Category: 夜上海论坛

Understanding debt mutual fund risks, and how to combat them

Posted on by

By Niranjan Avasthi

It is well known that optimal portfolio diversification can help you generate compelling risk-adjusted returns, that is, mitigate downside risk while maintaining the upside potential of the portfolio. Generally, we gravitate towards debt investments to give our portfolio protection and towards equity investment to generate compelling long-term returns. However, it is important to understand that while equities are a riskier asset class, debt investments too have certain degrees of risk. Knowing and understanding some of the key risks in debt investments can help you better leverage the benefits of this asset class and choose the right debt fund for your portfolio.

Assume you invested Rs 100 in a 2-year bond which pays an interest of 10% per annum. After a year of holding the bond, the interest rates in the economy rise to 11%. 

Now the bond which you hold has 1 year remaining to mature and pays 10% interest. But a new bond in the market with 1-year maturity now pays 11% interest as rates have risen. This makes your bond less valuable. If you want to sell this bond in the market then you will have to compensate the buyer by providing a discount of 1% (this is an assumption to reflect the 1% change in rates – the discount could vary). Hence, you will now have to sell it for less than Rs 99.

As a result of an increase in interest rates, the price of the bond that you were holding fell.

In the same example, assume that the interest rates fell by 1%. Now the bond that you are holding becomes more valuable than the bond in the market since the interest rate on this bond is higher than the prevailing interest rate in the market. Now, when you want to sell this bond, you will demand a premium of 1% (this is an assumption to reflect the 1% change in rates – the discount could vary) for the extra interest that it provides. Hence, you will sell it for Rs. 101.

As a result of a decrease in interest rates, the price of the bond that you were holding rose.

Impact of maturity on bond prices

The demand and supply at a certain interest rate is one aspect that impacts the price of a bond. The other aspect is the maturity or the holding period of the bond. Generally, the longer the maturity of the bond, the larger will be the change in price due to interest rate changes.

Assume you invested Rs 100 in a 5-year bond that pays 10% interest. After 1 year, the interest rate rises by 1%. To compensate the buyer for the remaining 4 years, i.e., for 1% loss each year, you will need to sell your bond at Rs. 96.

In the earlier example, where the bond’s remaining maturity was 1-year and the rate went up by 1%, you sold the bond at Rs. 99. In the second example, where the bond’s remaining maturity was 4-years and the rate went up by 1%, you had to sell the bond at 96.

Due to the uncertainty that persists over a longer holding period, the longer maturity bond witnessed a higher price change. Due to the risk associated with holding the bond for a longer time period, the seller needs to offer a higher discount or offer more compensation. 

Choosing the right debt mutual fund

The NAV of a debt mutual fund responds to these changes. To arrive at a fair value of the bond, the mutual fund calculates its price daily after taking into account such changes in interest rates. As a result, the NAV gets impacted daily. 

The calculations done above are rough estimations. However, they can be calculated by using Modified Duration. This measures how sensitive the price of a bond is to changes in interest rates.

Understanding modified duration: A modified duration of 5 years means that a 1.5% change in the interest rate or yield will impact bond price by 7.5% (1.5 x 5). Higher maturity bonds will have the higher modified duration and therefore, will witness higher volatility due to changes in interest rates.

How to use modified duration while selecting a debt mutual fund?

Your investment time period and ability to absorb volatility is directly related to modified duration. If you want to invest for 3 months and don’t want volatility in returns, you will be better off investing in a debt fund with a modified duration of 3 months rather than 3 years. The modified duration can be found in the factsheet of the fund.

This is because, if you invest in a fund with a 3-month modified duration, even if interest rates go up by 1%, your returns will not fluctuate much. However, if you invest in a fund having 3 years modified duration, then a 1% rise in interest rate can reduce the NAV by 3%. 

How do you manage this uncertainty while investing in a debt fund?

There are 2 ways to manage this risk.

