Why you should subscribe UTI AMC, brokerages answer
UTI Asset Management Company (AMC), the sixth IPO to launch this month, is set to open for subscription on September 29 and close on October 1. The company will be the third AMC to get listed on the stock exchanges after Nippon Life India Asset Management (NAM) and HDFC AMC and has fixed a price band of Rs 552-554 per share for its IPO. At the upper end of the price band, the IPO would fetch Rs 2,160 crore.
UTI AMC is the second-largest AMC in India in terms of total AUM, seventh-largest AMC in India in terms of mutual fund Quarterly Average Assets Under Management with Rs 1.5 lakh crore. It also has the largest share of monthly average AUM amongst the top ten Indian AMC coming.
The IPO comprises the sale of 3.9 crore equity shares, or 30.75 percent, stake by existing shareholders. The objects of the IPO are to achieve the benefits of listing the equity shares on the stock exchanges and to carry out the sale of equity shares offered for sale by the promoters. Read more
Here are all the details regarding the postponement of Monetary Policy Committee’s meeting
The Monetary Policy Committee (MPC) meet which was supposed to be held between September 29 – October 1, 2020, has been rescheduled, the Reserve Bank of India (RBI) said on Monday.
The dates of the MPC’s meeting will be announced shortly, it added. The MPC was earlier expected to announce policy on October 1.
The MPC has six members – the RBI governor, deputy governor and an executive director and three members nominated by the government. The tenure of the first set of external members — Chetan Ghate, Pami Dua and Ravindra H Dholakia — ended in September and the government is yet to announce their replacement. Under the RBI Act, part-time or external members of the MPC have a four-year term which cannot be extended.
Last week, the Centre ruled out giving an extension to the terms of three external MPC members. The central bank had earlier this year in June approached the Ministry of Finance seeking an extension of the three external members – Pammi Dua, Chetan Ghate and Ravindra Dholakia. Continue reading
Market Watch: Ruchit Jain of Angel Broking
ICICI Prudential Life Insurance is one of the stock which one can go short on from a trading perspective. Lower top lower bottom structure has been seen on a daily chart and a cluster of moving averages resistances are there in this stock around Rs 420-425, so keeping stop above Rs 430 we have already advised going long on Put options in this. One can go short with stop above Rs 430 for target of Rs 395.
Sun TV is second recommendation to go short on. Here there would be a conditional sell, I would wait for some more pullback towards Rs 470. Right now the stock is trading around Rs 465-466 so in the range of Rs 470-475 there is a very strong resistance again for the stock so on pullback move towards Rs 470-475 range one can go short on Sun TV with a stop loss above Rs 489 for target of Rs 440.
SBI announces a slew of festive offers; waives processing fee on Car, Gold, Personal & Home Loans
The country’s largest lender, State Bank of India (SBI) on Monday announced a slew of special offers on home, car, personal and gold loans for its retail customers ahead of the festive season. The bank has announced a 100 percent processing fee waiver for all customers applying for Car, Gold, and Personal loan through its digital application, YONO. Its lowest interest rate starts from 7.5 percent for customers who opt for car loans. They can also get 100 percent on-road finance on select models.
SBI said it would completely waive off the processing fees on home loans for homebuyers of approved projects. It will also provide special concessions of up to 10 bps on interest rates, based on the customers’ credit score and loan amount. To promote the use of its application, SBI said that homebuyers can avail 5 bps interest concession if they apply through YONO. Read more here.
Angel Broking on UTI-AMC IPO
UTI AMC, the second largest AMC in India in terms of total AUM, is 8th largest in terms of QAAUM (Rs 1,33,600 crore) as of June 30, 2020. In terms of live folios, UTI AMC accounts for 12.2% of the 89.7 million industry folios as of March 31, 2020.Over the past five years (FY15-20), equity AUM for the Indian MF industry has increased 2.7x from Rs 3.24 lakh crore to Rs 9 lakh crore.
At the upper end of the IPO price band, it is offered at 25.4x its FY20 earnings and 5.25% of Q1FY21 QAAUM, demanding Rs 7,024 crore market cap, which we believe is reasonable; listed peers like HDFC AMC trades at 35x FY20 earnings and Nippon AMC trades at 37x FY20 earnings. Additionally, HDFC and Nippon AMC trade at 12.56% and 8.55% of Q1FY21 QAAUM, respectively. Considering attractive valuation, huge growth potential of MF industry, asset-light business and higher dividend payout ratio, we are positive on this IPO and rate it as Subscribe.
Principal Asset Management launches Principal Large Cap Fund
Principal Asset Management has launched a new fund offer (NFO) Principal Large Cap Fund, an Open-ended Equity scheme predominantly investing in Large Cap stocks. The NFO will open for subscription from 28th September 2020 to 12th October 2020.
The fund will allocate 80-85% of its corpus to the top 100 Indian Large Cap stocks by market cap and actively invest up to 15% in US stocks with a market cap higher than $50 billion. The large-cap fund will aim to provide growth from Indian and US economies and depreciating currencies. The fund will be benchmarked against the composite index of Nifty 100 Total Return Index (NIFTY100 TRI).
