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JSPL to Separate Power Business to Worldone for Rs.7,401 crore

JSPL to Separate Power Business to Worldone for Rs.7,401 crore
05/09/2021

On 03-Sep, shareholders of Jindal Steel & Power (JSPL), approved the proposal to sell 96.42% stake in Jindal Power Limited to Worldone. It must be noted that Worldone is a promoter group company of the Jindal family. The special resolution was passed by shareholders of JSPL with 97.12% votes supporting the resolution.

The consideration of Rs.7,401 crore will entail two parts. It will entail a cash pay-out of Rs.3,015 crore to JSPL. In addition, Worldone will also assume Rs.4,386 crore worth of liabilities and obligations of JSPL which are in the form of intercorporate deposits (ICD) and capital advances given by Jindal Power to JSPL. However, the final outcome was not smooth sailing all along.

The original meeting to seek shareholder approval was set in May-21. However, that meeting was cancelled after proxy advisors strongly objected to the low pay-out. Subsequently, Worldone sweetened its offer and agreed to pay a cash component plus assumption of liabilities of JSPL. However, there are still objections on the arms-length issue since the buyer of JPL, Worldone, is a Jindal group company. 

Notwithstanding the objections, the resolution has got a decisive vote of 97.12% of shareholding and the deal is now likely to be executed. There are some distinct benefits for JSPL from this sale. Firstly, the deal will eliminate Rs.6,566 crore of debt in the books of JSPL attributable to the Jindal power business. Secondly, it allows JSPL to focus on its core steel business, which is seeing strong demand at present. 

Above all, this sale will help JSPL to reduce its carbon footprint, something all metal companies are trying to do. This move also gives JSPL a more favourable positioning in terms of its ESG (Environmental, Social, Governance) metrics and is expected to be valuation accretive.

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Best Defensive Stocks That Gave Outstanding Returns

by 5paisa Research Team 05/09/2021

One narrative you heard in the last few days is that defensive stocks have done very well. What exactly are defensive stocks? There are no hard and fast classification, but defensive stock have 3 characteristics. Firstly, demand for their products is perennial in nature. Seasonal products and services are out. Secondly, defensives are not subject to cycles like metals and cement stocks. Lastly, defensive stocks generally enjoy high levels of ROE and possibly higher P/E too. 

8 defensive stocks and how they performed:
 

Defensive Stock

CMP (03-Sep)

YTD Returns (%)

Nifty YTD

Aug-21 (%)

Nifty Aug-21

Hindustan Unilever

₹ 2,767

15.51%

23.90%

16.75%

8.69%

Avenue Supermarts

₹ 3,939

42.52%

23.90%

12.71%

8.69%

Dabur Ltd

₹ 641

20.04%

23.90%

3.46%

8.69%

TCS

₹ 3,842

34.21%

23.90%

19.54%

8.69%

Infosys Ltd

₹ 1,701

35.42%

23.90%

5.96%

8.69%

Wipro Ltd

₹ 655

69.61%

23.90%

9.16%

8.69%

Sun Pharma

₹ 789

33.27%

23.90%

2.60%

8.69%

Cipla Ltd

₹ 941

14.78%

23.90%

3.02%

8.69%

Data Source: NSE

1)    Hindustan Unilever: India’s largest FMCG company has seen robust demand post pandemic and managed to pass on input cost spikes to customers. HUL outperformed Nifty in Aug-21 but underperformed Nifty YTD.

2)    Avenue Supermarts: The owner of D-Mart brand saw retail sales and per store profits pick up sharply, despite COVID 2.0. Avenue Supermarts outperformed Nifty in Aug-21 and also YTD.

3)    Dabur Ltd: The stock has seen good traction from its Ayurvedic FMCG brands, especially health drinks and immunity builders. It has been a steady performer in 2021.

4)    TCS Ltd: The Tata software giant made the best of rising tech spend globally. While TCS does not give guidance, it saw operating margins steady. TCS outperformed Nifty in Aug-21 and also on YTD basis.

5)    Infosys Ltd: The stock has been consistently re-rated in the last one year as it closed in its OPM gap with TCS and gave robust guidance. Infosys outperformed Nifty on YTD basis but returns were lower than Nifty in Aug-21.