Match your investment horizon with the modified duration of the fund: For instance, if you are investing for 1year then invest in a fund with a modified duration of less than 1 year. This will reduce volatility in the returns due to changes in interest rate.Invest in target maturity funds: These funds have specific maturity like 3 years, 5 years or 10 years. They invest in bonds of the same maturity and hold them till they mature. Since the bonds in the portfolio are held till maturity, the risk is substantially mitigated. Whether interest rates go up or down, till the time you don’t sell the bond, it will not impact your returns (as you don’t have to sell at a discount). Similarly, if you stay invested in a target maturity debt fund till its maturity, your returns can be similar to what they were when you invested in the fund (yield at the time of investment). While the NAV may intermittently fluctuate, no loss or gains are realised since the bond is held till maturity. You can simply select a fund with a target maturity that suits your needs and stay invested till its maturity. This reduces the impact of interest rate changes on your returns.

Niranjan Avasthi is the Head – Product & Marketing, Edelweiss Asset Management Limited (EAML) and the views expressed above are his own. Please consult your financial advisor before investing.

Petrol, Diesel Price Today, 16 Sep 2022: Fuel cost static; check rates in Delhi, Noida, Mumbai, other cities

Posted on by

Petrol and Diesel Rate Today in Delhi, Bangalore, Chennai, Mumbai, Lucknow: The price of petrol and diesel has been kept steady on Friday, 16 September 2022, keeping costs steady for more than three months now. Petrol and diesel in Delhi is priced at Rs 96.72 and Rs 89.62 a litre, respectively. In Mumbai, petrol is retailing at Rs 106.31 per litre and diesel at Rs 94.27 per litre. The last country-wide change in price came on 21 May 2022, when Finance Minister Nirmala Sitharaman announced a cut in excise duty on petrol by Rs 8 per litre, and Rs 6 per litre on diesel. Since then, Maharashtra is the only state to have cut rates. The Maharashtra government had announced a cut in value-added tax (VAT) on petrol by Rs 5 a litre and by Rs 3 a litre for diesel in July.

Also read: Will bulls take a backseat as bears drag Nifty fall below 17800? 5 things to know before market opening bell

Also read: Adani Ports, PVR, Tata Power, UPL, Reliance, BPCL, Ami Lifesciences stocks in focus on 16 September 2022

Petrol, diesel prices in Chennai, Kolkata, Bengaluru, Lucknow, Noida, Gurugram

Mumbai: Petrol price: Rs 106.31 per litre, Diesel price: 94.27 per litre

Delhi: Petrol price: Rs 96.72 per litre, Diesel price: Rs 89.62 per litre

Chennai: Petrol price: Rs 102.63 per litre, Diesel price: Rs 94.24 per litre

Kolkata: Petrol price: Rs 106.03 per litre, Diesel price: Rs 92.76 per litre

Bengaluru: Petrol: Rs 101.94 per litre, Diesel: Rs 87.89 per litre

Lucknow: Petrol: Rs 96.57 per litre, Diesel: Rs 89.76 per litre

Noida: Petrol: Rs 96.79 per litre, Diesel: Rs 89.96 per litre

Gurugram: Petrol: Rs 97.18 per litre, Diesel: Rs 90.05 per litre

Chandigarh: Petrol: Rs 96.20 per litre, Diesel: Rs 84.26 per litre

Public sector OMCs including Bharat Petroleum Corporation Ltd (BPCL), Indian Oil Corporation Ltd (IOCL) and Hindustan Petroleum Corporation Ltd (HPCL) revise the fuel prices daily in line with international benchmark prices and foreign exchange rates. Any changes in petrol and diesel prices are implemented from 6 am every day. Retail petrol and diesel prices differ from state to state because of local taxes like VAT or freight charges.

SC to hear RIL’s contempt petition against Sebi today

Posted on by

The Supreme Court will hear on Friday a petition by Reliance Industries (RIL) seeking to initiate contempt proceedings against Sebi for failing to give certain documents, which the Mukesh Ambani company claims will exonerate it and its promoters from criminal prosecution initiated in a case related to the alleged irregularities in acquisition of its own shares between 1994 and 2000.

Sebi has not so far shared the three documents — the two legal opinions by former SC judge BN Srikrishna and a report by former ICAI president YH Malegam which examined the irregularities —that the SC had on August 5 directed it to share “forthwith”. As a result, RIL has filed a contempt plea against the market regulator and its authorised representative Vijayan A.

Also Read: Reliance Retail launches premium store brand AZORTE

In its contempt plea, RIL said there was no justification for Sebi to continue to resist the production of these documents, and that its continued withholding of the same constituted “willful disobedience, contumacious disregard and defiance” of the SC’s orders.

