The Nifty and the Sensex opened the day on a positive note with financial stocks getting a further boost from investors.
Join us as we follow the top business news through the day.
Sensex rallies 584 pts, private banks shine
The bull run in stocks continues.
PTI reports: “Equity benchmark Sensex rallied 584 points on Tuesday tracking gains in HDFC twins, ICICI Bank and Kotak Bank amid positive cues from global markets.
The 30-share BSE index ended 584.41 points or 1.16 per cent higher at 51,025.48, and the broader NSE Nifty surged 142.20 points or 0.95 per cent to 15,098.40.
Kotak Bank was the top gainer in the Sensex pack, rising around 3 per cent, followed by HDFC twins, ICICI Bank, Tech Mahindra, Bajaj Finance, Asian Paints and TCS.
On the other hand, PowerGrid, ONGC, NTPC and Dr Reddy's were among the laggards.
According to Binod Modi, Head-Strategy at Reliance Securities, domestic equities extended gains for the second consecutive day mainly aided by favourable cues from global markets.
Financials (ex-PSU banks) majorly supported the market's rally on Tuesday. Barring Financials and IT, most of the key sectoral indices traded lower.
Notably, midcap and small cap indices were down as investors opted to take profit off the table after recent run-up in these spaces, he added.
Elsewhere in Asia, bourses in Hong Kong and Tokyo ended on a positive note, while Shanghai and Seoul were in the red.
Stock exchanges in Europe were trading with gains in mid-session deals.
Meanwhile, the global oil benchmark Brent crude was trading 0.72 per cent higher at USD 68.73 per barrel.”
Staff bid for Air India disqualified
Air India (AI) employees' consortium has been disqualified from the bidding process for the privatisation of the national carrier, according to an internal mail.
Transaction adviser EY wrote to the employees' grouping on Sunday informing it of the decision.
“The EoI (expression of interest) and the supporting documents submitted by you have been duly evaluated and have been found to not fulfil the eligibility requirements set out in the preliminary information memorandum issued in respect of the strategic disinvestment of Air India Limited (AI) and is liable for disqualification.”
A group of 200 AI employees had submitted an EoI in partnership with a fund based in Seychelles.
India Inc anticipates rise in payrolls in Apr-Jun qtr: Survey
Labor market conditions are set to improve.
PTI reports: “Corporate India is indicating a rebound in its recruitment plans for the coming three months, and the sectors that are expected to drive the second-quarter job market include public administration and education followed by the services sector, a survey said on Tuesday.
According to the ManpowerGroup Employment Outlook Survey by ManpowerGroup India, hiring is rebounding in Q2 2021 with a net employment outlook of 9 per cent.
“India remains resilient in the job market recovery post the pandemic. The new budget announced also seems to provide the right impetus to opportunities in job creation especially in the public infrastructure, healthcare and BFSI,” said Sandeep Gulati, Group Managing Director of ManpowerGroup India.
Gulati, however, noted that “in all probability, the impact of the government spending on employment will be seen in Q3 and Q4, 2021 when the rubber meets the road.” The strongest hiring pace is recorded in the large-sized organisations followed by medium-sized ones with a seasonally adjusted outlook of 10 per cent, which is an improvement of 3 percentage points as compared to the last quarter, the survey of 2,375 employers across India showed.
Sector-wise, workforce gains are expected in all seven industry sectors during the April to June period. The sectors which will lead the job market are likely to be public administration and education followed by the services sector, the survey said.
The weakest labour market is expected in the wholesale and retail trade sector where the outlook is 2 per cent.
Gulati further said the corporate world has witnessed a rapid change in the job ecosystem with a mix of permanent workforce and gig workers as well as a hybrid working model. “Too many moving parts in the quest to find a robust and scalable work set-up in the new normal,” he said.
Going ahead, digital transformation will continue to be the key driver for the job market with a preference for those who can collaborate remotely and effectively. “Professionals having an upskilling mindset will stand a better chance over the others,” Gulati said.
ManpowerGroup further extended its survey to include the impact of COVID-19, as per which nearly 27 per cent of employers reported that they may return to pre-COVID hiring within June 2021, while 56 per cent stated they will resume by the end of 2021.
Globally, employers expect to add to payrolls in 31 of the 43 countries and territories surveyed by ManpowerGroup for the second quarter of 2021. In 10 countries and territories, employers anticipate a decrease in payrolls, while no change is expected in two.
For the second quarter of 2021, the strongest labour markets are forecast in Taiwan, the US, Australia and Singapore, while employers in Panama, the UK and South Africa anticipate the weakest hiring activity.”
Passenger vehicle retail sales rise over 10 pc in Feb on low base effect: FADA
A low base helps paint a rosy picture.
PTI reports: “Automobile dealers' body FADA on Tuesday said passenger vehicle (PV) retail sales in February witnessed an increase of 10.59 per cent to 2,54,058 units on account of low base of last year.
