By: System Administrator

    The Reserve Bank of India on Thursday allowed banks to dip further into statutory cash reserves in a bid to ease a liquidity squeeze afflicting the nation's money markets.

    RBI in a statement said banks could 'carve out' up to 15 per cent of holdings under the statutory liquidity reserves to meet their liquidity coverage ratio (LCR) requirements as compared to 13 per cent now.

    This resulted from a rise in the facility to avail funds for LCR to 13 per cent from 11 per cent, effective October 1, RBI said in a statement.

    The move by the central bank follows concerns over tight liquidity conditions and banks' unwillingness to lend to NBFCs.

    RBI said it "stands ready to meet the durable liquidity requirements of the system through various available instruments depending on its dynamic assessment of the evolving liquidity and market conditions." (Source : Business Today)

  • LIC chairman says all options open to revive IL&FS
    2018-09-25, By: System Administrator

    India's largest state-run insurer, Life Insurance Corporation (LIC), will not allow the country's beleaguered Infrastructure Leasing & Financial Services (IL&FS) to collapse, LIC Chairman V.K. Sharma told reporters on Tuesday.

    All options, including increasing LIC's stake in IL&FS, are open, Sharma said.

    IL&FS has revealed a series of delays and defaults on its debt obligations and inter-corporate deposits in recent days. For the third time in a month, crippled infrastructure conglomerate IL&FS Financial Services Monday defaulted on interest payments on commercial papers, PTI reported on Monday.

    The interest payment on the papers were due Monday, the company informed the exchanges. The company said it will not be able to access commercial papers market for up to six months from the date of repayment of this obligation. The company did not quantify the default amount.

    Meanwhile, a finance ministry official said that cutting bank's cash reserve ratio (CRR), or the amount of funds they set aside with the central bank, are among options that the Reserve Bank of India (RBI) could look at to improve liquidity in the system.

    The central bank could also consider buying more bonds from the open market and open a special window for mutual funds to inject liquidity, the official told reporters, declining to be identified as the discussions are not public. Presently, the CRR is at 4 percent of bank's total deposits.(Source : Mint)

  • Govt announces five measures to stabilize rupee, curb current account deficit.
    2018-09-15, By: System Administrator

    Finance minister Arun Jaitley on Friday night announced a series of measures to boost market confidence, curb the widening current account deficit and stabilize the rupee after a marathon meeting with Prime Minister Narendra Modi to discuss the nation's economy.

    Jaitley said five decisions have been taken to address the issue of the current account deficit, which touched 2.4% of gross domestic product in the June quarter. Mandatory hedging conditions for infrastructure loans through the external commercial borrowing (ECB) route will be reviewed and a 20% exposure limit on investments by foreign portfolio investors in debt to a single corporate group will be removed.

    Government will permit the manufacturing sector to access ECBs up to $50 million with residual maturity of one year instead of three years. Masala bonds will be exempted from withholding tax this financial year and Indian banks will be allowed to become market makers in masala bonds including by underwriting.

    In addition, "government will take efforts to reduce non-essential imports," Jaitley said against the backdrop of India's rising trade deficit which stood at $17.4 billion in August.(Source : Mint)

  • GDP growth speeds up to 8.2% in Q1
    2018-08-31, By: System Administrator

    India's economy accelerated to 8.2% in the April-June quarter of 2018-19 due to a pick up in manufacturing activity, helped by a lower base during the same period a year ago. Economic growth had dipped to 5.6% in the June 2017 quarter due to destocking by companies ahead of the implementation of the Goods and Services Tax from July that year.

    In an update to its World Economic Outlook (WEO), IMF trimmed India's growth projection for 2018-19 by 10 basis points to 7.3%, citing negative effects of higher crude oil prices on domestic demand and faster-than-anticipated monetary policy tightening due to higher-than expected inflation.

    The Bank also said India's $2.6 trillion economy surpassed France's in 2017 to be the world's sixth largest, and it was not far before the UK.

    GDP growth for the year ended 31 March at 6.7% was a tad higher than previously estimated by the Central Statistics Office but still slower than the 7.1% growth recorded in the previous year.

