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Short-term rates crash in India with funds overflowing with cash

November 26, 2020 - 11:35am
By Subhadip SircarA glut of cash chasing assets in India has caused short-term rates to plunge.A three-month treasury bill was sold at a record low yield Wednesday, while the market repo clocked a trade at 0.01%. Key borrowing costs like the weighted interbank call rate and collateralized money-market rates are way below the Reserve Bank of India’s benchmark in recent days, indicating investors such as mutual funds are accepting returns lower than what RBI’s deposit window would offer banks.79421997Governor Shaktikanta Das has pledged to stay accommodative well into 2021 as he tries to dig the economy out of an unprecedented technical recession. But a liquidity bloat is coming from the central bank’s intervention in the foreign currency market, as it seeks to rein in the rupee and keep exports competitive.“The RBI’s dollar buying to prevent the rupee from appreciating has driven liquidity to a large excess,” said Arvind Chari, head of fixed income and alternatives at Quantum Advisors Pvt. “The RBI may have to act to suck out liquidity to maintain the sanctity of the reverse repo rate.”Deposit WindowBanks have parked 6.1 trillion rupees ($82.5 billion) of excess cash with the central bank at the reverse repo rate of 3.35%, according to the Bloomberg Banking Liquidity Index. Mutual funds and other such investors don’t have access to this window, and ICICI Securities Primary Dealership suggests the RBI should consider including them if it’s worried about the depression of overnight yields.“A weekly or fortnightly liquidity absorption window with wider participation could address the skew in excess liquidity and reinforce the reverse repo rate as the floor,” ICICI Securities economists including A. Prasanna wrote in a note. “A stronger option would be to introduce the Standing Deposit Facility at a rate slightly above reverse repo -- say 3.5% -- so that money market rates reset.”The so-called SDF is a tool that would enable the central bank to take in money without offering collateral.The State Bank of India, the nation’s largest lender, warned that a sustained cash surplus may eventually push loan rates below similar-rated bonds, introducing policy unpredictability.“Such type of irrational pricing, because of abundant liquidity, can impact banking sector profits and initiate asset liability mismatch, if the spread is more prevalent for lower-rated borrowers,” according to Soumya Kanti Ghosh, group chief economic adviser at the lender. “A sure recipe for financial instability in the future.”The Reserve Bank’s policy review meeting is due to start next week with the announcement on Dec. 4.
Categories: Business News

India's efforts to emphasize preventive care

November 26, 2020 - 8:32am
A not-so-popular government tagline reads ‘Sahi Bhojan Behtar Jeevan’ (right food better life). Coined two years ago to spread the essence of the ‘Eat Right India’ scheme launched by the Food Safety and Standards Authority of India, the slogan encapsulates a simple message: eat safe, healthy and sustainable food. This scheme and the missions on sanitation, health insurance and fitness have emerged as the four pillars of India’s preventive healthcare policy. Covid-19 has widened that spectrum, bringing in a sense of urgency, also nudging India Inc to come on board and think beyond the usual hospital-pharmacy route of healthcare services.As citizens had no option but to bank on preventive modes till they got vaccinated, it was only logical that the business potential of immunity boosters, sanitisers and masks grew sharply, with newer ideas such as consultancy-on-phone and e-pharmacies catching on.“Because of Covid, people have been focusing on preventive healthcare. Our Apollo Pharmacy data has shown a steep rise in sale of sanitation products, up to 350% (as compared to pre-Covid months),” said Shobana Kamineni, executive vice-chairperson of Apollo Hospitals, which runs a chain of 71 hospitals and 3,400 pharmacies in multiple cities.Kamineni, a former president of the Confederation of Indian Industry, also said that several companies have started exploring new healthcare packages such as testing and call-a-doctor to take care of their employees working from home.Rana Mehta, leader of healthcare practice at consulting firm PricewaterhouseCoopers (PwC), said companies such as 1mg, PharmEasy, Practo and Mfine have emerged stronger amid the pandemic as they have all their verticals such as consultancy, e-pharmacy and diagnostics on one platform.Investors are now scouting for such medical companies that emphasise on preventive healthcare and innovation, he said.“The future lies in preventive healthcare. As the World Health Organization data shows, the countries spending more on preventive medicines have low mortality and morbidity. Also, a country controlling diseases such as diabetes, cardiac arrest and hypertension end up saving half a percentage of its GDP (gross domestic product),” said Mehta.Although doctors and medical experts have been on the same page on tuberculosis (TB) being the biggest long-term healthcare problem in India, with its fast spread being noticed among the workforce in the manufacturing sector and community at large, they are concerned that TB is getting sidetracked because of Covid-19. While financial details of this financial year have yet to be made public, it is suspected that resources spent on prevention of TB have dwindled since the Covid-19 outbreak.Most actions, be it the ramping up of health infrastructure or focusing on the preventive segment, get stuck mainly on one count — lack of adequate resources. Former union health secretary Lov Verma said India must step up its public spending on healthcare.“A lot more money needs to be set aside for healthcare. At present, India’s health budget is just 1.4% of GDP, way below the nation’s target of spending 2.5% by 2025,” he said, adding that the government must make artificial intelligence, screening, health and wellness centres as well as digital interventions the key pillars for future healthcare.Meanwhile, the government has sought to revive the use of traditional medicines and practices to prevent diseases. “One of the surprising but important aspects in preventive healthcare is the use of traditional cures and medicines in raising immunity level,” said Rajiv Kumar, vice-chairman of NITI Aayog, the government’s premier policy think-tank.“With the NITI Aayog setting up a high-level committee on integrated medicines, we are hopeful we will soon be able to mainstream our traditional medicines.” As the world awaits an end to Covid-19, preventive medicine remains the buzzword among policymakers.
Categories: Business News

