You are on page 1of 52
RNI No. MAHENG/2009/28962 | Volume 9 Issue 10 | 16th - Mumbai | Pages 52 |
RNI No. MAHENG/2009/28962 | Volume 9 Issue 10 | 16th - Mumbai | Pages 52 |
RNI No. MAHENG/2009/28962 | Volume 9 Issue 10 | 16th - Mumbai | Pages 52 |
RNI No. MAHENG/2009/28962 | Volume 9 Issue 10 | 16th - Mumbai | Pages 52 |
RNI No. MAHENG/2009/28962 | Volume 9 Issue 10 | 16th - Mumbai | Pages 52 |
RNI No. MAHENG/2009/28962 | Volume 9 Issue 10 | 16th - Mumbai | Pages 52 |
RNI No. MAHENG/2009/28962 | Volume 9 Issue 10 | 16th - Mumbai | Pages 52 |

RNI No. MAHENG/2009/28962

|

Volume 9 Issue 10

|

16th -

Mumbai

|

Pages 52

|

For Private Circulation

31st Oct ’17

RNI No. MAHENG/2009/28962 | Volume 9 Issue 10 | 16th - Mumbai | Pages 52 |
RNI No. MAHENG/2009/28962 | Volume 9 Issue 10 | 16th - Mumbai | Pages 52 |

Diwali Delights

RNI No. MAHENG/2009/28962 | Volume 9 Issue 10 | 16th - Mumbai | Pages 52 |
RNI No. MAHENG/2009/28962 | Volume 9 Issue 10 | 16th - Mumbai | Pages 52 |
RNI No. MAHENG/2009/28962 | Volume 9 Issue 10 | 16th - Mumbai | Pages 52 |
RNI No. MAHENG/2009/28962 | Volume 9 Issue 10 | 16th - Mumbai | Pages 52 |
RNI No. MAHENG/2009/28962 | Volume 9 Issue 10 | 16th - Mumbai | Pages 52 |
RNI No. MAHENG/2009/28962 | Volume 9 Issue 10 | 16th - Mumbai | Pages 52 |

Five hand-picked companies to add sparkle to your investment portfolio

Financial Decisions On The Go Stay ahead in a rapidly changing world by making smart and
Financial Decisions On The Go Stay ahead in a rapidly changing world by making smart and

Financial

Decisions

On The Go

Stay ahead in a rapidly changing

world by making smart and informed

using the Beyond app. This app

you to trade from just about any

Financial Decisions On The Go Stay ahead in a rapidly changing world by making smart and

Key Features

View real-time streaming quotes and charts

Access market news and updates Obtain trade reports and account information Access NB Research Reports View delayed market data for non-subscribed tickers

Financial Decisions On The Go Stay ahead in a rapidly changing world by making smart and

Download Beyond app on

Financial Decisions On The Go Stay ahead in a rapidly changing world by making smart and
Financial Decisions On The Go Stay ahead in a rapidly changing world by making smart and

eyond

Powered

by

Financial Decisions On The Go Stay ahead in a rapidly changing world by making smart and

Disclaimer : Insurance is a subject matter of solicitation .mutual fund Investments are subject to market risk. ‘investment in securities/ Commodities market are subject to market risks, read all the related documents carefully before investing’ Nirmal bang securities pvt.ltd. Please read the Do’s and Don’ts prescribed by Commodity Exchange Before trading. The PMS Service is not o ering for commodity Segment *Nirmal bang Commodities Pvt ltd #Distributors. “The securities quoted are exemplary and are not recommendatory”

DB Corner – Page 5 Diwali Delights Five hand-picked companies to add sparkle to your investment
DB Corner – Page 5
Diwali Delights
Five hand-picked companies to add sparkle to your investment portfolio
– Page 6
Far From True
Contrary to popular belief, the Indian economy is not as bad as it is being
made to believe – Page 11
High Spirits
IPOs of many companies have attracted reasonably good valuations due
to ample liquidity in the markets – Page 14
A Change Of Track
The government’s plans to develop metro rail projects across India
indicates the growth opportunities that lay in the construction sector
– Page 16
Just As Good, If Not Better
Though investors are cautious and are focusing on quality deals, experts
believe that the future of private equity investment looks good – Page 19
India’s Global Appeal
Volume 9
Issue: 10, 16th - 31st Oct ’17
Structural economic reforms and policies are primary reasons for the
growth of India’s textile exports – Page 22
Editor-in-Chief & Publisher: Rakesh Bhandari
Editor: Tushita Nigam
Senior Sub-Editor: Kiran V Uchil
A New Benchmark
An RBI study group has recommended a switchover to an external
Art Director: Sachin Kamble
Junior Designer: Orianne Fernandes
benchmark in a time-bound manner to solve the monetary transmission
issue – Page 25
A Game Changer
FMCG firms and retailers are seeing a clear recovery post the
Operations: Namrata Sabbani
implementation of GST – Page 28
Timely Insights
Research Team: Sunil Jain, Runjhun Jain,
Akansha Jain, Vikas Salunkhe, Swati Hotkar,
Nirav Chheda
The Uday Kotak Committee’s recommendations on corporate governance
have come at the right time – Page 31
Reinventing To Stay Relevant
Printed and published by Mr Rakesh Bhandari
on behalf of Nirmal Bang Financial Services Pvt
Ltd, printed at Uchitha Graphic Printers Pvt Ltd
65, Ideal Ind. Estate, Senapati Bapat Marg,
Lower Parel, Mumbai – 400013 and published
at Nirmal Bang Financial Services Pvt Ltd, 19,
Sonawala Building, 25 Bank Street, Fort,
Mumbai-400001. Editor: Tushita Nigam
Although the Indian insurance market is facing challenging times, it is
poised for strong growth – Page 34
Buckfast Recommendations – Page 38
Technical Outlook – Page 42
Smart Investment Plan
CORPORATE OFFICE
SIPs are the secret to long-term wealth creation and should, therefore, be
B-2, 301/302, Marathon Innova,
Off Ganpatrao Kadam Marg,
Lower Parel (W), Mumbai - 400 013
considered by investors – Page 43
To Each His Own
Tel: 022 - 3926 8000/8001
For some investors, Scuttlebutt technique is the perfect way to invest in
the markets, and for others it is Cigarbutt – Page 46
Web: www.nirmalbang.com
beyondmarket@nirmalbang.com
Tel No: 022 - 3926 8047
Important Jargon – Page 49
Beyond Market 16th - 31st Oct ’17
It’s
simplified ...
Festive Picks Tushita Nigam Editor S eason’s greetings to all the readers of Beyond Market. This
Festive Picks Tushita Nigam Editor S eason’s greetings to all the readers of Beyond Market. This

Festive Picks

Tushita Nigam

Editor

Season’s greetings to all the readers of Beyond Market. This Diwali, add sparkle to your investment portfolio by considering the five stocks suggested by the Equity Research Team at Nirmal Bang.

The research team believes that while the Indian stock markets have been on an upswing, individual stocks have been skewed. Some companies are overvalued and some are yet to reach their true value. Hence, the team has narrowed down on five such companies and elaborated each one of them in the cover story of the current edition.

Apart from the special article on stock picks, other topics in this issue are the current state of the Indian economy, which is not performing as bad as people are making it out to be, the cautious and focused approach adopted by private equity (PE) players while investing in India, the upswing in the number of initial public offerings (IPOs) with good valuations that are likely to come up in the Indian stock markets, the details of the recommendations made by the RBI study group for a switchover to an external benchmark as well as to solve the issue of monetary transmission, and the suggestions made by the Uday Kotak Committee on corporate governance.

Also featured in this issue are articles on the growth of Indian textile exports, growth opportunities in the construction sector due to metro rail projects and recovery in fast moving consumer goods (FMCG) post the implementation of GST.

The Beyond Leaning section features two very interesting articles. One article dwells on the basics and importance of systematic investment plans (SIPs), the other talks about two different investment techniques – Scuttlebutt and Cigarbutt. Read on to know more.

The Beyond Market Team wishes you all a very Happy Diwali and a Prosperous New YeaR!

Beyond Market 16th - 31st Oct ’17

It’s simplified ...

The Indian stock markets look good in the coming fortnight. T he International Monetary Fund (IMF)
The Indian stock markets look good in the coming fortnight. T he International Monetary Fund (IMF)

The Indian stock markets look good in the coming fortnight.

The Indian stock markets look good in the coming fortnight. T he International Monetary Fund (IMF)

T he International Monetary Fund (IMF) upgraded its global economic growth forecast for 2017 by 0.1% to 3.6% in its latest World Economic Outlook. The growth rate for 2018 now stands at

3.7%.

The US Federal Reserve recently announced that it was rolling back quantitative easing (QE). Timelines have also been drawn to achieve this feat. This programme was introduced nine years back in the wake of the financial meltdown, hoping that increased money supply would boost the economy.

The Reserve Bank of India’s (RBI’s) Monetary Policy Committee (MPC) kept the repurchase or repo rate unchanged at 6% at its monetary policy meet earlier this month. The move was necessitated due to upside risks to inflation. It further said decline in interest rates would be difficult in the future.

India Inc results have started on a positive note and are likely to show an uptrend in comparison with Q1 earnings results.

The Indian stock markets look good in the coming fortnight. The Nifty has support at the 10,110 level. The expected target for the Nifty on the upper side is at the 10,600 level.

In the coming fortnight, market participants are advised to look out for the remaining corporate results as the markets are likely to be driven by them as well as outlook by company managements for the second half of the financial yeaR.

The Indian stock markets look good in the coming fortnight. T he International Monetary Fund (IMF)

Sensex: 32,609.16 Nifty: 10,234.45 (As on 17th Oct ’17)

Disclaimer It is safe to assume that my clients and I may have an investment interest in the stocks/sectors discussed. Investors are required to take an independent decision before investing. Investment in equity is subject to market risk. Our research should not be considered as an advertisement or advice, professional or otherwise. The investor is requested to take into consideration all the risk factors including their financial condition, suitability to risk return profile and the like and take professional advice before investing.

Beyond Market 16th - 31st Oct ’17

It’s simplified ...

Five hand-picked companies to add sparkle to your investment portfolio Diwali Delights Beyond Market 16th -

Five hand-picked companies to add sparkle to your investment portfolio

Diwali Delights

Five hand-picked companies to add sparkle to your investment portfolio Diwali Delights Beyond Market 16th -
Five hand-picked companies to add sparkle to your investment portfolio Diwali Delights Beyond Market 16th -
Five hand-picked companies to add sparkle to your investment portfolio Diwali Delights Beyond Market 16th -
Five hand-picked companies to add sparkle to your investment portfolio Diwali Delights Beyond Market 16th -
Five hand-picked companies to add sparkle to your investment portfolio Diwali Delights Beyond Market 16th -

Beyond Market 16th - 31st Oct ’17

It’s simplified ...

T he Indian stock markets have been on an upswing since some time now. While some

T he Indian stock markets have been on an upswing since some time now.

While some companies are overvalued and continue to rise, others have been skewed and are yet to join the bandwagon.

The Research Team at Nirmal Bang has hand-picked five companies that are currently underperforming but have a huge potential to outperform. These will delight you this Diwali by adding the much-desired sparkle to your investment portfolio.

Shemaroo Entertainment Ltd

T he Indian stock markets have been on an upswing since some time now. While some

Incorporated in the year 1962, Shemaroo Entertainment Ltd, a content aggregator, is an established film entertainment “content house” in the country.

The content library at Shemaroo consists of more than 3,500 titles spanning Hindi films and other regional languages like Marathi, Gujarati, etc, as well as non-film content such as devotional, animation and spiritual, among others.

Since the past few years, the company has been incurring a huge capex on buying titles of movies. From 2013 to 2017, its number of titles has grown at a CAGR of 6.2%, and inventory has increased at a CAGR of 36%.

As per management guidance of FY18, closing inventory is likely to be lower than FY17 inventory, indicating that the investment phase is getting over. Higher profits, aided by lower capex will lead to a positive FCFF of the company.

Shemaroo’s New Media Segment, which was contributing around 8.1% of FY12 revenue has contributed

27.75% in Q1FY18. With an increase in Internet penetration, the company’s new media segment is expected to grow at a CAGR of 39% from FY17 to FY19E.

Being a high-margin business, higher growth in this segment will not only improve the overall margin of the business, but will also improve free cash flow generation.

going forward. So, as debt is believed to have peaked out, the company will start repaying debt.

The company is likely to do a PAT of `88 crore and an EPS of `32.4 in FY19E. At the current market price, the share is trading at an EV/EBITDA of 7.6x and PE of 12.4x FY19E EPS.

