Nifty 17196.7 (-1.18%)
Sensex 57696.46 (-1.31%)
Nifty Bank 36197.15 (-0.85%)
Nifty IT 35848.05 (-0.86%)
Nifty Financial Services 17779.5 (-1.13%)
Adani Ports 737.45 (-0.22%)
Asian Paints 3110.45 (-2.21%)
Axis Bank 673.00 (-0.46%)
B P C L 385.90 (1.86%)
Bajaj Auto 3287.85 (-1.22%)
Bajaj Finance 7069.25 (-1.55%)
Bajaj Finserv 17488.70 (-1.52%)
Bharti Airtel 718.35 (-1.94%)
Britannia Inds. 3553.75 (-0.69%)
Cipla 912.05 (-1.00%)
Coal India 159.75 (0.28%)
Divis Lab. 4757.05 (-0.42%)
Dr Reddys Labs 4596.50 (-1.42%)
Eicher Motors 2455.55 (0.16%)
Grasim Inds 1703.90 (-1.16%)
H D F C 2771.65 (-1.29%)
HCL Technologies 1171.40 (-1.12%)
HDFC Bank 1513.55 (-0.80%)
HDFC Life Insur. 690.95 (-2.03%)
Hero Motocorp 2462.45 (-0.41%)
Hind. Unilever 2343.65 (-1.66%)
Hindalco Inds. 424.65 (-1.72%)
I O C L 122.20 (1.28%)
ICICI Bank 716.30 (-0.84%)
IndusInd Bank 951.15 (0.59%)
Infosys 1735.55 (-0.73%)
ITC 221.65 (-1.69%)
JSW Steel 644.55 (-0.34%)
Kotak Mah. Bank 1914.20 (-2.55%)
Larsen & Toubro 1801.25 (0.67%)
M & M 836.95 (-1.48%)
Maruti Suzuki 7208.70 (-1.59%)
Nestle India 19321.35 (-0.93%)
NTPC 127.00 (-1.32%)
O N G C 145.90 (1.32%)
Power Grid Corpn 206.10 (-3.92%)
Reliance Industr 2408.25 (-3.00%)
SBI Life Insuran 1165.95 (-1.86%)
Shree Cement 25914.05 (-1.43%)
St Bk of India 473.15 (-0.81%)
Sun Pharma.Inds. 751.80 (-1.89%)
Tata Consumer 774.30 (0.14%)
Tata Motors 480.10 (0.21%)
Tata Steel 1118.00 (0.50%)
TCS 3640.45 (-0.07%)
Tech Mahindra 1593.30 (-2.23%)
Titan Company 2369.25 (-0.72%)
UltraTech Cem. 7332.45 (0.13%)
UPL 712.75 (2.08%)
Wipro 640.75 (-0.94%)

NSE Launches Weekly Currency Futures on USDINR

NSE Launches Weekly Currency Futures on USDINR
by 5paisa Research Team 12/10/2021

Monthly currency futures contracts on USDINR are one of the oldest and most popular currency futures contracts traded on the NSE. To make the markets for USDINR futures deeper and more liquid, NSE has now launched weekly currency futures on the USDINR. Normally, USDINR futures are bought when the trader is positive on the dollar and the USDINR futures are sold when the trader is negative on the dollar.

The mock trading for the weekly USDINR futures was conducted on 09-Oct and the trading was officially launched on the NSE on 11-Oct. The trading has commenced with 3 weekly contracts comprising of the near-week, mid-week and the far-week. In addition, NSE has also permitted trading in two spread contracts across different maturities.

The table below captures the weekly USDINR contracts to begin with.
 

Instrument

Symbol

Expiry Date

Description

FUTCUR

USDINR

14-Oct-2021

Near-Week

FUTCUR

USDINR

22-Oct-2021

Mid-Week

FUTCUR

USDINR

29-Oct-2021

Far-Week


In addition, there will be 2 spread contracts made available as under.
 

Symbol

Leg-1

Leg-2

USDINR

14-Oct-2021

22-Oct-2021

USDINR

14-Oct-2021

29-Oct-2021

 

In the equity futures market, weekly options on the Nifty and the Bank Nifty are extremely popular and also very liquid. It is hoped that the introduction of weekly futures in the currency markets will be instrumental in bringing more participation and depth to the currency futures trading in India. Weekly futures tend to be lower on the risk scale.

