Scribbling over the CAA
Small and Smart - Digital solutions for micro enterprises
Angriya – thy name is enough
Sometimes We Think From Our Stomach Too
NBFCs and its Transforming Capacity to Solve Credit Deficit
Blackstone Group gets Trident Hotel
Blackstone Group obtained the approval of India’s bankruptcy court to acquire Trident Hotel, owned by Golden Jubilee Hotels and managed by East India Hotels of Oberoi group, for around Rs 585 crore, months after lenders cleared its resolution plan. This is the first deal by the global private equity giant under Insolvency and Bankruptcy Code (IBC) to infuse foreign capital. As a part of its resolution plan, Blackstone Group under its resolution plan has agreed to pump in Rs 384 crore up front to clear the dues of the workmen and creditors, apart from committing infusion of Rs 180 crore towards capital expenditure.
SBI Cards IPO gets SEBI nod
The Securities and Exchange Board of India (SEBI) has given its in-principle approval for the initial public offering (IPO) of SBI Cards and Payment Services. According to the media reports the company is likely to be valued at Rs 60,000 crore and it is expected to raise through IPO approximately Rs 6,000 crore. However, the date is yet to be announced.
As per the DRHP, the public issue comprises a fresh issue of Rs 500 crore and an offer for sale of up to 13,05,26,798 equity shares. The offer for sale includes up to 3,72,93,371 equity shares by SBI and up to 9,32,33,427 equity shares by CA Rover Holdings.
SBI posts the highest ever quarterly net profit recorded
State Bank of India has created a history of sort. The bank has posted the highest ever quarterly net profit recorded by it when it reported 41% jump in net profit at Rs 5,583 crore in the third quarter ended December 31, 2019 against Rs 3,955 crore in the year ago quarter. The push came from - steep decline in provisioning requirement towards bad loans and a healthy rise in net interest income. The net interest income was up 22% yoy at Rs 27,779 crore (Rs 22,691 crore) in the year ago period and the provisioning requirement declined 41% to Rs 8,193 crore against Rs 13,971 crore in the year ago quarter.
Gross non-performing assets (GNPAs) declined by Rs 1,975 crore during the quarter. Net NPAs declined to 2.65% of net advances in the quarter against 2.79% in the preceding quarter.
Moody’s puts Yes Bank ratings under review
Moody’s Investors Service has placed Yes Bank’ long-term foreign currency issuer rating of B2 under review. It has also downgraded bank’s standalone credit profile or its BCA to CAA2 from B3. The placing reflects Moody’s expectation that the bank’s standalone viability is getting increasingly challenged by its slowness in raising new capital. Yes Bank is in discussions with a number of investors to raise new equity capital.
Exim Bank to raise up to $3 billion
The Export-Import Bank of India (Exim Bank) has a plan to raise up to USD 3 billion from overseas borrowing in the financial year 2020-21. The bank has raised USD 1.7 billion of overseas borrowing through bond issuances and foreign loans in current financial year. Bank’s recently raised USD 1 billion bond was listed on India International Exchange platform. On January 6, the bank raised USD 1 billion through a 10-year 144A/Reg S bond which was the third such issuance by the bank under its USD 10 billion global medium term notes (GMTN) programme.
Jio becomes largest telecom company
Reliance Jio has added 5.6 million new subscribers in November 2019. With this it has become the largest in terms of the number of subscribers. It held 32.04 percent share in the segment in November 2019, as against Vodafone Idea's 29.12 percent and Bharti Airtel’s 28.35 percent. As of November 2019, Jio had 369.93 million subscribers. Vodafone Idea lost 36.41 million subscribers that same month. Bharti Airtel added 1.65 million to its list, taking the total up to 327.3 million. BSNL added 341,722 users to its list, thus ending with a market share of 10.19 percent.