According to the Federation of Automobile Dealers Associations (FADA), which collected vehicle registration data from 1,274 out of the 1,481 regional transport offices (RTOs), PV sales stood at 2,29,734 units in February 2020.
Two-wheeler sales however declined 16.08 per cent to 10,91,288 units last month, as compared to 13,00,364 units in February 2020.
Commercial vehicle sales also slipped 29.53 per cent to 59,020 units, as against 83,751 units a year ago.
Similarly, three-wheeler sales fell 49.65 per cent to 33,319 units last month, from 66,177 units in the year-ago period.
Tractor sales, however, grew by 18.89 per cent to 61,351 units last month, against 51,602 units in the same month last year.
Total sales across categories declined 13.43 per cent to 14,99,036 units, last month compared to 17,31,628 units in the year-ago period.
Commenting on the sales data, FADA President Vinkesh Gulati said the passenger vehicle sales witnessed double-digit growth last month on the low base of last year.
Sales had dropped in February last year as the transition process from BS-IV to BS-VI emission norms had begun during the period.
“Besides the global semiconductor outrage kept the waiting period of passenger vehicles as high as eight months. FADA survey showed that 50 per cent dealers lost over 20 per cent sales due to non-availability of vehicles,” Gulati said.
Two-wheelers continued to see sluggish demand as the new wave of COVID-19 in certain states kept customers away, he added.
Besides, high fuel prices have also led to sluggish sales in the segment, Gulati said.
Commenting on commercial vehicle registrations he noted that offtakes continue to be impacted due to financing issues and negligible sales of passenger buses due to closure of educational institutes.
Besides, supply side constraints have also impacted the registrations, Gulati said.
On outlook, he said that high fuel prices would continue to negatively impact on two-wheeler and commercial vehicle sales.
“The Federation also urges the Union Government to hold diplomatic discussions with countries manufacturing semiconductors (Taiwan and other similar countries) so that the momentum which was built so far in auto sales is not lost and the industry continues to fuel the recovery process,” Gulati said.
Overall, FADA continues to remain guarded in its optimism for vehicle registrations in march, he added.”
Equity MFs see outflow for 8th straight month in Feb
An interesting divergence between stock prices and MF inflows.
PTI reports: “Equity mutual funds witnessed an outflow of Rs 10,468 crore in February, making it the eighth consecutive monthly withdrawal, with flexi cap category accounting for most of the outflow.
However, investors put in Rs 1,735 crore from debt mutual funds last month after pulling out Rs 33,409 crore in January, data from the Association of Mutual Funds in India showed on Tuesday .
Overall, the mutual fund industry witnessed a net outflow of Rs 1,843 crore across all segments during the period under review, compared to Rs 35,586 crore in January.
Despite the outflow, asset under management (AUM) of the mutual fund industry rose to Rs 31.64 lakh crore in February-end from Rs 30.5 lakh crore in January-end.
As per the data, outflow from equity and equity-linked open ended schemes was at Rs 10,468 crore in February compared to Rs 9,253 crore in January.
Overall, equity schemes had witnessed an outflow of Rs 10,147 crore in December, Rs 12,917 crore in November, Rs 2,725 crore in October, Rs 734 crore in September, Rs 4,000 crore in August and Rs 2,480 crore in July, which was their first withdrawal in over four years. Prior to this, such schemes had attracted Rs 240.55 crore in June.
Apart from debt funds, Gold exchange traded funds (ETFs) witnessed an inflow of Rs 491 crore last month, compared to Rs 625 crore in January.”
Banks wrote off ₹1.15 lakh cr. in nine months of FY21: Thakur
Banks have written off bad loans to the tune of ₹1.15 lakh crore in the first three-quarters of the current fiscal, the Lok Sabha was informed on March 8.
As per RBI guidelines and policy approved by bank boards, non-performing loans, including those in respect of which full provisioning has been made on completion of four years, are removed from the balance-sheet of the bank concerned by way of write-off, Minister of State for Finance Anurag Singh Thakur said in a written reply to the Lok Sabha.
Banks evaluate the impact of write-offs as part of their regular exercise to clean up their balance-sheet, avail tax benefit and optimise capital in accordance with RBI guidelines and policy approved by their boards, he said.
However, Mr. Thakur said, as borrowers of written-off loans continue to be liable for repayment and the process of recovery of dues from the borrower in written-off loan accounts continues, writing off does not benefit the borrower.
Investment in prop-tech firms up at USD 551 mn in 2020 amid pandemic: Report
Yet another trend induced by the pandemic.
PTI reports: “Investment in prop-tech companies rose marginally to record USD 551 million last year amid surge in adoption of virtual platforms for real estate marketing during the COVID-19 pandemic, according to Housing.com.
