AWS on Air 2020: AWS What’s Next ft. Amazon SageMaker Debugger

RBI to probe HDFC Bank Auto loan rigging

RBI has asked HDFC Bank to provide details of an internal investigation into allegations of improper lending practices in its vehicle-financing operation, according to people familiar with the matter.

The Reserve Bank of India is also seeking information on steps taken by HDFC Bank to remedy any issues identified during the investigation.

IPO ANALYSIS : ROSSARI BIOTECH LIMITED

Issue Details :

Issue opens / closes on	13-07/15-07-2020
Issue size	Fresh issue Rs 50 Cr plus  OFS of 1.05 cr shares
Face value	Rs 2
Price Band	Rs 423-425
Business	Speciality chemical manufacturers
Promoters	Edward Walter Menezes, Sunil Srinivasan Chari
Listing	Bse, Nse
BRLM	Axis Capital and ICICI Securities
Registrar	Link Intime

Await detailed analysis.

Vodafone's loss widens

Vodafone Idea's pre-tax loss rose 73 per cent to Rs 11,742 crore in the March quarter of 2019-20 owing to exceptional expenses.

The telecom firm had posted a pre-tax loss of Rs 6,758 crore in the same quarter last year.

While the firm’s revenue remained flat on a year-on-year basis, the loss widened due to Rs 6,140 crore worth of exceptional items, which included costs related to merger and integration, additional provisioning for depreciation and impairment, and one-time spectrum charges.

China’s manufacturing activity expands

• China’s manufacturing activity expanded in June with the official Purchasing Manager’s Index coming in at 50.9.

ICICI Bank reports excellent numbers

 ICICI Bank has reported 26 per cent jump in net profit in the fourth quarter of the fiscal 2019-20 at Rs1,221 crore as against Rs 969 crore a year ago.

The bank’s total income grew by 12 per cent to Rs 23,443 crore in the quarter ended March 30, 2020 from Rs 20,914 crore a year ago. The net interest income grew by 17 per cent to Rs 8,927 crore in the fourth quarter, from Rs 7,620 crore a year ago.

The net interest margin is the highest ever at 3.87 per cent in the fourth quarter.

Forthcoming IPO : Stove Kraft Limited

Stove Kraft Ltd, manufacturer of kitchen appliances is planning to lists its shares on the exchanges. The company has received markets Sebi's clearance in this regard.

The company is engaged in the manufacture and retail of a wide and diverse suite of kitchen solutions under Pigeon and Gilma brands.

The IPO is being lead managed by Edelweiss Financial Services and JM Financial.

The public offer comprises a fresh issue of equity shares aggregating up to Rs 145 crore and an offer for sale of up to 71,63,721 equity shares, according to the draft red herring prospectus.

HUL posts muted numbers

FMCG major Hindustan Unilever has posted a 3.56 per cent year-on-year  decline in its consolidated net profit at Rs 1,515 crore for the quarter ended March 2020. 

The company had posted profit of Rs 1,571 crore in the year-ago period. On a standalone basis, profit came in at Rs 1,519 crore, down 1.23 per cent against Rs 1,538 crore in the corresponding quarter of the previous fiscal.

Revenue from operations  stood at Rs 9,055 crore, down nearly 10 per cent against Rs 10,018 crore in the year-ago quarter. 

The company has recommended a final dividend of Rs 14 for the financial year ended March 31, 2020 on equity shares of Re 1 each.

HUL closed at Rs 2205, down one percent in Thursday's trade. 

RIL announces rights offer.

RIL  has announced the much-awaited details of its rights issue, which is the India’s largest. The company is planning to raise Rs 53,125 crore by issuing one equity share for every 15 shares held by eligible shareholders as on the record date, which will be announced later.

This would mean an equity dilution of 6.7 per cent at the proposed issue price of Rs 1,257 per share (including a premium of Rs 1,247 per share). 

The rights offer price is at a 14 per cent discount to RI L's closing price of Rs 1,467, on Thursday.

RIL posts unimpressive numbers

Reliance Industries has reported a 33.5 per cent decline in its consolidated profit before tax at Rs 9,223 crore for the quarter ended March 2020 due to pressure in its petrochemicals business, higher expenses and exceptional items.

