MF industry bets big on SIP to hit Rs 20-trillion AUM mark
Fund houses are betting big on investments through systemic investment plan (SIP) to achieve the magical figure of Rs 20 trillion assets under management (AUM) for the industry by end of the current calendar year. While some of the fund houses see the growth in SIP coming from B-15 cities, few others said their SIPs are doing very well and hence they are confident of the industry achieving the Rs 20 trillion mark by the year-end. The AUM reached Rs 17.4 trillion in January, expanding 36.4 per cent from Rs 12.7 trillion a year ago, according to data from the Association of Mutual Funds in India (AMFI). DHFL Pramerica Mutual Fund, with Rs 27,000 crore AUM currently, said its SIP was growing by 35-40 per cent over past nine months.
Government mandates launch of CPSE IPOs within 22 weeks of concerned ministry’s nod
Drawing strict timelines for listing of profitable PSUs, the government has mandated launch of initial public offer (IPO) within five-and-half months of a nod from the ministry concerned. Within two weeks of the Budget announcement of listing all profitable central public sector enterprises, the Department of Investment and Public Asset Management (DIPAM) has issued guidelines detailing the mechanism and procedure for time-bound listing of CPSEs on Stock Exchanges. All CPSEs having a positive net-worth, no accumulated losses and having earned net profits in three preceding years back-to-back will be listed through divestment of 25 per cent government equity, the guidelines said.
Havells to buy Lloyds consumer durables biz for Rs 1600 cr
Havells India today announced the acquisition of consumer durables business of the Lloyds group at an enterprise value of Rs 1,600 crore on a slump sale basis. Havells plans to finance the debt-free, cash-free deal through a mix of debt and internal accruals. Havells could raise anywhere between Rs 500 crore and Rs 700 crore as debt to fund the deal, the company’s Chairman and Managing Director Anil Rai Gupta told Moneycontrol. The Noida-headquartered company will only be taking on some working capital debt of Lloyds on its books, he said, adding the deal would be EPS neutral but not margin neutral. Lloyds’ consumer business has an operating margin of around 6 percent, less than half of Havells’ around 14 percent at the consolidated level.
Chandra walks into Tata corner room on Tuesday
N Chandrasekaran, new chairman of Tata Sons, walks into the corner room in Bombay House on Tuesday. Amid uncertainties at almost all group companies due to global challenges, litigation and legacy issues. Chandra, who will succeed the ousted Cyrus Mistry, will have to take an immediate call on loss-making Tata Teleservices. The company requires fresh fund infusion of Rs 10,000 crore by the financial year starting April 1. This is apart from Tata Tele facing the prospect of losing another $1.2 billion to NTT Docomo, which has sued Tata Sons in US, UK and Indian courts to force the latter to buy back its 26.5 per cent stake in Tata Teleservices.
Don’t settle all Friday trades in HDFC Bank: RBI to custodians
The Reserve Bank of India (RBI) has directed that certain trades in the HDFC Bank scrip on Friday be annulled, said three people with knowledge of the development. The cut-off time for the central bank’s directive is 1.40 pm. No trades after that involving foreign investors are to be settled. The time in question was when the market participants were intimated through a circular that the 74 per cent investment ceiling for foreign portfolio investors (FPI) had been crossed. Restrictions on FPI buying in HDFC Bank’s stock were lifted for Friday after the segment’s holding in the lender fell below the threshold of 74 per cent. The move led to a huge demand for shares of the country’s most valued bank from FPIs, sending the stock soaring 9.5 per cent.
Capgemini India chief says 65% of IT employees not retrainable
With the domestic IT industry staring at a shift in nature of work due to increasing use of digital technologies, a leading firm has said a majority of the workforce cannot imbibe the required emerging skill-sets, and warned of high job losses at the middle and senior levels. I am not very pessimistic, but it is a challenging task and I tend to believe that 60-65 percent of them are just not trainable,” Capgemini India’s chief executive Srinivas Kandula said here over the weekend. The domestic arm of the French IT major employs nearly one lakh engineers in the country. “A large number of them cannot be trained. Probably, India will witness the largest unemployment in the middle level to senior level,” he said at the annual Nasscom leadership summit here over the weekend.
PE investments decline to $652 mn in Jan: Thornton
Private equity investment activity has begun the new year on a sluggish note with January witnessing a decline in PE investments both in volumes as well as value terms, says a report. According to assurance, tax and advisory firm Grant Thornton, there were 79 private equity investments worth USD 652 million in January this year, where as in the corresponding period last year there were transactions worth $1,120 million by way of 97 deals. “PE activity continues to slip away both from a volume and value perspective,” Prashant Mehra — Partner at Grant Thornton India LLP said, adding that it was the startup sector which continues to lead the activity by contributing $180,000, followed by media and entertainment which contributed $120,000.
Source: The Hindu Business Line
Hero MotoCorp: Geared for a comeback
Considering that 60-65 per cent of two-wheeler purchases are paid for in cash, the ban on high value currency notes has impacted sales in this segment quite badly. But while the effect of demonetisation is expected to wean away by the end of this fiscal, measures announced in the Budget to boost rural India will lead to a pick-up in demand. With over half of its entry-level bike sales coming from the rural markets, Hero MotoCorp will be a beneficiary. A growing foothold in the executive segment bikes implies that the company will also benefit as urban consumption returns to normalcy, after the note ban. Investors with a one- to two-year perspective can buy the Hero MotoCorp stock. It currently trades at about 18 times its trailing 12-month earnings, cheaper than other listed two-wheeler makers such as Bajaj Auto (20 times) and TVS Motors (36 times).
