Month: December 2022

Sahara India Commercial Corporation: SC stays SAT order lifting Sebi’s attachment directive

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The Supreme Court on Friday stayed the order of the Securities Appellate Tribunal (SAT) that had lifted Sebi’s attachment order on Sahara India Commercial Corporation (SICCL) and its directors, including Subrata Roy, subject to the company depositing Rs 2,000 crore with the markets regulator.

This lifting order, according to Sebi, is in contravention of the SC’s 2012 and 2013 orders that had directed Sebi to take all legal remedies, including attachment and sale of properties and freezing of bank accounts, for realisation of Rs 25,781 crore collected by the two Sahara firms – SICCL and Sahara India Real Estate Corporation – from three crore investors with interest in case of default in payment by them.

Also Read: Share Market HIGHLIGHTS: Sensex ends 105 pts up, Nifty at 17833 amid volatility; Infosys, TCS, SBI stocks jump

A bench led by Justice SA Nazeer while staying the SAT’s order also sought response from Sahara India Commercial Corporation, Subrata Roy and others on the Sebi’s appeal against the tribunal’s decision. It also tagged the case with the cases already pending before it.

The SAT in November asked SICCL and then directors, including Subrata Roy, to deposit Rs 2,000 crore with Sebi. Following the deposit of the amount, the attachment order against the company and its directors would be lifted. The fund was to be kept in an escrow account by the market regulator. Besides, the tribunal had also directed SICCL and Sahara India to provide a full inventory of all the assets and properties and details of all the bank accounts in India and abroad, demat accounts and holding of mutual funds/shares /securities (in physical or in demat form) to Sebi within four weeks.

In April last year, Sebi’s recovery officer had issued a demand notice directing SICCL and its then directors to deposit Rs 14,106 crore within 15 days, failing which recovery would be made. As Sahara group company failed to comply with its orders, the recovery officer issued an attachment order in October 2021 directing the banks to attach the accounts and demat accounts of the firms. This was challenged by SICCL before the SAT.

Sahara group has been locked in a prolonged legal battle with Sebi for allegedly breaching norms in raising over Rs 25,000 crore through bonds. Roy and two group directors are out on parole since May 2016, after spending two years in Delhi’s Tihar Jail.

Innov8 plans to double its co-working centres in FY2024

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Co-working startup Innov8 has announced that it will double its footprint in the ongoing financial year FY 2023-2024. The company added 5 new centres in key business cities in India in early 2023 and is all set to inaugurate 5 more centres in the current quarter.

The company is in the process of setting up 10 additional centres in the last quarter of the financial year, thereby taking the new centre count in the year to 20. At the beginning of the year, Innov8 had 20 centres across 9 business cities, including Delhi, Gurgaon, Noida, Mumbai, Pune, Bangalore, Chennai, Hyderabad and Ahmedabad. With the ongoing expansion, Innov8 will add ~8000 seats and 300,000 sq. ft of co-working spaces across Delhi NCR, Mumbai, Pune, Bengaluru and Chennai. Innov8 and its partners plan to invest Rs 100 crore + to open these centres pan India.

Innov8 Aerocity and CP in New Delhi, Innov8 Marol in Mumbai, and Innov8 locations in Bellandur and KR Puram in Bangalore are amongst centres slated to be inaugurated within this quarter.

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Innov8’s pivot to a ‘5 mins to a metro station’ strategy, to open new co-working centres only near metro stations and key arterial roads across top business cities in India, has been instrumental in driving this growth. The company has witnessed over 90% occupancy, high demand and healthy rentals in its co-working centres across the country which are within five minutes to metro stations. As work from office or at least hybrid working becomes a mandate even in startups, which form a significant part of Innov8’s customer base, ease of public commute is a major draw. Employees strongly prefer metro proximity and prefer joining companies choosing their office spaces accordingly.

According to recent reports, start-ups account for almost one-third of place adoption, second only to technology sector. India’s flex space operational footprint in FY 2023 stands at 53 mn sq. ft, marking a ~400% increase from 2018. It is expected that the operational flex stock is likely to reach around ~106 mn sq. ft, doubling again over the next five years. Innov8 is looking to capitalise on this market opportunity through this planned expansion.

Talking about the expansion, Dr. Ritesh Malik, Founder of Innov8, said, “In FY2023 Innov8’s growth in centres was 30%. Since our pivot to the “5 minutes to a metro station’ strategy we have nearly doubled the number of centres in the country. Growth in India’s flex space industry and the startup ecosystem in general is indicative of a fundamental shift in how businesses perceive and utilize office spaces. Innov8’s has pivoted so that it can capitalise on this shift and provide businesses with a dynamic and flexible workspace solution.”

