WHAT HAPPENED LAST WEEK Sectors at a glance

21th October - 27th October 2018

What is inside this week’s newsletter?

Chemical And Paints -Sukriti Hatgaonkar Abu Dhabi National Oil Company (ADNOC) to acquire 25% of Aramco's stake in India’s $44-billion West Coast refinery. A big boost to the petroleum and fertiliser sector .

Banking -Sarthak Krishna Kotak Mahindra Bank stops opening new accounts under its popular model 811

Real Estate, Infrastructure & Cement -Arpit Daga & Akshit Batra

Office leasing on the rise while residential Real Estate struggles to win back confidence

Pharmaceuticals -Shefali Sharma Zydus Cadila Group is set to obtain the consumer brand business Kraft Heinz in India together with the children’s milk drink Complan for INR 4500-4600 Crore beating Coca-Cola.

IT & Telecom -Gaurav S Patole Kotak Mahindra Bank stops opening new account under it’s popular model 811

Metals & Mining -Thomas Kuncheria Essar Steel promoters offer to pay Rs 54,389 crores to seek withdrawal of Essar Steel from IBC

Auto & Aviation -Chirag Goyal Records sales for New Honda’s Amaze in 5 months

FMCG - Shruti Kajaria India’s milk powder exports to rise on subsidies

Consumer Durables -Prateek Singhal OnePlus partners with Reliance Digital for offline sales

Auto Ancillary -Suraj M. Hi Tech Gears acquires Neo-Tech Smart Solutions

Textiles & Retail -Vimal & Anoop The Commerce Ministry plans for a comprehensive strategy for promoting exports by providing incentives to exporters with the aim to target the opportunities at SAARC and ASEAN countries

NBFC -Svetlana & Aashpreet NBFC crisis to bring down land prices, triggers M&As in realty sector

Ports And Logistics -Snigdha Baidya Adani looking forward to invest in Chittagong Port which is in the priority list of infrastructure road map of Bangladesh Government.

What is inside this week’s newsletter?

Records sales for New Honda’s Amaze in 5 months

Hero MotoCorp to expand its two-wheelers line-up

The all-new version of compact sedan Amaze by Honda Cars India Ltd (HCIL) launched in May this year has crossed 50,000 sales mark in just five months of its launch in the country. It became the fastest 50,000 sales registered by any new model introduced by HCIL in India. The new Amaze contributed 50percent of HCIL's total revenue for the period from April to September of the current fiscal year. The response to the car is overwhelming with 50,000 sales in five months. Advanced CVT* technology has become popular among customers as 30% of Amaze customers opt for automatic for automatic variants in petrol and diesel. https://economictimes.indiatimes.com/industry/auto/cars-uvs/hondas-new-amaze-records-50000-unit-sales-in-5-months/articleshow/66315504.cms

Hero MotoCorp* is planning to have 6 scooters in its product portfolio in the next 8-12 months as it seeks to expand its presence in a fast-growing segment where its presence is rather small. The company announced earlier this year its intention to enter the premium motorcycles and scooter space. It launched the Extreme 200 motorcycle in July, and now, introduced a new 125 cc scooter, Destini. With this, it has four scooter models in its portfolio others being Pleasure, Maestro, and Duet. It is also planning to launch the Maestro Edge 125 before the end of the fiscal year and a 110 cc model next financial year. https://economictimes.indiatimes.com/industry/auto/two-wheelers-three-wheelers/hero-motocorp-to-expand-two-wheeler-line-up/articleshow/66322227.cms

AUTO & AVIATION By Chirag Goyal

*Continuously variable transmission (CVT) is an automatic transmission that can change seamlessly through a continuous range of effective gear ratios.

*Hero MotoCorp is the largest two-wheeler manufacturer in the world, and also in India, with a market share of about 46% in the two-wheeler category

Bharat Stage VI norms from April, 2020

Supreme Court ordered the ban on the sale of BS IV vehicles from 1 April 2020, which will impact both automakers and buyers. While the Centre announced the deadline for the adoption of the Bharat Stage* VI emission standards as April 1, 2020, the Supreme Court considered whether car manufacturers should be granted a grace period for the sale of BS-VI non-compliant vehicles after the deadline. It declined to grant a reprieve. BS-IV compliant vehicles became mandatory from 1 April 2017, while the government planned to skip the fifth stage and move to Bharat Stage VI from 2020. Compliance with BS-VI norms will require greater investment in technology to upgrade existing vehicles and build new ones. It will also mean fewer launches by the deadline. https://economictimes.indiatimes.com/industry/auto/cars-uvs/bharat-stage-vi-norms-know-how-they-will-impact-you/articleshow/66362907.cms

AUTO & AVIATION By Chirag Goyal

*Bharat stage (BS) are emission standards instituted by Central Government to regulate the output of air pollutants from internal combustion engine equipment, including motor vehicles.

