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Top companies where FIIs raised stake over 50% in the last 4 quarters

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FPI


Markets mostly have been a one-way street since the presentation of Union Budget on July 5 when the government proposed to increase tax on foreign portfolio investors (FPIs) up to 42 per cent. Following the proposal, overseas investors pulled out over Rs 11,000 crore (nearly $2 billion) from Indian equities in July, the steepest outflow in nine months. In the first two sessions of August, they withdrew a net Rs 2,881 crore, data show.


Last week, however, the government held meetings with representative of FPIs to assuage their concerns and reports suggest it may come up with measures to recover the overseas investors’ trust in the Indian markets. CLICK TO READ FULL REPORT



That said, there are over 80 companies where foreign institutional investors (FIIs) have continuously increased their holding in the last four quarters, and around 30 firms where they have raised their holding by 50 per cent.


Some of the prominent firms where FIIs increased their stake phenomenally include Mishra Dhatu Nigam (up 5,700 per cent), Astrazeneca Pharma India (382 per cent), L&T Technology Services (171 per cent), AU Small Finance Bank (up 141 per cent), Aster DM Healthcare (up 116 per cent), Greaves Cotton (up 115 per cent) and Aarti Industries (up 103 per cent).


Companies where FII holding has increased over 50 per cent but less than 100 per cent include Bata India (up 78 per cent), Endurance Technologies (up 66 per cent), Trident (up 66 per cent), Coal India (up 66 per cent), Granules India (up 63 per cent), Vaibhav Global (up 52 per cent) and Usha Martin (up 51 per cent).


BETTING BIG ON INSURANCE


These FIIs, ACE Equity data shows, are betting big on insurance companies. For instance, the FII holding in SBI Life Insurance Company (SBI Life) jumped around 351 per cent to 19.42 per cent in the quarter ended June 30, 2019. In the year-ago period, their stake in SBI Life stood at just 4.31 per cent. Similarly, ICICI Lombard General Insurance saw FII holding increase by 157 per cent to 18.53 per cent, as compared to 7.20 per cent in the corresponding quarter of the previous fiscal.


In HDFC Asset Management Company, they have raised their stake by 81 per cent to nearly 5 per cent from 2.61 per cent in the year-ago quarter, ACE Equity data show.


At the bourses, stocks of most insurance companies have given a decent return in the last one year (till June quarter). While the shares of ICICI Lombard have spurted 40 per cent, those of SBI Life have risen nearly 7.5 per cent. The benchmark index S&P BSE Sensex, on the other hand, have surged around 19.50 per cent during the same period.


Shares of HDFC AMC, which debuted on the bourses on August 6, 2018, have gained 13.5 per cent till the end of June quarter, ACE Equity data show.


On the fundamental front, SBI Life posted an increase of 5 per cent in its net profit at Rs 371.9 crore in the June 2019 quarter, while gross written premium during April-June period of 2019-20 grew 41 per cent to Rs 6,690 crore as against Rs 4,760 crore a year ago. Asset under management (AUM) of the company stood at Rs 1.47 lakh crore as on June 30, up 22 per cent from Rs 1.20 lakh crore a year earlier.


“Overall operating metrics remain steady, growth has been relatively strong with it being in top three players and significant opportunity of penetration in its parent clientele will augur well. We maintain ‘buy’ with the revised target price of Rs 906 (from Rs 779) implying 2.9x multiple on Mar-21 EV,” commented analysts at Prabhudas Lilladher in SBI Life’s post result note.


ICICI Lombard General Insurance reported a 7.1 per cent year-on-year (YoY) rise in its net profit for the quarter ended June 2019 (Q1FY20) at Rs 309.81 crore. Analysts at Edelweiss Securities believe ICICI Lombard can grow at 20 per cent for the next 20 years, while maintaining 20 per cent return on equity (RoE). They maintains ‘buy / sector outperformer rating’ on the stock with target price of Rs 1,300.

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Sitharaman’s sops for NBFCs may perk up lending, ease liquidity stress

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Illustration by Binay Sinha


To further ease the liquidity stress in the non-banking sector and nudge them to revive their lending activities, Finance Minister (FM) Nirmala Sitharaman on Friday announced a slew of measures for non-banking financial companies (NBFCs) and housing finance companies (HFCs). The government hopes this will result in more credit support for purchase of houses, vehicles, and consumption goods.


