The relentless outflow of funds from equity mutual fund schemes continued in October; fund companies hope that investors looking to book profits would be flushed out by now.
It seems that the steady bleeding experienced by equity mutual funds is showing no signs of abating. The month of October has witnessed further outflow of Rs2,869 crore from the corpus of equity funds, according to data released by industry body Association of Mutual Funds in India (AMFI). This takes the total redemption over the past ten months to a whopping Rs17,000 crore.
Funded by a renowned PE firm New Silk Route, financial services provider Destimoney Securities is looking to make further inroads in a highly competitive environment
The attractive yet cutthroat world of retail financial services and distribution is like a rainbow being chased by companies big and small. Everyone, from banks to non-banking financial companies (NBFCs) is keen to get a larger share of the mammoth pie.
Destimoney Securities is another such financial services provider that is geared up for a more aggressive expansion into this business. Recently, Kerala-based lender Dhanlaxmi Bank invested Rs13 crore for acquiring a 15% stake in Destimoney Securities. This is yet another instance of a bank tying up or investing money in a brokerage firm to offer a bouquet of financial services to its customers. Axis Bank-Geojit BNP Paribas, Bank of Baroda-India Infoline, SBI-Motilal Oswal are just some of the examples of alliances between banks and brokerage houses.
Dhanlaxmi Bank currently offers Destimoney products and services from across all its existing and new branches. The online trading product is being marketed as "Dhan4U" and is currently being offered to all the customers of Dhanlaxmi Bank. Going forward, other product offerings of Destimoney, namely, Portfolio Management services, Portfolio Advisory services, Commodity & Currency trading services, etc, shall be offered to all existing and new customers of the bank, points out Vivek Vig, managing director, Destimoney Group.
Speaking about the nature of Dhanlaxmi's investment in the company, Vivek Vig said, "This investment into Destimoney Securities is an extension to the strategic partnership with Dhanlaxmi Bank to offer online trading facility to the bank's existing and new CASA customers. It shall also bring in greater synergy and focus towards expanding (the) product basket to (the) bank's customers and also increase fee-based revenue for the bank. Both the partners are keen to set up high-quality infrastructure and technological platforms to offer value-added products and services to middle India markets."
Destimoney claims to differentiate itself from its competitors through a unique client-centric philosophy and an ethos of integrity. On his company's game-plan for further expansion, Mr Vig said, "Destimoney shall continue to grow its business besides this partnership with Dhanlaxmi Bank. We are committed towards building a world-class retail financial services powerhouse and will continue offering value-added products and services to 'Middle India'."
Destimoney Securities is currently offering its products and services through 15 branch offices and over 100 associate partners spread across more than 50 cities. It hopes to continue expanding its reach and point of sale across strategic territories within the country.
Responding to whether the company would seek more investments in the future, Mr Vig said, "Destimoney is on the growth path and shall continue making fresh investments into the company to support its accelerated growth either through its existing shareholders or from other investors, going forward."
Destimoney Securities is a 100% subsidiary of Destimoney Enterprises, a financial services and advisory company owned and controlled by private equity firm New Silk Route (NSR). NSR acquired a 100% stake in the business in
mid-2008. The fact that a respected and well-known private equity firm like NSR invested a sizeable chunk of money into this business is a testimony to the potential of the nascent financial services industry in India.
Various PE funds have tried their hand at this business, which includes the investment by Barings India Private Equity in Cochin-based JRG Securities back in 2007. NSR is a leading Asia-focused growth capital firm founded in 2006 with $1.4 billion under management, focused on the Indian subcontinent, as well as other rapidly-growing economies in Asia and the Middle East.
The firm is led by Rajat Gupta, Victor Menezes and Parag Saxena, all with track records of building and leading global organisations.
The indices witnessed another choppy session on the lack of any positive trigger. Quarterly results of Indian companies were mixed, as a result of which investors chose to wait and watch before making any fresh move.
The market opened lower today, tracking unsupportive global cues. Volatility continued for another day, with the indices moving on both sides of the neutral line on quite a few occasions. Every move into the green was followed by a dip into the negative territory. However, the broader indices stood firm trading with good gains today.
The see-saw continued unabated in the post-noon session with the indices touching the day’s lows towards the close of trade but the market managed to end the session just above that figure.
