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Rich Indians join the global party in vaccine company stocks

November 20, 2020 - 7:53am
Mumbai: Rich Indians have joined the global investment game of buying stocks of pharma MNCs at the frontline of Covid vaccine development. In the last couple of months, especially in recent weeks, many high networth individuals and even a few retail investors have bought stocks of Moderna, Pfizer, Johnson & Johnson, AstraZeneca, GlaxoSmithKline, Abbott and Sanofi.It’s all perfectly aboveboard – the stock buys happen via the Liberalised Remittance Scheme (LRS). “The trend of diversifying assets and hedging strategies away from home markets took off in 2014-15 and accelerated during the course of the pandemic around March and April this year,” said Nitin Shakdher, a professional institutional investor and founder of Green Capital Single Family Office. Many Platforms to Choose From“Recently we have seen accumulation in pharma stocks such as Pfizer, AstraZeneca, Abott and Sanofi both at home and in the international market,” he added.Moderna and Pfizer shares have rallied after the companies said their Covid-19 vaccines have achieved more than 94% and 90% efficacy, respectively, in phase-3 trials. Moderna has jumped over 33% since November 1 on NYSE while Pfizer, Johnson & Johnson, AstraZeneca and GlaxoSmithKline have gained between 8% and 12%.Rajiv Modi, CEO of Ahmedabad-based Cadila Pharmaceuticals, owns over 400,000 Novavax shares, currently worth $36 million. Modi is also on the board of Novavax, which is developing a Covid vaccine. The company’s shares surged from $3.98 on December 31, 2019 to hit an all-time high of $133.93 on July 24 this year. On Thursday, its shares were trading at $90 on NASDAQ.Under the LRS route, Indians can invest up to $250,000 in foreign stocks. A lot of domestic brokerages and standalone platforms such as ICICI Securities, Axis Securities, Kotak Securities, HDFC Securities, Geojit Financial Services, Upstox, Mastertrust, Winvesta, Stockal, among others, are now allowing Indians to invest directly in the US stock market.There is no minimum investment size and retail investors can invest as low as $1 for high priced shares by making investment in less than one stock.A few international brokerage firms such as Interactive Brokers, TD Ameritrade, Charles Schwab also allow Indians to set up an account and trade in US stocks, mutual funds and ETFs.“There has been a substantial increase in demand from HNIs, retail investors and those who track global equity investment markets for investing in global equities” said Satish Menon, executive director of Geojit Financial Services. “Since the beginning of 2020, Indian retail investors have bought over Rs 350 crore in overseas markets.”Some domestic wealth managers said global pharma stocks are “too speculative nowadays” and investments of Indians in them are still substantially lower compared to those in US IT stocks.“Currently only savvy investors are showing strong intent to spread risk and expand equity investment globally by betting in tech and pharma stocks listed in the US,” said B Gopkumar, CEO, Axis Securities. “But this trend may pick up going forward as many platforms have emerged in the last few months which offers investment in global stocks”.
Categories: Business News

Why regulating OTT platforms is over the top

November 20, 2020 - 1:51am
New technology — especially when it’s alluring — can be frightening for some. But some of these people can be smart enough to use this ‘fright’ to push for a larger, less obvious agenda. Take the 19th-20th-century American composer John Philip Sousa. With the music recording industry in its infancy, Sousa wrote a searing essay in 1906 against early wax cylinder records, ‘Now, in this the twentieth century, come these talking and playing machines, and offer again to reduce the expression of music to a mathematical system of megaphones, wheels, cogs, disks, cylinders.’Sousa, a patriot whose livelihood as a composer-conductor of ‘live’ military marches was threatened by the newfangled tech, added as a warning, ‘What of the national throat? What of the national chest? Will it not shrink? When a mother can turn on the phonograph with the same ease that she applies to the electric light will she croon her baby to slumber with sweet lullabys, or will the infant be put to sleep by machinery?’ At a congressional hearing the same year, he vociferously argued, ‘These talking machines are going to ruin the artistic development of music in this country.’ From all reports, Americans continued to make decent music, one of them even earning a Nobel Prize in Literature for his songs in 2016.In 2020 India, Sousa’s Bogey is not ‘canned music’ but over-the-top (OTT) streaming content. On October 12, the Supreme Court, responding to a PIL made by two advocates, Shashank Shekhar Jha and Apurva Arhatia, gave notice to GoI, the ministry of information and broadcasting, and the Internet and Mobile Association of India (IAMAI), to react to the petitioners’ demand that ‘a proper board/institution/association for the monitoring and management of content on different OTT/Streaming and digital media platform’ be set up.Jha and Arhatia were deeply concerned about how the absence of censoring of OTTs allows ‘exploitation of creative liberty’, which ‘pushes the limits on depicting infringements of social mores, such as brutality, scenes and disgusting dialects’. They insisted on the need to ‘keep the value system intact’, adding, ‘That Hotstar is airing foreign series like Game of Thrones, Amazon airing movies like The Wolf of Wall Street, Netflix airing movies like 365 Days etc. in India which are having various scenes inappropriate for the households including nudity, sexy [sic], drugs, smoke, crime etc’. Not to sound anti-international, they pointed out Indian series and films like Mirzapur, Paatal Lok, Sacred Games and Koffee with Karan being full of ‘unseemly content for ordinary families and isn’t exposed to any balance by any administration, which this way is destructive for society at large’.Too Hotstar to HandleA month later, GoI reacted by issuing a gazette notification bringing digital audio-visual content — without distinguishing films and web shows on OTT streaming platforms from news and current affairs on online platforms — under the I&B ministry from the earlier nuts-and-bolts ambit of the ministry of electronics and information technology.On the face of it, the move is unsurprising, considering a Nanny State has been the ‘old normal’ for the film industry. OTT streaming services like Netflix, Hotstar, Amazon Prime, etc, allowed a ‘room for grown-ups’, not only in terms of what could be viewed in people’s living or bedrooms, but also when and where. Instead of a level-playing ground pushing cinemas to screen films with scenes that grown-ups could watch without Bablis and Buntys being told to shut their eyes, OTTs have now been made to come under Cinema Chaachi’s purview.Even before the GoI notification, the Akshay Kumar-starring horror-comedy film, Laxmii Bomb (renamed Laxmii, because that kind of ‘derogatory’ nomenclature has been culturally sanctioned only for the ‘Kali Patakha’), released on Hotstar — not released in theatres due to Covid-19 — received the ‘cinema hall’ reaction from the usual suspects, ‘Hindu sentiments outraged by making fun of Hindu beliefs (while showing Muslim superstitions in a beneficial light!)’. With no dearth of ‘outrageable film critics’ lined up, one can expect new Mirzapurs and Sacred Games to speak in chaste Hindi and show less flash and flesh being streamed.The fact that OTT content — showing what can be achieved when no one is constantly peering over a ‘content creator’s’ shoulders — is eating into the old cable industry’s territory worldwide gives at least one lobby a ‘motive’ to cut this new channel for entertainment down to size. But, technologically, this is a losing game. Speaking about the ‘OTT vs network’ battle played out in the US five years ago, former Time Warner CEO Jeff Bewkes stated what should have been (but isn’t) obvious to Indian authorities, ‘The basic cable networks didn’t have full video-on-demand. We were reliant on advertising. It’s not that the streamers had superior programming, they had superior technology.’ Today, ‘cord-cutting’ is no longer niche. From a high of 105 million in 2010, the number of pay-TV households in the US came down to about 86.5 million in August 2019 — this, before the surge in streaming post-Covid. This number is estimated to go down to at least 72.7 million in the next three years. Indian consumers do not inhabit a different planet.WhatsApp With the Times?But what is ‘strange’ is the conflation made here of ‘news and current affairs’ and ‘entertainment’. In the name of controlling ‘fake news’ that platforms like Facebook, WhatsApp and Google continue to pass the buck on, content like films and web series are also being brought under the scanner. It’s not as if OTT entertainment falls outside the purview of Indian laws.Content considered to promote enmity, hatred and ill-will… ‘with deliberate and malicious intention’ falls under Sections 153(A) and 295(A) of the Indian Penal Code. Child pornography, extolling terrorism, etc, fall under the Information and Technology Act. In terms of tax laws, too, OTT services fall under Online Information Database Access and Retrieval (Oidar) in the goods and services tax (GST).Perhaps the clue to OTT government chaperoning lies in (loss of) command and control concerns elsewhere. With media companies shifting their best — and most popular — content to existing, or their own new streaming, services, a burgeoning industry waits to be tapped by tappers and file-pushers. If, in the process, the ‘original’ job of sifting the wheat of information and broadcasting from the chaff of fake news, hate speech, etc, is outsourced to GoI, the likes of Facebook and Google may well be sitting prettiest in this latest victory for our latter-day, tech and innovation-phobic John Philip Sousas.Views expressed are author's own
Categories: Business News