Ahead of Covid vaccine, government & companies stock up vials, syringes

November 26, 2020 - 8:32am
New Delhi: The government and pharma companies have started stockpiling syringes and vials, as they begin the groundwork for a rapid, safe and efficient delivery of potential vaccines.“Scaling up the manufacturing of syringes and other medical products required to deliver a vaccine to the Indian population will be just as important as the vaccine itself,” said a senior government official. Around 300 million people are likely to receive the first shot of the vaccine as and when it becomes available in the country. That means a requirement of at least as many vials and syringes — or double that if it is a two-shot vaccine.To meet that demand, pharma companies, which are working on the potential vaccine candidate for Covid-19, have started tying up with manufacturers of vials and the rubber stoppers that are used in the vials.79419588Since most companies would trade through government institutions and not the private market, they are going for multi-dose vials which will bring down the number of units required. They will also be utilising the existing production and filing lines for potential Covid-19 vaccines. “We have started preordering and have tied up with manufacturers for volumes. The vials cannot be stored in advance, but we have tied up with various companies. We have preordered with both Indian and Chinese suppliers with capacities so that there is no rush when we need it,” said a senior person from a vaccine manufacturing company. A manufacturer of syringes said the government had yet to disclose its requirements.“The government has not listed precise requirements, but estimates are to vaccinate 900 million in all. For two shots per person 1,800 million injections are required,” said Hindustan Syringes & Medical Devices managing director Rajiv Nath.At present, “we have got an order for 52 million and we have been told to expect another order for 41 million. It’s in the pipeline. Total requirement of 93 million to be supplied by March next year as an add on requirement to the tender that we already have in place,” he said. Additionally, HMD has shipped more than 100 million syringes to Unicef for the Covax facility. The company has increased its annual manufacturing capacity from 550 million of 0.5ml AD syringes per month in June to 700 million currently. This will be further increased to 800 million by next quarter and to 1 billion by the end of June 2021.
Categories: Business News

View: For good healthcare, India needs a more responsive public and more responsible private sector

November 26, 2020 - 8:32am
In a mixed health system that has evolved by default rather than design, all available healthcare resources have to be optimally utilised to provide services to everyone, based on need rather than paying ability. That is the prime objective of Universal Health Coverage, a target of the Sustainable Development Goals, which we have committed to deliver by 2030. This commitment demands efficient and equitable service provision, with the public sector leading the way and private and voluntary sectors playing a supportive role. Across the world, the pandemic has reinforced the case for a strong and efficient public sector in providing health services to all sections of people. Whether in testing, contact tracing, treatment or research, public health services and publicly funded institutions have led the way. Even the vaccine development process has emerged from foundational science of publicly funded research and trials of drugs and vaccines have received substantial funding and scientific leadership from government funded agencies.In India too, the pandemic response has been led by public institutions – from field-level public health measures and early mobilisation of hospital capacity to development of innovative paper-based diagnostic tests and indigenous vaccine development. An under-resourced public sector battled against odds to give a valiant response, from the slums of Mumbai to AIIMS in Delhi.The public sector has a mandated commitment to deliver primary care, while it is optional and unattractive to the organised private sector which prefers to operate in the more constricted but financially rewarding arena of advanced hospitalised care. The unorganised private sector is heterogenous and scattered, with no accountability or assurance of appropriate care. Even for secondary care, tier II-III cities in several states are unable to offer eligible private hospitals for accreditation to government-funded health insurance schemes while neglected district hospitals can provide those services if upgraded. There certainly are deficiencies in public health services. They must be corrected with higher public financing, expanded workforce, improved infrastructure and governance. The private sector can be encouraged to play a supportive role, with clearly defined deliverables and unambiguously framed accountability measures. For India’s mixed health system to serve better, we need a more responsive public sector, a more responsible private sector and a more resourceful voluntary sector. (The writer is President, Public Health Foundation of India)
Categories: Business News

Key crossover hints at more gains for ONGC

November 26, 2020 - 8:32am
Mumbai: Oil and Natural Gas Corporation (ONGC), a late entrant in the Dalal Street’s recent bull party, is showing promise after moving in a tight band in the past six months. Analysts said shares of the oil explorer, which soared 6.2 per cent to Rs 80.80 in a weak market on Wednesday after global crude prices firmed, broke past key technical hurdles in the trading session. Now, the stock is poised to advance as much as 15 per cent soon.ONGC shares crossed a crucial obstacle of Rs 77.40 — its 200 Day Moving Average (DMA) — on Wednesday. When a stock or an index breaks above the 200-DMA, it is said to be in a long-term bull trend and vice versa. “The ONGC stock after a sharp underperformance on an absolute basis now staged a breakout of its 200-DMA (daily moving average) of Rs 77.40,” said Sandeep Porwal, technical analyst, Ashika Stock Broking. “The sustainable swings above the Rs 77 shall result in a continuation of rally up to the Rs 86 and Rs 93; while it’s key support is placed at Rs 75.”ONGC is one of the cheapest stocks on the Nifty with a high dividend yield of 7 per cent. The shift in investor interest to value stocks has helped the stock shrug off its recent lethargy, with the share gaining 14 per cent in the past three trading sessions on higher volumes. About 6 crore ONGC shares were traded on an average in the past three days compared to 1.86 crore shares traded daily in the preceding 30 days. 79419261“Mean risk-reward is favourable for ONGC investors with attractive valuations and a combination of a likely change in gas pricing policy and downstream restructuring,” said Pinakin Parekh, analyst, JP Morgan.“ONGC is finally moving to simplify its downstream assets, which is a positive.”Oil prices, which have stabilized in the $40-45 per barrel range, rose about 4 per cent to $ 47.86 per barrel on Tuesday—a nine month high after the third breakthrough in coronavirus vaccine raised hopes of economic activity coming back on track. The stock has risen 33 per cent since March 23--when the market rebounded after the coronavirus-triggered sell-off—as against a 71 per cent advance in the Nifty.Analysts said ONGC’s crude subsidy burden has significantly eased following downstream sector reforms. Despite weaker oil prices of late, the company’s net realization has been protected due to a significant reduction in petroleum subsidies.“We believe ONGC will continue to benefit from the benign subsidy environment and its net realization will now closely track oil price,” said Jal Irani, analyst, Edelweiss Securities. “The proposed HPCL and MRPL merger is a good measure to optimise operations of its key subsidiaries, valuations are compelling at 4.3 times FY22 estimated price earnings ratio.”
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ETFs on Sensex and Nifty beat large-cap funds in returns

