New Maharashtra EV policy will expedite transition, say experts

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Maharashtra government has issued a new electric vehicle (EV) policy. This policy aims to make 10 percent of new vehicle registrations under electric and have 25 percent electrification of public transport and last-mile delivery by 2025.

Sunil Bohra, ED & Group CFO, Minda Industries, and Sanjay Thakker, Founder & Chairman, Group Landmark, discussed the policy with CNBC-TV18.

Bohra said, “The policy is actually towards the right step, which the central government has been talking about as well, moving towards more battery electric vehicles (BEVs) rather than internal combustion engine (ICE), so it is definitely a step forward. It also spells out about mandatory parking. You need to have mandatory parking in the new construction for 20 percent for residential businesses, complexes, 25 percent for commercial, and 100 percent for government enterprises. There are various steps which the government is taking, definitely, this will sort of expedite the transition to EVs.”

“The biggest factor also at play is the cost of the vehicle, how it sort of pans down, because still even with a subsidy, there is a gap between IC engine and EV. Overall, definitely, it is a positive step and it will bring a lot of confidence among the common man in terms of the infrastructure for charging, availability, reducing the cost, even the running cost definitely is going to be very negligible so overall, we do hope that this provides support to transition in a faster way.”

Thakker said, “For passenger cars, it is a slow start and I think less than 1 percent of the vehicles sold today are electric vehicles. Everybody believes that is something which will increase over a period of time but it is a slow start and it depends largely on the charging infrastructure, the government subsidies, and resale value of the cars. Fear that many people have in their minds is that what would be the resale value of the electric vehicle if they were to buy it.”

He added, “The banks may also be a little bit cagey to fund these vehicles at this point where the technology is kind of getting better by the day and the resale value is a little bit uncertain.”

On the demand situation, Thakker said, “It is again a second time of V shape recovery that we are seeing. I am happy to state that the demand is back with a bang and we have a waiting period for most of the vehicles that we sell. This month of July is looking maybe around 30 percent better than the last week of June. Contracts are pouring in and we actually are seeing excellent rebound which I did not expect.”

On EV order book, Bohra said, “From both the components, be it the traditional components or EV specific components, we have actually secured business for both the sets from the existing players and also we have got some business from the new players because a lot of imports are also happening and they are also working to sort of localise to benefit from FAME 2 policy, etc.”

For full management commentary, watch the video.

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Steel Strips Wheels rallies 18% on new orders, reduction in pledged shares

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Shares of Steel Strips Wheels (SSWL) hit a 52-week high of Rs 1,350 as they surged 18 percent on the BSE on Wednesday after the company said it received new orders for over $15 million (Rs 113 crore) from Western Hemisphere.

The stock has risen 25 percent in the last two sessions.

“SSWL confirms export orders valued over $15 million from Western Hemisphere. SSWL will complete its execution by August 21 from its Chennai and Dapper plants. Orders for a similar capacity are anticipated in coming months from a similar customer base as the business continues to recover rapidly,” the company said in a BSE filing.

In a separate regulatory filing, the firm also announced that the promoters have released 1.33 lakh pledged shares reducing the number of shares pledged to 32.8 lakh. This is 21 percent of the total paid-up capital of the company and 33.53 percent of total promoter shareholding.

The promoters along with the persons acting in concert hold 98 lakh equity shares in SSWL, which is 62.77 percent of the total paid-up capital of the company and out of which 34.2 lakh equity shares were pledged which was 21.9 percent of the total paid-up capital of the company and 34.89 percent of total promoter shareholding, the firm added.

In the past month, the stock of SSWL has rallied 81 percent, as compared to a marginal 0.26 percent rise in the S&P BSE Sensex.

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ICICI Securities positive on Axis Bank, HDFC Bank, SBI; expects single digit growth for sector

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Loan growth has remained weak for the banking sector in Q1FY22. On a year-on-year (YoY) basis, it was up about 5.8 percent while on a sequential basis, it has declined by 1 percent on a quarter-on-quarter (QoQ) basis in Q1FY22. One can expect the net interest margin (NIM) to improve sequentially due to the fact that interest income derecognition had impacted the NIM in Q4FY21. Large banks like HDFC Bank, ICICI Bank, Axis Bank and State Bank of India (SBI) etc. are expected to continue their outperformance in terms of their results. Kunal Shah, Analyst at ICICI Securities, shared his outlook on the sector, for Q1FY22 earnings, with CNBC-TV18.