Indian steel mills hike prices by Rs 750- Rs 1000 per tonne as demand improves

November 20, 2020 - 1:51am
MUMBAI: Debates over the shape of the economic recovery underway have virtually exhausted the alphabet. But the steadily rising prices of steel – perhaps a more accurate gauge of aggregate demand than any academic analysis – point to a V-shaped rebound.That helps explain the second price increase by Indian steel mills in three weeks – prices have been raised by around Rs 750- Rs 1,000 per tonne this time.As per industry sources, JSW Steel and ArcelorMittal Nippon Steel (AMNS) raised prices by Rs 750 per tonne, whereas JSPL has hiked by around Rs 1,000 per tonne effective November 18. SAIL has hiked prices by Rs 1,250 per tonne and Tata Steel will also likely be raising prices.In the beginning of the month, top steelmakers announced a price hike of hot-rolled coils (HRC) and cold-rolled coils (CRC) by INR 1,000-1,500/tonne on the back of better auto demand.“During March and April, Indian manufacturers priced their products reasonably lower to clear inventory and focussed on exports. Now the pent-up demand is pushing prices,” said Saurabh Bhatnagar, National Leader, Metals & Mining, EY India.Festive season has boosted the auto sector, which consumes high-grade steel. Demand has gone up reasonably well in infrastructure segments like roads, ports and railways too.As per analysts and industry sources, JSW Steel is offering HRC at Rs 44,750 - 45,000/t and CRC at Rs 54,150/t. AMNS India is offering CRC prices Rs 54,000/t and JSPL is offering at around Rs 45,000 per tonne.“The recovery in the auto and white goods segments globally is likely to sustain the steel price hike in the near term,” Amit Dixit, research analyst, Edelweiss Institutional Equities, said in a report.Steelmakers are also witnessing a shortage in iron ore which is aiding to the steep price hikes. State-owned iron ore producer NMDC has hiked prices of lump ore for the second time this month by Rs 400 per tonne and that of fines by around Rs 300 per tonne.“Iron ore is also one of the reasons for the steel price hikes. There has been no investment in the iron ore mining segment in India to improve efficiency for a long time. The supply gap is still persistent in iron ore, which is leading to a push in prices,” EY’s Bhatnagar said.“Everyone will be affected due to iron ore price hikes. This will also lead to an increase in the steel prices going ahead,” said JSPL's managing director, V.R. Sharma, in an interaction."Iron ore integrated players is likely to benefit more and NMDC has more headroom to rise prices further", said Edelweiss' Dixit.Steelmakers earnings should improve further as prices of the other significant raw material, coking coal, have remained stable.“The turnaround for domestic companies could not be starker. From the lowest Ebitda over the past several quarters in Q1FY21, we expect Q3FY21 to be dreamlike,” said Dixit in a report.“We expect Tata Steel and SAIL to benefit the most due to iron ore integration in India operations. On the regional front, we are positive on price hike and inventory reduction in China, indicating a pickup in demand,” the report said.Industries such as makers of engineering and electrical goods will have to negotiate higher input costs.“A recent sharp rise in steel prices has dealt a crippling impact on the country's engineering exports, which are facing the most challenging global markets,” said Engineering Export Promotion Council India Chairman Mahesh Desai.
Categories: Business News

