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Invesco wants EGM to Replace Punit Goenka from the Post of MD & CEO

26/09/2021

The Zee Entertainment story appeared to have a happy ending last week after the merger announcement with Sony Pictures. The merger will give the combine a 27% market share of the Indian entertainment and sports market with a total of 75 plus channels.

However, the rift between the current management and its largest shareholder, Invesco, is far from over. That is, if you go by the latest letter written by Invesco to Zee.

The letter has called for an urgent EGM (extraordinary general meeting) of shareholders to decide on the removal of Punit Goenka from the post of MD and CEO of Zee. Invesco wants the EGM to be held before the conclusion of the Zee-Sony merger.

According to Invesco, the decision on an important aspect like merger should have been taken ahead of the merger announcement, which was not done.

In fact, Invesco has specifically pointed to the merger as a case of poor corporate governance. Invesco expected to be taken into confidence before announcing the merger. It felt structural management changes should have preceded the merger announcement.

When Invesco first wrote the letter to Zee Entertainment on 11th September, it had called for removal of non-independent directors and inducting 6 directors recommended by Invesco.

In the merged entity, Sony nominates majority of directors. For Invesco, the best way to prevent this happening is to insist on the EGM to vote on the proposal and the constitution of the board. Then Invesco wants the reconstituted board to consider the merger afresh.

Invesco had called for the removal of Punit Goenka and 3 other directors from the board. Invesco was of the view that with just 3.44% stake in the combined entity, the former promoter family was exercising influence disproportionate to the quantum of holdings.

Post-merger, Subhash Chandra's stake in the combine goes up to 4%, thanks to 2% non-compete payment to Zee promoters. The promoter family also has the leeway to enhance this stake from 4% to 20%. That is precisely what Invesco wants to avoid.

Also Read:

Subhash Chandra Takes Up a Good Deal on his Zee Stake

What does the Zee merger with Sony mean

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SEBI to Introduce Swing Pricing Mechanism for Debt Funds

26/09/2021

In a move that was long awaited, SEBI rolled out swing pricing in the case of debt funds. The detailed process flow would be finalized by AMFI in consultation with the various asset management companies and placed for approval by SEBI. To understand the swing price mechanism, it is essential to understand how volatility will impact the NAVs of debt mutual funds and how it puts small retail investors at a disadvantage.

The new swing pricing framework will be officially effective from March 2022. To begin with, the facility of swing pricing would only be allowed in the event of large redemptions. In such cases, since the redemption is done at the previous day’s price the HNIs try and exit at an attractive NAV. This puts an additional burden on the existing unit holders as, quite often, the fund may have to sell less-liquid bonds at sub-market prices.

The whole purpose of Swing Pricing is to ensure that long term investors are not adversely impacted during big ticket redemptions. Normally, long term investment is recommended as the ideal strategy to investors in equity and debt funds. However, it has been observed that in the event of heavy redemptions the long term investors are the worst hit. Swing pricing will overcome this issue, but how will swing pricing work?

Here is how swing pricing works. For example, on the day of huge redemptions, some HNI investors may try and exit at the previous day's NAV. In the swing pricing mechanism, the exit NAV for the selling investor will be adjusted lower to reflect this loss so that the long term investors are not penalized. The idea is to avoid additional erosion for existing investors. If there is a huge cost in terms of liquidity, then outgoing investors bear the cost.

Swing pricing formula will only be applicable in the case of market dislocation. To begin with, the swing pricing mechanism will be introduced for all debt funds except money market funds, gilt funds and 10-year government security funds. SEBI will decide on what amounts to market dislocation while the AMFI will set the limits for triggering swing pricing.

Also Read:- 

SEBI Announces Optional T+1 Settlement From 01-January

Next Article

Tata Group to Consolidate Airlines Under a Single Entity

Tata Group News
by 5paisa Research Team 27/09/2021

Almost 73 years after Air India (formerly Tata Airlines) was taken away from the Tatas, the Tatas may be again chasing their dream of a consolidated national airline. The bidding for Air India is not over and Tata Group, Ajay Singh of SpiceJet and few PE funds are in the fray.