Pankhuri Sakhuja, Business Head of Innov8, said, “On average, Innov8 co-working offices see 90% occupancy in less than 3 months, compared to the industry average of 6 months. Innov8’s success in gaining the trust and support of customers has paved the way for exploring new market opportunities and driving further growth. With this expansion, Innov8 is well-positioned to capitalise on these opportunities and continue its upward trajectory.”

Innov8 provides premium co-working spaces with uninterrupted connectivity, easy access & proximity to key transit hubs such as metro stations, airport, railway station & more and flexible working arrangement, all this at an affordable price. Innov8 currently has seven centres in Delhi-NCR that have great connectivity with the Delhi Metro and Transit Metro, making it seamless for customers to travel across Delhi, Noida, and Gurgaon. All Innov8’s centres in Mumbai are in the Andheri East with proximity metro stations making it a preferred destination for startups, well-established corporates and other businesses.

Founded in 2015 by Dr. Ritesh Malik, Innov8 is currently spread across 9 cities—Delhi, Gurgaon, Mumbai, Pune, Chennai, Bangalore, Ahmedabad, Hyderabad & Indore, with over 20 centres hosting over 8000+ employees of brands like IndusInd Bank, Jio Saavn , Phone Pe & Tata Digital.

Paytm share price rises 7% in 6 months, may rally this much more; JP Morgan bullish, should you buy?

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Paytm share price rose 3 per cent on Monday after foreign brokerage firm JP Morgan reiterated a positive stance on the stock last week. Analysts maintained a price target of Rs 1,000 on the scrip, suggesting an over 50 per cent potential rally going forward. The brokerage firm believes that Paytm is undergoing a model shift from chasing ‘growth at any loss’ to ‘profitability at scale’ now. “Moderation in indirect expenses Q2 onwards should hence be a catalyst,” it said. Paytm shares have tanked over 50 per cent so far this year, but have risen 7 per cent in the last 6 months. Paytm share price jumped over 3 per cent to hit an intraday high of Rs 660 on NSE. JPMorgan’s target price on the counter suggests a 51 per cent potential upside over Monday’s intraday high level. 

According to the JP Morgan report, Paytm’s Q2 earnings will be key to see evidence of loss reduction and increasing confidence in 23 September breakeven. “The increase in indirect expenses could moderate, driving significant operating jaws in adjusted EBITDA losses. Paytm has been reinvesting gains in contribution margin back into marketing and its device business buildout which has limited its EBITDA margin improvement,” it said, adding that this will be key to Paytm achieving its guidance for a given target.

Paytm share price set to give sharp upside movement

Paytm shares price has tumbled nearly 70 per cent from its upper price band of Rs 2150. The shares have been nosediving ever since it was listed on Indian bourses in November last year. However, after hitting the lifetime low of Rs 510 on NSE, the stock has bounced back giving a little hope to positional investors. According to the JP Morgan report, Paytm share price is set to give some sharp upside movement and it may regain four-digit price by end of March 2023. “We estimate incremental CM of 60 per cent – well above 43 per cent in Q1F23- suggesting scope for further improvement. Q2 earnings print on loss reduction rate will be a key catalyst,” it said.

Payments business now decisively in positive margin territory

According to the analysts, Paytm’s financial services business scale-up has remained a key value driver and that loss rates on syndicated loans are running below normal. It felt payments business is now decisively in positive margin territory. “Further tailwinds to Payment business margins exist from potential UPI P2M monetisation either from MDR introduction (unlikely) or from increased subsidies from the government (currently at $200 million for the system) to support network investments. UPI’s P2M becoming monetisable via government rebate is a major mid-term positive for payment economics,” the brokerage said.

Strong revenue growth likely across all business segments

Meanwhile, analysts added that competitive intensity could moderate in the payments/digital lending space from fintechs, given the tightening of funding and regulatory hold in the sector.  “In our view, this could benefit Paytm as it is well funded to drive expansion and has also highlighted that it is compliant with the digital lending regulatory guidelines, which we think can clear the regulatory overhang on the FS part of its business model,” they said. The brokerage expects, Paytm to see strong revenue growth across all its business segments, thanks to device monetisation in payments, financial services cross-selling, ticketing recovery and rising ad monetisation. 

