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Tag: India

  • Reliance Retail picks 25.8% stake in Dunzo for $200 million

    Reliance Industries Ltd’s retail arm has invested $200 million (around ₹1,488 crore) in Bengaluru-headquartered Dunzo as it looks to get a foothold in the country’s rapidly growing market of quick delivery.

    With the investment of $200 million, Reliance Retail will own 25.8% stake in the online delivery platform on a fully diluted basis.

    Existing investors Lightbox, Ligthrock, 3L Capital and Alteria Capital also participated in the latest funding round that was led by Reliance Retail Ventures Ltd.

    “With an investment of USD 200 million, Reliance Retail will own 25.8% stake,” the statement said.

    In addition to the funding, Dunzo and Reliance Retail will also enter into certain business partnerships. Dunzo will enable hyperlocal logistics for the retail stores operated by RRVL, further adding onto Reliance Retail’s omni-channel capabilities.

    Dunzo will also facilitate last mile deliveries for JioMart’s merchant network.

    The capital will be used to further Dunzo’s vision to be the largest quick commerce business in the country, enabling instant delivery of essentials from a network of micro warehouses while also expanding its B2B business vertical to enable logistics for local merchants in cities across the country, the statement said.

    “We are seeing a shift in consumption patterns to online and have been highly impressed with how Dunzo has disrupted the space. Dunzo is the pioneer of Quick Commerce in India and we want to support them in furthering their ambitions of becoming a prominent local commerce enabler in the country,” RRVL Director Isha Ambani said.

    She added that through the partnership with Dunzo, the company will be able to provide increased convenience to Reliance Retail’s consumers and differentiated customer experience through rapid delivery of products from Reliance Retail stores.

    “Our merchants will get access to the hyperlocal delivery network of Dunzo to support their growth as they move their business online through JioMart,” she said.

    Dunzo is a leading player in the quick commerce category which has an addressable market opportunity of over USD 50 billion.

    At present, Dunzo is available across seven metro cities in India and the additional capital will be used to expand the quick commerce business to 15 cities, the statement said.

    Dunzo launched its instant delivery model ‘Dunzo Daily’ in Bengaluru earlier this year, which is seeing over 20% week-on- week growth.

    The Dunzo Daily model delivers daily and weekly essentials within 15-20 minutes, with a focus on providing high quality fruits and vegetables.

    While traditional e-commerce deliveries take a day or longer, quick commerce (or q-commerce)

    enables customers to get small quantities of goods to customers in a shorter period of time.

    According to a RedSeer report, the quick commerce sector in India is expected to grow to USD 5 billion by 2025 from the current USD 0.3 billion.

    The report said quick commerce is growing in India on the back of trends like a shift in consumer behaviour, entry of big players like BigBasket and Blinkit , and rise of instant delivery platforms.

    Last month, food delivery platform Swiggy announced an investment of USD 700 million (about ₹5,250 crore) in its express grocery delivery service, Instamart.

    Previously, Ola had also started piloting a quick delivery service for items like groceries in Bengaluru.

  • State Bank of India invests $20 million in Pine Labs

    Bengaluru: India’s largest lender, the State Bank of India NSE 0.90 %, has invested $20 million in Pine Labs, the fintech startup said Tuesday without sharing any further details of the deal.

    The IPO-bound online payments and merchant solutions platform raised around $700 million in multiple tranches last year and was last valued at $3.5 billion. ET reported in December that it was in advanced stages of talks to raise at least $100 million from Falcon Edge and that the total funding round could increase to $200 million.

    Pine Labs, best known for its offline merchant payments tool, is also looking to list in the United States in the first half of 2022, ET reported last month.

    “In the past year, several marquee investors have placed their trust in our business model and growth momentum, and that is a gratifying feeling,” Pine Labs CEO Amrish Rau said Tuesday. “This association with SBI is a personally satisfying experience as I had started my career selling financial services technology to SBI.” In a statement, Pine Labs said it would invest in scaling its new product Plural, a payments gateway.

  • Alka Mittal becomes first woman to head ONGC as CMD

    Alka Mittal, director of human resources at energy major Oil and Natural Gas Company (ONGC), has been given the additional charge of chairman and managing director, the company announced on January 3.