Vaccines that can help India in its fight

November 19, 2020 - 10:51pm
NEW DELHI: The global race to create vaccines against the novel coronavirus has entered a critical stretch, with Pfizer and Moderna releasing very promising final trial data that has raised the hopes of nations struggling to fight the pandemic. Pfizer, which reported 95% efficacy, has now sought early regulatory approval. Experts have said that vaccines like Pfizer that requires super-cold storage may not be ideal for India and will pose a logistical hurdle. However, India is still in various stages of talks with at least half-a-dozen companies, including Pfizer, to manufacture and procure vaccines for a population of 1.3 billion people. Here are the various vaccine options that provide a ray of hope in the fight against Covid-19 pandemic and how beneficial they could be for India.Oxford-AstraZenecaAmong India’s vaccine deals, the Oxford-AstraZeneca candidate is the most promising.India's Serum Institute had entered into a manufacturing partnership with AstraZeneca to produce and supply 1 billion doses of the Covid-19 vaccine.According to ICMR, the candidate, locally called Covishield, is the most advanced vaccine in human testing in India with Phase 3 trials nearing completion.Based on the Phase 2/3 trial data, the ICMR had said that the promising results of the trials have given confidence that Covishield could be a realistic solution to the deadly pandemic.Interim results of the Oxford-AstraZeneca study are expected soon. If successful, it too could begin distributing by the end of the year.How it works: The Oxford University vaccine is based on a harmless, weakened version of a common cold virus, or adenovirus, that causes infections in chimpanzees. The vector (the carrier) is derived from adenovirus (ChAdOx1) taken from chimpanzees. It is genetically engineered so that it does not replicate in humans.Pfizer and Moderna Pfizer-BioNTech and Moderna - both US-based firms - were among the first in the world to announce successful interim results from their large-scale Phase 3 studies.On Wednesday, Pfizer announced more results in its ongoing coronavirus vaccine study that suggest the shots are 95% effective in normal adults and 94% effective among elderly. It is now planning to seek regulatory nod for emergency use. Similarly, Moderna Inc's experimental vaccine was found to be 94.5% effective in preventing Covid-19 based on interim data from a late-stage clinical trial.A deal with Pfizer or Moderna does not appear to be on the horizon for India, but the Moderna vaccine would be the better option as it can be stored at -20°C in commercial deep freezers. Pfizer's vaccine, on the other hand, requires storage at minus 70 degrees Celsius or below.Moreover, as both Pfizer and Moderna are two-dose vaccines, India would need nearly 3 billion doses for its entire population. Neither manufacturer is likely to be able to produce such large quantities anytime soon. However, India said it's closely monitoring progress and is in talks with all the firms.How they work: Instead of using the actual Covid virus, both vaccines use its synthetic genetic material, called messenger RNA or “mRNA”, to train the immune system to fight it.CovaxinCovaxin is being developed indigenously by Bharat Biotech in collaboration with the Indian Council of Medical Research (ICMR).The potential vaccine was found to be safe without any major adverse events in the first two stages of the trials involving about 1,000 people. The company had said that more than 90% of the participants developed antibodies against the novel coronavirus.The vaccine has now entered Phase 3 trials with 26,000 participants. It will be the largest clinical trial conducted for a Covid-19 vaccine in India.How it works: Covaxin has been modelled using an inactive version of the virus (Sars-Cov-2) after isolating a strain of the deadly pathogen from an asymptomatic individual in a containment facility in Hyderabad in May. Sputnik VIndia also has a deal with Russia’s Gamaleya Research Institute for its Sputnik V vaccine that claims 92% efficacy although its results have not been peer reviewed or published.At Tuesday's Brics summit, Russian President Vladimir Putin suggested that Russia's Sputnik V vaccine against Covid-19 could be produced in India.In September, Dr Reddy's and the Russian Direct Investment Fund (RDIF), Russia's sovereign wealth fund, entered into a partnership to conduct clinical trials of Sputnik V vaccine and its distribution in India. Dr Reddy will soon start the combined phase 2 and 3 clinical trials of the Russian vaccine in India. The vaccine has to be kept at a temperature of -20 to -70 degrees Celsius.On August 11, Russia had become the world's first country to register a coronavirus vaccine, called Sputnik V. The vaccine was developed by the Gamaleya Research Institute, while the Russian Direct Investment Fund (RDIF) is investing in the production and promotion of the vaccine abroad.How it works: The vaccine is administered in two doses and consists of two serotypes of human adenovirus, each carrying an S-antigen of the new coronavirus, which enter human cells and produce an immune response. It is a so-called viral vector vaccine, meaning it employs another virus to carry the DNA encoding of the needed immune response into cells.NovavaxNovavax, with which India has reserved a billion doses, is still in Phase 3 human trials in the UK with 10,000 volunteers.A larger Phase 3 trial is set to begin in the US this month. If tests are successful, its vaccine may be commercially available in the second half of 2021. In September, Novavax and the Serum Institute of India entered into an agreement to make up to 2 billion doses a year.How it works: Novavax makes its vaccine candidate by growing harmless copies of the coronavirus spike protein in the laboratory and packaging them into virus-sized nanoparticles.Zydus CadilaIn July, the Indian vaccine-maker Zydus Cadila began testing a DNA-based vaccine - called ZyCoV-D - delivered by a skin patch. They launched a Phase 2 trial on August 6 and are planning a Phase 3 trial in December.Zydus Cadila said its Pegylated Interferon alpha-2b, PegiHep, was originally approved for Hepatitis C and was launched in the Indian market in 2011.Since then safe and efficacious drug use for this product has been demonstrated in thousands of patients, the company said.
Categories: Business News

Voda Idea gets Rs 3,760 crore by selling 11.15% stake in Indus Towers after merger with Infratel

November 19, 2020 - 10:51pm
New Delhi: Vodafone Idea (Vi) has received Rs 3,760.1 crore by selling its 11.15 per cent stake in the tower company Indus Towers which completed its merger with Bharti Infratel on Thursday.“Vodafone Idea Limited (VIL) had elected to receive cash pursuant to the right available to certain shareholders as per clause 1.2 of Part C of the Scheme. Pursuant to the same, VIL has received cash consideration of Rs. 37,601 nm. for its 11.15 per cent shareholding in Indus. The said transaction had been executed and completed on November 19, 2020 ("VIL closing"),” the company said in exchange filing by the company after market hours on Thursday.Promoters of the merged entity, Bharti Group and Vodafone Group’s shareholding in the merged entity is 36.7 per cent and 28.12 per cent, respectively. Mauritius-based P5 Asia Holding Investments will hold 3.25 per cent, it said.“Further, the Board has proposed appointment of Mr. Bimal Dayal as Managing Director & CEO of the Company to be made effective from the date of approval of the shareholders of the Company. The Company will follow the process for seeking shareholders' approval shortly,” it said. Having received NCLT (National Companies Law Tribunal) nod for the merger, Bharti Infratel announced the closing of the deal after completing the ROC filing process on Thursday.Bharti Infratel will cease to be Bharti Airtel’s subsidiary and will be renamed as Indus Towers Limited.
Categories: Business News

Govt will look into suggestions of banning iron-ore exports amid supply crisis: Dharmendra Pradhan

November 19, 2020 - 10:51pm
Kolkata: Union Steel Minister Dharmendra Pradhan on Thursday said there were supply constraints of iron ore for the steel sector and the Centre will "look into" suggestions to ban export of the key raw material. Representatives of the sector have been seeking a ban on iron-ore exports to aid the domestic industry and had earlier sought the minister's intervention to tide over the crisis. "It is a good suggestion, let us see. We are talking to stakeholders," Pradhan said during a virtual interaction at Merchants' Chamber of Commerce's annual general meeting. He also called for policy initiation on the part of state governments to tackle the supply woes. The minister, however, said though there is supply constraints at present, in 2019-20, the total aggregate production of iron-ore was 250 million tonne in the country and domestic demand was 180 million tonne. The representatives, including members of MCC said the central government can also consider allowing state-owned miners to take over mines, at least on a temporary basis, which are yet to begin commercial production. Pradhan said the Union government is making efforts to boost domestic sourcing of iron and steel products by central organisations and mandating preference. "Through the Domestically Manufactured iron & Steel Products (DMI&SP) policy, steel imports worth more than Rs 20,000 crore have so far been avoided. We are working to ensure raw material security for the sector," he said. "By way of 'Mission Purvodaya', we are building an integrated steel hub in eastern India, which would add to the competitiveness of the steel sector and facilitate regional development with job creation," Pradhan added. He said without development of the eastern region, 'Atmanirbhar Bharat' is not possible.
Categories: Business News