On the first day of trading on 11-Oct, the volumes were fairly robust and there appeared to be a lot of trading interest in this relatively lower risk product. According to data put out by the NSE, a total of 122 members participated in the trading of weekly USDINR futures and a total of 1.43 lakh contracts got transacted on the day. The total value of the trading in weekly USDINR futures on the day of launch stood at Rs.1,080 crore.

While the USDINR remains the most popular rupee pair in terms of volumes and OI, the exchange also offers pairs of GBPINR, EURINR and JPYINR. In addition to these four rupee pairs, the exchange also offers 3 cross-currency pairs viz. EURUSD, GBPUSD and USDJPY.

Open Demat Account

Enter First Name & Last Name
Enter Mobile Number
Enter correct otp
Please enter referal code
Start investing in just 5 mins
Free Demat account, No conditions apply
  • 0%* Brokerage
  • Flat ₹20 per order
Next Article

Invesco Objects to the Merger of Zee and Sony Pictures

Invesco Objects to the Merger of Zee and Sony Pictures
by 5paisa Research Team 12/10/2021

The stand-off between Zee Entertainment board and its largest investor, Invesco Fund, has played out in the public domain for the last 1 month. A lot has transpired in this period. It all started with Invesco calling for the removal of Punit Goenka from the post of MD & CEO. This was followed by Zee announcing a quickly stitched merger with Sony Pictures. Repeated requests by Invesco to call an EGM were denied by the Zee board.

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

In the midst of all the legal and procedural wrangling, there is a latest development in which Invesco has objected to the merger of Zee and Sony Pictures. Invesco’s contention is two-fold. Firstly, Invesco is unhappy that despite being the largest shareholder of Zee with 17.88% stake, it was not consulted on the deal. Secondly, Invesco has expressed concerns that the deal would favour the Subhash Chandra family at the cost of other shareholders.

It is actually about the non-compete fee

The bone of contention is the non-compete fee that Sony is paying to the Subhash Chandra family. The fee will not be a cash payment but it will be a stock payment. As per the term-sheet, Sony will have 53% in the merged entity while Zee will have 47%. 

However, Sony will transfer 2% out of its shareholding to the Subhash Chandra family as non-compete fee. Invesco’s contention is that non-compete fee questions should not arise when Punit Goenka has been appointed the MD and CEO of the merged entity for next 5 years.

The real catch in this story is the ownership shift that Invesco is wary of. Currently Invesco holds 17.88% in Zee while the Subhash Chandra family holds 3.44%. Post the deal, Invesco will only hold 8.4% while Subhash Chandra family will hold 4% (including the non-compete fee). That is what is riling Invesco as it feels that the narrowing of ownership gap between Invesco and Subhash Chandra family was not justified.

The next steps would depend on the verdict of the NCLT on the holding of EGM and how the voting happens at the EGM. For now, the battle lines are drawn and neither side is willing to relent on their stand.

Also Read:-

Zee Refuses to Call for EGM at the Request of Invesco Fund

What does the Zee merger with Sony mean

Open Demat Account

Enter First Name & Last Name
Enter Mobile Number
Enter correct otp
Please enter referal code
Start investing in just 5 mins
Free Demat account, No conditions apply
  • 0%* Brokerage
  • Flat ₹20 per order
Next Article

Rakesh Jhunjhunwala's Akasa Air Gets Approval to Launch Operations

Rakesh Jhunjhunwala Akasa Air Gets Approval
by 5paisa Research Team 12/10/2021

Rakesh Jhunjhunwala is not called the Warren Buffett of India without reason. He is known to bet big on stories that he finds convincing. Titan is, perhaps, the finest example of his acumen in picking stocks early and holding them through its journey. Interestingly, his next big bet is on airways and like his mentor, Radhakishan Damani, this time Rakesh will also drive the business.

Akasa Air has announced that it has received approval from the Ministry of Civil Aviation to commence its air operations by the middle of 2022. The next step will be to get the approval of the Directorate General of Civil Aviation (DGCA). Subsequently, the flight manuals, logs and processes have to be documented and approved before starting.

Jhunjhunwala has already roped Vinay Dube as the CEO of his airline venture. Vinay Dube was formerly the CEO of Jet Airways before it was grounded. While Rakesh has invested Rs.248 crore in Akasa Air, the promoter of New Horizon Funds is also putting his funds on the project.