    With this appointment, Mittal has become the first woman ever to head ONGC as its CMD. She will hold the post for six months or until a regular appointment for the position is announced, whichever is earlier.

    ONGC has not had a full-time chairman and managing director since former chief Shashi Shanker retired on March 31, 2021. Typically, the government select a future CMD at least a few months before the retirement of the incumbent but instead, after Shanker’s retirement, the then senior-most director was given the additional charge. Subhash Kumar, former director (finance) was given the additional charge of the post from April 1, 2021. Kumar too retired end-December, leaving the top position vacant for a couple of days.

    Given that Mittal is currently the senior most on the board of directors, it was speculated that she would be given the CMD’s position but the formal orders came late on January 3.

  • West Bengal announces fresh curbs, restricts flights from Mumbai, Delhi

    The West Bengal government on Sunday said flights from Mumbai and Delhi were being restricted to twice a week from January 5 as new Covid cases in the state mounted to 6,153 from 1,089 on December 29.

    In a letter to the civil aviation ministry, the state government said that in view of the rising Covid cases it had decided that with effect from January 5, all incoming domestic flights from Mumbai and Delhi to West Bengal will be temporarily allowed only twice a week on Monday and Friday till further orders.

    This is among a set of fresh curbs announced by Chief Secretary H K Dwivedi after a panel of the state disaster management authority recommended review of the current restrictions and relaxations amid concerns of “high rate of infectivity” and multiple cases of the Omicron variant.

    The restrictions are effective Monday and will be in force till January 15.

    Dwivedi said direct flights from the UK were being temporarily suspended from tomorrow. The Civil Aviation Ministry had already been informed, the chief secretary said.

    Till January 1, 19 had tested positive for Omicron, and 15 were active. Dwivedi, however, reassured on hospital bed availability and said the total bed occupancy was around 1.5 per cent. Those who are asymptomatic or have mild symptoms can isolate at home, he said.

    The order includes an advisory to the management of industries, factories, mills, tea gardens, and other establishments to ensure strict compliance of Covid-appropriate norms and “only double vaccinated workers” to be allowed to enter the work sites.

    All academic activities in schools, colleges, and universities are to remain closed and only administrative activities will be permitted with 50 per cent employees at a time.

    Government offices, including public undertakings, will function with 50 per cent of employees at a time, and work from home is encouraged. The same holds for private offices and establishments.

    Swimming pools, spas, gyms, beauty parlors, saloons, wellness centres, entertainment parks, zoos, and tourist places will be closed.

    Shopping malls and market complexes will, however, function with capacity not exceeding 50 per cent and till 10 pm. Similarly, restaurants and bars have been allowed to operate with 50 per cent capacity and till 10 pm.

    Cinema halls and theatre halls, too, will operate with 50 per cent seating capacity and up to 10 pm.

    The maximum number of people at meetings and conferences has been limited to 200 people at a time or 50 per cent seating capacity of the hall. The number of people at social, religious and cultural gatherings has been capped at 50.

    As far as public transport is concerned, local trains will operate with 50 per cent seating capacity and up to 7 pm; metro services will operate with 50 per cent seating capacity and as per usual operational time.

    Further, the movement of people and vehicles and public gatherings is prohibited between 10 pm to 5 am and only essential and emergency services are permitted.

  • Economists feel an uptick in investment and demand in FY23 will broad-base growth

    The economic recovery is likely to be broad-based and more durable in the next financial year as Covid-battered micro, small and medium enterprises (MSMEs), informal industries and contact-intensive services see a pick-up in capital investments and healthier balance sheets due to revival in demand, say economists. The resurgent Omicron variant, persisting shortages and bottlenecks, and worldwide divergence in policy stances due to inflationary pressures remain a concern, they say.

    “While we are watchful of the economic impact of global spread of Omicron, we are cautiously optimistic economic recovery in India will be more durable and broad-based in the coming year,” said Aditi Nayar, chief economist, Icra NSE 0.37 %.