S Chand And Company Ltd

With 3,585 titles, 948 perpetual rights and 2,637 aggregate rights as on FY17, Shemaroo, has the largest content base in Bollywood, which makes it vital for a broadcaster to

purchase contents from Shemaroo in

order to run a meaningful Bollywood

content service.

Going ahead, the company’s sales is expected to grow by 11.2% in FY18E and 11.8% in FY19E. Reselling of historically acquired perpetual inventory and aggregate rights of over 10 years, which are completely amortized, will lead to higher profits for the company.

Apart from this, increased Internet penetration and the company’s new media segment are likely to gain traction, going ahead. Operating margins of the company are likely to improve by 186 bps in FY18E and 150 bps in FY19E and inch to 31.8% and 33.3%, respectively.

S Chand and Company Ltd
S
Chand
and
Company
Ltd

was

established over 70 years ago and

operates as an education content

company in India. The company

delivers content, solutions and services across education lifecycle through its K-12, higher education and early learning segments.

In K-12 business segment, the company largely provides content to CBSE and ICSE-affiliated schools. Having a seasonal business, nearly 75% of the company’s revenue comes in Q4 of the financial year.

Himanshu Gupta has been associated with the company since 2000, and on 1st Jul ’07, he became the Managing Director of the company. Since FY12-17, the company has grown at a CAGR of 31.6% to `684.1 crore in FY17 from `173 crore in FY12.

With 3,585 titles on books, the major capex phase of the company seems to have gotten over and will likely slow down in the coming years.

Higher profits with low capex will generate a positive FCFF, which is believed to come in at `52.5 crore in FY19E from a negative of `81.1 crore in FY17.

Owing to higher operating profits, Shemaroo is likely to acquire new content mostly from internal accruals,

In spite of being a 70-year-old company, major growth was visible in the last 5 years, organically and inorganically, indicating that the management is quite aggressive in bringing growth to the company.

Looking at the growth potential of the K-12 market, S Chand is continuously acquiring different brands to fill gaps in the portfolio with respect to individual subject strengths, which, in turn, will increase the bag share of a K-12 student and

Beyond Market 16th - 31st Oct ’17

It’s simplified ...

lead to growth of the company.

indigenous, leading coding and

It manufactures industrial printers at

 

From FY12 to FY17, the K-12 business has grown at a CAGR of 45.5%. In FY11, S Chand’s three most important subjects were English Grammar, Mathematics and Science.

By acquiring Madhubun and Vikas brands in FY13, and Saraswati brand in FY15, the company has reinforced

marking solutions player in an oligopolistic industry, dominated by global players, with ~18% domestic market share. The Indian coding industry is estimated to be around `10,000 to `11,000 million as of FY17, and is currently growing at a CAGR of ~12% to 15%.

years, it has nurtured relationships with its client, which has benefitted from repeat and referral businesses.

New product launches, coupled with a marketing push, is expected to benefit overall growth for Control Print, going ahead. New product launches would help the company to increase its installations, thus benefitting revenues from

knowledge products in its K-12

its

two

manufacturing

facilities

consumables as well as servicing.

business in Hindi and French

located at

Nalagarh

(HP)

and

language titles, languages, arts and crafts titles, respectively.

Guwahati. It manufactures printers for printing variable information and

More and more companies are opting for coding and marking solutions

thereafter also sells their

mainly from regulatory and efficiency

Currently, the company acquired

consumables,

preventive

and

point of view. Moreover, GST

Chayya and IPP brands, which cover

breakdown

services,

filters,

spare

implementation is likely to provide a

various subjects including Bengali, Chemistry, English, Physics, History, Mathematics and Geography. Other than this, S Chand currently caters to around 40,000 institutions and plans to add 3,500 schools every year.

parts, etc.

CPL caters to varied industries including personal care, food & beverages, pharmaceuticals, construction materials, chemicals and petrochemicals, among others.

fillip to this segment as more and more unorganized players convert to the organized segment by implementing coding and marking for their products.

Going ahead, the management expects a growth of 14% to 15% year-on-year (YoY) in FY18E and FY19E, organically. S Chand is also looking for inorganic growth, mainly in western and southern India.

CPL has three revenue streams, namely revenue from sale/ job work/ lease of printers, revenue from consumables such as inkjet fluids, ribbons, ink rolls, and revenue from annual maintenance contracts.

Currently, the industry is suffering from about 15% to 20% sales of spurious consumables, which is hurting the organized players. To counter this issue, Control Print has started supplying RFID tagged printers and consumables.

The company’s margins are expected to remain stable mainly due to the impact of GST on authors. ROCE stands at around 7% in FY17, which is low on account of goodwill, acquisition, and investment in digital, which is likely to improve.

As per the research team’s estimates, the company’s EPS is likely to touch `35 in FY19E. At the current market price, S Chand And Company Ltd is trading at an EV/EBITDA of 5.8x and a PE of 13.2x FY19E EPS.

Control Print Ltd

lead to growth of the company. indigenous, leading coding and It manufactures industrial printers at From

Control Print Ltd (CPL) is an

Sale of printers earns low margins, but it is quintessential to capture high margin, repeat consumables, spares, and services business. While printer sales is a one-time activity, consumables, spares and services is an annuity business, which stays with the company for a fairly long time owing to the inelastic nature of the services business.

Also, in a price-sensitive country like India, people prefer lower denomination packing of goods (price points like `5, `10, etc) which provides a boost to the packaging and printing industry.

CPL has been focusing on a pan India foot print so that its service is prompt and service quality is better than or in line with its global competitors.

Almost 70% of its sales come from repeat customers. CPL derives over 75%+ revenues from high margin segment, which boasts gross margins

of over 80%.

CPL has a wider customer base without any concentration towards a company or a sector. Over the past 25

The company has already invested in adding service engineers/sales force and training. And it is now expected to leverage on its investments. This is

believed to be margin accretive for

the company.

At the current market price, the stock is trading at 15.6x FY19E earnings.

Beyond Market 16th - 31st Oct ’17

It’s simplified ...

Minda Corporation Ltd

 

financial year 2020.

 

Rane (Madras) Ltd

Incorporated in 1985,
Incorporated in
1985,

The new die casting facility of Minda

Incorporated in 1985, The new die casting facility of Minda
Incorporated in 1985, The new die casting facility of Minda

Corporation Ltd is expected to be

Minda

operational in FY18, and annual sales from this plant is expected to be

Rane (Madras) Ltd (RML) is part of

The steering division manufactures

The die casting division manufactures

Corporation Ltd (MCL or the

around `200 crore by FY20.

the `44 billion Rane Group, which

company) is a flagship company of Spark Minda (Ashok Minda) Group.

In Mexico, Minda KTSN inaugurated

Minda Corporation has taken various

was established in year 1960. RML is into auto ancillary products and

It

has a major

presence in the auto

a new plant for plastic interiors in

operates under two divisions 1)

ancillary industry.

The company operates in three divisions, namely, (i) safety, security and restraint system, (ii) driver information and telematics system and (iii) interiors system.

Minda Corporation Ltd is one of India’s leading manufacturers of security systems, wiring harnesses, couplers and terminals, instrument clusters, sensors, die casting, interiors, keys and key duplicating

April ’17. Expected annual sales from this facility is to the tune of `175 crore by FY20.

initiatives to keep the technology of its products up to the mark and has always stayed ahead of the learning curve. The new R&D facility in Pune will help the company’s existing businesses to innovate advanced technology in automotive sub-systems.

steering gear (SGP) steering and suspension linkage products (SSLP) and 2) die casting product.

manual steering, hydrostatic steering system and steering and suspension linkage products. RML holds 39% and 72% market share in India in SGP and SSLP, respectively.

low porosity, high-quality aluminium die-casting such as steering housing,

In

addition

to

this,

the

sensor

engine case covers, etc.

machines, that caters to all major two-, three-, four-wheeler and off-road vehicle manufacturers in India and overseas.

Minda Furukawa joint venture contributed 15% of consolidated revenue and had reported a revenue of `496 crore in FY17.

The company reported a net loss of `55 crore in FY17, largely attributable to non-profitable contract with one of its customers, an increase in raw material prices, and other operating costs.

The company, along with its JV partner, has set up a task force to make MCL profitable by increasing operational efficiencies and making it sustainable over the long run. The management is confident of turning it around in FY18.

business, going ahead, is expected to expand going by the number of sensors that will increase per vehicle once BS-VI norms become effective. This will substantially add to the company’s revenue.

The company’s EBITDA margins are expected to improve from 6.7% in FY17 to 10.5% in FY19E, mainly driven by the successful turnaround on Minda Furukawa JV.

As major capital expenditure related to its expansion is almost over and new facilities are geared up to contribute to the overall revenue, all this will generate higher free cash flow for the company.

At the current market price, Minda Corporation Ltd is trading at a P/E of 23.2/17.3x on FY18E/FY19E earnings, respectively.

The company acquired a loss-making casting business in the US last year. The US company had a revenue of around `205 crore and a negative EBITDA margin of 2.5% in FY17. The business has already turned EBITDA positive in FY18, and is expected to be PAT positive in FY19.

Though the revenue growth will be limited to single digits, the company is working on reducing the cost and wastage to improve its margins.

The company has introduced its own developed power steering for the tractor market. Apart from the company, there are only two MNCs, which supply power steering for tractors in the Indian market. The company’s product has been approved by customers and has seen good growth in sales recently.

Minda Corporation Ltd has set up another die casting plant, which will take the total capacity from 4,600 MT per annum to 9,600 MT per annum by

Beyond Market 16th - 31st Oct ’17

The company’s stock looks attractive at current valuations given the future dynamics of the business.

The die casting division in India is operating at lower capacity utilization and as such has lower operating

It’s simplified ...

margin. Sales of die-casting

is

The company had done a capex of

expected to improve gradually, leading to improvement in margins.

`300 crore in the last four years, resulting in increase in debt from `103 crore in FY13 to `284 crore in

Steering

gear

and

steering

and

FY17. This has resulted in high

suspension

linkage

products

are

depreciation and interest.

seeing good demand from passenger

car MHCV/ LCV and tractor

Going forward, the investment will be

segments and

have

been

growing

 

limited and the company will be able

ahead of the industry. The contribution of sales for passenger

to utilize its existing assets rather efficiently and will be able to reduce

cars in total sales has increased from

debt with free cash flow generation.

28% in

FY15 to 36%

in FY17 and

further to 40% in Q1FY18.

It has also infused `80 crore into the

company

at

the

price

of

`547

to

reduce its debt. RML’s debt is expected to come down by `125 crore over the next two years.

RML is likely to do sales of `1,345 crore and `1,525 crore, EBITDA of `125 crore and `159 crore and a PAT of `28 crore and `54 crore in FY18 and FY19, respectively. Higher growth in PAT is on account of the decline in interest costs. At the current market price, the share is trading at 11.5 PE on FY19E EPS of `44.

Is Your Dealer Keeping Your Call On Hold? Become Your Own Dealer Simply Download The Beyond
Is Your Dealer Keeping
Your Call On Hold?
Become
Your Own Dealer
Simply Download The Beyond App
eyond
Powered
by
EQUITIES | DERIVATIVES | COMMODITIES* | CURRENCY | MUTUAL FUNDS # | IPOs # | INSURANCE # | DP
Disclaimer : Insurance is a subject matter of solicitation. Mutual fund Investments are subject to market risk. ‘Investment in securities/
Commodities market are subject to market risks, read all the related documents carefully before investing’ Nirmal Bang Securities Pvt.Ltd.
Please read the Do’s and Don’ts prescribed by Commodity Exchange before trading. The PMS Service is not o ering for commodity
Segment *Nirmal Bang Commodities Pvt Ltd #Distributors. “The securities quoted are exemplary and are not recommendatory”
MCX SEBI No INZ000043630,
www.nirmalbang.com
Beyond Market 16th - 31st Oct ’17
It’s simplified ...
Far From True Contrary to popular belief, the Indian economy is not as bad as it

Far

From

True

Contrary to popular belief, the Indian economy is not as bad as it is being made to believe

Far From True Contrary to popular belief, the Indian economy is not as bad as it

M

arket

is

a

strange

space.

And

stranger

space Today, due to access

is

the

media.

to copious amounts of information, it

is

quite

an

easy

task

to

paint a

particular scenario depending upon what one intends to project. So, if one

aims to show a bleak

and negative

picture of the economy, an array of data is available that would substantiate the particular viewpoint. And if one wishes to show a scenario

in which things are not that bleak and worrisome, there is also an array of data, which could amply prove that stand. So, depending upon one’s outlook whether it is philosophical or factual, one can depict the world the way we intend to depict.