In its report titled ‘PropTech: The Future of Real Estate in India', realty portal Housing.com said USD 2.4 billion has been invested so far in India's prop-tech industry across 225 deals.
Housing.com is part of Singapore-based Elara Technologies that also owns Makaan.com and PropTiger.
“Investments in the prop-tech segment grew marginally up to USD 551 million in 2020 from USD 549 million in 2019,” the report said.
This has been the peak investments since tech-based start-up companies in India began entering the real estate segment in India, starting 2000s.
“During the lockdown and the subsequent phased opening of the economy, most buyers concluded their property purchases using virtual mediums,” said Dhruv Agarwala, Group CEO, Housing.com, Makaan.com and PropTiger.com.
Investments in the prop-tech segment since 2010 made this possible, he said.
“If these platforms were only popular to find and finalise properties in the pre-pandemic era, the pandemic has changed much of that,” Agarwala said.
Housing markets in India would have taken an even more severe hit because of the virus outbreak and its effects had the prop-tech industry not been gradually growing in the country, he observed.
“Online business platforms that have been on the radar of investors since 2009, have evolved since, from being mere mediums for digital classifieds to offering full-stack solutions towards discovery, advisory and transactional support,” Agarwala said.
The prop-tech segment is likely to see a tremendous boost in the near future amid growing use of technologies such as virtual reality, drones, big data, artificial intelligence in home purchases, the report said.
It, however, pointed out that a majority of business is still conducted through the offline mode in the property brokerage business in India, estimated to be a USD 1.4 billion industry.
“Even with the actual transaction culminating offline, over 50 per cent of the real estate buying decisions take place through online searches,” the report said.
With the growing internet user base that is expected to increase up to one billion by 2025, the opportunity for players in this segment is colossal, it added.”
Craftsman Automation IPO to open on Mar 15, sets price band at Rs 1,488-1,490/share
The IPO boom continues.
PTI reports: “Auto component maker Craftsman Automation on Tuesday fixed a price band of Rs 1,488-1,490 a share for its Rs 824-crore initial public offer, which will open for subscription on March 15.
The three-day public issue will conclude on March 17, and the bidding for anchor investors would be open on March 12, Craftsman Automation said in a virtual press conference.
The IPO comprises a fresh issue of equity shares aggregating up to Rs 150 crore and an offer-for-sale of up to 45,21,450 shares by promoter and existing shareholders.
Those offloading shares in the offer-for-sale are Srinivasan Ravi, K Gomatheswaran, Marina III (Singapore) Pte Ltd and International Finance Corporation (IFC).
Currently, IFC and Marina hold 14.06 per cent and 15.50 per cent stake, respectively, in the company. Besides, Srinivasan Ravi owns 52.83 per cent stake and K Gomatheswaran has 7.04 per cent shareholding.
The IPO is expected to fetch Rs 824 crore at the upper end of the price band.
Half of the issue is reserved for qualified institutional buyers, 35 per cent for retail investors and 15 per cent for non-institutional bidders.
Net proceeds of the issue will be utilized for repayment or pre-payment of certain borrowings availed of by the company and for general corporate purposes.
In addition, the company expects to receive the benefits of listing of the equity shares on the stock exchanges.
Axis Capital and IIFL Securities have been appointed as book running lead managers to the issue. Shares of the company are proposed to be listed on BSE and NSE.
Earlier, the auto component maker had filed draft papers with Securities and Exchange Board of India (SEBI) in June 2018, and had received the regulator's clearance for launching the IPO.
However, the company couldn't launch the initial share-sale due to unfavourable market conditions, traders said.
Headquartered in Coimbatore, the company has satellite units across India including in Pune, Faridabad, Pithampur, Jamshedpur, Bengaluru, Sriperumbudur and Chennai.”
CEA stresses on infra-led growth, takes on crony lending
The CEA lays out the government's priorities.
PTI reports: “The financial sector will have to play an important role in infrastructure lending which needs specialised expertise, Chief Economic Adviser KV Subramanian said on Tuesday.
Speaking at a webinar organised by ficci, Subramanian said that for India to become a USD 5 trillion economy, capital allocation to the infrastructure sector should be of high quality.
“Capital allocation to the infrastructure sector has to be of high quality and the financial sector has an important role in this regard. The financial sector should refrain from resorting to crony lending, which would put the brakes on lending and the economy will suffer,” he said.
Subramanian said the operational aspects of different projects are different. “Once a loan goes into distress, it blocks capital for credit-worthy borrowers. In such a scenario, the lenders will have to take complete responsibility.” He said that the country is placing emphasis on growth through infrastructure.
“This places responsibility on the financial sector.
The sector has to see that there should not be a sub-optimal allocation of capital. Even if distress takes place, the right things have to be done. Analytics can be used to identify crony lending,” he said.