Arbitration award not binding: Future to HC

November 19, 2020 - 7:51pm
NEW DELHI: Reiterating that the interim order of the Singapore International Arbitration Centre (SIAC) was not binding and enforceable in India, lawyers for Future Group on Wednesday argued in the Delhi High Court that Future Retail does not have any contractual rights with Amazon, hence does not need to seek permission from the US giant for any investments.The US giant has only invested in Future Coupons, a promoter company of Future Retail, they said.Senior lawyer Harish Salve appearing for Future Retail said that by seeking to be informed of all investments the Amazon is not asserting its investor protection rights but trying to get indirect control over the listed Indian retailer. When you have passive investment of less than 10 percent, you can't make an active investment, he said."..The degree of Amazon's control will become enormous.. an American company with less than 10 percent shares.. can it have the right to tell whom I can do business with?," argued Salve. "(If Reliance wants to invest but) sorry I have to ask Big Brother sitting in America," he added.He added that by putting in Rs 1,400 crore Amazon can't control the large Indian retail group. "We are also big businesses in India," he said. Salve said that with this investment (Reliance) creditors worth's Rs 18,000 crore are being protected, who are all Indians and Amazon does not care about them.He went on to say that Reliance may not be as big as Amazon but it is a muscular company in India. "What prevents Reliance from entering online market. It will then be Amazon vs Reliance," Salve said.On the first day of the hearing of a case filed by Future Retail in a bid to stop Amazon from approaching Indian regulatory authorities with the interim order of the Singapore International Arbitration Centre (SIAC), lawyers for the Indian retailer had argued that the SIAC order was not binding and enforceable in India.Future Group’s lawyers had said the letters that Amazon wrote to the Competition Commission of India and the Securities and Exchange Board of India were designed to put a spanner in and derail the purchase of the Indian group’s assets by Reliance Retail.Last year, Amazon bought 49% stake in Future Coupons -- which owns 7.3% of Future Retail -- with an option to buy out the entire holding.
Categories: Business News

India reassessing future oil demand projections and refinery capacity due to pandemic

November 19, 2020 - 7:51pm
New Delhi: India is reassessing its future oil demand projections and refinery capacity needs in the wake of the pandemic that severely hurt fuel demand, shook many industry assumptions and triggered calls for accelerated transition to cleaner energy.“The demand in the country is growing and some energy transition is also taking place. The Petroleum Planning and Analysis Cell (PPAC) is preparing a report on the country’s future oil demand and refinery capacity needs,” petroleum secretary Tarun Kapoor told ET. The PPAC, an arm of the oil ministry, is responsible for regular industry analysis and forecasts.An oil ministry panel, comprising PPAC officials and industry executives, had undertaken a similar exercise in 2016 and spent nearly two years to ready a report that forecast that diesel demand would rise threefold and petrol three-and-a-half times by 2040 in the country. The panel considered multiple scenarios and offered different projections for oil demand growth in each case. The forecast assumed 8.2% of compounded annual economic growth and 0.8% per year growth in population up to 2040 for the country.The pandemic has tossed out these assumptions, driving policymakers back to the drawing board. Globally, analysts are now predicting faster transition to cleaner energy and a plateauing of oil demand quicker than that thought possible before the pandemic. Many analysts believe oil demand has already peaked and it would never return to the 2019 level.The oil ministry panel had also said the country’s refining capacity was set to rise to 439 million tonnes per annum by 2030 from the then 245 million tonnes, an 80% rise. The refining capacity was expected to reach 259 million tonnes by 2020, and 415 million tonnes by 2025.As of October 2020, India’s capacity is 250 million tonnes, already reflecting the deviation from projections.The projection was based on “firm plans and the projects already conceptualised and accepted in principle till year 2030 only”, the report had said.Since India is a major exporter of refined fuels, the planned refinery expansion to 439 million tonnes was way higher than the capacity of 363 million tonnes needed to meet the local needs in 2030.The pandemic has forced a rethink among oil companies globally about owning refineries. Super majors like BP and Shell want to produce and process less oil and have set themselves a roadmap for that. Lower oil prices and demand uncertainty have also translated into capex cuts by oil companies.Untitled Carousel 79263428 79246164 79207723
Categories: Business News

Xiaomi clocks 8.3% growth during festive season, sells over 13 million devices in India

November 19, 2020 - 7:51pm
New Delhi: Chinese tech major Xiaomi on Thursday said it sold over 13 million devices, including smartphones, smart TVs and power banks, this festive season, registering over 8 per cent growth in sales over the same period last year. Xiaomi -- which is locked in an aggressive battle for market leadership with Samsung in the smartphone category -- said it has sold over 9 million smartphones. "In addition to this, Mi India witnessed a significant demand for ecosystem products during festive sales and sold over 4 million devices driven by categories like TVs, streaming devices, trimmers, smart bands, audio products, power banks etc," it added. Newly-launched products like Mi Watch Revolve and Mi Smart Speaker were amongst the top favourites for consumers, while Mi Box 4k and Mi TV Stick continued to be the top selling streaming devices across Amazon and Flipkart, the company said in a statement. Xiaomi had sold about 12 million devices during the festive season last year, including 8.5 million smartphones. "We are thrilled to share that Mi India registered its highest ever sales during this festive season with 13 million devices across smartphones and other product categories. "We introduced a wide selection of products and coupled it up with great offers and initiatives like the Mi Smart Upgrade to meet our consumers requirements," Mi India Chief Business Officer Raghu Reddy said. He added that the company is looking forward to a higher demand in the fourth quarter and gearing up to end the year on a high note. Xiaomi's rival Realme on Wednesday had said it has clocked 20 per cent growth in sales this festive season, selling 8.3 million smartphones in the country. Xiaomi said during this year's festive period, the company saw an "unprecedented demand from first time users, as well as existing users". It said over 4.5 lakh Mi TVs and Home Entertainment products were sold during Diwali, with 4K TVs witnessing the biggest growth in demand over last year. Larger screen size of 50/55-inch saw over 50 per cent growth vis-a-vis last year. The company reached the milestone of 10 million sales for 'Made In India' Mi Power Banks during the festive period, while sales of Mi Air Purifiers grew by 100 per cent, it added. The company also said Mi Smart Band was amongst the best selling products in the fitness category.Untitled Carousel 79264614 78477393
Categories: Business News

Premium valuation of this auto ancillary stock looks sustainable. Should you buy?

November 19, 2020 - 7:51pm
ET Intelligence Group: Improving truck sales in the domestic and the US markets and rising focus on the non-truck segment of revenue augur well for forging component maker Bharat Forge. Though the stock trades at premium valuation, it may sustain given the increasing business momentum.The company’s domestic revenue from trucks division, which accounts for 40% of the standalone revenue, has started showing signs of revival following increasing fleet utilization and new infrastructure orders. The trend in e-Way bills and electronic toll collection shows consistent improvement in the freight movement. The fleet utilization rose to 76% in October, nearing the 80% mark beyond which fleet operators start buying new trucks.The recovery helped the company to gain market share thereby restricting the fall in the domestic revenue from the trucks segment to just 2% in the September quarter after sliding to a 20-year low in the previous quarter. Analysts expect the segment revenue to grow by 25-60% in the next two fiscal years.In the overseas market, orders for the class 8 trucks — a gauge for heavy truck orders in the US — have staged a sharp recovery since June 2020 after declining for nearly one-and-a-half years. Based on the sales in the two months to October, the annualized rate of class 8 orders has improved to four lakh units from 3.2 lakh units in the previous year. The effect of this recovery will be seen in Bharat Forge’s consolidated numbers in the second half of the current fiscal year. Analysts have reduced the extent of expected decline in export volume for FY21 to 20-22% from the earlier forecast of 34-35% drop.Bharat forge has been expanding presence in other business areas such as defence, and renewable energy to diversify beyond the forging activities. The manufacturing of gear boxes and other components for wind energy are gaining traction, which may offset the moderating volume from the oil and gas customers in the US. Wind energy and marine segments may generate around Rs 50 crore annually and grow three times in a year. While order approval in the defence sector has slowed due to the pandemic, the company has made significant progress in the Advanced Towed Artillery Gun System (ATAGS). The Indian Army may require around 3,000 guns with each gun costing over Rs 15 crore. This would open up a revenue opportunity of Rs 500-800 crore annually over the long term.On the valuation front, price-book (P/B) multiple is more appropriate than price-earnings (P/E) multiple since the company posted net loss twice during the latest industry downcycle. At Thursday’s closing price of Rs 510.5 on the BSE, the stock was traded at 4.2 times the FY22 expected book value, a 16% premium to the long-term average. Historically, the multiple has touched 6.5-7 during the peak of an industry upcycle. Which means the current valuation of the company may sustain in the medium term.
Categories: Business News

BPCL acquisition could pay for itself, but question is how will Vedanta secure funding?