But can one really ignore realism at a time when extreme pessimism is reigning high? One cannot. So, the moot question is is India really going through a slowdown as is being

believed by many? Let us view the other side of the story in this cacophony of extreme negativity:

A statement on the Indian economy by a non-Indian would help us save any criticism of one-sided presentation of facts. Recently, during a conference call ahead of the annual meeting of the International Monetary Fund and the World Bank, Kim Jim Yong, President, World Bank said, “The recent slowdown in India’s

Beyond Market 16th - 31st Oct ’17

It’s simplified ...

economic growth is an “aberration” mainly due to temporary disruptions

deceleration in the first quarter, but

were limited to big cities across the country. Sales at the company increased more than 30% over the last Navratri-Dussehra season.

Suzuki reported an 18% growth in

temporary disruptions in preparation

bookings and 15% increase in

economy, underpinned by good monsoon rain. YS Guleria, Senior Vice-President, Sales and Marketing at Honda Motorcycle & Scooter India said sales increased more than 30% as higher capacity increased the availability of products of the automobile company.

volumes during Navratri, while

going

to

have

a

hugely positive

impact on the economy.”

50%, making

this

festive season a

sales this year were visible when

 

record of sorts for the carmaker. RS

e-commerce marketplaces, led by

He added, “We think that the recent

Flipkart and Amazon, reported their

slowdown is an aberration, which will

Marketing and

Sales

at

Maruti

best-ever performance. While

correct in the coming months, and the

Suzuki, said the momentum built up

Flipkart doubled its overall sales,

GDP growth will stabilize during the

Amazon reported similar growth for

continued into Navratri.

 

as Prime Minister (Narendra) Modi has really worked on improving the business environment, and so, we

more than half the categories of products on its web site.

Rakesh Srivastava, Director, Sales and Marketing at Hyundai Motor

think all of those efforts will pay off as well.”

India said the company is likely to have sold more than 26,000 units during Navratri, more than half of

Kamal Nandi said the online buzz and strong advertising by large retailers have boosted demand, even in

And to support these statements made

markets such as Kerala, where sales

by Yong, there are hard facts also. Recent announcements of key companies about their sales - both

momentum is likely to continue into Diwali. Hyundai may cross retail sales of 50,000 units in September,”

Demand this year is more for

picked up after Onam.

expected and reported, point out that all is not gloom and doom for the Indian economy. Here are some of the key announcements:

Srivastava elaborated.

momentum may slow down after Diwali to 7% to 8% for the industry due to the statistical base effect. However, the company is likely to

and large-capacity washing machines. According to industry estimates, the

clock double-digit growth.

refrigerators increased more than 15% this Navratri and Dussehra from last year, pointing to bumper business

in the run-up to Diwali and calming concerns that the currency swap and

and Panasonic - have increased their primary sales (to dealers) by 25% this festive season.

have battled any signs of customer fatigue and have had combined sales of about $450 million during the recently-concluded second leg of festive sales, according to industry

Panasonic

have a prolonged impact on the consumer sentiment.

India recently said that strong primary demand is an indicator that Diwali

sales will be big this year, with the Navratri-Dussehra weekend setting the stage for a bumper season. Appliances said consumers across the

momentum is expected to continue till Diwali sales, with the entire festive month expected to be twice as big for e-commerce players from the festive period last year.

country, including those from smaller towns, are buying more premium products this festive season.

are buying high-end television sets,

Sony has clocked 15% growth in volume sales at its stores this Navratri, and is now hopeful of a 20% increase by Diwali.

`65,000, reporting strong volumes during

and large-screen models that hitherto

Navratri on prospects of a robust rural

Regional Director (India) Praveen Valecha said the next online sale will be closer to Dhanteras-Diwali, and, hence, expected to be the biggest in terms of purchases for electronics since consumers by then get their

Beyond Market 16th - 31st Oct ’17

It’s simplified ...

festive bonuses.

Flipkart said the second sale that was held from 5th October to 8th October saw about 35% of the Gross Merchandise Volume (GMV) recorded during its flagship Big Billion Day (BBD) sale and that it is on track to see 2.5 times growth in GMV from this 30-day festive period over last year’s festive month.

second round of sales for e-commerce players like Amazon and Flipkart was much smaller than the first round, it has grown 200% from the second

round of sales during 2016.

Given these announcements of

expected and reported sales, it seems that the situation is not as bad as it is being made out to be. One of the factors that one needs to keep in mind is what do crucial macro-economic indicators reveal.

He said, “Restructuring-related to demonetisation, the goods and services tax and cleaning of non- performing assets, complemented by tepid export performance, readily explain the current slowdown in quarterly growth.

As regards macroeconomic terms, the

“Given this fact and stable

current account deficit are low, the exchange rate is stable and fiscal consolidation is on track.

macroeconomic environment, any talk of major course correction is premature,” mentioned Panagariya.”

Former Vice-chairman, Niti Aayog Arvind Panagariya in an article stated, “We have seen growth rates below 7% for only two quarters. This performance contrasts with the below 7% growth in six of the eight quarters during the last two years of UPA.”

Probably, one of the consolations for detractors could be the fact that plan to loosen its fiscal deficit target to enable it to spend up to `500 billion ($7.7 billion) more to halt an economic slowdowN.

festive bonuses. Flipkart said the second sale that was held from 5th October to 8th October

Beyond Market 16th - 31st Oct ’17

It’s simplified ...

HIGH SPIRITS IPOs of many companies have attracted reasonably good valuations due to ample liquidity in

HIGH

SPIRITS

IPOs of many companies have attracted reasonably good valuations due to ample liquidity in the markets
IPOs of many
companies have
attracted
reasonably good
valuations due to
ample liquidity in
the markets
HIGH SPIRITS IPOs of many companies have attracted reasonably good valuations due to ample liquidity in
  • I t is that time of the markets where everything seems to go up. A situation has developed where Initial Public Offerings

(IPOs) of companies have attracted more than reasonable valuation.

So, how has this situation developed? One of the key reasons as to why the Indian stock markets are touching a new peak almost every month is consistent liquidity in mutual funds (MFs) post demonetisation.

The money that came in banks had to be parked in avenues, which give reasonably better returns than fixed deposits if not supernormal returns like real estate.

Consequently, as per the Association of Mutual Funds in India (AMFI), the total inflows in MFs in the year-to- date period (equity, balanced, equity ELSS) were `10,0325 crore. Given the massive inflows, the question that arises is where is this money parked?

Mutual fund distributors observe that close to 50% of these inflows have been parked in balanced funds. This is followed by 25% in equity savings schemes and remaining - close to 25% - in large-cap, mid-cap and multi-cap schemes.

This diversification is helping savvy investors, especially HNIs, protect the downside risk to their portfolios. This diversification is a marriage of best of all categories in mutual funds besides

Beyond Market 16th - 31st Oct ’17

It’s simplified ...

taking into account the tax benefits.

Balanced funds provide the best of equity and debt, while equity savings schemes are a mix of equity, debt and arbitrage schemes. Equity savings schemes invest 30% to 35% of the portfolio in equities and the remaining in debt and arbitrage. This structure provides comfort to new investors as the possibility of fall in returns of these schemes is quite low given its diversification.

These schemes are also favourable in terms of tax. Investments held in these schemes for a year have no long-term capital gains tax. Even the returns of these schemes (10% to 12%) have been far encouraging for the investors.

Distributors point out that since these schemes have given far superior returns than fixed deposits, investors consider these schemes as a viable investment option.

Now, the present rally in the market is driven by this consistent and excess liquidity, which is being parked in mutual funds. Since fund managers have the capacity and legal eligibility to buy a large number of shares of a company, these IPOs are being subscribed by mutual funds.

The recent IPOs are nothing but supply of new scrips. It is fairly evident in huge oversubscriptions of recent IPOs. It is estimated that most IPOs are subscribed more than 50 to 100 times the amount offered.

Their steep listing premium shows that fund managers are willing to pay a steep price for a decent growth story, which otherwise would receive reasonably good response in the markets with already listed companies performing well.

For example, Avenue Supermarkets

(D Mart). The company’s share price is quoting almost 205% more than its IPO price. Also, AU Small Finance Bank is quoting double its issue price and CDSL is quoting 154% higher than its issue price.

One important reason why this is happening is lack of clarity about improvement in demand. Hence, there is confusion about improvement in earnings growth.

Due to this, share prices of large listed companies have gone up but their earnings have not caught up with their valuations. Take for instance, cement sector, one of the key barometers of whether construction activity in the economy has picked up or not.

Going by key trends of the sector, it seems like it will take a long time for earnings to justify steep valuation of cement manufacturers. Large-cap cement stocks trade at an average EV/EBITDA of 21 and 16 for FY18 and FY19, respectively which is high when compared with past 10-year average of 7-10.

A key reason for this is high likelihood of postponement in earnings’ growth at least for the next two to three years if one considers present demand growth of 4% to 5%. There are several factors which point out why earnings’ growth of cement companies may delay further. Firstly, companies have added capacities through acquisitions and organic expansion, which put pressure on pricing across regions and limited any growth in cement prices.

As a result, companies may resort to volume growth by slashing prices, which, in turn, would result in lower realizations, and, hence, lower earnings growth. Also, demand from the housing segment, which contributes nearly 60% to 65% of cement demand would not be

sufficient enough to enhance the overall cement demand to 8% to 10% from 4% to 5% at present.

Ironically, with the exception of a few sectors, earnings growth across key sectors may delay. This is one of the key reasons IPOs are seeing renewed interest of key institutional investors.

Besides, lack of availability of companies in the listed space, which are a blend of earnings growth and attractive valuations, the very business model and performance of new companies, which are getting listed, have also triggered off a huge interest in them.

A good number of companies from the financial sector would hit the market with their IPOs. These are UTI Asset Management Company, SBI Life, HDFC Standard Life, the General Insurance Corporation and New India Assurance, among others. It is estimated that on the whole these companies would raise `30,000 crore to `50,000 crore.

Experts

point

out

that

the

data

pertaining to the proportion of assets under management (AUM) and household savings in the GDP indicate that the flow may remain intact in the medium term. The total AUM of domestic mutual funds is 12% of the GDP as compared to the global average of 55%.

Penetration level is even lower for equities. Equity AUM to GDP ratio in India is 4% compared with the global average of 29%. Experts estimate that the share of equity in total AUM may rise to 44% to 45% from the current 35% in the next five years.

Given this, it is natural that those companies with high likelihood of earnings’ growth or those companies which are untapped stories would attract massive liquiditY.

Beyond Market 16th - 31st Oct ’17

It’s simplified ...

A Change Of Track The government’s plans to develop metro rail projects across India indicates the

A Change Of Track

The government’s plans to develop metro rail projects across India indicates the growth opportunities that lay in the construction sector

Beyond Market 16th - 31st Oct ’17

It’s simplified ...

E nvisioned to decongest road and rail traffic, the metro rail projects across India is the

E nvisioned to decongest

 

road

and rail traffic, the

metro rail projects across

India is the need of the

hour

and

will

indeed

boost

the

construction sector.

 

That the government is lining up investments for metro rail projects demonstrates the opportunity that lies ahead for the construction sector.

At present, metro projects with a total length of 370 km are operational in 8 cities, namely, Delhi (217 km), Bengaluru (42.30 km), Kolkata (27.39 km), Chennai (27.36 km), Kochi (13.30 km), Mumbai (Metro Line 1-11.40 km, Mono Rail Phase 1-9.0 km), Jaipur (9.00 km) and Gurugram (Rapid Metro - 1.60 km).

Metro projects with a total length of 537 km are in progress in 13 cities including the eight mentioned above. New cities acquiring metro services are Hyderabad (71 km), Nagpur (38 km), Ahmedabad (36 km), Pune (31.25 km) and Lucknow (23 km), according to a release issued by the Press Information Bureau (PIB).

Metro projects with a total length of 595 km in 13 cities including 10 new cities are at various stages of planning and appraisal. These are Delhi Metro Phase IV - 103.93 km, Delhi and NCR - 21.10 km, Vijayawada - 26.03 km, Visakhapatnam - 42.55 km, Bhopal - 27.87 km, Indore - 31.55 km, Kochi Metro Phase II - 11.20 km, Greater Chandigarh Region Metro Project - 37.56 km, Patna-27.88 km, Guwahati - 61 km, Varanasi - 29.24 km, Thiruvananthapuram and Kozhikode (Light Rail Transport) - 35.12 km and Chennai Phase II - 107.50 km, added the release.

As per industry estimates close to `2 lakh crore is likely to be spent on metro projects with a standard mix of underground and elevated sections.

These are currently under execution and at the planning stage.

