Reserve Bank of India – Press Releases
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Ajit Prasad Press Release: 2021-2022/1212 |
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Velocity.in raises $20 million in funding led by Peter Thiel’s Valar Ventures
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Velocity.in, a Bengaluru-based fintech start-up, has raised $20 million in Series A funding from Peter Thiel’s Valar Ventures along with the participation from Presight Capital, Utsav Somani’s iSeed, Maninder Gulati (Oyo), Zac Prince (BlockFi) and Philippe De Mota (Hedosophia).
Combined with the $10 million seed round announced earlier this year, Velocity has raised a total of $30 million in equity till now. In addition, Velocity has also raised multiple debt lines with NBFCs to scale its revenue-based financing platform.
Launched in early 2020, Velocity offers revenue-based financing to e-commerce businesses as an alternative to venture capital and traditional bank debt. Within the span of 1.5 years, over 1,500 D2C and e-commerce businesses have signed up for Velocity’s revenue-based financing. The fintech player claims to have over ₹1,200 crore fundable revenues connected to its platform and has processed 250+ investments across 175 companies. With the new capital, the start-up aims to deploy over ₹1,000 crore towards 1,000+ e-commerce businesses.
Commenting on the fundraise, Abhiroop Medhekar, co-founder and CEO of Velocity, said, “Our vision is to build the future of business financing in India. Valar’s investment in our Series A has reaffirmed the firm’s belief in Velocity. We are keen to use this funding to build multiple world class products for thousands of new-age businesses.”
Andrew McCormack of Valar Ventures, said: “Since our last investment, Velocity has grown 10x and secured the lead position in this fast-growing market. Despite this exponential growth, their portfolio quality remains strong. We were impressed by their strong customer orientation, tech-product DNA, and ambitious growth plans.”
Velocity leverages digital data to evaluate an application across 50+ parameters and extend up to ₹3 crore of finance within five days. The repayments happen flexibly as a share of the company’s online revenues. Velocity does not take any collateral, personal guarantee or equity dilution and only charges a fixed fee of 4-8 per cent on the deployed capital.
Brands that have historically raised capital through Velocity are said to have grown their revenues by 1.5x within six months of funding and 78 per cent of these brands become repeat customers. Velocity’s portfolio includes companies like PowerGummies, Green Soul, WallMantra, BellaVita, Smoor Chocolates and CrossBeats.
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2 Construction Sector Stocks To Buy For Potential Upside Of Upto To 29%: IDBI Capital
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Ashoka Buildcon: Buy for a target price of Rs. 135
IDBI Capital maintains its ‘Buy’ rating on the scrip of Ashoka Buildcon for a target price of Rs. 135 while the stock last closed the trading session at a price of Rs. 104.55, implying potential investors in the stock can make decent gains of 29%.
• Q2FY22 Snapshot: The construction and contracting firm reported Q2FY22 revenue at Rs.9 billion, +5% YoY / -9% QoQ. The decline in revenue sequentially is attributed to delayed initiated of the projects owing to heavy monsoon. EBITDA margin came in at 11.5 percent, while EBITDA at Rs. 1 billion during the review period saw a decline both QoQ and YoY. Profit after tax has been reported at Rs. 0.9bn (-9% YoY / -6% QoQ). The company has guided for EBITDA margin of 12-12.5% and revenue growth of 20% YoY for FY22E.
• Order inflow robust: “H1FY22 Order book at Rs120bn (equals 3x TTM Revenue) with Roads at 61%, power T&D 16%, EPC building at 16% and Railway at
7%”, says the report. During the review period, the company bagged orders worth Rs 18.7 billion. YTDFY22 total order inflow stood at Rs. 33.5 billion.
• Trigger for future stock performance: “Catalyst for stock performance is conclusion of ACL asset sale,
execution momentum and orders win. ACL stake sale is key event to watch and will remove overhang on stock performance and provide CF for future growth to ASBL.Stock at 5x FY24E EPS is trading at -1 STD of its historical average”, adds the brokerage report.
PNC Infratech: Buy for a target price of Rs. 406
Brokerage firm has retained its previous ‘Buy’ call on the scrip of PNC Infratech for the target price of Rs. 406. This means potential investors in the stock can gain returns to the tune of 27.5% considering the stock’s current price of Rs. 318.35.
