Housing prices may rise 10-15% if rates of construction raw material not controlled: CREDAI

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

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Realtors’ apex body CREDAI on Tuesday expressed concern over an increase in the rates of cement and steel during the past one year and said housing prices could rise 10-15 percent if the prices of construction raw materials do not fall. The industry body demanded that the government should take measures to control the prices and suggested reduction in GST for construction raw materials.

The Confederation of Real Estate Developers’ Association of India (CREDAI), which has over 13,000 member developers, pointed out that the prices of construction raw materials have been increasing consistently since January 2020. Moreover, the association said the delays in construction caused by lockdowns, curfews and the shortage of labour resulted in a direct increase in construction cost anywhere between 10 percent and 15 percent in the past 18 months.

“If the prices of a higher raw materials do not start decreasing in the immediate future, there is a high probability that the prices of residential properties will go up by 10-15 percent to offset the increased cost of construction,” CREDAI said in a statement.

Harsh Vardhan Patodia, president, CREDAI National, said, “We have been consistently witnessing sharp increase in the raw material prices over the last one year and they don’t seem to be decreasing or stabilising in the near future.” He said the developers might not be able to absorb escalating costs and will pass on the burden onto homebuyers.

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Patodia urged the government and relevant ministries to address this issue and tackle the prices rise at the earliest. CREDAI suggested that the government can permit escalation of prices by allowing a clause in the buyer-seller agreement.

“The government may also consider either allowing input tax credit for real estate projects and/or rationalisation of GST on various construction raw materials from their current rates,” it said. If these steps are not taken immediately, property prices across all segments will shoot up, directly hampering the affordable housing and housing for all missions of the government, CREDAI said.

Anarock Chairman Anuj Puri said, “We have to give credit where it is due despite the massive increases in input costs for developers since the pandemic took hold, they held on to the low property prices as long as possible in order to foster and nurture demand.” However, he said it was evident that sooner or later developers will have to hike their prices. “The hikes in the cost of construction materials are too severe to absorb any further without impacting buyers. Inflation has impacted our lives at every level, and real estate construction is certainly no exception,” Puri said.

Gurugram-based SilverGlades Group CEO Anubhav Jain said, “Raw material costs like cement and steel have gone up significantly in the past few months. Given that most developers are operating on very thin margins in the current market condition, there is a huge pressure on pricing. We are evaluating our input cost, if need be we will also have to increase the price.”

Trehan Developers Managing Director Saransh Trehan said the construction cost has already gone up by 10-20 percent compared to last year because of the increase in the cost of raw material as well as labour charges. “Developers are left with no elbow room to absorb this increase in raw material cost, unwillingly developers will have to offset the increase in cost by increasing the price to some extent,” he added.

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Why Credit Suisse is positive on housing finance companies, upbeat on HDFC

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

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Credit Suisse is positive on housing finance companies, and expects them to benefit from a multi-year housing cycle. The brokerage house sees mortgage loans doubling to $600 billion in the next five years, and expects mid-teen housing loan growth led by mortgages.

However, India’s mortgage penetration will remain low at 13 percent versus 18-70 percent globally, according to Credit Suisse, which is upbeat on mortgage lender Housing Development Finance Corporation (HDFC) with a target price of Rs 3,350. It has a target price of Rs 830 for Home First.

Credit Suisse is ‘neutral’ on PNB Housing with a target of Rs 485, and had an ‘underperform’ rating on LIC Housing Finance with a target price of Rs 390.

Watch the accompanying video of CNBC-TV18’s Nimesh Shah for more details.

To watch other videos in this series, click on the Standout Brokerage Report tab below.

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

Home rentals in cities on path to recovery, says report

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

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The rental housing sector is on the path to recovery as employees are returning to metro cities for work. While the sector was deeply impacted by the COVID-19 pandemic, the demand for rental properties is rising again, a media report said.

