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Wednesday, January 27, 2016

Daily Market Strategy - Jan 27 2016


Hope doesn't come from calculating whether the good news is winning out over the bad. It's simply a choice to take action. - Anna Lappe
 
Things look better after a break for the Indian market. This month has seen one of the highest foreign fund outflow for January since 2008. While world markets were tumbling, Indian markets were shut on account of Republic Day and saved some damage. The Indian economy is less vulnerable to external shocks as it is mainly driven by household consumption and government spending, says S&P. 
 
The outlook is a positive start. The choppiness associated with F&O expiry could come into play. Crude prices are swinging and data from China continues to be worrisome. The outcome of US Federal Reserve's rate-setting meeting is also expected this week. Global cues are positive and a number of results are expected including HDFC, Colgate-Palmolive IDFC Bank, Bharti Infratel, Godrej Consumer, Power Grid and Just Dial.
 
Asian markets are mostly upbeat with Nikkei trading over 2% higher. China's CSI300 is down over a percent while Hong Kong's Hang Seng has gained 1%. South Korea's Kospi and Taiwan's TWSE are in the green.  US stock indices rallied on Tuesday, driven by energy stocks following a recovery in oil prices. Earnings from Sprint Corp., Procter & Gamble Co. and 3M Co. also perked up the sentiment on Wall Street. The Dow surged 1.8% and the S&P 500 was up 1.4. 
 
Finance Minister Arun Jaitley reportedly said the government is looking into the recommendations of Parthasarathi Shome committee for simplifying tax administration.
 
India’s Chennai based auto maker HMFCL-Mitsubishi, is recalling approximately 2400 Cedia vehicles produced between 2006 to 2008 so as to refit the passenger side airbag.
 
Addressing a gathering of business leaders of France and India, along with French President Francois Hollande, Prime Minister Narendra Modi said that retrospective tax is thing of the past, and assured them that the government is working on the modalities to ensure that such steps are not taken in future.
 
Among stocks to watch today: 
 
HDFC: Housing Development Finance Corporation Ltd will announce its Q3 results today. IIFL expects net profit to rise 15.4% to Rs.1,746.10 crore yoy and 8.8% qoq. 
 
Colgate Pamolive: Colgate Pamolive India Ltd, a leading manufacturer of personal care products, will announce its Q3 results today. IIFL expects net profit to rise 26.10% to Rs. 165 crore yoy and 5.2% qoq.  
 
Bharti Infratel: The company will announce its Q3 results today. According to IIFL estimates, the company’s net profit for Q3FY16 is likely be around Rs. 605.5 crore, a rise of 19.5 % on Y-o-Y basis and 4.5 % on Q-o-Q basis.
 
Bajaj Auto: Bajaj Auto is scheduled to launch a new motorcycle on 1st February that could be a new brand introduction by the Pune-based two-wheeler major, reports a business daily. The new brand could be called 'Bajaj V', according to a recent teaser video.
 
Reliance Power Ltd: Reliance Power Ltd. has written to the Andhra Pradesh government, seeking to exit the stalled 4,000 MW Ultra Mega Power Project (UMPP) in Krishnapatnam, reports a business daily.
 
Hinduja Foundries: Hinduja Foundries has announced that the Committee of Board of Directors at their meeting held on January 25, 2016 recommended to the Board of Directors to issue Global Depository Receipts (GDRs) to promoters, promoter group, group company(ies) and any other entity which is a subsidiary, associate of its parent, group companies or any other entity eligible to invest in GDR for an amount up to Rs.400 crore.
 
Gujarat Fluor chemicals: The company has announced that Inbox Wind Infrastructure Services Limited, a step down Subsidiary of Gujarat Fluor chemicals Limited, has acquired 100% of Equity Shares of Vinirrmaa Energy Generation Private Limited with effect from January 23.
 
IOC,BPCL,HPCL: Public sector oil firms IOC, BPCL, HPCL and EIL will invest Rs. 1.5 lakh crore in setting India's biggest refinery on the west coast, Oil Minister Dharmendra Pradhan reportedly said.
 
BEL: The company will announce its Q3 results today. IIFL expects net profit to plunge 7.4% to Rs. 252 crore yoy; however, Q3 net profit is expected to rise 21.7% qoq.
 