Net profit, after exceptional items was 38.7 per cent lower at Rs 6,348 crore from Rs 10,362 crore in the quarter ending March 2019. The company incurred a one-time loss of Rs 4,245 due to the Covid-19 pandemic induced lock down and inventory losses because of fluctuations in the global oil prices.

RIL's refining and petrochemical businesses, which was hurt by the corona-virus, declined 18.2 percent sequentially  to Rs 84,854 crore and fell 12.7 percent QoQ to Rs 32,206 crore, respectively.

The stock closed at Rs 1464, up 2.64 percent in Thursday's trade.

Banks lend helping hands to NBFCs

Amid liquidity crisis, Banks in India have started lending to Non-Banking Finance Companies, the highest since 2008, as the shadow lending industry bulked up before the financial year closure, which probably is also making banks lend more to them or provide moratorium on payments.

Total loans grew 4 percent in the same period at Rs. 3.57 lakh crores, data from RBI shows. While NBFC accounted 32 percent of the total, industry loans also grew, including MSMEs at 37 percent. 

Moody's slash India's growth rate

Moody’s Investors Service has slashed India growth forecast for calendar year 2020 to 0.2 per cent, from 2.5 per cent projected in March. For 2021, the rating agency expects India’s growth to rebound to 6.2 per cent.

The rating agency had cut its projections from 5.2 per cent to 2.5 per cent after Prime Minister Narendra Modi announced a nationwide lock down on March 24.

ICICI Bank's exposure to Ocean Tankers is likely to turn bad

ICICI Bank has issued notices to impound two vessels operated by Ocean Tankers, a unit of the troubled Singapore oil-trading company Hin Leong Trading.

ICICI Bank, which has about $100 million exposure to HLT, has issued writs against the vessels Wu Yi San and Chang Bai San.

According to S&P Global Platts, a provider of energy and commodities information, Hin Leong Trading's founder Lim Oon Kuin has been blamed for financial mismanagement and reselling of inventory that was used as banking collateral, causing losses running into billions of dollars, in a court filing by his son Lim Chee Meng. Hin Leong has suffered $800 million in unaccounted derivatives losses .

Top blogs of Bangalore

Top 100 Bangalore Blogs, Podcasts and Youtubers in 2019. FirstChoiceIPO is at 50th spot. Know more in http://stillbuddy.com

Brickwork : Moratorium provisions to hurt banks profitability

Brickwork Rating estimates that 10 per cent provisioning on loans granted moratorium could hit profitability by up to Rs 72,000 cr.

The Reserve Bank of India stipulation that banks maintain higher provision of 10 per cent over the two quarters of March and June 2020 on loans that have been granted a three-month moratorium could drill a huge hole, ranging from Rs 36,000 crore to Rs 72,000 crore, in their profitability, Brickwork Ratings has cautioned.

Neighboring nations FDI : govt tightens norms

In a major change in its foreign direct investment (FDI) policy, India has brought in stricter measures to curb the 'opportunistic takeover' of Indian companies due to the current Covid-19 pandemic by firms in neighbouring countries, including China.

According to the Press Note 3 issued by the Department for Promotion of Industry and Internal Trade, the government has said that an entity of a country which shares a land border with India can invest only after receiving government approval.

Recently China's Central Bank has purchased one percent stake in housing major HDFC through open market operations.

NBFCs seek additional liquidity

Non-bank lenders have sought additional liquidity support of Rs 2 lakh crore through a special central bank mechanism after April cash-flows were choked.

The support has been sought either through the TLTRO mechanism, the proceeds of which banks must use to buy bonds of corporate or non-bank lenders or some kind of refinancing window. 

HDFC Bank posts 18% increase in net, provisions doubles

HDFC Bank has reported 18 per cent year-on-year rise in net profit at Rs 6,928 crore, for the March quarter. 

Net interest income for the quarter climbed to Rs 15,204 crore from Rs 13,089 crore, driven by 21 per cent growth in advances and a 24 per cent growth in deposits.

 The bank's provisions and contingencies stood at Rs 3,785 crore in March quarter compared with Rs 1,899 crore in the same quarter last year.

Goldman Sachs buys Indusind Bank shares

Goldman Sachs Singapore has picked up shares worth over Rs 176 crore in IndusInd Bank, through an open market transaction, on Wednesday.