    On Wednesday, the Reserve Bank of India said economic growth was expected to accelerate to 7.4% in the current fiscal, from 6.7% the previous one, despite risks posed by higher oil prices and global trade tensions.(Source : Mint).

  • LIC Board Agrees To Acquire 14.9% Stake In IDBI Bank.
    2018-08-28, By: System Administrator

    India's largest insurer Life Insurance Corporation (LIC) of India Ltd will purchase 14.9 percent equity stake in IDBI Bank, as a first step towards taking majority ownership in the lender.

    LIC has given "in principle approval for subscription of the equity shares on preferential basis subject to their total exposure not exceeding 14.90 percent of post issue capital of IDBI Bank at any point of time...", the bank said in a stock exchange notification on Tuesday. The state-owned lender will approach its shareholders for an approval on this deal on August 31, the notification said.

    According to B Sriram, managing director of IDBI Bank, this is the first tranche of the deal between LIC and IDBI Bank.

    The government had earlier approved a transfer of 51 percent majority ownership in IDBI Bank to LIC. However, for LIC to increase stake in the bank beyond 15 percent, approvals are needed from the insurance regulator. Also the Reserve Bank of India's approval is needed for the transfer of majority ownership to LIC. (Source : Bloomberg).

  • Stressed assets: Court refuses interim relief to power firms
    2018-08-27, By: System Administrator

    Public sector banks may end up taking a 60-70% haircut on loans given to power companies.

    The Allahabad High Court on Monday refused to grant interim relief to power companies, which had filed pleas against the Reserve Bank of India (RBI) regulations on stressed assets, CNBC-TV18 reported. Public sector banks may end up taking a haircut of 60-70% on loans given to power companies.

    The Reserve Bank of India (RBI), in its 12 February circular, tightened norms for settling bad debt by setting timelines for resolving non-performing assets (NPAs). It allowed lenders to initiate insolvency proceedings against defaulting companies. Although banks were given several options to arrive at a resolution plan, they had 180 days to do so. The central bank also introduced the concept of a one-day default under which banks have to identify incipient stress even when repayments are overdue by a day.

    The Allahabad High Court had earlier ordered lenders to avoid acting against power producers after they sought relief against the RBI's new stress resolution norms. Also, in a relief to power producers, the Supreme Court had refused to stop Allahabad High Court from hearing these petitions.(Source : Mint).

  • NCLAT Says Tata Sons Cannot Force Sale Of Mistry Shares Till Case Decided.
    2018-08-24, By: System Administrator

    The National Company Law Appellate Tribunal today declined to pass an interim order on Cyrus Mistry's plea against the conversion of Tata Sons Ltd. to a private limited company.

    But the two-judge bench headed by NCLAT Chairperson Justice SJ Mukhopadhyay asked Tata Sons not to take steps on the sale of minority shareholders stake until the appellate tribunal decided on Mistry's plea alleging oppression by the group holding company.

    The NCLAT will start hearing arguments on Mistry's appeal against the National Company Law Tribunal order that removed him as Chairman of Tata Sons on Sept. 24.

    Mistry was represented by Senior Advocate CA Sundaram who had argued that there was no urgent reason for this conversion and it should be stopped until Mistry's plea against his removal is decided by the NCLAT.

    Senior Advocate Abhishek Manu Singhvi, who represented Tata Sons, had informed the court that the Registrar of Companies had recognised Tata Sons as a private limited company on Aug. 6.(Source : Bloomberg).

  • Overseas bondholders approve plan to ease RCom's debt burden.
    2018-08-24, By: System Administrator

    Anil Ambani-led Reliance Communications Ltd clinched the approval of its overseas bondholders to ease the carrier's debt burden, putting the company a step closer to averting bankruptcy. The operator, which defaulted last year on a $300-million bond, got 83% of bondholders to approve the plan, the company said in an exchange filing.

