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B P C L 385.90 (1.86%)
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Fisdom Launches Stock Broking Services

Fisdom Launches Stock Broking Services
by 5paisa Research Team 21/10/2021

Fisdom, one of India’s fastest growing wealth advisory platforms, has now made a foray into stock broking. Fisdom is backed by Naspers. Incidentally, Naspers is a South Africa headquartered technology investor with deep value investments in a number of internet and fintech propositions across the world.

The stock broking venture will position Fisdom as an advisory based stock broker offering a wide array of financial products and services. This would include equity, futures, options, ETFs, Gold Bonds, NCDs as well as services like currency broking. All this would be backed by strong research pool as well as screeners to shortlist companies.

Direct investing or do-it-yourself investing has become the big craze in India, especially after the surge of millennials in stock market trading. This trend has been underlined by a lot of value added digital services being provided by the low cost broking houses like Zerodha, Upstox, 5Paisa and Paytm Money.

Of course, cost would continue to be a major consideration for the do-it-yourself or DIY investor. Fisdom will target the long term investors and the aggressive traders. The idea is to have a dual pricing approach. For the long term investors and the small traders, the focus will be on offering zero brokerage or near zero brokerage offerings to clients. 

For the aggressive traders, who churn large volumes on thin spreads, Fisdom will offer a fixed subscription model. Here the clients will pay a fixed brokerage amount for a month and on that amount they will be allowed to put in almost limitless trades. Only the statutory charges will be billed on actuals. This is likely to attract aggressive churners of capital.

Fisdom already operates a successful mutual fund distribution platform and wants to extend that logic to equities. Apart from low costs, Fisdom will also offer a host of add-ons like research coverage on nearly 3,500 stocks, research tools like quants and technicals as well as smart screeners enabling the right search in a short time.

The broking opportunity looks salivating with the demat account doubling in the last 18 months from 3.5 crore to 7 crore. Of course, the risk is that the broking end is already getting crowded and differentiation and a unique proposition will make the difference in the final analysis. That would be Part-2 of the fight for the broking mindshare.

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Bandhan Financial May Look to Buy into Future Generali Insurance

Bandhan Financial May Look to Buy into Future Generali Insurance
by 5paisa Research Team 21/10/2021

Bandhan Financial, the holding company of Bandhan Bank, plans to foray into the insurance business by picking up a stake in Future Generali Insurance. Bandhan Financial had monetized close to Rs.10,600 crore from the sale of its stake in Bandhan Bank to comply with the RBI stipulations on promoter holding in banks. This cash will now be used.

Future Generali is a 3-way joint venture between Future Group, Generali and Industrial Investment Trust (IIT). While Future group holds 34% and IIT holds 17%, the balance 49% is held by Generali group. Bandhan Financial has already made it clear that it would be willing to pay a control premium, but only if it gets management control of Future Generali. It is not keen on being a junior partner.

This is not the first attempt by the Future group to monetize its stake in Future Generali. Future group was in talks with Sachin Bansal of Flipkart some time back but the talks did not materialize. Future Group has been looking to monetize its assets but then insurance is one of the few businesses to be left with Future group after their merger with Reliance Retail.

An important factor in this entire deal will be the Generali group. This Trieste, Italy based group already has 49% and as per the modified FDI rules for insurance investments, they can take their holding in the insurance joint venture up to 74%. They would be keen to make the best of the vast insurance opportunity available in the Indian context.

For FY21, Future Generali had collected first year premiums of Rs.521 crore and total gross premiums written was Rs.1,322 crore. The business model is up and running and that will be an advantage. Bandhan bank, with its vast distribution network, will be in a position to leverage the insurance business to the hilt. In short, there are synergies in the deal.

Recent reports on the insurance industry outlook show a humongous opportunity. India is at an inflexion point wherein the gap between the longevity funding needs and the retirement savings are at their highest level. 

That makes insurance an important part of the financial plan. While neither Bandhan Financial nor Future group or Generali have commented, the battle for insurance mind share is going to be the next big battleground.

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Asian Paints Share Q2 Results

Asian Paints share Q2 Results
by 5paisa Research Team 21/10/2021

You can be sure that there is pressure on margins when a marquee company like Asian Paints reports pressure on profits. In fact, for the Sep-21 quarter, Asian Paints has reported pressure on operating and net profits, largely due to a spike in raw material costs. Apart from the steep increase in Brent crude prices, supply chain constraints were also responsible. Here is a quick story of the Asian Paints Q2 results.