HUGE INVESTMENTS

Typically, a project in a major city involves expenditure of around `10,000 crore and higher. For instance, Phase I of the Delhi Metro was completed at `10,571 crore with 60% of the expenditure derived from a soft loan from the Japan Bank for International Cooperation, now known as the Japan International Cooperation Agency (JICA).

wherein private participation in new project proposals was made compulsory. Last mile connectivity and urban development within a five kilometre catchment area are focus areas of the new Policy.

The Policy prescribes development of metros as ‘Urban Transformation’ projects rather than ‘Urban Transportation’ projects. The Policy requires Public Private Partnership (PPP) to be a mandatory component of proposals made by the states that seek central assistance.

While Phase II of Delhi Metro was

The total extent of Phase I and Phase

The three pathways

for

central

completed at `18,783 crore, Phase III

assistance

are

PPP

with

central

expansion has been estimated at

assistance, Grant in the form of 10%

`41,000 crore as most of it is

lump sum and 50:50 equity-sharing

underground. With the present

model

between

the

state

and the

network of the Delhi Metro spanning

central government.

 

about 217 km mostly of Phase I and Phase II and small stretches of Phase III, another 140 km will be added when Phase III is completed.

II is around 190 km with 143 stations. With costs of around `29,000 crore for the two phases spanning 190 km, the cost per km works out to around `155 crore. The standard cost for a Metro Rail line is `200 crore per km. When the track goes underground, the cost doubles to `400 crore.

A CASCADING EFFECT

While government agencies will have the overall responsibility such as in the case of Delhi Metro developed by Delhi Metro Rail Corporation (DMRC), it would mean huge ancillary work for engineering and construction companies in India.

DMRC has developed expertise in the construction of Metro rail lines and has envisaged the development of projects in Tier II cities at 70% of the

INCREASING

 

PRIVATE

cost involved in Tier-I cities. The

PARTICIPATION

DMRC is currently for the development of Kochi, Lucknow and

Apart from

the

size

of

the

Vijayawada Metro Rail projects.

opportunity, what is also worth noting

is

that

the government has

OPPORTUNITY

 

FOR

emphasized on private participation. The 2017 Metro Rail Policy states

DEVELOPERS

 

that

all

forms

of

Public

Private

Track work tenders are awarded for

Partnership (PPP) will be encouraged

design and construction over

for

future

projects

including

viaducts, tunnels, underground and in

Design-Build-Finance-Operate-Trans fer (DBFOT).

depots. Construction of elevated structures includes viaducts and

The Union Cabinet unveiled its new Metro Rail Policy in August ’17

stations while underground structures include tunnels, stations and their associated tunnels.

Beyond Market 16th - 31st Oct ’17

It’s simplified ...

The Hyderabad Metro Project is a

previously

been

involved

in

a

L&T had awarded the AFC contract

PPP, which is being implemented by

Chennai

Metro

`900 crore

to Samsung Data Systems India. The

Larsen & Toubro (L&T) on a Design,

construction contract in a JV with

AFC System for the Chennai Metro

Build, Finance, Operate and Transfer

Gammon

India.

But

they

left

the

was awarded to Nippon Signal

basis. The company is financing 90% of the project cost of about `14,000

project mid-way over payment issues.

Company for `110 crore.

crore. L&T was among the primary

JMC Projects implemented a `400

COMMUNICATIONS

AND

civil engineering contractors of the Kochi Metro with projects worth about `900 crore.

crore project in the Delhi Metro of elevated viaduct and six stations in a JV with China Harbour Engineering Company (CHEC). JMC has won

SIGNALING

Metro train projects rely heavily on electric systems and communication

TRACKS AND COACHES

CONSTRUCTION

AND

contracts in the elevated sections of

devices. There will be a huge

ENGINEERING

the Mumbai Metro.

requirement for such equipment

The other key segment to watch out for is construction where companies like Simplex, J Kumar, NCC and others are already working.

Its previous JV partner CHEC has now entered into a JV with Tata Projects for another contract within the Mumbai Metro Elevated Corridor.

suppliers. For the Hyderabad Metro project, L&T awarded the signaling contract to French company Thales Group’s Portugal Unit. Bengaluru Metro’s signaling contract was

J Kumar Infraprojects is a major player in Maharashtra and has completed Metro Rail projects worth about `200 crore in Delhi Metro. The company’s JV with China Railway Tunnel Group (CRTG) has won

Other major player in this sector includes Afcons, which has constructed projects worth `700 crore in Delhi Metro and ITD Cementation India, which built elevated viaducts and stations worth `132 crore.

awarded to Alstom. Chennai Metro’s `600 crore signaling, platform screen doors and telecom work was awarded to Siemens India consortium.

contracts in the Mumbai Metro Underground project where the work

ELECTRIC AND EQUIPMENT

 

IRCON, which is the Government of India company, and operates under

is set to start this month.

Beyond construction

 

and

Also in a JV with a Chinese company STEC, L&T is among the five contractors currently involved in the construction of the underground phase of the Mumbai Metro.

L&T had previously completed the `500 crore Chennai Metro project as part of a consortium with Alstom for design, construction of track work in viaduct, tunnel, underground, and depot in corridor I & II of the project.

L&T had partnered with Shanghai Urban Construction Group (SUCG) to complete the `700 crore project in Delhi Metro. It had implemented a `380 crore viaduct stretch on its own also in Delhi Metro.

Another company that has won civil construction contracts in the Mumbai Metro project is HCC through its JV with MMS of Russia. MMS had

development, the entire value chain in the equipment business will also get a boost in the process. The Chennai Metro’s `300 crore power supply contract was awarded to Siemens India consortium.

Air-conditioning of the underground stations, tunnel ventilation systems, lifts and escalators will be among the bid areas of requirements. Companies like Voltas implemented the `200 crore underground systems air conditioning project in the Chennai Metro. Blue Star implemented projects in Bengaluru and Delhi.

Likewise automated fare collection systems (AFC), which are largely dominated by foreign players, will also be required. The system that deploys contactless card technology to achieve 100% ticket checking was deployed by L&T as part of its Hyderabad Metro DBFOT project.

the Ministry of Railways is the prime contender for the job of laying down tracks. IRCON International won the award for tracks for Phase III of the Delhi Metro.

Other sections of the same Phase III track contracts were implemented by Alstom India consortium. IRCON has also implemented `160 crore track work projects for Kochi Metro.

Metros will also drive demand for the rolling stocks and coaches and Electric Multiple Units (EMUs). Most of the ongoing manufacturing of EMUs and all future EMU production is going to be within the country.

Titagarh Wagons, BEML and few other companies in the segment that are currently engaged in refurbishing rolling stock are eying this segment of the market. BEML has already supplied rolling stocks for Delhi, Jaipur and Bengaluru MetroS.

Beyond Market 16th - 31st Oct ’17

It’s simplified ...

Just As Good, If Not Better Though investors are cautious and are focusing on quality deals,

Just As Good, If Not Better

Though investors are cautious and are focusing on quality deals, experts believe that the future of private equity investments looks good

Just As Good, If Not Better Though investors are cautious and are focusing on quality deals,
Just As Good, If Not Better Though investors are cautious and are focusing on quality deals,
Just As Good, If Not Better Though investors are cautious and are focusing on quality deals,
Just As Good, If Not Better Though investors are cautious and are focusing on quality deals,
Just As Good, If Not Better Though investors are cautious and are focusing on quality deals,
Just As Good, If Not Better Though investors are cautious and are focusing on quality deals,
Just As Good, If Not Better Though investors are cautious and are focusing on quality deals,
Just As Good, If Not Better Though investors are cautious and are focusing on quality deals,
Just As Good, If Not Better Though investors are cautious and are focusing on quality deals,
Just As Good, If Not Better Though investors are cautious and are focusing on quality deals,
Just As Good, If Not Better Though investors are cautious and are focusing on quality deals,
I
I

n

contrast

to

the

global

happened,

which

created

an

be extremely beneficial, there were

The first quarter of 2017 saw a 22%

economy, which was

environment of confusion among

some critics who saw little to no good

relatively

stable,

the

Indian

in this decision. The other major

economy experienced quite a few ups and downs in the last one year. India registered a growth of 7.6% in FY16 compared with a 6.5% growth in 2015. Things were looking

good and then demonetisation

financial institutions and Private Equity (PE) firms on treading ahead.

Opinion on the demonetisation exercise was widely split. While there was a general consensus that in the longer term, this move would prove to

policy change that took place was the passing of Goods and Services Tax (GST) Act.

decline in PE investments in India.

Beyond Market

16th - 31st Oct ’17

 

It’s simplified ...

PE Deals

Period

Number

Value

Of Deals

($bn)

Q1 2015

408

4.57

Q2 2015

414

5.94

Q3 2015

489

6.39

Q4 2015

476

5.08

Q1 2016

432

4.19

Q2 2016

319

2.31

Q3 2016

332

2.87

Q4 2016

321

3.89

Q1 2017

238

3.04

Source: News Corp, VCC Edge

According to India Quarterly Deals Report for Q1 CY17 released by News Corp, the number of deals fell to 238 from 432 while the deal value fell to $3.04 billion from $4.19 billion during the corresponding period last year, showing a decrease of 45% and 27%, respectively.

As a result, PE investments in India are at a five-year low. Although fund infusions got better, investors chose to tread cautiously. Investment values doubled against the last quarter to $820 million for Q1 of calendar year 2017, though this was a fraction of the $2,500 million for Q1 CY16. Global PE fund KKR & Co Lp and Canada Pension Plan (CPP) Investment Board put together invested $900 million in Bharti Infratel in March, making it the largest in the first quarter.

The report further adds that mergers and acquisitions (M&A) saw several large deals being inked during the period. The deal numbers stood at 226 as opposed to around 237 for the previous quarter.

Khazanah Nasional Berhad-Apollo Hospitals deal were the key exits

recorded for the quarter.

The slowdown during the first quarter

was temporary because in May ’17,

private equity investments jumped by

nearly 64%.

investments stood at US $4.2 billion in 173 deals. Overall there were 155 transactions that took place with

Mumbai, the National Capital Region

(NCR) centered on Delhi and Bengaluru as the top locations for most PE investments.

In terms of industry, according to the

Investors pumped in $963 million

report,

Information

Technology

&

across 67 deals and more than half of

IT-enabled Services (IT & ITeS)

sector

retained

the

top

spot

this

this was in the start-up and emerging business space. This news came as a relief for PE investors, because there was a looming fear that deal activity

may slow down with fund managers taking a cautious approach towards fresh funding.

According to Prashant Mehra, Partner at Grant Thornton India, M&A values recorded a marginal increase of 4% over the same period last year. While the domestic deal activity recorded a nearly two-fold increase, the cross-border deal values fell by 49% due to reduced inbound investor interest in them.

quarter, with 78 deals worth approximately US $2.7 billion. Investments in the sector rose 93% year-on-year to US $2.7 billion.

Sandeep Ladda, Leader, Technology at PwC India said, “Despite the slowdown in growth in the Indian technology sector and in the midst of layoffs and US visa issues, technology continued to be a major investment theme in the second quarter, with IT & ITeS accounting for a large share of overall deal value despite growth in volumes remaining rather flat.

As

far

as

the

second

quarter

is

concerned, according to MoneyTree

India

Report

by

PricewaterhouseCoopers (PwC), PE investments in India declined 13% by

deal

value

to

$6.3

billion

in

the

second quarter compared with the

preceding quarter.

 

However, the value of deals in this

quarter has

grown

by

51%

as

compared to Q2 2016 where

“Similarly IT & ITeS was the top sector in terms of PE exits in this quarter, with a total of 14 exits worth around US $718 million. This quarter witnessed significant developments around further consolidation in the e-tail segment along with several new billion-dollar funds flowing into the technology sector.

“As transactions continue to move online, new areas such as FinTech and

Vodafone-Idea deal was the leader on charts, contributing $12.4 billion of the total deal value of $16 billion. The year-on-year (y-o-y) exit value has fallen to $1.4 billion for Q1 CY17 from $2.1 billion for the same quarter last year.

With

total

exit deal values

at $945

million, Providence

Equity

Partners-Idea Cellular deal and the

Largest PE Investments in July - September 2017

   

Amount

Company

Investors

(US$ mn)

Flipkart

SoftBank

2500

Paytm

SoftBank

1400

Flipkart

Tencent, Others

1400

Bharti Infratel

KKR, CPPIB

952

GlobalLogic

CPPIB

720

 

CPPIB

500

IndoSpace Core ICICI Lombard General Insurance

Warburg Pincus, Others

383

Tata Technologies

Warburg Pincus

360

Source: Venture Intelligence Report

Beyond Market 16th - 31st Oct ’17

It’s simplified ...

the hyper local and travel segments are set to benefit in the long term. As e-Commerce players strive to achieve profitability, the year could also see companies opting for an initial public offering (IPO) as a preferred exit route.” Ladda further added.