November 26, 2020 - 8:32am
ET Intelligence Group: The exchange traded funds (ETFs) having the Nifty 50 and the S&P BSE Sensex as underlying indices have outperformed the large-cap funds according to the data from the Association of Mutual Funds in India (AMFI). In addition, they showed higher growth in folio accounts than the latter thereby underscoring their rising popularity among investors.A sample of ETFs each with more than Rs 1,000 crore worth of assets under management (AUM) outperformed the large-cap funds of similar AUM size by 2.1% over the past year. The outperformance widens when the returns from the March lows are considered. The sample has gained 72.6% during the period compared with the 64.1% return of the large-cap funds.Rising weight of a handful of stocks in the benchmark indices Nifty and Sensex is cited as one of the reasons why large-cap funds have been lagging behind the ETFs. This is because the mutual funds cannot exceed the weight of any stock in the portfolio beyond the regulatory threshold of 10% of the portfolio size. Therefore, when the weight of a stock in an index increases due to consistent gain in its price, mutual funds are not able to track the stock’s movement effectively. ETFs face no such restrictions and hence are more efficient since their underlying is the index itself.For instance, the weight of Reliance Industries (RIL) in the Nifty increased by nearly 320 basis points to 13.2% in October from the March lows. Given the cap on the exposure to an individual stock, incremental buying in RIL by the domestic funds remains subdued. The top five heavyweight stocks of the Nifty 50 have a cumulative weight of 44%, while the large-cap funds have 38-39% weight in these stocks.Another factor that has pulled down the return of large-cap funds is their higher expense ratio. ETFs typically exhibit an expense ratio one-fifth of the large-cap funds.The total AUM of the sample ETFs expanded to Rs 1.6 lakh crore in November 2020, a gain of 84.2% from March lows. The AUM of large-cap funds rose by 62% to a similar level. ETFs received a net inflow of Rs 20,630 crore in the seven months to October while there was a net outflow of Rs 11 crore from the large-cap funds.The ETF folios have risen by 50% in 2020 so far, while those for the large-cap funds have increased by 8%. The ratio of the ETF folios to the large cap folios rose to 30% in October compared with 15% at the beginning of the year.
Categories: Business News

