Companies & Sectors
SEBI passes consent order against five entities

The applicants had sold shares comprising over 32% share capital of Wellman’s Homeopathic Laboratories between 30 December 2009 and 2 February 2010 in five tranches. However, disclosures were made in September 2010 with several weeks of delays

The Securities and Exchange Board of India (SEBI) has settled charges of non-compliance of takeover norms against five entities after they paid Rs2.5 lakh towards settlement fee.

 

In an order dated 30th May, SEBI said the order will come into force immediately and the regulator would not initiate any enforcement action against these entities.

 

A consent order enables settling administrative or civil proceedings.

 

The five applicants—Gurmeet Singh Dhingra, Renu Dhingra, Wellmans Finlease (now known as Trinidhi Finance), Kuldeep Jain and Trilochan Singh—had been charged with delay in filing the requisite information under the SEBI’s Takeover Regulations during 2009-10.

 

The applicants had sold shares comprising over 32% share capital of Wellman’s Homeopathic Laboratories between 30 December 2009 and 2 February 2010 in five tranches.

 

However, disclosures about share-sale were made in September 2010 with several weeks of delays.

 

The applicants had submitted a consent order application to SEBI in December 2010.

 

The High Powered Advisory Committee of SEBI had recommended that proceedings may be settled if the applicant is agreeable to pay Rs2.50 lakh towards settlement charges.

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JD Power says in in five automobile dealers in India expect losses

The JD Power study said dealers felt an attractive range of vehicles was critical for them and the automakers to succeed in Indian markets

Market research organization JD Power said, due to the increasing number of automobile dealers in India, one in five dealers expect to be in the red during 2013. This is more than double the number compared with 2012, according to a study by JD Power.

 

As per the study “JD Power Asia Pacific 2013 India Dealer Satisfaction with Automotive Manufacturers Index” released on Friday, only 44% of dealers expect to make a profit for the 2012-2013 financial year.

 

In a statement, Mohit Arora executive director for Asia Pacific at JD Power, said, “Declining profitability for dealerships in India not only highlights the impact that the slowdown in new-vehicles sales has on the viability of a growing number of dealers, but also underlines the importance placed on automakers to provide adequate support to their respective networks”.

 

Among the manufacturers included in the 2013 study, Maruti Suzuki India and Toyota performed particularly well in overall dealer satisfaction, showing improvement from 2012.

 

“The success of Maruti Suzuki and Toyota not only demonstrates the automakers’ commitment to ensuring the dealers’ operations are viable, but it also shows their active support regarding such areas as training, marketing and sales activities,” Arora said.

 

On average, 88% of dealers believed that they definitely would continue to work with their automaker for two years, the JD Power study said.

 

Among dealers in the top quartile of satisfaction, 98% expect to be working with the same automaker in 2015.

 

According to the study, there was a need to improve the supply chain with dealers expressing dissatisfaction over the time taken in delivery of parts and ease of ordering parts.

 

“This highlights the need for some automakers to further support dealers with an improved and more efficient supply chain,” Arora said.

 

The 2013 India Dealer Satisfaction with Automotive Manufacturers Index was based on responses from 618 dealership general managers or dealer principles across all main manufacturers. The study was conducted in association with the Federation of Automobile Dealers Associations (FADA), and was fielded between February 2013 and April 2013.

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JP Morgan Balanced Fund: Nothing new to offer

Balanced schemes have not been great performers in the past. Would the new scheme from JP Morgan deliver?

JP Morgan Mutual Fund plans to launch an open-ended balanced scheme—JP Morgan Balanced Fund. Similar to all balanced schemes, the scheme of JP Morgan MF would invest 65%-75% in equity securities and 25%-35% in debt and money market instruments. The performance of the scheme would be benchmarked to the CRISIL Balanced Fund index. The new scheme from JP Morgan MF offers nothing different from the 20-odd balanced schemes available today. Recently Axis MF filed an offer document to launch Axis Dynamic Balanced Fund (Read: Axis Dynamic Balanced Fund: Using hedging strategies could be risky), a scheme that will use hedging strategies to ‘manage’ risk, in order to separate itself from the rest. The only differentiating factor for the JP Morgan scheme is how the fund managers of the scheme would pick stocks. This scheme would be managed by as many as four fund managers, two for the equity portion and two for debt segment.
 

How has the fund management company performed in the past? JP Morgan currently manages two schemes—JPMorgan India Equity Fund and JPMorgan India Smaller Companies Fund. Both the schemes have performed better than their benchmarks taking a three-year period. Even though the schemes have aged more than five years, they have been able to accumulate a total corpus of just over Rs300 crore. The fund management does not have a long track record of consistent performance.
 

We have analysed balanced schemes in the past and have found that the way they invest is no different from equity diversified schemes. Balanced schemes of mutual funds look to provide long-term capital appreciation along with current income by investing in a mix of securities in which a major portion is allocated to equity and the rest is in fixed-income instruments such as bonds. Compared to their benchmarks, balanced schemes have not performed too well.
 

The equity portion of the scheme would be managed by Harshad Patwardhan and Amit Gadgil who have 19 year and 11 years of experience, respectively. The debt segment of the scheme would be managed by Namdev Chougule and Ravi Ratanpal, who have 11 years and nine years of experience, respectively. Whether having four fund managers would ensure benchmark beating returns would be left to be seen. Most balanced fund schemes have at the most two managers and have still found it difficult to beat the benchmark.

 

Additional Details of the Scheme

 

Initial Application Amount:

Rs5,000 (per application and in multiples of Re1 thereafter).
 

Initial Application Amount through SIP:
 

Six instalments of Rs1,000 each and in multiples of Re1 thereafter.
 

Additional Application Amount:
 

Rs1,000 per application and in multiples of Re1 thereafter.
 

Expenses
 

Maximum total expense ratio (TER) permissible under Regulation 52(6)(c)(i) and (6)(a): Up to 2.50%
 

Additional expenses under regulation 52(6A)(c): Up to 0.20%
 

Additional expenses for gross new inflows from specified cities: Up to 0.30%
 

Exit load
 

Within and including 18 (eighteen) months from the date of allotment: 1%.

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