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QBiz: SBI Cuts Interest Rate; Tata Steel Profit Up 54%

1. Sebi Offers no Opinion on MFs’ Breather Plan for Zee

The Securities and Exchange Board of India (Sebi) has declined to give its opinion on the plan by mutual funds to give Essel Group’s cash-strapped promoters a breather, said people aware of the matter. The capital market regulator has put the onus on funds holding Essel Group debt securities to do what is best for unit holders.

They had sought Sebi’s informal nod for a plan that would give the Subhash Chandra-led group time to sell assets and repay debt instead of offloading pledged shares as there has been a drop in the security cover. The funds will now amend the debenture trust deeds to allow this.

“Sebi told us that it will neither acknowledge nor approve of what we are doing,” said an executive who was part of the discussions. “The regulator’s view is that it is a commercial transaction which is being done on our assessment of the current situation.” Sebi didn’t respond to ET’s queries.

(Source: The Economic Times)

Also Read: Zee promoter Essel Group receives formal consent of lenders

2. Brokerages Cut Price Targets on Tata Motors Post Poor Q3 Results

Tata Motors’ shares recorded their second worst ever single-day fall on Friday, in reaction to the company’s biggest ever quarterly loss in the December quarter,sparking target price cuts from brokerages and in some cases rating downgrades. The stock plummeted 17.3% to close at ₹151.30 on the BSE after falling as much as 22% intraday. With Tata Motors as the worst performer on both benchmarks, Sensex fell 424.61 points or 1.1% to close at 36,546.48 and Nifty declined 125.80 points or 1.1% at 10,943.60.

“Despite a 65% stock price fall over the past two years, we see more downside given insufficient near-term product triggers in JLR, Brexit uncertainty and an imminent downturn in Indian trucks,” said CLSA, retaining ‘sell’ rating with a target price of ₹150.

Phillip Capital cut target price the most, by 31% to ₹200 while Nomura, Kotak Institutional Equities, JM Fiancial, Jefferies, Edelweiss and Citi cut target price by 7-28%. Nomura even downgraded the stock to ‘neutral’ from ‘buy’ and reduced target price to ₹187 from ₹260. Motilal Oswal downgraded the stock to neutral and lowered target price to ₹166.

(Source: The Economic Times)

Also Read: Tata Motors Group posts Q3 net loss of Rs 26,961 cr

3. Inflows in Equity Mutual Funds Hit 24-Month Low

Net inflows of investments into mutual fund equity schemes have hit a 24-month low, with only ₹6,158 crore accruing in January 2019. The continuing volatility in stock markets and political uncertainty seem to have impacted overall sentiment, except for one silver lining— retail investment in such funds seems to be intact.

The dramatic drop in net inflows, according to data released by the Association of Mutual Funds of India (Amfi) for January 2019, continues a trend that has been evident for several months. January’s net inflows are down 6.7% from ₹6,606 crore in December 2018. Compared with the ₹15,390 crore net inflows into equity mutual fund schemes a year ago, the fall is a steep 60%.

(Source: Hindustan Times)

4. Tata Steel Profit Up 54% in Dec Quarter

Tata Steel, India’s second-largest private steel producer by capacity, reported a 54% rise in net profit in the December quarter over the year-ago period, aided by higher sales volumes and a 24% increase in sales to the lucrative automotive sector.

The October-December net profit stood at ₹1,753 crore compared with ₹1,136 crore a year ago.

Over the same period, production rose 11% to 7.23 million tonnes (mt), of which 4.38 mt was produced in India, backed by its recent acquisition of insolvent Bhushan Steel (now re-named Tata Steel Bamnipal Steel). Sales in India stood at 3.89 mt, accounting for more than 55% of consolidated volumes, the company said.

