shiva sharma

The fact that these enterprises come from a wide range of industries reflects the market’s positive attitude towards investment and expansion.

The primary market appears to be picking up momentum, with three main board IPOs and four from the small and medium businesses (SME) group slated to hit Dalal Street in the coming week, beginning on July 26.

• The public offering consists of a fresh issue of Rs 240 crore in shares and an offer-for-sale (OFS) of 48.69 lakh shares by the founders and investors.

• Employees of the company would be given 13,112 equity shares at a discount of Rs 32 per share from the final issue price.

The entire amount raised is expected to be around Rs 380 crore, while the pricing range has yet to be determined.

The 2.56 billion rupee public offering of shares includes a fresh issue of 1.82 billion shares and an OFS of 73.73 lakh shares by promoter Pravin Kumar Agarwal.

Small and medium-sized businesses (SMEs)

The company intends to raise Rs 16.17 crore by selling 23.1 lakh equity shares at the top of the price band.

Tridhya Tech, a provider of software development services and solutions, intends to raise Rs 26.41 crore by the issuance of 62.88 lakh shares at the upper end of the price band of Rs 35-42 per share.

Synoptics Technologies

The IT services and solutions firm plans to generate Rs 54.03 crore through its initial public offering of 22.8 lakh shares at Rs 237 per share. promoters would issue new shares for Rs 35.08 crore and an OFS worth Rs 18.96 crore as part of the IPO.

The proceeds from the new issue will be used to settle certain debts, fulfil working capital requirements, and invest in strategic acquisitions or joint ventures, in addition to general business reasons.

So far in the current calendar year, excluding the aforementioned IPOs, eight businesses have raised more than Rs 10,000 crore through mainboard IPOs.

Look at more info: https://learningsharks.in/

Follow us on insta”http://learningsharks/

FLDG is a common product that fintechs use to collaborate with lenders. It assists banks and NBFCs in covering potential losses that may occur when clients fail to make payments.

When the Reserve Bank of India (RBI) announced its formal approval of the first loss default guarantee (FLDG) system last week, most lending fintechs applauded.

Indeed, others believe that this could harm digital lending to persons with minimal credit history, as well as the goal of bringing more people into the official credit system.

• It assists banks and NBFCs in covering potential losses that may occur when clients fail to make payments.

• There are numerous types of coverage, with fintechs often covering losses ranging from 10% to 25% of the overall loan amount.

Outside of home and personal loans, most digital lending by fintechs had a substantially higher FLDG rate, typically exceeding 10%, depending on their negotiating strength with banks and non-banking financial company (NBFC) partners.

The RBI has emphasised that the sum must be paid upfront as a bank guarantee or cash to minimise any systemic risks resulting from fintechs going bankrupt or failing to make good on the FLDG promise.

• This decreases the risks for REs, because a slowdown in startup funding could have an impact on lenders if the loan portfolio has a high default rate.

• While this will help a few fintechs, most will fail,” says a senior executive of a private sector bank that deals with fintechs.

• according to the CEO, will end up lending to customers with good credit scores, which are highly sought after by all financial institutions.

“Because lenders will have to share the risk with a lower FLDG rate, they will be cautious about who fintechs lend to, “the creator says.

What is the significance of FLDG’s 5%?

“With the guidelines taking effect immediately, we anticipate a drop in volumes in segments with relatively higher FLDG as the industry adjusts to the new normal.”

• Director of CRISIL Ratings, “the market may see sourcing lenders adapting their business models to align with the revised regulations.”

• some asset classes to counteract the impact of the FLDG cover cap. However, it is possible that the situation will take some time to stabilise.

• FLDG allowed for this, and REs requested higher FLDGs when they considered the segments were riskier.

• Even with a 4% cost of operations and an industry typical of 1.5-2 percent non-performing asset (NPA), the profit margin might be 6%.

A stake in the game

According to the RBI, REs have no incentives to determine if the borrower has the potential to repay and to carry out underwriting correctly.

“The RBI is clearly concerned about creating a culture in which REs engage in irresponsible lending,” says a former banker who now works as a consultant for fintechs.

There are high-quality fintechs that bring clients to banks at a fraction of their normal sales costs.

Furthermore, keeping FLDG at 5% means that lenders will be cautious not to lend to persons who do not have a Cibil (credit) score. These included, among other things, payday loans, consumer durable loans for shopping and electronics, and short-term personal loans for routine expenses.

