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Category: Investment news

  • MFs garner Rs 99,704 crore via NFOs in 2021 on sharp rally in stock market

    Mutual fund houses launched 140 new fund offerings (NFOs), which collected about Rs 1 lakh crore in 2021 on a sharp rally in the markets and an exceptional increase in the retail investors’ interest.

    However, the current volatility in the stock market might prompt asset management companies (AMCs) to limit the launch of NFOs this year, said MyWealthGrowth.com co-founder Harshad Chetanwala.

    Ankit Yadav, wealth manager (USA) and director of Market Maestro, also believes that NFOs are going to decrease in 2022 and little will come in 2023 when rates start changing.

    According to data compiled by Morningstar India, there were 140 new fund offers (including closed-end funds and ETFs) in 2021. These managed to garner a respectable Rs 99,704 crores during their inception stage.

    This was way higher than 81 NFOs floated in 2020 and cumulatively, these funds were able to garner Rs 53,703 crore.

    “Given the sharp rally in the markets along with the need to fill product gap created post-recategorisation and giving investors new themes to invest in, asset-management companies launched a plethora of new schemes across the year (2021),” Morningstar noted.

    Usually, NFOs come during a surging market when investor sentiments are high and optimistic. The stock market along with the positive investor sentiments kept surging post-March 2020. It is from this point in time the launch of NFOs started, Chetanwala said.

    The NFOs were floated to capitalise on the mood of investors and attract their investment as they were willing to invest at that time, he added.

    “The main fact as a wealth manager I see in low rate scenario is that the borrowing becomes easy with easy money fluctuating around businesses tend to bring their IPOs and AMC (assets management company) businesses are inclined NFOs,” Market Maestro’s Ankit Yadav said.

    In 2020, the central banks throughout the globes cut the rates and made rates hit all-time lows in the 100-year history. Rates remain unchanged in 2021. That’s why to utilise low rates, AMC businesses bring NFOs, he added.

    The maximum number of funds (25) were launched in the index fund segment, which amassed Rs 4,082 crore, followed by other ETFs (24), which collected Rs 7,482 crore and fixed-term plans (23), which mobilised Rs 5,057 crore.

    In addition, investors were attracted to international funds and sectoral or thematic funds. The AMCs launched 12 sectoral or thematic funds, which raised Rs 13,237 crore and floated 12 overseas funds of funds, which mopped up Rs 6,351 crore.

    Experts believe that the dominance of index funds and ETFs (exchange-traded funds) within NFOs is not surprising, owing to a couple of factors.

    Existing AMCs have no restrictions in the number of passive products they can manufacture, whereas there are limits on other types of funds, Vasanth Kamath, founder and CEO at Smallcase, said.

    “Also, as investors (across retail, HNIs, institutional) are broadening and diversifying their portfolios, they’re preferring to take an index approach to new exposures and asset types, making it both efficient and simple versus having to build their own frameworks and strategies on these universes,” he said.

    In addition, the staggering growth of new demat accounts requires fund houses to offer a larger, diverse line-up of ETFs that were missing in the exchange-traded form factor, he added.

    Another factor for higher NFOs in the index category could be strong performance as the index delivered over 20 per cent last year.

    Further, the penetration of Indian investors towards index or ETF is low. So, AMCs try to capture their market share, Market Maestro’s Yadav said.

  • Zomato to invest $400 million more in quick commerce; will set up a lending biz for restaurants

    Online food delivery firm Zomato Ltd on Thursday said its revenue from operations for the December quarter rose from both a year earlier and sequentially, even as its loss shrank.

    Revenue from operations for the fiscal third quarter rose to Rs 1,112 crore from Rs 1,024.2 crore in the July-September period and Rs 609.4 crore a year earlier. Loss narrowed dramatically to Rs 67.2 crore, compared with Rs 434.9 crore a quarter earlier and Rs 351.3 crore in the previous-year period.

     

    Online food delivery firm Zomato Ltd on Thursday said its revenue from operations for the December quarter rose from both a year earlier and sequentially, even as its loss shrank.