Check - Rakesh Jhunjhunwala Bets Big on Indian Aviation with Akasa Air

Apart from Dube, the other airline veteran who has teamed up with Jhunjhunwala for Akasa Air is Aditya Ghosh, the former CEO of Indigo Airlines. Ghosh is credited with the ruthlessly efficient model adopted by Indigo which created the momentum for Indigo to eventually capture 55% market share of the domestic Indian market.

The airline industry, being a highly contact intensive sector, has borne the brunt of the pandemic. However, the recovery is likely to be equally rapid. There is a huge gap in the aviation sector and the recent instance of Tatas winning the bid for Air India is just one more example of power pockets getting created in the aviation industry. The game is open and the market will gravitate to the most efficient and the most economical airline.

While the aircraft acquisition and leasing plans of Akasa Air are still under wraps, it is already being reported that in the coming year Akasa may be the biggest buyer of Boeing 737 aircraft outside of the United States. It surely looks like another aggressive innings for Rakesh Jhunjhunwala.

Also Read - 

Big Bull Rakesh Jhunjhunwala's Portfolio 2021

Open Demat Account

Enter First Name & Last Name
Enter Mobile Number
Enter correct otp
Please enter referal code
Start investing in just 5 mins
Free Demat account, No conditions apply
  • 0%* Brokerage
  • Flat ₹20 per order
Next Article

Zostel asks SEBI to Reject OYO’s $1.2 billion IPO

Why Zostel has a problem with OYO IPO
by 5paisa Research Team 12/10/2021

As Oravel Stays, the company that owns and operates the OYO brand, gets set for its Rs.8,430 crore IPO, it is likely to face a roadblock from a 6 year old deal that had failed. This pertains to the proposed acquisition of Zostel and Zo Rooms by OYO in 2015. The deal finally fell through and subsequent to that Zostel had to shut down its business. Now Zostel has written to SEBI about the breach of terms by OYO.

Check - Oravel Stays (OYO) Files for Rs.8,430 Crore IPO

According to the letter written by Zostel to SEBI, OYO was required to transfer 7% of the equity to Zostel shareholders as part of the agreement. The agreement had also included a clause that till that agreement was executed, OYO would not be permitted to alter its capital structure. Zostel has alleged that this IPO, which was a combination of fresh issue and an offer for sale, was a clear alteration of capital.

In its letter to SEBI, Zostel has underlined that the IPO of Oravel Stays was in contravention of the ICDR regulations as OYO had not met the conditions for alteration of capital. Zostel also alleged that the investment bankers to the issue had done inadequate due diligence in putting up the IPO proposal to SEBI for approval.

Zostel and OYO have been fighting a pitched legal battle since the last 6 years. In Mar-21, a Supreme Court appointed arbitrator had ruled that OYO was in breach of the agreement for the acquisition of Zostel. It also added that Zostel was entitled to go ahead and execute the definitive agreement giving it legal sanction.

This arbitration order was challenged by OYO in the Delhi High Court and in response Zostel had filed an execution petition and a petition to restrain OYO from going ahead with the IPO. Zostel has already sent a notice to OYO to enforce the award which includes the transfer of 7% of shares of the current capital to the shareholders of Zostel. The case is coming up for hearing in the Delhi High Court on 21-Oct.

While OYO has dismissed these claims of Zostel as being fictitious, SEBI is likely to be wary of approving the DRHP if there are pending legal orders pertaining to the essence of the IPO. It looks like challenging times for OYO in the days ahead.

Also Read:-

OYO IPO - 7 Things to Know About

Upcoming IPOs in 2021

List of Upcoming IPOs in October 2021

Open Demat Account

Enter First Name & Last Name
Enter Mobile Number
Enter correct otp
Please enter referal code
Start investing in just 5 mins
Free Demat account, No conditions apply
  • 0%* Brokerage
  • Flat ₹20 per order
Next Article

Nykaa IPO – Another e-tailer to debut on Dalal Street

Nykaa
12/10/2021

Should you invest in Nykaa IPO? 

The success story of Zomato has motivated a lot of new age start-ups to file DRHP. Start-ups lining up in IPO queue includes big names like Paytm, Policy Bazaar, Delhivery and Nykaa. In the upcoming IPO, Nykaa plans to raise Rs. 4000 Crores from the IPO, targeting a valuation of $5 billion - $5.5 billion 

Among these big names what makes Nykaa standout? 

Well, chances are that if you have bought makeup in the past five years or so, it was probably from Nykaa. 