Maruti Suzuki net profit drops by 9.8%

After 17 quarters, the first decline in net profit was recorded for Maruti Suzuki India Ltd* as auto sales remained weak due to higher auto fuel prices, higher borrowing costs and worsening macroeconomic factors. It was also burdened by rising raw material costs and depreciation. It announced a decline in net profit of Rs.2,240.4 Cr by 9.8% in the last quarter, compared to Rs.2484.3 Cr a year earlier. However, the profit exceeded Bloomberg's estimate of 2,023 Cr. Net sales increased slightly by 0.5% to 21,551.9 Cr amid weak demand. https://www.livemint.com/Companies/slNwqVugkwX8m1asVZkl0I/Q2-results-Maruti-Suzuki-profit-falls-10-but-beats-estima.html

*As of July 2018, Maruti Suzuki India Ltd had a market share of 53% of the Indian passenger car market.

Office leasing on the rise while residential Real Estate struggles to win back confidence

The office leasing market, as per reports by Cushman & Wakefield India, has been witnessing a robust growth for the last few years. While the residential Real Estate sector has been stagnant since 2013-14, the leasing sector saw a growth of 15% during January September period (YoY). The residential sector saw a decline in new project launches with inventory levels dropping 10% from 1.1 billion to 1 billion sq. ft. Property prices have been stagnant YoY, at Rs 6100 per sq. ft. The leasing industry stands at 33 million sq. ft, distributed around top 8 cities of India. Adequate supply of leasing space has ensured that rent remained under control even though demand increased. The real estate sector has been reeling under buyer’s confidence and is expected to remain stagnant for the next 2 years. https://www.livemint.com/Money/43xN1Ts3Itp207yU8AsbCK/Residential-real-estate-continues-to-struggle-office-leasin.html

REAL ESTATE,

INFRASTRUCTURE

& CEMENT

By Arpit Daga &

Akshit Batra

*NCR region has been the worst affected region and saw launches worth only 1 million sq. ft. in July 2018.

Century Textiles and Industries gets shareholder nod for cement demerger with Ultratech

BK Birla – led Century Textiles and Industries’ minority shareholders gave their nod to the company’s decision to sell its cement assets to Ultratech Cement Limited. In the NCLT* convened shareholders meeting on October 24, 2018, minority shareholders showed full confidence and support to the company’s decision to sell its cement assets at an enterprise value of Rs. 8621 crore with 81.39% votes in favor of the transaction. https://economictimes.indiatimes.com/industry/indl-goods/svs/cement/century-textiles-and-industries-gets-shareholder-nod-for-cement-demerger-with-ultratech/articleshow/66381128.cms

*NCLT : The National Company Law Tribunal is a quasi judicial body in India that adjudicates issues relating to the Indian companies.

REAL ESTATE,

INFRASTRUCTURE

& CEMENT

By Arpit Daga &

Akshit Batra

Import restrictions relaxed on Petcoke

Government relaxed import duties on petcoke*, feedstock for certain industries such as cement and aluminium. India allowed imports of 500,000 tonnes petcoke by aluminium companies and 1.4 million tonnes by calcined petcoke makers as per DGFT (Directorate General of Foreign Trade). The recent decline in petcoke can be contributed to cement companies, which have been shifting to coal based production system, to avoid delays due to pollution related policies. Petcoke, an alternative to coal produces 11% more greenhouse gases than coal. India is the biggest consumer of Petcoke and imports half its petcoke consumption of 27 million tonnes. https://www.livemint.com/Politics/yIty3NB2ZMpZVyIc5KynLO/India-relaxes-curbs-on-petcoke-imports.html

*Fuel grade petcoke is typically very high in heating value (BTUs per pound), produces virtually no ash when burned, and is most commonly used in electric power plants and cement kilns.