Apart

from

IT

&

ITeS,

both

manufacturing and energy sectors displayed notable growth in nvestments compared to Q1 FY17, closing with around US $121 million in five deals and US $541 million in six deals, respectively.

“Indian

manufacturing

industry

is

looking to focus on new

products/services,

R&D,

IT

and

expanding

its

facilities

in

select

sectors.

Companies

in

the

manufacturing

space

have

shown

resilience in the face of challenges

and are confident about the sector’s growth prospects,” says Bimal Tanna,

Partner

and

Leader,

Industrial

Products, PwC India.

As

far

as

investment in the

manufacturing sector is concerned, Tanna commented in the report, “While the number of PE deals in the manufacturing sector is limited compared to that in other sectors, we note that quite a few manufacturing companies are open to exploring the PE route to further expand their business operations.”

According to a report by Venture Intelligence, PE firms invested about US $5.7 billion across 106 deals during the third quarter ended

Private Equity Investments By Quarter

 

Amount

Investments

($B)

Q3 2016

 
  • 3.3 153

Q4 2016

 
  • 4.8 197

Q1 2017

 
  • 6.2 163

Q2 2017

 
  • 5.4 133

Q3 2017

 
  • 5.7 106

Source: Venture Intelligence Report

Top PE Deals In Q2 2017

Company

Industry

Investor

Amount

(US$ mn)

One97

IT & ITeS

SoftBank Corp

1400

Communications

IndoSpace Core

Shipping & Logistics

CPPIB

500

ICICI Lombard

BFSI

Warburg Pincus,

383

General Insurance

Others

Tata Technologies

IT & ITeS

Warburg Pincus

360

Aegis BPO

IT & ITeS

Capital Square

275

Partners

Source: PricewaterhouseCoopers (PwC)

September ’17, which was 73% higher than that in Q3 FY16 and 5% higher than the immediate previous quarter. Q3FY17 recorded as many as 13 investments above US $100 million as compared to 10 in the same period last year.

Even though the number of deals in the first nine months of 2017 are 23% lower than that in the comparable period during the previous year, according to Venture Intelligence report, private equity firms invested about $17.6 billion in Indian companies in the first nine months of 2017, sailing past the previous high of $17.3 billion in 2015.

The year has already recorded as many as 21 investments over $200 million in size in addition to 15 private equity deals between $100 million and $200 million.

Mega deals have been dominated by four sectors: Internet & Mobile, Infrastructure, IT Services & BPO and BFSI (Banking, Financial Services and Insurance). “Private equity investments have largely flown into growth stage companies in just 3-4 sectors, which are looking quite attractive at this point of time. This is one of the reasons behind the increase in deal value.

accounts for the maximum number of transaction,” said Arun Natarajan, CEO, Venture Intelligence.

Japan-based investment giant SoftBank contributed 24% of the total investment value, which included $250 million in budget hotels aggregator OYO, $1.4 billion in mobile wallet leader PayTm and $2.5 billion in e-commerce leader Flipkart.

Softbank has invested over $6 billion in the Indian market in less than three years alone.

The report further states that while SoftBank’s $2.5 billion investment in Flipkart was the largest reported during the latest quarter, the next three largest investments during Q3FY17 were accounted for by BFSI companies - Carlyle’s $300 million into SBI Cards; the $260 million raised by RBL Bank and the $240 million buyout of investor services firm Karvy Computershare by General Atlantic.

Though investors are cautious and are focusing on quality deals, experts believe that the future of private equity investment looks good. After the initial setback in investments earlier this year, the pace has picked up again.

“However, the number of deals has

come down largely because of lack of

interest shown by venture capital

investors in early stage companies. It is generally this segment that

“India is clearly maturing as a PE

market with bigger and more complex

deals becoming more commonplace,”

said Mayank Rastogi, partner at Ernst & YounG.

Beyond Market 16th - 31st Oct ’17

It’s simplified ...

INDIA’S GLOBAL APPEAL Structural economic reforms and policies are primary reasons for the growth of India’s

INDIA’S GLOBAL APPEAL

Structural economic reforms and policies are primary reasons for the growth of India’s textile exports

Beyond Market 16th - 31st Oct ’17

It’s simplified ...

I ndia’s textile companies are leaving their footprints on the global arena as is evident from
  • I ndia’s textile companies are leaving their footprints on the global arena as is evident from the rising exports of textiles

and garments.

This is not a mean feat considering the fact that the share of India’s Asian peers in their exports to the US - one of the key export destinations - has been declining in terms of realization per unit.

Let us find out how the journey has been for India’s textiles industry.

THE BASICS

hand-spun-and-woven segment, on the other hand are capital-intensive mills. But a large part of India’s textile industry comprises of decentralised power looms, hosiery and knitting units.

In addition to this, the textile industry is connected to agriculture as cotton is one of the essential raw materials for production. It is estimated that the size of India’s textile industry is around US $120 billion, and is expected to reach US $230 billion by the year 2020.

GOVERNMENT INITIATIVES

4)The government announced a slew of labour-friendly reforms aimed at generating around 11.1 million jobs in apparel and made-up sectors, and increasing textile exports to US $32.8 billion and investment of `80,630 crore (US $12.09 billion) in the next three years.

As a result of these initiatives and other business advantages, India’s textile sector has witnessed a spurt in investment in the past five years. The industry (including dyed and printed) attracted Foreign Direct Investment (FDI) worth US $2.47 billion from April ’00 to March ’17.

India’s textile industry is one of the oldest and can be traced back to centuries. It is estimated that the

One of the key reasons for the rise in per unit realization in exports to the US despite the fall in exports of its

INDIA’S EXPORTS

Owing to these revivalistic policies,

textile sector contributes close to 15%

Asian peers

is

due

to

the

India’s exports of locally made retail

to India’s total exports. Besides, it is

government’s

policies

on

exports,

and lifestyle products grew at a

one of those sectors that provides

including

a

number

of

export

compound annual growth rate

sizeable employment.

promotion

policies

aimed

at

the

(CAGR) of 10% from 2013 to 2016,

textile sector.

 

mainly led by bedding, bath and home

The textile sector employs about 51 million people directly, and 68 million people indirectly. India’s overall textile exports during

The textile and garment sector can be

Most importantly, it has allowed 100% FDI in the Indian textile sector under the automatic route.

decor products, and textiles. The government has set a target of US $45 billion for 2017-18 for textile and garment sector exports.

FY15-16 stood at US $40 billion. The industry contributes approximately 4% to India’s Gross Domestic Product (GDP) and 14% to overall Index of Industrial Production (IIP).

divided into two broad segments – the unorganized sector and the organized sector. The unorganized sector

A few key initiatives announced in the Union Budget 2017-18 to boost the textiles sector are as under:

1) Encourage new entrepreneurs to invest in sectors such as knitwear by increasing allocation of funds to Mudra Bank from `1,36,000 crore (US $20.4 billion) to `2,44,000 crore

In the past three-and-a-half years (calendar), even as countries like China, Bangladesh and Vietnam have been recording a decline in their per unit realization of apparel exports to the United States, India has been successfully able to maintain the per unit realization.

consists of handloom, handicrafts and

(US $36.6 billion).

According to data

released by the

sericulture, which are operated on a

Office of Textiles and Apparel

small scale and through traditional

2) Upgrade labour skills by allocating

(OTEXA), US, the average

tools and methods.

`2,200 crore (US $330 million).

realization

per unit of

apparels

The organized sector mainly consists of spinning, apparel and garments, which use modern machinery and employ techniques such as economies of scale.

A review of the textile industry shows that while on one hand there is a

Beyond Market 16th - 31st Oct ’17

3) Memorandum of Understanding (MoU) with 20 e-commerce companies, aimed at providing a platform to artisans and weavers from India in different handloom and handicraft clusters across the country for selling their products directly to the consumer.

exported by India to the US has been in the range of $3.4 to $3.5 for the

past three-and-a-half years.

In comparison with this, in the same period, the average realization per unit of apparels exported by China and Bangladesh fell to $2.3 and $2.6 from $2.7 and $3, respectively.

It’s simplified ...

 

Though rising exports are a healthy

With consumerism and disposable

investments

of

$11

billion

and

There are three fundamentals reasons why India has been able to maintain its average realization per unit in its apparel exports to the US.

First, unlike its Asian peers, Indian apparel manufacturers have not been slashing prices for their products that are sold to buyers in the US. Due to high labour costs in China, Chinese apparel manufacturers have been slashing prices to get more business from buyers in the US.

Due to this, their average realization per unit has come down. Second, industry veterans point out that there is an increasing trend wherein man- made garments are exported to the US

sign for India’s textiles companies, a lot needs to be done to make them and the sector highly and consistently profitable. It would be a great help for textile companies if domestic consumption also provided strong business along with export demand. The future for the Indian textile industry looks promising.

incomes on the rise, the retail sector has experienced rapid growth in the past decade with the entry of several international players like Marks & Spencer, Guess and Next into the Indian market.

generating $30 billion in exports.

The minister informed that funds to the tune of over `1,900 crore had been given to the apparel industry under the rebate of state levies to boost exports from the sector. This provides high hope for the industry.

Recently, the government exempted export promotion schemes such as Advance Authorization Scheme and Export Promotion Capital Goods Scheme (EPCG) from payment of Goods and Services Tax (GST) till 31st March next year. This is expected to enhance investments in the textile sector, say experts.

more than cotton-based garments.

The apparel market

in

India is

estimated to grow at a compound

According

to

estimates,

40%

of

Man-made garments such as winter

annual growth rate (CAGR) of 11.8%

India’s

textile

exports

are

by

wear and other specialized garments fetch higher value than cotton-based

to reach US $180 billion by 2025.

merchant exporters. By providing the facility that they need to pay a

garments. Lastly, experts point out that more and more Indian apparel manufacturers are complying with the norms set by buyers in the US.

The Indian cotton textile industry is expected to showcase stable growth in FY17-18, supported by steady input prices, healthy capacity

The government in June ’16 had

nominal amount of 0.1% as GST while claiming goods from manufacturers for exports will ensure that there is no cash flow problem.

Compliances in terms of quality of products and legalities have increased the cost of production for India-based apparel-manufacturers. And buyers in the US are willing to pay a higher value to such compliant companies based in India.

utilization and steady demand from domestic buyers.

approved a `6,006 crore special package for textile and apparel sector to create one crore new jobs in the next three years, attracting

But we need more such initiatives taking into account the business dynamics domestically, and global competitiveness in comparison with players outside India. Only then, India’s textile companies would achieve peak of earnings’ cyclE.

Though rising exports are a healthy With consumerism and disposable investments of $11 billion and There

Catch-up Effect

In any period, the economies of countries that start off poor generally grow faster than the economies of countries that start off rich. As a result, the national income of poor countries usually catches up with the national income of rich countries. New technology may even allow developing countries to leap-frog over industrialized countries with older technology. This, at least, is the traditional economic theory. In recent years, there has been considerable debate about the extent and speed of convergence in reality.

One reason to expect catch-up is that workers in poor countries have little access to capital, so their productivity is often low. Increasing the amount of capital at their disposal by only a small amount can produce huge gains in productivity. Countries with lots of capital, and as a result higher levels of productivity, would enjoy a much smaller gain from a similar increase in capital. This is one possible explanation for the much faster growth of Japan and Germany, compared with the US and the UK, after the Second World War and the faster growth of several Asian ‘tigers’, compared with developed countries, during the 1980s and most of the 1990s.

Beyond Market 16th - 31st Oct ’17

It’s simplified ...

T he Reserve Bank of India (RBI) and commercial banks are at loggerheads over monetary policy
T he Reserve Bank of India (RBI) and commercial banks are at loggerheads over monetary policy

T he Reserve Bank of India (RBI) and commercial banks are at loggerheads

over monetary policy transmission. Banks are slower in passing benefits to customers even when the RBI obliges with a rate cut. Surprisingly, banks are comparatively quicker in increasing lending rates when the RBI shifts towards a tighter monetary policy.

Clearly transmission of RBI’s monetary policy, which involves management of money supply and interest rates in the system, is currently inadequate. The issue in a way ridicules RBI’s monetary policy and undermines the integrity of the interest rate process in the economy.

An internal group of RBI, formed in August to study the monetary

transmission

issue,

recently

submitted its report to the central

bank. Findings and suggestions of the study group are far-reaching.

Out of the many recommendations, the study group wants banks to set interest rates based on an external benchmark and not as per internal benchmarks as is the practice now.

INTERNAL BENCHMARKS

The present loan pricing regime is benchmarked on the marginal cost of funds-based lending rate (MCLR). The previous regime of base rate still exists for some loans. Both are calculated based on banks’ internal factors such as cost of funds and maturity of deposits.