Football legend Diego Maradona no more

November 25, 2020 - 11:27pm
World soccer great Diego Armando Maradona, who died on Wednesday less than a month after his 60th birthday, was worshipped like a god for his genius with the ball, but his demons almost destroyed him.Maradona had died after suffering a heart attack at his home in the suburbs of Buenos Aires, those close to him confirmed.Rising to stardom from a grimy Buenos Aires slum to lead Argentina to World Cup victory, Maradona was a rags-to-riches story in his soccer-mad homeland and gained the iconic status of fellow Argentines Che Guevara and Evita Peron.One of the most gifted soccer players in history, Maradona's pinnacle of glory came when he captained Argentina to win the World Cup in 1986 before plunging to misery when he was kicked out the 1994 World Cup for doping.Years of drug use, overeating and alcoholism truncated a stellar career and altered his appearance from the lithe athlete who could slalom effortlessly through teams to a bloated addict who nearly died of cocaine-induced heart failure in 2000.But he reinvented himself in a stunning comeback in 2008 as coach of the Argentina team, persuading managers that with sheer charisma he could inspire the team to victory, despite a lack of coaching experience.A magician with the ball - deceptively quick and a visionary passer - Maradona is considered by some as the greatest soccer player ever, edging out that other great, Brazil's Pele. In Argentina, he was worshipped as 'El Dios' - The God - partly a play on words on his number 10 shirt, 'El Diez.'He was largely responsible for Argentina's World Cup victory in 1986 in Mexico, scoring two famous goals in one game against England in the quarter-finals.The first was a notorious goal scored with his fist, and the second, where he dribbled past half the England team, is often called the goal of the century."It was partly by the hand of God and partly with the head of Maradona," he said of his opener in the 2-1 win.On the ball from the startBorn on October 30, 1960 in the Buenos Aires working class suburb of Lanus, the fifth of eight children of a factory worker, Maradona grew up in the Villa Fiorito shanty town.His mother Dalma, known to his fans as "Dona Tota," saw a star reflected on the floor in the church where her son was baptized and imagined a bright future as an accountant.But Maradona's love affair with soccer was apparent from the start. Given his first football as an infant, he slept with it under his arm.Discovered in street kickabouts by the scout for first division club Argentinos Juniors, the prodigy made his league debut at 15.At 17 he just missed inclusion in Argentina's 1978 World Cup-winning squad at home. In the 1982 tournament in Spain, a sending-off against Brazil was a fitting prologue to two unhappy seasons at Barcelona, marred by hepatitis and injury.But then came liberation, and triumph. In 1984, he moved to Napoli for a then world-record $7.5 million contract. Maradona helped underdogs Napoli to the Italian title twice - creating a whole new set of adoring fans in the process.And, after the 1986 World Cup triumph in Mexico, he also coaxed a mediocre Argentine team to a second successive World Cup final in Rome in 1990.But by 1991, drugs and alcohol began taking over his life.That year Maradona was handed a 15-month suspension from football worldwide for doping and was called to trial in Naples over alleged links with a vice ring.He was banned again for 15 months after testing positive for drugs at the 1994 World Cup in the United States.The compact, 5-foot 4-inch (1.65m) player with dark curly hair and a pugnacious set to his jaw surrounded himself with an entourage of yes-men and became known for his sharp-tongued confrontations with reporters and critics.Through the years he reflected publicly on his greatness and on his weaknesses, publishing books of photos and quotes about himself and hosting a television show."Soccer is the most beautiful and healthy sport in the world. Soccer shouldn't have to pay for my mistakes. It's not the ball's fault," he said.Slow-motion suicide Maradona retired from professional soccer in 1997 and after his brush with death in 2000 he underwent drug rehabilitation, living off-and-on in Cuba between 2000 and 2005, where he often spent time with Fidel Castro. He had a tattoo of the Cuban leader on his leg - and one of fellow revolutionary Che on his arm.For many, his off-pitch sins overshadowed his genius."My main doubt is whether he has the sufficient greatness as a person to justify being honored by a worldwide audience," Pele said after a popular vote gave Maradona the FIFA century award in 2000, leaving Pele in second place.Argentine media obsessed over Maradona's addictive personality, with blanket coverage of his 2005 gastric bypass operation to lose weight and his 2007 hospitalization for life-threatening alcohol-induced hepatitis.Drug and alcohol experts called Maradona's abuse of one substance after another a slow-motion suicide.But Maradona cleaned up and bounced back. In 2008 he talked himself into a position as the coach of Argentina's national team.Many Argentines doubted he could get a talented squad of players to act as a coherent unit, and they seemed justified when the team barely squeaked through the qualifiers for the 2010 World Cup in South Africa, finally crashing out in the quarter-finals.Spells coaching in the United Arab Emirates were followed by a stint in charge of Mexican second division club Dorados de Sinaloa, before returning to Argentina to take over Gimnasia y Esgrima in La Plata in 2019.All the while, Maradona was never far from the front pages.During a rest cure in Italy, tax police confiscated his trademark diamond earring to help pay back taxes. In 2010 he was rushed to a hospital in the middle of the night for reconstructive surgery after one of his own dogs bit his lip.With his knees causing him increasing pain and his weight fluctuating, his mobility was hampered and his famous speed long gone.But fans remained devoted. From China to Europe, Argentines found they could make friends just by mentioning Maradona's name.Some created the Maradoniana Church, complete with its own religious imagery and 10 Commandments, one of which is, 'Make Diego your middle name and name your first son Diego.'Maradona was an antidote to upheaval for Argentina as it suffered successive economic crises and humiliating defeat to England after the 1982 conflict over the Falklands, or Malvinas Islands.And he was balm for the wounded soul of Argentines, obsessed with their country's perpetual failure to live up to its potential on the world stage."In our collective imagination Diego Maradona represents a certain glorious past, he's a symbol of what we might have been," popular culture professor at Buenos Aires University and Maradona expert Pablo Alabarces has said."He will always be forgiven," said Maradona fan Marcelo Pose, a Buenos Aires attorney.
Categories: Business News

Amazon fined for not displaying mandatory information about products

November 25, 2020 - 11:27pm
New Delhi: The government has imposed a penalty on e-commerce major Amazon for not displaying mandatory information, including the country of origin, of products sold on its platform, according to an official order. Last month, the consumer affairs ministry had issued notices to e-commerce majors Flipkart and Amazon for not displaying such information. The ministry had also asked states to ensure that all e-commerce firms comply with the Legal Metrology (Packaged Commodities) Rules. Penalty has been imposed on Amazon as its reply to the notice was not found satisfactory, as per the order issued by the ministry dated November 19. As per law, Amazon as been fined Rs 25,000 per director for the first offence, a senior official of the ministry said. Flipkart has not been fined, the official added. An email sent to Amazon on the matter did not elicit any immediate response. In the notice issued last month, the consumer affairs ministry had said, "It has been brought into notice that some of the e-commerce entities are not displaying the mandatory declaration on digital platforms required under the Legal Metrology (Packaged Commodities) Rules, 2011." In similarly worded notices, the ministry had said Flipkart India Pvt Ltd and Amazon Development Centre India Pvt Ltd have to ensure that all mandatory declarations are displayed on the digital and electronic network used for e-commerce transactions.
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$240 million equity infusion, acquisition and IPO plans: Inside JSW Group's expansion strategy