Sebi had obviously “misadvised itself” in assuming that its compliance with the judgment is a matter of discretion and on which it can seek advice, it said, adding that the market watchdog’s conduct is liable to be dealt with heavily and invites the maximum penalty prescribed under law.

According to the company, it had sent a notice to Sebi stating that if the documents were not received by it by August 18, it would assume that the market regulator has no intention of complying with the orders passed by SC and the company would take further consequential action as advised.

Sebi had, in January 2019, rejected RIL’s request for the “privileged” documents on the grounds that under the Sebi (settlement proceedings) regulations, the accused company had no right to seek information from it.

Chartered accountant S Gurumurthy had filed a complaint with Sebi in 2002 alleging fraud and irregularities by RIL, its associate companies and their directors/promoters, and 98 others in the issue of two preferential placement of non-convertible debentures in 1994. Sebi had alleged that RIL along with Reliance Petroleum had “circuitously funded the acquisition of its own shares” in violation of Sections 77 and 77A of the Companies Act, 1956 and the market regulator’s then takeover code, among various other regulations.

SRF Rating: BUY; Growth prospects in chemicals

Posted on by

We interacted with Ashish Bharat Ram, along with the various heads of segments. SRF is optimistic about solid growth opportunities in the chemicals business driven by a fast changing geopolitical environment. This will usher in aggressive capex plans in chemicals (~Rs 120 bn over the next five years). SRF is also uniquely positioned to divert its solid cash flows from the commodity business to chemicals, which enjoys higher margins and return ratios. We are aligned with management’s view of a favourable industry scenario and are gung-ho about its capex plans, which can treble its chemical segment Ebitda over the next five years. Retain ‘BUY’ with a SoTP-based TP of Rs 3,128.

Management meeting and annual report: Key takeaways

* Agrochemicals to grow at 20%-plus p.a. over the next 2-3 years; accelerated focus in pharma to support growth in the medium-term. Electronics and battery chemicals to unleash future growth potential in the long-term.

* Foray into PTFE (polytetrafluoroethylene) will unleash growth in fluoropolymers where SRF will leverage its fluorination capability. Its undisputed leadership in refrigerant gases and strong demand environment in HFCs will keep the revenue and margins strong.

Also read: Blue Energy Motors launches LNG-fuelled green trucks

* SRF has generated solid cash flows in the last five years – partially diverted from a commodity nature (packaging film and technical textile) to chemicals business, which enjoys higher margins, RoCE and commands premium valuations.

* Witnessed solid FY22 Ebitda growth (48% y-o-y) as favourable pricing environment in refrigerant gases and technical textiles boosted margins. This has led to 600bp RoCE improvement to 24.7% and strong free cash flow generation.

Outlook and valuation: Multiple growth levers; retain ‘BUY’

We believe, SRF’s chemical business has catapulted strong growth opportunity and can sustain a high capex environment over the next five years while enjoying higher margins and return ratios. We believe, long-term growth opportunity will remain intact amid muted PAT growth expectations in FY24E (2% y-o-y) – margin pressure in packaging film, technical textile and refrigerant gases over next 4-6 quarters on the back of peak margins enjoyed by these businesses over the last 4-6 quarters. Our SoTP-based target price of Rs 3,128 values SRF’s chemicals business at 32x EV/Ebitda and technical textile and packaging film at 12x each, based on Q3FY24E estimates. We retain ‘BUY/SO’. Contraction in margins in packaging film and refrigerant gases pose near-term concerns. Failure in pick up in its fluoropolymers, pharma specialty chemicals may risk our estimates.

Gold Price Today, 30 Sep 2022: MCX gold tops Rs 50250 on global cues; check support, resistance

Posted on by

Gold Price Today, Gold Price Outlook, Gold Price Forecast: Gold rate and silver rate in India were trading in the positive territory on Friday on the back of pullback in US dollar. On Multi Commodity Exchange, gold December futures were ruling Rs 71 up at Rs 50,258 per 10 gram, as against the previous close. Silver December futures were trading Rs 280 or 0.5 per cent up at Rs 56,440 per kg on MCX. Globally, yellow metal prices edged higher supported by a pullback in the US dollar, but the Federal Reserve’s commitment to stay on an aggressive rate-hike path kept the metal on track for its sixth straight monthly decline, according to Reuters. Spot gold was up 0.2% at $1,663.79 per ounce. While prices are headed for their biggest weekly gain in seven, it is down 2.8% for the month so far. U.S. gold futures rose 0.3% to $1,673.10.