According to the bulk deal data on the exchanges, Goldman Sachs bought 14 lakh shares, at an average price of Rs 430.3 apiece.

Recently IndusInd Bank's promoters had indicated that they will hike their stake in the private sector lender by buying extra shares from the market.

The promoters of the bank —IndusInd International Holdings and IndusInd — plan to acquire additional shares from open market in India.

The stock closed at Rs 426 in yesterday's trade. NSE had a volume of 2.83 Cr shares with 31 percent delivery.

The stock is likely to spurt in today's trade.

Bank credit grows at 6.14 percent, slowest since 1962

Bank credit growth decelerated to an over five-decade low of 6.14 percent in the fiscal ended March 31, 2020, amid a faltering economy, lower demand and risk aversion among banks, according to RBI.

Bank advances growth in FY20 was the slowest since the fiscal ended March 1962, when loans had grown by 5.38 percent.

In the week ended March 27, 2020, advances stood at Rs 103.71 lakh crore as against Rs 97.71 lakh crore as on March 29, 2019, according to Reserve Bank data

FIEO : 15 millions may lose jobs

About 15 million people face job losses in India's exports sector following cancellation of over half of the orders and gloomy forecast for global trade due to the Covid-19 pandemic, exporters' body FIEO says.

Seeking immediate announcement of a relief package for exports, Federation of Indian Export Organisations (FIEO) President says a fine balancing is required between life and livelihood, as opting for only one can be disastrous for the country.

IMF ropes in Raghuram Rajan

IMF has named former RBI governor Raghuram Rajan and 11 others to her external advisory group to provide perspectives from around the globe on key developments and policy issues, including responses to the exceptional challenges the world now faces due to the corona-virus pandemic.

Rajan, who was the Reserve Bank of India governor for three years until September 2016, is currently working as a professor at the prestigious University of Chicago.

HDFC BANK FARES BETTER THAN EXPECTED

India’s largest private lender HDFC BANK informed the exchanges today that its advances grew 6.3 percent quarter-on-quarter to Rs 9,93,000 crore while deposits rose 7.4 percent over the previous quarter to Rs 11,46,500 crore. On an annual basis, advances rose to a four-quarter high of 21 percent, while deposits grew 24 percent—the third consecutive quarter when the metric registered growth over 20 percent.

The bank’s CASA (current and savings account) ratio rose to 42 percent from 39.5 percent in the previous quarter and 42.4 percent a year ago.

FPI holdings raised

National Securities Depository  and Central Depository Services  revised Foreign Portfolio Investment (FPI) limits for all listed stocks on Indian bourses.

With this move, FPI limit in certain stocks has gone up to 100 per cent. The move is likely to increase India’s weight-age in MSCI and FTSE global indices.

The effective date is 01-04-2020.

India to get emergency funding from World Bank

 World Bank has approved $1-billion emergency financing for India to tackle the corona virus outbreak, which has claimed 53 lives and infected 2,500 others in the country.

The World Bank's first set of aid projects, amounting to $1.9 billion, will assist 25 countries, and new operations are moving forward in over 40 nations using the fast-track process, the bank said.

The largest chunk of the emergency financial assistance has gone to India -- $1 billion.

We saw 'Black Swan' event coming in 2014, which would affect the world's financial markets

KARVY had predicted that SENSEX @1,00,000 IN 2020. The prediction was made in June 2014.

While countering the Karvy predictions, among others, we had indicated the following:

 Happening of a 'Black Swan' event - like the one occurred in 2008 which led to global melt down. A sub prime crisis. Prior to the global melt down in 2008, Sensex was hovering around 22,000 and experts like KARVY then predicted that Sensex will touch 50,000 mark by 2014. Believing this theory millions of investors jumped in to the market. Then came the melt down. Equity markets across the world plummeted. Within few months Sensex came down to 8000 levels. Most investors lost money, some went bankrupt, few committed suicide. Brokerage houses down sized their operations.  It took nearly 6 years for Sensex to come to the level of 2008. Between June 2008 and June 2014, in full 6 years, the Sensex has moved by just by 3000 points.

(This article was first published on 05-06-2014)

World's financial markets did witness a 'Black Swan' event in March 2020.