    The International Monetary Fund (IMF) projected an 8.5% growth for India in FY23 in its October review last year. Overall economic growth is likely to be impressive in the current financial year, statistically boosted by the low base of 7.3% contraction in FY21. The Reserve Bank of India has forecast a 9.5% real GDP growth in the current fiscal, which should be a 1.6% rise over pre-Covid FY20.

    “We also expect broad-basing of growth, with rising contributions from the services sector. Government support has put investments on a stronger footing vis-a-vis private consumption, which is currently fragile,” said Dharmakirti Joshi, chief economist, Crisil.

    MULTIPLE DRIVERS
    Next fiscal could see both investments and consumption drive growth, with exports providing a helping hand. Rising consumption will push capacity utilisation above the crucial threshold of 75% by the end of 2022, which should trigger a broadbased pickup in private sector investment activity, said Nayar. Private consumption — the biggest GDP component — rose by over 8.6% in the second quarter of the fiscal but is yet to cross pre-Covid levels. If the economic recovery continues, private consumption is expected to rebound, too.

    An expected solid expansion in taxes will allow the government to prioritise growth-enhancing capital spending, which is also expected to crowd in private investment. The new tech ecosystem, asset monetisation and expansion of productionlinked scheme are among key drivers that could offset the potential demand slowdown.

    AND HEADWINDS
    The rapid advance of Omicron in the metros remains a concern as it could disrupt the economic recovery. However, economists are optimistic that its impact would not be so severe amid indications that the variant may spread faster but is not likely to be as damaging as earlier ones.

    “Omicron as a wildcard entry has tilted risks to outlook downwards.

    Experience tells us that successive waves, even if they overwhelm the health infrastructure, are less damaging to the economy,” said Joshi. Other risks that could weigh on growth include actions of the US Federal Reserve and other central banks, and domestic inflation dynamics. A rapid rise in US interest rates could disrupt financial markets.

    “Rising input prices (WPI) is bound to find its reflection on retail prices (CPI). This, along with higher deficit, will increase interest. However, exports is a ray of hope, said Devendra Pant, chief economist, India Ratings.

    Economists ET spoke to expect RBI to raise the repo rate by 50 basis points starting next financial year. Another concern is high crude and commodities prices, which could cause a faster-than-expected rise in interest rates if inflation accelerates.

  • Here’s where stock investors should consider putting their money in 2022Here’s where stock investors should consider putting their money in 2022

    Coming off several years of outsized gains in the stock market, investors may be hoping 2022 is like deja vu again.

    Don’t count on it. While future performance is impossible to predict with certainty, many financial advisors expect returns will come back down to Earth.

    “We have been telling clients to expect a lackluster year in the stock market and in portfolios in general, with lingering elevated inflation, slower economic growth and interest rate hikes,” said certified financial planner Shon Anderson, president and chief wealth strategist for Anderson Financial Strategies in Dayton, Ohio.

    So far this year, the S&P 500 Index — a broad measure of how U.S. companies are faring — has posted a total return (price gains plus dividends) of about 29.2%. That’s on the heels of 18.4% in 2020 and roughly 31.5% in 2019 (and a loss of more than 4% in 2018). Over time, the annual average is about 10%.

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    The Dow Jones Industrial Average has a total return so far this year of 21.1%, following 9.72% in 2020 and roughly 25.3% in 2019 (and a loss of 5.6% in 2018). The tech-laden Nasdaq Composite index, meanwhile, has posted a 23.2% gain so far this year, after 44.9% in 2020 and about 36.7% in 2019 (and a loss of 2.84% in 2018).

    While 2022 may end with lower returns — i.e., single-digit gains, perhaps — the economy is expected to continue to expand, albeit at a slower pace than earlier in the year. In the third quarter, gross domestic product — which measures all economic activity — grew at an annual pace of 2.3%, according to the Bureau of Labor Statistics. That came on the heels of 6.5% annual growth in the second quarter, and 6.4% in the first quarter.

    With that slower growth as a backdrop, coupled with persisting inflation and the Federal Reserve’s latest expectations that interest rate hikes are on their way next year, there may be certain industries or market sectors that outperform others. 