Also read: GST collection in Sep likely to touch Rs 1.5 lakh crore on improvement in biz activities; what do experts say?

MCX gold October, already up by 1.22% in the week gone by, is trading in a tight range ahead of an important data release. The RBI is likely to announce a 50 bps hike in the policy and rupee may strengthen in case of hawkish statements. The dollar index gave up earlier gains falling toward 112 after tumbling more than 1% in the previous session, as the pound pushed above $1.11 and the Yuan gained for the first time in nine days after the CCP warned of further currency intervention. The DXY initially tracked gains in treasury yields as fresh data showed weekly claims fell to a 5-month low, and PCE prices were revised higher in Q2. Hawkish remarks from Federal Reserve officials and the rejection of a possible currency agreement among major economies also supported the dollar. For intraday We recommend to wait for the policy outcome later short gold in case October future slips below Rs. 49,900 per 10 gram.

Also read: Rupee likely to remain volatile ahead of RBI monetary policy meet outcome, USDINR may trade in this range

Bhavik Patel, Commodity & Currency analyst, Tradebulls Securities

Gold prices have recovered from lows of 48980 and now are back above 50000 level. Safe haven buying is evident after fall in equities and risk aversion rising. Currency and bond markets have been very volatile so safe traders are accumulating gold. With RBI’s policy today, there will be volatility in Indian rupee which will get reflected in MCX prices. Any dips should be bought as we may see some more upside on the back of US dollar retreat.

Navneet Damani, Sr. Vice President – Commodity & Currency Research, Motilal Oswal Financial Services

Gold prices edged higher, supported by a pullback in the U.S. dollar, but the Federal Reserve’s commitment to stay on an aggressive rate-hike path kept the metal on track for its sixth straight monthly decline. Fed policymakers are expected to press ahead with raising U.S. borrowing costs to fight soaring inflation, impacting both the global financial market as well as the taking in U.S. jobs market. The dollar index held near a one-week low touching the levels of ~111.70, as active intervention from BOE supported the move in Pound. Euro zone economic sentiment fell sharply and by more than expected in September, as confidence dropped among companies and consumers, who are also downbeat about price trends in the coming months. U.S. growth reported another quarter of contraction, although were in-line with expectations at -0.6%. There are also updates regarding geo-political tensions which are improving the sentiment for safe haven assets.

A positive move in base metals yesterday after China’s intervention supported the move in silver as well. On the data front, focus today will be on the U.S. Core PCE and Michigan inflation expectations numbers. Also, market participants will keep an eye on RBI policy meetings. Broader trend on COMEX could be in the range of $1640-1680 and on domestic front prices could hover in the range of Rs 50,000-50,675.

(The views in this story are expressed by the respective experts of the research and brokerage firm. Financial Express Online does not bear any responsibility for their advice. Please consult your investment advisor before investing.)

Govt hikes allocation of wheat under open market sale scheme

Posted on by

The government has decided to offload 0.3 million tonnes (MT) under the open market sale scheme (OMSS) by the Food Corporation of India (FCI) in its weekly e-auction from next month, against 0.2 MT currently being offered for the bulk purchaser to cool down the prices.

Sources told FE that because of surplus stocks held by the FCI, the government may offer more quantity of wheat through weekly e-auctions so that prices do not spike during the current festive months.

FCI has sold more than 2.75 million tonnes (MT) of wheat from its stock in the open market through weekly e-auctions being held since June so far, thus, curbing the increase in the retail prices, a food ministry official said.

On Thursday, the corporation sold 0.19 MT of wheat, against 0.2 MT offered on the e-auction, and the target is to sell 5 MT of grain to the bulk buyers by the end of the year.

At present, FCI had 22.4 MT of wheat stocks against the buffer of 13.8 MT for January 1.

In August, to contain the rise in cereal prices, the government had announced the sale of 5 MT of wheat. Earlier food Secretary Sanjeev Chopra had stated that the government is considering several measures, including cutting import duty on wheat.

“We may sell more wheat in the open market, if needed to cool down the prices,” Chopra recently said.

The official said that the weighted average selling price of wheat under open market sale scheme on Thursday’s auction rose to a high of Rs 2,310.69/quintal against the reserve price of Rs 2,127.7/quintal.