6)    Wipro Ltd: The new CEO, Thierry Delaporte, has brought in aggression and focus on high value clients. The impact is visible in the price. Wipro also outperformed Nifty in Aug-21 and also on YTD basis.

7)    Sun Pharma: The company has managed to integrate its Ranbaxy acquisition and exit its financial ventures. It also benefited from the pandemic demand. Sun Pharma outperformed Nifty on YTD basis, though not necessarily in Aug-21.

8)    Cipla Ltd: The Mumbai based pharma company has gained from COVID focus as also it recent inorganic focus on bio-similars. Cipla has been a solid performer in 2021.

With Nifty and Sensex at all-time highs, institutions and HNI clients are showing a clear preference for defensive picks.

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Vijaya Diagnostic IPO Allotment - How to Check the Allotment Status?

Vijaya Diagnostic Centre IPO Allotment
IPO
05/09/2021

The Rs.1,895 crore IPO of Vijaya Diagnostic Centre, consisting entirely of an offer for sale (OFS), was subscribed 4.54X overall at the close of bidding on 03 September. The basis of allotment will be finalized on 08 September. If you have applied for the IPO, you can check your allotment status online. 

You can either check your allotment status on the BSE website or the IPO registrar, KFINTECH Private Limited (formerly Karvy Computershare). Here are the steps.

Checking the allotment status of Vijaya Diagnostic Centre on BSE website

Visit the BSE link for the IPO allotment by clicking on the link below https://www.bseindia.com/investors/appli_check.aspx

Once you reach the page, here are the steps to follow.
•    Under Issue Type – Select Equity Option
•    Under Issue Name – Select Vijaya Diagnostic Centre from the drop down box
•    Enter the Application Number exactly as in the acknowledge slip
•    Enter the PAN (10-digit alphanumeric) number
•    Once this is done, you need to click on the Captcha to verity that you are not a robot
•    Finally click on the Search Button


The allotment status will be displayed on the screen in front of you informing about the number of shares of Vijaya Diagnostic Centre IPO allotted to you.

Checking the allotment status of Vijaya Diagnostic Centre on KFINTECH (Registrar to IPO)

Visit the KFINTECH registrar website for IPO status by clicking on the link below:
https://rti.kfintech.com/ipostatus/

Once you click on Recent IPOs, the dropdown will only show the active IPOs, so once the allotment status is finalized, you can select Vijaya Diagnostic Centre from the drop down box.


•    There are 3 options. You can either Query the allotment status based on PAN, Application Number or DPID-Client ID combination.

•    To Query by PAN, check the appropriate box and follow these steps.
o    Enter the 10-digit PAN number
o    Enter the 6-digit Captcha Code
o    Click on Submit button
o    Allotment status gets displayed on screen

•    To Query by Application Number, check the appropriate box and follow these steps.
o    Select Application Type (ASBA or Non-ASBA)
o    Enter the Application Number as it is
o    Enter the 6-digit Captcha Code
o    Click on Submit button
o    Allotment Status gets displayed on screen

•    To Query by DP-ID, check the appropriate box and follow these steps.
o    Select the depository (NSDL / CDSL)
o    Enter the DP-ID
o    Enter the Client-ID
o    Enter the 6-digit Captcha Code
o    Click on Submit button
o    Allotment Status gets displayed on screen
 

Also Read: 

Upcoming IPOs in 2021

IPOs in September

7 Interesting Facts to Know About Vijaya Diagnostics IPO

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Ami Organics IPO Allotment - How to Check the IPO Allotment Status

Ami Organics IPO Allotment
IPO
05/09/2021

The Rs.570 crore IPO of Ami Organics, consisting of Rs.200 crore fresh issue and Rs370 crore OFS, was subscribed 64.54X overall at the close of bidding on 03 September. The basis of allotment will be finalized on 08 August. If you have applied for the IPO, you can check your allotment status online. 

You can either check your allotment status on the BSE website or the IPO registrar, Link Intime. Here are the steps.

Checking the allotment status of Ami Organics on BSE website

Visit the BSE link for the IPO allotment by clicking on the link below https://www.bseindia.com/investors/appli_check.aspx 

Once you reach the page, here are the steps to follow.