Stock Update: Lupin’s shares trade 0.85 percent lower to Rs 990.40 per share on the NSE after the company announced the launch of Atorvastatin Calcium Tablets. The product will be manufactured at the Nagpur facility, said the exchange filing. The annual sales was approximately $559 milionin the US for the 12 months ending July 2020, as per the IQVIA data.
European markets open higher, looking to rebound from last week’s losses
European stocks opened higher Monday, looking to recover from their worst week since mid-June, with a global rise in coronavirus cases and political developments stateside on investors’ radar.
The pan-European Stoxx 600 jumped 1.2 percent at the open, with banks adding 1.8 percent to lead gains as all sectors and major bourses entered positive territory.
The European blue chip index closed 3.7 percent lower for the week on Friday after a choppy session, with global markets roiled by a resurgence in coronavirus cases on the continent and further afield, reported CNBC International.
RBI approves 3-member committee to function as ad-interim MD & CEO of LVB
The Reserve Bank of India (RBI) has allowed a Committee of Directors (CoD) composed of three independent directors to run the day-to-day affairs of Lakshmi Vilas Bank (LVB). This CoD will exercise the discretionary powers of MD & CEO temporarily.
Meeta Makhan, Chairperson of the Committee of Directors and members Shakti Sinha and Satish Kumar Kalra, will now run the operations, as part of the CoD, as approved by the central bank.
LVB earlier sought to soothe its depositors and shareholders via a statement issued on Sunday, saying its liquidity position remains comfortable, and that the board along with senior management would continue to manage the daily affairs of the bank.
At 12:48 pm, the shares traded 0.26 percent lower to Rs 19.15 per share on the NSE. Read more
Stock Update: Escorts’ shares rallies over 7 percent to Rs 1,294.30 per share on the NSE after the company said that it has begun commercial production of Kubota tractors along with its joint venture Kubota Corporation. The production began on September 25, said the company’s filing.
Trader’s Diary: Bank Nifty remains to be the biggest worry. Here’s why
Right off the bat, the Nifty move has been textbook so far. With 10800 holding and a bounce ensuing, the guessing game is to try and rationalize the upward move as a sustainable one. September quarter numbers should start rolling in from the 2nd week of October but the auto numbers for Sept will come in to provide direction.
Ahead of the festive season, the management commentary should sound positive and if all that buzz about the second stimulus package was anything more than headline management, there could be a justification for putting a floor under the Nifty at the 200DMA. So, for now, let’s wait and watch and try and see if the expectations of the market are exceeded or they are priced in. Nifty range to keep in mind is 10800-11250 and my stop loss for the negative call remains a distant 11460 for now. Read more
BPCL executive says privatisation will unlock value for company
Privatisation of Bharat Petroleum Corp will unlock value by increasing investment and technology, its chairman told a shareholders meeting on Monday. ”This (privatisation) is expected to unlock tremendous value through sharpening of professionalism, improvement inefficiencies, increased investments, access to advanced technologies and newer global markets and product diversification, thus propelling future growth,” K Padmakar said. The government is targeting that sale of its 53.29 percent stake in BPCL in this fiscal year ending March 2021. But the privatisation could spill over into the next fiscal year, according to a government document and sources.
Gold rate today: Yellow metal falls; Support seen at Rs 49,100 per 10 grams level
Gold prices in India traded lower on the Multi Commodity Exchange (MCX) Monday tracking a muted trend in the international spot prices. Silver prices also declined by over 1 percent. Gold futures for October delivery fell 0.36 percent to Rs 49,480 per 10 grams as against the previous close of Rs 49,659 and opening price of Rs 49,474 on the MCX. Silver futures traded 1.03 percent lower at Rs 58,420 per kg. The prices opened at Rs 58,513 as compared to the previous close of Rs 59,027 per kg. “The gold prices continue to trade below support levels. Amid the absence of any major data, the yellow metal is expected to remain weak,” said Ajay Kedia, director, Kedia Commodity. More here
Lakshmi Vilas Bank’s shares fell over 6% after shareholders voted out current management
Lakshmi Vilas Bank’s share price fell as much as 6.25 percent to Rs 18 on the NSE after the shareholders voted out 7 directors including promoters on bad governance and mismanagement. At the bank’s annual general meeting, shareholders also rejected the appointment of statutory auditors. However, the company put out a statement on Sunday and assured depositors about the bank’s financial health. It said that the liquidity coverage ratio stands at 262 percent while provision coverage ratio stands at 72.6 percent.
Stock Update: Gateway Distriparks’ shares gained 5 percent to Rs 91.85 per share after the company’s board approved interim dividend of Rs 2 per share of face value Rs 10 each. The record date for the payment of the interim dividend has been set as October 8, 2020. The board has also decided to relieve Sachin Bhanushali as the company’s CEO in order to enable him to focus on the expansion of the company’s rail vertical. Prem Kishan Dass Gupta, the company’s CMD will take over managing the day-to-day affairs of the CFS vertical of the company.
