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Sharekhan Recommends To ‘Buy’ This Stock For +33% Returns, In 1 Year

November 25, 2021 root Personal Finance

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Target Price

The Current Market Price (CMP) of Apollo Tyres Ltd. is Rs. 217 The brokerage firm, Sharekhan has estimated a Target Price for the stock at Rs. 290. Hence the stock is expected to give a 33.64% return, in a Target Period of 1 year.

Stock Outlook
Current Market Price (CMP)	Rs. 217
Target Price	Rs. 290
1 year returns	33.64%

Company performance

Apollo Tyres Ltd. is expected to benefit from its strategy by deleveraging its balance sheet, capital utilization of more than 90% and focus on firm capital allocation and cash management in the medium term. The company’s Consolidated net revenues were up 18.6% y-o-y to Rs. 5,077 crore, driven by 25% growth in India business and 6% (in Euro terms) growth in Europe business. EBITDA margin for Q2FY22 stood at 12.6%, an improvement of 20 bps q-o-q, led by robust operational performance of Europe business.

Comments by Sharekhan

According to Sharekhan, “Q2FY22 results beat our expectations, led by better-than-expected improvement in operational performance. We maintain our Buy rating on Apollo Tyres Limited with an unchanged PT of Rs. 290, led by the company’s dominant positions in key markets, expected market share gains across segments, and attractive valuations. The stock trades attractively at P/E multiple of 9.1x and EV/EBITDA multiple of 4.5x its FY2023E estimates.”

About the company

Apollo Tyres Ltd. is the second largest tyre manufacturer in India. Indian business contributes about 70% to revenue, while European business contributes about 30%. With its recent entry into the two-wheeler space, ATL has become a full-fledged tyre player present across automotive categories viz. passenger vehicles, commercial vehicles, and two wheelers.

Disclaimer

The above stock was picked from the brokerage report of Sharekhan. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution. Greynium Information Technologies, the author, and the brokerage house are not liable for any losses caused as a result of decisions based on the article.

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78.6% of women have bank accounts, up from 53% in NFHS-4, BFSI News, ET BFSI

November 25, 2021 root Banking & Finance

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NEW DELHI: Nearly 81% women in urban India and 77.4% in the country’s rural area own a bank account that they operate themselves, as per the National Family Health Survey-5 (2019-21), the findings of which were released on Wednesday. Overall, there has been a big jump in numbers, with 78.6% women across India owning bank accounts as compared to 53% recorded in NFHS-4 (2015-16)

The survey also brought out data on how much of a “voice” women have in key household decisions. NFHS-5 assesses this by taking into account how many married women usually participate in three household decisions – healthcare for herself, making major household purchases, and visits to her family or relatives. NFHS-5 data shows that most women participate in these decisions and the percentage is quite high at 91% in urban India and 87.7% in rural parts.

The all-India percentage is 88.7% and is an increase over 84% in 2015-16. In terms of property ownership, there is still a long way to go even though there is an overall increase from 38.4% in 2015-16 to 43.3% in NFHS-5. Clearly the percentage of women owning a house and or land alone or jointly with others remains low. A notable fact here is that a much higher percentage of women in the country’s rural part (45.7%) have a property in their name compared to women in urban India (38.3%).

Women having a mobile phone that they themselves use has also gone up with 69.4% women in urban and 46.6% in rural India using a phone of their own. Overall, there has been an increase of 8% over the two NFHS periods from 45.9% to 54%.

It also showed how many women aged 15-24 years use hygienic methods of protection during their menstrual period – it is 89.4% in urban India and 72.3% in rural parts. Overall, compared to 57.6% women using hygienic methods of protection during menstruation in 2015-16 as per NFHS-4, 77.3% women use locally-made napkins, sanitary napkins, tampons and menstrual cups.

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Bank of Baroda arm partners OneCard for a new mobile-first metal card, BFSI News, ET BFSI

November 25, 2021 root Banking & Finance

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Mumbai: Bank of Baroda’s credit card arm has partnered FPL Technologies-owned start-up OneCard to launch co-branded mobile-first metal credit cards. The internationally card will be issued by BFSL and managed by OneCard on VISA’s Signature platform.