Bengaluru, Chennai, Delhi-NCR and Mumbai were the most affected as demand for rental homes dipped by 10-20 percent as a result of the pandemic. With lockdown restrictions limiting mobility and many companies shifting to a work-from-home model, many employees went back to their hometowns. Increased vacancies in rented apartments and paying-guest accommodations led to low rental rates. But as companies are calling employees back by January, workers are making their way back and filling up the vacant lots, Economic Times reported.

“The demand is primarily driven by working professionals moving back to cities with life returning to normal and office spaces opening up gradually. We are expecting significant demand to come back in the next few months,” Deepak Anand, chief executive of Housr, a co-living firm, told ET

Against the backdrop of a rapidly progressing immunisation program and a low number of COVID-19 cases, around 60 percent of companies plan to call at least some of their workers back to offices. The shift back to a fully work-from-office model will be scaled up further in June. As such, the rental market is expected to start making a healthy recovery by the first half of 2022, barring the resurgence of any new COVID-19 waves.

“Enquiry levels have started to move up as companies are asking their employees to return to work. Unlike before, both landlords and tenants are now showing preparedness to negotiate rentals and tenures. The market is seeing some stability returning for now,” said Dinesh Rathod, a broker operating in Pune.

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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

India received record FDI in last 7 yrs; hope to see the trend continue: Piyush Goyal

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

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India attracted “record” foreign direct investments in the last seven years and the trend is expected to continue in the coming years as well on account of major structural reforms being undertaken by the government, Commerce and Industry Minister Piyush Goyal said on Tuesday. He also said that India is focusing on integrating its quality standards with the world and the country needs to let go of the mindset of a particular product being for the domestic market and others for the export market.

“Last seven years, we have seen record FDIs (Foreign Direct Investments). I hope to see that continue, looking at major structural reforms being undertaken. This pickup in economic activity is here to stay and the future looks to be extremely bright,” he said at industry body CII’s National Conference on MNCs 2021. FDI inflows into the country rose 62 percent to USD 27 billion during the April-July period of the current fiscal.

On Free Trade Agreements (FTAs), the minister said India is negotiating such pacts with countries, including UAE, Australia, UK, European Union (EU), Israel, and GCC ( Gulf Cooperation Council)) group. “We will have an FTA with UAE in next 60-100 days, an interim agreement with Australia probably around the same time. With the EU, work should start soon (as) they have recently appointed a lead negotiator and we are working to start with Canada,” he said.

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Goyal appealed to MNCs (Multi-National Corporations) to use India as a manufacturing base as they can capture the whole world from India. “Hope you continue to grow, acquire new businesses, recruit in India and bring international talent here,” he said, adding that on the single window clearance platform, more states will come on board.

Under an FTA, two trading partners reduce or eliminate customs duties on the maximum number of goods traded between them. Besides, they liberalise norms to enhance trade in services and boost investments.

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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

SJS Enterprises shares gain 5% after a meek listing on Monday

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

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Shrugging off the weakness witnessed on the listing day, shares of SJS Enterprises rose as much as 5 percent on Tuesday. Though after paring most gains, the stock was trading 1.2 percent higher at Rs 516.15 per share on the BSE at 1:57 PM.

On Monday, shares of the decorative aesthetics products maker had listed at Rs 540 on the BSE, a 0.4 percent discount to the issue price of Rs 542. On the NSE, the scrip was listed at Rs 542, equivalent to the issue price.

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The stock had fallen over 4 percent on the BSE after the market debut.

Market participants believe the buying enthusiasm in newly listed stocks including SJS Enterprises is in hopes of clocking decent returns in the weeks coming ahead.

“With the bumper listing and post-listing gains in Paras Defence, investors are hoping the IPO frenzy would help them get decent returns. This has strengthened the risk-appetite for newly listed stocks, such as SJS Enterprises even as it made a tepid debut,” said Purvesh Shelatkar, head of institutional broking at Monarch Networth Capital.

On the BSE, Paras Defence was listed at a share price of Rs 475, over a 171 percent premium to the higher end of its issue price range. At 1:52 PM, the stock was trading at Rs 780.55.

