A round-up of the biggest articles from newspapers.
Kotak, Axis lead race in Citi India retail business
Kotak Mahindra Bank and Axis Bank have emerged as the top contenders to acquire Citi India’s retail assets, The Economic Times reported.
Why it’s important: All-cash deal may value assets at around $ 2 billion.
IndusInd Bank is said to be out of the race.
Kotak Mahindra Bank has emerged as the most aggressive bidder.
The bidders are looking at the cash payout, fee and commissions they will cough up for Citi’s team to service the consumer book.
Govt to finalise Nalco, HCL sale soon
The disinvestment department is expected to soon seek cabinet clearance for the strategic sale of Nalco and Hindustan Copper Ltd (HCL), The Economic Times reported.
Why it’s important: Demand is likely to be keen given the rally in commodities and interest in metal producers.
Stake sales may take place in the next fiscal.
All clearances will be completed within this fiscal year.
HNIs give large IPOs a miss, bet on smaller issues
High net worth individuals, who borrow and invest in IPOs, have preferred smaller issues so far this year, The Economic Times reported.
Why it’s important: This is in the context of several large share sales have failed to generate enough returns.
Out of the 17 IPOs with over ?2,000 crore in size so far in 2021, only two — Nykaa and Zomato — have seen sizeable bids from HNIs.
In contrast, these investors put in bids in the range of ?20,000 crore to ?77,000 crore for 20 IPOs below the size of ?2,000 crore.
The main reason bankers said it’s easier for HNIs to get funding in smaller issues, which have made better listing gains than their larger peers.
SEBI, RBI, taxman get access to KYC data under crypto bill
The new Cryptocurrency bill is set to empower regulators and government agencies, including SEBI, RBI and the tax department to scrutinise KYC data of investors that crypto exchanges have collected from clients, The Economic Times reported.
Why it’s important: The new regulations would mandate cryptocurrency exchanges to share their KYC data, which mainly includes details of their investors, with the government.
The KYC data could help regulators zero in on transactions across platforms, check that against bank deposits and even calculate or scrutinise gains and other discrepancies.
The new cryptocurrency framework will also put in place a uniform KYC process that every exchange must adhere to.
Ability of small firms to repay debt improves
The ability of Indian companies to service their debt improved in the quarter ended 30 September, Mint reported.
Why it’s important: The main reason for this is the rise in earnings and low interest rates to some extent.
While even smaller companies could deleverage their balance sheets, some industries struggled to service debt.
A Mint analysis of 69 companies in BSE Midcap and 662 in BSE Smallcap showed interest coverage ratio (ICR) improved to a multi-year high in the September quarter.
The ICR of midcaps rose to 3.75 times from 2.30 times in the preceding three months and 2.12 times a year ago.
For small-caps, ICR jumped to 3.38 times from 2.83 times in the June quarter and 2.71 times a year ago.
Govt proposes to sanction 3 new dedicated freight corridors
The railway ministry proposes to sanction the construction of three dedicated freight corridors (DFCs) to facilitate the transport of minerals from mining areas, Mint reported.
Why it’s important: This is in addition to two other DFCs—the eastern and western freight corridors—where work on part of the project has already been completed.
A detailed project report for the three new DFCs, the east coast corridor, the east-west sub-corridor, and the north-south sub-corridor, will be done soon.
The DPRs are prepared by aligning the requirement of the evacuation of minerals also from the hinterland so that these benefit the sector.
New coffee chains brew plans to increase outlets
Coffee chains in the county are going for a big expansion after the pandemic blues, Mint reported.
Why it’s important: Coffee chains such as Blue Tokai, Third Wave Coffee and Dope Coffee have plans to expand their number of outlets.
The expansion is helped by the availability of cheaper real estate and younger consumers seeking new hangout spots.
The relatively new chains believe that their distinct branding, store aesthetics and an assortment of gourmet food will draw younger coffee-drinking consumers.
Third Wave plans to open more than 300 cafes over the next few years.
Dope’s packaged coffee is set to open its experience centres in Mumbai and Delhi, and, after a pandemic-induced slump, Blue Tokai, too, is opening in cities beyond Delhi-NCR.
Non-power industries still face coal shortage
Despite the power sector having come out of the coal crisis, captive power plant-based non-power industries, such as aluminium, steel, zinc and cement, among others, continue to get less than 50 per cent of their coal requirements, Business Standard reported.
Why it’s important: This comes despite these industries having secured linkages and Coal India auctions.
Power producers have sought urgent support for normalising coal supplies to CPP-based nonpower industries.
Apart from coal shortage, the availability of coal rakes is also another hurdle being faced by the industries.
Rake supplies to these industries are at 40-50 per cent of their requirements.
Most cryptocurrencies have no inherent value: Anand Rathi
Anand Rathi, the chairman of Anand Rathi Wealth, in an interview with
Business Standard said that historically, the firm has made yields of around 1.3 per cent on the AUM.
What he says: AUM has grown 22-23 per cent per annum and this could be an indication of growth in the years ahead.
The strategy is to increase focus on chosen client segment and build a strong value proposition.
Any cyclical downturn will impact revenues temporarily.
The focus is to generate long-run returns with consistent long-term asset allocation and proper risk management.
The underlying blockchain technology holds great promise, but most cryptos themselves have no inherent underlying value.
The current value is merely derived from the belief that someone else will be willing to pay a greater price down the road.
FPIs dump $ 2.1 bn worth of bank shares in November
Foreign portfolio investors dumped $ 2.1 billion worth of shares of banks and financial companies in November, Business Standard reported.
Why it’s important: It has triggered a 9 per cent slide in the Bank Nifty index.
On the other hand, FPIs are pumping in over $ 2.7 billion into FMCG and retail stocks.
Oil and gas (FPI outflows of $ 634mn), metals and mining ($ 410 million) and IT ($ 366 million) were the other sectors that saw maximum FPI selling.
Besides FMCG, realty (inflows of $ 524 million) was the only sector to see meaningful inflows.
The inflows into the realty sector too could have been subdued if not for Godrej Properties’ inclusion in the MSCI index.