The government has provided additional support of Rs 20,000 crore to the stressed housing finance companies from National Housing Bank (NHB). With this, the additional liquidity support for the HFCs from NHB has gone up to Rs 30,000 crore.



In the Union Budget last month, the FM had encouraged public sector banks (PSBs) to buy high-quality pooled assets of NBFCs up to Rs 1 trillion for which the government would provide a one-time six-month partial credit guarantee for the first loss of up to 10 per cent.


The Reserve Bank of India (RBI) had also chipped in by tweaking banks’ bond-holding norms. This will allow banks to borrow an additional Rs 1.34 trillion exclusively for buying such pooled assets and giving loans to NBFCs. The FM on Friday said this partial credit guarantee scheme will be monitored at the highest level in each bank. Through this, it is expected that many of the assets will get quickly pooled and NBFCs will receive the necessary liquidity. “NHB has already settled some of the issues. NBFCs are receiving money from the banks and are moving towards funding,” said Sitharaman.


Sanjaya Gupta, managing director, PNB Housing Finance, said “This will support growth and ease the liquidity crunch. HFCs will now get an additional Rs 20,000 crore from NHB. The initiatives have potential to kick start the real estate sector.”


The government has also permitted NBFCs to use Aadhaar-authenticated bank KYC to avoid repeating the same process when a customer approaches it for credit. This has been a long-standing demand. The necessary changes in the Aadhaar regulations and Prevention of Money Laundering Act rules will be made, the FM said.


“This will streamline the process and also reduce frauds,” said Raman Aggarwal, chairman, Finance Industry Development Council.


The government has also asked PSBs and NBFCs to fast-track their collaboration to provide credit to micro, small and medium enterprises, small traders, self-help groups, and micro finance industry client borrowers.

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PACL Case: Sebi panel invites expression of interest for 28,974 properties

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Sebi


A committee headed by Justice R M Lodha has invited expression of interest (EoI) from prospective buyers for a total of 28,974 properties belonging to PACL Group.


Market regulator Sebi had set up a committee headed by former Chief Justice of India R M Lodha following a Supreme Court order to refund money to investors in the matter of PACL Group.



As per the notice issued by Sebi, the committee has divided the total 28,974 properties belonging to PACL group in four zones — east, west, north and south — with maximum properties being located in the southern zone.


Regarding PACL properties, the apex court’s order dated July 30 observed “we also leave it open to the committee to receive any further offers and to explore them after duly publishing a further notice on the website,” the notice said.


In pursuance of apex court’s order, the committee “invites Expression of Interest from prospective buyers clearly indicating therein, list of properties in each zone, its circle rate, the offer amount and other relevant details,” the Friday notice said.


“The proposal should be for properties in each zone aggregating in value not less than Rs 1,000 crore,” the notice added.


The notice further said that the last date of receipt of proposals is September 9.


PACL, also known as Pearl Group, had raised Rs 60,000 crore from public in the name of agriculture and real estate businesses and was found by Sebi to have collected these funds through illegal collective investment schemes over 18 years.

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Improved market access for domestic retail investors with Aadhaar-based kYC

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Markets, Investors, Indices, Stocks


The government will allow Aadhaar-based KYC for domestic retail investors, and necessary amendments to the rules under the Prevention of Money Laundering Act will be issued.


Announcing a slew of measures to boost the economy, the government said the Depository Receipt Scheme 2014 is expected to be operationalised soon by Sebi. “This will give Indian companies increased access to foreign funds through American Depository Receipt (ADR)/ Global Depository Receipt (GDR),” she said.



In order to improve market access for the domestic retail investors, Aadhaar-based KYC will be permitted for opening of demat account and making investment in mutual funds. In this regard, necessary notification for amendments in PMLA rules would be issued.

Besides, steps would be taken with regard to offshore rupee market.


“To bring offshore rupee market to domestic stock exchanges and permit trading of USD-INR derivatives in GIFT IFSC, Ministry of Finance is working with RBI to introduce this measure shortly,” the government said.

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