•    Under Issue Type – Select Equity Option
•    Under Issue Name – Select Ami Organics from the drop down box
•    Enter the Application Number exactly as in the acknowledge slip
•    Enter the PAN (10-digit alphanumeric) number
•    Once this is done, you need to click on the Captcha to verity that you are not a robot
•    Finally click on the Search Button

The allotment status will be displayed on the screen in front of you informing about the number of shares of Ami Organics allotted to you.

Checking the allotment status of Ami Organics on Link Intime (Registrar to IPO)

Visit the Link Intime registrar website for IPO status by clicking on the link below:
https://linkintime.co.in/MIPO/Ipoallotment.html

This dropdown will only show the active IPOs, so once the allotment status is finalized, you can select Ami Organics from the drop down box.

•    There are 3 options. You can either access the allotment status based on PAN, Application Number or DPID-Client ID combination.

•    Select the appropriate option you want to use and enter the details (PAN / Application Number / DPID-Client ID)

•    Finally, click on the Search button

The IPO status with number of shares of Ami Organics allotted will be displayed on the screen.

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5 Mantras for Trading Derivatives

5 Mantras for Trading Derivatives
by 5paisa Research Team 06/09/2021

5 Mantras for Trading Derivatives

 

 The underlying is what matters: Derivatives get their value from an underlying asset. This could be a stock, commodity, currency, or even interest rates. Since the value is derived from an underlying asset, we talk of derivatives in terms of contracts. Two broad categories of derivatives include futures and options. When you trade a futures contract, you must honour it at the pre-decided time and price. When you trade an options contract, you have the right but not the obligation to honour the contract at the time of expiry.

 Customised vs Standardised: Derivatives could be over-the-counter (OTC) customised or exchange traded and standardised. OTC derivatives have customisable features tailor-made to suit your needs (Forwards) or they could be completely standardised by the exchange for the retail investor (Futures)..

 Leverage is a double-edged sword: You can enter a futures contract at a fraction of the price it would take for you to buy the same number of shares. This means that you can trade derivatives with a lower capital base. However, it is important to note that a lower capital base might give you higher Return on Investment (ROI) but, it will also increase the risk since both returns and losses get magnified.

 Marked to Market: At the end of each day, the futures contract closes at a certain price. Based on this closing price, you would either be making a profit or loss. The exchange, with the help of brokers and the clearing house, collects money from the loss bearing party and pays the same money to the profit-making party. This is called marking to market.

 Payoffs can be symmetric or asymmetric: Symmetric returns means when the trade has the potential for unlimited profit or unlimited loss. This would be the case in a futures contract where the potential to gain money and lose money is unlimited. Asymmetric means when the potential to make a gain or loss is not equal. For example, when you buy a call option, your loss is limited to the premium that you pay. However, if the price of the underlying moves in your favour, you can make unlimited profits. This refers to asymmetrical returns.
 

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UCO Bank Partners with Fisdom for Wealth Management

UCO Bank partners with Fisdom for Wealth Management
06/09/2021

Kolkata based UCO Bank has partnered with Fisdom, the wealth start-up operated by Finwizard Technology, for offering wealth management products to its clients. UCO Bank is one of the few surviving PSU banks after the spate of mergers that the government had piloted in the last 3 years. Fisdom is a wealth management products platform, which offers mutual funds, insurance and pension products along with research  and content support.

The partnership will allow UCO Bank to offer the wealth management products on the Fisdom platform to its banking customers through the m-banking app. Customers of UCO Bank will have a more organized way to plan their finances with mutual funds and other financial products with the Fisdom platform integrated into the UCO banking application. In a way, it offers an integrated experience of banking and wealth nurturing.

For UCO Bank it becomes a product extension to the existing customer base. In the last two years, there has been a surge in equity and mutual fund investors with millions of new demat accounts and SIP accounts being opened. This agreement will allow UCO Bank to capitalize on this trend by offering the add-on wealth product offerings to banking clients. 

With the number of banks reducing by merging into larger sized banks, the onus is on each bank to deepen their relationship with their existing customers to improve ROI. The digital nature of the product allows them to scale up their offerings at minimal cost.

For Fisdom, the partnership provides them the much needed banking partnership which is the key to offering wealth management products on a much wider platform. For Fisdom, this is an opportunity to offer a largely customized wealth management experience to the large mass of UCO Bank customers. 

To begin with, it does look like a symbiotic relationship in which the bank gains from the customer deepening experience and the platform gains from the banking customer access.