OneCard offers users complete control of the credit card on spends, rewards, limits and payments through the app. The features include lifetime validity, zero joining and annual fee, instant virtual card issuance, instant issuance of reward points, and redemption within the app. It also claims to have the lowest forex fee in the market at just 1%.

Speaking at the launch, Shailendra Singh, MD & CEO, BFSL said, “BFSL is currently on its transformation journey, investing in technology, processes and people. The mobile-first OneCard further bolsters our portfolio of offerings, especially for the young, tech-savvy generation and reinforces our commitment towards unique and differentiated offerings for our customers”

BFSL was established as BOBCARDS in 1994 by Bank of Baroda, to manage the cards business. BFSL issues and manages Bank of Baroda Credit Cards, and is committed to becoming one of the largest Credit Card issuers in the country.

According to Anurag Sinha, Co-founder & CEO, OneCard the pandemic has brought about a drastic shift in consumer sentiments driving a strong inclination towards easy digital payments solutions.

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Union Bank of India partners Capri Global for co-lending, BFSI News, ET BFSI

November 25, 2021 root Banking & Finance

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Mumbai: Union Bank of India has partnered Capri Global Capital (CGCL), an NBFC focused on MSMEs, and affordable housing finance segment, for co-lending. The two partners entered into a co-lending agreement under which they aim to disburse MSME loans across over 100 centres in India.

In November 2020, the RBI had issued guidelines enabling banks to co-lend with finance companies to the priority sector. The tie up aims to enhance last-mile credit and drive financial inclusion to MSMEs by offering secured loans between Rs 10 lakh to Rs 1 crore in tier-2 and -3 markets.

The agreement was signed in the presence of Rajkiran Rai G, MD & CEO, Union Bank of India and Rajesh Sharma, MD, Capri Global Capital. The NBFC will have the advantage of low cost funds while the bank will get the benefit of last mile efficiency of the NBFC.

“The partnership with CGCL is part of UBI’s strategy to support the MSMEs by providing tailor-made financial solutions and accelerating the growth of MSMEs to contribute to the country’s economic development,” said Rai.

According to Sharma, the aim is to reach out to a large section of society by offering easy, convenient, and efficient credit solutions and empowering them to be key contributors to fiscal growth. “Our focus is to support the grassroots entrepreneurship that creates economic value,” said Sharma.

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What happens to cryptocurrency you buy if India decides to ban it, BFSI News, ET BFSI

November 25, 2021 root Personal Finance

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Well, it is not the first time that the Indian government has pondered over banning cryptocurrencies. Initially, in 2013, when bitcoin was launched, the first few years went in hush-hush. The technology was new. This was something that was a store of value with no central authority.

Not only the government but also, enthusiastic investors were speculating how bitcoin will turn out to be. When after the end of 2016, this revolutionary financial asset made noise, the Indian government came to action.

Any government of the world is about authority, power and regulation. And bitcoin, or rather say, cryptocurrency, took that power from the government. There was no bank, no RBI or no scrutiny around your money. You held an asset and you did your investment, you used the money gained and you made sure your investment strategy works for you. There was no advisory, no policymakers, no brainwashing whatsoever. The bitcoin investment grew so much in 2017, that the Indian government had to come into action.

When wheels came, bicycles were invented. We all thought this is going to stay. Then came the motors and we thought the motor vehicles were going to stay. Then came the Wright brothers, who told us that we also could fly. But when the finite supply of automobile fuel would be exhausted, none of these would matter.

On the same lines, we thought writing letters is the best way to reach farther places. Then boom. The 2000s came and the internet was all over. The communication could be done in milliseconds.

So now let us talk about what we cannot do when there is a ban. When we say the ban, we mean that the transactions between the bank and your crypto exchanges will be stopped. This means that you will not be able to convert your local currency into buying any kind of cryptocurrency. This also means that you will not be able to liquidate your HODLed cryptos and get them encashed. This means, your HODLed cryptocurrency will be on *HODL* for some time more until the ban is uplifted.