India’s largest paints company, Asian Paints, reported 32.6% growth in total revenues for the Sep-21 quarter at Rs.7,096 crore. Asian paints broadly operates in two segments viz. the paints segments and the home improvement solutions, which is much smaller. In both the segments, the sales growth remained robust, largely on the back of festival demand. Here is a quick snapshot of the financials of Asian Paints.

Asian Paints Q2 results

Rs in Crore

Sep-21

Sep-20

YoY

Jun-21

QOQ

Total Income (Rs cr)

₹ 7,096.01

₹ 5,350.23

32.63%

₹ 5,585.36

27.05%

Operating Profit (Rs cr)

₹ 701.70

₹ 1,071.62

-34.52%

₹ 712.97

-1.58%

Net Profit (Rs cr)

₹ 595.96

₹ 830.37

-28.23%

₹ 568.50

4.83%

Diluted EPS (Rs)

₹ 6.21

₹ 8.66

 

₹ 5.93

 

OPM

9.89%

20.03%

 

12.76%

 

Net Margins

8.40%

15.52%

 

10.18%

 


Let us turn to the operating profits of the company. On a YoY basis, the operating profits were down -35% at Rs.702 crore. This operating profits is before interest and after depreciation but excludes other income from the revenue calculation. The main pressure point on operating profits came from the spike in raw material costs.

The spike is quite obvious. On a YoY basis, the raw material costs were up nearly 73% in the Sep-21 quarter and almost accounted for 5% of sales. Even an attempt at inventory efficiency gains did not help much in the final analysis. As a result, operating margins almost halved on a YoY basis as high crude prices and supply chain constraints took its tool.

Check - Asian Paints - Quarterly Results

Net profits in the quarter fell by -28% YoY at Rs.596 crore largely due to the operating profit pressures getting transmitted to the bottom line. Of course, the interest costs are quite low for Asian Paints and they don’t make a material difference in the overall scheme of things.

Paints are crude oil intensive and with Brent crude crossing $85/bbl that was bound to be the big challenge. Net margins at 8.40% was sharply lower than 15.52% in Sep-20 quarter. Asian Paints announced an interim dividend of 365% on its par value.

Also Read:- 
 

1. Crude Oil at $83/bbl – Who Gains and Who Loses

2. Paint Sector Stocks

3. Sectors dependent on crude Oil

4. Crude Oil at $75/bbl – Here comes inflation

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Gold Plus to Launch IPO of Rs.1,200 crore

Gold Plus Launch IPO of Rs.1,200 crore
by 5paisa Research Team 21/10/2021

Gold Plus Glass Industry is likely to file the draft red herring prospectus (DRHP) for its proposed IPO. The DRHP filing is likely to happen around late December or in early January, so the entire process will only start after that. Gold Plus Glass is backed by Premji Invest, the family office of Azim Premji of the Wipro Group.

While details are yet to be available, only the size is known and that Jefferies and Axis are among the investment bankers to the issue. The company will look at a combination of a fresh issue and an offer for sale, where the original promoters will look to partially monetize their holdings in the company.

The company is planning to use the fresh funds to expand its capacity to manufacture solar glass and float glass. In fact, the combined capacity of Gold Plus to manufacture solar glass and float glass currently stands at 1,250 tonnes per day. Post the expansion, this capacity will stand enhanced to 1,900 tonnes per day.

It is interesting to under the applications of float glass and solar glass. Solar glass is a high resistance glass that is used in solar panels that are used to produce electricity. It is a high-end form of glass. Float glass, on the other hand, is more of a distortion free material that finds extensive application in domestic use.

The total project cost for the expansion will be Rs.2,200 crore which will be funded partially through the fresh issue, partially through internal accruals and partially through debt. Float glass and solar glass factories typically have a gestation period of 2-3 years. It will invest in 1 solar glass line and 2 float glass lines in all.

Once the entire expansion goes on stream, Gold Plus targets annual revenues of Rs.3,000 crore. It also sees a huge export market for this glass. Currently, in the float glass and solar glass segment, there are established players like Saint Gobain, Asahi Glass and Gujarat Guardian. Amidst rising global demand, Gold Plus wants to emerge the largest Indian producer of specialized glass.