• Q2FY22 snapshot: The company’s revenue jumped by 53% YoY at Rs.16 billion. EBITDA was up 56% at Rs2.2bn with EBITDA margin of 13.7% vs 13.5% YoY. Q2FY22 PAT stood at Rs1.3bn (+95% YoY / +45% QoQ). Increase in PAT is on the back of lower tax rate at 26% versus 36%.
The company has guided for revenue growth of 20-25% with EBITDA margin of approximately 13.5-13.75%.
• Nearly 3/4th of the company’s order book is accounted by the Road sector: “H1FY22 Order book at Rs132bn (equals 2x TTM Revenue) comprises of roads at 72% and water and Irrigation projects at 28%. Q2FY22 order inflow stood at Rs27bn”, mentions the report. The company focuses to realize an order inflow of Rs. 80 billion in FY22 (HAM: EPC at 50:50). Further ahead, the company is planning to make a bid for NHAI projects amounting to Rs. 250 billion and also sees opportunities under the Jal Jeevan Mission.
The company maintains ‘BUY’ rating, while the stock trades closer to its historical average at 12x, 2 years forward EPS. “PNCL remains our top pick in the construction with order book visibility, lean balance sheet for the growth and key beneficiary of capital expenditure in road construction in India”, adds the brokerage.
Disclaimer:
The above stocks have been picked from the brokerage report of IDBI Capital. 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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Former RBI DG says central bank’s concerns on crypto stem from money laundering, valuation concerns, BFSI News, ET BFSI
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Former RBI Deputy Governor N S Vishwanathan on Wednesday said money laundering and lack of clarity on valuations are the primary concerns of central banks in being circumspect about the introduction of cryptocurrencies. If the government goes ahead and allows cryptocurrencies, bankers need to be wary and not confuse persons’ wealth with the amount of crypto assets they hold even if they do not use it as collateral for lending, Vishwanathan said.
The comments come amid a heated debate over whether to allow private cryptocurrencies into the country, which has seen the RBI being vocal about its concerns, while the government seems to be more amenable.
RBI Governor Shaktikanta Das had on Tuesday reiterated his concerns over cryptocurrencies, saying there are ‘far deeper issues’ involved in virtual currencies that could pose a threat to the country’s economic and financial stability. The government is likely to introduce a bill on cryptocurrencies during the winter session of Parliament, beginning November 29.
Vishwanathan said world over, central banks are concerned with cryptocurrencies and wondered what makes governments more supportive of it.
“The central bank’s concerns come from two fundamental areas. One, of course, is that crypto-assets are seen as a possible source of money laundering, number two is that the valuations,” he said, speaking at the 8th SBI Banking and Economic Conclave.
He said we should not confuse cryptocurrencies with dematerialisation, where there is an underlying asset, which comes up in a digital form.
The career central banker added that we do not know what defines a value of a crypto asset, and the limited understanding is demand-supply forces govern the value.
The value of bitcoin, probably the most popular among the crypto assets, “gyrated” to USD 10,000 and swings between USD 7-17,000 per coin, he noted.
Vishwanathan said a person’s crypto holdings should not determine the wealth because the constant volatilities in the value can make a rich person seem poor or vice-versa.
Bankers should be extra careful and should not look at the crypto holdings while assessing a wealth of a potential borrower and should not lend against such assets, he added.
Earlier, Vishwanathan said, central banks prefer central bank digital currencies (CBDC) over the private and unregulated crypto assets and added that the introduction of the CBDC will help foreign trade.
The former DG said the activity of big tech companies like Google in aspects like deposit mobilisation for lenders is not so high that the RBI needs to be concerned about.
SBI Chairman Dinesh Kumar Khara said our experiences with the past will ensure an orderly exit from the present stimulus given by the RBI.
Replying to a question on whether banks are overcharging for forex commissions to small exporters, Khara said the market forces can ensure that no one is over-charged, while Swaminathan J, a managing director of SBI, said any enterprise works on cross-subsidisation, where it earns higher from a particular revenue stream and less from another.
Swaminathan added that various fee and commission streams have closed down with time, and banks will take an appropriate call on this particular one and case of regulatory action.