Also Read | Asian Paints confirms 4-6% price hike from Dec; stock up over 1%

An institutional equity sales trader also echoed a similar view and added, that the retail investors are gung-ho on IPOs and the newly listed stocks in hopes of making a quick buck.

At 1:56 PM, shares of Sigachi Industries were up 5 percent while those of PB Fintech soared 18 percent on the BSE.

Catch LIVE stock market updates here.

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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

PTC India Fin says Rs 280 cr assets near resolution; focusing on diversifying source of renewable

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

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PTC India on Thursday posted a marginal rise of nearly 1 percent in consolidated net profit at Rs 195.48 crore for the quarter-ended September of the current financial year. In the year-ago period, the company clocked a profit of Rs 193.64 crore, according to a BSE filing.

Total income stood at Rs 5,474.34 crore in the quarter under review as compared to Rs 6,011.39 crore in the same period last year. The company’s board in its meeting held on Thursday declared an interim dividend of Rs 2 per equity share having face value of Rs 10 each for the financial year 2021-22.

On NPAs, Pawan Singh, MD & CEO of PTC India Fin Svcs, said, “Net NPA figure, it has come down from over Rs 500 crore at the beginning of the year to Rs 281 crore. All these 280 crore is at a very advanced stage of resolution and one account where we had 90 crore we had made provision that also the recovery is on the anvil. We are looking for regulatory consent and that also should happen very shortly.”

He added, “Since we are at a very very advanced stage and the value which will recover will be higher than whatever is the net NPA amount so, we are expecting a write back on this account. So, as far as we are concerned, we are out of the stress cycle which you know was largely because of the thermal assets, which were legacy assets, which were lying in our book for quite some time.”

On future growth drivers, Singh said, “We are trying to become a company which is 360 degree renewable in the sense that it is into the sustainable area not confined to renewable of the sustainable part. So, we have started doing sanitation, water treatment, waste management, and recently the first you know, immobility large scale which was launched in the country by the Prime Minister (Narendra Modi) in Lucknow 700 buses that also be financed, e-charging stations and of course, Make in India manufacturing on the renewable side.”

“So, it is not renewable, certainly not the wind and solar conventional renewable, but we have moved to other areas of sustainability finance, which is opening up and these are niche areas and apart from the International Finance organisation we are the one of the few first infrastructure finance companies who have taken exposure in this area.”

He added, “The other areas like – we entered about two years back or three years back that was road sector and we have taken some exposure in the port also. Transmission line of course, this is one of the areas which we have traditionally also financed. So this would constitute another area. So that is how we are, you know diversifying our source of renewable and then in sustainability that is our focus.”

For full management commentary, watch the video.

-With PTI inputs

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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

Kotak Mahindra Bank, PVR Cinemas launch co-branded movie debit card; offer vouchers, reward points: Here’s how to apply

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

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Kotak Mahindra Bank and multiplex chain operator PVR on Tuesday launched a co-branded debit card, claiming to be the first ones to offer such a product in the movie and entertainment genre. The partners are seeking to leverage on the rise in usage of debit cards in the aftermath of COVID-19 pandemic and the reopening of cinemas across India.

On taking Kotak PVR debit cards, users will get joining vouchers and earn points on every transaction on the debit card (at PVR and outside PVR as well), with no upper limit on the points earned. Points can be redeemed all year round on PVR movie tickets and/or on food and beverages at PVR, Kotak Mahindra Bank said in a statement.

Further, Kotak PVR debit cardholders will get automatically enrolled to the PVR Privilege Plus programme, PVR’s loyalty programme, with enhanced benefits – over and above the PVR Privilege programme.