    “The environment is right for being more cautious and defensive … but there are still opportunities to make money,” said CFP Matthew McKay, an investment analyst with Briaud Financial Advisors in College Station, Texas.

    “Typically this is an environment where utilities, health care and consumer staples can outperform, generally speaking,” McKay said.

    International stocks — in  both developed markets and emerging markets — also may outperform, he said.

    “Looking at the second half of the year, many countries should turn up growth year over year, which would be quite positive for these two broad markets, especially given the reasonable multiples they are priced at,” McKay said.

    Real estate investment trusts could also do better than the broader market, Anderson said. REITs, as they’re called, are companies that own and/or operate properties such as office buildings, shopping malls, apartment complexes and warehouses. 

    “Specifically for REITs, we think there is more opportunity in the data centers, self-storage and health-care [facilities],” Anderson said. 

    Stocks related to residential building may also be a spot of strength, said Joseph Veranth, chief investment officer and portfolio manager at Dana Investment Advisors in Waukesha, Wisconsin. 

    Industrial stocks may also benefit from a strong economy and from more being spent on infrastructure or defense, said CFP Barry Glassman, founder and president of Glassman Wealth Services in Vienna, Virginia. Generally, companies in that sector manufacture and distribute goods used by industries such as construction, engineering, aerospace and defense, or they may be involved in transportation and logistics services.

    Additionally, Glassman said, his firm is focusing on total shareholder return — that is, looking at stocks with consistent dividend payouts, as well as stock buybacks. The latter generally causes a company’s share price to rise because fewer shares are on the market once the buyback happens.

    “I can’t imagine the S&P continuing its impressive three-year run but even if the index doesn’t do as well, I think there are stocks that could do better,” Glassman said. “I think what will rule is profitability and stability of earnings.”

  • NPS to allow 4 changes per fiscal in investment pattern

    Pension fund regulator PFRDA will soon allow subscribers of the National Pension System (NPS) scheme to change investment pattern as many as four times during a financial year as there has been a demand to increase the limit, its chairman Supratim Bandyopadhyay said Tuesday.

    Currently, NPS subscribers are allowed to change the investment pattern twice in a financial year. “One can change the investment choice twice in a year. Now, in a very short period of time, we are going to increase it to four times because there are requests that you allow more number of times (to change the investment pattern),” he said, addressing a webinar on NPS scheme organised by industry body Assocham.

    The only cautionary note PFRDA wants is that it is a long-term investment (product) to build a pension corpus, and it should not be treated akin to a mutual fund scheme, he said.

    “People sometimes mix it up with some mutual fund kind of thing that can give good returns. You have to give it some time and thereafter, only you can use it (changing option). Use it judiciously, we are going to increase it to four times in a year (financial year),” Pension Fund Regulatory and Development Authority’s chairman said.

    Subscribers are allowed to allocate their investments in a mix of instruments such as government securities, debt instruments, asset-backed and trust-structured investments, short-term debt investments, and equities and related investments.

    Currently, pension fund managers under NPS are – ICICI Prudential Pension Funds Management Company, LIC Pension Fund, Kotak Mahindra Pension Fund, SBI Pension Fund, UTI Retirement Solutions, HDFC Pension Management Co, and Birla Sun Life Pension Management.

    Bandyopadhyay also said the PFRDA wants to offer a variable annuity product to the subscribers after retirement, aimed at shielding them against inflation. “Once the annuity starts, that remains constant for your lifetime. Of course, there is one annuity (product) that gives a simple rise of three per cent per year but obviously, that will not take care of the risk of inflation.

    “We have been talking to the insurance regulator (Irdai) …and we have been talking to the annuity service providers also if they can think of this kind of variable annuity which can give some cushion against the rise of inflation,” he said.

    The PFRDA chairman said the Insurance Regulatory and Development Authority of India (Irdai) has made a working committee and a report has also been submitted by the committee.

    “We are in discussion with Irdai to ensure that those kinds of products are released as quickly as possible,” he added.

  • NPS to allow 4 changes per fiscal in investment pattern

    Pension fund regulator PFRDA will soon allow subscribers of the National Pension System (NPS) scheme to change investment pattern as many as four times during a financial year as there has been a demand to increase the limit, its chairman Supratim Bandyopadhyay said Tuesday.