    "Reliance Communications bondholders approved the tender and exchange offer of $300 million bonds with an overwhelming majority of over 83%, at their meeting held today, 24 August 2018, in London. "RCom said in a statement. Following the offer, bondholders will receive cash proceeds of up to $118 million. "Bondholders will also get $55 million bonds to be issued by Global Cloud Xchange Ltd (holding company of GCX), a foreign subsidiary of RCom." the statement added. The Global Cloud Xchange bonds will be unsecured and will carry a coupon of 0.1% with maturity of four years, it added (Source : Mint)

  • L&T Approves Rs 9,000-Crore Share Buyback.
    2018-08-23, By: System Administrator

    L&T will buy back up to 60 million shares, at a premium of more than 13% over Tuesday's share price, aggregating up to 4.29% of paid-up equity capital.

    Larsen & Toubro Ltd. will buy back as much as Rs 9,000 crore of its shares, in a first for the country's largest construction and engineering company.

    The company will repurchase 6 crore shares (or 4.3 percent of equity) at Rs 1,500 a piece, according to its stock exchange notification today. The price is higher than the stock's all-time high of Rs 1,470 it clocked on Feb. 01. (Source : Bloomberg)

  • Jet Airways Says Not Aware of Any Inquiry by Indian Government
    2018-08-21, By: System Administrator

    Jet Airways India Ltd., the carrier that deferred earnings this month pending endorsement of its books by auditors, said it's unaware of any probe initiated by government authorities after a report said the company is under scrutiny for alleged embezzlement of funds.

    The Registrar of Companies, which is under the Ministry of Corporate Affairs, has started an initial inquiry into potential wrongdoings such as diversion of cash, and will also look at the role of auditors, people familiar with the matter said, asking not to be identified citing government rules. The examination is only preliminary, and it may turn into a formal probe upon any evidence, one of them said.

    Jet Airways "has not received any communication from the Ministry of Corporate Affairs in this regard," it said in a statement to the stock exchange Tuesday.

  • Govt asks ONGC to list ONGC Videsh abroad.
    2018-08-21, By: System Administrator

    In a letter sent to ONGC last week, the government did not state how much of ONGC Videsh stake should be offered to outside investors.

    The government has asked its biggest state-owned firm Oil and Natural Gas Corp. Ltd (ONGC) to list its overseas unit ONGC Videsh Ltd, according to a letter seen by Reuters. The move to float the unit which has investments in 11 producing assets in countries including Russia, Brazil and Iran is part of a government push to sell state-assets to raise funds.
    A listing would also help unlock value in the unit by improving its corporate governance and efficiency, the letter from the Department of Investment and Public Asset Management to ONGC said. The letter, sent last week, did not state how much of ONGC should be offered to outside investors.The letter said any state-owned firm with a positive net worth and no accumulated loss should be listed to unlock value. The listing would help the government meet its divestment targets and make up for a failed plan earlier this year to sell a stake in Air India.(Source : Mint).

  • Sebi plans to cap investor's equity exposure in line with net worth.
    2018-08-14, By: System Administrator

    The Securities and Exchange Board of India (Sebi) is planning to limit investor's exposure to shares and equity derivatives in line with their net worth, said three people with knowledge of the development. The move is aimed at preventing individuals from going overboard on equity investments, considered riskier than bonds.
    The proposal is similar to the concept of accredited investors in some developed markets. An accredited investor is one who meets requirements regarding income, net worth, asset size, governance status or professional experience. The US regulator has adopted requirements for accredited investors to protect those who may be unable to sustain the economic risk of investing in unregistered securities. The proposal, if implemented, could impact a number of equity investors. (Source : Economic Times)

  • HDFC Bank founder member & deputy MD Paresh Sukthankar Quits.
    2018-08-11, By: System Administrator

    Paresh Sukthankar, deputy managing director and a member of the founding team at HDFC Bank Ltd, has resigned.

    In a notification to stock exchanges, the bank said that Sukthankar has tendered his resignation as Deputy Managing Director, to be effective 90 days from the close of business hours on Friday.

    Sukthankar's resignation comes as a surprise as he was considered one of the front-runners to succeed MD and chief executive officer (CEO) Aditya Puri, who is set to retire in October 2020.

  • Investors can hold shares in physical form even after December 5: Sebi
    2018-08-11, By: System Administrator

    The Securities and Exchange Board of India (Sebi) on Friday said its new guidelines do not bar investors from holding shares in the physical form even after December 5. The clarification comes after the market regulator received several calls concerning the applicability of its directive. The regulator had said in July that the transfer of shares of listed companies had to be in the dematerialised mode from December 5.