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Reserve Bank of India – Tenders
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Reserve Bank of India, Chandigarh invites e-Tender from eligible and willing firms for Operation and Routine Maintenance of Central Air Conditioning (HVAC) Plant Installed at Main office Building, RBI Chandigarh. The estimated cost of work is ₹8,75,400/- (including GST) only. 2. This is an Open Tender. Only those firms, who are registered on MSTC portal will be able to take part in the Tender process. The tender document is available on website www.rbi.org.in for download. 3. Tender shall be submitted online in two parts. Part-I of the tender will contain the Bank’s standard technical and commercial conditions for the proposed work, which must be agreed to by the tenderers. Part-II of the tender will contain Bank’s schedule of quantities and tenderer’s price bid to be submitted online. 4. The firms fulfilling the eligibility criteria and desirous of being considered for award of the work should upload all the required documents at www.mstcecommerce.com/eprochome/rbi on or before December 15, 2021 till 02:00 PM. 5. Part-I of the tender will be opened on December 15, 2021 at 03:00 PM on MSTC website. The timeline of the tender is as follow:
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Fino Payments Bank to expand product offering
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Fino Payments Bank, which has begun offering credit through NBFCs to its customers, plans to expand its product offering but is not looking to convert to a small finance bank.
“We are already offering credit to our customers through a tie up with KreditBee. We are also offering insurance. We plan to have a much bigger bouquet of products including mutual funds, recurring deposit, fixed deposit and international remittances,” said Rishi Gupta, Managing Director and CEO, Fino Payments Bank.
The payments bank is also looking at deposits, for which pilots are going on at the moment.
The bank has launched products including subscription current accounts, AEPS cash deposit, Aadhaar Pay, PPI cards, Gift cards and UPI P2M in the first half of the fiscal.
But conversion to a small finance bank is not on the cards anytime in the near future though the bank’s personal loan offering is doing well.
“We don’t want to get into credit business on our own books as of now. Credit is a completely different area. We don’t have the expertise. We don’t have the team,” Gupta told BusinessLine.
Fino Payments Bank was recently listed on the bourses. It also announced its second-quarter results reported a 74.5 per cent increase in its net profit at ₹7.89 crore.
Asset-light model
The bank remains upbeat about its business model despite many of its peers facing pressures in maintaining profitability.
“Growth and profitability are built into the Fino model. We don’t need to compromise on one to focus on another,” Gupta said, adding that the bank has been able to set up a very asset-light ecosystem.
“We are focused on the business. We have a good mix of profit, good mix of high margin as well as low margin products model,” he further said, adding that the bank is confident of being able to maintain its growth trajectory.
The capital raised as part of the listing is being used on building a bigger technology stack as well as for marketing and branding.
“We are investing in infrastructure, on software and digital ecosystem. We have already started to build a team. There is a lot of products on the digital side as well,” Gupta said.
As of September 30, 2021, the bank has 8.1 lakh merchants and 34 lakh, customers.
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Mahindra Finance launches vehicle leasing, subscription business
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Mahindra & Mahindra Financial Services on Wednesday announced the launch of its leasing and subscription business Quiklyz.
“This venture is a new-age digital platform for vehicle leasing and subscription, that aims to provide great convenience, flexibility and choice to customers across cities,” it said in a statement.
It provides a digital journey on car usership with which the customer can access a brand-new car without purchasing it. Quiklyz will take care of registration, insurance, scheduled and unscheduled maintenance, road-side assistance. It will be available for both corporate (B2B) and retail (B2C) customers.
In the initial phase Quiklyz will launch its services in metro cities like Bengaluru, Chennai, Delhi, Gurugram, Hyderabad, Mumbai, Noida and Pune. It will expand to other cities, including tier-II cities, covering 30 locations over the next one year. It is also in discussions with several automotive OEMs.
Ramesh Iyer, Vice-Chairman and Managing Director, Mahindra Finance, said, “We aim to achieve a book size of ₹10,000 crore in a span of three to five years. Leasing is seeing significant traction in the last mile mobility space especially with EVs, something our business module will also focus on.”
Turra Mohammed, SVP and Business Head – Quiklyz, said at present leasing accounts for 10 per cent of corporate registered vehicles. “We expect it to grow to 20-25 per cent share in the next five years. We will leverage Mahindra Group’s extensive network to expand Quiklyz to 30 cities within a year,” he said.
