Month: July 2021

Check Ratings On Adani Ports Proposed Bond

The proposed USD senior unsecured bonds of APSEZ have been assigned a rating of ‘Baa3’ by Moody’s Investors Services. While both Fitch Ratings and S&P Global Ratings have given the same bonds a ‘BBB-‘ rating. Fitch and Moody’s have given the bonds a negative outlook, while S&P has given them a stable outlook.

Fitch Rating

The proposed senior unsecured long-tenor notes of India-based port operator Adani Ports and Special Economic Zone Limited (APSEZ, BBB-/Negative) have been granted an expected rating of ‘BBB-(EXP)’ by Fitch Ratings.

“The Outlook on the proposed notes is Negative. The proposed bonds will rank pari passu with the company’s existing US dollar bonds. The proceeds will be used mainly to fund capex requirements, and general corporate purposes and working capital requirements,” Fitch said.

APSEZ’s underlying credit profile is assessed at ‘bbb’ while its rating is capped by India’s (BBB-/Negative) Country Ceiling of ‘BBB-‘, Fitch added.

The credit profile of APSEZ reflects its position as India’s largest commercial port operator, with best-in-class operating efficiency. Throughout economic cycles, particularly the present Covid-19-related downturn, the issuer has demonstrated throughput resilience, according to Fitch.

Moody Rating

APSEZ’s Baa3 issuer grade, according to the rating agency, underlines the company’s solid market position as India’s largest port developer and operator by cargo volume. The assessment also considers India’s economy as a whole’s long-term growth potential, which has been a major driver of the country’s huge increase in trade volume in recent years.

“As the proposed USD bonds rank pari passu to all of APSEZ’s existing and future unsecured and unsubordinated debt, the Baa3 rating of these bonds follows that of its existing senior unsecured bonds issued in 2017, 2019, 2020 and 2021,” says Abhishek Tyagi.

The ramp-up of capacity related to its recently purchased and commissioned ports and terminals, as well as its increased share of containers with the addition of additional terminals to its portfolio, are expected to fuel APSEZ’s performance over the next two to three years, according to Moody’s. Meanwhile, according to Moody’s, APSEZ’s overall volumes are expected to expand by 20% to 25% in fiscal 2022, aided by the recent acquisitions of the Dighi and Gangavaram ports, it added.

S&P

In its rating explanation, S&P stated: “We expect APSEZ to maintain its credit profile in line with the issuer credit rating. The company’s financial ratios are likely to improve, driven by organic growth as well as the completion of its announced acquisitions, including that of Krishnapatnam Port Co. Ltd., Sarguja Rail Corp., and Gangavaram Port. These acquisitions were funded using cash or equity. We expect APSEZ’s ratio of funds from operations (FFO) to debt to remain above 15% in fiscal 2022.”

The port’s strategic location, long-term contracted revenue, tariff flexibility, and strong operating efficiency all contribute to APSEZ’s profitability. During fiscal year 2021, the company handled 142 million metric tonnes of cargo (up 7.4%), as well as 7.2 million twenty-foot equivalent unit (TEU) of container traffic (up 15.9 percent ). This was despite the fact that all Indian ports had experienced a 5% reduction. APSEZ was also able to keep running despite India’s COVID-19 lockdowns.

Given management’s ability to modify growth objectives, shareholder distribution, and investments, the stable outlook on APSEZ underscores our expectation that the company’s financial structure can withstand any headwinds.

“We expect APSEZ’s adjusted net debt to EBITDA ratio to be below 4.0x in fiscal years 2022 and 2023, down from 4.2x in the fiscal year 2021,” S&P stated.

Deposit Rules of Sukanya Samriddhi Yojana

While opening an SSY account, one is required to make a minimum deposit of Rs 250 up to a limit of Rs 1.5 lakh in a financial year. Deposits made in surplus of one lakh fifty thousand rupees in any fiscal year, would not be eligible for interest and will be refunded to the depositor immediately. Deposits can be maintained in the account for a period of fifteen years from the day the account was opened. A defaulted account is one in which the minimum contribution amount has not been made.