“We estimate that a substantial proportion of partnership/co-lending arrangements — particularly those with unsecured personal loans and business loan lenders — currently carry a FLDG cover of above 5%.”

digital lending guidelines were released last year. When combined with a funding slowdown that has put an end to any ambitions of giving a higher FLDG, the new 5% cap might effectively kill the business.

As a starting point, use 5%.

Even as the RBI was cracking down on fintechs with several restrictions last year, a few of the startups were shifting to Second Loss Default Guarantees and performance guarantees.

• The fintech founder quoted above feels that the RBI has not mentioned anything about performance guarantees and bonuses for good performance and the profits or losses can be shared by the partners.

• “Market and risk will be priced using a variety of methods, including interest rates and other methods, which will also be determined by the customer profile.”

That is not the culture the RBI wishes to encourage, according to the senior expert quoted above.

Look at more info: https://learningsharks.in/

Follow us on insta”http://learningsharks/

The Nifty 50’s largest gainer of the session was HDFC Life Insurance Company Ltd (NS:HDFL), which surged 5.43% or 31.40 points to close at 609.55.

In late activity, SBI Life Insurance Company Ltd (NS:SBIL) rose 3.24% or 40.15 points to 1,281.25, while Dr. Reddy’s Laboratories Ltd (NS:REDY) up 2.32% or 111.60 points to 4,915.05.

• Wipro Ltd (NS:WIPR) was the biggest loss, down 1.97% or 7.65 points to trade at 381.30 in late afternoon.

• Tata Consultancy Services Ltd. (NS:TCS) fell 1.29% or 41.40 points to 3,174.90 after Bajaj Auto Ltd (NS:BAJA) down 1.69% or 79.60 points.

The top performers on the BSE Sensex 30 were Dr. Reddy’s Laboratories Ltd (BO:REDY), which increased 2.33% to 4,916.75, Bajaj Finserv Ltd (BO:BJFS), which increased 2.21% to 1,508.50, and Titan Company Ltd (BO:TITN), which increased 1.67% to 2,954.15.

Wipro Ltd (BO:WIPR), which was down 1.94% to 381.40 in late trade, and Tata Consultancy Services Ltd were the worst performers.

• On the Bombay Stock Exchange, 2013 climbed and 1389 sank, while 122 ended unchanged on the India National Stock Exchange.

• The India VIX, which measures implied volatility of Nifty 50 options, fell 2.17% to 10.84, setting a fresh three-year low.

Look at more info: https://learningsharks.in/

Follow us on insta”http://learningsharks/

Wipro share buyback: The size of the buyback offer is 4.91 percent of total equity shares, which analysts believe is sufficient to achieve a satisfactory acceptance ratio in the retail category.

The record date is the deadline set by a corporation to identify which shareholders are eligible for the repurchase. The stock was trading at Rs 388 on the NSE at 9:40 a.m., down 0.14 percent from the previous close.

• “We believe that the acceptance rate will be higher than 60%.” According to ICICI Direct analysts, “retail acceptance has been in the range of 50-100 percent in the last four buybacks, with 100 percent three times.”

• The acceptance ratio is the percentage of shares tendered or offered for repurchase by shareholders that the corporation is willing to accept. IIFL Securities anticipates an acceptance ratio of 10 to 15% for non-retail investors, based on 25-50 percent tendering by significant shareholders.

Should you tender your stock?

According to Ashish Gupta, an independent trader located in Singapore, individuals who hold the shares in their portfolio for the long term can tender them in the buyback and buy the accepted shares back based on the acceptance ratio.

“For example, if you own 500 shares, you can tender them all and assume the acceptance ratio is 8%, in which case 40 shares will be accepted at $445 each, leaving you with 460 shares.”

What experts are saying

Wipro’s stock has dropped 1.3 percent in 2023 and is down 8 percent in the last year. According to Bloomberg, the stock has 12 Buy calls, 17 Hold calls, and 17 Sell calls, with a 12-month target price of Rs 391, which is only 1.5 percent higher than the current market price.

• With the prognosis for the IT services company being poor at the moment, analysts feel the stock is unlikely to provide favourable returns.

• For example, Kotak Institutional Equities has maintained a “reduce” recommendation on the stock, with a target price of Rs 360 per share.

• Wipro reported a 0.6 percent fall in QoQ constant currency (CC) sales, matching the lower end of its guidance band.