Sun pharma launches psoriasis treatment drug in US

Kraft heinz to sell india business portfolio to zydus

North America CEO of Sun Abhay Gandhi said that the availability of Ilumya, the drug for treating plaque psoriasis, is a landmark in expanding their specialty drug portfolio in US. Ilumya offers a novel, safe and effective treatment alternative for people who are still stressed to manage their moderate-to-severe plaque psoriasis, he added. The strength of Ilumya is 100 mg/mL in the US market. Sun is committing to make Ilumya among the most cost-effective treatment in current market, said Gandhi. https://www.thehindubusinessline.com/companies/sun-pharma-launches-psoriasis-treatment-drug-in-us/article25299622.ece

Zydus Cadila Group is set to obtain the consumer brand business Kraft Heinz in India together with the children’s milk drink Complan for INR 4500-4600 crore said multiple sources. Cadila might rope in a private equity partner for supporting the finances. Zydus Cadila is the fourth-largest Indian Pharmaceutical Company with INR 11,600 crore in FY 18 sales. Heinz had decided to sell the European holding company that houses the Indian operations and asked buyer to absorb the tax losses of that entity, registered in Italy. The Italian company is held by an arm of the US parent that is registered in the Netherlands. Coca-Cola was the top contender of the European entity, while Cadila had bid only for the Indian operations but its bid was 10-15% higher than Coke’s.

PHARMACEUTICAL

SECTOR By Shefali Sharma

*Plaque psoriasis: Psoriasis is a common skin condition that changes the life cycle of skin cells. Psoriasis causes cells to build up rapidly on the surface of the skin. The extra skin cells form thick, silvery scales and itchy, dry, red patches that are sometimes painful.

Kraft Heinz had been seeking about USD 1 billion for the assets but most bidders hesitated at the valuations due to lower growth predictions for certain products within changing consumer tastes in India. For Ahmedabad-based Zydus Wellness, the listed consumer business subsidiary of Pankaj Patel-led Zydus Cadila Healthcare, the Kraft Heinz portfolio will add to its standing offerings of personal and skin care, sugar substitutes and health foods. The business, accounting for 4% of the Zydus Cadila Group’s total revenue, grew 7% in FY18 from the year earlier. https://economictimes.indiatimes.com/articleshow/66338517.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst

PHARMACEUTICAL

SECTOR By Shefali Sharma

*Specialty drugs: Specialty drugs are high-cost prescription medications used to treat complex, chronic conditions like rheumatoid arthritis, multiple sclerosis, and cancer. These medications often require special handling and administration.

TCS first Indian Company to get Foreign Labour Certification for H-1B Visas

Wipro revenue grows by 1.37% Y-o-Y basis in second quarter result

TCS stands to be only Indian firm amongst the top 10 organization to get foreign labour certification for the H-1B visas. TCS has received the 20,755 H-1B specialty occupation labour certification for the fiscal year ending for labour department ending on 30th September 2018. https://eurasiantimes.com/tata-consultancy-services-tcs-h-1b-visas/

Wipro’s revenue increases by $2.04 billion in the second quarter beating analyst prediction. Bloomberg survey of 25 analyst had estimated Wipro revenue to be around $1.96 billion. In constant currency terms, revenue rose by 1.6% on a sequential basis. Wipro’s leading vertical of Banking and Financial Services posted increase in revenue by 4.4%. https://www.livemint.com/Companies/aSoQQ4XO9mBEubyeiPfvIM/Wipro-Q2-profit-drops-nearly-14-to--1889-crore.html

IT & TELECOM

SECTOR By Gaurav Patole

Attrition Rate : Basically indicates employee or staff turnover. It is an off Balance Sheet Item which tells us how many employees are moving out of the organization. Important indicator to tell us the bench strength or if any cost cutting has taken place which lead to lay off of employees.

HCL Tech to hire more US locals with rise in profit by 16% in second quarter

Tech Mahindra CEO Wins Gold in 2018 CEO World Award

HCL tech India's third largest IT company posted 16% growth in its net profit at Rs 2540 crore. It has also announced to hire more US local in its largest market. Revenue for HCL Tech grew 19% at Rs 14,861 crore in the quarter under review against Rs 12,434 crore in September quarter last year. HCL Tech is expecting its revenue to grow by 9-12% in FY2019. https://timesofindia.indiatimes.com/business/india-business/hcl-q2-net-up-16-to-hire-more-locals-in-the-us/articleshow/66335632.cms

Mr. Gurnani (Tech Mahindra CEO) has been honored for his ambitious initiative aimed at re-skilling and up-skilling of over 112,000 Tech Mahindra employees to ensure that they have the requisite skills and knowledge to remain competitive in an ever-evolving information technology and digital market space. https://www.apnnews.com/tech-mahindra-ceo-cp-gurnani-wins-gold-in-ceo-world-awards-2018-for-organization-wide-reskilling-initiative/

IT & TELECOM

SECTOR By Gaurav Patole

Attrition Rate : Calculation is given by = Change in Number of Employees in a year/ Total employees at the start of the Financial Year.