The senior management of the financial institutions would have to incentivised to prevent crony lending, Subramanian said.
“Incentive mechanisms need to be put in place to prevent crony lending as infrastructure projects involve high gestation periods,” he added.”
‘Ola unit can make 10 millon two-wheeler EVs'
Mobility firm Ola said its electric two-wheeler facility coming up in Krishnagiri in Tamil Nadu will have an annual capacity to produce 10 million scooters, accounting for some 15% of the world's total production of e-two-wheelers.
“Our aim is to be a world-leading sustainable mobility company,” said Bhavish Aggarwal, chairman and Group CEO, Ola.
“We are building the world's largest e-two-wheeler plant, Ola Future Factory, with a 10-million annual capacity that will comprise about 15% of the world's two-wheeler manufacturing.''
Mr. Aggarwal said his company had realised, through several EV pilots, the need for building a global scale for better cost efficiency, control on quality and delivery.
Rupee surges 18 paise to 73.07 against US dollar in early trade
The rupee gets a boost with help from stocks.
PTI reports: “The rupee appreciated by 18 paise to 73.07 against the US dollar in opening trade on Tuesday supported by positive domestic equities.
At the interbank forex market, the local unit opened at 73.16 against the US dollar, then inched higher to 73.07 against the greenback, registering a rise of 18 paise over its previous close.
On Monday, the rupee had settled at 73.25 against the American currency.
On the domestic equity market front, the 30-share BSE benchmark Sensex was trading 372.32 points higher at 50,813.39, and the broader NSE Nifty advanced 107.25 points to 15,064.15.
Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, rose 0.02 per cent to 92.33.
“The US dollar rose against the basket of currencies this Tuesday morning in Asian trade supported by higher bond yields and expectations of faster economic normalisation from the pandemic in the United States,” Reliance Securities said in a research note.
However, higher crude oil prices and strong American currency could limit the appreciation bias in the local unit, traders said.
Brent crude futures, the global oil benchmark, rose 0.78 per cent to USD 68.77 per barrel.
Foreign institutional investors were net sellers in the capital market as they offloaded shares worth Rs 1,494.49 crore on Monday, according to exchange data.”
10,113 companies shut down operations voluntarily between April ‘20-Feb. ‘21: Ministry
Over 10,000 companies were shut down voluntarily in the country from April 2020 till February this year, in the period when the coronavirus pandemic and subsequent lockdowns significantly disrupted economic activities.
The latest data available with the Ministry of Corporate Affairs (MCA) showed that a total of 10,113 companies were struck off under Section 248(2) of the Companies Act, 2013, in the current financial year till February.
The Section 248(2) implies that the companies had shut their businesses voluntarily and not due to any penal action.
In a written reply to the Lok Sabha on March 8, Minister of State for Corporate Affairs Anurag Singh Thakur said the Ministry does not maintain any record of the companies that have gone out of business.
“A total of 10,113 number of companies during the year 2020-21 (from the month of April 2020 to February 2021) have been struck off under section 248(2) of the Act. MCA has not run any drive to strike off companies suo moto during 2020-21,” he said.
Shares gain as financials boost counters energy weakness
Another good morning for stocks.
Reuters reports: “Indian shares opened higher on Tuesday as high-flying financial stocks advanced, although gains were capped by weakness in the energy sector after a report that oil companies have been told by the government to not revise fuel prices for now.
Gasoline and gasoil prices in India have risen to record highs in India of late, mirroring global markets. The central government has informally conveyed to India's three major oil-marketing companies to not revise fuel prices ahead of polling in some states, the Business Standard newspaper reported https://bit.ly/3rv17cE.
The Nifty Bank Index, which rose 13.87% last month, gained 1.49%. HDFC Bank Ltd rose 2.4% and was the top boost to the Nifty 50.
The Nifty energy index fell 0.34% after advancing 1.14% in the previous session.
Broader Asian markets fell on fears of rising bond yields, stretched company valuations and inflation fears, after a mixed session overnight on Wall Street.”
25 million new jobs in Indian retail sector by 2030: study
Around 25 million new jobs will be created by the Indian retail sector by 2030, as per Retail 4.0 Report released by Nasscom in partnership with Technopak.
According to the study, Retail 4.0 will result in a significant rise in the size of the domestic market, job creation, and exports. The changing demand and supply drivers are likely to accelerate the growth momentum, with the India retail market reaching up-to $1.5 trillion by FY2030.
“As India leaps forward to become a digitally transformed nation, the country's retail sector has emerged as one of the most dynamically-evolving, rapidly digitising sectors, with the second-largest consumer base in the world, from 5th largest in 2020,” found the study.
Over the last decade, as per the study, the Indian retail market size has witnessed a massive growth of 3X, accounting for $800 billion, contributing 10% to India's GDP In FY 2019-20 and 8% to the total workforce with more than 35 million employees.