Persistent Systems Ltd: Persistent Systems Ltd. is targeting annual revenue of US$1 billion and will focus on acquisitions to achieve the same, reports a financial newspaper. 
 
Concor: Container Corporation of India Ltd reported standalone net profit of Rs. 206.12 crore for the quarter ended December 31, 2015, registering decline of 31.53% yoy. The company’s standalone total income from operation of Rs. 1404.56 crore, declined by 3.25% yoy
 
HCL Technologies: HCL Technologies announced its acquisition of Point to Point Limited and Point to Point Products Limited (jointly referred as Point to Point or P2P).
 
United Spirits: United Spirits will announce its Q3 results today. According to IIFL estimates, the company’s net profit for Q3FY16 is likely be around Rs. 173.9 crore, a rise of 132.9 % on Y-o-Y basis while 81.3 % decline on Q-o-Q basis.
 
Tata Power: Tata Power announced termination of a share purchase agreement (SPA) with Ideal Energy Projects Limited (IEPL) for acquisition of 100% stake in a 270 MW coal based thermal power project in Maharashtra, extendable to 540 MW. 
 
Kajaria Ceramics: The company will announce its Q3 results today.IIFL expects net profit to rise 63.8% to Rs. 74.70 crore yoy and 27.2% qoq.
 
RCOM: Reliance Communications has increased capital expenditure outlook by Rs. 1,000 crore to Rs. 4,000 crore for the financial year ending on March 31, according to reports.
 
Power Grid: Power Grid will announce its Q3 results today.IIFL forecasts the company’s net revenue for Q3 FY16 to rise to Rs. 5,195 crore, growing at a rate of 19.3% yoy and 5.6% qoq. 
 
Reliance Capital: Reliance Capital Ltd announced that it has acquired more than 5% voting rights in Radiant Hues CRM Solutions.
 
Kirloskar Oil Engines: Kirloskar Oil Engines, leading auto parts and equipments company, will announce its Q3 results today. According to IIFL estimates, the company’s net profit for Q3FY16 is likely be around Rs. 29.8 crore, a decline of 12.6 % on Y-o-Y basis and 16.6 % on Q-o-Q basis.
 
HCL Infosystems: The net loss for the quarter stands at Rs. 65.7 crore as against loss of Rs.49.2 crore (YoY). The consolidated net sales stands at Rs. 1146.6 crore as against Rs. 1470.6 crore (YoY).
 
HT Media: HT Media, leading media and publishing company, will announce its financial results for the quarter ended December 2015 today. HT Media is likely to witness higher ad revenue growth backed by increase in corporate spending due to festive season. According to IIFL estimates, the company’s net profit for Q3FY16 is likely be around Rs. 53.0 crore, a decline of 28.3 % on Y-o-Y basis and 10.4 % rise on Q-o-Q basis.
 
Nilkamal: Nilkamal, home furniture manufacturer in India, reported standalone net profit of Rs. 20.19 crore for the quarter ended December 31, 2015, registering over two folds jump yoy but decline of 21.56% qoq. The company’s revenue stood at Rs. 428.42 crore, witnessing growth of 1.76% yoy.
 
Veto Switchgears: The company has bagged additional order worth Rs. 40 crore from dealers conference, Rajasthan.
 
Subros: Subros, manufacturer of air-conditioner systems and thermal products, reported standalone net profit of Rs. 6.01 crore, registering growth of 55.7% yoy but decline of 2.12% qoq. 
 
Mcleod Russel India: Mcleod Russel India, world's largest tea planter, reported standalone net profit of Rs. 56.98 crore for the quarter ended December 31,2015, registering decline of 29.15% yoy and 73.67% qoq. 
 
MRF: The net profit for the quarter stands at Rs. 388 crores. The company's EBITDA Margin at 22.6% as against 19.2% (YoY).
 
Kansai Nerolac Paints: The company's total income has increased by 8.7% at Rs. 965 crore for the quarter against Rs.887 crore in the corresponding quarter of the previous year.
 
HDFC Bank: The bank reported standalone net profit of Rs. 3,356.84 crore for the quarter ended December 31, 2015, registering growth of 20.12% yoy. The bank’s Net Interest Margin stood at 4.3% for the quarter.
 
Eveready Industries: The company recorded a rise of 10.8% in its net profit at Rs. 17 crore for the quarter ended December 31, 2015 as compared to Rs.15.3 crore for the quarter ended December 31, 2014. 
 