In a short span of 9 years, Nykaa has achieved what not many Indian e-commerce startups have. Not only has it achieved unicorn status, it’s also the only profitable startup to file for a DRHP. It is also the biggest women led unicorns in the country.

Nykaa, the leading beauty e-tailer is stepping into the stock market.Though they do not provide discount, the quality of the products offered makes Nykaa to stand out.Lets deep dive into the success story of Nykaa and discover the reasons to invest in the upcoming IPO.

Success story of NYKAA

FSN E-Commerce Ventures (Nykaa) was incorporated in 2012 to provide beauty & personal care platform to their potential customers.The company has 2 major segments beauty&personal care and fashion. Nykaa has around 2476 brands in the former segment across the make-up, skincare, haircare, bath&body, fragrance, grooming appliances, personal care and health and wellness categories. Apart from all these Nykaa’s own brands including Nykaa cosmetics, Nykaa Naturals and Kay Beauty are also available in this platform. Nykaa also reached out to customers through offline stores as well in 2014 by opening first of this king in the T3 International airport New Delhi. The company has spread to 73stores in 38cities including an exclusive fashion store as of March 2021.Nykaa Stores are operated under three formats – Nykaa Luxe, Nykaa On Trend and Nykaa Kiosks. In 2018, the company launched ‘Nykaa Fashion’. As of March 2021, Nykaa Fashion sells 1,350 brands with fashion products across four consumer divisions – women, men, kids and home. Nykaa clocked the highest average order value (AOV) among leading online fashion retail platforms in India, in FY21.Nykaa Fashion has six owned brands, which are available at Nykaa’s online and physical store.
 
Who buy from Nykaa

As of FY21, Nykaa’s customer base has increased to 5.6million from 3.5million in FY19. Nykaa has around 35 million customers around the country which is growing larger. Potential customers of Nykaa are women and there are 663 million of women in India. Nykaa has launched ‘Nykaa Man’ exclusively for male grooming products. Nykaa is mainly focussed on tapping the potential customers from urban India and there are around 233million women in the cities. Nykaa products can be used by the customers aged between 15 to 45. Teenagers and youth are more benefited by the products of Nykaa contributing to 122million females in urban India. As the products of Nykaa has some pricing standards, 30% of the population can afford to buy the Nykaa products. Nykaa has around 35 million potential customers around the country which would grow more and more over the time.

How does Nykaa earn?

Revenue from sales – The Beauty & Personal Care (BPC) segment works on the 
inventory model where the company buys the goods from brands and sells these to consumers. Thus, the cost of working capital and the risk of obsolescence is reduced. 

Revenue from marketplace – The Nykaa fashion runs mainly on the 
marketplace model (although some part of the business operates on 
the inventory model). Here the company charges commission from vendors for listing and selling products on Nykaa platform. 
 
Revenue from marketing support services – This is the revenue earned for advertising and promoting brands 
on its platform and through surfing on the website or app. 

Where do Nykaa stand in the market

Nykaa’s projected overall BPC market CAGR at 10.5% over FY21-41. Online channel contribution of 8% in FY21, can cross the 30% mark by FY41. Nykaa holds 2.2% market share in the overall BPC industry and 27.2% in the online channel as of FY21, per our calculations. By FY41, the company’s market share in the overall BPC industry could move up to 10.5% and to 33.5% in the online channel. In other countries such as the US and China, online penetration is currently much higher than in India. 
Fashion, a relatively new business for Nykaa, is seeing rapid growth. In the Fashion segment, ‘apparel’ is the largest category with 35% sales contribution, followed by bags & footwear at 20-25%, jewellery & accessories and lingerie at 17% and 20% respectively, and electronics at 3-5%.Overall projected fashion market CAGR of 14% during FY21-41. Online channel contribution, which stands at 12% in FY21, couldcross the 40% mark by FY41. Nykaa holds 0.1% market share in the overall fashion industry and 0.6% in the online channel as of FY21. By FY41, its market share in the overall fashion industry could move up to 1.7% and to 4.5% in the online channel.

Why do we invest in Nykaa – Financial health and scope of investment in Nykaa

It is very important to have an idea on the financial health of a company before we invest.It helps us to reduce the risks involved in investing. A brief analysis on financial position of Nykaa is given here.

Let’s see some of the financial parameters which talks about the financial position of the company.

