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Superstar Investor Alert: Rakesh Jhunjhunwala buys 0.3% stake in Jubilant Pharmova

As per bulk deals data published on NSE, Ace investors Rakesh Jhunjhunwala and Rekha Jhunjhunwala have increased their stake in Jubilant Pharmova, a radio pharmaceuticals manufacturer by 0.3%. 

The data shows Rekha Rakesh Jhunjhunwala acquired 20 lakh equity shares and Rakesh Radheyshyam Jhunjhunwala bought 25 lakh shares in Jubilant Pharmova at Rs 594.35 per equity share, but his firm Rare Enterprises sold 40.25 lakh equity shares at same price, as.

As per the shareholding pattern of June 2021, Rakesh Jhunjhunwala held in total 6.29 percent stake in Jubilant Pharmova. The net purchase by Rakesh Jhunjhunwala and Rekha Jhunjhunwala minus of the sale by

Rare Enterprises comes to 4.75 lakh shares or about 0.3 % of total paid up equity. At 11:15 am on August 26, Jubilant Pharmova stock was trading at Rs 629.95, up 3.02%. 

Recently Rakesh Jhunjhunwala bought 1.59% in Canara Bank. To know more about his portfolio and about portfolio of other superstar investors read here.

Big Bull Rakesh Jhunjhunwala's Portfolio 2021

Superstar Investor Alert: Azim Premji-associated market funds add two portfolio companies in Q1


 

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Vijaya Diagnostic fixes price band for Rs 1,895-cr IPO. Check details here

26/08/2021

Hyderabad-based pathology chain Vijaya Diagnostic Centre Ltd has fixed a price band of Rs 522-531 per share for its initial public offering that begins next month. 

Vijaya Diagnostic’s IPO will open September 1 and close two days later. The anchor bookwill open on August 31.This is the 39th IPO in 2021.

The IPO is completely an offer for sale of about 3.57 crore shares by the company’s promoters and private equity investor Kedaara Capital.The promoter Dr S Surendranath Reddy is selling about 51 lakh shares while Kedaara will offload the remaining.

The IPO will constitute at least 35% of post-offer equity share capital of the company. At the upper end of the price band, the IPO will raise almost Rs 1,895 crore.

Half of the IPO size is reserved for qualified institutional buyers while up to 35%has been set aside for retail investors and the remaining 15% for non-institutional investors.The company has also reserved 1.5 lakh shares for its employees and may allot these shares at a discount to the final issue price.

Investors can bid for a minimum of 28 shares and in multiples of 28 shares. This means retail investors can bid for shares worth at least Rs 14,868 for one lot. Their maximum investment would be Rs 1,93,284 for 13 lots of shares.

Vijaya Diagnostic provides a wide range of about 740 routine and 870 specialized pathology tests. It also offers 220 basic and 320 advanced radiology tests across a range of specialties.

The company is the largest integrated diagnostics chain in southern India by operating revenue. It has 81 diagnostic centres and 11 reference laboratories across 13 cities and towns in Telangana, Andhra Pradesh, the National Capital Region and Kolkata as on June 2021.
 

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Ami Organics IPO opens on September 01

27/08/2021

Ami Organics Ltd’s initial public offering will open for subscription next week, with the company joining several other specialty chemicals manufacturers that have tapped into the stock market euphoria this year.
The company has fixed the price band for its IPO at Rs 603-610 per share. The offer will open on September 1 and close two days later. It will compete for investor attention with Vijaya Diagnostic’s IPO, which opens the same day.

Ami Organics IPO includes a fresh issue of shares of Rs 200 crore and an offer for sale of 60.59 lakh shares by 20 individual shareholders including Kiranben Girishbhai Chovatia and Parul Chetankumar Vaghasia.

The total IPO size will be Rs 569.63 crore at the upper end of the price band. The minimum bid lot size is 24 shares and in multiples of 24 shares thereafter. This means retail investors can subscribe for shares worth at least Rs 14,640 worth in a single lot. Their maximum investment would be Rs 1,90,320 for 13 lots.
The company reduced the size of the fresh issue to Rs 200 crore from Rs 300 crore after raising Rs 100 crore in a pre-IPO placement offering.

It plans to use the net proceeds from the fresh issue to repay its debt and to meet working capital requirements.