November 25, 2020 - 11:27pm
Mumbai: The JSW Group has appointed Citibank and O3 Capital as lead investment bankers to raise equity capital for JSW Cement and JSW Paints, respectively, to fund its latest round of expansion before the two businesses go public.Citibank has a mandate to raise around $200 million and O3 Capital around $40 million by the end of FY 21.“Currently we are in the market for a capital raise for our paints and cement businesses,” Parth Jindal, managing director of the two companies, told ET. “Citibank has been appointed as the lead banker for JSW Cement and O3 Capital, a boutique investment bank, has been mandated with the fund raise for JSW Paints.”With the planned investments, the cement company expects to double its capacity of 25 mt to 50 mt by 2026 after the planned initial public offer (IPO) is completed.“I have made a robust 50 MT strategy for JSW Cement within India. Once we get the IPO out of the way and we have more funds at our disposal, then we can really look at going from 25 mt to 50 mt, which is very much possible,” Jindal said.JSW Cement's subsidiary, Shiva Cement Limited, Wednesday announced it would invest more than Rs 1,500 crore in a 1.36 million tonne clinker project to be established in the Sundergarh district of Odisha. JSW Cement has also planned around 20 million tonnes of expansion in the north and central regions, and aims to become a pan-India player by the end of FY 21.“JSW Cement is not present in the north and central parts of the country. It is very important for us to set up facilities in Rajasthan, Madhya Pradesh and Chhattisgarh,” Jindal said.JSW Cement has acquired limestone mines in Rajasthan and Chhattisgarh. The company will be setting up a clinker facility in Rajasthan and Chhattisgarh, with split grinding units in Haryana, Punjab, Bihar and Uttar Pradesh.“The master plan is to set up a 10 million tonne facility in Rajasthan…so we can also strategically enter the Himachal pradesh market. There is another 10 mt planned for Chhattisgarh,” Jindal said.JSW Cement is also eyeing Gujarat’s ABG cement for acquisition.“A lot of companies are already acquired by either UltraTech or Nuvoco…However the only real one which is of size and scale is ABG Cement in Gujarat…We are looking at it as well, but the big daddies are also eyeing it, which makes it more difficult to compete with,” Jindal said. JSW Paints is likely to turn positive in FY 21 with turnover almost doubling to Rs 500 crore, Jindal said.“With the new capital we are raising, we would be looking to double the turnover to about Rs 1000 crore in FY 22. Now we are looking at expanding our capacities further,” Jindal said.On the outlook for FY21, Jindal said that the rural segment continues to remain strong, and urban demand is back in the third quarter.“Infra projects have picked up and real estate, which was muted for several years, is seeing some greenshoots. Indian cement industry will de-grow only by 7% y-oy- given a 29% degrowth in the first half of FY21; so we are very bullish,” he said.
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Why HNI investors are looking to flee Srei Group-issued bonds

November 25, 2020 - 11:27pm
MUMBAI: High net-worth investors are keen to sell the outstanding bonds at SREI Group amid concerns that a central bank audit might generate adverse results, further denting the value of the instruments.Bond prices plunged pushing yields up. Since November 23, the first working day after the Reserve Bank of India (RBI) ordered a special audit into SREI’s books, bond prices plunged 13.5%.A particular bond series for Srei Equipment Finance, maturing in 2028, saw its price drop to Rs 666.01 (adjusted for interest) compared with Rs 770 on Monday.“In the past few months, investors have been looking to exit Srei’s bonds. This has intensified after RBI’s proposed audit for the company’s books of accounts,” said a Mumbai-based wealth manager.Wealthy investors, market sources said, are reaching out to wealth managers, with brokers offering to offload those bonds at deep discounts. Yields on offer ranged up to 25% for bonds with shorter duration residual maturities, dealers said. Those bonds had offered coupons in the range of 9-12%.Buyers are scarce in an illiquid secondary market. Wealth managers, however, are trying to tap a few distressed asset buyers.The company has an outstanding of about Rs 2,627 crore worth of bonds (until March 31 this year) via public and private issuances. In the past, the non-banking finance company had to cancel its last public bond sales due to a rating cut that coincided with the proposed issue.Earlier this month, CARE Ratings placed several SREI instruments under a credit watch.“Brickwork Ratings India Pvt Ltd (Brickwork) has revised the ratings for Perpetual Debt Instrument aggregating to Rs 10 crore of the company," SREI Infrastructure Finance said in a regulatory filing on November 21.SREI group issued bonds under two entities: Srei Infrastructure Finance and Srei Equipment Finance. The group proposed to merge both the companies to make it a single entity.“Investors got wind of the group’s deteriorating financials although the issuer has been making bond interest/repayments,” said an asset manager who has dealt with those securities. There is a clear liquidity problem for the group, the person said.RBI is conducting a special audit into Srei Infrastructure Finance, hinting that something might be amiss at the financier that has more than Rs 30,000 crore in outstanding loans. The company, on its part, has described the audit as a ‘regular’ regulatory scrutiny."SEFL only has the option of restructuring… its assets and not its liabilities. The resultant asset liability mismatch has forced SEFL to enter into certain arrangements with the secured creditors,” Care Ratings said in a report on November 9. Some of the lenders have already rescheduled Srei’s loans.
Categories: Business News