METALS & MINING By Thomas Kuncheria

*Section 12A- Insolvency and Bankruptcy Code The section says that a resolution application can be withdrawn as with the approval of 90 % of lenders. But it adds that the withdrawal can only happen before the bidding process starts.

Essar Steel promoters offer to pay Rs 54,389 crores to seek withdrawal of Essar Steel from IBC

The Ruia family which controls the Essar Steel, has offered to pay the full dues amounting to Rs 54,389 crores including secured and unsecured creditors of Essar steel. This offer comes up when 92.4% of creditors had decided in favour of accepting the bid of ArcelorMittal Essar Steel. The Ruias have stated that Section 12A of the IBC allows the CoC to permit the withdrawal of an insolvency application. ArcelorMittal said the Ruias bid does not meet legal requirements since the bankruptcy law requires the founders to make any offer to settle loans before the bidding process begins. https://www.moneycontrol.com/news/business/companies/ruias-re-entry-for-essar-steel-seen-as-last-resort-to-gain-control-delay-process-3088721.html

Government allows captive coal miners to sell 25% output in open market

The government has allowed captive coal miners to utilize a minimum of 75 % and sell up to 25 % of the actual production in the open market. The price that the allottees of mines can sell at is determined by Coal India. Earlier the allottees were not given permission to sell. The government would be auctioning 19 coal blocks this fiscal for sectors including iron and steel. https://economictimes.indiatimes.com/industry/indl-goods/svs/metals-mining/govt-allows- sale-of-25-actual-output-from-captive-coal-mines-in-open-market/articleshow/66382292.cms

JSW Steel –Q2 Profit Jumps 150 %; board agrees Rs 5000 crore rights issue; takes over Dolvi Minerals and Metals ;

The consolidated profits soared 150 % year-on-year to Rs 2087 crore for quarter ending on September. Its total revenue increased to Rs 21,608 crore from Rs 17,279 crore in the year-ago period. The main reason for the jump in profit was because of the rise in steel prices. Steel prices increased by 25 % year-on-year. The Board also approved the issue of equity shares of the company by way of a ₹5,000-crore rights issue. JSW Steel has taken over Dolvi Minerals and Metals by buying the remaining 60 % of its share capital at Rs 109 crore. This will help in better raw material security as it is a supplier of coking coal. https://economictimes.indiatimes.com/markets/stocks/earnings/jsw-steel-q2-profit-jumps-150-to-rs-2087-crore-board-okays-rs-5000-crore-rights-issue/articleshow/66363141.cms

METALS & MINING By Thomas Kuncheria

* A rights issue is an invitation to the existing shareholders to purchase additional new shares in the company. The downside of rights issue is that they often send a stock's price lower.

Kotak Mahindra Bank stops opening new accounts under its popular model 811

Bandhan Bank market cap falls by half in just 2 months

Kotak Mahindra Bank has stopped opening new accounts under Kotak 811 name which used Aadhar based identification for opening new accounts. It was the first bank in the country to offer Aadhar based accounts. After the recent ruing by the Supreme Count of India, which forbids any private banks to use a person’s biometric data, Kotak Mahindra Bank has decided to stop it. However, the company claims that they have already achieved their target for new accounts. https://economictimes.indiatimes.com/industry/banking/finance/banking/kotaks-8/11-aadhar-based-accounts-take-a-hit-post-sc-order/articleshow/66350271.cms

On 9th August, Bandhan Bank was trading at Rs 729, its record high, since then the company has lost over Rs 42,000 Crore resulting in reduction of its market cap by half. The decline in its price is due concerns over high promoter holdings and its exposure to IL&FS. It is currently trading at Rs 380. https://www.livemint.com/Money/itREQonqNdot6VCEzWncsI/Bandhan-Bank-sheds-half-of-its-market-value-in-last-eleven-w.html

BANKING SECTOR By Sarthak Krishna

*Kotak 811 is named after the date of demonetisation in India i.e. 8th November

*Bandhan Bank’s IPO was launched at Rs 375.