November 19, 2020 - 7:51pm
NEW DELHI: Metals-to-oil conglomerate Vedanta's interest in buying Bharat Petroleum Corp Ltd (BPCL) is a natural progression towards downstream integration that will hedge its margins but there are doubts over its promoters' ability to raise finances for such acquisition, analysts said.While BPCL dividends could easily cover the cost of debt of any acquisition, "the question we have is how would Vedanta Ltd secure funding, given the worries on leverage at Vedanta and the parent?," JP Morgan said in a report.Buying a 75 per cent stake in BPCL (52.98 per cent of government and 22 per cent through open offer) would cost Vedanta Rs 64,200-97,600 crore depending on the price (Rs 395 to 600 per share)."Assuming that Vedanta sells down the equity stake (BPCL has) in (city gas firm) Indraprastha Gas Ltd and (LNG importer) Petronet LNG Ltd, the net cost of the acquisition would be Rs 52,200 crore to Rs 85,500 crore. At 8 per cent interest cost, the interest cost would range from Rs 4,100 crore to Rs 6,800 crore."On our conservative FY23 standalone earnings estimates, even at a 75 per cent dividend payout, this would service the debt cost even assuming the dividend income is taxed at 25 per cent," it said.This does not take into account any additional divestments such as Mozambique LNG stake sale, additional profits if BPCL acquires management control of Bina refinery and any further asset sales."However the question is how would Vedanta secure any funding?" JP Morgan said. "While Vedanta on a consolidated basis is not very levered, the key question has been the leverage at the unlisted parent and inter-company loans to the parent (currently at USD 1 billion). In this context, we struggle to see how Vedanta secured funding."But an SPV structure which is ring-fenced and services the debt from dividends from BPCL could be possible, it said.PTI on Wednesday reported that a special purpose vehicle (SPV) of BSE-listed Vedanta Ltd and its London-based parent Vedanta Resources had earlier this week put a preliminary expression of interest (EoI) for buying government stake in BPCL.Vedanta owns oilfields in Rajasthan and BPCL would give it refineries that could process and turn the crude oil it produces into value-added fuels such as petrol and diesel. Adding India's second-largest fuel retailer is a natural downstream integration as it would hedge risks associated with the upstream business such as volatile prices, analysts said."While a ring-fenced SPV structure, where the debt is secured by the BPCL stake and serviced by dividends from the company, is possible, we would highlight that Vedanta primarily has interests in operating upstream assets, and not downstream," JP Morgan said.Vedanta, however, has a track record of successfully creating value out of state-owned assets (Hindustan Zinc, Balco) and it could bring in other partners in any SPV, which would reduce the risk, it said.It went on to add that an EoI does not automatically translate into an actual bid and Vedanta could very well drop off in the financial round.Vedanta, JP Morgan said, has no experience in running refining and fuel marketing, but has been able to create significant value from state-owned companies.Also, BPCL's FY23 profits would not reflect steady-state profits and would be below mid-cycle profitability, it added.
Categories: Business News

India to grow from April: Morgan Stanley

November 19, 2020 - 4:50pm
Mumbai: Even as first signs of recovery were visible in October and many predict that the country would keep the momentum up, Indian economy would see strong growth only by April next year, a Morgan Stanley report said.“We maintain a constructive view on the economy and expect the growth recovery to gain strength from 2Q21,” the Insight: 2021 Global Macro Outlook report said. The report said that the growth would be accompanied with inflation under control.“Inflation will remain marginally above the 4%Y target but external stability risks stay contained and policy rates only see a first lift-off at year-end from an extraordinarily accommodative stance,” the report said.The report also said that China’s GDP would grow at 9% in 2021 before it comes down to 5.4% in 5.4% while the US economy would grow at 5.4% in 2021.Domestic demand-oriented economies like India and Brazil, a number of indicators have recently exceeded pre-COVID-19 levels and are registering positive year-on-year growth. This strong momentum should continue into 2021, with EM growth rising to 7.4%, higher than the consensus expectation of 6.3% the report added.Global economy too would see a recovery across geographies and sectors from March-April next year. “Driving this synchronous recovery will be a more expansive reopening of economies worldwide and the extraordinary monetary and fiscal support now in place. Global GDP, already at pre-COVID-19 levels (based on seasonally adjusted GDP levels), continues to accelerate and is on track to resume its pre-COVID-19 trajectory by 2Q21 (April),” the report said.The report also cautioned of some risks along the path to recovery. The near-term risks hinge on virus and vaccine developments. A sharper rise in hospitalisations in the US or Europe could prompt policy-makers to adopt stricter lockdown measures than our base case, and approval of vaccines for emergency use could come later than January 2021. Looking a bit further out, we see scope for upside inflation risks from 2H21, which could create a disruptive shift in expectations on Fed policy, the report said.
Categories: Business News

