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Market Today with EZWealth – 27 Oct 2021
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Citi consumer business sale: Kotak Mahindra, Axis and IndusInd submit bids
Three of the country’s leading private lenders – Kotak Mahindra Bank NSE -1.03 %, Axis Bank and IndusInd Bank NSE -1.07 % – have made binding offers to buy Citi’s consumer business in India, valued at about $2 billion, said people with knowledge of the matter. The US bank under CEO Jane Fraser is looking to exit consumer banking in 13 countries, including India.
Citi is expected to start bilateral negotiations and announce a formal winner in the next one-two months. None of the bidders have offered stocks, and have submitted all-cash bids. The first two are the most aggressive bidders and are the frontrunners. Singapore’s DBS, ICICI Bank and HDFC Bank had evaluated the prospects of a deal, but eventually did not bid, said the people mentioned above. The business comprises credit cards, retail banking, home loans and wealth management. The bank has 35 branches in the country and employs 4,000 people in the consumer banking business.
JP Morgan says India index inclusion may lure $25 billion inflows
Earlier this month, the U.S. bank’s index team said that Indian government bonds were on track to be placed on index watch for inclusion. The ability to access the market through an international central security depository such as Euroclear, and clarity on taxes were among key hurdles cited by investors.
India’s inclusion in JPMorgan’s global emerging-market bond index could prompt $25 billion of inflows from foreign investors, the bank said in a research report. Actual inclusion will depend on domestic and international developments
Petrol crosses Rs 120 per litre in MP’s border district; diesel nears Rs 110
Border districts of Madhya Pradesh are bearing the brunt of the hike in fuel prices, with the cost of petrol in Anuppur crossing Rs 120 per litre and diesel nearing Rs 110 per litre on Wednesday. Similarly, the price of petrol in Balaghat, which shares borders with Chhattisgarh and Maharashtra, reached Rs 119.23 per litre.Abhishek Jaiswal, a petrol pump owner in Anuppur’s Bijuri town bordering Chhattisgarh, said the price of petrol has gone up to Rs 120.4 per litre after an increase of 36 paise on Tuesday. According to petrol pump owners, the fuel business in border districts of the state is severely hit, as most vehicles prefer to refuel in Maharashtra or Chhattisgarh, where petrol and diesel are cheaper.
Paytm’s insurance business to raise Rs 920 crore from Swiss Re
Ahead of its initial public offering Paytm’s associate company Paytm Insuretech Pvt Ltd is raising a strategic round of Rs 920 crore from global reinsurance firm Swiss Re. The company will invest in by way of equity shares and compulsorily convertible preference shares for a 23% stake. While Rs 397 crore investment will happen up front, the remaining amount will come in tranches subject to fulfilment of certain milestones.
India’s insurance market presents a significant opportunity, given the market’s protection gap and under-penetration compared to the global average. Gross written premium for non-life insurance is expected to increase from $27 billion as of the financial year 2021 to $50-60 billion by the financial year 2026(1), as per RedSeer data. Paytm Insuretech plans to leverage Paytm’s customer base and merchant ecosystem to develop innovative insurance products. The development happens soon after Paytm Insuretech announced the acquisition of Raheja QBE.
Sundar Pichai: JioPhone Next launch will have a lot of impact over the next 3-5 years
Alphabet CEO Sundar Pichai views the upcoming launch of JioPhone Next, co-developed with Reliance, as a “version of digital transformation” and will have a lot of impact in the country over a three-five-year time frame. On October 25, Reliance confirmed that JioPhone Next, one of the most anticipated 4G smartphones of 2021, would be arriving in India next week on Diwali.
Billed as the world’s most affordable smartphone, the JioPhone Next features premium localized capabilities such as automatic read-aloud of screen text, language translation, smart camera with augmented reality filters, and voice assistant among others. It is powered by Pragati OS that’s built on top of Android Go operating system and is tailor-made for the Indian audience.