IDFC Bank to be renamed as IDFC First Bank

Following the merger of NBFC Capital First Bank with IDFC Bank, the name of IDFC Bank is going to be IDFC First Bank. It was an all stock deal between IDFC Bank and Warburg Pincus backed Capital First https://economictimes.indiatimes.com/industry/banking/finance/banking/idfc-bank-to-be-renamed-as-idfc-first-bank/articleshow/66366767.cms

BANKING SECTOR By Sarthak Krishna

RBI gives nod to 3year term for new MD and CEO of ICICI Bank

After the resignation of Chanda Kochhar, the board of ICICI bank had selected its COO Sandeep Bakshi for the position of MD and CEO. But due to the current ongoing issues at Yes Bank and Axis Bank, RBI gave approval for a 3 year period instead of the usual period of 5 years. Recently, Axis Bank’s new CEO Amitabh Chaudhary also received approval for a tenure of 3 years from RBI. https://www.businesstoday.in/sectors/banks/rbi-steps-scrutiny-private-bank-ceos-gives-3-year-term-sandeep-bakhshi/story/285504.html

*NBFC stands for Non Banking Financial Institutions. They offer various banking services but do not take deposits as they do not have a banking license.

Higher oil prices smudge Asian paints earnings palette

CHEMICALS AND

PAINTS

By Payal Jhawar and Sukriti Hatgoankar

*Consolidated net sales are the company’s gross sales minus its returns, allowances and discounts

Asian Paints reported a mixed set of earnings in Q2 FY19. Consolidated net sales increased 9% YoY but the operating margin declined by 2% due to inflationary cost pressures. The volume grew at 11% in the quarter gone by and this was due to the high demand from the emulsion segment which drove the higher volumes. The sales growth was lower than the volume growth due to changes in the product mix, reason being the permanent shutdown of Phthalic Anhydride plant (in Q2 FY18) and price revisions. Its international operations in Africa and Middle East are also facing difficult times due to the currency fluctuations and increased competitive intensity. As 30-35% of its raw materials are imported, it has hiked its prices three times to mitigate rising cost pressures. But the increase in the oil prices has put the company in a dilemma as another rate revision could have a negative impact on its demand. https://www.moneycontrol.com/news/technology/auto/this-week-in-auto-sunshine-santro-makes-a-comeback-supreme-court-rules-no-bs-iv-cars-after-2020-3095031.html

Saudi Arabia, UAE reiterate investment plans in India: A big boost to the petroleum and fertiliser sector

Abu Dhabi National Oil Company (ADNOC) signed a memorandum of understanding with Saudi Aramco to acquire 25% of its stake in India’s $44-billion West Coast refinery in which the latter has a 50% stake. The remaining 50% is held by the Indian Oil, BPCL, and HPCL. They are looking to invest in the entire oil value chain, including fuel retailing, this investment would be the highest in this sector. Saudi Arabia’s mining and fertiliser firm Maaden is also interested in investing in the phosphate fertiliser sector in India and has signed a pact in this regard. The West Asian leaders are committed to fulfilling India’s oil demand amidst higher fuel prices and weakening rupee thus boosting the petrochemical sector. https://www.financialexpress.com/market/commodities/big-boost-to-petroleum-and-fertilizer-sector-saudi-arabia-uae-reiterate-investment-plans-in-india/1350437/

CHEMICALS AND

PAINTS

By Payal Jhawar and

Sukriti Hatgoankar

*Memorandum of Understanding is a non-binding agreement between two or more parties which includes the terms and details of the understanding, each parties requirements and responsibilities

Patanjali milk to hit stores soon

Coca-Cola enters two new categories of health drinks

Patanjali Ayurveda announced this week that it plans to get into the dairy business, and will soon look to sell Patanjali branded milk, cheese and curd. With the foray into these new products, Patanjali aims to target sales worth Rs. 10 billion in the dairy segment. Recently, Patanjali also ventured into frozen vegetable products and added frozen peas, sweet corn and potato fingers to its product portfolio. The firm has a network of 56000 retailers across the country. In addition to regular milk, the company also aims to introduce milk and allied products in tetra packs. The company plans to purchase the milk directly from the farmers and would retail at Rs. 2 cheaper than the competitors, said Baba Ramdev. http://www.businessworld.in/article/Patanjali-Milk-At-A-Store-Near-You-Soon-Group-Targets-Rs-10-Billion-Dairy-Sales/13-09-2018-159970/

Coca-Cola, India’s largest beverage maker, has announced that it will enter two new categories of enhanced hydration and nutritious dilutables. The products to be launched are Aquarius Glucocharge and Minute Maid Vitingo. This would consolidate Coca-Cola’s position as a total beverage player. These drinks are a combination of glucose, salt, fruits and water. Thus, the product will not only provide instant hydration to those who toil in the heat but also supply them with much needed glucose and other vital minerals. This is the 4th beverage segment the company is entering into after sparkling beverages, fruit-based juices and water. http://www.businessworld.in/article/Coca-Cola-Enters-Two-New-Categories-Of-Health-Drinks/03-05-2018-148148/

FAST MOVING

CONSUMER GOODS By Kenneth Rohan Kotian

Coca-Cola makes so many different beverages that if you drank one per day, it would take you more than nine years to try them all. Coca-Cola has a product portfolio of more than 3,500 beverages (and 500 brands), spanning from sodas to energy drinks to soy-based drinks.