India to see Rs 10,000 crore investment in LNG stations: Dharmendra Pradhan

November 19, 2020 - 4:50pm
New Delhi: India will see an investment of Rs 10,000 crore in the next three years in setting up of LNG stations, a fuel that promises to revolutionalise long-haul transport with reduced cost and lesser emissions, Oil Minister Dharmendra Pradhan said on Thursday. Liquefied natural gas (LNG), which is supercooled natural gas, is favoured by long-haul buses and trucks due to its higher energy density than CNG, its ability to give a 600-800 km run on a single fill, and it being 30-40 per cent cheaper than diesel. So far, India uses petrol, diesel, CNG and auto-LPG as fuels to run automobiles. LNG is a new fuel that can be dispensed from outlets similar to petrol pumps, and is used not just in long long-haul buses and trucks but also in running mining equipment, as bunker fuel, and rail locomotives. LNG will reduce the cost of operation as well as reduce carbon emissions, Pradhan said at the launch of construction of the first 50 LNG dispensing stations. "In the next three years, Rs 10,000 crore will be spent on setting up of 1,000 LNG stations in the private and public sector," he said. LNG as a fuel, he said, is poised to bring a transformational change in the way transportation happens. "There are around 10 million trucks in the country. If we are able to convert even 10 per cent of them (10 lakh), imagine the savings it will bring considering the fact that LNG is up to 40 per cent cheaper than diesel," he said. LNG as a fuel has almost zero carbon emissions and 85 per cent lesser NOx emissions, he said. The initial 50 LNG stations are being set up on the Golden Quadrilateral highways connecting four metros of Delhi, Mumbai, Chennai and Kolkatta. "In times to come, there will be an LNG station at every 200-300 km on the GQ and on all major highways," he said. Promoting LNG as a fuel is part of the government's push to raise the share of natural gas in its energy basket to 15 per cent by 2030 from the current 6.2 per cent. Greater use of environmentally friendly natural gas will bring carbon emissions down. "We have been working on a well thought of strategy for a gas-based economy. "Expansion of city gas networks, laying of trunk pipelines, building LNG (import) terminals, raising of domestic production fo gas, simplification of tax structure and a uniform and simple tariff structure are all part of that plan," he said. The initial 50 LNG stations would be set up in one year, he said. Pradhan said 20-25 million standard cubic meters per day-equivalent LNG will be consumed in the transportation sector. "LPG is going to be priced cheaper. If we buy LNG (from abroad), it will reduce our dependence on crude oil. Will lower demand from the world's third-largest importer, crude oil prices will soften, thus helping us," he said. India is 85 per cent dependent on imports to meet its crude oil needs while it imports about half of its gas needs. With LNG being cheaper than diesel by 30-40 per cent, use of the new fuel in long-haul transportation, as well as sectors such as mining, would help cut logistics cost and have a positive impact on inflation, he said. Of the initial 50 LNG stations being set up, state-owned Indian Oil Corp (IOC) will set up the maximum 20 outlets. Hindustan Petroleum Corp Ltd (HPCL) and Bharat Petroleum Corp Ltd (BPCL) would set up 11 each, while gas utility GAIL would put up six outlets and Petronet LNG Ltd the remaining two. Gujarat, which houses almost two-thirds of India's current LNG import capacity, would see the maximum number of LNG stations at 10. Maharashtra and Tamil Nadu, which too have LNG terminals, would each house 8 LNG stations, while Andhra Pradesh will get 6, Karnataka 5, Kerala 3, Odisha 1, Telangana 2, Haryana 1, Rajasthan 3, Uttar Pradesh 2 and Madhya Pradesh 1. Pradhan said shifting trucks to LNG from liquid fuel will lead to savings and cut in emissions too. Oil Secretary Tarun Kapoor said LNG is a clean fuel, convenient and bit cheaper than other fuels. "It is very appropriate for long-distance transportation." The first trial of LNG as fuel started in 2015 by IOC and Tata Motors. Thereafter, first LNG-run bus was launched in 2016 and now, the fuel use is attaining commercial scale, he said.
Categories: Business News

Renewables' share in energy mix falls marginally to 10.7 pc in Q2: Report

November 19, 2020 - 4:50pm
New Delhi: The share of renewables in energy mix came down marginally to 10.7 per cent in September quarter this fiscal year from 11.4 per cent in the year-ago period, as per a report. According to the latest edition of the CEEW-CEF's quarterly Market Handbook, the prominent reason for the decline was the unseasonable and sharp reduction in wind speed in resource-rich states Gujarat, Rajasthan, and Tamil Nadu. The reduction in wind speed in these states led to 41 per cent decline in wind generation in July 2020 as compared to the same month last year, it said. September quarter typically records the highest wind energy generation every year. "Renewable energy's share in the energy mix decreased marginally from 11.4 per cent in Q2 FY20 to 10.7 per cent in Q2 FY21," it said. The CEEW Centre for Energy Finance (CEEW-CEF) is an initiative of the Council on Energy, Environment and Water, one of Asia's leading think tanks. It also highlighted that 3.2 GW of renewables were auctioned in September quarter 2020-21 as compared to 4.4 GW (excluding 8 GW sanctioned as part of a manufacturing-linked upsizing of a solar auction from an earlier quarter) in April-June period. Further, auctions for vanilla renewable energy projects gave way to auctions for blended generation mixes in the last quarter. Auctioning blended solar and wind projects is aimed at improving the transmission infrastructure utilisation with higher capacity utilisation. It also highlighted that market concentration - the share of top five developers in the total project capacity sanctioned - increased to 84 per cent in the quarter under review as compared to 81 per cent in the previous quarter, and is expected to remain high going forward. Further, aggregate renewable energy capacity additions slowed down in second quarter partly owing to supply chain disruptions due to COVID-19, which impacted grid-scale capacity additions. In contrast, rooftop solar picked up with 399 MW capacity added in the quarter, as compared to 188 MW in second quarter of 2019-20. Gujarat, Rajasthan, and Tamil Nadu led the growth in rooftop solar installations. Meanwhile, coal capacity addition remained subdued with net addition in second quarter at 550 MW, approximately a third of renewable energy additions of 1,560 MW during the same period last fiscal. "Among renewables, grid-scale and rooftop solar continued to dominate capacity additions in the quarter, accounting for a nearly 60 per cent share. A five-month extension granted by the Ministry of New and Renewable Energy for grid-scale project commissioning could result in a noticeable uptick in renewable energy capacity additions as the lockdown eases further," Nikhil Sharma, Associate at the CEEW-CEF, said. The report also indicated that short-term electricity prices, in both day-ahead and real-time spot markets, saw an increase to Rs 2.53 per kWh and Rs 2.42 kWh in the quarter from Rs 2.35 per kWh and Rs 2.22 kWh, respectively in June quarter. This was due to a recovery in demand from discoms and increased volumes when compared to second quarter levels last fiscal. On the discom payables front, the report highlighted the Rs 1.4 lakh crore discom overdues to power producers as of September 30, 2020, representing an increase of 50 per cent compared to overdues in September 2019. However, the pace of increase in overdues dropped significantly, increasing only 5 per cent over the year-ago quarter. In June quarter, it spiked to 30 per cent.
Categories: Business News