SEBI bars 11 entities for fraudulent trading
Sebi has restrained 11 entities that include Decent Vincom Pvt Ltd, Premsagar Vinimay Pvt Ltd, Nityadhara Plaza Pvt Ltd, Conquer Barter Pvt Ltd, Navdurga Investment Consultants Pvt Ltd and six individuals from accessing securities market for three years for fraudulent trading in the scrip of Unisys Software and Holding Industries. During the period of restraint, the existing holding of securities, including the holding of units of mutual funds, of the entities will remain frozen. The order follows a probe conducted by the regulator during January 2010 to November 2014 into the scrip of Unisys.
PE funds raise record $600 billion
In 2019, globally private equity funds raised record $595 billion. However it was lesser than what they raised in the preceding two years. However, the fundraising in 2019 was the third highest ever, only surpassed by 2017 and 2018, when PE funds generated $628 billion each. The number of funds that raised their targeted corpus from their investors, however, fell for the third straight year, from 2,398 in 2017 to 1,790 in 2018 and 1,316 in 2019, indicating that investors are only willing to back select funds and showing an increasing average ticket size of a fund.
TRUTH: Yes Bank clarifies
On Friday, Yes Bank’s independent director head – audit committee Uttam Prakash Agarwal resigned and in a letter to the RBI, ministry of corporate affairs and Sebi complained compliance failures and pressed multiple charges of mismanagement in capital-raising exercises by CEO Ravneet Gill. On his move the share price declined 7% intraday. Now the truth has come out, which is very disturbing. Bank responded saying it was reviewing Agarwal’s ‘fit and proper’ status following a directive from RBI. The bank said it had obtained legal opinions from eminent jurists which were to be considered by the Nomination and Remuneration Committee of the Board and the bank’s board on Friday.
Sebi comes hard on 29 entities
SEBI has slapped a total fine of Rs1.83 crore on 29 individuals for indulging in fraudulent trading in scrip of Dhanleela Investments and Trading Company Ltd between February 2013 and March 2015. The order came after an investigation conducted by SEBI. It was noted that the scrip opened at Rs 17.5 on February 26, 2013 and reached Rs 427.8 on October 09, 2013. On October 10, 2013, the scrip opened at Rs 87.2 and thereafter reached a high of Rs 213.9 on December 05, 2013 and closed at Rs 90.3 on March 02, 2015.
Infosys net profit up 23%
Infosys has posted 10.6 per cent growth in net profit on a sequential basis. While the net profit rose 23.7 per cent to Rs4,466 crore on a year-on-year basis from Rs 4,019 crore QoQ, revenues grew 7.9 per cent to Rs23,092 crore. On a sequential basis, revenues grew 2 per cent. The reasons attributed to the performance are - a weaker rupee, cost reductions and the signing of large deals. The dollar revenue growth was 1 percent QoQ at $3,243 million in Q3, and it was same in constant currency at 1 percent QoQ (up 9.5 percent YoY) against 3.3 percent in Q2FY20 and 2.7 percent in Q3FY19.
Route Mobile gets approval from Sebi
Omni channel cloud communications service provider Route Mobile has received approval from Sebi to launch its IPO. The offer comprises of a fresh issue worth Rs 240 crore and an offer for sale of Rs 360 crore by the promoters. It may also consider a pre-IPO placement of upto Rs100 crore, which will reduce the size of the offer if it takes place. Its total revenue increased at a CAGR of 37.87 percent to Rs 844.67 crore in FY19, up from Rs 457.5 crore in FY17.
CAMS files IPO papers
Computer Age Management Services (CAMS) has filed its draft red herring prospectus (DRHP) with Securities and Exchange Board of India (SEBI) for its initial public offering (IPO) to raise approximateky Rs1,600 crore. CAMS is a financial infrastructure and services provider to the mutual fund industry. CAMS served AAUM of Rs 18.7 lakh crore as on November 2019, which is 69.4 percent of total mutual fund assets held by 16 mutual funds.