    Currently, NPS subscribers are allowed to change the investment pattern twice in a financial year. “One can change the investment choice twice in a year. Now, in a very short period of time, we are going to increase.

    The only cautionary note PFRDA wants is that it is a long-term investment (product) to build a pension corpus, and it should not be treated akin to a mutual fund scheme, he said.

    “People sometimes mix it up with some mutual fund kind of thing that can give good returns. You have to give it some time and thereafter, only you can use it (changing option). Use it judiciously, we are going to increase it to four times in a year (financial year),” Pension Fund Regulatory and Development Authority’s chairman said.

    Subscribers are allowed to allocate their investments in a mix of instruments such as government securities, debt instruments, asset-backed and trust-structured investments, short-term debt investments, and equities and related investments.

    However, there are different rules for different sets of subscribers. For instance, government sector employees cannot have high exposure towards equities, while the corporate sector employees are allowed to allocate as much as 75% of asset towards equities.

    Separately, subscribers are also allowed to change fund managers once in a year. Fund managers invest subscribers’ pension assets in the prescribed investment schemes, as per choice.

    Currently, pension fund managers under NPS are – ICICI Prudential Pension Funds Management Company, LIC Pension Fund, Kotak Mahindra Pension Fund, SBI Pension Fund, UTI Retirement Solutions, HDFC Pension Management Co, and Birla Sun Life Pension Management.

    The PFRDA chairman said the Insurance Regulatory and Development Authority of India (Irdai) has made a working committee and a report has also been submitted by the committee.

    “We are in discussion with Irdai to ensure that those kinds of products are released as quickly as possible,” he added.

     

  • Investment via P-notes drop to Rs 94,826 crore in November

    Investments in Indian capital market through participatory notes (P-notes) dropped to Rs 94,826 crore till November-end after hitting 43-month high in the preceding month.

    P-notes are issued by registered foreign portfolio investors (FPIs) to overseas investors who wish to be a part of the Indian stock market without registering themselves directly. They, however, need to go through a due diligence process.

    According to Securities and Exchange Board of India data, the value of P-note investments in Indian markets — equity, debt and hybrid securities — was at Rs 94,826 crore by November end as compared to Rs 1,02,553 crore by October end.

    The month of October saw the highest level since March 2018, when P-notes had invested to the tune of Rs 1,06,403 crore. Abhay Agarwal, Founder and Fund Manager, Piper Serica, a Sebi-registered PMS, said there was a net sale of more than Rs 8,000 crore in November in the equity segment by P-note holders reversing the October inflow of more than Rs 5,000 crore.

    This is consistent with the FPI sales that have been seen in the current quarter to lock-in their gains for the year. “We expect to see a negative number in the month of December also. There was a marginal net inflow in the debt segment, but the number is too small to read much into,” he added.

    At the end of September this year, the investment level was at 97,751 crore, Rs 97,744 crore by August-end. The figure for July was revised to Rs 85,799 crore from Rs 1,01,798 crore posted earlier.

    Prior to that, investment level was at Rs 92,261 crore by June-end, Rs 89,743 crore by May-end, Rs 88,447 crore at April-end and Rs 89,100 crore by March-end.

    Of the total Rs 94,826 crore invested through the route till November, Rs 84,915 crore was invested in equities, Rs 9,605 crore in debt, Rs 306 crore in hybrid securities.

    P-notes flows have been volatile over the last four months in line with the volatility of the global and Indian markets. Divam Sharma, Co-founder, Green Portfolio, a Sebi-registered PMS, said that November 2021 has witnessed slight change in course of FPI inflows and this negative trajectory has also continued in the month of December 2021.

    The key reasons for FPI withdrawal from equity markets include expectations of monetary tightening by federal banks, high inflation levels, uncertainty around Omicron variant spread, and higher valuation levels in equity markets, he said.

    “This is also considering that most FPI’s go on year-end holidays for 2-4 weeks and had lightened positions before their vacations. This is a global trend as emerging markets across the globe along with developed markets have witnessed selling in November and December,” he added.