Blue Star Limited: The company has announced the launch of a stylish range of airconditioners comprising a wide array of highly energy-efficient as well as eco-friendly split airconditioners for the residential and commercial segments.
 
Swaraj Engines: Swaraj Engines, Hi-tech engine components manufacturer, reported standalone net profit of Rs. 8.36  crore for the quarter ended December 31,2015, registering marginal growth of 0.96% yoy. The Company’s standalone revenue stood at Rs. 105.59 crore, witnessing growth of 3.48% yoy.
 
Global Data: Consumer Price Index (QoQ) (Q4) AUD, RBA trimmed mean CPI (YoY) (Q4) AUD, Consumer Price Index (YoY) (Q4) AUD, RBA trimmed mean CPI (QoQ) (Q4) AUD, Gfk Consumer Confidence Survey (Feb) EUR, Nationwide Housing Prices s.a (MoM) (Jan) GBP, Nationwide Housing Prices n.s.a (YoY) (Jan) GBP, UBS Consumption Indicator (Dec) CHF, Consumer Confidence (Jan) EUR, Consumer Confidence (Jan) EUR, Business Confidence (Jan) EUR, BBA Mortgage Approvals (Dec) GBP, 30-y Bond Auction EUR, MBA Mortgage Applications (Jan 22) USD, New Home Sales Change (MoM) (Dec) USD, New Home Sales (MoM) (Dec) USD, EIA Crude Oil Stocks change (Jan 22) USD, 5-Year Note Auction USD, Fed Pace of MBS Purchase Program (Jan) USD, Fed Pace of Treasury Purchase Program (Jan) USD, Fed's Monetary Policy Statement  USD, Fed Interest Rate Decision USD, Fed's Monetary Policy Statement and press conference  USD, RBNZ Interest Rate Decision NZD, Monetary Policy Statement  NZD, Trade Balance (MoM) (Dec) NZD, Exports (Dec) NZD, Trade Balance (YoY) (Dec) NZD, Imports (Dec) NZD, Foreign bond investment (Jan 22) JPY, Foreign investment in Japan stocks (Jan 22) JPY, Retail Trade s.a (MoM) (Dec) JPY, Retail Trade (YoY) (Dec) JPY, Large Retailer's Sales (Dec) JPY
 
Results: Colgate-Palmolive (India),HDFC, IDFC Bank,Bharti Infratel, Bharat Electronics Ltd, Godrej Consumer Products,Power Grid Corporation Of India, Just Dial,State Bank Of Mysore, Kajaria Ceramics,Neyveli Lignite Corporation, SKS Microfinance, Graphite Indiablue Star Infotech, Beryl Drugs, Accel Frontline,Bajaj Steel Industries, Alfred Herbert (India),United Spirits,Zenotech Laboratories, Alkyl Amines Chemicals,HT Media,Ortel Communications, Tata Coffee, Sagar Cements, Ser Industries, Shanthi Gears,Sri Amarnath Finance, Aunde India, Automobile Products Of India,Beryl Securities,Aditya Birla Money, Database Finance, Datasoft Application Software, Dhruv Estates, Dhunseri Petrochem, Ecoplast, Emami Paper Mills,Freshtrop Fruits,Gujarat Narmada Valley Fertilizers & Chemicals Ltd., Gujarat Nre Coke, Havells India, Healthfore Technologies, Heg, Ind-Agiv Commerce,Ivee Injectaa,Kaushalya Infrastructure Development Corporation Ltd,Kirloskar Oil Engines, K.P.R.Mill, Kss,L.G.Balakrishnan & Bros, LGB Forge,Mirza International, MPS, Modi Naturals, Natural Capsules, National Plywood Industries, Next Mediaworks, Nidhi Granites,Nocil,Pentokey Organy (india), Polyspin Exports, Procal Electronics India, Rane Engine Valve, Rose Merc, Safari Industries, Umang Dairies
 
Trends in FII flows: The FIIs were net sellers of Rs.9.11 bn in the cash segment on Monday. The domestic institutional investors (DIIs) were net buyers of Rs.30.7 bn as per the provisional figures released by the NSE.
 