An account in default can be normalized at any time until the end of a period of fifteen years from the date of the initial registration of the account, on payment of a penalty of fifty rupees for each year of default, as well as the minimum yearly contribution for the defaulted years. An account in default can be normalized at any time until the end of a period of fifteen years from the date of the initial registration of the account, on payment of a penalty of fifty rupees for each year of default, as well as the minimum yearly contribution for the defaulted years. If an account is in default and is not formalized within the period stated, the entire deposit, comprising deposits made previous to the date of default, is liable for interest at the prevailing rate of the scheme until the account is closed, according to the regulations of the Sukanya Samriddhi Account Scheme 2019.

Interest on deposit

For the quarter ending in September 2021, Sukanya Samriddhi Account will fetch an interest rate of 7.6% per annum. The relevant interest rate is computed on an annual basis and is updated quarterly. For a calendar month, the interest is computed on the lowest available balance in the account between the closing of the fifth day and the end of the month. Regardless of whether the concerned bank or post office changes due to a transfer of the account during the financial year, interest will be credited to the account at the end of each financial year. Section 80C of the Income Tax Act of 1961 exempts interest earned within a fiscal year from taxation, according to the regulations of the Sukanya Samriddhi Account Scheme 2019.

Premature closure of the account

After 5 years after account inception, Sukanya Samriddhi Accounts can be closed. The account can be closed in the case, the account holder’s serious illness, or the death of the guardian who oversaw the account. The guardian shall be paid with the account balance and interest amount thereon until the date of death upon submission of a death certificate issued by the competent authority along with the duly filled application form. Interest will be paid on the amount maintained in the account between the date of death of the account holder and the date of closure of the account at the rate applicable on Post Office Savings Accounts. The account holder or guardian will be paid the entire balance in the account with interest payable in accordance with the rules of Sukanya Samriddhi Account Scheme 2019.

Withdrawal rules of Sukanya Samriddhi Yojana

After a girl child reaches the age of 18 or has completed the tenth standard, whichever comes first, a withdrawal from the SSY account is permitted. Withdrawal of up to 50% of the amount in the account at the end of the fiscal year before the year of application for withdrawal will be permitted for the purpose of education of the account holder by filing and submitting Form-3 at the relevant post office or bank.

Along with the application form, documents such as an admission letter issued by an educational institution or a fee-slip from such institution given to the account holder are required for withdrawal. The withdrawal can be made in one lump sum or in installments of not more than once per year for a maximum of five years, subject to the stated cap, according to the rules of Sukanya Samriddhi Account Scheme 2019.

Closure of SSY account on maturity

The account would mature once the girl child or the account holder reaches 21 years of age. Closure of the account will also be allowed before the completion of twenty-one years at the time of marriage of a girl child after attaining the age of 18years. A declaration duly signed on non-judicial stamp paper attested by the notary and age proof of the girl child is required while closing the account.

Closure of an SSY account shall not be permitted before one month of the scheduled marriage date or after three months of the marriage date. By correctly filling Form-4 and submitting it to the relevant post office or bank, the account holder will be paid the balance maintained, plus the prevailing interest rate applicable.

Upcoming Stock Split in India 2021

Evexia Lifecare

It is currently trading at a price of 100.45 dollars per share. It is currently valued at Rs 622.12 crore on the stock exchange. Gross sales of Rs. 974.2 crore and a total income of Rs. 1016.28 crore were reported in the most recent quarter.

Equity shares with a face value of Rs. 10/- each completely paid up into equity shares with a face value of Rs. 2 each fully paid up, with effect from July 27, 2021. (Record Date), the company said in the press release.

The Company has set July 27, 2021, as the Record Date for the purpose of dividing each 1 equity share with a face value of Rs. 10/- into 5 equity shares with a face value of Rs. 2/-. This means if you have one share of the company it will become five after the stock split, If you have 2 shares, it will convert into 10 shares.

With a solid interest coverage ratio of 24.95, the company is in good shape. The company has a high level of operating leverage, with average operating leverage of 9.78 percent. The corporation manages its cash flow well, with a CFO/PAT ratio of 1.09.

Evexia Lifecare Stock Split

The Company has set July 27, 2021, as the Record Date for the purpose of dividing each 1 equity share with a face value of Rs. 10/- into 5 equity shares with a face value of Rs. 2/-. This means if you have one share of the company it will become five after the stock split, If you have 2 shares, it will convert into 10 shares.