The company has reduced its sales expectations for FY2024-25e by 1-2 percent, resulting in a 3-4 percent drop in earnings per share.

Look at more info: https://learningsharks.in/

Follow us on insta” http://learningsharks/

HDFC Life shares rose 6% in early trade on June 16 following strong commentary from top management.

“We have typically grown at a rate that is 1.8x to 2x that of the private sector and slightly higher as a multiple of the overall industry.”That is how we are transitioning from being an average ticket size target sector to greater penetration.”

• The insurer’s market share increased there as well, with a 25 percent increase, which was double that of the private sector. The number of policies increased by double digits in May 2023.

• In a filing with the BSE on June 15, the business stated, “On June 14, 2023, the stakeholders relationship committee of the board allotted 35,226 equity shares to the eligible option holders pursuant to their exercise of stock options under various employee stock option schemes.”

The company’s paid-up equity share capital after the allotment was “Rs 21,49,67,94,560 comprising 2,14,96,79,456 equity shares of face value of Rs 10 each.”

The HDFC Life Insurance Company Ltd shares was trading 5.65 percent higher on the NSE at Rs 610.80 at 2:04 p.m.

HDFC Life Insurance Company Ltd stock has returned 6.22 percent over the previous six months, compared to 2.68 percent for the Nifty.

Look at more info: https://learningsharks.in/

Follow us on insta” http://learningsharks/

For years, the pay disparity between senior executives at public and private sector banks has been a source of contention.

According to the bank’s annual report, State Bank of India (SBI) chairman Dinesh Khara received a salary of Rs 37 lakh during fiscal year 2022-2023, an increase of nearly 7.5 percent over the previous year. SBI is India’s largest bank in terms of assets.

And, while his salary (base pay plus dearness allowance) has increased by around 7.5 percent over the previous year, it is still insufficient to compete with that of his private bank counterparts.

This was 13.4 percent more than his predecessor, Rajnish Kumar’s, pay during FY21.

While the FY23 figures aren’t yet available, Khara drew almost 18 times less than Jagdishan last year. When compared to the SBI Chief and other PSB heads, the salaries of other private bank CEOs are likewise fairly high.

Khara joined SBI as a probationary officer in 1984 and will take over as chairman in October 2020. Prior to that, he was the bank’s managing director, where he was in charge of worldwide banking and SBI subsidiaries, among other things.

Is the remuneration of the PSB Chief too low?

This is, in reality, an old argument. In 2020, an unintentional joke by the then-SBI chairman, Rajnish Kumar, sparked a debate in India’s banking circles about the low pay packages of government-run bank officers in comparison to their private-sector colleagues.

And, as is typical with such statements, Kumar’s remarks sparked a new round of debate on the subject. Many in the financial business were offended by the remarks.

How does Khara’s pay compare to that of other bank CEOs?

In comparison, Amitabh Chaudhry, MD and CEO of Axis Bank, was the highest-paid private bank leader in India in the previous fiscal year, earning a total annual pay of Rs 7.62 crore, according to the bank’s FY22 annual report.

Following Chaudhry was Sumant Kathpalia, the CEO of IndusInd Bank, who received more than Rs 7.31 crore in yearly compensation in FY22. According to the bank’s annual report, Sandeep Bakhshi, the MD of ICICI Bank, received Rs 7.05 crore in yearly compensation past fiscal year.

Sashidhar Jagdishan, MD and CEO of HDFC Bank, was paid Rs 6.51 crore in the previous fiscal year, whereas C.S. Ghosh, MD of Bandhan Bank, was paid Rs 4.35 crore in FY22.

Is the industry in agreement?

Former SBI chairman stated Kumar’s remark was in poor taste and lowered the dignity of his office. The individual declined to be identified. Others agreed with Kumar, noting that he has a valid point about the lower pay levels in PSBs.

• The SBI Chairman pay must be viewed in conjunction with the benefits received. Here are a few examples: a plush apartment in Mumbai, devoted assistance, two cars with drivers, unlimited petrol and so on. Even still, overall compensation (including perks) will be significantly lower than that of private sector bank peers.

• The issue is that a lack of a level playing field may produce a lack of incentive for experts to stay with state-run banks for prolonged periods of time. While the salary discrepancy is significant, PSUs, particularly banks, are expected to compete aggressively with private sector rivals.

• PSBs, according to JN Gupta, founder of SES, a proxy advisory service, and former executive director at the Securities and Exchange Board of India (SEBI), need a level playing field to compete with private banks.