Other news in the media:
 
Tata Power announced termination of a share purchase agreement (SPA) with Ideal Energy Projects Limited (IEPL) for acquisition of 100% stake in a 270-mw coal based thermal power project in Maharashtra, extendable to 540 Mw.  (BS)
 
Blue Star, is eyeing around 12% market share in the Indian AC market by end of FY17 from the current 10.5%. After launching THE company's new range of star rated inverter ACs, B Thiagarajan, Executive Director & President - AC&R Products Business, Blue Star Limited said that the room AC segment is estimated to be around Rs110bn in the overall AC market, which is estimated to be around Rs150bn.  (BS)
 
Low cost carrier SpiceJet announced its cheaper deals for domestic base fares as low as Rs826 and overseas base fares starting at Rs3026. (BS)
 
Mahindra and Mahindra (M&M) had offered its new generation Scorpio for bookings online on e-commerce portal Snapdeal in September 2014. The success of the endeavour encouraged the company to now offer its latest offering the micro sports utility vehicle (SUV) KUV100 online on Flipkart and two other platforms. (BS)
 
Eros International Media Ltd has announced its pipeline of 65-plus films across multiple languages for this year. The titles include Housefull 3, Shivaay, Singam 3 and Rock On 2. (BL)
 
Emami Ltd has launched a new product Zandu Pure Honey. In a statement, the company said the product’s 100% purity is guaranteed, and no sugar is added to it. It is available in pack sizes of 100 gm, 250 gm and 500 gm and priced at Rs75, Rs165 and Rs270, respectively. (BL)
 
At least five Indian drug companies — Torrent Pharmaceuticals, Dr Reddy's Laboratories, Aurobindo Pharma, Cipla and Lupin — are in initial discussions to bid for Sagent Pharmaceuticals, a Nasdaq-listed specialty injectables maker, sources familiar with the talks said. (ET)
 
Looking to exit the stalled 4,000 MW Krishnapatnam power project, Reliance Power has written to Andhra Pradesh government suggesting that it could be done on similar lines to that of Tilaiya UMPP, which was acquired by procurers from the company. (BS)
 
Indian naval ship (INS) Vikrant, the first aircraft carrier, which played a pivotal role in the 1971 Indo-Pak war, has made its way into a commuter bike to be launched by Bajaj Auto next month. It will launch a 150-cc motorcycle on February 1 christened ‘V’ which is built from metal used in the country’s most celebrated aircraft carrier. (BS)
 
The Paradip Refinery of Indian Oil, which is set to be dedicated to the nation on February 7, will massively boost the bottomline of the largest oil marketeer to the tune of 20-30%, thanks to the latest technologies deployed at the facility that's coming up after a delay of 14 long years. (BS)
 
Drug discovery firm Sun Pharma Advanced Research Company (SPARC) has received markets regulator Sebi's approval to raise up to Rs2.50bn through a rights issue. (BS)
 
Apollo Energy Company Limited, an Apollo Hospitals Group company, has approved the divestment of 23.3% shareholding in Apollo Munich Health Insurance Company Limited to its joint venture partner, Munich Re of Germany for Rs1.6bn. The proposed transaction values Apollo Munich at Rs7bn. (BS)
 
In a tussle of manufacturers and the end-user industry over imposition of steel import curbs, the department of commerce has recommended introduction of standards on certain grades of steel as a measure to keep shipments from South Korea and China at bay. (BS)
 
Road Transport and Highways Minister Nitin Gadkari will meet bankers and road contractors on January 28 to discuss issues related to funding of highway projects. (ET)

International Solar Alliance: France commits €300 mn for solar energy



The Prime Minister of India Narendra Modi, and the President of France Fran├žois Hollande, on Monday jointly laid the foundation stone of the International Solar Alliance (ISA) Headquarters and inaugurated the interim Secretariat of the ISA in National Institute of Solar Energy (NISE), Gwalpahari, Gurgaon.

The Alliance has France’s full support. The France President announced that the French Development Agency will allocate €300 million to developing solar energy over the next five years in order to finance the initial projects.

Government of India has dedicated 5 acre land in NISE campus for the ISA Headquarters and also has contributed Rs 175 crore for ISA corpus fund and also for meeting expenditure for initial five years.

ISA is part of Prime Minister’s vision to bring clean and affordable energy within the reach of all and create a sustainable world. It will be a new beginning for accelerating development and deployment of solar energy for achieving universal energy access and energy security of the present and future generations.