Total assets of the company - 13020 million(Mn) rupees as of FY21.
Total revenue - 24409mn rupees of FY21
Profit after tax (PAT) - 619mn Rupees of FY21.
Net Profit Margin - 2.5% in FY21.
ROE (Return on Equity) - 15.2% in FY21.
Debt to Equity is 2.6 in FY21.

Cost of goods sold (COGS) which (COGS=Starting inventory + purchases - ending inventory = cost of goods sold) can be only used in case of a business involving inventory model and not marketplace model. So we should, calculate COGS as a percentage of net sales. As a percentage of net sales, COGS was at 68.2% in FY21, a rise of 419bps over FY20 suspected reason may be product mix, forecasted COGS as a percentage of net sales, to be constant at 67.5% over FY21-41. 30% growth for the next 3 years, which may drop thereafter to 28% or 25% in FY25-26, as revenue growth moderates. 
Nykaa reported EBITDA margin of 6.6% for FY21, and EBITDA of Rs1.6bn. . Nykaa will gradually increase its EBITDA margin from 6.6% in FY21 to 11.8% by FY26, and achieve EBITDA CAGR of 53.4%, an increase from Rs1.6bn in FY21 to Rs13.7bn in FY26. 

Should you invest in Nykaa IPO?

The potential growth of the company is illustrated with statistical data, with growth of technology and e-commerce this company has the potential to attain huge and stable growth. Hope this article is helpful for you to make safe and wise investment decisions.
 

Open Demat Account

Enter First Name & Last Name
Enter Mobile Number
Enter correct otp
Please enter referal code
Start investing in just 5 mins
Free Demat account, No conditions apply
  • 0%* Brokerage
  • Flat ₹20 per order
Next Article

Drop in Retail Inflation, IMF Bullish on Indian Markets

Inflation Tapers, Growth Picks Up and IMF Stays Bullish on India
by 5paisa Research Team 13/10/2021

On 12th October, 3 important macro data points were out in the market. The first two were domestic; consisting of September Inflation and August IIP. The third data point pointed to IMF estimates of India’s GDP growth.
 

How did retail inflation and IIP growth pan out?


Let us look at inflation first and then turn to IIP growth.

a) Retail inflation, or headline inflation, for Sep-21 fell to a 5-month low level of 4.35%. It was last at 4.29% in Apr-21. Inflation has fallen nearly 200 bps from 6.40% in May-21.

b) The sharp fall in food inflation from 3.11% in August to 0.68% in September triggered the fall in headline inflation. Most food items dipped lower on record Kharif and good Rabi promise.

c) Core inflation, which is structural inflation excluding food and oil, stayed elevated at 5.77%. The fall in inflation in Sep-21 was largely food driven with non-food items still running high. 

d) With Brent Crude at $84/bbl, fuel inflation is at 13.5% and Transport inflation above 9.5%. These remain the big risks, more so because they have strong spill over effects on other items. 

Check - Crude Oil at $75/bbl – Here comes inflation

e) Industrial of industrial production or IIP growth for Aug-21 came in stable at 11.86% as compared to 11.5% in July. This data is YOY and comes with a one-month lag.

f) The growth in IIP has sustained at 11.86% despite the base effect of low IIP waning. So, this is more of genuine growth in output that is visible this time around. 

g) The 2-year IIP growth (pre-COVID versus post-COVID) is finally positive at 3.88% and is a signal that the IIP has overcome the pressures created by COVID-19 and COVID 2.0.

h) High frequency indicators like GST, e-way bills and freight are robust but manufacturing IIP is yet to catch up with the pace of growth of mining and electricity.

The moral of the story is that the RBI may finally take comfort from the fact that IIP is back to durably normal levels. Hence soft rates and accommodative stance to boost growth may not be the need of the hour any longer. Now the action will purely shift to inflation as a deciding factor in RBI monetary policy.

What IMF said about India’s growth for 2021 and 2022?

According to the latest IMF report, Indian economy was projected to grow at 9.5% in calendar 2021 and at 8.5% in calendar 2022. Interestingly, the IMF has lowered the 2021 growth projections for the world economy from 6% to 5.9%. For China, the growth projections are lowered from 8.1% to 8% while US growth has been cut sharply from 7% to 6.1%.

Open Demat Account

Enter First Name & Last Name
Enter Mobile Number
Enter correct otp
Please enter referal code
Start investing in just 5 mins
Free Demat account, No conditions apply
  • 0%* Brokerage
  • Flat ₹20 per order