“This quarter, in particular, is going to be distinct given that the financers have been riding on the waves of both sudden disruption in April and May, as well as the gradual recovery in June,” he said.

According to him, in terms of loan growth, there has been a sequential dip but on a lower base on a YoY basis, the momentum will sustain.

“Overall, for the banking sector, we are expecting a single-digit operating profit and earnings growth for this quarter,” he added.

“We like Axis Bank, SBI, HDFC Bank with a target price of Rs 944, Rs 544 and Rs 1,818 respectively,” Shah mentioned.

“We are looking at 0.5 percent to 2 percent kind of slippages on a non-annualised basis. HDFC Bank, Kotak Mahindra Bank, Axis Bank and SBI should do relatively better,” he said.

For the full interview, watch the accompanying video.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

All-party meet ahead of Monsoon Session of Parliament on July 18

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Ahead of the Monsoon Session of Parliament, Parliamentary Affairs Minister Pralhad Joshi has called an all-party meeting on July 18. Lok Sabha Speaker Om Birla has called an all-party meeting of floor leaders on July 18.

The Bharatiya Janata Party’s Parliamentary Party Executive meeting is also scheduled to be held on July 18. NDA floor leaders meet is also scheduled for the same day, ANI reported.

The Lok Sabha Speaker had said all COVID-related protocols will be followed during the Parliament session, which is scheduled to begin on July 19. He said that both the Lok Sabha and the Rajya Sabha will sit simultaneously in the upcoming session, which will start at 11 am.

He added that due to the restrictions in view of the pandemic, visitors will not be allowed during the monsoon session of Parliament.

The monsoon session of Parliament is scheduled to begin from July 19 and conclude on August 13. Since the outbreak of the Covid pandemic, three sessions of Parliament were curtailed, while the winter session last year had to be cancelled.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

PepsiCo India reports double-digit volume growth in Q2, gains beverage market share

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Snacks and beverages major PepsiCo has registered a double digit organic revenue growth in India for the March-May quarter. Announcing its second quarter (12 weeks ended June 12, 2021) results globally, PepsiCo’s India business reported a double-digit volume growth as well in its food and beverages business.

PepsiCo India sells popular snacks like Lays, Kurkure, Doritos and beverages such as Pepsi, Slice, Mountain Dew, Tropicana, among others.

For the quarter, PepsiCo’s snack unit grew 116 percent on the back of the acquisition of Pioneer Foods’ and double-digit growth in India and Pakistan, the company said. For the beverages unit too, volume growth came in at 38 percent, “primarily reflecting a 4-percentage-point impact of our Pioneer Foods acquisition and double-digit growth in India,” the company said in its global earnings release.

Overall, PepsiCo’s net revenue grew by 20.5 percent to $19.22 billion in the quarter ended June 12.

“As mobility trends improved, our international beverage business accelerated and delivered 22 per cent organic revenue growth, while our international snack business delivered 11 per cent organic revenue growth,” the company added.

A double-digit volume growth for the Indian market comes at a time when the country witnessed a second COVID wave, its most severe yet registering the highest number of cases and deaths since the beginning of the pandemic. The second wave, which also hit rural markets this time around, further hit consumer sentiment and discretionary spending in a period that is considered peak season for the beverages industry, accounting for two-thirds of annual cola sales.

A CRISIL report in May had suggested that the soft drink business is unlikely to bounce back to pre-pandemic levels in the current fiscal and that full-year revenue may be 10 percent below pre-pandemic levels.

However, the double-digit volume growth for PepsiCo India also comes on the back of a low base where the months of March-May in 2020 saw the country being under a strict nationwide lockdown that hit sales of most consumer products companies badly as supply chains too saw major disruptions.

PepsiCo has also gained market share in beverages in India, along with other markets such as Egypt, Mexico, China, and Russia.

For the March-May quarter, the Africa, Middle East and South Asia (AMESA) region, which also includes India saw a 15 percent growth in revenue and a 34 percent volume growth.

“The recovery from the COVID-19 pandemic contributed to a current-year increase in consumer demand, which had a positive impact on net revenue, unit volume and operating profit performance,” the company said about the performance of the AMESA region.

The company also alluded to rising prices on the back of rising input costs in the US markets.

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Zomato IPO: Issue fully subscribed on Day 1; retail portion booked 2.7x

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The initial public offering (IPO) of online food delivery platform Zomato has been fully subscribed on July 14, the first day of bidding. The offer has received bids for 75.64 crore equity shares against the IPO size of 71.92 crore equity shares.