Stocks that helped PMSes deliver solid returns to the ultra-rich in Oct

November 19, 2020 - 4:50pm
NEW DELHI: A strong show by banking, IT and select FMCG stocks helped many multicap and largecap PMS schemes outperform the benchmark indices in October.The top-performing PMS schemes gained up to 7 per cent for the month compared with a 3.5 per cent rise in Nifty during the month.Data compiled by PMS AIF World suggests Saurabh Mukherjea-led Marcellus’ Consistent Compounders emerged the top performer, having delivered 6.70 per cent return for the month. Financial stocks accounted for 35 per cent of the scheme’s portfolio. The BSE Bankex rose some 12.45 per cent for the month. The Rs 2,144 crore fund, which is managed by Rakshit Ranjan, has delivered 9.90 per cent return for last one year.Kunj Bansal-led AcePro Advisors’ Largecap Strategy delivered 4.96 per cent return for the month. HDFC Bank, Infosys, ICICI Bank and TCS enjoyed a combined 38 per cent weightage in the scheme at the end of October. Shares of ICICI Bank jumped 10.6 per cent for the month, while HDFC Bank rose 9.65 per cent, Infosys 6.95 per cent and TCS 5.21 per cent.The scheme has delivered 0.45 per cent return for last one year compared with a 0.98 per cent drop in its benchmark index, Nifty 50-TRI.NJ Asset Management’s Rs 406 crore NJ Bluechip Fund returned 4.9 per cent for the month and 13 per cent for last one year. This scheme had HCL Tech, TCS, Asian Paints and HDFC Bank as key portfolio holdings. Asian Paints rose 11.5 per cent last month while HCL Tech gained 4 per cent.Ambit’s Rs 507 crore Coffee Can scheme, managed by Manish Jain, delivered 4.8 per cent return. HDFC Bank was its top portfolio holding followed by Pidilite Industries, Asian Paints and Nestle India. Shares of Pidilite Industries rose 9.66 per cent last month while Nestle India gained 7.77 per cent.Bhavin Shah’s Rs 347 crore Sameeksha Capital Equity Fund rose 4.8 per cent for the month to take its one-year return to 24.70 per cent. Some 36.40 per cent of the portfolio holdings are investment in banking and financial stocks, while 20.20 per cent was in IT names.Motilal Oswal’s Rs 983 crore Business Opportunities (BOP) Scheme rose 4.67 per cent for October. The Manish Sonthalia-led fund had Max Financial, TCS, HDFC Bank, Kotak Mahindra bank and ICICI Bank among its key holdings. Shares of Max Life fell 3.5 per cent last month, while those of Kotak Mahindra Bank rallied 22 per cent.Sanctum Wealth’s Indian Olympians and Tata PMS’ ACT gained 4.4-4.7 per cent for the month. Bank and IT stocks accounted for over 46 per cent of Sanctum's assets, while the Tata scheme had SBI, Kotak and Infosys among its key holdings.ICICI Prudential’s Largecap Scheme, meanwhile, rose 4.09 per cent for the month. Its top five holdings did not include either banking or IT name; rather the portfolio is full of consumer non-durables and cement names.
Categories: Business News

Manufacturers to step up hiring at IIMs, IITs as business recovers

November 19, 2020 - 4:50pm
Mumbai: Despite the Covid-19 pandemic, thousands of jobs could be up for grabs for those graduating from top management, engineering and law schools this year as leading manufacturers look to hire talent as business recovers. At least a dozen manufacturers in sectors such as automobiles, metals, mining, energy, infrastructure, healthcare and consumer goods said they plan to hire 250-600 graduates each this year. Vedanta, Schneider Electric, Maruti Suzuki, Tata Steel, Hero Motocorp, Siemens, TVS Motor and Johnson & Johnson will increase hiring or maintain it at the same level as last year.“Post Schneider Electric merging some of its business with Larsen & Toubro’s electrical and automation business, our demand for campus graduates is likely to go up,” said CHRO Rachna Mukherjee.Diversified miner Vedanta will hire 500-600, while others such as automaker Maruti Suzuki will hire 250-300.“We are targeting to induct top quality students in good numbers,” said Vedanta Group CHRO Madhu Srivastava.The company will visit 130-140 colleges including tier-1 B-schools and engineering colleges such as the Indian Institutes of Management (IIMs) and the Indian Institutes of Technology (IITs) besides the National Law Schools and MICA as well as colleges in the northeast and Jammu and Kashmir.The country’s largest carmaker Maruti Suzuki will not cut down on hiring numbers. “We will go for campus recruitment from B-schools as well as engineering colleges,” said Rajesh Uppal, senior executive director for HR and IT. “We will offer campus placements similar to last year, in the range of 250-300.”Steel major Tata Steel will also hire at the same level from campuses. “We hire around 200-300 from campuses every year…our campus recruitment numbers will remain almost the same this year,” said Atrayee Sarkar Sanyal, vice president, human resource management (designate), Tata Steel.Johnson & Johnson will also keep hiring unchanged.“Strong talent guarantees sustainable business growth, even amid turbulent market scenarios,” said Emrana Sheikh, head of HR, India and South Asia.A Hero Motocorp spokesperson said: “Our campus recruitment program is on track for FY21-22.”However, Mahindra & Mahindra has lowered its recruitment numbers. “We are not giving campus hiring a miss but it's significantly less than last year,” said Rajeshwar Tripathi, CHRO. The company will hire engineers and MBAs.Apart from management and engineering, a big focus this time will be on R&D, digital, automation, analytics, internet of things (IOT) and other tech roles as companies increase their focus in these areas to save costs and increase efficiency.“Apart from increasing production and reducing cost, it will also help us with improved employee productivity and predictability through data analytics,” said Srivastava of Vedanta.“Candidates with digital dexterity would be a key consideration and skills like AI (artificial intelligence), ML (machine learning), NLP (natural language processing), deep learning, data science and advanced analytics have increased demand,” said Sheikh of J&J.Siemens is giving an accelerated thrust to hiring candidates with digital skills.“There is a clear trend toward digital transformation of industry, infrastructure and mobility sectors, which require innovative solutions leading to increase in demand for talent,” said a company spokesperson.HR heads said salaries at campuses will not be affected by the pandemic.“There is no such impact on remuneration and perks for campus placements. They will be maintained at the same levels as in previous years,” said Uppal of Maruti Suzuki.“Since campus hires are the right investment any company can make, we don’t see a significant impact in terms of compensation,” said Srivastava of Vedanta.
Categories: Business News

Experts chart India's road to revival

November 19, 2020 - 1:49pm
NEW DELHI: The Indian economy likely contracted 10.2% in the July-September quarter from the year earlier according to the median estimate of 10 economists and experts polled by ET, which would be a substantial improvement from the 23.9% decline in the June quarter due to the Covid-led lockdown. It's also an advance from the 12% median estimate in poll ET conducted in September as the economy picked up pace toward the end of the second quarter. At a contraction of 10.2% from the year earlier, the implied sequential growth from the first quarter would be 57%.The latest estimates of the contraction ranged from 8% to 13.5% as agriculture and manufacturing propped up growth, aided by favourable government policies, while the services sector lagged behind on account of continued restrictions and consumer caution, independent economists said. The government is expected to announce second-quarter GDP figures at the end of this month."The pace of contraction in GDP is likely to have more than halved in Q2 FY2021 as compared to Q1 FY2021," said ICRA principal economist Aditi Nayar, adding that growth during the quarter was led by electricity within the industrial sector followed by mining and manufacturing. ICRA has estimated a second-quarter contraction of 9-10%. Industrial production expanded 0.2% in September, reversing six months of contraction with mining and electricity growing 1.4% and 4.9%, respectively.The Purchasing Managers' Index (PMI) rose to the highest in eight-and-a-half years in September and goods and services tax (GST) collections rose to a post-pandemic high of Rs 95,480 crore. 79294273Tackling supply issues helpedSeptember also saw record e-way bill generation at 57.4 million.While demand remained constrained, the removal of supply side restrictions drove growth, according to Rahul Bajoria, chief India economist at Barclays, estimating an 8% contraction in the second quarter."Since August, India's recovery is happening largely because the supply constraints that were very debilitating were removed and activity suddenly picked up," Bajoria said. While October saw improvements, pent-up demand combined with a festive season upsurge drove growth toward the end of the second quarter, said Pronab Sen, former chief statistician of India. He projected a 5-8% contraction in the September quarter."The level of economic activities in July and August were not very different from June," said DK Pant, chief economist at India Ratings and Research, pegging the September quarter contraction at 11.9%. "It was only in September that economic activities have shown significant improvement."The uptick in the July-September period and evidence of further acceleration in October and November triggered upgrades in FY21 GDP estimates.Capacity utilisation lowGoldman Sachs said Tuesday it expects India's economy to shrink 10.3% in FY21, compared with a 14.8% contraction it projected in September. While agriculture fared comparatively well, floods in many parts of the country disrupted the farm sector. The shortage of migrant labour resulted in patchy recovery in the construction sector, according to M Govinda Rao, chief economic advisor at Brickwork Ratings."Although the relaxation of the lockdown resulted in an improvement in economic activity to some extent, the capacity utilisation continued to be low," Rao said, estimating second-quarter shrinkage at 13.5%."The important thing is for six consecutive months we are seeing negative growth," said Madan Sabnavis, chief economist at CARE Ratings. "But this is very much on expected lines given that it was a manmade lockdown." The gradual pace of recovery is due to the calibrated lifting of restrictions, he said. The agency expects a 9.9% contraction in the second quarter.RBI played key roleHDFC Bank estimated the second-quarter contraction at 11% while State Bank of India Research pegged it at 10-10.5% with a downward bias.While most economists agreed that the Reserve Bank of India (RBI) played its part in terms of providing support through monetary policy during the quarter, they felt fiscal policy was lacking. The government last week announced a Rs 2.65 lakh crore stimulus package - the third in the series - to provide a boost to the Covid-hit economy.Although a major stimulus was not called for in the second quarter, Sen said the government should have made its intentions clear and announced the steps it was going to take to provide some assurance to various sectors of the economy.
Categories: Business News