Overall cereals retail inflation last month was still at double digits (10.95%), a marginal decline from 11.85% in August because of some softening of wheat prices.

The rate of increase in wheat prices declined to 7.93% last month on the year from 9.3% in August on the year.

To boost output, the government recently announced a 7% increase in the minimum support price (MSP) of wheat, to Rs 2,275/quintal for the 2024-25 marketing season (April-June) compared to the previous year.

In April 2019, India raised the duty to 40% from 30% as domestic prices had dropped, to discourage cheaper wheat imports.

Last month, the government reduced stock holding limits for wheat for traders, wholesalers and retailers to 2000 tonne from 3000 tonne, imposed three months back.

In the last couple of months, the government has announced a series of measures to check price rise, including a ban on white rice exports, initiating open market sale of wheat, rice from the central pool, and the imposition of stock holding limits, a measure last initiated in 2008.

Rupee hits new lifetime low, nears 82 mark on strong dollar, weak markets; USDINR support at 81

Posted on by

The Indian Rupee fell to a fresh lifetime low of 81.90 in opening trade on Wednesday amid strong dollar, FII outflows, and risk-off sentiments in equity markets. The delay in Indian bond inclusion in the JP Morgan bond index also likely weighed on the local unit. In the previous session, rupee weakened past the 81.60 mark. On the flow side, there has been notable outflow since Fed’s hike day. “Surely, RBI will have to closely monitor the situation. If not today or tomorrow, then the expectation of direct or indirect intervention will rise on the Policy day- that is on 30th September,” said Amit Pabari, MD, CR Forex Advisors.

Also Read: Nifty above 16940 may hit 17200, momentum indicators signal possibility of pullback rally; Buy Cipla, LTI

Rupee may fall further to 82.20

“Stronger US consumer confidence and durable goods orders have pushed the American currency higher. US 10-year bond yield touched 4%, adding to the gains in the dollar. Hawkish statements from various Fed members too have supported the rally in the dollar. Amid RBI policy, we expect Rupee to decline further to 82.20 on spot. RBI is likely to increase rates higher by 50 bps,” said Jigar Trivedi, Senior Analyst – Currency & Commodity, Reliance Securities told FinancialExpress.com.

More weakness in Rupee ahead

“Weakness in the Chinese yuan and delay of India’s bond inclusion in the JP Morgan EM Bond Index weighed on the rupee in early trade today. The depreciation in the Chinese yuan, a stronger dollar index and foreign fund outflows could further weigh on the local unit in the near term. We believe the rupee could slip below 82 and may fall to 82.90 if the situation doesn’t improve while on the downside 81 will act as support,” Dilip Parmar, Research Analyst, HDFC Securities told FinancialExpress.com.

Also Read: Petrol, Diesel Price Today, 28 Sep 2022: Fuel cost static; check rates in Delhi, Mumbai, Noida, other cities

Importers can buy all dips as dollar remains King

“USDINR rises to 81.83 as US 10-year rises to nearly 4% on hawkish comments from US FED officials. The US dollar index also rose higher to 114.55 as Euro and GBP fell from their recent highs. The Asian currencies were all trading lower to the dollar as IDR fell to 15205, CNH to 7.22 and KRW to 1439. Equities over Asia were down after the Dow fell overnight on the hawkish comments. SGX nifty was trading down by 112 points. The range is expected to be between 81.50 to 82.00 for the day. Exporters are to continue to hold their export proceeds with a stop at 81.30 while importers will have to buy all dips as the dollar remains the King amongst all currencies,” said Anil Kumar Bhansali, Head of Treasury, Finrex Treasury Advisors.

(The recommendations in this story are by the respective research analysts and brokerage firms. FinancialExpress.com does not bear any responsibility for their investment advice. Capital markets investments are subject to rules and regulations. Please consult your investment advisor before investing.)

Veteran billionaire US investor says no gains to be made in share markets in next 10 years

Posted on by

Legendary billionaire investor Stanley Druckenmiller said that the stock market is likely to be flat for the next ten years. “There’s a high probability in my mind that the market, at best, is going to be kind of flat for 10 years, sort of like this ’66 to ’82 time period,” Druckenmiller said in an interview with Alex Karp, CEO of Palantir, a software and AI firm on September 13. Rising inflation, interest rate hikes, the ongoing Ukraine-Russia war, and reversing globalization, he says, are highly likely to cause a global recession in the coming decade.