India’s milk powder exports to rise on subsidies

Government subsidies aimed at supporting local farmers has resulted in a spike in the production of milk powder and it is expected to increase by nine times YoY. India’s SMP* exports are expected to surge to 100000 tonnes in FY18-19 and will ensure that the world’s largest dairy producer remains competitive in the global arena. Global SMP prices have reduced by more than 50% over the last 4 years due to surplus supply. In the previous fiscal, India exported a total of 11500 tonnes of SMP. There were widespread protests last year from the farmers as raw milk prices fell to a 3-year low and the price was below the cost of production. This resulted in build up of some inventory as well. The subsidies offered by the Gujarat and Maharashtra state governments in addition to the 10% subsidy given by the central government will ensure that this inventory will be reduced and will translate into higher exports. http://www.businessworld.in/article/India-s-Milk-Powder-Exports-To-Surge-On-Subsidies-Dampen-Global-Prices/27-07-2018-156056/

*SMP – Skimmed Milk Powder is a product that is created when water is removed from pasteurized nonfat milk. By depriving micro-organisms of the water which they require in order to develop,drying allows skim milk powder to have a shelf life of up to 3 years if stored properly.

FAST MOVING

CONSUMER GOODS By Kenneth Rohan Kotian

Double digit growth for Welspun in Q2FY19

Boost for exporters from Commerce Ministry

One of the world’s largest home textile manufacturer, Welspun has reported an improvement in sales by 13.9 percent in Q2FY19. The total income has increased by 10.3 percent y-o-y* which is mainly caused by an increase in volume of sales. The total sales were reported as Rs.17,978 million in the second quarter of this fiscal year which was Rs.16,299 million last year. EBITDA has also improved from Rs.3,063 million to Rs.3,073 million. The effect of new exchange rates is not reflected here, due to the existing hedges. The actual impact of these rates will only be reflected in the revenue of the next financial year. https://www.fibre2fashion.com/news/textile-news/welspun-sees-double-digit-growth-during-q2fy19-245326-newsdetails.htm

The Commerce Ministry is planning for a comprehensive strategy for promoting exports by providing incentives to exporters. During the first half of the fiscal year, exports have increased by 12.5 percent to 164 billion USD. Director General of Foreign Trade (DGFT) Alok Trivedi said that the expected export for this fiscal year is 330-340 billion USD , compared to 300 billion USD last year. The aim of this plan is to target the opportunities at SAARC and ASEAN countries. Tax rebates, duties and embedded taxes are other key issues that the ministry is planning to resolve. https://economictimes.indiatimes.com/news/economy/policy/commerce-ministry-considering-incentives-for-exporters/articleshow/66376139.cms

TEXTILES & RETAIL

By Anoop Krishnan K,

Vimal Gupta

*y-o-y – Year on Year *In India, fiscal period starts from 1st April and ends on 31st March. This period in which the income is earned is known as the Financial Year or the Fiscal Year.

OnePlus partners with Reliance Digital for offline sales

Ikea’s real challenge in India lies online

OnePlus has now partnered with Reliance Digital Stores to create more retail touch points. After achieving the great success in the Indian market and capturing a major share in the premium segment phone market, the company now strategizes to maintain this by reaching more number of people through offline stores. With Reliance Digital as its channel partner, customers will now have hands on experience of the phone which will be more convenient. The target price of the phone remains same as what offered on the ecommerce platforms. OnePlus will also participate in the promotional events of Reliance Digital thus benefiting the customers. The company aims to have a more holistic reach by entering the offline market. This is done to give the product a better visibility and trust . https://www.livemint.com/Industry/SYNOtHDuc2wfcCLVc6bO3J/OnePlus-partners-with-Reliance-Digital-for-offline-sales.html

IKEA Hyderabad, the first store in India is drawing crowds from all across the nation. The investment of about 800 crore is done for setting up the store. The target footprints is 6 to 7 million in an year with about 25,000 in a day. Of course the recovery of the investment is just not determined by the footprints but by the conversion of those footprints to the purchases. For the company to have a wider reach, it is important for it to have online presence on platforms like Amazon, Flipkart or Alibaba for long term which its competitors are already doing. https://www.livemint.com/Companies/evTuanw9EhdWbzpUJkswUJ/Ikeas-real-challenge-in-India-lies-online.html

CONSUMER

DURABLE GOODS By Prateek Singhal

FACT : Consumer Durable Goods are divided into Brown and White goods, consumer electricals and gold.

