Month: July 2021

5 IPOs That Doubled Or Nearly Doubled Investors’ Money On Listing Day Recently

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1. Tatva Chintan Pharma IPO:

The specialty chemicals manufacturing company that issued an IPO to mobilize Rs. 500 crore as against the issue price of Rs. 1086, listed with gains of 95% at a price of Rs. 2111 per share on the listing and still gained further to a price of Rs. 2318.

The stock’s day high and low price are Rs. 2534.2 and Rs. 2111, 85. The top high made during the day indicated a gain of 133%. The IPO of Tatva Chintan is the second most subscribed IPO for the CY 2021.

2. GR Infraprojects:

2. GR Infraprojects:

This is another real estate company that on listing doubled investors’ wealth. The company on the NSE debuted at a price of Rs. 1715.85 per share as against the issue price of Rs. 837 per share. The company launched an IPO to mop up Rs. 936-crore. Last the scrip of GR Infraprojects traded at a price of Rs. 1760.

3. Happiest Minds:

3. Happiest Minds:

The mid tier IT firm that made its listing last year made a robust listing at a premium of 111% percent against the issue price of Rs. 166. Prospects of the digital segment as well as strong fundamentals, management propelled the listing gains for the scrip. Listing price was at Rs. 351. As of last trade, the firm commands a market cap of Rs. 19,730 crore.

4. Clean Science:

4. Clean Science:

The Maharashtra Pune-based fine chemical manufacturing and exporting company of India also nearly doubled investors’ money on the listing day. The scrip listed at a premium of 98% at a price of Rs. 1784.4. The company’s financials are robust in the segment. Others positives that drove listing gains include its ESG focus as well as diversified product line up.

5. Burger King:

5. Burger King:

This is a QSR company that also nearly doubled investors’ money on the listing day by listing at a premium of 92%. The scrip listed in December 2020 at a price of Rs. 115.4 per share on BSE, up 92% from the issue price of Rs. 60 per share.

IPOs That Have Doubled Investors' Money On Listing

IPOs That Have Doubled Investors’ Money On Listing

Scrip Issue price Listing gains Listing price Last traded price as on July 29, 2021
Tatva Chintan Rs. 1086 95% Rs. 2111 Rs. 2275.55
GR Infraprojects Rs. 837 105% Rs. 1715.85 Rs. 1763.05
Happiest Minds Rs. 166 111% Rs. 351 Rs. 1356.55
Clean Science Rs. 884.4 98% Rs. 1784.4 Rs. 1625.45
Burger King Rs. 60 92% Rs. 115.4 Rs. 182.4

Conclusion:

Conclusion:

Ideally though IPO listing gains in recent time as listed above can be overwhelming to the tune of 100% or even higher, none can with certainty ensure such high returns. The factors that determine listing gains for a scrip are intrinsic to the company as well as depend on the market momentum. Even a good company with sound fundamentals may see a weak listing owing to weak market momentum. And even if you make some mind boggling returns on the first day of the company hitting the Indian bourses and are not sure of its outlook going ahead, you may even book partial profits in the scrip.

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FamPay partners Visa to woo teenagers with personalised doodle cards

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FamPay, a fintech start-up focused on online and offline card payments for teenagers, has launched India’s first Visa prepaid card — FamCard Me — for teenagers with personalised doodles on it.

“This launch of FamCard Me marks yet another innovation in the fintech and card industry, being the first ever doodle card in India,” Sambhav Jain, Co-Founder, FamPay told BusinessLine. It will also be the first time Visa forays into numberless cards. Teens can select from a range of 200+ doodles and signature fonts to create unique designs on their FamCard Me.

With FamPay and its numberless pre-paid card, teens can make online and offline payments using the FamCard and the FamPay App and without the need to set up a bank account, Jain added.

FamPay was founded in 2019 by two Indian Institute of Technology (IIT) Roorkee Graduates, Kush Taneja and Sambhav Jain while in college.

Over 2 million registered users

FamPay crossed 2 million registered users within eight months of its launch and in June 2021 raised one of India’s biggest Series A funding of $38 Million with Elevation Capital and Sequoia Capital as lead investors.

Also read: FamPay raises $38 million in funding from Elevation Capital, others

FamPay rolled out their virtual Visa Cards in May 2021, and more than 2,00,000 users have adopted it in just the first few weeks.