With a solid interest coverage ratio of 24.95, the company is in good shape. The company has a high level of operating leverage, with average operating leverage of 9.78 percent. The corporation manages its cash flow well, with a CFO/PAT ratio of 1.09.

Tide Water Oil

Tide Water Oil has long been a major player in the Indian lubricant market. Its share price presently is 15995.55. It currently has a market capitalization of Rs 5574.13 crore. The company reported gross sales of Rs. 11272.8 crores and a total income of Rs. 11601.6 crores in the most recent quarter.

The record date for determining shareholders for the bonus issue and the stock split has been set for July 27, 2021. Tide Water Oil split the face value of its shares from Rs 5 to Rs 2. The share has been quoting on an ex-split basis from July 26, 2021. The firm announced that the face value of equity shares will be divided from Rs 5 to Rs 2. The last stock split happend in the year 2016.

Tide Water Oil Stock Split

For the financial year 2020-21, the board additionally suggested a final dividend of 4,000 percent (Rs 200 per share) on a face value of Rs 5 per share (i.e. before sub-division of shares and bonus issuance). On July 19, 2021, the stock will become an ex-dividend. The stock returned 188.79 percent over three years, compared to 50.8 percent for the Nifty Midcap 100.

Globe textiles

It currently has a market capitalization of Rs 176.23 crore. The company reported gross sales of Rs. 2651.68 crores and a total income of Rs. 2670.46 crores in the most recent quarter.

GTIL is a top-ranked and well-known private sector company in Ahmedabad (Gujarat State, India), with a primary business focus on fabric exports. The share has been quoting on an ex-split basis from July 29, 2021.

For the past three years, the company has had a mediocre profit growth rate of 9.45%. The company’s sales have grown at a dismal 11.67 percent.

Globe textiles split the face value of its shares from Rs 10 to Rs 2. The record date has been set on July 29, 2021.

Markets have been on a solid footing over the last 1-year and largecap equity mutual funds have followed the Sensex in terms of returns. Solid robust returns have become the norm for some of these funds, as the Sensex continues to scale new highs. Recently, it crossed another milestone of 53,000 points and largecap equity mutual funds returns over the last 1-year have been phenomenal.

3 Largecap funds that have done well over the last 1-year

Now, when we say they are the best largecap equity mutual funds, what we mean is that they have been the best in terms of returns. Over the last 1-year. We are in no way saying that they are the best to invest in, based on other parameters.

Best 1-year returns from largecap equity mutual funds

If a year back, you would have told investors that one would get 58% returns in 1-year, they would have dismissed you. But, the fact is that most largecap equity mutual funds have given those kind of returns and small cap equity mutual funds have given an even higher returns of 70% and above.

Should you invest in the SIPs of these mutual funds?

For starters let us inform readers that if you look at largecap equity mutual funds, their top 5 holdings which can account for 30 to 40% of the portfolio is almost the same. You almost always find the same set of stocks namely SBI, ICICI Bank, Reliance, Infosys and HDFC Bank. Therefore, there could be a marginal variation in performance. A mutual fund that has performed well today, may not necessarily perform well tomorrow.

What we would suggest is to take a look at the ratings accorded to some of these mutual fund schemes from agencies like Morningstar and CRISIL before investing. Some of these adopt very stringent measures for rating.

Another important thing to remember that the ideal way to invest now would be through the Systematic Investment Plans only. It would be very unwise to just go ahead and put lumpsum amount in some of the funds, as the markets are dangerously high. Also, if you are expecting phenomenal returns when the Sensex is as high as 53,000 points, your expectations must be a bit too much. Therefore, it is advisable to lower expectations as well, given where the markets currently are.

As far as Franklin India Bluechip Fund is concerned it has a 2-star rating from Value Research and one can start an SIP with a sum of Rs 5,000. Nippon India Largecap Fund too has a 2-star rating, and so does IDBI India Top 100 Equity Fund from Value Research. We have to caution readers as well, that past performance is no indication of future performance. However, since we are suggesting SIPs, the risks are less, should there be a sudden crash in the markets.

Disclaimer

Investing in equity mutual funds is risky. Investors should invest based on their risk ability. The above article is for informational purposes only and should not be construed as investment advise. Neither the author, nor Greynium Information Technologies would be responsible for losses incurred based on a decision taken after reading the article.