India TWS market grows 723% in Q3 2020

November 25, 2020 - 8:24pm
NEW DELHI: India's TWS (True Wireless Stereo, commonly known as earbuds) market clocked its highest-ever growth of 723 per cent year-on-year in the September 2020 quarter, with shipments of about 6 million units, according to Counterpoint Research."It is one of the few segments which managed to defy the impact of economic slowdown, reaching its highest ever growth in shipments for a single quarter," it said in a report.The growth was led by Boat, which cornered 18 per cent market share. This was followed by Xiaomi (16 per cent), Realme (12 per cent), JBL (8 per cent) and Apple (6 per cent)."Inventory build-up prior to the festive season, along with a good number of new launches and entry of new players like OnePlus, vivo and Infinix, drove this substantial TWS growth."Besides, work-from-home and study-from-home due to the COVID-19 pandemic continued to boost demand," Counterpoint Research Associate Anam Padha said.Counterpoint Research Analyst Shilpi Jain said most of the smartphone manufacturers now have entered the CIOT (consumer Internet of Things) segment and are expanding their TWS portfolios across price tiers to benefit from the huge potential it holds."Increase in 'stay at home' activities due to the COVID-19 pandemic have also boosted the demand for TWS. The smartphone OEMs have managed to carve a significant place for themselves in the segment by leveraging their already established brand awareness and sales channels," she added.Jain said the India TWS average selling price (ASP) has increased for the first time since 2019, largely due to the increase in Apple AirPods shipments and new launches in higher price tiers.Apple's decision to not include wired EarPods with its new iPhone 12 series evidently helped it to increase the demand for AirPods, she said.In a separate statement, Boat said it has seen 385 per cent growth in the TWS category in the September quarter over the June 2020 quarter.Overall, the TWS category has grown by 172 per cent since the earlier quarter, while Boat has grown by 385 per cent during the same period, it said.Boat said in January this year, it sold around 40 per cent wired and 60 per cent wireless products. As of November 2020, the sales for wireless have increased to 70 per cent with wired at 30 per cent."Being an Indian brand, boAt understood the requirement of its target group ie the millennials who cannot be influenced through traditional marketing strategies but through quality experience."The Counterpoint report is a result of our commitment towards boAtheads to provide them a product that isn't just fashionable and aspirational but affordable," Boat Audio co-founder Aman Gupta said.The company already has a community of over 3 million consumers. It has witnessed a 20 per cent surge in demand for its products amid the pandemic and currently sells more than 15,000 units a day as against 8000-10,000 in pre-COVID times.
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SC adjourns OTSC hearing to next week

November 25, 2020 - 8:24pm
Mumbai: The Supreme Court on Wednesday adjourned until next week hearing in the one-time spectrum charge (OTSC) case, in what may be the culmination of another battle between the government and the telcos over statutory dues. This will be a high impact case. If the ruling is in favour of the telcos, then it can reduce their liability by more than 60% of the Rs 25,000 crore amount being demanded by the telecom department. Airtel and Vodafone Idea, like in the adjusted gross revenue (AGR) will again be the most impacted by the ruling in the OTSC case.The OTSC dues are based on DoT rules that require a telco holding beyond 6.2 MHz/circle between July 2008 and December 31, 2012, to pay a one-time market-linked price for the excess spectrum held. Likewise, the telcos are required to pay the market price for airwave holdings beyond 4.4 MHz/circle between January 2013 till the expiry of their respective licences. Airtel two quarters ago had made provisions of Rs 7,004 crore in its exceptional item, mostly on account of OTSC dues.Vi had recognised Rs 3890 crore in its exceptional items in the March end quarter towards providing for OTSC dues. The tussle started with the government’s decision to charge telecom operators OTSC in the wake of the Supreme Court cancelling 122 telecom permits in 2012, under the alleged 2G scan which declared airwaves as public goods which were best utilised through an auction.The cabinet had then decided to levy an OTSC on telcos that were allocated spectrum along with pan-India licences at Rs 1,658 crore. Under the subscriber linked criteria followed previously, telcos were given additional tranches of spectrum after they reached a certain subscriber base in a circle. However, the UPA II government then changed the policy and announced that all airwaves allocated beyond 4.4 Mhz will be charged for at a market rate.But the telcos protested this move on retrospective dues. The matter went to Telecom Disputes Appellate Tribunal (TDSAT) which ruled in July 2019 that the OTSC could be levied prospectively, not retrospectively.TDSAT had observed that demand for such dues needed to come with the option of surrendering spectrum. So while the demand notice of 2012, came in with dues retrospect from 2008, the option of surrendering airwaves was given only from 2012 onwards and not from 2008.The DoT then moved SC and the highest court refused to stay TDSAT order.
Categories: Business News

IATA urges Centre to support Indian airlines to tide over COVID crisis

November 25, 2020 - 8:24pm
New Delhi: The central government should change its position and support the Indian airlines and other aviation stakeholders in the face of COVID-19 crisis, a top official of global airlines body IATA said on Wednesday. The Indian carriers have laid off employees, cut salaries and posted significant losses during the last few quarters as coronavirus-induced travel restrictions have drastically impacted the aviation sector. "The Indian government has not engaged in support for airlines and we do urge them to change that position and to assist the airlines and airports and other aviation stakeholders," IATA Regional Vice President for Asia Pacific region, Conrad Clifford said. This is something that we continue to encourage and urge the Indian government to do, he said at a virtual press conference. The Indian airlines have sought an interest-free credit line of at least USD 1.5 billion for the coronavirus-impacted aviation sector, Civil Aviation Minister Hardeep Singh Puri had told the Rajya Sabha on September 16. The airlines have sought relief from the government by asking that banks and financial institutions may be directed by the Centre to defer repayments of loans to the aviation industry by six months, the minister had noted. Clifford said given the increase in domestic activity in India, he hopes that the Indian carriers would get back to a cash positive situation, possibly more quickly than the carriers that do not have a strong domestic market. The International Air Transport Association (IATA) represents around 290 airlines across the world comprising 82 per cent of the global air traffic. "The progressive raising of the limitation by the Indian authorities is actually being matched by demand... and I do expect that trend to continue so it is very welcome to be raising the restriction, which the authorities have been doing progressively," Clifford said. Since May, the country has gradually raised the limit on the number of domestic flights that the Indian carriers can operate. India had resumed scheduled domestic passenger services from May 25, after a gap of two months due to the coronavirus-triggered lockdown. However, the airlines were allowed to operate not more than 33 per cent of their pre-COVID domestic flights. On June 26, this was increased to 45 per cent, and on September 2, it was further increased to 60 per cent. This cap was extended to 70 per cent on November 11. The cap raise is leading to increased passenger traffic and number of flights, Clifford added. Scheduled international passenger flights continue to remain suspended in the country since March 23 due to the pandemic. However, Indian airlines have been permitted to operate special international flights under the Vande Bharat Mission since May this year and under the bilateral air bubble pacts since July.
Categories: Business News