HCC default amount stands at Rs277 cr
Hindustan Construction Company’s current default amount stands at around Rs 277 crore. Of this, total default on long-term loans stood at Rs 233. 24 crore as on December 31, 2019. The company has total outstanding borrowings worth Rs 3,171.45 crore. HCC, in a joint venture with VCCL, won a Rs 489-crore contract for designing and constructing twin tunnels for the Delhi Metro. HCC has 75% stake in the venture. SBI has cash credit exposure to HCC of over Rs 225 crore and long-term borrowings exposure of over Rs 80 crore, which the company has defaulted in August last year.
Suzlon defaults on payment
Suzlon Energy has defaulted on the payment of Rs 7,256 crore to a consortium of 18 lenders, led by SBI.This amount includes interest of Rs 539 crore and principal amount of Rs 6,717 crore. The outstanding amount to the company was in the form of working capital, term loans and standby letter of credit. The total amount due to financial creditors stands at Rs 12,785 crore. This default has come at a time when bankers are still trying to figure out a resolution plan for the wind energy maker. They have time till month end to resolve the company.
Adani Port to have footprint in AP
Adani Ports and Special Economic Zone (APSEZ) intends to acquire 75% stake of Krishnapatnam Port Company (KPCL) from the existing shareholders. The investment is in line with the company's strategy to increase its footprint in Andhra Pradesh.
Maruti Suzuki India’s sales up
Maruti Suzuki India’s total sales in the month of December 2019 stood at 133,296 units, up 3.9 per cent from 128,338 units a year ago. During this period, the total domestic sales stood at 125,735 units, up 3.5 per cent from 121,479 units in December 2018. Apart from this, the total export sales were 7,561 units, up 10.2 per cent from 6,859 units year ago. The domestic passenger vehicle sales rose 2.5 per cent on-year to 122,784 units.
Bharti Airtel to raise USD2 billion
Shareholders of Bharti Airtel have approved proposals to raise up to USD 2 billion in equity and another USD 1 billion in debt. The proposal for issuance of securities received 99.99 per cent votes in favour of the special resolution at the company’s EGM. The second special resolution was for issue of foreign currency convertible bonds and unsecured/secured redeemable non-convertible debentures along with or without warrants.
Sensex nosedives over 700 points
As feared it was Black Monday on Dalal Street today. The BSE Sensex plunged over 700 points as escalation in tensions in the Middle East fuelled intense selloff in global equities. Domestic market witnessed heavy selloff as global stocks slumped after US President Donald Trump threatened Iran. Brent, oil prices surged nearly 3 per cent to USD 70.59. Meanwhile, the rupee depreciated 30 paise to 72.10 against the US dollar (intra-day).
Foreign investors greet India
According to the Department for Promotion of Industry and Industrial Trade (DPIIT) in the first half of the current fiscal year, Foreign Direct Investment in India rose by 15 per cent. It is the reflection of the confidence of international investors in India’s market. The government has opened up various sectors for foreign investment and has eased norms for certain sectors. Going forward, there are expectations of a further surge in the FDI investment as India.
2019 worst year for IPOs
In 2019 the IPOs in value terms have tumbled to a four year low and it was worst year from an IPO market perspective. Funds raised by IPOs fell to just $2.8 billion this year. In 2017, the proceeds hit a record $11.7 billion before falling to $5.5 billion in 2018. At the same time, many of this year's IPOs like IRCTC and Affle (India) have doubled in value from their issues prices. The S&P BSE IPO index has surged 34 percent this year, outperforming broader indexes such as NSE Nifty 50 and BSE Sensex.
Manappuram Finance to raise Rs 350 crore via issuance of NCDs
Manappuram Finance Ltd. is planning to raise up to Rs 350 crore through issuance of non-convertible debentures (NCDs) on private placement basis. The board of directors of the company has approved the issuance of rated, secured, redeemable non-convertible debentures having face value of Rs 10 lakh each for the amount of Rs 350 crore. Furthermore, another meeting of the board of directors of the company will be held on December 31, to consider the proposed allotment for the said issue.