Source: The Hindu Business Line
Ratan Tata’s investment in start-ups rises 30 per cent in fiscal 2016
Ratan Tata’s personal investment firm RNT Associates had invested up toRs. 80 crore in about 30 start-ups in fiscal 2016. This is 30 per cent higher than the Rs. 61-crore the company invested in FY-15. According to the company’s latest filings with the RoC, accessed by BusinessLine via business research platform Tofler, the Mumbai-based investment firm, set up by Ratan Tata in March 2009, made small ticket-size investments in the range of Rs. 25 lakh to about Rs. 5 crore on an average. However, in 2015-2016, RNT’s highest investment of about Rs. 31 crore was made in a company called Human Longevity. The San Diego-based company is creating the world’s largest and comprehensive database of whole genome, phenotype and clinical data.
Source: The Hindu Business Line
Paytm to invest Rs600 crore over 10 months to expand QR code payment system
Online payments firm Paytm, run by One97 Communications Pvt. Ltd, will invest Rs600 crore over the next 10 months to expand its QR code-based payment network, the company said on Monday. Noida-based Paytm said it is aiming to add 10 million merchants enabled with these codes across 650 districts by December. QR code, or Quick Response code, is a machine-readable label that contains information such as account details of the merchants.
HSBC, UBS stop issuing P-Notes as India steps up clampdown
A number of foreign investors including HSBC and UBS have stopped issuing controversy-ridden P-Notes as regulatory and enforcement agencies step up their clampdown on misuse of this once-popular instrument among foreigners to invest in Indian markets. Sebi has shared with the government for further action a list of foreign fund houses that are found to have issued the Offshore Derivative Instruments (ODIs), popularly known as Participatory Notes (P-Notes), to Indian nationals, while probe is on in several other suspected cases of NRIs/PIOs. These instruments are not allowed to be issued to Indians, NRIs or Persons of Indian origins.
Source: Moneycontrol
Top seven cos add Rs 48,519 cr in market cap
Seven of the top-10 most valued Indian companies together added Rs.48,518.62 crore in market valuation last week, with HDFC Bank emerging as the biggest gainer. While TCS, HDFC Bank, RIL, ONGC, Infosys, HDFC and IOC saw rise in their market capitalisation (m-cap) for the week ended Friday, ITC, SBI and CIL on the other hand suffered losses. HDFC Bank’s valuation zoomed Rs. 18,585.92 crore to Rs. 3,52,313.93 crore, becoming the biggest gainer among the top-10 firms.
Source: The Hindu Business Line
Despite fall, GDP will bounce back sharply: RBI Governor
Reserve Bank Governor Urjit Patel today said India’s economic growth will make a “sharp V” recovery following the recall of old 500 and 1,000 rupee notes. Patel also made a strong case for continuing with globalisation even in the face of a potential shift to trade protectionism under US President Donald Trump as India has benefited from open trade. “Almost everyone agrees that the impact is going to be a sharp ‘V’, that we would have a downgrade of growth for a short period of time,” he told CNBC-TV18 in an interview. “However, the remonetisation has happened at a fast pace and that was part of the plan.”
AAI deprived Rs 2,397 cr by DIAL firms, says CAG
The comptroller and auditor general (CAG) has turned its gaze on GMR-led Delhi International Airport Ltd (DIAL). An official source quoting a draft CAG report has pointed out that almost a dozen firms floated by DIAL for handling non-aero services like duty-free, cargo and food and beverage, have deprived state-owned Airports Authority of India (AAI) of Rs 2,397 crore in the last six years. The joint venture (JV) model for the non-core airport services has helped DIAL to shift its cost of operations to these companies, but caused revenue loss to AAI, which is entitled to 45.99 per cent of revenue share from the Delhi airport. As per initial findings, the effective revenue share from DIAL has sharply fallen due to formation of JVs and could be in the range of 4.60 per cent to 25.29 per cent.
Source: My Digital Financial Chronicle
Alibaba, Rakuten look to tap Indian e-commerce mart
India’s e-commerce market has high-profile suitors. The time has never been so right for Alibaba to make an entry into the e-commerce space — to wrap up the spin-off of Paytm and merge it with Softbank’s investee company Snapdeal. While the valuations of Snapdeal have become more realistic than what it was 18 months back, Japanese e-commerce major Rakuten too is conducting ground-level preparations to enter the Indian market.
Source: My Digital Financial Chronicle
Patanjali wins tax exemption claims
Yoga guru Baba Ramdev’s Patanjali Yogpeeth, a public charitable trust, has won the tax-exempt status from the income-tax appellate tribunal (ITAT), which is second appellate authority under the direct taxes and first independent forum in its appellate hierarchy. The Delhi bench of ITAT has entitled the trust to claim the income-tax exempt status under sections 11 and 12 of the Income Tax Act. In its report the appellate tribunal held that yoga involved providing medical relief and also education, which fall under the charitable purpose of the I-T Act under sections 11 and 12. While section 11 deals with the exemption of income from property held in trust/institution or other legal obligation for the religious/charitable purpose, wholly or in part, section 12 deals with vol- untary contributions, which include income of trusts or institutions from contributions and any voluntary contributions received by a trust created wholly for charitable or religious purposes.
Source: My Digital Financial Chronicle
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