Here are other offerings of the card (Compiled by Kotak Mahindra Bank):

• Customers will earn reward points on all spends. Customers will earn 10 reward points for every Rs 100 spent at PVR Cinemas and 0.50 Reward Points for every Rs 100 spent on all other transactions. One reward point is equivalent to one rupee. Customers can earn unlimited reward points for all the spends done on this card.
• These reward points will get converted to PVR vouchers upon reaching a threshold of 100 reward points and the vouchers can be redeemed to watch movies and/or to buy food and beverages at any PVR cinema across India.
• Multiple vouchers can be clubbed to make a single payment at PVR Cinemas. There is no cap/ upper limit on the points that can be earned.
• Customers will receive a Rs 500 welcome voucher from PVR when they enroll for the Kotak PVR Debit Card, and thereafter every year cardholders will get a Rs 200 voucher from PVR, which is valid on food and beverages at PVR cinemas.
• There will be automatic enrollment to the PVR Privilege Plus Programme.
• Existing PVR Privilege customers already earning PVR reward points (Five reward points per Rs 100 spent at PVR) will be upgraded to the PVR Privilege Plus programme and will earn double the reward points (10 reward points per Rs 100 spent at PVR) with the Kotak PVR Debit Card. All their existing points and vouchers will get migrated to the new programme.
• Apart from the above benefits, currently there are offers and discounts at over 100 brands for Kotak PVR Debit cardholders as well as cashback/discounts on Amazon.in, Flipkart, GoIbibo and other leading brands under the KayMall tab on Kotak’s mobile banking app.
• First year joining fee and annual maintenance fee thereafter for the Kotak PVR Movie Debit Card is Rs 499 plus taxes.

How to apply for the Kotak PVR debit card?

Existing eligible KMBL customers can apply online for the Kotak PVR Debit Card through the Kotak Mobile Banking app, Net Banking, the Kotak.com website or by visiting any Kotak branch across India, the bank said.

Non-KMBL customers can open a Kotak Savings Account and then apply for a Kotak PVR debit card directly, it added.

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

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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

Mensa Brands turns unicorn in just 6 months; gets Alpha Wave, Prosus backing in Series B funding round

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

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In what is so far the fastest unicorn story in the country, Mensa Brands, a house of brands that acquires and invests in online-first brands on the lines of the popular American startup Thrasio, on Tuesday announced its Series B fundraise of$135 million. With this funding, the company has turned into a unicorn in just six months since starting operations.

The round was led by Alpha Wave Ventures of Falcon Edge Capital with participation from all existing investors – Accel Partners, Norwest Venture Partners and Tiger Global Management. Prosus Ventures (Naspers) also invested in Mensa in the latest funding round. Mensa has raised a total of more than $300 million in equity and debt since starting its journey in May this year.

“We will continue to raise more capital. But, we are profitable in the first six months and also paid advance tax in the first quarter of operations, ” Ananth Narayanan, founder and CEO, Mensa Brands, told CNBC-TV18.

Narayanan was previously CEO of Myntra and co-founder and CEO at Medlife.

Mensa Brands has partnered with 12 brands and it says that a majority of them are growing 100 percent year-on-year (YoY) since their integration with Mensa.

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Narayanan said, “Mensa is trying to build a global, tech-led house of brands.” He added that some brands like Karagiri have started global operations and another brand Folkculture does 60 percent of sales in the US through amazon.com.

The roll-up model, also popularly referred to as the Thrasio model, has seen frenetic activity in India in recent months.

Thrasio is an acquirer of Amazon third-party private-label businesses. The company finds “top-reviewed, bestselling” products on Amazon and buys brands from small business owners.

It has so far acquired and scaled over 100 businesses.

Over the recent months, at least half a dozen such startups have emerged. These include Global Bees, Mensa Brands, 10Club, G.O.A.T Brand Labs, Powerhouse91, and Upscalio.

​Navroz Udwadia, co-founder and partner of Alpha Wave Ventures | Falcon Edge Capital said, “We are excited to continue backing Ananth Narayanan as he executes a best-in-class playbook of brand aggregation and acceleration focused on Indian and global e-commerce brands.”

He said, Mensa demonstrates a tangible uplift through a combination of product and pricing optimisation, technology-led process improvement, distribution and marketing augmentation and fine-tuning the supply chain.