(Source: Hindustan Times)

Also Read: Tata Steel subsidiary signs pacts with HBIS Group

5. PV Sindhu Inks ₹48cr Deal with Li-Ning

Top shuttler PV Sindhu has signed India’s biggest sports sponsorship deal for a non-cricketer and the biggest for any female athlete in India.

Sindhu, the first Indian woman to win an Olympic silver medal, has signed a four-year deal with Li-Ning pegged at ₹48 crore, including sponsorship money and ₹5 crore in equipment supply till 2023.

A leading Chinese sports brand, Li-Ning Company, had signed a similar four-year deal worth ₹35 crore with K Srikanth.

“Sindhu is surely the biggest female athlete of our country and her sports apparel plus shoes and racket is a very important category. Li-Ning is one of the top brands and an association with them will help Sindhu in the next phase of her journey,” said Tuhin Mishra, managing director, Baseline Ventures. Sports marketing firm Baseline Ventures, which exclusively manages Sindhu’s commercial interests, is also promoter of the ongoing Pro Volleyball League.

(Source: The Economic Times)

6. Sale of Pledged Shares by L&T Finance, Edelweiss Illegal: Reliance Group

Anil Ambani-promoted Reliance Group alleged on Friday that misconduct by certain non-banking financial companies (NBFCs), particularly L&T Finance and Edelweiss, had led to the recent slump in shares of some of its companies, and termed their action “illegal, motivated, and wholly unjustified”.

L&T Finance and Edelweiss refuted the allegations and said they had followed the due procedure.

Sources said while lenders were within their rights to sell the shares, the manner in which the share-sale was conducted was the real bone of contention. L&T Finance and Edelweiss might approach the Securities and Exchange Board of India early next week to clarify their position on the allegations, the sources said.

(Source: Business Standard)

7. Bharti Airtel's Focus on High Paying Customers, Deleveraging Key to Stabilise Rating: S&P

Telecom operator Bharti Airtel's measures to potentially lower debt levels with a focus on high paying customers and reduction in capital spending may help the company improve cash flows over 12 months, S&P Global Ratings said Friday.

The company's plan around deleveraging with a sizable debt reduction over the next three months would be key to stabilising the rating at the current level, S&P said in its report which did not include any rating action.

Earlier this week, Moody's Investor service for the first time lowered the credit rating of Bharti Airtel to Ba1 from Baa3.

Credit ratings reflect a company's calibre to repay debt and raise funds.

(Source: PTI)

Also Read: Bharti Airtel tanks over 4% after Moody's downgrade

8. SBI Cuts Interest Rate by 5 Bps on Home Loans Up to Rs 30 Lakh

Within a day of RBI reducing repo rate by 25 basis points, the country's largest lender State Bank of India Friday announced a cut in interest rates by 5 basis points on its home loans up to Rs 30 lakh.

In it sixth bi-monthly monetary policy review announced Thursday, RBI had cut the repo rate by 25 basis points to 6.25 percent.

"On the back of the monetary policy announced by the RBI, we have taken the lead to cut interest rates on home loans up to Rs 30 lakh," the bank's chairman, Rajnish Kumar, said in a statement.

The new rates are effective from Friday.

(Source: Business Standard)

9. Oyo In Talks With LA Firm To Buy Keys Hotels

SoftBank-backed Oyo Hotels and Homes is in talks with Los Angelesbased Berggruen Holdings, a $2-billion private equity and venture capital firm founded by billionaire investor Nicholas Berggruen, to acquire their company Keys Hotels in India, sources told ET.

Berggruen Holdings is the owner of Berggruen Hotels in India, founded in September 2006 to build and operate hotels under the Keys brand. Keys Hotels, which has witnessed a spate of senior level exits over the past two to three years, has a portfolio of about 20 hotels in locations such as Mumbai, Chennai and Mahabaleshwar. Keys Hotels had been scouting for buyers for a few years and has an estimated debt of about ₹160 crore.

Sources said EY is the intermediary transaction advisor for the deal.

(Source: The Economic Times)

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