Premji Finvest had allocated Rs.400 crore for a stake in Gold Plus in the year 2018. Its current value is not known.

Also Read:-

Upcoming IPOs in 2021

List of Upcoming IPOs in October 2021

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Nykaa IPO - 7 Things to know before applying for IPO

Nykaa IPO - 7 Things to know before applying for IPO
by 5paisa Research Team 21/10/2021

FSN Ecommerce Ventures Ltd, the company that owns and operates the Nykaa brand, has announced the dates for its proposed IPO.

Here are 7 things you need to know about the Nykaa IPO

✔️   The Nykaa IPO will open for subscription on 28-Oct and close for subscription on 01-Nov. The basis of allotment is expected to be done by 08-Nov while shares are expected to be credited to the demat accounts of allottees by 10-Nov. Nykaa IPO is slated to list on 11th November.

Check : Nykaa IPO Note

✔️    The IPO will be a mix of fresh issue and an OFS. The fresh issue will be worth Rs.630 crore while the OFS will be for a total of 419.73 lakh shares. While the price band is yet to be announced, the market is expecting a price band of Rs.1100 – Rs.1,125. That would peg the OFS at the upper end at around Rs.4,720 crore and the overall size of the IPO at approximately Rs.5,350 crore. This is a market estimate.

✔️    Nykaa was promoted by former Kotak investing banking head honcho, Falguni Nayar. The promoter and the family trusts will also participate in the OFS, but will continue to remain majority shareholders post the IPO. Nykaa offers a digital platform to sell beauty and fashion care products as well as apparel and accessories of marquee brands.

✔️    Nykaa is broadly structured under 2 verticals viz. Nykaa and Nykaa Fashion. The Nykaa vertical comprises the beauty and personal care products and has close to 1.98 lakh SKUs (stock keeping units) from across 2,476 brands. The Nykaa fashion vertical sells apparel and accessories and has 1.8 million SKUs across 1,350 brands.

✔️    The IPO proceeds will be used to invest in subsidiary, FSN Brands, as well as to set up new retail stores. It will also allocate part of the fresh proceeds towards setting up new warehouses. The biggest allocation will include Rs.156 crore for repayment of loans and Rs.234 crore towards investing in building brand visibility and brand awareness.

✔️    Nykaa prides itself in being the rare profit making digital play. For FY21, Nykaa made net profits of Rs.62 crore on revenues of Rs.2,453 crore. For the Jun-21 quarter, Nykaa reported net profits of Rs.3.52 crore on revenues of Rs.822 crore.

✔️    Nykaa, in a nutshell, intends to offer the perfect omnichannel experience. It will offer online and offline sales. It will also offer proprietary and external brands. It will offer pull and push experience for customers.
Nykaa is the biggest digital IPO after Zomato IPO and will test the institutional and retail appetite. QIBs have 75% allocation in the IPO with retail having just 10%.

 

Nykaa IPO - Details Explained

 

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Also Read:-

Upcoming IPOs in 2021

List of Upcoming IPOs in October 2021

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Changes in F&O Lot Sizes Effective from 29th Oct

Changes in F&O Lot Sizes Effective from 29th Oct
by 5paisa Research Team 22/10/2021

As per the NSE circular dated 30th September 2021, a total of 45 stocks will changes in their F&O lot sizes due to relevant price movements. While these changes will be effective from 29th October, the day after the October expiry, the contracts for which they will be applicable will wary. Here is a quick summary.
 

Lot size changes

Number of F&O stocks

Effective Date and Expiry

Lot size revised downwards

34 stocks

Effective 29-Oct for November expiries and later

Lot size revised upwards

5 stocks

Effective 29-Oct for January expiries and later

Lot size unchanged

127 stocks

Not applicable

Revised down (not multiple of old lot size)

6 stocks

Effective 29-Oct for January expiries and later


In the second and fourth case, the lot sizes will be changed from 29-Oct but the lot sizes will be the same for November and December contracts and will change only from January.
 