Also Read: Gold Price Today, 3 Oct 2022: Gold, silver price jump, follow global cues; check support, resistance levels

Several other global brokerages also remain bullish on the fintech stock. Goldman Sachs has maintained a target price of Rs 1,100 on Paytm shares which implies a 66 per cent upside. Meanwhile, Citi also maintains a positive outlook on Paytm shares. It has set a target price of Rs 998 for the stock, meaning a 50% upside from Monday’s intraday high of Rs 660 per share.

(The stock 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.)

HDFC Life allots 35.7m shares to HDFC to raise Rs 2,000 cr

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HDFC Life Insurance on Friday said it has allotted 35.7 million equity shares to Housing Development Finance Corporation (HDFC), one of the promoters of the company, on a preferential basis for raising Rs 2,000 crore.

In a stock exchange filing, HDFC Life said the capital raising committee of its board has vide its resolution allotted 3,57,94,824 equity shares at a price of Rs 558.74 per share (including premium of Rs 548.74 per share), aggregating to Rs 2,000 crore, to HDFC.

Also Read: Share Market HIGHLIGHTS: Sensex ends 105 pts up, Nifty at 17833 amid volatility; Infosys, TCS, SBI stocks jump

On Friday, HDFC Life scrip closed 1.43% lower at Rs 576 on the BSE.

Notably, the insurance company on July 29 informed that its board had approved the issuance of equity shares to promoter HDFC for Rs 2,000 crore on a preferential basis. The company’s board of directors approved issuance of 35.7 million equity shares at Rs 558.74 per share, not exceeding Rs 2,000 crore in aggregate, on a preferential basis to HDFC.

In a stock exchange filing, the insurance company had said, “The issue price at which equity shares are to be issued to HDFC Ltd is the higher of the price determined under the valuation report of the registered valuer and the price calculated in accordance with Chapter V of SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018 (SEBI ICDR Regulations).”

Backed by a healthy rise in annualised premium equivalent and a significant decline in Covid-related claims, HDFC Life reported around 22% year-on-year growth in its consolidated net profit to Rs 328.79 crore for the first quarter. The insurer had posted a net profit of Rs 269.55 crore for the year-ago period.

Engineering, Mathematics or Computer Science? Courses international students prefer to study in US – Find out

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International students drove an increase in first-time enrolments in the US in 2022 compared with 2021. The Council of Graduate Schools’ Graduate Enrollment and Degrees: 2012 to 2022 report shows that international commencements grew by 10.2% between 2021 and 2022, in contrast to a 4.7% decline in domestic commencements.

The significant jump in international enrolments comes on the back of a 12% jump in international applications to US graduate programmes in Fall 2021 and a 26% surge in 2022.

However, even with that growth in international student numbers, overall enrolment in US graduate programmes has been trending downward in recent years.

Where do international graduate students prefer to study?

At private, not-for-profit universities, international students made up a third (33.2%) of all first-time enrolments, while at public universities, their share was lower (25%).

Foreign students accounted for almost 7 in 10 commencements in mathematics and computer science and more than half in engineering programmes. Only one field of study – engineering – did not see growth in first-time international graduate enrolments in 2022. Mathematics and computer sciences saw a 16.6% bounce, biological and agricultural sciences enrolled 16.6% more, and physical and earth sciences saw 10.3% more new international students.

Mathematics and computer sciences, business, engineering, and health sciences accounted for 47% of all graduate applications for which the intended field of study was known.

Master’s programmes in US saw the biggest increase in applications. Overall, applications to US graduate schools rose by nearly 4% between Fall 2021 and Fall 2022. This increase was driven by interest in master’s programmes, especially from Indian students.

Stock market rally over, now focus on fundamentals, FIIs might continue to be net buyers | INTERVIEW

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With the record-breaking rally on Dalal Street spreading to several months now, it could have now reached an inflexion point. Valuations of most markets around the globe are higher than their long-term averages which hint at the rally being more or less done for now, said Raghvendra Nath, Managing Director, Ladderup Wealth Management in an interview with Kshitij Bhargava of Financial Express Online. Nath added that 2021 will see the stock market move sideways but is hopeful that foreign flows will be dessert India but will continue to be net buyers. Here are the edited excerpts.

Stock markets continue to inch higher even after sharp sell-off, bulls do not seem to be giving up. Does this rally have more legs from here on?

With markets at all-time highs, the valuations have also become fuller if not stretched. The global markets are inundated with money due to lack of alternatives and therefore the valuations of most markets around the world are much higher than their long term averages. The hope rally is more or less done now, any movement upwards would now be driven by the fundamentals and therefore news of earnings growth, macroeconomic data etc. will have a larger bearing in future.

Foreign investors have continued buying domestic securities, who do you interpret from this? Should markets anticipate a sudden withdrawal from FIIs?