For beginners, any lending rate of banks has two components:

benchmark rate (base rate or MCLR rate) and the spread (bank’s margin). As per regulation, banks cannot lend

below the base rate.

Ever since deregulation of interest rates in 1994, the RBI has experimented with many credit pricing methodologies: prime lending rate (PLR), benchmark prime lending rate (BPLR), base rate and finally MCLR rate. Successive benchmarks corrected the short comings of the previous one.

The latest and current regime is the MCLR, which was introduced in April ’16. It is based on banks’ increment cost of funds. So if the future cost of deposit came cheaper due to RBI’s loose policy, lending rates would come down. If the future cost of deposits were dearer, lending rates would go up. But the internal study group of the RBI has found that MCLR-based lending has some shortcomings, preventing desired monetary transmission.

An RBI study group has recommended a switchover to an external benchmark in a time-bound manner to solve the monetary transmission issue

A NEW BENCHMARK

Beyond Market 16th - 31st Oct ’17

It’s simplified ...

Change In MCLR V/s Base Rate V/s Policy Rate

 

Base Rate

Base Rate

 

Change In

Change in

Change In

Difference Between

As Of

As Of

Base Rate

MCLR

Policy Rate

The Reduction In Base

Apr ’16

Sept ’17

Since Apr ’16

Since Apr ’16

Since Apr ’16

Rate And MCLR

Axis Bank

9.50%

9.05%

 

0.45%

1.25%

0.50%

-0.80%

ICICI Bank

9.35%

9.35%

 

0.00%

1.00%

0.50%

-1.00%

HDFC Bank

9.30%

9.25%

 

0.05%

1.05%

0.50%

-1.00%

Kotak Bank

9.50%

9.40%

 

0.10%

1.00%

0.50%

-0.90%

Yes Bank

10.25%

10.25%

 

0.00%

0.80%

0.50%

-0.80%

Induslnd

10.60%

10.55%

 

0.05%

1.20%

0.50%

-1.15%

SBI

9.30%

9.10%

 

0.20%

1.20%

0.50%

-1.00%

PNB

9.60%

9.35%

 

0.25%

1.65%

0.50%

-1.40%

BOB

9.65%

9.60%

 

0.05%

0.95%

0.50%

-0.90%

BOI

9.70%

9.55%

 

0.15%

1.10%

0.50%

-0.95%

Canara Bank

9.65%

9.45%

 

0.20%

1.25%

0.50%

-1.05%

Source: RBI Data

THE FINDINGS

THE SOLUTION

 

RBI’s internal study group has found that under the MCLR regime, banks are slow in passing benefits to customers. Further, the study group found that the MCLR system is inconsistent among banks, thus putting borrowers at a disadvantage.

The transmission of interest rates on outstanding loans to old customers was significantly lower than on fresh loans. Banks secure their spread (margins) first before passing on the benefit to the customer. The study group found out that the spreads charged by some banks seemed excessive and consistently large.

Given the shortcomings discussed here, the RBI study group has recommended a switchover to an external benchmark in a time-bound manner. This is significant as the lending rate will be benchmarked to market rates. The RBI will take a final view on the recommendations of the study group after seeking comments from the public.

The study group has cited 13 possible candidates as external benchmarks. While the study said that no external instrument in India met all the requirements of an ideal benchmark, 3 candidates from these 13 can be considered, they said.

the apex bank’s policy repo rate are better suited to serve the role of an external benchmark.

The T-Bill reflects the rate at which the government borrows. CD rate is a time deposit with banks. And repurchase rate or the repo rate is the rate at which the RBI lends money to banks. It signals short-term interest rates in the system.

According to the suggestion of the study group, all floating rate loans from April ’18 can be based on one of the three external benchmarks that the RBI selects.

Outstanding loans can be switched

Further, the study group also found that the MCLR regime is not in sync with global practices on pricing of bank loans.

The study group of the RBI is of the view that the Treasury-Bill rate, the certificate of deposit (CD) rate and

without any fees from March ’19. The group has also suggested quarterly interest rate resets as opposed to a one-year reset as practised now for better monetary transmission.

Summary Assessment Of Suggested Candidates For Benchmark

 

Correlation With The Policy Repo Rate

Liquidity

 

Instruments

Robustness

High

Low To

High

Low To

Linked To Banks' Cost Of Funds

Existence Of

Reliability And

Moderate

Moderate

(At The Margin)

A Term Structure

Transparency

Market Repo

Yes

Yes

   

Yes

  • - Yes

    • - No

 

Yes

T-bill Rates

No

Yes

   

Yes

  • - No

  • - Yes

 

No

CD Rates

No

Yes

   

Yes

  • - Yes

    • - Yes

 

No

Repo Rate

Yes

-

   

-

  • - Yes

    • - No

 

No

Source: RBI Data

Beyond Market 16th - 31st Oct ’17

It’s simplified ...

THE DEBATE

Why do banks not transmit monetary policy quickly? There are some genuine factors limiting monetary transmission. Unlike in other countries, the liabilities side of a bank, comprising mostly of current account and savings account and fixed deposits, is insensitive to changes in external policy rates.

So, the bank has to lower the interest rate that it offers on savings account first before cutting lending rates in order to save margins. Many senior citizens would tend to lose.

There are other reasons also that impede monetary policy

transmission: asset liability mismatch, competition from other financial saving instruments and more recently deterioration in the health of the banking sector owing to rising cases of bad debts.

Bankers have expressed a need to move deposit rates to an external benchmark, in case loan prices are based on external benchmarks. This will allow quick monetary transmission, but there are challenges.

CHALLENGES

While the recommendations of the study group will bring in higher discipline and transparency in loan pricing, there are challenges. Fixing

deposits to an external benchmark can lead to volatility in returns for depositors, mostly senior citizens.

This can lead to investors moving from bank deposits to other financial products, subsequently robbing banks of cheap funds. Thus, banks relying on retail funds can take a beating if deposit and lending rates are benchmarked externally.

For banks, migration to an external benchmark for pricing credit can lead to volatility to banks’ spread and margin. Profitability of banks can take a hit initially. Further, any manipulation in external benchmark can trigger a systemic issue for the Reserve BanK.

Credit Pricing Methodologies Introduced By The RBI

Methodology

Introduced

Intent

Issues

PLR

October ’94

Interest rates deregulated. Interest rate charged to most creditworthy borrowers became PLR

PLRs became rigid and did not reflect the movement in policy rates

BPLR

April ’03

To improve transparency and ensure appropriate pricing of loans

Below-BPLR lending became dominant impeding monetary transmission. Few loan categories were outside the purview of the BPLR

Base Rate

July ’10

The base rate was linked to banks’ cost of funds. It facilitated better pricing of loans and enhanced transparency in lending rates. Quarterly reviews

Opaque. The discretion in charging of spreads impacted monetary transmission

MCLR

April ’16

The lending rate was linked to the marginal cost of funds for banks. Monthly reviews

High reset period and discretionary spreads being charged by banks prevented the desired monetary transmission

Source: RBI Data

Micro analysis. Mega gains. Trading at Nirmal Bang is based on extensive research and in-depth analysis,
Micro analysis. Mega gains.
Trading at Nirmal Bang is based on extensive research and in-depth
analysis, where we focus on the smallest of details and turn them into an
advantage for you.
Over the years, the analytical approach coupled with decades of
experience has helped us maximize returns for our investors and thereby
inspire con dence in them.
EQUITIES* | DERIVATIVES* | COMMODITIES | CURRENCY* | MUTUAL FUNDS ^ | IPOs ^ | INSURANCE ^ | DP*
www.nirmalbang.com
Contact at: 022-3926 9600
|
e-mail: sales@nirmalbang.com
Disclaimer: Insurance is a subject matter of solicitation. Mutual Fund investments are subject to market risk. Please read the scheme related document carefully before investing. Please read the Do’s and Don’ts prescribed by Commodity Exchange before trading. The PMS Service is not o ering for commodity segment. *Through Nirmal Bang Securities Pvt. Ltd.
^Distributors #Prepared by Research Analyst of Nirmal Bang Commodities Pvt. Ltd.
REGD. OFFICE: Sonawala Building, 25 Bank Street, Fort, Mumbai - 400 001. Tel: 022 - 39267500 / 7501; Fax: 022 - 39267510
CORPORATE OFFICE: B-2, 301/302, Marathon Innova, O Ganpatrao Kadam Marg, Lower Parel (W), Mumbai - 400 013. Tel: 022 - 39268000 / 8001; Fax: 022 - 39268010

Beyond Market 16th - 31st Oct ’17

It’s simplified ...

FMCG firms and retailers are seeing a clear recovery post the implementation of GST A GAME
FMCG firms and retailers are seeing a clear recovery post the implementation of GST A GAME
FMCG firms and retailers are seeing a clear recovery post the implementation of GST A GAME
FMCG firms and retailers are seeing a clear recovery post the implementation of GST A GAME
FMCG firms and retailers are seeing a clear recovery post the implementation of GST A GAME
FMCG firms and retailers are seeing a clear recovery post the implementation of GST A GAME
FMCG firms and retailers are seeing a clear recovery post the implementation of GST A GAME

FMCG firms and

retailers are seeing a

clear recovery post the

implementation of GST

A GAME CHANGER

FMCG firms and retailers are seeing a clear recovery post the implementation of GST A GAME

Beyond Market 16th - 31st Oct ’17

It’s simplified ...

A s the goods and services tax (GST) roll-out completes more than

three months, major fast

hair oil, toothpaste and soaps have been put under the 18% tax slab, significantly lower than the previous

Among consumer goods makers,

soaps segment, where GST rates have come down, the company has passed on the benefits to consumers through

Marico took a price cut of 5% in Vaho

moving consumer goods (FMCG) firms, including Hindustan Unilever, Dabur and Godrej Consumer, expect full recovery from the pangs of implementation of the new tax regime by the end of the third quarter with clear signs of demand picking up in the horizon.

22% to 24% slab. The GST rate schedule indicates that nearly 81% of all items are in the 18% tax bracket, or below that figure.

Hindustan Unilever was the first company to cut prices of products

price reduction or increase in weight. In categories where GST rates have gone up, the company has absorbed the price increase.

and 3% to 4% in Saffola due to GST. No price increase has been initiated in Parachute’s portfolio.

Most FMCG firms were hit by de-stocking by channel partners ahead of the implementation of GST in July this year due to uncertainties of transition to the new system.

FMCG companies have witnessed strong demand in the sector with many product prices declining post implementation of GST.

While

cut

in

product

prices

has

such as Rin bar, while increasing the weight of others like Dove bathing bar and Surf Excel bar.

Hindustan Unilever in its Q1FY18 results said that it had reduced prices of products such as detergent bars, skin cleanser, toothpastes and hair oil. For example, a Surf Excel bar, which would earlier cost `29, is now being sold at `27. Similarly, the company is currently selling a pack of four Lifebuoy Activ Silver at `94, instead

Experts said that FMCG companies are likely to witness their costs coming down, going forward with the implementation of GST on overall logistics, warehousing, and also enjoy the benefit of input tax credit.

All these are likely to improve margins of FMCG companies and demand is also expected to improve as the companies are likely to pass on

of `104.

the benefits partially to consumers.

definitely helped in the

revival of

demand in both urban and rural areas going forward, strong demand in the FMCG sector is expected to continue as normal monsoon in most places would revive rural economy. However, in some cases where

The company has brands such as Wheel, Rin, Surf Excel, Comfort, Sunlight, Vim, Domex, etc in the home care segment, while in personal care it has brands such as Lux, Liril, Hamam, Sunsilk, Rexona, Lifebuoy,

Prices have fallen in the FMCG

Industry experts said that after a prod

This has resulted

in

a

3%

to

8%

RS Sodhi, Managing Director, Gujarat Co-operative Milk Marketing Federation (GCMMF) said that Amul had reduced prices on dairy whiteners and cream by around 6%, which took the prices back to 2014 levels.

product prices have gone up marginally, FMCG companies have absorbed them.

Dove, Pears, etc. The company said any “further changes will be communicated in due course” on other products.

segment after the roll-out of GST. A host of consumer majors, including Hindustan Unilever and ITC, have reduced prices of FMCG products such as soaps, shampoo, detergents, biscuits and savoury snacks, among other items.

from the government, other FMCG companies also followed suit and brought down product prices, passing on the benefits of GST to consumers. The fear that anti-profiteering clause may be invoked, compelled FMCG companies to pass on the benefits of

However, the company increased prices on its Amul and Sagar ghee brands by 7%, following a GST of 12%, up from 5%. While he expects consumption growth in dairy whiteners, cream and paneer to go up, Sodhi feels ghee sales could be impacted because of the price rise.