But what if you send your cryptos to someone who is not an Indian resident and belongs to a country where crypto is legal. Well, in that case, you can always send your acquired crypto, and get the equivalent INR in your bank. However, this procedure of exit would come at a cost. The foreign exchange cost and penalties would cost you more than the actual exchange fees, had there been no ban in your own country.

But, you still need to identify the catch here. By the above method, we see that the transactions that involve crypto are still possible. No government can ever tame the internet. The government tried to ban PUBG. The gaming community in India identified VPNs that would still make PUBG accessible to them. The government tried banning porn, but anything that is accessible to everyone, or is made available on the cloud, can never be fully tamed. The same goes with the decentralised and open source-based cryptocurrencies as well.

Unocoin is one such platform that lets its user buy, sell and trade 40+ cryptocurrencies. The transactional fees are very nominal as compared to the features that it provides. Unocoin has always respected and abided by the laws set by the government of India and RBI. But it also makes sure it creates a space where the crypto exchanges are smooth. Hence, Unocoin collaborated with Airtm for a cross-platform transaction. With this Unocoin – Airtm collab, any Unocoin user can buy any crypto from either platform in exchange for his/her local fiat currency and via the pairing coin US dollar Tether ( USDT), can convert his/her acquired cryptos into another crypto/fiat currency from the other platform.

It is like entering a bridge, walking on the bridge and reaching the other side of the river. With the USDT acting as a pairing coin or the bridge, the walk from one end to the other and back to the first end is possible.

While there are speculations on the cryptocurrency, the virtual currency enthusiasts know for sure, that these are only the ups and downs that come in their investment plan. India would eventually be a country where there will be no inhibitions over cryptocurrencies, sooner or later.

The writer is Co-founder & CEO of Unocoin Technologies Private Limited

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Crypto industry urges govt to take nuanced approach, asks investors to remain calm, BFSI News, ET BFSI

November 25, 2021 root Personal Finance

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The cryptocurrency industry on Wednesday urged the government to take a nuanced approach towards regulating crypto assets in India and asked investors in the country to remain calm and not arrive at a rushed conclusion, a day after the government listed for introduction a Bill to ban all such cryptocurrencies, with some exceptions.

‘The Cryptocurrency and Regulation of Official Digital Currency Bill, 2021′, to be introduced in the winter session of Parliament beginning November 29, seeks to “create a facilitative framework for creation of the official digital currency to be issued by the Reserve Bank of India. The Bill also seeks to prohibit all private cryptocurrencies in India, however, it allows for certain exceptions to promote the underlying technology of cryptocurrency and its uses”.

BuyUcoin CEO Shivam Thakral said it expects the Bill to accommodate the aspirations of Indian crypto owners, Indian crypto entrepreneurs, and investors who have put their faith in India’s crypto growth story.

“The crypto Bill should be flexible enough for young blockchain projects to flourish and we strongly believe that there is a strong case for a standard process for new cryptocurrencies before they get listed on any exchange in India for trading.

“I think popular crypto-assets like Bitcoin and Ethereum will be pre-approved by the regulators for getting listed on the exchange. We also request the government to give immediate clarity on the taxation and filing of crypto assets,” Thakral said.

CoinSwitch Kuber founder and CEO Ashish Singhal said the industry has been actively communicating with all stakeholders keeping investor protection at the forefront.

“Our discussions in the last few weeks indicate there is a broad agreement on ensuring that customers are protected, financial system stability is reinforced and India is able to take advantage of the crypto technology revolution…

“As of now, I urge all crypto asset investors in the country to remain calm, do their own research before arriving at a rushed conclusion,” said Singhal, who is also the co-chair of the Blockchain and Crypto Assets Council (BACC).

Cryptocurrency exchange CoinDCX’s spokesperson said a well-assessed and thought-through regulation will pave the way for greater adoption of the technology and will help millions of Indians embrace this new-age asset class.

OKEx.com CEO Jay Hao said India is home to the highest number of crypto owners in the world and the onus lies on the government to protect the interest of a large number of crypto investors in the country.

“We urge the government to take a nuanced approach towards regulating crypto assets in India. With the positive outcome of the cryptocurrency Bill, India will embark on an exciting journey of becoming the global leader in crypto, Defi, and NFTs,” Hao said.

