Tag: Goldman Sachs

Goldman Sachs ramps up credit business in India, targets rich diaspora

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

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Goldman Sachs Group Inc. plans to ramp up its credit business in India and sees an increasing opportunity to target the nation’s wealthy diaspora as global investors shift their focus from China to what is now the world’s fastest-growing major economy.

The investment bank wants to broaden the range of loans it offers through its shadow banking unit, according to Sonjoy Chatterjee, chairman and chief executive officer for Goldman in India. The firm also plans to get a license to scale up in currency trading, which would allow Goldman to deal with any counterparty such as financial investors, equity customers or a corporate customer, he said in an interview.

Goldman joins Wall Street lenders and private equity giants chasing opportunities in an economy that is forecast to grow 7% in the year ending March. India is already home to the New York-based firm’s biggest overseas office, which houses thousands of workers from quants to software engineers. Goldman tops the league table for India deals this year, according to data compiled by Bloomberg.

“Indian markets have benefited from the emerging market equity flows that have shifted from China, though obviously the China story is not going to go away,” Chatterjee said.

Credit Push

The credit expansion through the firm’s non-banking financial company comes on top of a private credit fund that Goldman already runs on its own balance sheet in the South Asian country, he said. Most NBFCs, often referred to as shadow banks in India, can make loans but not accept deposits.

“This will be more of what we might want to originate and syndicate, keeping only a residual portion,” he said.

In wealth management, many Indian entrepreneurs have moved abroad during the pandemic, which has created a “more prominent” opportunity to serve such clients from offices in Singapore, London and Dubai, he said.

Private Equity

Chatterjee, who joined Goldman Sachs as a partner in 2010 after spending 16 years at India’s ICICI Bank, said private equity firms are looking to deploy a substantial proportion of the capital they’ve raised for Asia funds in India. That in turn is likely to fuel dealmaking in the country in future.

“Private capital continues to remain very hungry to invest,” he said. “When you have a large Asia fund of $8-10 billion, India is the most obvious destination.”

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

PharmEasy rights issue oversubscribed, raises close to ₹4,000 crore

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

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PharmEasy rights issue has been oversubscribed with the health tech major raising a little north of ₹3,950 crore from the issue. The issue saw Ranjan Pai committing the largest amount at ₹1,300 crore with the remaining ₹2,650 crore odd raised from existing investors who had the first right to infuse capital and employees.

The company has received around ₹2,000 crore from the rights issue while the remaining funds such as the commitment from Pai who has made the investment in his personal capacity is awaiting CCI approval.

Siddharth Shah of PharmEasy said this fund raising exercise is likely to be largest down round in the Indian start up world with a testament to the company’s standing.

While final allocation and shareholding pattern will be clear only once the funds come in Pai is expected to hold around 15% stake in health tech start up.

While Shah remains tight-lipped on the valuations, Pai’s investment of ₹1,300 crore for 15% values the company at $1 billion, a far shot from the $5.6 billion peak valuations the company enjoyed but an improvement from the lows of $650-700 million it had touched.

The funds from the rights issue will be used to pare down existing debt and the remaining funds for organic growth. Currently, Pharmeasy has roughly $285 to $300 million of debt from Goldman Sachs which was procured via NCDs. The debt from Goldman Sachs was taken on in June 2021 to fund the Thyrocare acquisition but the covenants of equity raising were not met.

The first bond from the Goldman Sachs loan is due immediately with the next bond due in the next 12 months. The repayment of debt will eventually reduce the promoter pledge which stands at 100% in Thyrocare.

Meanwhile, when it comes to IPO plans, Shah says listing is still on the cards but the timeline is not decided. The company which has around 20,000 shareholders he points out already works as a listed company with the high governance and regulatory protocols followed.

Listing he says will depend on performance. The Indian market he points out is now looking for profit along with growth. PharmEasy he points out is on its way to profitability having generated an EBITDA of ₹60 crore in Q1FY24 with the trend sustaining.

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

Goldman Sachs raises target price on KPIT Technologies, sees up to 14% upside

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

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Global financial services firm Goldman Sachs has turned bullish on KPIT Technologies, seeing a healthy double-digit upside potential in the stock.

Goldman Sachs has increased its 12-month target price on KPIT Technologies stock from ₹1,500 per share earlier to ₹1,710 per piece, indicating a 14.2% upside from the closing price on Thursday.

The brokerage stated that KPIT Tech’s balance sheets are getting stronger, with analysts estimating an almost $420 billion in net cash balances during the calendar year 2023 (CY23) at the top 22 original equipment manufacturers (OEMs), compared to $379 billion at companies such as KPIT Technologies in the previous calendar year 2022 (CY22).