Former RBI governor Raghuram Rajan raised the matter in August 2016 when he stated that top-level pay in the public sector, including the RBI, fall far short of global standards. “Of course, one of the issues is that the public sector overpays at the bottom but underpays at the top. “I also feel underpaid,” Rajan stated.

Look at more info: https://learningsharks.in/

Follow us on insta” http://learningsharks/

The wholesale inflation data comes after the statistics ministry reported on June 12 that headline retail inflation in May fell to a 25-month low of 4.25 percent.

Wholesale prices in India fell further into the deflationary zone in May, according to data issued by the commerce ministry on June 14. Inflation in the Wholesale Price Index (WPI) decreased to -3.48 percent in May, down from -0.92 percent in April, with a positive base effect once again playing a prominent role.

• The current WPI inflation figure of -3.48 percent is the lowest in seven and a half years. The last time wholesale inflation was less than 3% was in November 2015, when it was -3.68 percent.

• The wholesale inflation figures come after the statistics ministry reported on June 12 that headline retail inflation in May fell to a 25-month low of 4.25 percent.

Not only did wholesale prices fall year on year in May, resulting in the sub-zero inflation print, but they were also lower compared to April, with the WPI’s all-commodity index falling 0.9 percent. This is the index’s greatest drop in five months.

• However, for the first time since December 2022, all three major WPI groupings — primary goods, gasoline and power, and manufactured products — saw their indices fall from April.

• The highest loss was in fruits (-4%) and vegetables (-2.6%) among primary articles, whose index was down 1.1 percent month on month.

The manufactured products index, which accounts for approximately two-thirds of the total WPI, fell by 0.4 percent. The highest month-on-month reduction in this category was in edible oils, which fell 3.6 percent.

Input price increases helped push up Consumer Price Index (CPI) inflation last year, and while they have subsequently eased, retail inflation still has some way to go.

While CPI inflation declined to 4.25 percent in May, the Reserve Bank of India (RBI) forecasts it to average 4.6 percent in April-June before rising to 5.2 percent in January-March 2024, as the favourable base impact fades.

• The RBI has held the policy repo rate at 6.5 percent since April, awaiting the full impact of its 250 basis point rate hikes.

• Although inflation has slowed, experts predict that growth will suffer in the next months as well.

As a result, the RBI’s monetary policy committee may be forced to begin decreasing interest rates in early 2024.

Look at more info: https://learningsharks.in/

Follow us on insta” http://learningsharks/

Despite its high valuation, brokerages believe Trent has additional upside potential since its industry-leading growth and outstanding financial performance are likely to support high multiples.

Trent’s share price rose 5% in early trade on June 13 to a 52-week high of Rs 1,675, a day after the Tata group firm announced an aggressive expansion strategy at its annual general meeting, which brokerages applauded.

Other highlights from the AGM included a forecast of 30 new Westside stores, 10 Samoh stores in FY24, and a Rs 800 crore gross capital investment estimate for the current fiscal year. The company is also planning an international growth.

• Brokerages praised the company’s expansion plans as well, with Nuvama Institutional Equities and Motilal Oswal Financial Services issuing “buy” recommendations on the stock.

• Nuvama also increased its EBITDA (earnings before interest, taxes, depreciation, and amortisation) forecasts for Trent by 10%/140% to account for larger store openings.

• While the company is still adjusting to Zudio’s franchise model, its growing share is improving the returns profile, making the stock a top option for Nuvama.

Even while on an aggressive expansion spree beginning in FY23, the company was able to maintain its financials thanks to Zudio’s growing profits. Motilal MOFSL anticipates Trent to maintain its traditionally strong footprint growth through its expansion ambitions.

Despite Trent’s wealthy valuations — it trades at a P/E of 54.8x on an FY25E basis — Motilal Oswal feels the company’s excellent growth potential and historically robust performance justifies its higher multiples.

According to ICICI Securities, the company’s industry-leading performance and sustained revenue growth would underpin its premium valuations.

Look at more info: https://learningsharks.in/

Follow us on insta” http://learningsharks/

Over the past six months, Usha Martin Ltd. has had a return of 110.03 percent. As a result, the benchmark Nifty50 index, which provided a return of 0.51 percent during the same period, was significantly outperformed.