    The assets under the custody of FPIs declined to Rs 52.24 lakh crore in November-end from Rs 53.6 lakh crore in October-end. Piper Serica’s Agarwal expect the net flows to be anemic in the near future till FPIs start deploying their 2022 allocations.

    There are no big IPOs slated in the near term so the primary market inflows from P-note holders will be weak. Piper Serica’s Agarwal expect the net flows to be anemic in the near future till FPIs start deploying their 2022 allocations.”At the same time, market valuations have become quite reasonable after the recent correction. If the Omicron cases do not lead to national level lock downs and CPI inflation does not cross 6 per cent we expect the flows to be positive in the next quarter,” he added.

  • How Indians invested in crypto in 2021?

    The year 2021 will be remembered as the time when the crypto market came of age. From being a retail investor-heavy segment, the industry saw widespread adoption from major corporates such as Tesla, PayPal and MicroStrategy.

    As per experts, meme coins, central bank digital currency, metaverse, and non-fungible tokens (NFTs) were the four major trends of 2021.

    Hitesh Malviya, founder, itsblockchain.com, a blockchain and cryptocurrency publication believes, 2021 will be remembered as a year of mainstream cryptocurrency adoption. “In this year, India added more than 90% of its current retail investor size. Meme coins dominated the first half of the year when dogecoin pulled off a massive price rally. Shiba Inu and some other meme coins also followed the lead of dogecoin in the latter half of the year,” said Malviya.

    As per Indian crypto exchanges such as CoinDCX, BuyUcoin and WazirX, Bitcoin, Ethereum, Tether, Shiba Inu, Dogecoin, WazirX Token, Matic, Ripple, Cardano and Solana were among the most-traded crypto coins during the year.

    However, the majority of the trading volume was dominated by top coins. As per WazirX’s analysis of its database, Bitcoin was the most traded crypto on its platform in 2021. Interestingly, on WazirX, women traded more in Bitcoin, whereas men traded more in Shiba Inu.

    Further, an analysis of investment patterns by BuyUcoin revealed that of every ₹100 invested on its platform, ₹50 went into Bitcoin, ₹35 in Ethereum, ₹10 going to Shiba Inu or Dogecoin, and rest among other coins. Interestingly, the most held crypto coin on BuyUcoin was Ethereum with an average investment above ₹40,000.

    Sumit Gupta, chief executive officer and co-founder of CoinDCX believes that Indian users have always believed in less risky investment options. “The same is reflected in their crypto investments. Domestic investors mostly invest in major tokens such as Bitcoin and Ethereum, which have the largest share in the market cap. Some other altcoins such as Dogecoin and Shiba Inu also attracted Indian investors on different occasions,” said Gupta.

    Cryptocurrencies have seen an exponential increase in interest ever since a Reserve Bank of India (RBI) ban was lifted in March 2020, with Indian exchanges clocking impressive user additions and a sustained surge in daily trading volumes.

    As per a survey conducted by the exchange, 51% of the respondents admitted to entering crypto basis recommendations from friends and family first. The platform had sent out the survey to 8.5 million of WazirX users, out of which 1% users responded.

    The survey also revealed that 44% of the respondents had up to 10% of their overall investment portfolio in crypto.

    Apart from the word of mouth, the pull of astronomical returns couldn’t be ruled out as a possible factor behind the widespread adoption of crypto assets.

    As per data available with CoinGecko, a digital currency price and information data platform, on a year-to-date basis, Bitcoin is up 68% and Ethereum is 441%, while on the other hand Dogecoin has surged 3,596% and Shiba Inu 4,39,49,900%.

    On BuyUcoin, long-term investors who started buying crypto between 2020 and 2021 are sitting on massive gains. “However, the average gain on liquidated portfolio remains to be in the range of 45-55% for investors with quarterly holding periods and 15-25% for monthly holders and recent investors,” said Shivam Thakral, CEO, BuyUcoin.

    In terms of demographics, as per CoinDCX, the younger age group (between 18-30 years of age) tends to mostly look for short-term trading/investing opportunities ranging between a week to a month max. However, that trend is restricted to some meme coins only.