    Revenue from operations for the fiscal third quarter rose to Rs 1,112 crore from Rs 1,024.2 crore in the July-September period and Rs 609.4 crore a year earlier. Loss narrowed dramatically to Rs 67.2 crore, compared with Rs 434.9 crore a quarter earlier and Rs 351.3 crore in the previous-year period.

     

    Zomato said it saw 9% growth in revenue from operations on a quarterly basis, while its customer delivery charges shrank 22%.

    “This was driven by a Rs 7.50 per order reduction in customer delivery charges in Q3 FY22 as compared to Q2 FY22,” Zomato said, explaining that it re-distributed its growth investments more in favour of discounts on customer delivery charges compared with food coupons.

    “We are seeing higher return on investment with discounted delivery charges as compared to coupons. As a result, discounts per order reduced by Rs 5 per order in the last quarter as compared to Q2 FY22,” it said.

    Zomato reiterated its focus on the quick-commerce segment and added that it will invest an additional $400 million in the space in the next two years.

    The Gurgaon-based company also expanded to 180 new cities, taking its presence in India to more than 700 cities.
    Zomato’s adjusted revenue — a combination of revenue from operations and customer delivery charges — increased 78% on year to Rs 1,420 crore. As reported by ET earlier, the company saw a massive increase in food order volumes on New Year’s Eve, resulting in gross order value (GOV) of $18 million, 78% higher than the same day last year.
    Zomato’s GOV grew by 84.5% Y-o-Y and 1.7% Q-o-Q to Rs 5,500 crore in the December quarter.

    Zomato said over the years, unit economics in its food delivery business has improved with scale. Contribution margin (as a percentage of GOV) has improved steadily from a negative 15% in 2019 to 1% today, it said. “A 5% contribution margin in our food delivery business (at the current scale) should get us to Ebitda break-even as a company (covering all common corporate costs as well).”

  • Tube Investment Consolidated December 2021 Net Sales at Rs 3,410.10 crore, up 100.6% Y-o-Y

    Net Sales at Rs 3,410.10 crore in December 2021 up 100.6% from Rs. 1,699.99 crore in December 2020.

    Quarterly Net Profit at Rs. 278.88 crore in December 2021 up 159.79% from Rs. 107.35 crore in December 2020.

    EBITDA stands at Rs. 466.45 crore in December 2021 up 92.06% from Rs. 242.87 crore in December 2020.

    Tube Investment EPS has increased to Rs. 14.46 in December 2021 from Rs. 5.71 in December 2020.

    Tube Investment shares closed at 1,796.50 on February 04, 2022 (NSE)

  • Markets drop for a second day on global cues; eke out 2.5% weekly gain

    Benchmark indices fell for a second day on Friday but ended the week with a 2.5 per cent gain. Global investor sentiment was hit by hawkish comments by the European Central Bank (ECB), disappointing earnings from US technology giants and a simmering crisis at Ukraine’s border.

    The Sensex fell 143 points, or 0.24 per cent, to end at 58,645. The index gained 1,444 points, or 2.5 per cent, during the week after the capex push announced in the Union Budget drove optimism of revival in economic growth and corporate earnings. The Nifty 50 index fell 44 points, or 0.25 per cent, to finish at 17,516.3.

    In the preceding two weeks, domestic markets had crashed 7 per cent spooked by the US Federal Reserve’s decision to start raising interest rates to cool down inflation. On Thursday, the ECB joined the Fed in taking a hawkish turn as its President Christine Lagarde no longer ruled out an interest-rate hike this year. Meanwhile, the Bank of England Thursday raised interest rates back-to-back for the first time since 2004 as it began the process of quantitative tightening.

    Domestic markets started this week on a strong note but gave up some gains amid these headwinds.

    Earlier this week, the Finance Minister Nirmala Sitharaman announced plans to increase capital spending by 35 per cent to Rs 7.5 trillion in the next financial year, seeking to bolster the economy’s recovery after disruptions from the pandemic.

    “Domestic indices had a bull run during the first half of the week as the Budget was in line with market expectation. As global cues turned in favour of bears, the domestic market turned volatile towards the end of the week. US markets were under pressure following weak earnings numbers reported by Meta. The European market also lacked strength as the Bank of England imposed a back to back rate hike while the most dovish European Central Bank acknowledged the risk of rising inflation signaling a rate hike in near future,” said Vinod Nair, Head of Research at Geojit Financial Services.