Harder than ever for Stanley Druckenmiller to predict what will happen in next 1 year

Also read: Global Markets: European stocks set for weekly loss as global economic outlook worsens

“I like darkness”: Stanley Druckenmiller

However, there may be an upside to the static environment created by a flat stock market. “The nice thing is, there were companies that did very, very well in that environment back then,” he said, referring to the flat stock market period between 1966 and 1982. “That’s when Apple Computer was founded, Home Depot was founded,” he added. Druckenmiller also warned investors of his dreary outlook, mentioning his bearish bias, and said that this is the toughest time in economic history to forecast. “I’ve had a bearish bias for 45 years and it had to work around, I like darkness,” he said.

Central banks are “reformed smokers”

Globalization, Druckenmiller says, leads to increased worker productivity and disinflation. However, rising tensions between the United States and China, and the Ukraine war has aided the reversal of globalization. Further, central banks that adopted relatively loose monetary policies following the 2008 Global Financial Crisis have started tightening them. This is evident from the hikes in interest rates by central banks globally. “The response after the global financial crisis to disinflation was zero rates, and a lot of money printing, quantitative easing. That created an asset bubble in everything,” he added.

Now, central banks are turning away from these policies. “Now, they’re like reformed smokers,” Druckenmiller said about central banks. “They’ve gone from printing a bunch of money, like driving a Porsche at 200 miles an hour, by not only taking the foot off the gas but just slamming the brakes on,” he added.

Also read: Adani Group completes acquisition of Holcim stakes in Ambuja Cement, ACC for $6.4 bln

Druckenmiller, who is worth $10.1 Billion, ran his hedge fund, Duquesne Capital from 1981 until 2010 when he converted it into a family office. The fund posted average annual returns of about 30%. He also managed money for George Soros, lead portfolio manager at Quantum Fund, from 1988 to 2000. He is known for shorting against the British Pound in 1992, making over a billion dollars in profits.

Gas prices hiked 40 pc; CNG, PNG to cost more

Posted on by

Prices of natural gas, which is used to generate electricity, make fertiliser and is converted into CNG to run automobiles, were on Friday hiked by a steep 40 per cent to record levels, in step with global firming up of energy rates.

The rate paid for gas produced from old fields, which make up for about two-thirds of all gas produced in the country, was hiked to USD 8.57 per million British thermal units from the current USD 6.1, according to an order from the oil ministry’s Petroleum Planning and Analysis Cell (PPAC).

Also read: Gas price review panel seeks more time

These are the highest rates for administered/regulated fields (like ONGC’s Bassein field off the Mumbai coast) and free-market areas (such as the KG basin).

Also, this will be the third increase in rates since April 2019 and comes on the back of firming benchmark international prices.

Gas is an input for making fertiliser as well as generating electricity. It is also converted into CNG and piped to household kitchens for cooking purposes. A steep increase in prices is likely to reflect in higher rates for CNG and piped natural gas (PNG), which has in the last one year risen by over 70 per cent.

Also read: Infosys may announce share buyback in Q2 earnings

The government sets the price of gas every six months — on April 1 and October 1 — each year based on rates prevalent in gas surplus nations such as the US, Canada and Russia in one year with a lag of one quarter.

So, the price for October 1 to March 31 is based on the average price from July 2021 to June 2022. This is the period when global rates shot through the roof.

As higher gas prices can potentially further fuel inflation, which has been stubbornly above the RBI’s comfort zone for the past eight months, the government has set up a committee to review the pricing formula.

The committee, under former planning commission member Kirit S Parikh, has been asked to suggest a “fair price to the end-consumer” by September-end but the report is delayed.

The government had in 2014 used prices in gas surplus countries to arrive at a formula for locally produced gas.

The rates according to this formula were subdued and at times lower than the cost of production till March 2022 but rose sharply thereafter, reflecting the surge in global rates in the aftermath of Russia’s invasion of Ukraine.

The price of gas from old fields, which are predominantly of state-owned producers like ONGC and Oil India Ltd, was more than doubled to USD 6.1 per mmBtu from April 1.

Similarly, the rates paid for gas from difficult fields such as deepsea KG-D6 of Reliance went up to USD 9.92 per mmBtu from April 1 against USD 6.13 per mmBtu.