Speaking on the occasion, Modi stated that ISA will be India’s first international and inter-governmental organization headquartered in India.ISA will be dedicated to promotion of solar energy for making solar energy a valuable source of affordable and reliable green and clean energy in 121 member countries. He thanked the President of France for his continued help and support in shaping ISA.

Appreciating India, President of France, Francois Hollande said that at Paris Conference, India showed that it was ready to fully commit to energy transition and the fight against climate change. Thanks to India’s commitment, we were able to secure an ambitious, fair and dynamic agreement in Paris, which is binding for all of humanity, Hollande added.

He also said that India’s role will be just as essential in implementing the Paris Agreement and the commitments which have been made. He reaffirmed his commitment by saying that France want to build the post-Paris Agreement world with India and ISA paves the way for this. He stressed on the fact that contributing to the success of the Alliance also means launching French-Indian projects.

Pre Session- Gap up opening on the cards for Sensex despite China rout



The key domestic equity benchmarks are poised to extend a two-day rally on Wednesday as traders look past an ongoing China stock slump while eying key corporate earnings and the US Federal Reserve’s verdict with the world’s top central bank likely to hold off further interest rate tightening, bolstering the lure for risky assets. A bullish trend across most Asian equities and a strong finish at Wall Street overnight, coupled with gains in the CNX Nifty Index futures for January delivery which advanced by 0.56 per cent or 41.5 points at 7,437 at 10:26 am Singapore time signals a positive opening for Dalal Street today. Traders will focus on the December quarter earnings of HDFC, IDFC Bank, Havells and Godrej Consumer Products set to be unveiled on Wednesday. However, volatility may remain high at the domestic bourses as traders roll over their positions ahead of the January futures and options (F&O) contracts expiry on Thursday. Globally, all eyes will be fixated on the Fed which concludes a two-day meeting later on Wednesday. While the Fed is likely to keep interest rates unchanged after undertaking a maiden interest rate hike since 2006 in December, investors will focus on cues from the central bank over further lift-off in borrowing costs this year amidst heightened global economic uncertainty. Marking a second straight rally, on Monday the 30-share Sensex advanced by 50.29 points or by 0.21 per cent to end at 24,485.95 on strong global cues but gains were limited amidst comments from top rating agency Moody’s which in a poll warned of the risks facing the Indian economy from global headwinds such as higher US interest rates and China slowdown. Markets were closed on Tuesday on account of Republic Day.

Most Asian stocks were trading higher on Wednesday tracking an overnight rally in US markets as investors awaited the outcome of the US Fed meet. China’s Shanghai Composite extended a rout from a 13-month low, tumbling over 2 per cent after data showed that the country’s industrial profits fell 4.7 per cent in December 2015 from the same month a year ago, raising concerns over a slowdown in the world’s second biggest economy. Hang Seng surged over 1 per cent and Japan’s Nikkei 225 rallied over 2 per cent amidst speculation that the Bank of Japan which meets on Friday may take a call to expand stimulus. US stocks advanced on Tuesday as a rally in crude oil, strong corporate earnings and upbeat US economic data overshadowed worries over China. The Dow Jones Industrial Average advanced 1.78 per cent; the Nasdaq Composite rose 1.09 per cent while S&P 500 closed up 1.41 per cent. While a gauge measuring US consumer confidence rose to the highest level in three months at 98.1 in January from 96.3 in December, home prices in 20 cities advanced at the fastest pace since July 2014, up 5.8 per cent, year on year in November 2015, easing worries over a slowdown in the world’s biggest economy, buoying sentiment.

Top traded Volumes on NSE Nifty – Vedanta Ltd. 18539818.00, State Bank of India 17534650.00, ICICI Bank Ltd. 15579335.00, Axis Bank Ltd. 10252421.00 and Cairn India Ltd. 9123526.00.

On BSE, total number of shares traded was 26.04 Crore and total turnover stood at Rs. 2615.35 Crore.

On NSE Future and Options, total number of contracts traded in index futures was 407756 with a total turnover of Rs. 21632.15 Crore. Along with this total number of contracts traded in stock futures were 1202869 with a total turnover of Rs. 54808.10 Crore. Total numbers of contracts for index options were 4997046 with a total turnover of Rs. 274362.59 Crore and total numbers of contracts for stock options were 339671 with a total turnover of Rs. 16252.70 Crore.