Gold prices rise to over 6-year high

The gold price has reached to Rs 32,625 per 10 gm – the highest level since November 2012. The fall of domestic equity market boosted the appeal of gold. Depreciating rupee increases the import price of the metal. The other reasons are the ongoing US – China trade war, the uncertainty in Brexit and Italy budget woes. https://www.livemint.com/Money/cmVNf6OH2pikXEy8TwNwUK/Gold-prices-today-rise-to-over-6year-highs-6-things-to-kno.html

CONSUMER

DURABLE GOODS By Prateek Singhal

IKEA is a Swedish-founded multinational group that designs and sells ready-to-assemble furniture, kitchen appliances and home accessories, among other useful goods and occasionally home services

L&T Finance Holdings creating Rs 10 bn corpus for unanticipated risks

NBFC crisis to bring down land prices, trigger M&As in realty sector

LTFH Managing Director, Dinanath Dubhashi said that the intent was to make a provision of Rs 0.5-1 billion in each quarter. The company had put aside Rs 1.1 billion for this in the September quarter, taking the overall macro-prudential provision to Rs 2 billion, for two segments -- Rs 1.5 billion rural and Rs 0.5 billion for housing. LTFH's provision coverage ratio has also increased to 62.47 per cent at end-September from 53.57 per cent. These measures are important due to the exposure to the IL&FS group. LTFH said that it has no exposure to the group's holding company and its lending arm, both of which have defaulted on payments. But it does have an exposure of Rs 18 billion in IL&FS Transportation Network Ltd (ITNL) and its special purpose vehicles. In these, LTFH has exposure in four annuity projects and two toll road projects, both of which are operational. Provision coverage ratio refers to the prescribed percentage of funds to be set aside by the banks for covering the prospective losses due to bad loans. https://www.business-standard.com/article/companies/l-t-fin-creating-rs-10-bn-corpus-for-unanticipated-risk-118102501172_1.html

The ongoing NBFC crisis that has dried up liquidity for the real estate sector has come as a shot in the arm for financially strong developers, who believe the situation will bring down irrational land prices and usher in consolidation in the sector. The crisis, which began with IL&FS failing to repay its commercial dues, has caused a liquidity crisis for the entire NBFC sector. The cost of borrowing for NBFCs has gone up, following which they have increased commercial lending rates by up to 200 basis points or two per cent. “The industry is in a consolidation phase right now

NBFC By Svetlana and Aashpreet

*Exposure is the amount an investor stands to lose in an investment. Knowing and understanding financial exposure, which is an alternative name for risk, is a crucial part of the investment process.

*The first two are: 1. Exposure 2. Default

Indiabulls Housing Finance to sell stake in OakNorth

Indiabulls Housing Finance is planning to sell all or parts of its 18.7 per cent stake in UK-based OakNorth Holdings within a month to a private equity fund. The deal will help the company gain six times on investment in less than three years. The current valuation of Indiabulls’ stake is around Rs 4,500 crore. The valuation of OakNorth is over $2.5 billion to $2.9 billion as per this transaction. The potential investors includes Softbank’s Vision Fund. In November 2017, the company sold around 10 per cent of its stake in OakNorth Bank to GIC, the investment arm for the Government of Singapore for Rs 770 crore for a valuation of $1.2 billion. Shares of Indiabulls Housing Finance fell by 17% to Rs 654 on Friday at the BSE. Default at IL&FS had a domino effect and had impacted the perception of industry towards housing finance companies. Indiabulls was in tough soup when one of its borrowers, Supertech Realty, defaulted on payment to other lenders, which leads to the fear that more real estate developers may default on their repayments. https://economictimes.indiatimes.com/markets/stocks/news/indiabulls-housing-finance-to-sell-stake-in-oaknorth/articleshow/66309888.cms

NBFC

By Svetlana and Aashpreet

*Default is the failure to pay interest or principal on a loan or security when due. Default occurs when a debtor is unable to meet the legal obligation of debt repayment.

