Private equity investors avoid the market in the June quarter with the exception of one sizable transaction involving GIC and Brookfield REIT.
There were no PE investments in well-known markets like Delhi-NCR and Bengaluru, which had recently been the centre of activity.
INTRODUCTION
Private equity (PE) investments fell slightly by 5% year over year to $1.9 billion in Q1 FY24 from $2 billion in April to June of the previous year. There is a catch, even though the decrease in investment capital was minimal.
A closer examination of the most recent data released by Anarock reveals that, save from one significant transaction, PE activity in India remained largely subdued.
There were no PE investments in well-known markets like Delhi-NCR and Bengaluru, which had recently been the centre of activity.
Mumbai, one of the top commercial markets, had some PE activity with acquisitions totaling more than $400 million, accounting for 22% of all PE investments made during the quarter.
94% of the $1.9 billion total came from investments in equity, with the remaining 6% coming from debt.
74% of all PE investments made during the April–June quarter came from the $1.4 billion deal between Brookfield Asset Management’s PE fund and a group led by Brookfield India Real Estate Trust REIT and GIC.The average ticket amount increased 92 percent YoY to US$ 192 million in Q1FY24 as a result.
“Without this transaction, private equity activity remained muted because of the high interest rate environment and international uncertainty. In any case, foreign equity investments in office assets typically predominate in PE deals in Indian real estate.
In the June quarter, Ashish Kacholia had 2,31,683 shares or 2.02 percent of Raghav Productivity Enhancers. This comes as another investor, Rekha Jhunjhunwala, reduced her holdings in this multibagger stock.
And, in this ‘togetherness’ year, more over a third of its staff have left, a huge increase from FY2022.
Introduction
In terms of the third component of the new tagline, “Winning,” Axis has undoubtedly won the prize for consumer complaints in banks (as mentioned in my piece), and perhaps it has also won the award for staff attrition.
Similar lofty statements about customer satisfaction stated in the bank’s FY2022 annual report eventually proven false, as Axis Bank emerged as the private sector market leader in customer complaints.
Similarly, records from the bank’s FY2023 annual report show that, far from demonstrating loyalty, Axis employees continued to quit in droves throughout the year. Staff churn rose to 34.8% in FY2023, up from 31.6% in FY2022.
In FY2023, the bank’s attrition rate is the second highest since FY2018. With record client complaints in FY2022 and such significant staff churn, primarily at the entry and mid-management levels, the bank’s entire retail strategy could be jeopardised.
Attrition in percentage is computed using the average headcount. Axis Bank provided the information.
What is less notable is that female worker attrition has been higher than male attrition over the last three years. Apparently, female employees at Axis Bank are dissatisfied for several reasons. Female attrition is at its highest since fiscal year 2018.
From FY2018 to FY2022, Axis Bank was an industry leader in voluntarily disclosing data on employees and attrition. Stakeholders could calculate attrition in various categories such as age bucket, management cadre, gender, and even new hires.
Attrition in percentage is computed using the average headcount. Axis Bank provided the information.
The Securities and Exchange Board of India (SEBI) had mandated attrition disclosure in annual reports beginning in FY2023, and this analyst had believed that Axis Bank would continue to provide such thorough information.
As a result, stakeholders are unaware of the alarming 41% and 58% attrition rates in frontline sales and among the youngest age groups (those under 30), which were recorded in FY2022.
Attrition
Employees at Year End
< 30 yrs
14,584
35,580
30-50 yrs
11,322
49,435
> 50 yrs
54
800
Total
25,960
85,815
Top Management
0
9
Senior Management
21
218
Middle Management
1,002
8,909
Junior Management
8,742
37,766
Sales Channels
16,195
38,913
Total
25,960
85,815
Axis Bank has a persistent issue as seen by its historically high attrition rates in the less than 30 years and sales/frontline categories.
Freshmen typically take the bank 9 months to break even, but when turnover is this high, the fees become an expense.
The continually high turnover in these categories is a result of the bank’s recruitment team’s subpar selection procedures, insufficient training, and a toxic work environment.
Additionally, stakeholders are made aware that one of the seven observations and actions the board of the bank’s performance evaluation for FY2022 was “oversight on actionables relating to attrition and customer complaints.”
In FY2022, a few banks voluntarily acknowledged attrition.
The causes should be made public because increasing turnover causes inconvenience, unhappy customers, and greater employee hiring and training costs. Shareholders must request an explanation from the board of directors at the bank’s annual general meeting, which is set for July 28, 2023.
Confidence in the bank and its board of directors is damaged when a bank makes bold statements in its annual report that are refuted by facts in its own disclosures.