Large automakers remain committed to electrification or autonomous vehicle efforts, and expect improved EV margin and lower losses from autonomous vehicles in 2024, Goldman Sachs stated.

In October, Goldman Sachs maintained its ‘buy’ rating on the KPIT Tech stock and raised the target price to ₹1,420 per share.

Last week, another brokerage firm Kotak Institutional Equities turned bearish on KPIT Tech, initiating a ‘Sell’ rating on the stock, with a lower price target. The brokerage set a target price of ₹940 per share on the stock despite the company’s shares giving healthy returns of 23% in a month’s time without any commensurate fundamental catalyst.

Kotak Institutional finds KPIT Technologies’ stock valuations to be high at 59 times the estimated forecast for the financial year 2025 (FY25E), extrapolating the recent robust performance.

For the September quarter, KPIT Technologies witnessed a sharp 68.73% rise in consolidated net profit at ₹140.85 crore compared to ₹83.48 crore in the same period last year.

The stock was trading 0.67% lower at ₹1,489.25 apiece on Friday, December 1.

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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

Goldman Sachs looks to end Apple partnership as credit card business struggles

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

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Goldman Sachs Group Inc., which has been trying to jettison its struggling credit card business, now has a potential way out of its partnership with Apple Inc.

The iPhone maker, which offers a credit card and savings account with Goldman, recently sent a term sheet to the financial giant that would be a first step toward severing the contract, according to a person familiar with the matter. The process could still take multiple years, said the person, who asked not to be identified because the discussions are private. The partnership had been slated to last at least another five years.

Goldman Sachs has been pulling back from a foray into consumer lending after it proved costlier than expected. The New York-based company has said it pushed too quickly into the effort, contributing to missteps. Goldman also is expected to scrap a credit card partnership with General Motors Co.

For Apple, the partnership was part of a broader push into financial offerings. The company is looking to generate more revenue from services as sales of its hardware products slow. Apple got 22% of its sales from that category last year, up from less than 10% a decade ago.

The iPhone maker remains committed to its Apple Card credit card and savings account and doesn’t plan to discontinue the products — whether or not Goldman is involved — the person familiar with the situation said. Apple hasn’t gotten to the point of talking to firms that could replace Goldman, according to the person.

In a statement, Apple said it was “focused on providing an incredible experience for our customers to help them lead healthier financial lives.”

“The award-winning Apple Card has seen a great reception from consumers, and we will continue to innovate and deliver the best tools and services for them,” the Cupertino, California-based company said in the statement.

Goldman Sachs has been exploring options to get out of its credit card tie-ups for much of this year, people with knowledge of the matter have previously said. Apple’s proposal would give the company a way to do that, but it’s not yet a done deal, according to one of the people.

Goldman Sachs declined to comment. The Wall Street Journal previously reported on the proposal Apple sent to Goldman, saying it could take effect within approximately 12 to 15 months.

Goldman Sachs has held talks with American Express Co. to take over the Apple credit card and other services, but that company expressed concerns about loss rates, the Journal said. Synchrony Financial also broached the idea of taking over the credit card program, according to the newspaper.

Despite the struggles, Apple and Goldman Sachs just introduced a long-promised high-yield savings account in April. And the companies touted in August that the program had reached $10 billion in US deposits.

The savings account drew complaints from some users, who weren’t unable to easily withdraw cash. Chief Executive Officer Tim Cook said in a June interview that the problem was caused by a security system designed to prevent fraud.

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

Goldman Sachs’ Sengupta projects 6.5% GDP growth for upcoming year, anticipates current-year inflation at 5.7%

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

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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

India’s long-term appeal remains strong: Goldman Sachs’ Timothy Moe

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

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The Indian market is relatively cheap and the country’s long-term appeal remains strong, according to Timothy Moe, Chief APAC Strategist at Goldman Sachs.

Moe highlighted that despite the market’s upward trajectory, with the Nifty experiencing a 9% increase year-to-date, there has been a narrowing of valuations. The price-to-earnings ratio (P/E) has decreased from 24 times to approximately 20 times, offering a relatively less expensive entry point.

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“We would be reasonably constructive on the investment flow outlook for India,” Moe stated, cautioning, however, that this optimism is set against the backdrop of intense competition from other regions.

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He highlighted specific investment themes, including the ‘Make in India’ initiative, the energy transition theme, and the defence spending theme. According to Moe, these themes offer substantial investment potential.

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On November 21, Mark Matthews of Bank Julius Baer & Co. also pointed out his preference for India over other emerging markets. “We like it, the price-earnings ratio is bang in line with the long-term average at about 19 times forward earnings and high teens, possibly even low 20s earnings growth, depending on what the oil price does. So why not be in India and we are,” he told CNBC-TV18.