According to him, these levers meaningfully accelerate the growth and margin trajectory of the brands and make them well-poised to become category leaders. “We believe Mensa is well on track to cement its reputation as the partner of choice for well-performing e-commerce brands,” Udwadia said.

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

Strict NPA rules for NBFCs: Experts analyse impact on industry

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

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The Reserve Bank of India (RBI) has tightened asset classification norms for non-banking financial companies (NBCFs), which brings them on par with banks. 

Two rules will change for NBFCs. One, the nonperforming asset (NPA) classification should be as of end-of-day and not the month. And second, if an account has to be upgraded from NPA to standard, all the arrears should be paid and not just a part of it.

The aim of the RBI circular is harmonisation, that is, the same set of rules should apply to both banks and NBFCs. 

To understand how the new rules will impact NBFCs, CNBC-TV18 caught up with YS Chakravarti, MD and CEO, Shriram City Union Finance, Deepak Shenoy, founder, Capitalmind and Vikas Khemani, founder, Carnelian Capital Advisors.

When asked if this would mean a one-time rise in GNPAs for some NBFCs, Chakravarti said, as far as Shriram City Union Finance is concerned, the firm has always followed the ‘once an NPA always an NPA rule’, so up-gradation is not an issue because it actually follows the same rule that RBI has specified.

“Probably on the daily admission of the NPA problem, we may have an impact, but it will be marginal. We are still working on it but it would be about Rs 60 to 70 crores of impact. On the provisioning and on P&L, there would be no impact,” he said.

When asked if his company would follow the exact due date or the month that is taken into consideration, Chakravarti said it is as per month and the impact would be between Rs 60 to 70 crore as on the GNPAs. They have more than adequate provisioning, he added.

Also Read: Explained: RBI rule limiting IPO funding by NBFCs to Rs 1 crore per borrower and the implications

Meanwhile, Shenoy said the industry has complained, in general. “If you are on the other side of the equation, for instance, securitized loans, when banks buy them from NBFCs, they uncover a few practices that are not followed by banks but are followed by NBFCs. Like for instance, the quarter-end rule, which sometimes gives 180 days because the loan comes due in the first week of say April, they get 90 days from the end of June technically but now it has been clarified, it is going to be 90 days from the due date of the loan. So this will change,” he explained.

He also pointed to several other practices like cheque bouncing when it is presented when the person does not have a balance towards the end of the quarter. It bounces but the bounce impact only happens at the beginning of the next quarter. So technically, it is not an NPA. This is a bad practice, but it has been found and identified in certain audit cases as well, Shenoy said.

According to Shenoy, the new rules are a good step to reduce misreporting of NPAs but it will have an impact, which the companies will exactly find out next year because it is only applicable from March 2022.

Khemani termed it a good measure by RBI but not something game-changing. It can have only a one-time impact, he said, adding that it has been done at a time of economic recovery and NBFCs have been given a time frame to come around until March 22. “I don’t think it will really have a major impact on the industry,” he said. 

For the full discussion, watch the accompanying video

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

Modi govt will reopen Kartarpur Sahib Corridor from November 17, says Amit Shah

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

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The Narendra Modi government has decided to re-open Kartarpur Sahib Corridor from November 17, said Union Home Minister Amit Shah.

“In a major decision that will benefit large numbers of Sikh pilgrims, the government has decided to re-open Kartarpur Sahib Corridor from tomorrow, November 17. This decision reflects the immense reverence of the Modi government towards Shri Guru Nanak Dev Ji and our Sikh community,” tweeted Shah.

The Kartarpur corridor links Gurdwara Darbar Sahib in Pakistan, the final resting place of Sikhism founder Guru Nanak Dev, to Dera Baba Nanak shrine in Punjab’s Gurdaspur district.

Shah said the nation is all set to celebrate the Prakash Utsav of Shri Guru Nanak Dev ji on November 19 and he was confident that this move will further “boost the joy and happiness across the country”.

The copy will be updated soon.

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