Office space renewals gaining pace post pandemic
Occupiers are increasingly renewing their office spaces since April 2020 when the pandemic started, as per Colliers’ and Propstack’s joint report “Evolving office space trends in a post pandemic world.” Renewals for office spaces accounted for 23% of the total leasing during the 15-month period starting April 2020. This is up 8 percentage points from the 15-month period pre pandemic till March 2020.
Bengaluru followed by Mumbai witnessed the highest share of term renewals post pandemic. Delhi NCR and Bengaluru emerged as the most resilient cities in the office markets post pandemic, as per the report. Compared to 15 months pre-pandemic, these two cities saw the lowest decline in leasing in the 15 months post April 2020.
The leasing in Bengaluru was led by the IT sector, followed by the BFSI sector. In Bengaluru, BFSI sector’s share in leasing rose to 12% in the months post pandemic, up 6 percentage points from pre-pandemic levels. In NCR, the IT sector’s leasing improved post pandemic. Overall, total leasing declined 39% in the 15 months post pandemic. Southern cities accounted for 52% of the leasing post pandemic.
Evergrande’s Hui amassed billions in dividends before crisis
As Evergrande struggles to meet obligations to creditors, suppliers and homeowners, authorities in Beijing are urging Hui to alleviate the crisis with his own wealth. The Bloomberg Billionaires Index estimates Hui’s fortune at $7.6 billion, down from $42 billion at its peak in 2017. While the value of his stake in Evergrande has dropped more than 80% this year, Hui has received more than $7 billion in dividends since the company started trading in 2009, the most among 82 Chinese tycoons tracked by Bloomberg.
While Evergrande paid a $83.5 million coupon to international bondholders last week before the expiration of a grace period, the company is having trouble raising funds via asset sales, financial institutions or wealthy friends.
Active COVID-19 cases in country lowest in 242 days
India logged 13,451 new coronavirus infections, taking the total tally of COVID-19 cases to 3,42,15,653, while the active cases declined to 1,62,661, the lowest in 242 days, according to the Union Health Ministry data updated on Wednesday. The death toll climbed to 4,55,653 with 585 fresh fatalities, according to the data updated at 8 am. The daily rise in new coronavirus infections has been below 30,000 for 33 straight days and less than 50,000 daily new cases have been reported for 122 consecutive days. The active cases comprise 0.48 per cent of the total infections, the lowest since March 2020, while the national COVID-19 recovery rate was recorded at 98.19 per cent, the highest since March 2020, the ministry said.[/vc_column_text][vc_column_text css=”.vc_custom_1635334121852{margin-top: 11px !important;margin-right: 11px !important;margin-bottom: 11px !important;margin-left: 11px !important;border-top-width: 2px !important;border-right-width: 2px !important;border-bottom-width: 2px !important;border-left-width: 2px !important;background-color: #dddddd !important;border-left-color: #000000 !important;border-left-style: solid !important;border-right-color: #000000 !important;border-right-style: solid !important;border-top-color: #000000 !important;border-top-style: solid !important;border-bottom-color: #000000 !important;border-bottom-style: solid !important;border-radius: 1px !important;}”]
Stocks in the news today
[/vc_column_text][vc_column_text]Mahindra Lifespace Developers on Wednesday said it has entered into a joint development agreement (JDA) for a nearly 5 acre residential project in Mumbai Metropolitan Region. In a regulatory filing, the company informed that it has “finalised terms for a joint development on a 4.8-acre land parcel in Dahisar East.” Strategically located on the Western Express Highway, this is Mahindra Lifespace’s first project in Dahisar and will offer approximately 5 lakh square feet of carpet area.
TTK Prestige share price rose more than 15 percent intraday on October 27 after the company reported better earnings for the quarter ended September 2021 and also announced sub-division of shares. TTK Prestige shares touched a 52-week high of Rs 11,137. The company, which makes kitchen appliances and cookware, posted a 58.2 percent jump in its Q2 net profit at Rs 103.5 crore, up from Rs 65.4 crore in the year-ago period. Revenue was up 34.9 percent year-on-at Rs 858.6 crore. Earnings before, interest, tax, depreciation (EBITDA) rose 58.1 percent at Rs 143.4 crore and the EBITDA margin at 16.7 percent YoY.