and will continue for at least some quarters,” said Amit Goenka, MD and CEO at Nisus Finance Services. https://www.thehindubusinessline.com/news/real-estate/nbfc-crisis-to-bring-down-land-prices-trigger-mas-in-realty-sector/article25312719.ece

Hi Tech Gears acquires Neo-Tech Smart Solutions

Motherson Sumi Systems assigned rating of AAA/Stable/A1+

Gurgaon-based component and engineering solutions provider, Hi-Tech Gears has announced that it has acquired Ontario-based start up Neo-Tech Smart Solutions Inc, which will now become a wholly owned subsidiary. The company said that the acquisition has been done for around CAD $250,000 (Rs 1.40 crore) and it may further make investments into the capital of Neo-Tech. This acquisition will help in strengthening internal capabilities related to automation and robotics. Neo tech smart solutions improve operational efficiency, productivity, product quality, speed to market, agility, workplace safety and environmental sustainability. http://www.autocarpro.in/news-national/hitech-gears-acquires-ontariobased-neotech-smart-solutions--looks-to-leverage-industry-40-expertise-41104 uct-range/65924593

Motherson Sumi Systems was assigned a fund based working capital rating of AAA/Stable/A1+ by ratings agency- India Ratings and Research Private Limited ( India Ratings), formerly known as Fitch Ratings India for local debt instruments as of Oct 23, 2018. The company was also assigned a commercial paper rating of IND A1+ https://www.thehindubusinessline.com/companies/announcements/others/motherson-sumi-systems-ltd-announcement-under-regulation-30-lodr-credit-rating/article25297328.ece

AUTO ANCILLARIES By Suraj M

*A firm's working capital is the money available to meet the current obligations (those due in less than a year) and to acquire earning assets

Subros Limited posts profits of Rs 23.81 cr

Subros Limited has posted profits of Rs 23.81 cr for the quarter ending on 30th September 2018 compared to Rs 15.07 crore for Q1 2017. Also the total revenues of the firm has increased from Rs 500 cr YoY to Rs569.79 cr for the current quarter. https://www.thehindubusinessline.com/companies/announcements/results/subros-ltd-unaudited-financial-results-for-the-quarter-and-half-year-ended-30th-september-2018/article25331701.ece

AUTO ANCILLARIES By Suraj M

* Commercial paper is an unsecured, short-term debt instrument issued by a corporation, typically for financing of accounts receivable and inventories, and meeting short-term liabilities. Maturities on commercial paper rarely range longer than 270 days

Adani looking forward to invest in Chittagong Port

UPS to attain full ownership in Express Services by further investments

A terminal is proposed to be developed near the Chittagong Port. This terminal is in the priority list of infrastructure road map of Bangladesh Government. The Asian Development Bank is considering to fund the terminal. The terminal will be handling coal. Private investment is being invited by Government of Bangladesh through private-public partnership for the further development of the Port infra. Adani group has expressed their interest to invest in this Port. https://www.thehindubusinessline.com/economy/logistics/adani-eyes-investments-in-bangladesh-ports/article25335938.ece

UPS(United Parcel Service) had held a majority position in an express services joint venture. This venture exclusively serves the small package shipping business of UPS’ international express in India. According to the World Bank global economy will expand by $6.5 trillion in 2017-19. GDP of India will contribute about 8.6% to it. India emerged as a key player in shipping and logistics sector recently and UPS is looking forward to play a leading role in supply chain and supporting international trade in India. UPS has announced to do investments to attain full ownership in its express service unit. https://www.itln.in/ups-announces-additional-investment-in-india-with-full-ownership-of-express-services-logistics

PORTS & LOGISTICS By Snigdha Baidya

Logistics Performance Index(LPI): LPI is an interactive benchmarking tool created to help countries identify the challenges and opportunities they face in their performance on trade logistics and what they can do to improve their performance.

JNPT to acquire three ports in Maharashtra

JNPT(Jawaharlal Nehru Port Trust), country’s largest container port is to acquire three ports in Maharashtra. They are Vijaydurg, Revas and Dighi. Out of these three only Dighi port is operational whereas the other two have little or no developments. They are planning this move to make profits up to Rs 2,000 Crore in the next three years and more than double to Rs 3,000 Crore in the next seven years. https://economictimes.indiatimes.com/industry/transportation/shipping-/-transport/jnpt-mulls-acquisition-of-3-ports-in-maharashtra-aims-at-doubling/articleshow/66303915.cms

PORTS & LOGISTICS By Snigdha Baidya