The issue has received huge interest from retail investors as the portion reserved for them has been subscribed 2.7 times, while non-institutional investors have put in bids for 13 percent against their reserved portion, as per the subscription data available on the exchanges till 5:00 pm.

The portion set aside for employees is subscribed 18 percent, while that of qualified institutional buyers have seen 98 percent subscription.

The IPO size has been reduced to Rs 5,178.49 crore from Rs 9,375 crore earlier as Zomato already raised Rs 4,196.51 crore from 186 anchor investors on July 13, a day before the public opening of the issue.

The price band for the offer, which closes on July 16, is Rs 72-76 per share.

Also Read: Zomato IPO: Here’s how to invest via Upstox, Zerodha, Paytm Money

Analysts believe the company has certain positive factors like asset-light scalable business model, expanded target market post the pandemic, first-mover advantage in the food delivery business, etc.

But its operations in an almost duopoly market may attract regulatory actions, which would be negative for the company.

Read here: Zomato IPO: Investors with high-risk appetite should subscribe for listing gains

“The IPO is expected to generate a lot of interest given the company uniqueness, large opportunity size, and some evidence of scale economies, but the valuations look expensive on conventional parameters at 25x FY21 EV/sales vs 10x for global peers and 12x for Indian QSRs, with the path to profitability also unclear,” said Yes Securities.

The brokerage has recommended subscribing the IPO for listing gains.

“While the current frenzy should deliver some listing gains, we would await more clarity on capital allocation plans, competitive activity, and unit economics over the next few quarters to provide a more nuanced fundamental view of the company,” it added.

Read here: Zomato IPO to open on July 14: Here’s all you need to know about the issue

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Planning to buy unlisted shares? Here’s what you need to know

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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For companies aiming to go public, 2021 may even be better than 2020. Sixteen firms have already filed their draft red herring prospectus (DRHP) detailing the company’s operations, financial position, reasons for seeking money, and how it will use it, less than halfway through 2021.

As various companies are planning their public listings, many investors have started buying unlisted shares of pre-IPO companies. Buying equities in the grey market — the unlisted market for unlisted shares — comes with risks, but it can also be profitable for investors, according to market analysts.

Pre-IPO companies typically have a proven revenue model and are in the process of raising more funding from the market via a public listing. Financial experts say that investing in a company that is about to roll out its IPO (initial public offering) can help an investor participate in the growth of a company, but such investments should only be made by aggressive traders as it includes risk.

Meanwhile, experts say that the prices of stocks in the grey market are often less volatile than in the stock market itself. Besides, buying stocks in the grey market is no more a luxury limited to big companies/investors. These days individual investors also have access to the grey market.

Here is how to buy unlisted shares:

Intermediaries and platforms buy shares of pre-IPO companies from the employees who own shares (ESOP) and the existing investors of the respective company and offer them to new investors. Unlisted shares can be bought in demat account and it is an off-market transaction between the buyer and seller. Hence, it is crucial to buy such stocks from trustworthy intermediaries/platforms.

Unlisted stock investment is a high-risk investment that can yield much larger returns because early investors profit the most before the company is listed on the stock exchange.

As of July 14, a total of 12 companies have already rolled out their IPOs in 2021 and several more are planning for public listing. The most awaited IPOs include — Zomato, Go Airlines, CarTrade, Sona Comstar, Nuvoco Vistas, and Aptus Value Housing, among others.

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Moneycontrol Pro Ideas For Profit: Here’s why Finolex Industries is in focus

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Finolex Industries is one of the largest backward integrated manufacturer of PVC pipes in the country. The topline growth of the business has been quite muted over the past three-four years.

However, in FY21, the company managed to grow its topline by 16 percent year-on-year, primarily on the back of higher realisations across its key business verticals.

Also, the company witnessed very significant jump in cash flow operations and ended the year with cash of more than Rs 800 crore on its balance sheet.

The ongoing challenges on the demand front thrown up by the pandemic are expected to persist, but government policy support such as the push for Make in India, import duty hikes on PVC should augur well for Finolex’s profitability in the coming three-four years.

In the special segment of ‘Moneycontrol Pro Ideas For Profit’, moneycontrol.com’s Sachin Pal gets more details on the company’s performance, going forward.

Watch the video for more.

Disclaimer: The views and investment tips expressed by investment experts on CNBCTV18.com are their own and not that of the website or its management. CNBCTV18.com advises users to check with certified experts before taking any investment decisions.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow