RIL, Bajaj Finance power 777-pt rally in Sensex; Nifty holds 17,200

 An alleviation rally in worldwide business sectors assisted the Indian values with snapping their two-day long string of failures. The S&P BSE Sensex flooded 777 focuses, or 1.37 percent, to end at 57,357 levels on Tuesday while the Nifty50 shut shop at 17,200, up 246 places or 1.45 percent.

Adani Ports, Bajaj Auto, legend MotoCorp, Power Grid, M&M, Titan, Tata Consumer Products, IndusInd Bank, Reliance Industries, and Bajaj Finance flooded between 3.5 percent and 5.8 percent. HDFC Life, Cipla, L&T, Divis Labs, Bharti Airtel, Britannia, HUL, Tata Motors, SBI, and Shree Cement, in the interim, mobilized as much as 2%.

Just ONGC, Apollo Hospitals, Axis Bank, Maruti Suzuki, Hindalco, Wipro, Asian Paints, and TCS finished losing money, down up to 2 percent.

In the more extensive business sectors, the BSE MidCap record added 1.6 percent and the BSE SmallCap added 0.7 percent. Sectorally, all the records finished in the green zone, drove by the Nifty Realty and Auto files, up 3.5 percent and 3 percent, individually....

RBI bars YES Bank from coupon payment on Upper Tier II bonds

The Reserve Bank of India has controlled private area loan specialist YES Bank to pay premium (coupon) on the Tier II bonds as its capital sufficiency proportion was beneath administrative prerequisites.
The private loan specialist had moved toward banking part controller RBI looking for endorsement to pay enthusiasm due as on June 29, 2020 for Upper Tier II Bonds. These Unsecured Non-Convertible Upper Tier II bonds convey coupon of 10.25 percent.
Its general capital sufficiency proportion remained at 8.5 percent at end of March 2020 with Common Equity level I (CET I) of 6.3 percent. Its stock was exchanging 1.8 percent lower on BSE. The capital sufficiency proportion is beneath the administrative necessities.
The bank educated trades that RBI has communicated its failure to agree to bank's solicitation for installment of Interest due, since it doesn't meet the base capital necessities right now. Along these lines, the bank would be not able to pay Interest or coupon on the said Upper Tier II Bonds.
The Interest sum due and staying unpaid will be amassed and be paid later, subject to Bank agreeing to the specified administrative necessity, it included.
Bank has plans for raising value money to improve capital ampleness proportion, bolster development and make cushions for Covid-19. Its investors' have affirmed proposition for a total capital raise of up to Rs 15,000 crore.
This capital raising from business sectors would be additionally helped by wellsprings of natural capital (inside age). It intends to do as such by goals of Stressed resource goals and resource sell-down.

The conceded charge resource of Rs 6,118 crore deducted from total assets for processing CET 1, speaking to about 2.55 percent in CET 1 might accessible to the bank after some time, as indicated by Bank introduction.

Tata Power, BoB among 6 stocks dropped from MSCI India Domestic Index

Abbot India, Ipca Laboratories, Jubilant Foodworks and Tata Consumer are among the six stocks that have been added to the MSCI India Domestic Index (See document), while there have been five deletions, which include Ashok Leyland, Bank of Baroda, Cummins India Kirloskar and M&M Financial Services.
MSCI India Domestic Small Cap Index (see document), on the other hand, has seen 52 deletions which include BSE, Venky’s India, Jammu & Kashmir Bank, Power Finance Corporation and Dish TV India. IndiaMart Intermesh, Mishra Dhatu Nigam, Nippon Life India and Relaxo Footwears are among the 13 added to this index. Though changes in both these indices have been announced, they will take place as of the close of May 29, 2020.
Domestic equities, according to a recent report by Emkay Global, are expected to see inflows to the tune of $250 million (Rs 1,900 crore) on account of this semi-annual rebalancing of the MSCI India Index, which is tracked by funds worth $14 billion (Rs 1 trillon).

It had anticipated Tata Consumer, Torrent Pharma, Jubliant Foodworks, and Biocon as key inclusion candidates, which it said, are expected to see inflows in the range between $50 million (Rs 380 crore) and $85 million (Rs 640 crore).

RBI rate cut, government stimulus done. What are the markets eyeing now?

After the relief package by the government for the poor and the marginalized sections of society and a series of liquidity enhancing measure by the Reserve Bank of India (RBI) announced over the past few weeks, the central bank slashed rates by a 75 basis points (bps) – the most aggressive cut in the last 10 years. That apart, the RBI put a moratorium on all equated monthly installments (EMIs) on loans to ease the borrower’s pain.
On their part, the Indian markets which expected the authorities to roll out measures to stem the fall and stabilise sentiment after the over 35 per cent fall from the peak levels seen earlier this year triggered by the sudden and rampant spread of coronavirus (Covid-19) pandemic across the globe, witnessed profit booking. The S&P BSE Sensex slipped 1,310 points from the day’s high to close marginally negative on Friday post the RBI’s measures.
With these expected stimulus measures out of the way, will the markets continue on their journey south? What are the cues they will keep a tab on?
Over the next few weeks, analysts expect the markets to remain volatile and now track developments related to Covid-19 across the globe and how fast & successfully the governments are able to combat the pandemic. Back home, the 21 day lockdown imposed by the government and the possibility of an extension in the same will sway investor sentiment, they say.
As regards policies, most expect this to be an ongoing process – at least till the time the economy is up and running. They, however, caution that the government could run out of dry powder soon in its fight against Covid-19 given the fiscal situation and the fact that the Indian economy was already slowing down ahead of this pandemic.
“We expect coordinated fiscal and monetary easing to continue. We believe the next tranche of fiscal measures will address cash-flow challenges faced by SMEs and other hard-hit industries. Amid weak growth, we believe the government may temporarily suspend the FRBM legislation and the central government’s fiscal deficit is likely to rise to around 5 per cent of GDP in FY21 versus 3.5 per cent budgeted,” wrote Sonal Varma, managing director and chief India economist at Nomura in a co-authored report with Aurodeep Nandi.
They now expect a further 75 bps cut in repo rate in the second and the third quarter of 2020 (Q2-Q3/2020). On unconventional policies, they see more aggressive open market operations, further liquidity injections via targeted longer-term refinancing operations (TLTROs), including expanding its scope to target banks loans.
Those at BofA Securities, too, share a similar view and expect the RBI to remain aggressive as regards its policies. They expect the central bank to cut rates by 25bp each in June and October and peg the inflation rate at 2.5 per cent in the second half of financial year 2020-21 (H2FY21).

“We now see its 2020 rate cuts totaling 125bp up from 100bp. This, in turn, will take the RBI reverse repo rate to 3.5 per cent, close to 2009's 3.25 per cent low. We have cut down our FY21 growth forecast to 4 per cent,” wrote Indranil Sen Gupta, India economist at BofA Securities, in a co-authored report with Aastha Gudwani.

SBI Cards lists 12% below issue price of Rs 755; recovers later

Current Affairs
Portions of SBI Cards and Payment Services (SBI Cards) recorded at Rs 661, 12.45 percent beneath its issue cost of Rs 755 on the National Stock Exchange (NSE) on Monday. On the BSE, it opened at Rs 658, 13 percent lower against issue cost.
Be that as it may, at 10:09 am, the stock was exchanging at Rs 751, in the wake of hitting a high of Rs 754 on the BSE. A consolidated around 26 million offers have changed hands on the counter on both the trades up until now.
The stock saw a frail introduction because of winning economic situation as the vulnerability with respect with the impact of the coronavirus plague kept on holding financial specialist notion in line. The benchmark files Nifty50 and S&P BSE Sensex have declined 16.6 percent since the SBI Card starting open offer (IPO) opened for membership on March 2, 2020. The records have failed almost 21 percent, since the charge card arm of the State Bank of India (SBI) documented Draft Red Herring Prospectus (DRHP) for its IPO with Sebi on February 26.
Practically all financiers were certain on the underlying open offer (IPO) and some had anticipated up to 60 percent upside from the IPO value scope of Rs 750-755, given its prevailing situation in the Mastercard showcase and solid parentage, SBI Cards is very much set to profit by the rising pattern of advanced installments and internet business.