RBI approves 3-member committee to function as ad-interim MD & CEO of LVB
The Reserve Bank of India (RBI) has allowed a Committee of Directors (CoD) composed of three independent directors to run the day-to-day affairs of Lakshmi Vilas Bank (LVB). This CoD will exercise the discretionary powers of MD & CEO temporarily. Meeta Makhan, Chairperson of the Committee of Directors and members Shakti Sinha and Satish Kumar Kalra, will now run the operations, as part of the CoD, as approved by the central bank. LVB earlier sought to soothe its depositors and shareholders via a statement issued on Sunday, saying its liquidity position remains comfortable, and that the board along with senior management would continue to manage the daily affairs of the bank.
PVR, Inox Leisure’s shares surge 7% as West Bengal govt allows reopening of cinema halls from Oct 1
Multiplex stocks such as PVR and Inox Leisure’s share price surged in trade on Monday after West Bengal chief minister Mamata Banerjee allowed cinemas to reopen in the state from October 1. Cinema halls have been shut since the nationwide coronavirus lockdown began in late March. On Twitter, Banerjee wrote, “o return to normalcy, jatras, plays, open air theatres, cinemas and all musical, dance, recital and magic shows shall be allowed to function with 50 participants or less from 1 October, subject to adherence to physical distancing norms, wearing of masks and compliance to precautionary protocols.” More here
ArcelorMittal in talks to merge US assets with Cleveland-Cliffs: Sources
ArcelorMittal SA, the world’s largest steelmaker, is exploring a deal to merge its US operations with Cleveland-Cliffs Inc, the largest US producer of iron ore pellets, people familiar with the matter said on Sunday. The combination would signal a new push among steelmakers to consolidate and diversify their business, making it less vulnerable to swings in demand. It would come after Cleveland-Cliffs acquired AK Steel, a US maker of flat-rolled carbon steels, including stainless steel, for $3 billion, including debt, last March. The latest deal could result in the merger of US assets of Luxembourg-based ArcelorMittal that are worth between $2 billion and $3 billion with Cleveland-Cliffs, one of the sources said. It would be transformative for Cleveland-Cliffs, which has a market value of $2.3 billion and had total long-term debt as of the end of June of $4.5 billion. More here
IPOs in top gear: September 2020 witnesses 8 launches; busiest month in a decade
September 2020 has ended a long dry spell of the IPO markets, which were severely hit due to the COVID-19 pandemic. The month has been one of the busiest months for the primary markets in a decade, witnessing the launch of 8 IPOs. Before this, more than 8 IPOs in a single month was launched in September 2011. These 8 IPOs include Happiest Minds, Route Mobile, CAMS, Chemcon Specialty, Angel Broking, UTI AMC, Likhitha Infrastructure, and Mazagon Dock. These IPOs together are looking to raise over Rs 7,000 crore. The new IPOs come after a four-month-long hiatus during which companies stayed away from the primary market. After the failed IPO of Antony Waste Handling Cell in March, the next IPOs came only in July – Rossari Biotech and Mindspace Business Parks REIT. They together raised Rs 5,000 crore from investors amid heavy demand. The IPOs have also witnessed strong subscriptions and robust listings this month and as per experts investor are looking forward to more IPOs after the gap of 6 months. More here
Market Watch: Prakash Diwan, Market Expert on IndusInd Bank
“The stock has recovered and lost ground and again probably is looking at recovering but I would believe it will probably be underperforming the Bank Nifty because the Bank Nifty itself has been beleaguered for various other reasons. So if there is a recovery in Bank Nifty and the overall environment, IndusInd would probably not lead that is what I would guess. The positioning is very simple, buying to the better promising banks than IndusInd and IndusInd could probably wait. Once it crosses that Rs 600-630 kind of a hurdle then I think there would be some sort of a revival but till then I would look at some of the other banks, which will participate in the Bank Nifty is what I feel.”
Opening Bell: Sensex opens over 150 points higher, Nifty around 11,100; metals, banks gain
Indian indices started the week on a higher note led by gains in all key sectors with metal, pharma, and auto indices rising over 1 percent each at the opening. Broader markets also rose in early deals. Nifty Midcap and Nifty Smallcap rose 1 percent and 1.5 percent, respectively. At 9:18 am, the Sensex was up 188 points at 37,577 while the Nifty rose 55 points at 11,105. On the Nifty50 index, ONGC, Bharti Airtel, Hero Moto, Tata Steel, and Dr Reddy’s were the top gainers while only 3 stocks – TCS, Nestle, and HUL, traded in the red.
Market Watch: Dipan Mehta, Director at Elixir Equities On banks
“Banks have clearly underperformed because of what we are seeing in the economy and more so because of complete uncertainty as regards the credit cost in the post-COVID world. So I think that there is no point putting more money into banks at this point of time. I never like to buy into uncertainty but I think there is no point in selling bank investments as well because already they have corrected the way they are and a lot of banks are available at very attractive valuations and maybe six-twelve months from now, when the credit cost will be absorbed, you may see the leadership position coming back into banks. So I would like to remain invested in banks and maybe investors who are slightly underweight and are looking at increasing go for the safer banks like HDFC Bank or Kotak Mahindra Bank where the credit cost will not be as high as the other banks. From a medium-term to long-term basis we are positive on the banking sector.”