Brand Titan and foreign brands experienced great purchase momentum, with double-digit increases. “Consumer preferences for premium brands resulted in a significant increase in the average selling price for watches,” according to the Tata Group company.
The one-year beta of the stock is 0.84, indicating modest volatility. Meanwhile, Indian equity benchmarks reached new highs today.
Titan Company Ltd reported a 20% year-on-year (YoY) revenue increase in the June quarter of fiscal year 2023-24 (Q1 FY24). The company announced in a post-market hours announcement on Thursday.
Despite significant volatility in gold prices throughout the quarter, Akshaya Tritiya sales in April and wedding purchases in June were robust,” said a spokesperson for the Jewellery business.
The primary categories of gold and studded rose well, while the overall product mix remained stable. “New store openings, golden harvest, and exchange programmes performed well during the quarter,” Titan said.
The 13% YoY growth in the Watches & Wearables division was comprised of 8% growth in the analogue watches segment and 84% YoY growth in wearables.Brand Titan and foreign brands experienced great purchase momentum, with double-digit increases.
Sales in the EyeCare Division increased by 10% year on year. Titan also stated that the commerce and distribution channels expanded quicker than Titan Eye+.
Titan reported that fragrances and fashion accessories grew 11% year on year, driven by 9% growth in fragrances and 13% growth in fashion accessories. Taneira’s first-quarter revenue increased by 81% year over year.
The 14-day relative strength index (RSI) for the stock was 79.96. A value less than 30 is considered oversold, while a value more than 70 is considered overbought.
CEAT share price: The company gained 19.40 per cent to achieve a 52-week high of Rs 2,498.10 over its previous close of Rs 2,092.30. The counter’s turnover was Rs 31.15 crore, with a market capitalisation (m-cap) of Rs 9,882.77 crore. The stock has gained 28.48 percent in the last month and 49.45 percent year to date (YTD).
CEAT stock price: CEAT appeared to be mostly ‘bullish’ on the technical front.
INTRODUCTION
CEAT shares surged to a one-year high in Thursday’s trading. The stock increased 19.40% from its previous close of Rs 2,092.30 to a 52-week high of Rs 2,498.10.
The counter’s turnover was Rs 31.15 crore, with a market capitalisation (m-cap) of Rs 9,882.77 crore. The stock has risen 28.48 percent in the last month and 49.45 percent.
The current increase can be attributed to new luxury vehicle introductions, according to a person familiar with the situation. CEAT received the most attention when the stock reached a 52-week high.
The increase is more likely a beneficial spillover impact on tyre stocks, according to an industry source who requested anonymity.
“CEAT is planning to increase exports in FY24-25,” stated Ravi Singh, Vice-President and Head of Research at Share India.
It is bullish and trading above the 50 and 200-day moving averages, with an RSI of 70. In the short run, the stock might reach Rs 2,600.”
“CEAT is bullish but overbought on the daily charts,” said AR Ramachandran of Tips2trades, Investors should take profits now or hold till the daily support of Rs 2,168 is broken on a closing basis.”
The 14-day relative strength index (RSI) for the stock was 87.29. A value less than 30 is considered oversold, while a value more than 70 is considered overbought.
The stock of the corporation has a price-to-earnings (P/E) ratio of 32.28. It has a price-to-book ratio (P/B) of 2.05.
The 30-share BSE Sensex slid 60 points, or 0.09 percent, to 65,386, while the wider NSE Nifty fell 14 points, or 0.07 percent, to 19,385.
The National Stock Exchange said that eight of the 15 sector indices were trading in the red.
INTRODUCTION
Indian equities indexes fell in early trade on Thursday due to negative global cues. Domestic indices were driven down by equities in technology, finance, metals, and consumer goods.
The 30-share BSE Sensex slid 60 points, or 0.09 percent, to 65,386, while the wider NSE Nifty fell 14 points, or 0.07 percent, to 19,385.
Wall Street equities slumped overnight as minutes from the June US Federal Reserve meeting revealed that the decision to pause rate hikes was unanimous and that most members expected future policy tightening.
According to preliminary NSE statistics, foreign institutional investors (FIIs) bought Rs 1,603 crore of Indian equities on a net basis on Wednesday, while domestic investors sold Rs 439 crore.
Continue to invest in high-quality large-cap stocks. “For direction, wait for the Q1 results,” said VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
Nifty outlook
“Several downside attempts occurred on expected lines, but none of them gained the momentum required to reach our target of 19,125.” The subsequent pullback provides a neutral bias to begin with, but we are tempted to chase the downside chances indicated by the spinning top the day before.