    Overseas investors sold shares worth Rs 2,268 crore, while domestic institutions were net-buyers to the tune of Rs 622 crore.

    “Market is witnessing higher volatility but the sentiment has improved post the Budget. Now the focus would shift to the rising interest rate regime globally and consequent higher bond yields. Surge in oil price to seven-year high of $92 per barrel would present further challenge for inflation. The December quarter earnings has been good so far as companies largely delivered on the earnings front, despite the unprecedented inflationary pressures from rising commodity and energy prices. The corporate earnings delivery is highly crucial, in a rising rate regime which is getting well reflected in the market with poor performers getting battered severely,” said Siddhartha Khemka, Head – Retail Research, Motilal Oswal Financial Services.

    As per Bloomberg data, out of the 33 Nifty 50 companies that have announced results so far, 18 either met or exceeded analyst estimates, 13 missed and two can’t be compared.

  • Markets drop for a second day on global cues; eke out 2.5% weekly gain

    Benchmark indices fell for a second day on Friday but ended the week with a 2.5 per cent gain. Global investor sentiment was hit by hawkish comments by the European Central Bank (ECB), disappointing earnings from US technology giants and a simmering crisis at Ukraine’s border.

    The Sensex fell 143 points, or 0.24 per cent, to end at 58,645. The index gained 1,444 points, or 2.5 per cent, during the week after the capex push announced in the Union Budget drove optimism of revival in economic growth and corporate earnings. The Nifty 50 index fell 44 points, or 0.25 per cent, to finish at 17,516.3.

    In the preceding two weeks, domestic markets had crashed 7 per cent spooked by the US Federal Reserve’s decision to start raising interest rates to cool down inflation. On Thursday, the ECB joined the Fed in taking a hawkish turn as its President Christine Lagarde no longer ruled out an interest-rate hike this year. Meanwhile, the Bank of England Thursday raised interest rates back-to-back for the first time since 2004 as it began the process of quantitative tightening.

    Domestic markets started this week on a strong note but gave up some gains amid these headwinds.

    Overseas investors sold shares worth Rs 2,268 crore, while domestic institutions were net-buyers to the tune of Rs 622 crore.

    “Market is witnessing higher volatility but the sentiment has improved post the Budget. Now the focus would shift to the rising interest rate regime globally and consequent higher bond yields. Surge in oil price to seven-year high of $92 per barrel would present further challenge for inflation. The December quarter earnings has been good so far as companies largely delivered on the earnings front, despite the unprecedented inflationary pressures from rising commodity and energy prices. The corporate earnings delivery is highly crucial, in a rising rate regime which is getting well reflected in the market with poor performers getting battered severely,” said Siddhartha Khemka, Head – Retail Research, Motilal Oswal Financial Services.

    As per Bloomberg data, out of the 33 Nifty 50 companies that have announced results so far, 18 either met or exceeded analyst estimates, 13 missed and two can’t be compared.

  • Gold investment platform Jar raises $32 million led by Tiger Global

    Savings and investment management platform Jar has raised $32 million in a Series A funding round led by Tiger Global, the company has said .The round also saw participation from Rocketship.vc, Third

    Prime, Stonks, Force Ventures and existing investors including Arkam Ventures and WEH Ventures, the company said on February 3.

    Angel investors, including Klarna founder Victor Jacobsson, Suleman Ali of Ali Capital, Shamir Karkal, founder of Sila Money, Byron Ling of Cannan Partners, Joel John of Ledger Prime and Italic founder Jeremy Cai also participated in the round.

    “We are helping people get comfortable with the idea of investing,” founder Nishchay AG said in a statement. “What we have found is that once people build familiarity with investments, they build a habit to invest more. A habit and discipline is clearly being formed and we see a jump of 20 percent in investments month over month by users.”

    The funds will be used to expand the user base and eventually add offerings like savings and other financial services, including lending and insurance.

    The round comes after the company raised $4.5 million in seed funding in August 2021, with the backing of Arkam Ventures, Tribe Capital and WEH Ventures.Founded in June 2021 by Nishchay and Misbah Ashraf, the platform aims to encourage Indians to invest small amounts in gold and help them build their savings.