Currently, there is no regulation or any ban on the use of cryptocurrencies in the country. Against this backdrop, Prime Minister Narendra Modi earlier this month held a meeting on the cryptocurrencies with senior officials, and indications are that strong regulatory steps could be taken to deal with the issue.

There has been a rising number of advertisements, featuring even film stars, promising easy and high returns on investments in cryptocurrencies in recent times, amid concerns over such currencies being allegedly used for luring investors with misleading claims.

Last week, the Standing Committee on Finance, chaired by BJP member Jayant Sinha, met the representatives of crypto exchanges and BACC, among others, and arrived at a conclusion that cryptocurrencies should not be banned, but it should be regulated.

The RBI has repeatedly reiterated its strong views against cryptocurrencies saying they pose serious threats to the macroeconomic and financial stability of the country and also doubted the number of investors trading on them as well as their claimed market value.

RBI Governor Shaktikanta Das has also reiterated his views against allowing cryptocurrencies saying they are a serious threat to any financial system since they are unregulated by central banks.

The RBI had announced its intent to come out with an official digital currency, in the face of proliferation of cryptocurrencies like Bitcoin about which the central bank has had many concerns.

Private digital currencies/ virtual currencies/ crypto currencies have gained popularity in the past one decade or so. Here, regulators and governments have been sceptical about these currencies and are apprehensive about the associated risks.

On March 4, 2021, the Supreme Court had set aside an RBI circular of April 6, 2018, prohibiting banks and entities regulated by it from providing services in relation to virtual currencies.

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Technology, collaborations, personalisation will drive customer experience, say top bankers, BFSI News, ET BFSI

November 25, 2021 root Banking & Finance

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Zuzar Tinwalla and Charu Mathur were part of a fireside chat, moderated by Amol Dethe, Editor, ETBFSI.

BFSI companies have been undergoing rapid digitisation for some years now. While many organisations had already been at the forefront in digitisation, the COVID-19 pandemic further amplified this adoption of new technologies.

“Pandemic has presented us with both difficulties and opportunities,” said Zuzar Tinwalla, COO-India & South Asia, Standard Chartered Bank at a fireside chat of ETBFSI Converge, titled ‘Crafting Tailor Made Products for Customers’.

Customer centric models

“Earlier, technologies were designed by keeping the internal processes guidelines and efficiency in mind, but that’s no longer the reality. Now, to be relevant, you have to keep the customer’s needs in mind.” he said, while elaborating on digitisation and how banks are catching up with it.

Charu Mathur, CDO & Head-Business Strategy of IndusInd Bank, adding to this, explained how banks have to be customer centric and not just process centric.

Technology, collaborations, personalisation will drive customer experience, say top bankers

“It is extremely important for us now to understand our clients very deeply and keep our ears close to them,” she added.

Zuzar Tinwalla and Charu Mathur were part of a fireside chat, moderated by Amol Dethe, Editor, ETBFSI.

Adopting technology: Data science, AI & ML

Banks are rapidly adopting new technologies like data and analytics, AI & ML, bots and robots. Tinwalla said, “ Anything more than 90 days is now considered obsolete.”

“We are investing capabilities in building the basic data foundation, and that’s a very critical function as you go along. And then sitting on top of that, you need an intelligent modeling capability or a data science function as we call it. Leveraging machine learning and artificial intelligence, and connecting dots and making logical sense out of it is important. And then at the top, you need a delivery mechanism,” said Mathur.

Although AI will progress, it will never replace human intelligence, Tinwalla said. “What is going to be appropriate for the organisation is still a human decision,” Zuzar added.

What does the future look like?

The panelists agree that many collaborations with fintechs are going to be witnessed in the coming years.

“There’s a lot to learn from fintechs,” said Tinwalla, while explaining how fintechs complement and compete with banks.

Technology, collaborations, personalisation will drive customer experience, say top bankers

On the innovation front, Mathur said, “Personalisation aspect will play a major role in driving customer experience. We see brands like Amazon and Netflix doing it quite well. I think more and more banks will probably start delivering something on the personalisation aspect, and demonstrate their ability of understanding the customer much deeper than what we do today.”

Furthermore, she believes that composable systems, which are completely API native to the core, will allow the banks to create products and services completely tailor made to a client’s unique requirements.