Starting on Thursday, teens can order the FamCard once their account is set up on the FamPay app. In addition to being doodled and personalized, the FamCard Me also gives exclusive offers and subscriptions to its teen users. They can immediately start using their virtual FamCard for online payments, while they wait for their physical cards to arrive, Jain added.

T R Ramachandran, Group Country Manager, India and South Asia, Visa said these innovative, numberless payment cards with personalised doodles from FamPay will appeal to a generation that is seeking the best of innovation and convenience for its payment experience.

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Google updates policy for personal loan apps; adds new norms for India, Indonesia

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Google has updated its financial services policy for developers to include clarifications related to personal loan apps, as also new requirements for such apps in India and Indonesia.

“We’re updating the Financial Services policy to clarify the definition of the total cost of the loan and require all personal loan apps be properly tagged under the Finance category. We are also adding new requirements for personal loan apps in India and Indonesia,” Google said on its support page.

The changes will be effective from September 15, 2021.

As per the policy, “Apps that provide personal loans, including but not limited to apps which offer loans directly, lead generators, and those who connect consumers with third-party lenders, must have the App Category set to “Finance” in Play Console.”

The apps will have to disclose a range of information in the app metadata including minimum and maximum period for repayment, the maximum annual percentage rate (APR), which generally includes interest rate plus fees and other costs for a year, or other similar rate consistent with local law.

“A representative example of the total cost of the loan, including the principal and all applicable fees,” explains the policy.

The apps will also be required to include a privacy policy that “comprehensively discloses the access, collection, use and sharing of personal and sensitive user data”.

Google publishes first transparency report in accordance with the new IT Rules

Google also specified additional requirements for personal loan apps in India and Indonesia. Apps must complete the additional proof of eligibility requirements in these countries.

In India, such apps will have to complete the personal loan app declaration, and provide documentation to support their declaration. For instance, for platforms licensed by the Reserve Bank of India (RBI) to provide personal loans, they must submit a copy of their licence for review.

RBI received complaints against over 1,500 loan apps: Thakur

Platforms not directly engaged in moneylending, and only facilitating lending by registered non-banking financial companies (NBFCs) or banks, will have to accurately reflect this in the declaration.

They must also ensure that the developer account name reflects the name of the associated registered business name provided through their declaration.

Google in January this year had reviewed hundreds of personal loan apps in India and removed those that violated its policies.

The tech giant’s crackdown comes a day after the RBI announced that it has set up a working group to study all aspects of digital lending activities by both regulated and unregulated players, in a bid to put in place an appropriate regulatory approach.

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RBI to HC, BFSI News, ET BFSI

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In a revelation, the Reserve Bank of India (RBI) has clarified that banks all over the country are witnessing increasing incidents of fraud due to their failure to adhere to its directives issued from time to time. In an affidavit submitted to the Nagpur bench of Bombay high court, the apex bank further disclosed that it doesn’t have the power to conduct investigations in banking frauds, nor does it have the machinery to do it.

The affidavit was filed while hearing a suo moto PIL for Rs25 crore losses caused to UCO Bank. Rajnish Vyas has been appointed as amicus curiae in the PIL. The embezzlement had taken place due to alleged forgery committed by a bank officer at its Wardha and Hinganghat branches. A division bench comprising justices Vinay Deshpande and Amit Borkar adjourned the hearing by six weeks.

Filed by RBI’s counsel SN Kumar, the affidavit added that as a regulator of the banking system in the country, it issued ‘Master Circular of Frauds’ to sensitize banks against scams and to have deterrent systems. “In spite of guidelines issued from time to time, it was observed that the frauds perpetrated in banks showed an increasing trend, mainly on account of non-adherence or improper implementation of circular directives issued by us. To enable the banks to have all current instructions in one place, a master circular incorporating all guidelines, instructions and directives on the subject was issued on August 1, 2001,” the affidavit mentioned.

Moreover, to enable the Government of India to have the required information on frauds, a suitable reporting system was introduced. Though the circular of March 22, 2002, has prescribed the period of reporting of frauds, it was realized that the banks aren’t following it scrupulously, the apex bank said.