CCEA nod to Rs 2,480 cr FDI in ATC Telecom

November 25, 2020 - 5:24pm
The government has approved a proposal involving foreign direct investment of Rs 2,480 crore by ATC Asia Pacific for purchasing about 12 per cent stock of ATC Telecom, Union minister Prakash Javadekar said on Wednesday. The investment underlines the growing confidence of investors in India's telecom sector and its infrastructure, he said. "Today, CCEA allowed FDI by ATC Asia Pacific Ltd to the tune of Rs 2,480 crore...for purchasing 12 per cent stock of ATC Telecom," Javadekar told reporters after the meeting of the Cabinet.
Categories: Business News

After Diwali boost, real estate developers expect to ride out demand for the rest of 2020

November 25, 2020 - 5:24pm
NEW DELHI: Real estate developers are expecting the sales momentum generated during the Diwali season to last till the year end after better than expected off take of housing units in the last month and a half due to release of pent-up demand, great discounts in the market and accommodative steps taken by the government. Multiple developers told ET that sales during the festive season has been better than last year and now they feel confident of strong demand even in next few months if they continue with discounts. “We have received an encouraging response in this Diwali festive season with over 50% increase in sales queries vis-a-vis last year. Govt initiatives in infrastructure building / people moving to their hometown have been instrumental in boosting this growth,” said Santosh Agarwal, CFO, AlphaCorp. Brokerage firm Square Yards said that the company’s overall property transactions grew 5% on-year during the recently ended quarter as against an industry drop of 50% in sales volumes. “Through the Diwali week alone, over 4500 home seekers walked in and booked more than 350 properties on the spots by paying the entire booking amount (not just EOIs), amounting to a gross transactions value of over Rs 225 crore,” said Kanika Gupta Shori, COO, Square Yards.Market watchers feel the festival season provided respite for the real estate sector as many developers clocked in strong sales over the last month and a half, thus stabilising cash flows. “This goes to show that despite the challenging macro environment there are consumers in the market, who remain interested in buying homes. The Covid-19 pandemic has reinforced the importance of owning a home and that was visible in the sales numbers during the festival season,” he said. Rajasthan-based Bhumika group, Noida-based ABA corp, and brokerage firm 360 Realtors also reported high number of sales and attributed it to optimism in the market.“During Navratras, we received good traction for our newly launched plots as well as ready to move-in units. The momentum continued closer to Diwali and we have witnessed reasonable traction from customers despite the outbreak of 3rd wave of Corona cases in NCR region,” said Amit Raj Jain, Head of Sales, BPTP Ltd.According to a report by property consultant JLL, home purchase affordability improved across key Indian cities despite a bigger fall in annual household income as compared to residential property prices.“We can attribute the increase in buyer sentiment due to multiple factors such as advanced status of construction of our projects, low interest rates and an overall positive sentiment towards purchase of property,” said Uddhav Poddar, MD, Bhumika Group & Area Director, Entrepreneurs Organisation (South Asia).Sales figures from July to September by property consultants pointed to signs of a recovery in the real-estate sector, though some of this growth could potentially be attributed to pent-up demand due to the prolonged lockdown across the country in the prior quarter due to the pandemic.“The real estate is sentiment-driven, and post Covid-19 pandemic people thronged to the building sites to check out real estate assets investment or self-use,” said Amit Modi, Director ABA Corp & President (elect) CREDAI Western UP.A brokerage firm 360 Realtors said that during the Diwali month, sales jumped by 85 to 90 percent on a month on month basis. “There is optimism in the market due to the steps taken by the authorities and people’s realisation about the importance of a real estate asset,” said Sanjeev Arora, Director, 360 Realtors.
Categories: Business News

Ecommerce fires Bengaluru airport to hit 26-month high cargo shipment

November 25, 2020 - 5:24pm
Bengaluru: The Kempegowda International airport in Bengaluru has processed 34,339 metric tonnes MT) of cargo in October, recording a 26-month high in tonnage.The airport witnessed a highest-ever domestic outbound tonnage of 8,117 MT in October, largely driven by e-commerce shipments, according to a press release from the airport operator, BIAL .Perishable commodities, which have been the major growth driver for the airport in the year 2020-21, continued to be the top international commodity, accounting for 12% of total exports in October. Doha emerged as the top destination in October 2020, with 1,095 MT of cargo. 79408666After becoming the first airport in India to record positive growth in September 2020, the trend has continued in October 2020 as well, registering a 0.1 % increase compared to October 2019.The record single-day Air Traffic Movement (ATM) was 52 ATMs on October 22, with the day witnessing a volume of 1,359 MT of Cargo, the press release added.
Categories: Business News