In the opening hours of trading on Monday, shares in Usha Martin spiked to their highest level in a year. The stock increased 14.76% from its previous closing of Rs 172.05. to reach its 52-week high of Rs 197.45. 1.61 lakh shares were traded in total today.

On June 12, Motilal Oswal Mutual Fund (MOSTF30) purchased 18.5 lakh shares of the producer of wire rope through an open market transaction for a total of Rs 50 crore at an average price of Rs 270.12 per share.

Usha Martin Ltd announced the cessation of Whole Time Director (WTD) in a corporate filing with the BSE on June 5, 2023, stating that “the board has placed on record its appreciation for the valuable services, guidance, and support extended by Mr. Dhrub Jyoti Basu during his tenure as a Whole-time Director (WTD) of the company.”

The 14-day relative strength index (RSI) for Maruti was 77.01. 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-equity (P/E) ratio of 22.46.

Over the last six months, Usha Martin Ltd has returned 110.03 percent. As a result, it has outperformed the benchmark Nifty50 index, which has returned 0.51 percent during the same time period.

A daily close over Rs 186 could lead to Rs 206 in the following days, but this rally should be utilised to book profits. “Rs 167 will provide strong support,” said A R Ramachandran of Tips2trades.

Usha Martin is a global leader in the production of steel wire ropes, as well as wires, LRPC strands, prestressing machines, accessories, and optical fibre cables. According to its website, Usha Martin’s wire rope manufacturing facilities in Ranchi, Hoshiarpur, Dubai, Bangkok, and the United Kingdom provide the widest range of wire ropes used in diverse sectors worldwide.

In terms of earnings, the wire ropes maker increased its standalone net profit by more than 7% to Rs 45.09 crore in the fiscal quarter that ended September 2022. In the same period last year, the company earned a net profit of Rs 42.05 crore.

Meanwhile, Indian market benchmarks got off to a good start in 2023, with indices rising in early trade, powered by advances in commodities and state-owned lenders.

Look at more info: https://learningsharks.in/

Follow us on insta” http://learningsharks/

The worst that can happen when you acquire a stock (without leverage) is if its share price falls to zero. However, if you invest in a truly exceptional firm, you can more than double your money.

For example, the share price of Central Depository Services (India) Limited (NSE:CDSL) is 293% higher than it was three years ago. What a treat for those who held the shares! Meanwhile, the share price is up 5.0% from a week earlier.

Following a strong 7-day performance, let’s examine the impact of the company’s fundamentals in creating long-term shareholder returns.

Central Depository Services (India) SWOT Analysis

Strength

• Currently debt free.

Weakness

• Earnings have fallen in the last year.

• Dividend is low when compared to the top 25% of dividend payers in Capital Markets.

• Based on the P/E ratio and projected fair value, the stock is expensive.

Opportunity

• Annual revenue is expected to outpace the Indian market.

Threat

• Cash flow does not cover dividends.

• Annual earnings are expected to expand at a slower rate than the Indian market.

While some continue to teach the efficient markets concept, it has been demonstrated that markets are too reactive dynamic systems, and investors are not always rational. We may obtain a sense of how investor sentiments towards a company have changed over time by comparing earnings per share (EPS) and share price fluctuations.

Central Depository Services (India) was able to grow its EPS at 37% per year over three years, sending the share price higher. This EPS growth is lower than the 58% average annual increase in the share price. 

As a result, it’s reasonable to believe that the market now has a greater opinion of the company than it did three years ago. Given the three-year track record of earnings increase, this is not surprising.

What About Dividends?

It is critical to analyse both the overall shareholder return and the share price return for each given stock. The TSR includes the value of any spin-offs or discounted capital raisings, as well as any dividends, assuming dividends are reinvested.

We observe that the TSR for Central Depository Services (India) for the last three years was 304%, which is higher than the share price return given above. And no prizes for guessing that the dividend payments account for the majority of the difference!

A Different Perspective

While the overall market gained roughly 11% in the previous year, Central Depository Services (India) shareholders lost 12% (even after dividends). Even solid firms’ share prices fall from time to time, but before we get too excited, we want to observe improvements in a company’s basic data. Long-term investors would be less upset because they would have made 32% each year for five years.

While considering the many effects that market conditions can have on the share price is crucial, there are other aspects that are even more important. Nonetheless, Central Depository Services (India) is displaying two warning indicators in our investment research, one of which should not be overlooked…

Look at more info: https://learningsharks.in/

Follow us on insta” http://learningsharks