While the price of Amul Ghee has gone up by 7% to `505 (1 litre refill

GST to consumers.

pack) from `470, Amulya 1 kg pouch price has in fact come down from

decline in

prices

of

goods

across

`358 to `335. Amul cream prices are

modern retail outlets, including Big Bazaar and HyperCity, apart from

online grocery firms such as

A Nestle India spokesperson said, the company has passed on the benefits to

down 4% (Amulspray 1 kg pouch - old price `360, new price `335; Amul

Bigbasket and Grofers.

the consumers in categories where there is a tax reduction.

Cream 1 litre - old price `190, new price `182).

After the implementation of GST,

Beyond Market 16th - 31st Oct ’17

According to a Godrej official, in the

However, major FMCG companies

It’s simplified ...

including Hindustan

Unilever,

Marico and Dabur India, among others, had witnessed a dip in sales and lower volumes impacted by de-stocking by trade partners due to transition in the run up to the implementation of GST.

Most consumer product companies reported tepid sales growth in the April-June period despite healthy consumer demand because of destocking by trade, especially wholesalers and retailers that purchased limited inventory in the run-up to the new tax system.

However, FMCG sales by volume, or an actual number of products sold, rose 6% in July, faster than 2% a year ago, according to the latest data by Kantar Worldpanel, the consumer insights arm of WPP.

This was mainly driven by 12% growth in rural areas and a 7% rise in the food and beverages (F&B) category that has a significant chunk of unbranded players.

A year ago, both segments grew 2% each. It’s been driven by a catch-up from the significant destocking that the industry saw, along with some benefits from government investments in the rural economy and the impact of a good monsoon.

According to an FMCG report for the July-September quarter of this year, industry experts feel most FMCG companies are likely to report growth of 4.3%, 5.3%, and 7% in revenue, EBITDA and net profit, respectively, on a year-on-year basis.

Despite a subdued year-on-year performance, a marked improvement in sequential performance is expected. Initial glitches post-GST roll-out in July has had an impact on all the companies in general. While corporates and large distributors have

aligned with the new taxation regime, problems continue to persist at smaller wholesale level.

According to a sector analyst, initial implementation glitches seem to be over and although the wholesale channel has taken a bit longer to adapt to the new tax regime, the retail channel recovered much faster and quite smoothly in the July-August time period.

By the end of the third quarter, a full recovery in the wholesale channel is expected and industry watchers are optimistic about a stronger performance in the coming quarters as the problem of destocking has been almost reslolved.

Modern retail chains agreed that post the roll-out of GST, prices of many products have dropped and demand has seen an upward trend.

“Post the roll-out of the GST, there has been a downward trend in the prices of products as far as new stock is concerned.

“However, as we still have three-five months of old stock which belongs to the pre-GST regime, the larger impact would be seen once the old stock gets completely replaced by new items,” said Sadashiv Nayak, CEO of Big Bazaar, Future Group India.

For instance, biscuit manufacturer Unibic India has brought down prices by 10% to 20% across products. Likewise, retailers claim that prices of other food products such as museli, corn flakes and wheat flakes, among others, too have come down.

At HyperCity, many of the food items have a zero percent tax and the retailer have passed on the benefits to customers mainly in private labels. A spokesperson of the retail chain said, Hindustan Unilever too has reduced

prices on certain products and other FMCG companies too have cut product prices, which has been passed on to consumers.

Moreover, lowering of prices has helped boost sales. An official from a leading e-grocery chain said that an e-grocer, prior to the GST regime, was clocking a 15% spurt in monthly sales. After the implementation of the GST, the company posted a 23% increase in sales in July.

Echoing a similar view, an official from Bigbasket.com, said that reduction in prices of products has helped both consumers as well as sellers. Post the drop in prices, the online grocery retail chain has seen an uptick in sales. Industry experts opined that as manufacturers get more clarity on input tax credit, a further reduction in rates is on the cards.

Industry experts are of the opinion that with the market sentiment showing signs of improvement and stability returning post-GST implementation, the demand scenario is expected to move up, both in rural and urban markets.

Overall the massive destocking seen in June has been sufficiently refilled and FMCG firms and retailers are seeing a clear recovery.

Not surprising that consumption of groceries and daily essentials picked up sharply in July, helped by pent-up demand from traders after orders had been slashed in June and blunted competition from unbranded products that struggled to reach retail shelves due to difficulties in GST compliance, especially in rural markets.

The implementation of GST will certainly usher in a more compliant environment. FMCG Players who don’t adapt to play by the rules will struggle over timE.

Beyond Market 16th - 31st Oct ’17

It’s simplified ...

TIMELY INSIGHTS The Uday Kotak Committee’s recommendations on corporate governance have come at the right time
TIMELY INSIGHTS The Uday Kotak Committee’s recommendations on corporate governance have come at the right time

TIMELY

TIMELY INSIGHTS The Uday Kotak Committee’s recommendations on corporate governance have come at the right time

INSIGHTS

TIMELY INSIGHTS The Uday Kotak Committee’s recommendations on corporate governance have come at the right time
TIMELY INSIGHTS The Uday Kotak Committee’s recommendations on corporate governance have come at the right time
TIMELY INSIGHTS The Uday Kotak Committee’s recommendations on corporate governance have come at the right time
TIMELY INSIGHTS The Uday Kotak Committee’s recommendations on corporate governance have come at the right time
TIMELY INSIGHTS The Uday Kotak Committee’s recommendations on corporate governance have come at the right time
TIMELY INSIGHTS The Uday Kotak Committee’s recommendations on corporate governance have come at the right time

The Uday Kotak Committee’s recommendations on corporate governance have come at the right time

Beyond Market 16th - 31st Oct ’17

It’s simplified ...

T he 23-member corporate governance committee headed by Uday Kotak submitted its recommendations to markets regulator

T he 23-member corporate governance committee

headed by Uday Kotak

submitted

its

recommendations to markets regulator Securities and Exchange Board of India (SEBI) on 5th October. The suggestions are so far-reaching that it has stirred a serious debate over the subject. The report is open for public comments till 4th November.

statuatory framework, the spirit behind corporate governance has yet not been embraced wholeheartedly by listed companies in India. To fix the loopholes, a new committee under Uday Kotak was set up to enhance standards of corporate governance in listed companies in India.

RECOMMENDATIONS

 

Key suggestions

of

the

Kotak

Corporate governance is a broad

committee revolve around

concept. It is all about how ethically a

effectiveness

of

company

board,

company through its board members

related-party

transactions

and

and management runs it, keeping

improving

disclosure

standards.

interests of all stakeholders in mind.

Importantly, the

committee

has

Core principles behind corporate governance are fairness, transparency and accountability.

proposed a timeline between 2018 and 2020 for the adoption of various suggestions made by it.

In India corporate governance has gained much importance in the last one decade. Serious wrongdoings like corporate scams, window dressing of financial statements, shady related-party transactions, influential promoter group, exorbitant managerial remunerations, risky mergers and acquisitions, and suppression of minority shareholder rights warrant fair standards of corporate governance.

THE JOURNEY

Improving standards of corporate governance is an ongoing process. Several committees in the past - Kumar Mangalam Birla, Narayana Murthy, Adi Godrej and Naresh Chandra - have made valuable recommendations, which have been largely adopted.

EFFECTIVE COMPANY BOARD

Directors

The committee on corporate governance has said that the minimum number of directors on the board of a public listed company be increased to six from three currently. The company board needs to have a minimum of 50% representation of independent directors, including one woman director.

The committee has also suggested that the number of board meetings be expanded to five every year from four currently. A director in a listed company can be a director on the board of only seven other companies, as against the current regulation, which allows one to be a director on the board of up to 10 companies.

could be lost if proxy for promoters are appointed just for the sake of numbers. But right spirit can make the company board effective.

Separate Roles For Chairman And Managing Director

The committee has recommended that starting April ’20, companies with a public shareholding of 40% or more should separate the roles of the chairperson and the managing director, and appoint a non-executive chairperson in order to prevent excessive concentration of power in one individual.

Analysis:

This

is

the

most

controversial suggestion of the committee. Promoters are entrepreneurs and they would not like to lose control over the company. If they become non-executive chairmen, they will lose control over the daily functioning of the company. And if they retain the post of the managing director, then they tend to lose influence on the company board.

Perhaps, this is the reason why most promoters hold both the posts - of the chairman and the managing director. Also, as a non-executive chairman, promoters only get a sitting fee and lose out on huge salaries they would have otherwise got if they were in an executive role. While the proposal can hamper the ease of doing business, if done in the right spirit, the management can get detached from the influence of the promoter group.

Related-Party Transactions

In India the standards of corporate governance for listed entities are set by the Ministry of Corporate Affairs (MCA) through Companies Act, 2013 and SEBI through Clause 49 of listing agreement that the company needs to sign with the stock exchanges. However, even with a robust

Analysis: The suggestion will prove expensive to the company as it will have to pay directors the sitting fees for attending board meets. Also, there is a dearth of quality independent directors in the market who can add value to the board. The purpose of the institution of independent directors

The committee has recommended that the related-party transactions (RPT) be strengthened. From once a year, the RTP should be disclosed on a half-yearly basis.

Analysis: Earlier many deals with related parties used to go unnoticed.

Beyond Market 16th - 31st Oct ’17

It’s simplified ...

The

suggestion

will

keep

depository receipt holders with more

promoter-management tussle at

shareholders happy.

 

than 1% shareholding to the stock

Infosys and Tata companies have

Information Flow To Promoters

 

exchanges on a quarterly basis.

forced regulators to review corporate governance norms.

 

The

committee

has

proposed

that

The committee has recommended the creation of a formal channel by way

disclosures by companies to stock exchanges and on their own websites

In that sense, the Kotak committee’s recommendations are timely.

of an agreement to facilitate sharing

be in a format that allows investors to

Recommendations on independent

of information between promoters

find

information

with

ease.

The

directors, related-party transactions

and the company.

company also needs

to

explain

and disclosures are structural in

significant changes in select financial

nature. This will enhance

Analysis: Currently, there are

Disclosure

ratios in the annual report.

transparency and effectiveness in the

instances of flow of information to

Additionally,

the

committee

has

way the boards of listed companies

promoters or significant shareholders through informal channels. Given their importance as decision makers,

recommended that all listed companies publish cash flow statements on a half-yearly basis.

function. However, it remains to be seen how many of these suggestions will actually be accepted given the

promoters can now seek sensitive information for legitimate purposes.

Analysis: This entire proposal will help small investors. They can now track companies with relative ease.

mixed reactions from corporates, which are mostly promoter-owned.

To increase transparency, the

IN A NUTSHELL

 

There is no denial that companies that exhibit sound corporate governance generate higher returns in the longer

committee has recommended higher disclosure needs citing reasons for the abrupt exit of an independent director or an auditor. The company will also have to disclose details of global

Several corporate governance failures across the world have directed the focus on good governance in recent times. Back home the

term. Good governance practices are indispensable for boosting investor confidence. It’s important for corporate India to accept governance norms in letter as well as in spiriT.

The most intelligent strategy in Chess is to be ready with the next move. Similarly, currency
The most intelligent strategy in Chess is to be ready with the next move. Similarly, currency
The most intelligent strategy in Chess is to be ready with the next move. Similarly, currency

The most intelligent strategy in Chess is to be ready with the next move. Similarly, currency trading involves moves that are a combination of knowledge and skill, backed by years of experience. Currency Derivatives Trading with us keeps you a few steps ahead, always.

EQUITIES | DERIVATIVES | COMMODITIES* | CURRENC Y | MUTUAL FUNDS# | IPOs# | INSURANCE# | DP

Contact: 022-39269600

|

e-mail: sales@nirmalbang.com

|

www.nirmalbang.com

Registered O ce: Nirmal Bang Securities Private Limited. 38-B, Khatau Building, 2nd Floor, Alkesh Dinesh Mody Marg, Fort, Mumbai - 400001. Tel: 3926 8600 / 01; Fax: 3926 8610

Disclaimer: Insurance is a subject matter of solicitation. Mutual Fund investments are subject to market risk. Please read the scheme related document carefully before investing. Please read the Do’s and Don’ts prescribed by Commodity Exchange before trading. Through Nirmal Bang Securities Pvt. Ltd. *Through Nirmal Bang Commodities Pvt. Ltd. # Distributors investment in securities is subject to market risk. investment in securities is subject to market risk

Beyond Market 16th - 31st Oct ’17

It’s simplified ...

REINVENTING TO STAY RELEVANT Although the Indian insurance market is facing challenging times, it is poised

REINVENTING TO STAY RELEVANT

Although the Indian insurance market is facing challenging times, it is poised for strong growth

REINVENTING TO STAY RELEVANT Although the Indian insurance market is facing challenging times, it is poised

T he

Indian insurance

industry continues to lag

behind its Asian and

global peers despite being one of the fastest growing economies in the world.