SBI Card's IPO had figured out how to pull in offers worth Rs 2 trillion, disregarding testing economic situations. The 100-million offer contribution created near 2.7 billion offers (multiple times). The certified institutional purchasers (QIBs) segment of the IPO was bought in multiple times, trailed by high networth individual (HNI) (multiple times) and investors (25.4 occasions). The representative fragment enrolled 4.7 occasions membership, while the retail partition being bought in 2.5 occasions...Read More

Burger King India to file for Rs 1,000-crore IPO this week: Details here

The logo of Burger King is seen outside a shop in Vienna in Vienna, Austria, October 1, 2016. REUTERS/Leonhard Foeger/File Photo

International News
Burger King India, a major player in the domestic quick service restaurant (QSR) space, will file a document for an initial public offer (IPO) this week with the Securities and Exchange Board of India (Sebi), said people with direct knowledge of the development.
The issue will comprise a secondary share sale worth Rs 600 crore by private equity major Everstone Capital and fresh fundraising worth Rs 400 crore, which will be used to fuel the burger chain’s expansion plan.
Assuming the regulatory approval process takes the usual time, Burger King India would list early next year, joining rivals Jubilant FoodWorks (operator of the Domino’s Pizza chain) and Westlife Development (master franchisee of McDonald’s in the western and southern markets) in going public. Typically, Sebi takes between four and six weeks to vet and clear an IPO document.Everstone owns and operates Burger King’s branded restaurants across India and Indonesia, as part of its food and beverage Asia portfolio. Everstone has invested in more than 30 portfolio companies in the consumer and consumer-led sectors across India and Southeast Asia.
Investment bankers said taking Burger King India public was part of Everstone’s strategy to liquidate its investment. In May, Everstone-backed non-banking financial company IndoStar Capital Finance had raised Rs 1,844 crore through an IPO. In 2017, the PE firm's education sector-focused publishing company S. Chand and Co got listed in a Rs 729-crore IPO. An email sent to Everstone seeking comment remained unanswered.

Edelweiss, Kotak Mahindra Capital, JM Financial, and CLSA are the investment bankers managing the Burger King IPO.Market players said Burger King India could command attractive valuations, given the investor preference for consumer-oriented brands. Also, the listed QSR players trade at lofty price-to-earnings multiples. Jubilant Foodworks now trades at 51 times its estimated one-year forward earnings....READ MORE

'Freak trade': Investors push up yields of Indiabulls Housing bonds to 43%

Company News
Investors on Thursday pushed up the yields of a few Indiabulls Housing Finance (IHFL) bonds to as much as 43 per cent, which a senior executive of the company termed as ‘freak trades’.
Late on Thursday evening, the company notified exchanges that it offered to buy back all its bonds maturing in November and December at par. “The company will also evaluate further premature redemption of its non-convertible debentures from time to time,” IHFL said in its filing.
This would take care of Rs 1,000-core of bonds outstanding. According to sources, the company may also consider an additional Rs 2,500 crore of bond buybacks in the days to come.
A five-year maturity, 8.75 per cent coupon bond, issued on September 26, 2016, with an annual interest payment schedule, shot up to 42.81 per cent.
According to the BSE website, the last traded price of the bond was Rs 60.38, for a trade size of Rs 135 crore. There were two other bonds that were traded, albeit for a small value of Rs 10 crore and Rs 65 crore, respectively, in which the yields touched 43.04 per cent and 33.51 per cent, respectively. The coupons of these bonds were at 8.90 per cent (maturing on September 26, 2021) and 8.57 per cent (maturing on March 30, 2022).
Gagan Banga, managing director and vice-chairman of IHFL, said these were ‘freak trades’ done near the end of the market closure.“There are some motivated groups of people dragging down our equity prices. We are taking a number of actions against them,” said Banga.

