Weekly Wrap-up!

Nestle India to invest Rs.2600 crore into India in the next 3-4 years

Ø This announcement came on the back of stellar results announced by Nestle India for the Sep-20 quarter

Ø With double digit growth in all its top brands, Nestle plans to invest in expanding and deepening these consumer markets

SBI Cards stock came under pressure on rising default concerns

Ø During the Sep-20 quarter, SBI cards saw 160% rise in bad debts to Rs.862 crore due to a series of retail defaults

Ø However, the company admitted that it had not fully factored in the likely impact of the Supreme Court decision on EMIs

SEBI clears the proposed buyback of shares by NTPC

Ø NTPC will be one among the 8 cash-rich PSUs in India to do a buyback under directions of the government

Ø With the market for PSUs still looking shaky, the government is relying on buybacks to meet its divestment targets

Brent Crude gained above the $42/bbl mark during the week

Ø OPEC is expected to announce another round of supply cuts, with the support of Russia, giving oil prices some support

Ø However, demand for crude continues to be weak and that may negate the price rise unless the supply cut is huge

Forex Reserves touch an all-time record of $555 billion

Ø India is already in the top-5 countries in the world in terms of forex reserves and this should reinforce its position

Ø With overall imports falling in line with lower oil prices, the forex cover for imports is now in excess of 15 months

Government imposes onion stocking limits to curb prices

Ø Now retailers are limited to stocking up to 2 tons of onions and wholesalers can only stock 25 tons of onions

Ø In the last few days, onion prices have gone above Rs.100/kg and that has normally been a very politically sensitive issue

NBFCs want to be included as beneficiaries in on-tap TLTRO

Ø This liquidity mechanism opened by RBI is currently only available to the scheduled banks in the system

Ø NBFCs believe that this could give them easy access to liquidity at economical rates in times of crisis

ICICI Lombard reports 35% spike in net profits to Rs.416 crore in Q2 Sep-20

Ø The higher profit was managed on the back of better management of costs during the quarter

Ø Even as direct premium grew, the insurer managed to expand its retention ratio sharply during the quarter

MPC minutes point to unanimity on an accommodative monetary stance

Ø Most of the members dwelt on the need to keep rates low and stance accommodative to revive GDP growth

Ø However, Jayanth Varma has raised objections to the MPC giving a long term guidance on accommodative stance

HPCL raises Rs.2000 crore via issue of debt instruments in the market

Ø The 3-year paper maturing in 2023 will carry a coupon rate of 4.79% on an annualized basis

Ø This is among the lowest rates at which Indian companies are borrowing and should be a boost to other PSUs

Flipkart to acquire 7.8% in Aditya Birla Fashions for Rs.1500 crore

Ø For Aditya Birla Fashions, this gives them the much needed capital to expand their retail brand franchise in a big way

Ø For Flipkart, this is an extension of their fashion offering, where it is already present via Myntra

Bernstein initiates coverage on Bharti Airtel with outperform rating

Ø Bernstein feels that the only telecom player other than Jio that has the ability to expand market share is Bharti Airtel

Ø Also, the price status quo in the telecom market is likely to favour Jio and Bharti at the cost of Vodafone Idea

Jet Airways stock rallies by 108% in a span of just 12 days

Ø This positive price movement came after the COC finally agreed to sell Jet to a consortium headed by Kalrock

Ø Kalrock along with Murari Jalan had placed the bid for Jet Airways, which was finally approved in the last meeting

In the US elections, most surveys point to neck-to-neck battle

Ø While Joe Biden had an advantage, the survey observes that Trump had covered enough ground in last few days

Ø Like in the past, the eventual election outcome may boil down to the swing factors in just a handful of states

Government likely to divest 10% stake in GIC RE and New India Assurance

Ø It may be recollected that the government had sold 15% in both these companies way back in 2017

Ø However, both the IPOs had been steeply priced and the stocks have grossly underperformed post listing

Reliance becomes extremely over owned by FPIs

Ø As of Sep-20, foreign portfolio investors hold a record 27.2% stake in Reliance Industries, with a last quarter spike

Ø At the same time, domestic MFs have cut their holding in RIL by 25 bps, largely due to breaching the 10% AUM ceiling

Equitas Small Finance Bank gets a tepid response to its IPO

Ø The overall IPO got oversubscription only to the extent of 1.95x with QIB portion showing 1.92x subscription

Ø While the retail book was filled, HNIs were not interested in an issue where funding was unlikely to be lucrative

SEBI penalizes promoters of Kirloskar Brothers to the tune of Rs.31 crore

Ø This includes a penalty and disgorgement of profits and is the largest such levy by SEBI on a promoter group

Ø The case pertains to 2010 when the promoter family had allegedly traded on inside information

Bajaj Finance reports 36% fall in net profits on higher provisioning

Ø While net interest income or NII increased by 4%, it provided an additional Rs.1370 crore for COVID provisions

Ø However, the gross NPAs of Bajaj Finance at 1.03% and net NPAs at 0.37% are among the best in the industry

Venugopal Dhoot makes Rs.30,000 crore bid to buy back Videocon

Ø Dhoot wants offer this as a full and final settlement of all dues and get control of Videocon back from the NCLT

Ø However, in the past, the COC has not been too enthused by the idea of letting promoters buy back at a discount

Gland Pharma may be the first mega IPO with a Chinese parent

Ø Gland Pharma of Hyderabad is majority owned by Fosun of China, which it acquired from private equity investor KKR

Ø The IPO will combine a new issue and an OFS, in which the Gland Pharma promoter and Fosun will seek partial exit