The Sensex ended 56.77 points (0.27%) down at 20,875, struggling hard to regain the highs seen last week. The benchmark touched an intraday high of 20,971 and a low of 20,850 during the session. The Nifty settled at 6,275, down 25.85 points (0.41%). The index swung between a high-low of 6,307 and 6,269, respectively.
The market breadth was tilted in favour of the declining stocks today. The Sensex closed with 19 gainers and 11 declining stocks. The Nifty list had 34 stocks that ended lower against 16 stocks that edged higher. The broader indices outperformed the key benchmarks today. The BSE Mid-cap gained 0.29% while the BSE Small-cap index surged 0.86%.
The top gainers on the Sensex were Mahindra & Mahindra (up 3.05%), Tata Motors (up 2.49%), Infosys (up 1.01%), Wipro (up 0.80%) and Oil & Natural Gas Corporation (up 0.71%). On the other hand, the laggards included Cipla (down 1.96%), State Bank of India (down 1.78%), Bharti Airtel (down 1.77%), BHEL (down 1.74%) and Hindalco Industries (down 1.60%).
BSE Consumer Durables (up 4.78%), BSE Auto (up 1.12%), BSE IT (up 0.73%) and BSE TECk (up 0.31%) were the sectoral gainers today. The sectoral losers were led by BSE Fast Moving Consumer Goods (down 0.99%), BSE Bankex (down 0.76%) and BSE Capital Goods (down 0.71%).
Markets in Asia settled mixed on speculations that the Chinese government will initiate fresh measures to curb rising property prices. On the other hand, financial stocks led the gains on the Nikkei on hopes that global regulations would not impact the country’s banks.
The Jakarta Composite gained 0.52%, KLSE Composite added 0.10%, Nikkei 225 jumped 1.40%, Seoul Composite surged 1.05% and Taiwan Weighted gained 0.06%. On the other hand, the Shanghai Composite was down 0.63%, the Hang Seng was down 0.85% and Straits Times fell 0.74% today.
Domestic passenger car sales jumped by 37.99% to 1,82,992 units in October compared to 1,32,615 units in the same month last year. According to the figures released by the Society of Indian Automobile Manufacturers (SIAM) today, motorcycle sales in the country during the month grew by 43.31% to 8,76,810 units from 6,11,828 units in the same month last year.
The US markets closed in the red for the second day in a row on Tuesday, as investors questioned the viability of the Fed’s stimulus package announced last week. Besides, inventories at US wholesalers grew more than twice as much as expected in September. While some see the build-up as a sign of higher demand, others are worried that supply would outstrip demand.
The Dow declined 60.09 points (0.53%) to 11,346. The S&P 500 shed 9.85 points (0.81%) to 1,213. The Nasdaq fell 17.07 points (0.66%) to settle at 2,563.
The Comptroller and Auditor General of India (CAG) today said it has submitted to the government the report on the second generation (2G) spectrum allotment that may have caused a loss of over Rs1.76 lakh crore to the exchequer.
Sources in the know say that the CAG has accused the telecom ministry for undervaluing 2G spectrum, sold to new players in 2008, and held that the allotment price was not realistic, which has caused a revenue loss of Rs1,76,700 crore to the government.
Foreign institutional investors were net buyers of stocks worth Rs474 crore on Tuesday. Domestic institutional investors were net sellers of equities worth 528 crore on the same day.
Realty major Parsvnath Developers (down 0.46%) is likely to raise about Rs100 crore this month by selling stake in a housing project to private equity firm.
The company is in talks are with couple of private equity (PE) firms and deal is likely to be finalised this month, according to sources. The company plans to dilute stake in a housing project, they added.
Tata Motors (up 2.49%) today said it would ask Nano customers to bring back their cars to add safety devices free of cost to prevent the vehicles from catching fire, but insisted it was not a “recall.” The company, however, said that the addition of safety devices, a lesson learnt from some of its brand new Nanos catching fire, was optional.
After these incidents, Tatas had engaged experts to get into the details for the cause of the mishaps, and its internal report had said that there was no manufacturing defect.
OP Jindal Group company Jindal Saw (down 1.81%) has bagged orders worth over Rs600 crore from domestic and overseas markets for supply of pipes, used for the transportation of oil and gas.
With these contracts, the total order book of the company stands at about Rs4,000 crore, it added.