When the Covid pandemic started, India was considered as a country at the highest risk levels as we have a substantial population below the poverty line and our medical infrastructure is much inferior to the developed nations. However, as it has turned out, India has managed the crisis extremely well debunking various fears. The Economy bounce back has more certainty in India than in many other nations. This is one of the prime reasons for FIIs’ bullishness. I think FIIs would continue to invest in India on a net basis as India offers one of the best alternatives in the Emerging Markets with excellent market regulations, depth and breadth of markets and growth potential.

India has taken reforms seriously in 2020, what positives can we expect these reforms to bring for investors in 2021?

Yes, both government and central bank have played on the front foot in 2020 to bring the economy back on rails. The ease of credit flows to the bottom of the business pyramid is going to have a salutary effect on GDP growth as well as employment; the PLI scheme if implemented properly can bring in much needed foreign players and foreign capital in many sectors; the government promise on escalating expenditure should result in higher Economic Growth in the next two years.

IPOs have been an easy way to make money for investors in 2020, is this trend likely to continue?

Every time the bulls enter the markets, IPOs become popular. Money making should never be easy and whenever it becomes so, one can conclude with certainty that the markets are tilting towards irrationality. If the bulls continue to charge ahead in 2021, the IPO market may also see the positive influence but it is advisable to always exercise caution when investing in IPOs.

Valuations are too stretched, how should one analyse stocks in such a scenario?

It is difficult to pinpoint on the right value that one should pay for any stock. And yes the valuations in many sectors are now definitely stretched. The best way to deal with such situations is to one look at long term while investing in stocks with rich valuations, but also at the same time take a pause wherever the valuations have stretched beyond reasonable levels and invest in other stocks or sectors. 

What is your suggestion for investors in 2021?

2021 is a year of hope after what people have endured in 2020. The equity markets are ending 2020 with a big bang having delivered one of the fastest recoveries in the history of the markets in the last 6 months. I expect that the markets should remain sideways as some of the after-effects of Economic deceleration would start becoming visible. While investors should continue to remain invested in equity markets, the return expectations should be moderate.

Petrol and Diesel Price Today, 6 Oct 2022: Fuel cost steady; Check rates in Delhi, Mumbai, Noida, other cities

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Petrol and Diesel Rate Today in Delhi, Bangalore, Chennai, Mumbai, Lucknow: The price of petrol and diesel remained unchanged on 6 October 2022 (Thursday), keeping costs steady for nearly four months now. The petrol rate and diesel rate in Delhi are at Rs 96.72 and Rs 89.62 per 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 fuel prices came on 21 May this year, 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.

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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.

Rupee hits new record low; Yuan, pound and euro crack against dollar

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The rupee plunged sharply on Monday to hit a new low of Rs 81.6526 against the dollar amidst a severe weakening of several currencies, as investors sought the safe haven of the dollar. The dollar index traded above 113 levels for the first time since 2002 as deep tax cuts in the UK sent the sterling to a record low. The greenback has gained in value since the US Fed’s announcement last Wednesday it would be raising rates more than earlier indicated.

Also Read: Weakening rupee to make import of crude oil, commodities expensive, fuel inflation

Sterling made a partial recovery on Monday after crashing to a record low in the early trade as traders rushed for the exits on mounting concerns that the new government’s economic plan will stretch Britain’s finances to the limit. The British pound’s drop helped lift the US dollar to a new two-decade peak against a basket of major currencies, while the euro hit a fresh two-decade low against the greenback. China’s yuan finished domestic trading session at a new 28-month low against the dollar.

Lakshmanan V, senior VP & head – Treasury, Federal Bank, observed the rupee was bound to get impacted given how the markets had been spooked by the weakness in currencies like the pound and how investors were moving money to the safe haven dollar. “The theme of the strengthening dollar and weakening rupee could continue to play out. A lot will depend on how the RBI views the depreciation and how it chooses to act in the currency markets,” Lakshamanan said. The central bank has always maintained it does not target a level for the rupee but merely aims to smoothen volatility.

Abheek Barua, chief economist, HDFC Bank, believes the central bank should intervene to ensure that a weakening currency doesn’t eclipse India’s fundamentals. “While there might be some benefits of a depreciated currency in closing the trade gap, the damage to the capital account in terms of reduced confidence of investors will outweigh this benefit,” Barua wrote in a note. He believes more capital at this stage would help stabilise the rupee and enable the RBI to replenish its reserves chest.