    "The new amendment does not prohibit investors from holding shares in the physical form. Investors have the option of holding shares in the physical form even after December 5, 2018." Sebi said in a statement. The new rule does not apply to transfer of title of shares by way of inheritance or succession and interchanging of the order of the name of shareholders.

    Besides, the regulator said any investor desirous of transferring shares held in the physical form after December 5 can do so only after the shares are dematerialised. Shares in the demat form will help in having a transparent record of shareholding at companies amid rising concerns over beneficial ownership of entities.(Source : Mint)

  • TCS fixes record date for Rs 16,000 crore share buyback as 18th August 2018.
    2018-08-11, By: System Administrator

    India's biggest IT services company TCS has announced 18 August, 2018, as the record date for buyback of shares. TCS shareholders will be able to participate in the buyback, if they holds shares in their demat accounts as on the record date.

    A buyback is a mechanism through which a company repurchases a specific amount of its outstanding shares. Buybacks help to improve the earnings per share and return on equity. "We would like to inform you that the promoter and promoter group of the company have communicated their intention to participate in the proposed buyback" TCS had said in a BSE filing.

    The buyback will take place through the tender route, in which TCS will accept shares on a proportionate basis during the buyback period. According to Sebi's mandate, companies have to reserve 15% of any buyback for small shareholders with holdings of less than Rs 2 lakh. This will increase the acceptance ratio for TCS retail investors who want to participate in the buyback offer.(Source : Mint)

  • M D Mallya The Frontrunner To Succeed Sharma As ICICI Non-exec Chairman
    2018-06-06, By: System Administrator
    Private sector icici bank has initiated the process of appointment of non-executive chairman as the term of incumbent m k sharma is coming to an end on june 30. The process has started and the board has to take a call if the appointment has to be made from the existing pool of independent directors or by inviting an outsider to take up the position, sources said. As the term of the current chairman is coming to an end so a new chairman has to be appointed, sources added. Among various independent directors, seasoned banker and former bank of baroda chairman and managing director m d mallya is set to be the frontrunner to succeed sharma. Mallya was recently appointed to the icici bank board as an independent director on may 29.
  • Tech View: Nifty50 Forms Bearish Engulfing Pattern, 10,620 Level Key
    2018-06-06, By: System Administrator
    The bulls were at the receiving end on monday. Their comeback attempt went in vain, and the nifty50 ended the session at the days low. In the process, the 50-pack index formed a bearish engulfing pattern on the daily chart. A breach of the 10,600-620 range in the coming session may further weaken the technical outlook for the index. On the other hand, the 10,770 level proved too strong a hurdle and may remain so over the next few sessions. For the past three sessions, the nift ..
  • Vegetable Prices Jump In India As Farmers Go On Strike
    2018-06-07, By: System Administrator
    Vegetable prices jumped as much as 10 percent in major indian cities, including mumbai and delhi, as a four-day old strike by millions of farmers curtailed supplies. Farmers began their 10-day protest on friday to press demands such as farm loan waivers and higher prices for produce such as cereals, oilseeds and milk. "wholesale prices of some vegetables like tomatoes and french beans have risen due to lower supplies," said a mumbai-based vegetable vendor mahesh gupta.
  • GCL Won Kisan Pragati Award 2017
    2018-06-06, By: System Administrator
    Ganganagar commodity limited (gcl), one of india's prestigious financial services group has won the "kisan pragati award" at a function organized by ncdex. Ncdx has selected gcl for the award under outstanding performance, category in agriculture commodity in west zone (rajasthan and gujarat) of india. Vishal bagadia and honey sharma, director (s) of gcl have received the award from central food and civil supplies minister ram, vilas paswan and union minister of state for water resources, arjun ram meghwal in a grand ceremony held in hotel taj, new delhi. On the occasion, vishal bagadia, director ganganagar commodity limited said that gcl has been active in the field of commodity exchange from last 13 years. The company is offering services of broking and investment in equities, currency, insurance, mutual funds, along with the online and offline procurement of commodities, hedging and trading to its customers.
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