 Assuring that the sharp rise in bond yields on a thinly traded basis is not a reflection of the company’s fundamentals but a feature of a shallow bond market, Banga said the company has over Rs 18,000 crore of cash that would cover its repayment obligations for the next 12 months at least.

Auto stocks slide on report GST Council unlikely to back tax cut for sector

International News

Shares of automobile companies, including auto ancillary firms, traded lower on Wednesday on report that the goods and services tax (GST) panel is unlikely to approve lowering the tax for the sector this week, as a study has warned of major revenue losses.
According to this Reuters report, a government study, attached to the agenda of a September 20 GST panel meeting, has said the total annual revenue loss could be as much as Rs 50,000 crore ($6.95 billion), if the panel decided to lower tax rates for the auto sector to 18 per cent from 28 per cent.
Another report by The Economic Times said the government body blamed the current liquidity crisis and troubles of non-bank lenders for the woes of the automobile sector.
Meanwhile, state officials in Kerala, Punjab and West Bengal say they are also opposed to any cut in tax rates in the autos sector, or even consumer goods, because of lacklustre tax collections this fiscal year.
Consequently, the Nifty Auto index dipped nearly 1 per cent on Wednesday as compared to a flat benchmark index Nifty50. Among individual stocks, Hero MotoCorp, Escorts Limited, Tata Motors, and Bosch dipped in the range of 1-2 per cent. Maruti Suzuki India slip 2.3 per cent while Ashok Leyland was down as much as 4.2 per cent on the National Stock Exchange (NSE).
The automobile industry has been facing challenges since past three quarters in terms of additional burden of new insurance policy, constraints on loan disbursement from financial institutions and higher axle load norm impacting commercial vehicle (CV) sales, say experts.

 The sector has pushed for a lowering of tax rates at the September 20 GST panel meeting, in a bid to revive vehicle demand.

Cox & Kings shares have declined 26% since credit rating downgrade

Company News
Shares of tour operator Cox & Kings have slipped 26 per cent since Friday, following a credit rating downgrade which highlighted delays in debt reduction and increase in receivables.
The stock declined 9.9 per cent on Wednesday to close at Rs 45 on the BSE after Brickwork Ratings downgraded rating of the company’s Rs 50-crore non-convertible debentures or NCDs, while retaining its commercial paper rating for Rs 2,060 crore.
On June 17, CARE Ratings had downgraded its rating. On a year-to-date basis, the stock is down 73 per cent.
Cox & Kings, which runs tours and hotels business in India and overseas, has been downsizing its operations since the last few years to pare debt.
Last October, the company sold its education tour business in Europe to Midlothian Capital Partners for an enterprise valuation of Rs 4,380 crore and used the proceeds for debt reduction.
Cox & Kings shares decline 26% following credit rating downgrade
However, lower-than-anticipated debt reduction and increase in receivables have worried investors. An industry source said Cox & Kings has been delaying salaries to its employees for the last few months. The firm’s suppliers, too, have become cautious on extending credit to the firm over fears of default.

 “Total debt of Cox & Kings in FY19 stood at Rs 3,238 crore, against Rs 4,014 crore in FY18. Sale of the education business has enabled the company to reduce debt to a certain extent. The firm has envisaged another monetisation of an overseas asset by the end of calendar year 2019 to pare debt. Timely asset sale and consequent reduction in debt will remain a key rating monitorable,” CARE Ratings said in its report, downgrading the company debt.