The company’s promoters own a 45.17%stake in the company. Its institutional shareholders include the Malabar India Fund and IIFL Special Opportunities Fund.

Ami Organics joins speciality chemicals maker Laxmi Organic and Anupam Rasayan to float an IPO this year. The company makes specialty chemicals that are used to develop advanced pharmaceutical intermediates.

The company posted consolidated revenue from operations of Rs 340.6 crore for the year through March 2021, up 42% from around Rs 239 crore for each of the previous two years. Net profit jumped to Rs 53 crore in 2020-21 from Rs 29.5 crore in 2019-20 and 24.7 crore the year before.

Intensive Fiscal Services, Ambit, and Axis Capital are the merchant bankers arranging the IPO.
 

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Explained: What SEBI norms for accredited investors mean

27/08/2021

Earlier this month, the Securities and Exchange Board of India (SEBI) introduced the concept of “accredited investors” as part of initiatives to open a new route of raising funds from sophisticated investors. Now, the capital markets regulator has come out with detailed guidelines to implement a framework for accredited investors.

SEBI has announced detailed guidelines on the eligibility criteria for accredited investors, the procedures for accreditation and to seek benefits linked to accreditation, it said in a circular. It also has given flexibility to investors to withdraw their “consent” and stop availing benefits of accreditation.

Such investors may get flexibility in minimum investment amount or concessions from specific regulatory requirements applicable to investment products, subject to conditions applicable.

So, how does one become an accredited investor?

Anyone who wants to be recognised as an accredited investor will have to approach an Accreditation Agency for accreditation. These agencies will verify the documents submitted by the applicants for accreditation, process the applications and issue an accreditation certificate. The agencies will also maintain data of such accredited investors.

What are the Accreditation Agencies?

According to SEBI, subsidiaries of stock exchanges and depositories can carry out the accreditation process. The subsidiaries will have to apply to SEBI through the concerned stock exchange or depository for recognition as an accreditation agency.

This is subject to the condition that the stock exchange should have minimum 20 years of presence in the Indian securities market and should have a net worth of at least Rs 200 crore.

Also, the exchange must have nationwide terminals and investor grievance redressal mechanisms in place, including arbitration and presence of Investor Service Centres in at least 20 cities.

The agencies will issue accreditation certificates to eligible investors. Each certificate will have a unique accreditation number, name of the accreditation agency, PAN of the applicant and validity of accreditation.
What’s the criteria to become an accredited investor?

A person will be identified as an accredited investor on the basis of either net worth or income.
Individuals, Hindu Undivided Family (HUFs), family trusts, sole proprietorships, partnership firms, trusts and body corporates can get accreditation if their annual income is at least Rs 2 crore or net worth is at least Rs 7.50 crore, with at least half of it in financial assets.

These entities can also become an accredited investor if they have at least Rs 1 crore annual income and a net worth of Rs 5 crore, with at least half in financial assets.

For trusts other than family trusts and corporate entities, a net worth of at least Rs 50 crore is required to qualify as accredited investors. In case of a partnership firm, each partner independently will have to meet the eligibility criteria for accreditation.

What’s the validity of the accreditation certificate?

SEBI said that the accreditation will be valid for one year, if the applicant meets the eligibility criteria for accreditation for the preceding year. The accreditation will be valid for two years if the applicant meets the eligibility criteria in each of the preceding three years.

To avail benefits linked to accreditation, investors will have to submit a copy of the accreditation certificate and an undertaking to the investment provider saying they can bear the financial risks associated with the investment.

Investors will also have the flexibility to stop availing benefits of accreditation subject to certain conditions. For instance, an investor who withdraws consent after availing the benefit of lower ticket size will have to increase the investment to the minimum amount that is stipulated under the applicable regulatory framework, SEBI said.

However, investors in pooled investment products which are launched exclusively for such investors won’t have the flexibility to withdraw their consent.
 

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RBI governor says will not surprise the market with sudden rate hike

27/08/2021

India’s central bank, which has been maintaining an accommodative monetary stance despite inflation climbing above its comfort level earlier this year, is unlikely to make sudden shock moves to directionally change the policy rate.

Reserve Bank of India (RBI) governor Shaktikanta Das told a television news channel that the central bank does not want to surprise markets with a sudden rate hike, amid concerns surrounding inflation.