List of 34 stocks where lot sizes are revised downward in multiples of old lot size

Sr No

Underlying

Symbol

Present Market Lot

Revised Market Lot

1

ACC LIMITED

ACC

500

250

2

ADANI ENTERPRISES LIMITED

ADANIENT

1000

500

3

AMBUJA CEMENTS LTD

AMBUJACEM

3000

1500

4

APOLLO HOSPITALS ENTER. L

APOLLOHOSP

250

125

5

ASIAN PAINTS LIMITED

ASIANPAINT

300

150

6

BALKRISHNA IND. LTD

BALKRISIND

400

200

7

BHARAT FORGE LTD

BHARATFORG

1500

750

8

CADILA HEALTHCARE LIMITED

CADILAHC

2200

1100

9

COFORGE LIMITED

COFORGE

200

100

10

DEEPAK NITRITE LTD

DEEPAKNTR

500

250

11

DIVI'S LABORATORIES LTD

DIVISLAB

200

100

12

DLF LIMITED

DLF

3300

1650

13

GODREJ CONSUMER PRODUCTS

GODREJCP

1000

500

14

GODREJ PROPERTIES LTD

GODREJPROP

650

325

15

HINDALCO  INDUSTRIES  LTD

HINDALCO

2150

1075

16

ICICI PRU LIFE INS CO LTD

ICICIPRULI

1500

750

17

INTERGLOBE AVIATION LTD

INDIGO

500

250

18

INFOSYS LIMITED

INFY

600

300

19

JUBILANT FOODWORKS LTD

JUBLFOOD

250

125

20

DR. LAL PATH LABS LTD.

LALPATHLAB

250

125

21

MANAPPURAM FINANCE LTD

MANAPPURAM

6000

3000

22

MARICO LIMITED

MARICO

2000

1000

23

MINDTREE LIMITED

MINDTREE

400

200

24

MUTHOOT FINANCE LIMITED

MUTHOOTFIN

750

375

25

NATIONAL ALUMINIUM CO LTD

NATIONALUM

17000

8500

26

NESTLE INDIA LIMITED

NESTLEIND

50

25

27

PIDILITE INDUSTRIES LTD

PIDILITIND

500

250

28

STEEL AUTHORITY OF INDIA

SAIL

9500

4750

29

SUN PHARMACEUTICAL IND L

SUNPHARMA

1400

700

30

TATA CONSUMER PRODUCT LTD

TATACONSUM

1350

675

31

TATA STEEL LIMITED

TATASTEEL

850

425

32

TATA CONSULTANCY SERV LT

TCS

300

150

33

UNITED BREWERIES LTD

UBL

700

350

34

WIPRO LTD

WIPRO

1600

800


This above downward revisions will be applicable from the November 2021 contracts and the lot sizes will be revised lower from November contracts itself and continue thereafter.
 

List of 5 stocks where lot sizes in F&O are revised upwards

Sr No

Underlying

Symbol

Present Market Lot

Revised Market Lot

1

ALEMBIC PHARMA LTD

APLLTD

550

700

2

AUROBINDO PHARMA LTD

AUROPHARMA

650

750

3

CITY UNION BANK LTD

CUB

3100

3400

4

IDFC FIRST BANK LIMITED

IDFCFIRSTB

9500

11100

5

STRIDES PHARMA SCI LTD

STAR

675

900


These upward revisions as above will only be applicable from the January 2022 contracts and the lot sizes for the November and December contracts will remain the present market lot.
 

List of 6 stocks where lot sizes are revised downward (NOT) in multiples of old lot size

Sr No

Underlying

Symbol

Present Market Lot

Revised Market Lot

1

BAJAJ FINSERV LTD.

BAJAJFINSV

75

50

2

BHARTI AIRTEL LIMITED

BHARTIARTL

1886

950

3

CONTAINER CORP OF IND LTD

CONCOR

1563

800

4

INDIAN RAIL TOUR CORP LTD

IRCTC

325

175

5

MPHASIS LIMITED

MPHASIS

325

175

6

SRF LTD

SRF

125

75

These downward revisions as above will only be applicable from the January 2022 contracts and the lot sizes for the November and December contracts will remain the present market lot.

A total of 127 stocks will not see any lot size change. You can access the circular and the full list by downloading the Zip file from the NSE website (note: you need to unzip the file).

https://archives.nseindia.com/content/circulars/FAOP49795.zip

Also Read:-

1. 5 Mantras for Trading in Options

2. 5 Mantras for Trading in Futures

3. 8 Stocks to Enter in F&O List

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