AstraZeneca COVID-19 shot candidate shows promise among elderly in trials

November 19, 2020 - 1:49pm
LONDON: A potential COVID-19 vaccine developed by AstraZeneca Plc and Oxford University produced a strong immune response in older adults, giving hope it may protect some of those most vulnerable to the disease, data from mid-stage trials showed. The data, reported in part last month but published in full in The Lancet medical journal on Thursday, suggest that those aged over 70 - who are at higher risk of serious illness and death from COVID-19 - could build robust immunity to the pandemic disease, researchers said. "The robust antibody and T-cell responses seen in older people in our study are encouraging," said Maheshi Ramasamy, a consultant and a co-lead investigator at the Oxford Vaccine Group. "The populations at greatest risk of serious COVID-19 disease include people with existing health conditions and older adults. We hope that this means our vaccine will help to protect some of the most vulnerable people in society, but further research will be needed before we can be sure." Late-stage, or Phase III, trials are ongoing to confirm the findings, researchers said, and to test whether the vaccine protects against infection with SARS-CoV-2 in a broad range of people, including people with underlying health conditions. The first efficacy data from those Phase III trials is "possible in the coming weeks", the Lancet report said. The Oxford-AstraZeneca COVID-19 vaccine candidate, called AZD1222 or ChAdOx1 nCoV-19, had been among the front-runners in global efforts to develop shots to protect against infection with the novel coronavirus, or SARS-CoV-2. But rival drugmakers Pfizer Inc, BioNTech and Moderna Inc have in the past 10 days edged ahead, releasing data from late-stage COVID-19 vaccine trials that shows more than 90% efficacy. Unlike the Pfizer-BioNTech and Moderna shots, both of which use new technology known as messenger RNA (mRNA), the AstraZeneca experimental shot is viral vector vaccine made from a weakened version of a common cold virus found in chimpanzees. The Phase II trial reported in The Lancet involved a total of 560 healthy volunteers, with 160 aged 18-55 years, 160 aged 56-69 years, and 240 aged 70 or over. Volunteers got two doses of the vaccine or a placebo, and no serious side effects related to the AZD1222 vaccine were reported, the researchers said. AstraZeneca has signed several supply and manufacturing deals with companies and governments around the world as it gets close to reporting results of its late-stage trials.
Categories: Business News

Adani Green Energy doesn't have a guaranteed buyer for $6 billion solar project in India

November 19, 2020 - 1:49pm
NEW DELHI|CHENNAI: Adani Green Energy's record $6 billion solar power project announced in June has no guaranteed customer, its deal with India's main solar-adoption agency shows, and may expose the company to higher financial risk. Shares in the firm, controlled by billionaire Gautam Adani, have soared three-fold since the signing of the 8 gigawatt (GW) multi-plant deal, which Adani hailed as the "largest of its type, ever" and a landmark for India. However, previously unreported details of the agreement between Adani Green and Solar Energy Corp of India Ltd (SECI) reveal the agency has no "legal or financial obligation" to support the project if SECI fails to find buyers. This would be the first major SECI project without a state-guaranteed Power Purchase Agreement (PPA), which analysts say has been key to building up India's renewable energy sector. When SECI floated the tender for the project in June 2019, it had said a PPA would be assured, but it withdrew the clause guaranteeing purchase in the deal signed a year later. "There shall not be any legal or financial implication to SECI in relation to such (unsold) quantum including associated quantum of manufacturing facilities," the agreement, reviewed by Reuters, says. Financing risk Adani Green has said 2 GW of generation capacity will come onstream by 2022, while the rest will be added in annual 2GW increments through 2025 as a part of the contract. There are no buyers lined up for the Adani project yet and its unclear when SECI will be able to find buyers, a process that typically takes months. Auctions by the SECI usually attract greater participation because of the assurance of power purchase and payments. But the lack of such a guarantee could undermine investor and lender confidence, raising financing costs in a market like India where power demand growth has repeatedly fallen short of expectations amid a broader economic slowdown. The quality of "federal government-guaranteed contracts with cashflow payment certainty provide investors the confidence to deploy tens of billions of dollars", said Tim Buckley, director at the Institute of Energy Economics and Financial Analysis. Adani Green has said it would receive interim funding for the project from a consortium of foreign banks, and later with money raised from the capital markets. It has reassured investors of its ability to tap markets citing its sovereign grade rating. It declined to comment on the project on Thursday. "We have full visibility and we would be in a position to inform the market shortly," the group's chief financial officer, Jugeshinder Singh, said earlier this month.Enough margin available Gautam Adani has said the project can make a profit at the power price of 2.92 rupees ($0.0393) per kilowatt hour (kwh) agreed in the SECI tender. "At 2.92 rupees, there is enough margin available plus we also have time of 3-5 years to implement this project," he said in June. The SECI tender for the project had dragged on for a year with the agency extending deadlines and raising the maximum bidding price to 2.93 rupees/kwh from 2.75 rupees/kwh. "SECI thought the final price agreed was on the higher side, and that's why there was no purchase assurance," an official familiar with the deal said on condition of anonymity due to sensitivity of the matter. Since dropping the PPA with Adani, SECI has removed the clause from some other renewable energy tenders too. SECI Managing Director J.N. Swain told Reuters on Wednesday potential buyers of power were consulted and "due processes" were followed during the auction and before signing the agreement with Adani.
Categories: Business News

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