The verdict is not yet out, but the market is excited about the likely impact of a consolidated Tata airline. After the demise of Kingfisher and Jet Airways, there has been no competitive airline market in India.
If the Tatas win the bid for Air India, they could look at consolidation of airline interests under one head. Tata Sons currently holds 83.67% in Air Asia with the balance 16.33% held by Air Asia Malaysia Bhd, which plans to exit India fully by May 2022.

This stake in Air Asia India will be sold to the Tatas for $18 million. Of course, in the case of Vistara, Singapore Airlines owns 49% with Tata Sons holding the balance. Here the buy-in of Singapore Airlines will be required.

Why does the consolidation make business sense? If you look at the market share of airlines in India, the 3-month rolling average is 56% for Indigo, 12.5% each for Air India & Spice Jet, 9% for Vistara, 5.8% for Air Asia and 3.2% for Go Air. 

Apart from Indigo, which leads the Indian market with its LCC model, other market shares are too dispersed. If the Tatas combine Vistara, Air Asia and Air India (subject to winning the bid), then the Tatas get a combined 27-28% of the Indian aviation traffic.

This puts them in a sweet spot to take on the leader, Indigo Airlines. Also, Tata Airlines will be the only airline to offer the complete bouquet of LCC and full service airlines under a consolidated banner. As part of its plan, the Tatas would like to get the buy-in of Singapore Airlines and also get them to partner the combined venture. 

When Cathay Pacific, Thai Airways and Singapore Airline wanted to benchmark themselves on airline service standards 50 years ago, it was Air India, under JRD Tata, that they turned to. It is perhaps time to revive some of the glory.

Next Article

BTST Trading Tips for Today: 28th September, 2021

BTST Trading Tips for Today: 28th September, 2021
by 5paisa Research Team 27/09/2021

5paisa analysts bring the best intraday ideas, short-term ideas and long-term ideas for you. In the morning we provide best momentum stocks to buy today, while in the last trading hour we provide Buy Today Sell Tomorrow (BTST) and Sell Today Buy Tomorrow (STBT) ideas.

BTST Trading Ideas for Today

1. BTST : FINPIPE 

- Current Market Price: Rs.208

- Stop Loss: Rs.205

- Target: Rs.214

 

2. BTST : DRREDDY SEP FUT

- Current Market Price: Rs.4,808

- Stop Loss: Rs.4,787

- Target: Rs.4,865

 

3. BTST : STOVECRAFT

- Current Market Price: Rs.1,034

- Stop Loss: Rs.1,015

- Target: Rs.1,095

 

4. BTST : CONFIPET

- Current Market Price: Rs.83

- Stop Loss: Rs.81

- Target: Rs.88

 

5. BTST : JBCHEMPHARM

- Current Market Price: Rs.1,922

- Stop Loss: Rs.1900

- Target: Rs.1978
 

Next Article

5 Stocks to Buy Today: September 28, 2021

5 Stocks to Buy
by 5paisa Research Team 27/09/2021

Every morning our analysts scan through the markets universe and chose the best momentum stocks to buy today. The stocks are recommended from a wider list of momentum stocks and only the best ones make it to the top 5 list. We also update on the performance of earlier recommendation every morning to help you with your trading journey. Read on to know the momentum stocks to buy today. The average holding period could be between 7-10 days on average.

List of 5 Stocks to Buy Today

1. Indian Railway Catering And Tourism (IRCTC)

Indian Railway Catering and Tourism Corporation (IRCTC) is an India-based company engaged in offering Internet ticketing, catering and tourism. The Company is engaged in offering catering and hospitality services at stations, on trains and other locations. Its segments include Catering and Hospitality; Internet Ticketing; Travel and Tourism, and Packaged Drinking Water (Rail Neer).

IRCTC Stock Details for Today: 

- Current Market Price: Rs.3,835

- Stop Loss: Rs. 3,740

- Target 1: Rs. 3,900

- Target 2: Rs. 4,050

- Holding Period: One week

5paisa Recommendation: Sideways Momentum likely to end, thus making it to the top stocks to buy list. 

 

2. Prestige Estates (PRESTIGE)

Prestige EstatesStock Details for Today: 

- Current Market Price: Rs. 495

- Stop Loss: Rs. 481

- Target 1: Rs. 507

- Target 2: Rs. 525

- Holding Period: 1 week

5paisa Recommendation: Our technical analysts observe positive momentum, thus recommending this stock as the best stock to buy today. 