At the RBI governor’s instance, the Central Vigilance Commission (CVC) has set up a high-level group to study incidents of fraud and suggest measures to prevent them. “This group observed that banks are not adhering to the time frame stipulated by RBI for reporting fraud cases. It has suggested that suitable penal action should be taken against defaulting banks. The banks are supposed to report frauds within a week of their detection and then a detailed report needs to be submitted in the prescribed format in the next three weeks,” the affidavit said.

The top bank added that to minimize incidents of fraud in the banking system, it has been making continuous efforts and regularly issuing circulars directing the banks to initiate appropriate action to contain them. “The Banking Regulation Act doesn’t empower RBI to conduct any investigations. The action may be initiated only after the offence is established by the law enforcement agencies. It’s mandatory for the banks to lodge a complaint of frauds with the police,” Kumar said.



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Rupee Bank admins express merger hope after Bapat’s Parliament speech, BFSI News, ET BFSI

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The current administrators of the stressed Rupee Cooperative Bank have expressed hope of a resolution of the financial institution, including a possible merger after Lok Sabha member Girish Bapat raised the issue in Parliament during the monsoon session.

Bapat urged the government to intervene regarding Rupee Bank, which has been run by Reserve Bank of India (RBI)-appointed administrators following allegations against the bank’s erstwhile management of misappropriation of funds and has been placed by the central bank under severe restrictions regarding withdrawals and advances.

Bapat said due to the restrictions, deposits worth more than a thousand crores of rupee could not be accessed by its customers, many of whom were senior citizens. He requested the Centre to revive talks of the bank’s possible merger with the Bank of Maharashtra.

When approached by TOI, a Bank of Maharashtra official declined to comment on Bapat’s speech. A source familiar with the issue said talks between the banks went on till 2018 when the Bank of Maharashtra was scheduled to take over Rupee Bank’s assets and liabilities under a scheme formulated by the RBI. However, the talks cooled after that. Rupee Bank is currently awaiting clearance from the RBI to merge with the Maharashtra State Cooperative Bank (MSCB), which is largely involved in agricultural banking, rather than retail.

“Bapat’s speech sparks hope of some resolution to the situation of the bank. If the Centre or the RBI decides to revive Rupee Bank’s merger with Bank of Maharashtra, we are ready to take the necessary steps,” said Sudhir Pandit, the administrator of Rupee Bank.



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Edelweiss Recently Listed IPO Fund- A Unique Mutual Fund To Play With Recently Listed Companies

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Details of Edelweiss Recently Listed IPO fund:

-The scheme was launched in the year 2018 as a closed ended scheme but now has turned into an open ended one from June 29, 2021. Also, previously the fund was known by the name Edelweiss Maiden Opportunities Fund.

-One of its kind offering exclusive to Edelweiss Mutual fund house.

– NAV of the plan – 18.0812

-Expense ratio: 2.42%, for its direct plan – 1.27%

-Minimum Investment: Rs. 5000 in multiples of Re 1 thereafter

SIP in the fund can be started for Rs. 500

– AUM: Rs. 432 Cr. As on June 30, 2021

-Exit Load: Exit load of 2% if redeemed within 6 months.

– Benchmark-100 IPO TRI

– Return since inception: 17.84%

– Risk category- Very high

– Fund manager: Bharat Lahoti (Since Feb 02, 2018) and Bhavesh Jain (Since Feb 02, 2018).

Where does Edelweiss Recently Listed IPO fund invests?

Where does Edelweiss Recently Listed IPO fund invests?

As the name suggests the fund typically has exposure into newly listed companies (of last 5 years and 100 companies) or companies that are about to open their IPO issues. The exposure is as high as 92 percent as per the fund house.

Top holdings of the fund are Dixon Technologies, Avenue Supermarts, Metropolis Health care , Gland Pharma, ICICI Lombard and HDFC Life Insurance. Together the top 10 holdings account for over 47% portfolio of the fund.

The fund is also invested into debt (4.55%) and (2.65%) in cash & cash equivalents.

Blended investment style with exposure across market capitalisations and largely into large caps.

Why Edelweiss Recently Listed IPO fund?

Why Edelweiss Recently Listed IPO fund?

The IPOs are making their way on the Dalal Street in never before seen count and the valuations as seen by experts are also pretty decent. Hence even if you could not participate in the IPO story as and when the issue got listed or failed to get the shares, herein the fund offers the opportunity to tap in the prospects of these recently listed companies.