AUM of the Indian Mutual Funds add over Rs 4 lakh crore
The asset under management (AUM) of the Indian Mutual Funds industry rose by 18 percent (Rs 4.2 lakh crore) to an all-time high of Rs 27 lakh crore in 2019 by November-end, up from Rs 22.86 lakh crore at the end of December 2018. According to AMFI going ahead, the industry should witness growth in the range of 17-18 percent in 2020 and equity funds should see robust inflows as expectations are high about improved equity markets and a revival in economic growth.
Equitas SFB files DRHP
Equitas Small Finance Bank has filed the DRHP with the Sebi for its IPO to raise up to Rs 550 crore via fresh issue and an offer for sale of up to 80 million equity shares. The IPO is expected to hit the market before the end of March 2020. The bank will use the capital for augmenting the bank’s Tier-I capital base to meet the bank’s future capital requirements. The offer includes reservation of up to Rs 100 crore for subscription by eligible shareholders of Equitas Holdings. The equity shares will be listed on the BSE and the NSE.
New NEFT Timimgs
Customers of SBI, HDFC Bank, Axis Bank, Punjab National Bank, ICICI Bank or any other commercial lender can now do NEFT transactions 24×7. The facility will now be available on any day of the week, including holidays. The Reserve Bank of India (RBI) has allowed this facility to be available at all times throughout the year. For smooth settlement of NEFT transactions, the RBI has decided to provide additional collateralised intra-day liquidity facility.
Tech Mahindra bags Rs 500-cr contract
Tech Mahindra, a provider of digital transformation, consulting and business re-engineering services and solutions, has announced its largest smart city project worth Rs 500 crore from the Pimpri Chinchwad Municipal Corporation (PCMC), Asia’s richest municipal corporation. Through this project, Tech Mahindra will convert it into a smart and sustainable city.
Markets to remain positive
We strongly feel that the momentum in the equity markets will remain positive. The immediate concern – the US and China trade deal – has been on right path. The second concern Boris Johnson’s win in the UK general elections are also positive for the markets. With this the fear of prolonged crisis globally is eliminated. Sooner than later more clarity is expected on the US-China trade settlement.
Today's Money Multiplier Recommendation Rocking
In today's edition of Money Multiplier under Fundamental View the IE&M Team has recommended Avanti Feeds. The logic is - during last three years, its sales grew 22% on CAGR basis while profit grew 19% on CAGR basis while during last five years, its sales grew 26% on CAGR basis while profit grew 30% on CAGR basis. At CMP, the stock is trading at P/E ratio of 20.4x. The Company has paid 100% dividend for FY19. Considering all these factors, we recommend a Buy.
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Direct tax collections slow
Direct tax collections, net of refunds, for the April-November period grew just 1.6% against the required rate of 17.4% to achieve the budget estimate of Rs 13.35 lakh crore for the current fiscal. In the first eight months of the fiscal, the government collected Rs 5.56 lakh crore in direct taxes compared with Rs 5.48 lakh crore in the same period in FY19. The tepid growth is partly due to the economic slowdown and also on account of the deep corporate tax cuts announced by the government. The headline corporate tax rate was slashed to 22% from 30% earlier for regular firms.
ADB trims India’s GDP growth forecast to 5.1% in FY20
The Asian Development Bank (ADB) has trimmed its forecast for India’s economic growth in 2019-20 to 5.1 per cent. In September, ADB forecast India’s GDP to grow 6.5 per cent in 2019-20 and 7.2 per cent in the year thereafter. The reasons stated are - consumption affected by slow job growth, rural distress aggravated by poor harvest and foundering of major NBFCs in 2018 which led to a rise in risk aversion in the financial sector and a credit crunch.
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