    The Jar app saves a small amount each time a user makes a transaction. The app, which can be allowed to look at the transaction history, rounds up an individual’s daily spendings and puts some money aside as investment.

    Users’ investments in digital gold is backed by physical gold of the same amount and they can choose to withdraw that much gold or liquidate their investments at any time. The company partners with Paytm and Safegold for helping users invest.

    “Hundreds of millions of Indians today don’t have any savings. This, unfortunately, continues to trap many of them in the world of bad debts that some take decades to get out of. We want to help Indians build a habit of saving so they have a financial cushion to fall back on in the time of dire need,” Ashraf said.

    The platform has four million users and the app sees over 100 transactions a minute.”Jar is bringing new users into the online investing space, starting with digital gold as the first product. We are bought into Jar’s mission of helping users build a daily savings habit, and we’re excited to partner with the team as they scale to millions of customers,” Alex Cook, Partner at Tiger Global, said.

    Users’ investments in digital gold is backed by physical gold of the same amount and they can choose to withdraw that much gold or liquidate their investments at any time. The company partners with Paytm and Safegold for helping users invest.

    “Hundreds of millions of Indians today don’t have any savings. This, unfortunately, continues to trap many of them in the world of bad debts that some take decades to get out of. We want to help Indians build a habit of saving so they have a financial cushion to fall back on in the time of dire need,” Ashraf said.

    The platform has four million users and the app sees over 100 transactions a minute.”Jar is bringing new users into the online investing space, starting with digital gold as the first product. We are bought into Jar’s mission of helping users build a daily savings habit, and we’re excited to partner with the team as they scale to millions of customers,” Alex Cook, Partner at Tiger Global, said.

  • BlackBerry to Sell Patents Related to Mobile Devices, Messaging for $600 Million

    BlackBerry Ltd said on Monday it will sell its legacy patents primarily related to mobile devices, messaging and wireless networking for $600 million to a special purpose vehicle formed to acquire the company’s patent assets.

    BlackBerry said the transaction with the vehicle, Catapult IP Innovations Inc, will not impact customers’ use of its products or services.

    The move comes weeks after BlackBerry pulled the plug on service for its once ubiquitous business smartphones, which were toted by executives, politicians and legions of fans in the early 2000s.

    U.S-listed shares of BlackBerry were down 3.6% in premarket trading. One of the so-called “meme stocks”, such as GameStop and AMC Entertainment, that witnessed a surge in early 2021, BlackBerry rose 41% last year.

    At the closing of the deal, the company will receive $450 million in cash and a promissory note for $150 million.

    Once known for its phones with a tiny QWERTY physical keyboard and the BBM instant messaging service, BlackBerry’s core businesses today are cybersecurity and software used by automakers.

  • Sensex down 4,000 points: What should mutual fund investors do?

    The year 2022 started on a volatile note with capital markets across asset classes witnessing a sharp correction amid investor concerns over tighter monetary policy settings in 2022 and geopolitical tensions. The benchmark index BSE Sensex has fallen over 3,000 points in the last 15 days, which is in line with the fall in global equity markets seen during the month. From its 52-week high levels, the index is down by 4,000 points, at 58,000. The expectations and uncertainty surrounding the Union Budget also led to volatility in equity markets. 

    Midcap and small caps have witnessed higher volatility in the last few months after having outperformed in the last two years. Year-to-date, mid cap mutual funds on an average have fallen by 2.5% and small cap funds have gone down by slightly over 2%. In fact, all equity mutual fund categories are in red YTD, except for banking and PSU funds.

    Technology funds, after remaining the best performers for a long duration, have taken the maximum hit of an average 12% YTD, followed by pharma sector schemes (-8.5%) and international schemes (-7.5%). Large cap funds, flexi cap funds and large & mid cap funds have plummeted by little over 2%.

    Investors should consider this fall as an opportunity to add more investments. In general, a 10% correction is an attractive enough “dip” to follow the time and tested “buy on dips” allocation strategy, says Sachin Jain, research analyst, ICICI Securities. “Investors may, therefore, allocate some lumpsum amount at current levels apart from their regular SIPs,” he adds.