“As stated yesterday, if the 19,320-19,250 region holds in the event of a slippage or if 19,479 is breached during upside attempts, this view will be invalidated,” said Anand James, Chief Market Strategist at Geojit Financial Services.
Derivative
“The Nifty weekly contract has the most open interest at 19,500 for ‘Calls’ and 19,300 for ‘Puts,’ while the monthly contract has the most open interest at 19,500 for ‘Calls’ and 19,000 for ‘Puts.”
“FIIs increased their future index long position holdings by 3.51 percent, future index short position holdings by 0.98 percent, and index options by 0.21 percent in Call longs, -3.02 percent in Call shorts, 17.53 percent in Put longs, and 2.59 percent in Put shorts,” James said.
MCX share price: MCX has regularly failed to meet deadlines for switching to a new trading platform. The stock fell 12.48 percent today to a day low of Rs 1,437 from its previous close of Rs 1,641.85.
MCX share price: MCX has approached 63 Moons for the third time to extend the software support service arrangement.
“We recognise the importance of providing our users with a dependable and robust platform, and we are committed to continuously improving our services.” “We will inform all of our stakeholders about the migration plan to the new Commodity Derivatives platform,” MCX added.
63 Moons, formerly known as Financial Technologies India Ltd, on the other side, stated that it has “once again agreed to the eleventh-hour request by MCX, which according to MCX is for the ‘last time’ for one more time.”
“We sincerely hope that this ‘last time’ happens someday, so that we can deploy our excellent team of exchange technology engineering group in a mega promising opportunity in the new digital world,” the company noted.
After the long-term agreement with MCX expired on September 30, 2022, and MCX selected a new technology service provider in February 2021, MCX approached 63 Moons for the third time to prolong the software support service arrangement.
Meanwhile, Indian market indexes rose in early trade on Friday to reach all-time highs, thanks to better sentiment following strong economic statistics from the United States, which alleviated concerns of a downturn.
SAMIL stock price: Motilal Oswal also stated that two intriguing items are in the works: a plastic tailgate and a type-IV hydrogen fuel tank, both of which have the potential to futureproof the company.
Samvardhana Motherson International share price: Y4W has a 9% global market share in Sunroof Systems and has been a long-term key supplier to Honda Motor.
Following that, Samvardhana Motherson International would purchase 81% of the remaining Yachiyo 4W business, forming an 81:19 joint venture with Honda Motor.
To be sure, Y4W has a 9% global market share in Sunroof Systems and has been a long-term strategic supplier to Honda Motor.
“We see this deal as a strategic positive for SAMIL’s long-term growth, as we believe it helps the company: penetrate deeper with Honda (cross-selling opportunities) and help foray into the global Sunroof and Fuel Tank market,” stated JM Financial.
ROCE is predicted to rise in the future as the supply chain improves, global vehicle sales rebound, operating leverage increases, and profitability improves.
According to the domestic brokerage, the Prysm acquisition is tied to a milestone that, if met, will open up a substantial market in non-auto applications for Samvardhana Motherson International.
“SAMIL’s second large acquisition of a Japanese firm at an attractive valuation impresses.” Given the delisting procedure, completing the transaction by 1QFY25 appears ambitious,” said InCred Equities.
The share price of Genus Power increased by 20% to a 52-week high of Rs 168.90. The stock has up 46.37 percent in four sessions at current pricing. So far, it has nearly doubled this year.
GIC will own 74% of the platform, with Genus Power owning the remaining 26%, according to a BSE filing.
Introduction
Shares of Genus Power Infrastructures Ltd (Genus Power) rose 20% in Wednesday trading, extending the company’s winning streak to four straight sessions,
after the company signed definitive agreements with Gem View Investment, an affiliate of Singapore’s GIC, to establish a platform for undertaking advanced metering infrastructure service provider concessions.
According to the company’s BSE filing, GIC will own 74% of the platform, while Genus will own 26%. The two partners have agreed to a $2 billion initial pipeline investment.
The stock has risen after the company was awarded a letter of award (LOA) worth Rs 2,207.53 crore for the appointment of Advanced Metering Infrastructure Service Provider (AMISP), which includes the design of an AMI system.
with the provision, installation, and commissioning of 27.69 lakh smart prepaid metres, feeder metres, DT metre level energy accounting, and FMS for these 27.69 lakh smart metres.
In the instance of GIC JV, an affiliate of GIC Chiswick Investment Pte will invest up to Rs 590 crore through a preferential allotment of warrants, representing 15% of Genus’ issued and paid-up share capital on a fully diluted/as converted basis.
The transactions are subject to Genus shareholder approval and the execution of normal closing conditions to the satisfaction of the GIC affiliates, according to Genus.