However, things have started moving in the right direction now. The

Beyond Market 16th - 31st Oct ’17

prospects of life and general insurance look good following the passage of new rules under the Insurance Laws (Amendment) Act, 2015. Further, deeper penetration of insurance among masses and rise in equity markets are encouraging people to save more by going in for insurance as an investment avenue.

In the last financial year, the Indian life insurance industry’s new business premiums grew by 26.13%, largely due to the popularity of single premium policies (both in individual segment as well as group business).

While general insurance companies’ gross direct premiums were at `1.27

It’s simplified ...

lakh

crore,

a

growth

of

32%

in

FY16-17, sharp growth in the non-life sector was largely due to the growth in health, motor and new crop insurance schemes.

Insurance

Regulator

and

Development Authority of India (IRDAI) and the opening up of the insurance sector to private players in 2000, it has witnessed rapid growth.

reduce discounts that investors used to ascribe to valuations.

LIFE INSURANCE INDUSTRY - AWAITING CHANGE

Owing to new rules, a surge in equity markets and overall positive sentiments for the insurance industry, life insurance as well as non-life insurance, have started lining up their initial public offerings (IPOs).

Till few days back, only one life insurance company, that is, ICICI Prudential Life Insurance was listed in India. But in the last one month, ICICI Lombard General Insurance and SBI Life have been listed on the Indian stock exchanges.

To address the need for custom-made products and ensure prompt service, many private sector players have entered the market in India.

Innovative products, aggressive marketing and effective distribution have altered fledgling private insurance companies, thus helping sign up Indian customers rapidly than expected. Private sector players are likely to play an increasingly important role in the growth of the insurance sector in the near future.

The size of the Indian life insurance industry is at nearly `4.2 lakh crore on a total-premium basis as of fiscal 2017. In terms of total premium, the Indian life insurance industry is the 10th largest market in the world and the fifth largest in Asia.

New premiums constituted 42% of total premiums as of fiscal 2017. The industry’s assets under management (AUM) grew at a compound annual growth rate (CAGR) of 19% in fiscal 2001 to fiscal 2017 to `30 lakh crore.

Soon New India Assurance, General Insurance Corporation of India (GIC Re), Reliance General Insurance and HDFC Standard Life Insurance may hit the equity markets and collect `25,000 crore to `35,000 crore through IPOs.

This article sheds light on the Indian insurance industry and how IPOs would change the face of this sector.

STORY SO FAR

Though the Indian insurance industry is a few decades old, we will look at the sector since the year 2000 when the sector was opened up to private players for business.

Since then, the sector has grown immensely. Competition among players has provided consumers with a never-before-seen range of products and providers, and also enhanced service levels markedly.

Both life and non-life insurance sectors in India, which were nationalized in the 1950s and 1960s, respectively, were liberalized in the 1990s. Since the formation of the

But changes in unit linked insurance plans (ULIPs) and passage of the much delayed bill on foreign direct investment (FDI) has been passed and activity levels are high. The most important piece of regulation ‘FDI in Insurance’ has finally seen the light of the day post 2014, after being in the making for years. This has brought much-needed speed in the insurance industry. Following this announcement, many foreign players increased their stake in their Indian joint ventures.

Multiple valuation disclosures, which had been a bane for investors for years, is now finally being addressed. Over the past few years, investors were grappling with a slew of disclosures under different valuation methods adopted by select players.

Potential listings will be a good beginning and it will enable investors to do meaningful comparisons. Listings, which prescribe a uniform method of disclosures and calculating embedded value, will enable more meaningful comparisons across insurance players. This, in turn, will bring in more transparency and

India’s life insurance penetration stood at 2.7% in 2016 compared with 4.4% in 2010. Among Asian countries, life insurance sector’s penetration in Thailand, Singapore and South Korea was at 3.7%, 5.5%, and 7.4%, respectively, in 2016. This suggests the untapped potential of the Indian life insurance market.

But things are set to change for the better. After ICICI Life Insurance, SBI Life is the second life insurance player to be listed on Indian bourses. The company is now valued at around `68,000 crore. While ICICI Prudential Life Insurance currently has a market cap of over `58,000 crore, HDFC Standard Life is also planning to come out with its IPO in the latter part of this financial year.

Potential listings would help Indian insurers provide clarity, improve trust and brand value, and retain talent.

Insurers need to seek approval from the IRDAI. Companies wishing to list will have to seek approval from IRDAI before approaching the markets regulator Securities and Exchange Board of India (SEBI).

Beyond Market 16th - 31st Oct ’17

It’s simplified ...

IPOs TO CHANGE FORTUNES OF GENERAL INSURANCE?

In the months to come, the Indian equity markets will see the listing of India’s largest non-life insurance company, The New India Assurance, along with national reinsurer, General Insurance Corporation of India (GIC Re). Together they are likely to collect anywhere between `15,000 crore and `20,000 crore.

While GIC Re plans to raise around `11,372 crore from its IPO, SBI has managed to raise `8,400 crore and ICICI Lombard `5,700 crore.

With a total gross premium of `1.3 lakh crore in fiscal 2017, India is among the top 15 general insurance markets in the world and one of the fastest growing markets.

India’s general insurance penetration (which is defined as gross insurance premiums as a percentage of GDP) was 0.8% in 2016, compared with 0.6% in 2007. In comparison, the global general insurance industry’s penetration was 2.81% in 2016. Such hugely under-penetrated market shows that there is potential for the non-life insurance industry to grow from here and investors would gain if they held such stocks for long term.

Gross premiums of general insurance companies grew at a CAGR of 17% in the last five years ending fiscal 2017. The growth in the industry can be attributed to increasing penetration due to continuing growth in segments such as motor insurance, introduction of government schemes in specific segments such as crop insurance, financial inclusion drive (Jan Dhan Yojana, etc) that has increased awareness about the need for insurance in general segments and continued growth in the economy.

With economic growth gradually

picking up and structural drivers in place (rise in healthcare costs, growth in retail, auto sector, agricultural reforms and schemes), the growth trajectory of the general insurance sector is expected to remain strong over the next five years.

Despite recording a double digit growth in eight out of the last 10 years, the sector has been making significant underwriting losses from its core operations for the past many years. In spite of growing rapidly, a majority of all non-life insurance companies are incurring huge underwriting losses. The only major source of profit has been investment income on policyholders’ funds.

investors. Also, these are the first set of companies being listed on the bourses while others will follow soon.

There is also a huge potential in the micro-insurance segment with a majority of the Indian population residing in rural areas. After de-tarrification, the non-life insurance segment witnessed a slowdown in premium growth. However, with one lakh crore premium mark passed in the last fiscal, the sector may grow at a stable rate in the coming years.

Both health insurance as well as auto insurance are highly promising, and are expected to increase their share manifold in the coming years.

The rise in the number of non-life insurers, coupled with de-tariffing in 2007 led to persistent price wars in a bid to gain market share. However, continued restrictions on premium pricing of the biggest non-life segment, i.e. third party motor liability (which is still administered by tariff) implied that insurers continued to book heavy losses.

Additionally, the inability of general insurers to differentiate on the basis of product offerings along with the lack of customer awareness about product features has kept customers’ relationship with the general insurance industry extremely price- driven. All such things are likely to improve once there is transparency and insurers move out of the loss-making business and focus more on money-making options.

On the other side, the reinsurance industry is likely to increase pricing rates in the light of rising claims. The market has to ensure that domestic companies increase their own capacities and introduce stricter guidelines as primary risk carriers.

Insurance companies need to establish business relations with their reinsurers to prevent them from worldwide reinsurance cycle that affects capacity and stability.

In the future, insurance companies are likely to compete on a number of parameters, including competitive prices, innovative products and sales techniques and underwriting. Poorly- managed players with weak capital base may either drop out of the market or become uncompetitive on premium rates and profits.

IN A NUTSHELL

Although the Indian insurance market is facing challenging times, it is poised for strong growth in the long run. Listing of insurance companies has many advantages for both life as well as non-life players as it would bring in a lot of transparency for

For insurance companies, profit from innovation will be key to its success. Technology will help them develop and customize products to meet individual needs. India will continue strong premium growth momentum, provided private players stay innovative with best product designs and distribution channel usagE.

Beyond Market 16th - 31st Oct ’17

It’s simplified ...

ere is no shortcut to reach your nancial goals. But there is always a proper
ere is no shortcut to reach your nancial goals. But there is always a proper

ere is no shortcut to reach your nancial goals. But there is always a proper path. We help simplify the path for you through in-depth research backed by decades of valuable experience in the industry.

ere is no shortcut to reach your nancial goals. But there is always a proper

Disclaimer : Insurance is a subject matter of solicitation .mutual fund Investments are subject to market risk. ‘investment in securities/ Commodities market are subject to market risks, read all the related documents carefully before investing’ Nirmal bang securities pvt.ltd. Please read the Do’s and Don’ts prescribed by Commodity Exchange Before trading. The PMS Service is not o ering for commodity Segment *Nirmal bang Commodities Pvt ltd #Distributors. “The securities quoted are exemplary and are not recommendatory”

Buckfast Recommendations Finance is a maze of umpteen possibilities and choices. And it is easy for
Buckfast Recommendations Finance is a maze of umpteen possibilities and choices. And it is easy for

Buckfast Recommendations

Finance is a maze of umpteen possibilities and choices. And it is easy for individuals to lose their way in this tangle. In such a scenario, an expert comes handy. For, he alone can wade through the enigmatic world of finance and simplify choices for investors.

Buckfast Research, the research arm of Buckfast Financial Advisory Services Pvt Ltd, recommends mutual fund schemes that can be considered by investors.

About Buckfast Research

Buckfast Research, the research arm of Buckfast Financial Advisory Services Pvt Ltd is guided by Mr Vijai Mantri and a team of professionals with more than 50 years of cumulative experience with leading Indian and Global Mutual Fund companies.

A number of parameters have been taken into consideration while making the recommendations. Some of the guidelines are track record of the scheme and consistency, risks associated with the scheme, fund house pedigree and credentials of the fund manager.

However, there is no specific time frame for the investment as such. It depends entirely on an investor’s objectives, investment timeline, risk tolerance and type of scheme he/she wishes to invest in. By and large, equity schemes are suggested with a long-term investment horizon.

Disclaimer

Mutual Fund Investments are subject to market risks. Please read the offer document carefully before investing. Source: ACE MF, NAV as on 10th Oct ’17. SIP returns as on 30th Sept ’17. M=Months, Y=Year, D=Days Past performance is no guarantee of future performance. Returns are of Growth option of Regular plans Returns which are below 1 year period are Annualized Returns

Diversified Funds

     

Historic Return (%)

   

SCHEME NAME

NAV

1 Year

3 Years

5 Years

7 Years

10 Years

AUM (Cr)

 

Lumpsum

 

Axis Focused 25 Fund

24.93

 
  • 22.75 -

18.17

17.94

   
  • - 1981

MOSt Focused Multicap 35 Fund

25.86

 
  • 25.35 -

24.91

-

   
  • - 9179

L&T India Spl. Situations Fund

47.57

  • 23.20 13.06

15.31

18.98

11.62

1090

Principal Growth Fund

137.65

  • 22.88 13.16

16.84

21.34

8.10

503

 

SIP

Axis Focused 25 Fund

24.93

 
  • 29.92 -

18.67

18.82

   
  • - 1981

MOSt Focused Multicap 35 Fund

25.86

  • 28.63 -

22.65

-

  • - 9179

L&T India Spl. Situations Fund

47.57

 
  • 21.84 17.47

15.49

18.51

 

16.49

1090

Principal Growth Fund

137.65

 
  • 25.83 19.32

18.96

21.00

 

15.95

503

Beyond Market 16th - 31st Oct ’17

It’s simplified ...

Large Cap Funds

     

Historic Return (%)

   

SCHEME NAME

NAV

 

1

Year

3

Years

5

Years

7

Years

10

Years

AUM (Cr)

 

Lumpsum

 

MOSt Focused 25 Fund

20.67

17.21

 

15.41

-

-

-

807

Invesco India Growth Fund

30.64

21.11

15.00

18.75

12.07

 

10.47

211

Mirae Asset India Opportunities Fund

45.31

21.35

16.54

20.81

14.73

-

4738

IDFC Focused Equity Fund

37.79

33.40

14.10

14.82

8.70

8.75

558

 

SIP

 

IDFC Focused Equity Fund

37.79

 

41.04

 

19.57

 

16.97

 

14.18

 

12.44

558

Invesco India Growth Fund