 

3. India Glycos (INDIAGLYCO)

India Glycos Stock Details for Today: 

- Current Market Price: Rs. 763

- Stop Loss: Rs. 744

- Target 1: Rs.781

- Target 2: Rs. 809

- Holding Period: 1 week

5paisa Recommendation: Our technical experts expects further buying in the stock and recommends buying this stock.

 

4. Nazara Technologies (NAZARA)

Nazara Technologies Stock Details for Today: 

- Current Market Price: Rs. 2,264

- Stop Loss: Rs. 2,200

- Target 1: Rs. 2,335

- Target 2: Rs. 2,450

- Holding Period: 1 week

5paisa Recommendation: Positive chart structure in stock is observed by our technical experts and thus making this stock as one of the best stocks to buy today.

 

5. Indo Count (ICIL)

Indo Count Stock Details for Today: 

- Current Market Price: Rs. 299

- Stop Loss: Rs. 291

- Target 1: Rs. 308

- Target 1: Rs. 321

- Holding Period: 1 week

5paisa Recommendation: Our technical experts see a strong volume in the stock hence making this stock best stock to buy.

 

Share Market Today

SGX NIFTY: 

SGX Nifty indicates positive opening for Indian markets. SGX Nifty is at 17,939.80 levels, higher 77.75 points. (Updated at 7:45 AM).

International Markets:

US Market:

US markets ended mixed as Dow Jones closed higher by 70 points while Nasdaq closed lower by 77 as bond yields rose to 4-month highs.

US 10-year yield hits 1.48% which prompts profit booking in technology stocks while banks see buying. The oil acts as a catalyst for higher yields as WTI hits 2-year highs with the inflation threat now a reality.

 

Asian Market:

Asian markets opened in the red led lower by the Japanese 'Nikkei' which was down 200 points in early trade.

Near-term profit booking could be the order for this week and beyond as markets react to higher crude, inflation, and equities at an all-time high.

Chinese stocks may be underperformers as money flows see institutional exit and entry into other Asian markets.

 

Disclaimer: The above report is compiled from information available on the public platforms.

Next Article

Paradeep Phosphates gets SEBI approval for IPO

Paradeep Phosphates gets SEBI approval for IPO
IPO
by 5paisa Research Team 28/09/2021

The Rs.1,255 crore fresh issue plus OFS, for which Paradeep Phosphates had filed the DRHP with SEBI in August 2021, has got SEBI approval for the IPO. The next step would be to factor in any comments of SEBI and then file the Red Herring Prospectus (RHP) with the Registrar Of Companies (ROC). The issue date is normally finalized after the RHP filing.

Paradeep Phosphates is currently 80.45% owned by Zuari Maroc Phosphates Private Limited and 19.55% owned by the Government of India. The overall issue will consist of Rs.1,255 crore fresh issue by the company to raise capital as well as an offer for sale of 12 crore shares by the existing shareholders viz. Zuari Maroc and Government of India.

As per the DRHP filed with SEBI, the government of India will offer 11.25 crore shares while Zuari Maroc Phosphates will offer 75 lakh shares as part of the offer for sale portion. The government stake will substantially reduce in this OFS and will add to its disinvestment receipts for fiscal year 2021-22. India has a divestment target of Rs.175,000 crore for FY22.

While the OFS portion will not alter the equity capital of the company, the fresh issue portion of Rs.1,255 crore will lead to expansion of the equity base and the dilution of earnings per share. The fresh issue proceeds will be used by the company for acquiring a fertilizer facility in Goa and repaying some of its debt to deleverage the balance sheet.

Paradeep Phosphates manufactures complex fertilizers like di-ammonium phosphate (DAP) and three grades of Nitrogen, Phosphorus, Potassium (NPK) fertilizers. The fertilizers manufactured by Paradeep Phosphates are currently marketed under the brands of “Navratna” and the Jai Kisaan Navratna”. 

The current year has been a solid year for the IPOs and looks all set to better the tally of 2017. Also, there are mega issues like Policybazaar, Nykaa, Paytm and LIC that are slated to hit the IPO market during the current fiscal.

Also Read:-

1. List of Upcoming IPOs in 2021

2. Upcoming IPOs to raise Rs.45,000 Crore in Oct-Nov