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UBS revises GDP forecast to 9.5% from 8.9% for FY22, BFSI News, ET BFSI
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Mumbai, Nov 17 (PTI) Citing faster-than-expected recovery, rising consumer confidence and the resultant spending spike, Swiss brokerage UBS Securities has revised upwards its growth forecast for the current fiscal to 9.5 per cent from 8.9 per cent in September. The brokerage also sees the economy clipping at 7.7 per cent in FY23 but moderating to 6 per cent in FY24, as it expects the benefit of the low-interest rate regime to end by the end of FY23, and it sees the central bank hiking policy rates by 50 bps in the second half of the next fiscal.
The Reserve Bank also forecasts 9.5 per cent GDP growth this fiscal while the average projection ranges from 8.5 to 10 per cent. The government projection is around 10 per cent.
The GDP grew 20.1 per cent in the June quarter of FY22.
In its September review, UBS said on a seasonally adjusted sequential basis, the real GDP declined by 12.4 per cent in the June quarter against the -26 per cent in the same period last year.
Therefore, we maintain the base case estimate of GDP growth at 8.9 per cent in FY22 compared to the consensus of 9.2 per cent against the deeper 7.3 per cent contraction in FY21, UBS Securities said.
The economy is bouncing back on progressive reopening, and the recovery from the second wave has been more pronounced than what we anticipated, Tanvee Gupta Jain, the chief economist at UBS Securities India said on Wednesday. Therefore pencilled in a higher-than-expected GDP run this fiscal.
Without giving an exact number, she said the economy will grow by 9-10 per cent in Q3 and 6-6.5 per cent in Q4 this fiscal, leading to higher overall full-year growth.
Gupta-Jain told reporters in a concall that she sees real GDP clipping at 9.5 per cent this fiscal, up from 8.9 per cent forecast earlier, 7.7 per cent in FY23 — which is more optimistic than the consensus 7.4 per cent for the year, but the growth momentum will moderate to 6 per cent in FY24 as the output gap will remain negative amidst the global growth engine slowing down.
Their optimism comes from their internal UBS India Activity Indicator data, which suggest economic activity has improved sequentially by an average of 16.8 per cent in the September quarter after contracting 11 per cent in the June quarter. Even for October, the indicator was up 3.1 per cent month-on-month on the festive demand bounce.
The brokerage bases the more-than-consensus growth optimism on the following: though consumption growth may moderate measures to boost public Capex and early signs of a recovery in the residential real estate sector may offset some of the adverse impacts.
Similarly, exports could also moderate next year from the very high rates this year due to a shift from goods to service consumption at the global level as the pandemic recedes.
They also see a potential credit accelerator effect in the country aiding the recovery. The baseline assumption is that activity continues to normalise, and remaining mobility restrictions are gradually removed.
Downside risks to the outlook include the following: a mutant virus that is resistant to vaccines is the biggest downside risk, as it may leave the government no choice but to begin new mobility restrictions, another could be a more than the expected spike in inflation and the resultant hike in repo rates to the tune of 75 bps next fiscal. If both materialise, then FY23 growth will be much lower at 5 per cent, she said.
And the upsides would be a successful and timely implementation of the recently announced structural reforms boosting growth beyond our baseline forecast, which will also lead to the economy closing the output gap faster.
According to the brokerage, potential growth has slowed to 5.75-6.25 per cent currently compared to over 7 per cent in 2017, due to longer-than-expected disruption caused by the pandemic and balance sheet concerns faced by economic agents.
Beyond FY22, Gupta-Jain believes Capex, especially infrastructure spending, manufacturing and exports will be the next key growth drivers.
On inflation, she expects CPI to decelerate to 4.8 per cent in FY23 from 5.4 per cent in FY22, assuming the RBI gradually starts unwinding its ultra-easy policy as the economic recovery gains momentum. In a base case scenario, she expects a policy rate hike of 50 bps in H2 FY23.
On the fiscal front, she expects the government to remain committed to fiscal consolidation and narrow the deficit to 8.8 per cent in FY23 from 10.1 per cent in FY22.