What made Raamdeo Agrawal enter stocks, adopt Buffettology

November 25, 2020 - 5:24pm
It is not usual for people to make stock market a career choice, not in 1980s. But Dalal Street veteran Raamdeo Agrawal says that was exactly the case with him: he chose stock market as his first career choice.The market veteran says he received several job offers after completing his education as a chartered accountant in 1983, but did not appear for any of the interviews. "I knew I wanted to die in the stock market," said he at an event on Tuesday .“In those days, there was no job for ‘analysts’,” Raamdeo recalls. So when he saw an advertisement for an analyst job by late RK Piparia, he decided to apply, and ended up being the only applicant for the post.“In my first two years of research, I used to go to office at 10 am and leave at 10 pm. Many times, I used to skip lunch. I was quite dedicated and I learnt a lot. That was the basic foundation that I built at Motilal Oswal,” he said.“Information was scarce in that era unlike today when there is an overload," he said.Raamdeo said when he met Motilal, the latter was also interested in the stock market and had a brother working in the premium market in Ahmedabad. So the two had a set of readymade client to start with.“Doing business without money is important,” Raamdeo said, and suggested that good most early-stage enterprises find a business model where capital is not required to make money.Today’s new entrepreneurs say “with your money and my brilliant idea I will try to make money. But in the old days, the risk of losing out was with you only. If you fail, you go to the gutter. If you win, you become Motilal Oswal,” Raamdeo said.He said during 1987-1994, he used to think he was very smart at investing. “But in 1994, one of my dear friends introduced me to Berkshire Hathaway and asked me to study its balance sheet. At that time, I did not know anything about Berkshire or Warren Buffett. When I studied those 30 pages, it opened my eyes. I realised I knew little of investing. Buffett became my guru,” he said.Raamdeo said, he used to read one Berkshire balance sheet of the 1965-1994 period every day.“That changed me completely. If one reads Buffett’s annual letters from 1965 to 1994, that is where the actual Buffettology lies. He wrote those letters with his own hands. I learnt from them immensely. I converted my portfolio of 25 shares into 15 companies. I had doubled the portfolio the same year. Since then, I have never had an unfocused strategy,” he said.Raamdeo said he started going to Omaha every year to learn. “Now we go there out of respect. Earlier there was no other way to go and listen to him. My DNA got adopted to Buffettology,” he said.In his early life, Raamdeo was an avid reader of balance sheets and fictional books, which helped him build his thought process on the huge money that could be made from equities.Agrawal said he was from a well-off family, even though his parents were farmers. He had no connection with the stock market whatsoever.“The excitement to make a lot of money was high. As a chartered accountant, I knew what exactly was happening in the stock market, how entrepreneurship works and how businesses make money. Those things really exited me and my brother was willing to lend me Rs 4-5 lakh. That combination helped me enter the stock market,” Raamdeo recalled.
Categories: Business News

GSK launches global oral care brand Polident in India

November 25, 2020 - 2:23pm
NEW DELHI: Consumer healthcare products maker GSK Consumer Healthcare on Wednesday announced the launch of global oral care and denture care brand Polident in India. With the introduction, GSK India has entered the specialised denture care category.“One of every seven Indians above the age of 45 wears a denture. Only 5% of these denture wearers use specialist care products,” GSK Consumer Healthcare area marketing director, oral health, Anurita Chopra said in a statement.Dental experts and chemists will play a critical role in establishing the category in India, GSK said in the statement. “The company will work with experts, who will develop India’s first denture care guidelines. These will put in place a go-to-guide for use of the specialised products in the country,” the statement said.GSK’s other oral care brand in India is Sensodyne toothpaste for sensitive teeth. Significant players in the oral care market in the country include Colgate-Palmolive, Hindustan Unilever’s Pepsodent and Dabur’s Red and Babool brands.In April this year, consumer goods giant HUL and GSK completed their merger, following which GSK Consumer's health drinks brands Horlicks, Boost, Maltova and Viva were formally brought under HUL. In December 2018, HUL had announced it would merge GSK Consumer Healthcare India with itself in a deal valued at Rs 31,700 crore.Post the merger, GSK Consumer’s standalone healthcare division comprises over-the-counter brands Sensodyne, Eno, Crocin and Otrivin.
Categories: Business News

Xiaomi sees huge potential in India over five years due to high feature phone base, says CEO

November 25, 2020 - 2:23pm
KOLKATA: Chinese smartphone maker Xiaomi Corp founder chairman and CEO Lei Jun said the company sees huge potential of conversion of feature phone users in Indian villages to smartphones which would boost growth of the company in the country over the next five years.Addressing analysts during the company’s July-September quarter earnings call on Tuesday, Jun said the Indian smartphone market is about 130-50 million units every year with another 150 million feature phones.“So that means, we have a lot of work to do, right? We should continue to innovate to make very cost effective high-performance smartphones to serve the Indian consumers,” he said.Jun said Xiaomi will build the sales channels down to the countryside till the villages so that consumers there are equipped with mobile internet which would hopefully change their lives and make it better. “This is our plan. So overall, I think…we're very, very optimistic about the future growth for the next maybe five years,” he said.Xiaomi reported 55% growth in revenue in the September quarter this year as compared to last from the rest of the world geographies which is mainly from India and Europe.Jun said Xiaomi is sustaining its smartphone leadership in the Indian market for 13 quarters now. He said the Indian market is now equally divided between online and offline channels with each contributing 50% sales. This, he said, requires a more balanced approach if Xiaomi wants to be successful in India.“Right now, we have established a system to cover the major market, including Europe, Latin America, Middle East, and Southeast Asian countries, and India,” he said.Jun said Xiaomi is seeing a global recovery in sales from the July-September quarter after the impact in business in the previous two quarters of the year due to the pandemic. However, he said there are tough challenges in supplies due to supplier shortage."So we are closely monitoring the status of the pandemic in Europe, in India,” he said. Jun is hopeful and optimistic of next year due to the vaccine roll out which is almost ready.Xiaomi said as of September 30, it had 20,881 full-time employees of which 19,319 were based in mainland China mainly in its Beijing headquarters, with the rest in India and Indonesia.
Categories: Business News

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