Also Read: Rupee-Dollar Value: 5 things to know before investing or sending money abroad

Meanwhile, the yield on the benchmark bond rose to 7.417% in intra-day trade, a level last seen on July 21, before closing the session at 7.359%; on Friday, the yield had closed at a two-month high of 7.3926%. At the end of the June quarter, on June 30, the yield stood at 7.449%. While the markets have priced in a 50-basis points hike in the repo on Friday, when the MPC will announce its decision, bonds sold off in morning trades on Friday, as investors remain nervous. Retail inflation rose to 7% in August and has stayed above the central bank’s upper tolerance level for eight straight months to August.

Radhika Rao, senior economist, DBS Bank, expects the repo to be hiked by 50 bps given the MPC is more confident about growth than inflation. “Rate hikes and a gradual adjustment in the benchmark yields will help prevent further fall in the spreads between the Indian and US ten-year bonds, underpinning rate sensitive flows. The end-2022 repo rate could be 6.25% with upside risks,” Rao observed in a note. Federal Bank’s Lakshmanan pointed out yields on US treasuries were moving up. The RBI, he said, has been supplying liquidity to the markets through variable repo auctions thereby keeping a lid on short-term rates. The markets saw a shortage of liquidity on a couple of days last week. Soumya Kanti Ghosh, chief economist at State Bank of India, said on Monday that the government cash balances with the RBI could be as high as Rs 4 trillion, following the outflows from the system on account of advance taxes and GST.

Mahindra & Mahindra Financial Services Rating: Neutral; Loan recovery to feel the heat with RBI ban

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The RBI last week has banned Mahindra Finance (MMFS) from carrying out any recovery or repossession activity through outsourcing arrangements (third-party external agencies or collection agencies) until the ban is revoked by the RBI. We, note that the regulator has allowed MMFS to continue carrying out all such recovery or repossession activities through its own employees.

MMFS in the normal course of business, repossesses ~4K5K vehicles per month using a combination of third-party collection agencies and its own employees. However, since the company is now required to implement the RBI order with immediate effect, it expects the repossession activity to be impacted by 75-80% – which in our view is significant given that a large part of the asset quality resolutions are effected by MMFS through customer settlements or vehicle repossessions.

MMFS carries a PCR (provision coverage ratio) of ~58% on its Stage 3 assets (including the policy of making 100% provisions on contracts above the age of 18 months). Vehicles that need to be repossessed are usually classified under Stage 3 already and the ban will not have a material adverse impact on the financials or Net Stage 3. In our view, MMFS’ higher dependence on customer settlements is partly because of the relatively more vulnerable customer segment served by MMFS and also due to the significant proportion of captive business underwritten by the company.

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Until such time that this ban is revoked, the repossession activities will be impacted adversely which could mean that the Gross Stage 3 (GS3) for MMFS would continue to remain elevated. This is even more important in the context of MMFS implementing the RBI NPA circular with effect from 1st Oct, 2022.

Buy these two shares for near term gains; Nifty’s intermediate uptrend remains intact

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By Subash Gangadharan

The Nifty has convincingly reversed the recent downtrend by moving up from a trend line support and convincingly closing above the 50 day SMA last Monday on the back of the Budget. With the uptrend intact, the Nifty now comfortably trades above the 20 day SMA. While there could be corrections in the very near term, we expect the index to make new life highs in the coming sessions.It is important that the Nifty does not move below the support of 14864 on any corrections for the short term uptrend to remain intact.The below picks are for the next 15-26 trading sessions

Technical indicators too are giving positive signals as the stock trades above the 20-day and 50-day SMA. Intermediate momentum readings like the 14-week RSI too are in rising mode and not overbought.

With the stock near its 52-week high of 385, we believe the stock is ready to continue the next leg of its underlying uptrend and has the potential to move higher in the coming weeks. Upside acceleration is likely to occur once the stock crosses the current 52 week high of 385.

We, therefore, recommend a Buy between the 355-375 levels. CMP is 369.9. Stop loss is at 330 while targets are at 470.

Buy Indiabulls Housing Finance

Indiabulls Housing Finance has broken out of the 210-227 trading range on Wednesday on the back of above average volumes.

Technical indicators are giving positive signals as the stock trades above the 20-day and 50-day SMA. Intermediate momentum readings like the 14-week RSI too are in rising mode and not overbought.

With the short term and intermediate technical setups looking attractive, we expect the stock to gradually move higher in the coming weeks. We, therefore, recommend a Buy between the 225-236 levels. CMP is 234. Stop loss is at 210 while targets are at 285.

(Subash Gangadharan is Senior Technical and Derivative Analyst at HDFC Securities. The views expressed are the author’s own. Please consult your financial advisor before investing.)