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12 Reasons Geojit Has A Buy On The Stock Of This Well-Diversified Company
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Investment
oi-Sunil Fernandes
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Geojit has has a “buy” call on the stock of Tube Investments and believes that investors pay a higher premium for companies that focus on newer technologies.
“Keeping this fact in mind, we have selected a company, which is using its existing cash flows to build new technologies and make itself future-ready. The company has set out a vision to transform itself by looking at expanding the top line and bottom line through an inorganic route. Last year, it acquired CG Power and turned around the business. One can expect more such inorganic growth moves from the company,” the brokerage has said.
Here is the summary of the reasoning for recommending to buy the stock of Tube Investments of India by Geojit Securities.
1) The company did extremely well in the first and second quarter of the current financial year during which the sales of the company increased by 100 percent and net profit by 500 percent.
2) The company will start manufacturing electrical vehicles from April to June 2022. If this product finds customer acceptance, it can re-rate the counter further.
3) Tube Investments of India is the first from India to produce optical lenses for auto cameras. This business has great prospects as in the future all cars will be fitted with Advanced Driver Assistance Systems (ADAS).
4) The company performed well despite its heavy reliance on the Auto sector-which faced a slowdown. This shows that the management knows how to navigate through the tough situation.
5) Tube Investments of India wants to use cash flow from the present business to fund the future higher growth opportunities.
6) Institutional investors like this company and have a stake as high as 41 percent.
7) The company has relied on exports to counter the domestic slowdown, and it will continue to focus on exports as it has a higher margin.
8) The company has two listed subsidiaries CG Power and Shanthi Gears.
9) The company has a bicycle business which is B2C, having a turnover of close to Rs 1,000 crore. This business can be a separate listed entity in the future. This can unlock value for the shareholders.
Auto, as well as infrastructure, should do well as the economy is bouncing back. This should help the company to report smarter top line as well as bottom-line growth.
10) The company margins in the second half would be better than the first half as it will be able to pass on the hike in the input cost now.
11) We believe that company will report its highest ever net profit in the current financial year.
12) Our technical indicators suggest a bullish trend.
Superb Quarterly numbers by Tube Investments of India
Tube Investments of India saw a consolidated Revenue for the quarter was Rs.3,262 Cr as against Rs.1,193 Cr inthe corresponding quarter of the previous year. The profit before tax (before exception)
for the quarter was at 287 Cr as against Rs. 136 Cr in the corresponding quarter of the
previous year.
CG Power and Industrial Solutions Ltd, a subsidiary company, in which the Company holds 52.61% stake, registered a consolidated revenue of Rs.1,454 Cr during the quarter as against Rs. 664 Cr in the corresponding quarter of the previous year. Profit before tax (before exceptional items) for the quarter was Rs.144 Cr as against a loss of Rs.37 Cr in the corresponding quarter of previous year.
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Buy This Auto Ancillary Stock For An 18% Upside In 1-year
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Robust outlook across segments
“We did an analysis of CY21/22 demand outlook provided by 21 entities, including CV/PV OEMs, non-auto companies and industry associations. The read-through is positive for forging companies. The HCV segment is expected to grow strongly by up to 16% in CY22 in the North America and Europe regions. The CY21 outlook has been moderated due to supply constraints, leading to expectations of robust growth in CY22. In addition, strong growth is expected in India in CY22,” the brokerage has said.
According to it, the global passenger vehicle segment is likely to clock double-digit growth in CY22 across regions, owing to the pending order book, improving macros and low channel inventory.
Bharat Forge: Leadership position in automotive segment
According to Emkay Global, Bharat Forge’s revenue CAGR is expected at 19% in FY22-24E, led by the cyclical recovery in the underlying Auto and Industrial segments in both domestic and overseas markets. Moreover, nascent segments, such as Defense, Aerospace, Railways, Power electronics and Aluminum components, have the potential to cross US$100mn each in revenues in the medium term.
“Our positive view on BHC is underpinned by its leadership position in automotive forgings, focus on diversification, and an expected recovery in the core segments. We have a Buy rating on the stock with a Dec’22 target price of Rs 950, based on 27x P/E for the standalone business on Dec’23E EPS,” the brokerage has said.
Disclaimer
The above stock has been picked from the brokerage report of Emkay Global. 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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