The FIIs on 25/01/2016 stood as net seller in equity and debt. Gross equity purchased stood at Rs. 3930.43 Crore and gross debt purchased stood at Rs. 1176.09 Crore, while the gross equity sold stood at Rs. 4663.85 Crore and gross debt sold stood at Rs. 1783.12 Crore. Therefore, the net investment of equity and debt reported were Rs. -733.42 Crore and Rs. -607.03 Crore.

Railways to install digital signboards to display ads



The Indian Railways has said that it will install large digital signboards across 2000 busy stations to display train-related information and commercial advertisements. As per reports, Railways will install about 100,000 networked large screens across 2000 stations connected using multi-path protected optical fibre network, with a screen in front of each train coach, in concourse, circulating area, foot over bridges, waiting rooms, lounges and every other place that makes sense to the rail users. Commenting on the issue, a senior Railway Official told the media, "We are planning carving out a new category of mass addressing by putting up large digital signboards for large viewership at the covered and uncovered platforms, open spaces in the entrance and exit areas and the long foot bridges that span across several platforms for displaying information related to train status round-the-clock using an all-India railway display network (RDN)." “The information needs of the travelling public pertaining to train arrival and departure times, expected delays, cancellations, route diversions and platform numbers of arrivals and departures of different trains will be displayed on these signboards,” he added.

Insurance is a service, not a product, says IRDA chief



Speaking at the FINCON 2016, the 17th annual Insurance Conference organised by Federation of Indian Chambers of Commerce and Industry (FICCI), Mr T S Vijayan, Chairman, lnsurance Regulatory and Development Authority of India (IRDAI), focused on three main aspects of the insurance sector: products, technology and customer grievances. About customer grievances, Mr Vijayan said that he was more interested in how insurance companies were handling claims, and not on the fine print of their policy documents. “This is a service, not a product,” he said, and wanted consumers to be aware of their rights. He was against companies questioning whether a victim should have been ‘present at a particular spot at a particular time’. “That should not be asked by the company, it is the work of the police.” Some companies offer consumers the choice of paying their premium at one time or over a period of five years; if the policy offered is declared as a five year policy and the company collects the premium at one stroke, Mr Vijayan was clear that “the difference should be returned to the customer.” He highlighted the changes sweeping the insurance sector in India. Chief among these were the change in the Insurance Act. These changes made it imperative for the regulator to respond in an appropriate manner. Despite this, the industry is very buoyant. However, he observed, that in 2014-15, real premium growth was 1.4 per cent and this highlights the potential for growth at least to catch up with the global standard. “The secret,” he advised companies, “is not on fighting the old but on building the new. Past experience may not be the right guidelines for the future.” The regulator’s chief concern is the customer and the people working in the sector, he disclosed. The insurance sector employs more than 20 lakh people. The opening up of the sector in 2000 brought with it changes and policies have to respond to these changes. The Government is cognisant of the disruptive changes driven by technology. These should be used for the benefit of customers. Mr Vijayan was all praise for the companies that responded promptly to the demands created by the recent floods in Chennai. “That is your moment of truth,” he felt. “When the need arises, you are able to offer support.”

PowerMin may push Electricity Amendment Bill in Budget Session



The Power Ministry is likely to push in the upcoming Budget session the Electricity Amendment Bill which seeks separation of carriage and content in power distribution, reported PTI. The Bill also seeks to provide multiple supply licences in the markets to enable electricity consumers choose their service providers among many. "The Bill is ready with the ministry and can be sent for Cabinet approval soon. After the Cabinet nod, it can be introduced again in the Lok Sabha," a senior ministry official told PTI. The official said, "All issues related to the Bill have been resolved particularly those raised by the power sector workers. It provides that states will prepare a roadmap for segregation of power distribution network business and the electricity supply business in five years time." "The new proposed Bill, ready for Cabinet approval, does not provide any timeline for segregation of carriage and content in power business. This was explained to power sector employees and they appeared to be convinced on that. Thus it is likely to be tabled again in the Budget Session," he added. The Bill was introduced in the Lok Sabha on December 19, 2014. It was referred to the Parliamentary Standing Committee on Energy. The panel gave its report on May 7, 2015. The panel had asked for more clarity about the level and manner of implementing such segregation. It has also asked for broad and flexible guidelines to give the states due scope for aligning these guidelines as per their conditions. Power sector employees also expressed their concerns about the segregation of the content and carriage business in electricity distribution saying that it could lead to cherry picking by the private sector. The committee has also suggested that granting of licences by central and state regulators should not be left completely to the discretion of these commissions. It had asked to lay down some well defined parameters to reduce the discretionary and arbitrary powers of commissions. These parameters should also divide the consumers for supply on the basis of their status, cross-subsidies paid to them, and nature of technical and commercial losses, it has suggested. The Committee had observed that no details have been provided in the Electricity Amendment Bill 2014 on options available to consumers regarding options available to them, changing their service provider and cost involved in that. The ministry official said that the concerns raised by the committee and other stakeholders have been resolved in the redrafted Bill.