The panel has been asked to recommend a fair price to end-consumers and also suggest a “market-oriented, transparent and reliable pricing regime for India’s long-term vision for ensuring a gas-based economy,” according to an oil ministry order.

The government wants to more than double the share of natural gas in the primary energy basket to 15 per cent by 2030 from the current 6.7 per cent.

The volume-weighted average of the price prevalent in a 12-month period in US-based Henry Hub, Canada-based Alberta gas, UK-based NBP and Russia gas are used to fix prices for administered fields of ONGC and Oil India Ltd.

For difficult fields like discoveries in deepwater, ultra-deepwater and high pressure-high temperature areas, a slightly modified formula is used by incorporating the price of LNG, which too had shot through the roof in 2021.

Reliance-bp operated KG fields are classified as difficult fields.

Sources said the increase in gas price is likely to result in a rise in CNG and piped cooking gas rates in cities such as Delhi and Mumbai.

It will also lead to a rise in the cost of generating electricity but consumers may not feel any major pinch as the share of power produced from gas is very low.

Similarly, the cost of producing fertiliser will also go up but as the government subsidises the crop nutrient, an increase in rates is unlikely.

For producers, it will bring in higher revenues.

Infosys, Embassy REIT, Jubilant FoodWorks, Mahindra Logistics, Forbes & Co, Orient Bell stocks in focus

Posted on by

Indian benchmark indices BSE Sensex and NSE Nifty 50 may open flat with a positive bias on Tuesday amid mixed global cues. SGX Nifty was up in green ahead of the session hinting at a flat to positive start for the domestic share market. “With no respite on the global front and a resumption of selling from foreign investors, we expect markets to remain under pressure and test the 16,800-16,900 zone in Nifty. Select pockets from FMCG, pharma and IT are showing resilience while the majority are reeling under pressure. Participants should align their positions accordingly,” said Ajit Mishra, VP – Research, Religare Broking.

Also Read: Sensex ends at 2-month low, Nifty support shifts to 200-day SMA at 16850; use volatility to buy quality stocks

Embassy REIT: Blackstone Inc is reportedly slated to sell 7.7 crore units of Embassy REIT worth Rs 2,650 crore via block deals on Tuesday (27 September). The offer price of the block deal stands at Rs 345 per unit, 1.82 per cent lower against Monday’s closing price of Rs 351.40 on the BSE. IIFL, BofA, and Morgan Stanley are brokers to the deal, according to media reports.

Jubilant FoodWorks: The Dominos operator informed in an exchange filing on Monday that it has acquired a 29.24 per cent stake on a fully diluted basis in Roadcast Tech Solutions Pvt Ltd. The acquisition of the remaining 10.58 per cent stake (on a fully diluted basis) is likely to be completed by October 26, 2022. Jubilant FoodWorks had entered into a share subscription agreement, shareholders’ agreement and share purchase agreement dated 28 July to acquire a 40 per cent stake in Roadcast.

Mahindra Logistics: The company has acquired the business-to-business (B2B) express unit of logistics startup Rivigo in a slump sale for Rs 225 crore. The deal is expected to close on or before 1 November. Under the agreement, Mahindra Logistics will acquire the express business through a business transfer agreement (BTA), including the customers, team, and assets of Rivigo’s B2B express business, its technology platform, and the overall brand.

Forbes & Company: The listed arm of Shapoorji Pallonji Group on Monday announced the demerger of its precision tools and machine parts business. According to the scheme of arrangements approved by the board of directors of the company, the new entity will be called the Forbes Precision Tools and Machine Parts Limited (FPTL). The new entity will be carved out of the existing company Forbes & Co.

Also Read: RBI MPC likely to raise repo rate 50 bps to tame inflation; may pause rate hike after Dec monetary policy

Amara Raja Batteries: The company said its board has given approval to the demerger of plastic component for battery business with the name of Mangal Industries. The turnover of the said business as of March 2022 was Rs 569.4 crore.

Orient Bell: The company announced completion of expansion at its Hoskote plant in Bengaluru district. This expansion involved a capex of around Rs 34 crore well ahead of schedule. With this, the total capacity of the company has increased from 32 MSM per annum to 33.8 MSM per annum including 10 MSM per annum of the associated entities.