“We are constantly monitoring the situation and we will act at the appropriate time. At the current juncture, we feel that appropriate time has not come,” said Shaktikanta Das.

He added: “All our actions will be calibrated, they will be well-timed, they will be cautious. We don't want to give any sudden shock or any sudden surprises to the markets.”

This should come as a relief to the corporate sector, which is enjoying a low interest rate regime coupled with an ebullient stock market that has been trading at record highs and beating global peers this year.

The RBI had last cut interest rates in May 2020 when it had reduced the policy repo rate by 40 bps to 4% as the growth outlook was sombre. The economy contracted by 7.3% in 2020-21 as the spread of Covid-19 and lockdowns impacted business operations and sentiments.

GDP growth did see a pickup despite a brutal wave of the pandemic in North India as also other parts of the country in the April-May period. Analysts estimate the country’s GDP to grow around 20% in the first quarter ended June after shrinking by a fourth in the same period last year. While the base effect will likely give an artificial push to the growth rate, activity would remain below the pre-pandemic period at an absolute level.
Meanwhile, retail inflation—which is closely tracked by the RBI in framing its monetary policy—has moderated after shooting past the red zone. Retail inflation cooled down to 5.59% in July, coming within the RBI’s target range of 2-6%. It was above 6% in April and May.

According to the RBI governor, the current inflation looks transitory and the central bank expects it to cool down further in the coming months. Part of the rise in inflation was due to rebound in the global oil prices that affects Indian inflation adversely as much of the oil is imported in the country.

Das said while the RBI is watching the revival of economic activity there is still some uncertainty around the pandemic. He added that some parts of the economy, such as the manufacturing and service sectors that are not dependent on physical contact, are showing a rebound.
 

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Indian investors’ interest in market fascinating, see rating downgrade: UBS

Details
29/08/2021

Indian retail investors’ interest in stock markets is “fascinating” as they have been pumping money into both the primary and secondary market despite experts cautioning against super-rich valuations, according to UBS.


The Swiss brokerage and financial services firm said that while offshore investors have turned cautious due to expensive valuations, Indian households have been on a buying spree.
The bullish sentiment is not just restricted to direct participation in the stock market by retail investors. Flows from domestic mutual funds have also turned positive after four quarters, it said.
It raised a question mark whether such a herd push can be sustained as net outflows by foreign institutional investors (FIIs) tend to buttress the fact that valuations have run up too high.

FII outflows

In the current quarter (July-September), FIIs have already encashed $1.1 billion on a net basis as against inflows of $800 million and $7.3 billion in the preceding two quarters.
Even as the FIIs are pulling out money, Indian households have been investing heavily in the market and had a net purchase value of $5 billion in equities in the April-June quarter. This has pushed up direct retail direct ownership at a 12-year high, UBS noted in a report.
UBS said that there is not much wiggle room for further positive re-rating of stocks and sectors given the expensive valuations. It added that if low absolute returns continue that could lead to a fatigue in retail flows and stop the locally fuelled momentum. This could be accelerated by the fact that bank deposit rates, which were sliding and had turned retail investors to look at higher returns from other channels, have likely bottomed out.

Growth outlook

UBS also said that it projects the GDP growth rate for the Indian economy for the current fiscal year ending March 2022 at 8.9%, below the consensus estimates. The Reserve Bank of India has forecasted a 9.5% GDP growth for the current year, after trimming it from an estimated 10.5% earlier.
In its base case scenario, it expects India’s economic growth to gain momentum from October 2021. This will be due to pent-up demand (largely led by contact-intensive services, especially after more people are vaccinated), favourable external demand (on strong global growth) and higher government spending, UBS said.

UBS said it doesn’t foresee any meaningful rise in corporate investment in the next couple of years. It also expects inflation to average 5.5% in 2021-22. This will keep the RBI from raising monetary policy rates. Central banks typically raise interest rates when inflation rises beyond their comfort levels.
High debt, downgrade warning

UBS flagged that public debt has climbed to 88% of GDP in FY21, from 72% in the previous year, and said the GDP has to grow at 10% on a nominal basis to make it sustainable.
The brokerage house said that any lags in policy execution and implementation of growth-supportive reform to boost sustainable growth could lead to widening macro stability risks.

“In our base case, we foresee a risk of a downgrade in India's sovereign rating by one of the three rating agencies in the next 12-18 months,” it warned.