PE deal tally rises 30 pct to $16 bn in 2015: Grant Thornton



Private equity deal tally surged by 30 per cent to USD 16 billion through 1,000 deals in 2015, largely driven by the startup segment, which contributed 60 per cent of the total investment volume, says a report as per the PTI.

In 2014, there were 608 private equity transactions worth USD 12.37 billion.

According to assurance, tax and advisory firm Grant Thornton, 2015 witnessed PE activity at an all-time peak contributing more than 60 per cent of overall deal volume during the year and 34 per cent of overall deal values.

“With inflation in control and GDP growth being revised to now higher than anticipated, all necessary ingredients seem to be in place for growth in deal activity as well. The recent FDI norms and the much-awaited GST will perhaps be a game changer and will accelerate the deal activity from an inbound investment, domestic M&A and PE perspective,” Grant Thornton India partner Prashant Mehra said.

The substantial increase in volume was largely due to an impressive level of interest among private equity and venture capita investors in India’s startups, the report said, adding that a huge chunk of the total volume — over 600 investments — involved startups.

The year also witnessed evolved startups like Flipkart, Snapdeal, Olacabs and Paytm raising funds in excess of USD 500 million at huge valuations.

The year saw various investor classes like angel investors, angel networks, venture capitalists and some of the more established PE funds betting on the startup growth story.

In 2015, IT & ITeS sector witnessed 38 per cent growth year on year, thereby reaching the highest record in this segment.

This sector alone contributed 45 per cent of total investments with USD 7 billion in 2015, thereby driving investment growth this year

Finance ministry seeks banks' view on more capital infusion



Pursuant to public sector banks' revamp plan, Indradhanush, the Finance Ministry has asked NPA-laden state-run lenders to present their business plans to understand their incremental capital requirement following the RBI directives to clean up their books, said the media reports.

Some banks have already made their presentations to the North Block and the remaining are being called in now.

The Indradhanush plan envisages Rs 70,000 crore of capital infusion over the next four years. Of this Rs 25,000 crore each will be infused in FY16 and FY17 and Rs 10,000 crore each in FY18 and FY19, reported PTI.

The government estimates that state-run lenders would require Rs 1.8 lakh crore over the next four years. Banks will have to raise the balance Rs 1.10 trillion from the market.

But the calculation has changed after RBI identified top 150 defaulters and asked banks to make provisions for those accounts and clean their books by March, 2017.

Following this, the banks are demanding higher capital infusion from the government as they are unable to raise funds from the market in prevailing conditions, wherein their stocks are trading on an average almost 60 per cent below their March, 2015 high, and also as higher provisioning norms have left them cash starved.

Under Indradhanush, the government had already infused Rs 20,088 crore into 13 public sector banks last September and the remaining Rs 5,000 crore would be given in the March quarter looking at the performance in the first nine months.

"Due to this additional provisioning our capital adequacy will be impacted and to maintain it we will require capital from the government," a senior public sector banker told PTI.

Higher provisioning norms are going to impact banks profitability over the next few quarters. The banker said capital need for his bank has increased by more than Rs 1,000 crore than estimated during the beginning of the fiscal.

Lenders also said with a substantial amount of their funds going for provisioning for these 150 accounts, they are left with very little growth capital and so need support from the government.

Many banks, who were looking to raise funds through qualified institutional placement, are planning to defer them as market conditions are not very conducive.

"Interest in equity market has dwindled. We are seeing low retail participation and also foreign investors are not very keen. In such a scenario, raising money from market is not a good idea. We need support from the government," another senior public sector banker told