Lumax Group, a Gurugram-based leader of automotive lighting and gear shifter manufacturing, has lined up a capital expenditure (capex) plan of Rs 450 crore for FY22 and FY23, a senior official said. The group has two listed companies — Lumax Industries and Lumax Auto Technologies — and multiple entities within these companies, including joint ventures that are engaged in manufacturing a variety of auto components.
Reliance Industries Ltd, in partnership with Assets Care & Reconstruction Enterprise Ltd (ACRE), Varde Capital-backed Aditya Birla Asset Reconstruction Company, a Welspun Group entity and foreign fund CarVal Investors, among others, have submitted expressions of interest (EoI) for bankrupt Sintex Industries Ltd, said two people with knowledge of the matter. Sintex Industries provides fabric to global fashion brands such as Armani, Hugo Boss, Diesel and Burberry, according to the company’s website. The Gujarat-based textile company was admitted into the insolvency process by the Ahmedabad bench of the National Company Law Tribunal in April this year at the behest of Invesco Asset Management (India) Pvt Ltd over a ₹15.4 crore default in payment of principal and interest of non-convertible bonds in September 2019.
Dabur India said it will enter the diapers segment in India, as part of its strategy to expand its baby care portfolio that has products including shampoo, soaps, oil and talc. The Ayurvedic firm will compete with Procter & Gamble and Unicharm which together controls over 80% of the overall market. The company said its ‘Dabur Baby Super Pants’ with insta–absorb technology will help get 50% more absorption compared to other brands
Two and three-wheeler major TVS Motor on Tuesday said the company registered the five million units milestone for its popular scooter “TVS Scooty”. TVS Scooty is the longest consistent running gearless scooter in the market and has been on an iconic journey since its launch.
State-owned Union Bank on Tuesday announced reducing its home loan rates to its all-time low of 6.40 per cent. The reduced rate will be effective from 27th October 2021.
Competition Commission of India on Wednesday raided the offices of Associated Alcohols & Breweries and Som Distilleries as part of an investigation into alleged price fixing in liquor products, two sources with direct knowledge of the matter said. The CCI officials were conducting search and seizure operations across several cities in a case about the companies allegedly violating anti-trust laws by colluding on prices while seeking necessary regulatory approvals from states, the sources added.
Asian Paints climbed 4 per cent to Rs 3,094.40 after a couple of brokerages said their interactions with dealers suggest the paintmaker plans to execute another 15-45 per cent price increase, effective November 12. This is in addition to the recent 7.5 per cent price increases, they said.
Shares of IRB Infrastructure Developers hit the lower circuit on Wednesday after the company’s board approved the fundraising plans. The board approved raising up to Rs 5,347 crore by issuing 252.45 million equity shares through the preferential issue on a private placement basis. However, the issue price for the preferential allotment is Rs 211.79 per share, a 28 per cent discount to Tuesday’s closing price of Rs 294.40 on Tuesday
Reliance Group firm Reliance New Energy Solar has offered Rs 375 per share to acquire 4.91 crore shares of Sterling and Wilson Solar for over Rs 1,840 crore. The 4.91 crore shares constitute 25.9 per cent equity stake or the entire public holding in Sterling and Wilson Solar Ltd, Sterling and Wilson Solar said in a regulatory filing.
Shares of Canara Bank jumped 5 per cent in early trade on Wednesday as the state-owned lender posted a three-fold on-year jump in standalone net profit at Rs 1,333 crore in the July-September quarter. In the second quarter of the previous financial year, Canara Bank had reported a net profit of Rs 444 crore.
Shares of Jindal Stainless rose as much as 7 per cent in early Mumbai trading on Wednesday as the steelmaker reported a five-fold on-year rise in consolidated net profit for the July-September quarter at Rs 411.62 crore. In the same period a year ago, Jindal Stainless had posted a net profit of Rs 80.64 crore. The company, which reported second-quarter earnings on Tuesday, benefited from higher income.[/vc_column_text][vc_separator][vc_column_text]
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