Experts are of the view that this can be a safer route to participate in recent IPOs and hence the returns shall not be of the scale that can be gained as in a IPO, implying modest gains for investors if they remain put for a longer term. Nonetheless, typically with concentration around IPOs, there is a higher risk as well. So, investors who have a special penchant for IPOs together with higher risk can certainly bet on this new fund type.

Returns:

Fund 1-year return 3-year return Since launch
Edelweiss Recently Listed IPO fund 76.25% 23.28% 18.63%

Taxation:

Taxation:

Short term gains in case the units are sold before 1-year are taxed at the rate of 15%. After a period of 1 year, gains of up to Rs. 1 lakh shall be tax exempt.

And long term gains amounting to more than Rs. 1 lakh will be taxed at the rate of 10%. In case of dividend income, the income shall be added to taxpayer’s other income and taxed as per his or her slab rate.

For dividend higher than Rs. 5000, there shall be deducted a TDS of 10% on such income by the AMC.

Conclusion:

Conclusion:

So, if you have an extraordinary liking for IPO market and can afford a high degree of risk as this fund is typically centered around recently listed firms or firms about to hit the primary market you can invest in atleast for three years in order for the returns to be more predictable as well as to reduce your risk element in the fund.

Disclaimer:

Disclaimer:

Mutual fund investments are risky, further the listed fund is a thematic fund type that is high in risk. So, you need to have to assess your risk profile before heading for such an investment. No investments listed out here, should be construed as investment advice.

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Weekly Rupee view: INR might gain on dovish Fed

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The Federal Reserve completed its two-day meeting and announced its policy decision yesterday. While the Fed was not expected to announce a decisive timeline on tapering, some sort of signal was largely anticipated. However, there was no inkling of it whatsoever and the interest rates were kept untouched, as expected.

The US monetary authority sees the inflation as transitory and, though the jobs market has strengthened, that there is room for ‘substantial’ progress, thereby maintaining a dovish stance. So, asset purchasing is set to continue at the current pace and this weighed on the greenback. The dollar (USD) initially bounced as the Fed sounded positive on the economy but gave away the gains and declined as there were no signs of tapering. This is positive for the rupee (INR) and it is likely to post gains in the forthcoming sessions. The current year-to-date loss of about 1.65 per cent is likely to reduce.

FPIs cut down on investments in the first six months of 2021

On the other hand, the price of crude oil, an important factor where the rupee is concerned, is likely to stabilise at the current levels in the short term — that is, the Brent crude is now hovering at $75 a barrel and if, at all, it moves it will most likely head south as the OPEC countries gradually increase supply. So, in that sense, the rupee is placed comfortably. However, sell-off by foreign portfolio investors (FPIs) can keep a check on the upside.

India joins trend to use strategic crude reserves to offset high oil prices

Net investment by FPIs has been minus ₹5,269 crore so far this month, as per National Securities and Depository Limited (NSDL) data. Of this, equities have witnessed a net outflow of ₹8,682 crore. Unless the stock market, which is broadly directionless now, shows positive signs, the fund flow to equity can remain negative. However, the debt segment, including VRR (voluntary retention route), has seen net inflow of ₹3,537 crore. There has been a net outflow of ₹123 crore in the hybrid segment, which includes real estate investment trusts (REITs) and infrastructure investment trusts (InvITs). On the whole, the net FPI flows is negative so far, and this can be a drag on the rupee.

Outlook

Supported by the dollar weakness and the bearish inclination in crude oil price, the rupee can be expected to gradually gain over the next week despite the recent FPI outflows. Technically, INR breached the hurdle at 74.40 after a period of consolidation. This has turned the outlook positive, and the rupee is likely to appreciate towards 74 in the short run. Above this, it can touch 73.60. But if the local currency weakens below 74.40, which is now a support, it can depreciate to 74.80.