On the BSE, Tata Power shares increased 3.15% to Rs 228.65. The Tata Group stock began higher at Rs 225, up from the previous finish on the BSE of Rs 221.65.
Shares of Tata Power Ltd gained over 3% today after the Tata Group firm said it won a smart metering project worth Rs 1,744 crore in Chhattisgarh.
INTRODUCTION
Chhattisgarh State Power Distribution Company Limited (CSPDCL) has won the contract. On the BSE, Tata Power increased 3.15% to Rs 228.65. The Tata Group stock began higher at Rs 225, up from the previous finish on the BSE of Rs 221.65.
The contract was awarded to Chhattisgarh State Power Distribution Company Limited (CSPDCL).
Tata Power rose 3.15% to Rs 228.65 on the BSE. The Tata Group stock opened higher at Rs 225, up from its previous BSE close of Rs 221.65.
In terms of technicals, the stock’s relative strength index (RSI) is 57.9, indicating that it is neither oversold nor overbought.
“The LOA was issued in response to CSPDCL’s tender for three packages for different areas under the Chhattisgarh discom,” the business said.
The project will comprise the design, delivery, installation, and commissioning of smart metres at the consumer and distribution transformer levels, as well as the operation and maintenance of the smart metres.
The project, which will be carried out under the Revamped Distribution Sector Scheme(RDSS), is projected to reduce AT&C losses in the allocated area while increasing revenue collection for CSPDCL.
Tata Power announced a 48% increase in fourth-quarter earnings for fiscal year. In the most recent quarter, net profit increased to Rs 939 crore, up from Rs 632 crore in the same period last year.
The company stated that this would be the 14th consecutive quarter of profit after tax (PAT) increase, and that the Q4 results would be bolstered by excellent performance across all operations.
One such complex mechanism is stock lending and borrowing.
Stock Lending and Borrowing: The market is brimming with intriguing concepts, both basic and sophisticated. Trading and investing in stocks and mutual funds is the most basic version of the market. The more complicated aspect is understanding the internal mechanisms that comprise the system known as the stock market.
In this post, we’ll try to explain stock lending and borrowingin an easy-to-understand manner.
What is Stock Lending and Borrowing?
SLB, or securities lending and borrowing, is a method by which investors and investment businesses borrow securities for a set length of time. Stocks, commodities, and derivative contracts are examples of securities that are lent and borrowed.
SLB increases market liquidity while also allowing stockholders to earn money on their investments through lending.
(Securities)How Does Stock Lending and Borrowing Work?
The SLB mechanism allows traders to borrow shares they do not already own or to lend stocks they do own to other traders. Stock lending and borrowing are not free because they involve interest rates and collateral pledging for a set period of time.
SLB benefits both parties: the lender gains money by issuing stocks to other firms, while the borrowers benefit from short selling.
A secure lending agreement, which includes the terms of lending, duration, interest rate, collateral, and fees,
The collateral that must be supplied against the loaned securities should be equal to 100 percent of the total amount borrowed.
Along with the agreement’s technical specifics, it also contains the deadline for returning the securities and a clause stating that lenders may take the securities back before the expiration date.
Perks Of Stock Lending and Borrowing:
The system of stock lending and borrowing would not exist unless both parties profited from it.Here are some of the benefits of stock lending and borrowing from both the lender and borrower viewpoints.
From the Lender’s Point of View:
Extra Earnings: This is accomplished through the fees imposed on loan as well as the interest income earned over the lending period.
Diversification: Stock lending is also viewed as a kind of diversification in which investors can hedge the risk of holdingequities by lending them.
Advantages of Corporate Action: Despite the fact that the securities are borrowed, the lenders are nevertheless entitled to corporate activities such as dividends and bonuses during the term of the loan.
From the Borrower’s Point of View:
Selling on the cheap:Borrowers can short-sell equities, providing them more trading possibilities.
Meet your obligations:Borrowers can use SLB to pay their commitments if they are late for delivery and want to avoid an auction in the cash sector.
Stock Lending and Borrowing Risk:
Every investment, including stock lending and borrowing, includes risk. Because of the risk associated in SLB, both lenders and borrowers are in a difficult situation.
Price Variation: The major risk for a lender is a price drop/fall in the value of the collateral acquired from the borrower. This is in addition to the borrower’s default and insolvency risk.
Risk of Secondary Timing: A timing risk occurs when the lender sends the securities before receiving the collateral, increasing their risk.
In India, the following are the requirements for securities lending and borrowing:
Stock lending and borrowing is a sophisticated system that only the most talented and experienced traders and investors understand how to use. The qualifications for SLB participation are determined by the stock broker and its policy.
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