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Niti Aayog suggests setting up of full-stack ‘digital banks’

November 24, 2021 root Banking & Finance

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A detailed architecture and sequencing of reform has been proposed in this paper, the purpose of which is to undertake stakeholder consultations. Based on the comments received, the paper will be finalised and shared as a policy recommendation from Niti Aayog.

The government think-tank Niti Aayog on Wednesday suggested setting up of full-stack ‘digital banks’ to deepen access to financial services in the country.

In a discussion paper, Niti Aayog examines the global scenario, and based on the same, recommends a new segment of regulated entities — full-stack digital banks.
A detailed architecture and sequencing of reform has been proposed in this paper, the purpose of which is to undertake stakeholder consultations. Based on the comments received, the paper will be finalised and shared as a policy recommendation from Niti Aayog.

Upon progression from the sandbox into the final stage, a full-stack digital business bank will be required to bring in `200 crore (equivalent to that required of the Small Finance bank). “Digital Banks” or DBs referred in this Paper means Banks as defined in the Banking Regulation Act, 1949 (BR Act).

“In other words, these entities will issue deposits, make loans and offer the full suite of services that the BR Act empowers them to. As the name suggests however, DBs will principally rely on the internet and other proximate channels22 to offer their services and not physical branches,” the think-tank said in the paper. However, as a natural corollary to being a “Bank” in full sense of its legal definition, it is proposed that DBs will be subject to prudential and liquidity norms at par with the incumbent commercial banks, it said.

Creating a new licensing / regulatory framework is being proposed as regulatory innovation and not as regulatory arbitrage. “

Having said that, DBs offer a differentiated proposition and as such, there is scope for differentiated treatment in adjacent areas of their operation consistent with treating them identically with incumbent commercial banks, in the critical areas of prudential and liquidity risk, it added.

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Security receipts for past NPAs appear as lenders seek to avoid provisioning

November 24, 2021 root Personal Finance

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“Time is not the essence for transfer of SRs. In the event of non-realisation of amount out of SRs, the bank is not liable to refund anything in part or full,” SBI said in the notice.

Security receipts (SRs) issued against bad-loan sales from seven-eight years ago are set to enter the stressed assets market as lenders seek to avoid provisioning against them. Both banks and non-banking financial companies (NBFCs) are likely to start hunting for buyers for SRs, with State Bank of India taking the lead, industry executives told FE.

The country’s largest lender by assets has issued a notice seeking bids for SRs with a face value of Rs 38 crore issued against its exposure to CM Smith and Sons by Invent Assets Securitisation & Reconstruction. The securities were assigned in January 2015.

“Time is not the essence for transfer of SRs. In the event of non-realisation of amount out of SRs, the bank is not liable to refund anything in part or full,” SBI said in the notice.

Executives from the stressed assets industry said SRs issued during non-performing asset (NPA) sales are now expected to be put up for sale, as for many of them, recoveries have not happened and erosion in the net asset value (NAV) may demand additional provisioning.

“Until a few years ago, there used to be structured deals in ARC sales – first under 5:95 and then under the 15:85 structure. SRs from these years are going to enter the market now as NAVs for many of them have depleted and that means the purpose of selling them to ARCs hasn’t fructified. So, to avoid providing against them, banks and NBFCs will both come to the market,” said a senior executive from the industry.

Most NPAs sold to ARCs since 2018 have been assigned through full-cash deals, which means that there were no SRs issued during the sale. In SRs, underlying cash flows are dependent on realisation from NPAs. Reserve Bank of India guidelines say investments in SRs may be aggregated to arrive at net depreciation or appreciation of investments under the category. Net depreciation, if any, must be provided for.

Prospective buyers for SRs are also mostly ARCs. According to industry executives, the quality of underlying assets for each set of SRs and their vintage are the two important factors that will determine the terms of sale. The most coveted SRs will have residential properties as the underlying, followed by commercial properties, office properties and industrial properties.

Lenders may have to take substantial haircuts as these assets are old. “Most of these sales are likely to be priced at 25-30 cents to the dollar because of the vintage of the asset,” the person quoted above said.