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DICGC Act: Here’s What FD Investors Need To Know After Recent Changes Made By FM

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Key details of amendment in DICGC Act

  • The Union Cabinet has agreed that fixed deposit investors can claim or recover the money deposited within 90 days once a responsible bank goes under a moratorium.
  • The initial 45 days will be set aside for banks in bankruptcy to be handed over to the Deposit Insurance and Credit Guarantee Corporation. FM stated that the procedure will be finished without having to wait for a settlement within 90 days.
  • All commercial banks in India, including subsidiaries of overseas banks operating in India, would be subject to this law, which will also apply to institutions that are now subject to a moratorium.
  • Sitharaman further stated that the DICGC Act will insure 98.3 percent of all bank accounts, with above 50 percent coverage in respect of deposit amount.
  • She further added that “Each depositor’s deposit in a bank is insured up to a maximum of Rs 5 lakh, for both principal and interest. Now in India, with an increase in insurance amount from Rs 1 lakh to Rs 5 lakh, this insurance is going to cover 98.3% of all deposit accounts. This clearance now, therefore, is going to give relief to all those institutions which have already come under moratorium. It is not going retrospectively back, but if your bank has already been declared under moratorium, this will cover.”

Which deposits are covered under DICGC?

Which deposits are covered under DICGC?

Except for the deposits listed below, the DICGC protects all deposits, including savings, fixed, current, and recurring deposits.

  • Deposits of foreign Governments;
  • Deposits of Central/State Governments;
  • Inter-bank deposits;
  • Deposits of the State Land Development Banks with the State co-operative bank;
  • Any amount due on account of and deposit received outside India
  • Any amount, which has been specifically exempted by the corporation with the previous approval of the Reserve Bank of India.

How does DICGC insurance cover works?

How does DICGC insurance cover works?

By citing an example on its official website, DICGC has stated that “The DICGC insures principal and interest upto a maximum amount of five lakhs. For example, if an individual had an account with a principal amount of 4,95,000 plus accrued interest of 4,000, the total amount insured by the DICGC would be 4,99,000. If, however, the principal amount in that account was five lakhs, the accrued interest would not be insured, not because it was interest but because that was the amount over the insurance limit.” Before deposit insurance is computed, all deposits held in the same kind of possession at the same bank are summed together. According to the DICGC Act, if the funds are under various forms of possession or are placed in different banks, they will be individually insured.

List of banks insured by the DICGC

List of banks insured by the DICGC

Except for primary cooperative societies, the following banks are DICGC-insured.

Sr No. Categories
1 Public Sector Banks
2 Private Sector Banks
3 Foreign Banks
4 Small Finance Banks
5 Payment Banks
6 Regional Rural Banks
7 Local Area Banks
8 State Co-operative banks
9 District Central Co-op banks
10 Urban Co-op banks
Source: DICGC

For more information, you can visit https://www.dicgc.org.in/FD_ListOfInsuredBanks.html



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Cabinet approves amendment in insurance law to push privatisation of one general insurance co

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The Union Cabinet has approved amendment in the General Insurance Business (Nationalisation) Act, 1972 to facilitate privatisation of one general insurance company in the public sector. A top Finance Ministry official confirmed to BusinessLine that Union Cabinet in its meeting on Wednesday has given its nod. Now, a bill will be moved in the Parliament. Although, the bill is not part of the indicative schedule of legislation for the monsoon session, it is not clear whether the Bill will be introduced during any of the remaining days of the session which is scheduled to end on August 13.

The amendment is follow-up to the budget announcement when Finance Minister Nirmala Sitharaman had said: “We propose to take up the privatization of two Public Sector Banks and one General Insurance company in the year 2021-22. This would require legislative amendments and I propose to introduce the amendments in this Session itself.” However, the bill could not be tabled during the budget session as it was curtailed on account of pandemic.

Four general insurance companies

As on date, there are four general insurance companies in the public sector – National Insurance Company Limited, New India Assurance Company Limited, Oriental Insurance Company Limited and the United India Insurance Company Limited. Now, one of these will be privatised for which the Government is yet to finalise the name.

The General insurance industry was nationalized in 1972 and 107 insurers were grouped and amalgamated into four Companies – National Insurance Co. Ltd., The New India Assurance Co. Ltd., The Oriental Insurance Co. Ltd. and United India Insurance Co. Ltd. The General Insurance Corporation (GIC) was incorporated in the year 1972 and the other four companies became its subsidiaries. In November 2000, GIC was notified as the Indian Reinsurer, and its supervisory role over its subsidiaries was brought to an end. From 21 March 2003, GIC’s role as a holding company of its subsidiaries also came to an end and the ownership of the subsidiaries was transferred to the Government of India.