For more, 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

Goldman Sachs raises Indian shares to ‘overweight’ on growth, earnings momentum

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

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Goldman Sachs upgraded Indian shares to “overweight” from “marketweight”, citing strong economic growth prospects, steady domestic mutual fund inflows and a potential supply chain shift from China.

Indian markets will continue to gain in 2024, supported by steady earnings growth and macroeconomic stability in what would otherwise be a “tricky” period in the Asia Pacific region, Goldman Sachs analysts led by Timothy Moe wrote in a note.

“We believe India has the best structural growth prospects in the Asia Pacific region and offers mid-teen earnings growth over the next two years,” Moe said in a note.

The Wall Street brokerage expects India’s real economic growth to be 6.5% in 2023 and 6.3% in 2024 – the highest among large economies in the region, but slightly below the Indian central bank’s target of 6.5% for fiscal 2024.

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The benchmark Nifty 50 jumped about 31% between March 2021 and October 2023, a period during which domestic investors remained net buyers each month, helping tide over sustained sales by foreign investors.

While the domestic participation was a healthy sign, said Goldman, it also noted the market’s surge has pushed valuations to an elevated 20 times the next 12 month’s expected earnings.

Still, that valuation had some support after earnings growth of 17% in 2023, the brokerage said.

Goldman also raised Thailand to “overweight”, while lowering Hong Kong-listed China shares to “marketweight”.

Also Read: BSE shares zoom 300% so far this year: Is upside capped for now?

The brokerage said concerns over China’s economy could lead to countries shifting their supply chains, which could benefit India.

The Nifty 50 has gained roughly 7% in 2023 so far, compared to a 3.75% drop in the MSCI Asia ex-Japan index.

Catch latest stock market updates on CNBCTV18.com’s blog

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

Is Amber Enterprises a multibagger in the making?

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

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Amber Enterprises India Ltd, a market leader in the heating, ventilation, and air conditioning (HVAC) industry in India, is drawing positive forecasts from analysts despite the company posting losses. Earlier this week, Amber Enterprises announced that its net loss during the quarter ended September 2023 (Q2 FY24) widened to ₹5.6 crore compared with a loss of ₹2.2 crore in the year-ago period. Despite that, most brokerages have turned bullish on the stock for various reasons.

After the Q2 FY24 results, global brokerage firm Jefferies has given a ‘buy’ call on Amber Enterprises while raising the target price to ₹3,990 per share. This translates into a massive upside potential of over 43% from the stock’s previous close of ₹2,785.75 on Monday on the BSE.

Jefferies said that Amber’s losses expanded in the second quarter of the current financial year due to higher interest and depreciation. The brokerage has cut the company’s FY24/25 earnings per share (EPS) estimates by 5%/2%. Jefferies added that Amber’s capital expenditure should normalise from FY25, supporting the expansion in the RoCE (return on capital employed).

Jefferies also noted that Amber Enterprises sees its sales in the electronics and mobility divisions growing two times over the next two years.

#CNBCTV18Market | Jefferies raises target for Amber Ent to 3,990. Co sees sales in electronics & mobility to grow 2x over next 2 yrs pic.twitter.com/yNN7Y85g9s

— CNBC-TV18 (@CNBCTV18Live) October 25, 2023

Global investment firm Goldman Sachs also gave a ‘buy’ call on Amber Enterprises. However, the stock price forecast was relatively muted at ₹2,990 per share.

Goldman Sachs said that the company is scaling up subsidiaries and components to improve its profitability. It noted that Amber’s strategic shift towards components continued this quarter with improved margins.

Amber Enterprises will be a key beneficiary of the secular growth story of air conditioners in India, Goldman Sachs said in its note.

#CNBCTV18Market | GS expects scaling up subsidiaries and components to improve profitability for Amber Ent pic.twitter.com/cDip46vK0U

— CNBC-TV18 (@CNBCTV18Live) October 25, 2023

Financial services firm CLSA was also bullish on Amber Enterprises. It issued a ‘buy’ rating with a target price of ₹3,650 per share (hinting at a 31% upside from the current levels).

CLSA said Q2 margins were tepid, but the outlook looked strong. The medium-term growth guidance for non-RAC (residential air conditioning) segments remained robust, it added.

