Companies & Sectors
Bombay HC dismisses UB Holdings’ plea for stay on sale of pledged shares

Lender banks have already sold the entire stake of over one crore shares in MCFL and around 7.3 lakh shares in USL in the open market so far

The Bombay High Court on Tuesday dismissed Vijay Mallya-led United Breweries (UB) Holdings’ (UBHL) plea to grant stay on sale of pledged shares in United Spirits (USL) and Mangalore Chemicals and Fertilizers (MCFL) by SBI-led consortium of banks.
Meanwhile, banks have already sold the entire stake of over one crore shares in MCFL and around 7.3 lakh shares in USL in the open market so far.
USL shares have been sold at an average price of Rs1,870 a piece since last week, of which 2.85 lakh shares were sold at Rs1,856 on Tuesday alone.
Bankers’ core group had also clarified that they were unwilling to sell USL shares below Rs1,850 during the day.
UBHL management may now take a call whether they wish to challenge the high court decision at division bench.
Meanwhile, Diageo has already communicated to its shareholders to launch an open offer for 26% on 10th April at Rs1,440 a share.


Consumer confidence rises to 41.8 in March

Despite being in the slightly pessimistic range, consumer sentiment is showing some signs of improvement, suggesting a possible reversal in consumer mood

Consumer confidence levels rose in March on the back of improved spending behaviour coupled with stable employment situation, as per a study by financial services provider BluFin.
The BluFin's Consumer Confidence Index (CCI) rose to 41.8 points in March, an increase of 1.1 points from the previous month.
This is the first time since the festive season in November that the index has shown a rise. Despite it being in the slightly pessimistic range, consumer sentiment is showing some signs of improvement, suggesting a possible reversal in consumer mood.
The index is a key ‘aggregate’ indicator that assesses the pulse of urban Indian consumers with regard to the economy, spending behaviour and employment. The index reflects pessimism at below 50 score and optimism above that.
“It is interesting to note that there has been a marginal improvement in the consumer confidence in the metros and tier I and tier II cities,” BluFin CEO Rashid Bilimoria said.
“In the metros it’s the rise in the spending sentiment that has affected (improved) the consumer confidence whereas in the smaller tier I and tier II cities, it is the improvement in the inflation sentiment, which is the main reason for the upturn,” he added.
A sub index, which rates spending sentiment, has improved by 2.7 points to 30.2, indicating that the consumers are getting slightly less pessimistic towards spending.
“The improvement in these fundamental macro economic variables has reflected in the spending sentiment of the consumer as well,” the study noted.
The inflation sentiment index after having remained below 25 for some time has now risen to 25.9, showing growing comfort around inflationary pressures.
Besides, employment sentiment remained stable at 51.7, indicating a positive sentiment amongst consumers regarding their job security and job prospects.
Another sub-index, which measures future expectations was at 40.5, indicating consumers were still pessimistic about the economy's prospects. However, consumers were more comfortable about their present situation with a score of 44.7.
The index is based on nation-wide monthly surveys of 4,000 respondents across 18 cities conducted by custom market research company TNS.


Pramerica Diversified Equity Fund: Nothing new to offer

The equity fund management of Pramerica Mutual Fund does not have a sufficiently long track record. With over 80 similar schemes available in the market, investors would probably invest in schemes that have an established track record

Pramerica Mutual Fund is planning to launch an equity diversified scheme—Pramerica Diversified Equity Fund. According to the offer document recently filed with the Securities and Exchange Board of India (SEBI), the scheme would invest over 65% of its assets in equities across all capitalisations. The remaining part of the portfolio will be kept in cash and debt instruments. This multi-cap scheme would benchmark its performance to the S&P BSE 100 Index. There are over 80 multi-cap schemes available for investment, the new scheme from Pramerica Mutual Fund would just add to the list.

At present, Pramerica Mutual Fund has only two other equity schemes—Pramerica Equity Fund and Pramerica Dynamic Fund. Both these schemes have a track record of less than three years. Pramerica Equity invests over 60% of its portfolio in large-cap stocks. Pramerica Dynamic, as the name suggests, varies its equity allocation from 30%-100% depending on a proprietary model based on the markets. Both the schemes combined have a corpus of just over Rs100 crore. Over the past one year, Pramerica Equity and Pramerica Dynamic have delivered a return of 5.05% and 6.54%, respectively. The S&P BSE Sensex delivered a return of 8.39% in this period.

The schemes of this fund house do not have a sufficient track record to judge the performance of the fund management. Lack of a performance track record does not give investors a good reason to invest. This can be seen by the poor response to the existing equity mutual fund schemes of Pramerica MF. As this scheme does not provide anything different from other schemes, an investor would opt for a scheme which has a proven track record.

The fund managers would have to perform well to attract investors. This scheme would be managed by Brahmaprakash Singh who has over 18 years in investment management and Mahendra Jajoo who has over 20 years of experience in financial services and capital markets. The expense ratio of the scheme would have a maximum limit of 2.50% which could go up by an additional 30 basis points depending on the inflows beyond the top 15 cities.


Other scheme details:

Initial Purchase: Minimum of Rs5,000 and in multiples of Re1 thereafter.

Additional Purchase: Minimum of Rs500 and in multiples of Re1 thereafter.

Exit Load:-

  • If units are redeemed/switched out on or before 30 days from the date of allotment - Nil;
  • If units are redeemed/switched out after 30 days, but on or before 395 days from the date of allotment - 1%;

If units are redeemed/switched out after 395 days from the date of allotment – Nil.


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