Also read: In relief to depositors, Cabinet clears Bill to amend Deposit Insurance Act

It is believed that amendment will focus on two provisions of the General Insurance Business (Nationalisation) Act, 1972. One is section 10A which prescribes transfer to Central Government of shares vested in Corporation (General Insurance Corporation). It says “all the shares in the capital of the acquiring companies, being – the National Insurance Company Limited, the New India Assurance Company Limited, the Oriental Insurance Company Limited and the United India Insurance Company Limited and vested in the Corporation before the commencement of the General Insurance Business (Nationalisation) Amendment Act, 2002 shall, on such commencement, stand transferred to the Central Government.

Another important section is 10B. which says “the General Insurance Corporation and the insurance companies specified in section 10A may, raise their capital for increasing their business in rural and social sectors, to meet solvency margin and such other purposes, as the Central Government may empower in this behalf. However, the shareholding of the Central Government shall not be less than 51 per cent at any time.”

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Motilal Oswal Has A “Buy” On This Auto, Cement And Steel Stock As Economy Recovers

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Buy Ashok Leyland for a 28% Upside, says Motilal Oswal

Broking firm, Motilal Oswal has a buy call on the stock of Ashok Leyland, India’s second biggest commercial vehicle player. The firm believes that Ashok Leyland’s Electrical Vehicle Strategy is in line with the technological revolution seen globally.

“We expect electrification in commercial vehicles to play out earlier in intra-city Buses and LCVs. While Ashok Leyland’s strategy is exciting and leverages on the strengths of both Optare (Switch Mobility) and Ashok Leyland, details are awaited for a more concrete plan and timeline for their EV roadmap.

The brokerage believes that the company would benefit from an expansion of its revenue/profit pool by ramping-up in LCVs, Exports, Spares, and Defense. The stock trades at 18.3x FY23E EPS and 9.9x EV/EBITDA. We maintain our Buy rating,” the brokerage has said.

Ashok Leyland recently showcased growth opportunities in the electrical vehicles segment. Its latest strategic initiative, through Switch Mobility, is in shaping the commercial e-Mobility space in India and overseas. Shares of Ashok Leyland were last seen trading at Rs 123 on the NSE.

Dalmia Bharat

Dalmia Bharat

Motilal Oswal is also bullish on another economy play, cement. The brokerage has recommended buying the stock of Dalmia Bharat in its latest report. Among the positives that the firm sees include margins led growth and a gain in market share for the company.

“Led by expansions, Dalmia Bharat is well-placed to gain market share. We estimate a 14% volume CAGR over FY21-23E,” the brokerage has said.

The company aims to be a pan India pure play Cement company, having a significant presence in its operating geographies, and plans to grow capacity at 14-15% CAGR to 110-130mt by CY31. “Around Rs 50 billion has been allocated towards its new expansion plan, of which Rs 13 billion will be spent on clinker debottlenecking. We reiterate our Buy rating with a target price of Rs 2,480 per share on 12x Sep’23E EV/EBITDA, ” the brokerage has said.

JSW Steel

JSW Steel

Motilal Oswal has set a 16% higher target on the stock of JSW Steel. The firm believes that the high debt levels are not a concern, as growth capex improves outlook.

“The announcement of the 7.5mtpa capacity expansion at Vijayanagar – coupled with the acquisition of Bhushan Power and Steel Ltd (BPSL) and the completion of the 5mtpa Dolvi expansion – indicates the management’s focus to grow its market share and the comfort to manage its cash flows and leverage,” Motilal Oswal has said.

“We like JSW Steel given its strong project pipeline and cost reduction initiatives, which should support margins. Over FY21-23E, we expect an above-industry volume CAGR of 17%, driven by the Dolvi expansion. We value JSW Steel at 6x FY23E EV/EBITDA to arrive at target price of Rs 840. Maintain Buy,” the brokerage has said.

Disclaimer

Disclaimer

The stock recommendations mentioned above are from the report of Motilal Oswal. However, neither the author, nor Greynium Information Technologies Pvt Ltd would be responsible for the losses incurred based on a decision from the article. Investors are advised caution given that the Indian stock markets have rallied significantly from the lows of last year. Only investors who have the appetite to take risk should buy.



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