    For the large cap segment, as per Rushabh Desai, founder of Rupee With Rushabh Investment Service, corrections anywhere between 10% and15% and for the mid and small cap segments, 15-25%, are considered to be decent correction pockets. However, even with the current correction and the company earnings prices and valuations in many segments in the equity markets remains high or expensive. Also, with the fear of new Covid-19 variants, supply chain disruption, high inflation, liquidity tightening and normalisation of policy rates (rate hikes) process etc. markets will remain volatile especially if company earnings don’t outperform, he explains. Thus, 2022 is the year to be extra cautious.

    For lumpsum investors who have investable amount, Desai suggests waiting for a decent and a deeper correction pocket before deploying their money. SIP investors should continue their investments and need not worry. Correction pockets should be looked at as an opportunity to invest for the long term.

    “This is a good time to assess your overall portfolio and reallocate your capital to schemes where the valuations are comfortable,” says Divam Sharma, co-founder of Green Portfolio, a SEBI-registered portfolio management service. He recommends value funds to be preferred over growth funds in the current markets and believes that IPO and start-up related funds should be avoided for now.

  • Sebi advises MFs to stop investing in int’l stocks

    The Securities and Exchange Board of India (Sebi) has advised mutual funds investing in overseas securities to stop further investments in foreign stocks to avoid breach of industry-wide overseas limits, two industry executives independently confirmed to Mint on the condition of anonymity.

    Mutual funds can make overseas investments up to $1 billion per mutual fund, with the overall industry limit of $7 billion, according to a Sebi circular of 3 June 2021. The suspension is likely to be temporary and could be revoked once the limits are enhanced by the regulator.

    Following the Sebi directive, the Association of Mutual Funds in India (Amfi) has asked fund houses to stop accepting flows in schemes investing overseas from 2 February. However, existing SIPs and STPs have been allowed to continue.

    Franklin Templeton Mutual Fund released a notice on Saturday announcing suspension of lump-sum subscription, switch-ins, and fresh registration of SIP/STP for its three overseas funds, Franklin India Asian Equity Fund, Franklin India Feeder-Franklin US Opportunities Fund and Franklin India Feeder -Templeton European Opportunities Fund, after 28 January 2021. The fund house temporarily withdrew the notice, but may be forced to reinstate it after the Amfi guidance.

    Sebi advises MFs

  • IPO-bound Delhivery announces investment in Falcon Autotech

    IPO-bound logistics service Delhivery has announced its investment in Falcon Autotech, a logistics automation solutions provider. This is in line with Delhivery’s stated objective of sustained investments in future-ready hardware solutions in its operations.

    The amount invested is undisclosed by both the firms.

    With this partnership, Delhivery expects to work closely with Falcon Autotech to design and implement new automation solutions for transportation and warehousing operations.

    The partnership will also enable the bundling of the hardware automated solutions along with Delhivery’s SaaS platform, one of the proposed growth verticals for Delhivery in the national and international market.

    Delhivery (including Spoton) already operates 20 automated sortation centres, 124 gateways, and 83 fulfillment centres across India as of June 30, 2021.

    Commenting on the investment, Ajith Pai, Chief Operating Officer, Delhivery, said, “The collaboration with Falcon Autotech strengthens our ability to drive greater speed, precision, and efficiency across our business lines.”

    Naman Jain, Chief Executive Officer, Falcon Autotech, added, “We are delighted to welcome Delhivery as a partner to Falcon. This investment is a testimony to Falcon’s commitment to our customers, our design, technology, and delivery capabilities, and the product roadmap ahead.”

    A month ago in December, Delhivery had acquired Transition Robotics Inc, a California-based company focused on developing unmanned aerial system platforms.  The deal would help strengthen its capabilities in a wide range of applications, including aerial photography, remote sensing, inspection and surveys.

    Delhivery on November 2 filed its documents with the market regulator, seeking to raise a billion dollars in an initial public offering.Delhivery IPO will consist of primary issuance of Rs 5,000 crores which the end-to-end supply chain unicorn will raise via public issue. The offer for sale by the existing investors will be to the tune of Rs 2,460 crores. It will mark a lucrative exit for many of its investors.