#CNBCTV18Market | CLSA maintains Buy call on Amber Ent, believes ability to ramp-up would be key for re-rating pic.twitter.com/AFuA3oV2Fz

— CNBC-TV18 (@CNBCTV18Live) October 25, 2023

Reacting to the positive commentary, the Amber Enterprises India stock gained over 6% on Wednesday to hit an intra-day high of ₹2,962.40 on BSE. The stock was trading around ₹2,000 levels a year ago and has already risen over 42%. With price targets as high as ₹4,000 levels being predicted, it would be interesting to see how the stock price moves from here on.

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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

Goldman Sachs downgrades diagnostics companies on rising competition

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

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Goldman Sachs on Wednesday downgraded Indian diagnostic companies on account of rising competition and stretched valuations. The global investment bank took a ‘negative’ stance on the sector and said it was turning bearish on B2C (business-to-consumer) incumbents in the space.

The investment bank downgraded the country’s two leading diagnostic firms—Dr Lal PathLabs Ltd and Metropolis Healthcare Ltd—and revised its ratings on the stocks to ‘sell’.

Goldman Sachs said that there is a rise in credible competition in the industry, but the market is underestimating the competitive dynamics.

On Dr Lal PathLabs, the investment banking firm said that the company was witnessing a structural decline in volume growth. The ramp-up at the sub-urban level is slow, it noted.

Goldman Sachs added that the valuation of Dr Lal PathLabs is stretched at 54 times the FY25 estimated price-earnings ratio.

It gave a price target of ₹2,100 on Dr Lal PathLabs shares, indicating a downside of more than 16 percent from the stock’s previous close of ₹2,503.55 on BSE on Wednesday.

Consequently, the Dr Lal PathLabs stock fell as much as 4.5 percent on BSE on Thursday to hit an intra-day low of ₹2,391.95 per share.

Goldman Sachs also downgraded Metropolis Healthcare to ‘sell’ with a target price of ₹1,285 per share. This was also 16 percent lower than the stock’s previous close of ₹1,528.30 apiece on BSE on Wednesday.

The global financial services firm noted that rising competition in the Western region poses a threat to the company’s volume growth. Valuations are high, too, relative to fundamentals at 43 times the estimated FY25 price-earnings ratio.

After the downgrade, Metropolis Healthcare shares lost as much as 4 percent on Thursday to hit an intra-day low of ₹1,467.65 on BSE on Thursday.

In a post-earnings chat with CNBC-TV18, Ameera Shah, Promoter and MD of Metropolis Healthcare said, “Metropolis has established its success on the foundation of top doctors, reputable hospitals, and sound scientific practices, not merely on offering the lowest prices,” adding, focussing only on prices can make competition burdensome.

Despite the focus on other aspects, Metropolis maintains strong growth rates, she noted. “We are expecting a very robust growth this year and going forward as well.”

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

Goldman Sachs CEO David Solomon quits secondary career DJing over ‘media distraction’

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

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Goldman Sachs CEO David Solomon has decided to step away from his secondary career as a DJ at high-profile events. This decision comes after increasing criticism that his hobby was diverting his attention from his primary role at the Wall Street firm.

According to the report by the Financial Times, Solomon’s DJing pursuits had caused discomfort among some Goldman board members, particularly highlighting his appearance at the 2019 Tomorrowland electronic dance music festival in Belgium and an event in the Hamptons in 2020, which was criticized for violating social distancing rules during the COVID-19 pandemic.

“David hasn’t publicly DJed an event in well over a year, which we have confirmed multiple times in the past. Music was not a distraction from David’s work. The media attention became a distraction,” Goldman Sachs spokesperson Tony Fratto was quoted as saying by The Guardian.

Solomon’s last significant DJ performance was in July 2022 at Lollapalooza.

Solomon, who had performed under the stage name DJ-D Sol, had set on his disk jockeying journey more than a decade ago while working on a financing deal for a Las Vegas casino. He had consistently mentioned that the proceeds from his performances were directed towards charities combating addiction.

One of his major achievements, according to the Guardian, was a remix of Whitney Houston’s classic song ‘I Wanna Dance With Somebody (Who Loves Me)’. The project was overseen by Larry Mestel’s firm, Primary Wave Music, which manages the rights to works by many artists, including Houston. Interestingly, Primary Wave Music is also a client of Goldman Sachs.

Apart from his musical ventures, Solomon has been under scrutiny for his leadership of Goldman Sachs, especially in the wake of challenging times for the firm.

Goldman Sachs recorded its lowest quarterly profit in three years during the second quarter, marked by a decline in earnings, high-profile departures, and scepticism from news outlets questioning Solomon’s management of the bank.

Since becoming CEO in 2018, Solomon has attempted to diversify Goldman’s business away from traditional investment banking and trading, focusing on areas such as asset and wealth management. However, the past year has posed significant challenges, leading to a re-evaluation of his extracurricular activities.

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