Regulations
SEBI restrains NICL from raising funds under CIS
According to SEBI findings, the company had raised nearly Rs7 crore from thousands of investors
 
Cracking down on illicit realty investment activity, market regulator Securities and Exchange Board of India (SEBI) has barred NICL India Ltd from raising funds from the public and launching new schemes with immediate effect. Based on a preliminary probe, SEBI found that the Madhya Pradesh-based company was running a 'collective investment schemes (CIS)' related to purchase and development of land, without getting requisite certification.
 
According to SEBI findings, the company had raised nearly Rs7 crore from thousands of investors. In an order, the market regulator said that to safeguard investors’ interest and till the time final decision is taken in the case, it was "necessary" for it "to take urgent preventive action by way of an interim measure". The regulator has asked the company and its directors -- Phool Singh Choudhary, Harish Sharma and Abhishek Chauhan "not to collect any fresh money from investors under its existing schemes" and "not to launch any new schemes or plans or float any new companies to raise fresh moneys".
 
Additionally, the company and its directors have been directed not to dispose of any assets obtained from the funds collected, while the entities also cannot divert money raised from the public.
 
Further, the entities have been asked to "immediately submit the full inventory of the assets" obtained through money raised by NICL. It would also have to furnish, among others, details about the investors and amount mobilised and refunded.
 
SEBI had come across a news report in July 2013 in respect of fund mobilisation from general public by NICL. The news report also stated that another group company of NICL was issuing debentures to investors. It was alleged that the group companies were offering high commission to their agents.

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Nifty, Sensex upward move intact – Friday closing report

Nifty will head higher as long as it does not close below 8,405

 

In Thursday’s closing report, we had mentioned that the NSE’s CNX Nifty will head higher subject to dips caused by global sell-offs. The weak opening on Friday was followed by a volatile up move. The Indian benchmarks touched a higher high and closed in the green.
 
S&P BSE Sensex opened at 28,057 while Nifty opened at 8,504. Both Sensex and Nifty then fell sharply hitting the day’s low at the beginning of the session at 27,945 and 8,452, respectively.  However, both moved higher later in the day to the level of 28,176 and 8,531. Sensex closed at 28,122 (up 46 points or 0.17%) while Nifty closed at 8,514 (up 20 points or 0.23%). NSE recorded a volume of 95.43 crore shares. India VIX rose 6.90% to close at 17.2750.
 
Data announced after market hours Thursday showed that India's merchandise export declined 3.8% to $25.4 billion in December 2014 over same month last year. Meanwhile, merchandise imports also declined 4.8% to $ 34.83 billion in December 2014 over December 2013. Thus, the trade deficit narrowed to 10-month low of $ 9.4 billion in December 2014, while nearly halving from US$ 16.86 billion in November 2014.
The Ministry of Commerce & Industry today claimed that some Japanese companies are seriously contemplating their future investment plans in India amounting to about Rs75,000 crore over the next 2-3 years.
 
The SBI Composite Index, an indicator for tracking India's manufacturing activity, registered declining month-on-month momentum. The monthly index has slipped from 55.4 (high growth) in December 2014 to 51.5 (low growth) in January 2015. On a year-on-year basis however, the index inched up to 52.1 in January (signalling moderate growth) from 50.6 (low growth) in December 2014.
 
As per the practice of revising rates every fortnight, state fuel retailers were expected to announce a cut in petrol and diesel prices Thursday as global rates had fallen by about 4%. However, they skipped the revision. Petroleum Minister Dharmendra Pradhan said the state-owned firms will do what is "appropriate". In fact, the government on Friday raised the excise duty on petrol and diesel by Rs2 per litre.
 
Sun TV Network (11.32%) was the top gainer in ‘A’ group on the BSE following the exit of promoters from lossmaking SpiceJet. Its December 2014 shareholding pattern showed increase in FII holding from 16.84% (in September 2014 quarter) to 17.94%  while DII holding fell from 1.92% to 1.52% and retail shareholding fell from 6.24% to 5.54%.
Jet Airways (4.02%) was among the top three losers in ‘A’ group on the BSE. It recently clarified that that reports saying that Naresh Goyal (the airline’s promoter and chairman) has pledged 51% shares held by him in Jet Airways to Punjab National Bank is factually inaccurate and incorrect. Jet Airways stated that the undertaking given to PNB implies that the airline’s promoter and chairman will not dilute his equity, by way of a sale, below 51% at any time, and will continue to be the majority shareholder in the airline. It is thus, an undertaking of non-disposal of any further equity and not a matter of pledging of his shares.
 
Sun Pharma (2.88%) was the top gainer while Hindalco (2.40%) continued to be the top loser in the Sensex 30 pack.
 
US indices closed Thursday in the red. Americans unexpectedly filed applications for unemployment benefits last week, indicating companies let go of seasonal workers following the holidays. Jobless claims climbed by 19,000 to 316,000 in the week ended 10 January 2015, the most since early September, from a revised 297,000 in the prior period, a Labor Department report showed.
 
Except for Shanghai Composite (1.20%) all the other Asian indices closed in the red. Nikkei 225 (1.43%) was the top loser.
 
China's foreign direct investment (FDI) rose an annual 1.7% last year. China attracted a record $119.56 billion from foreign investors last year compared to $117.6 billion in 2013, the Ministry of Commerce said in a statement.
 
European indices were trading higher while US Futures were trading in the red. Switzerland's central bank yesterday, 15 January 2015, scrapped its policy of capping the Swiss franc at 1.20 to the euro. The Swiss National Bank has intervened in markets since September 2011.
 
The latest data showed that inflation in Germany weakened in December, confirming its preliminary estimates for the previous month.  The annual rate of inflation in Germany, measured according to common European Union standards, was 0.1% in December, while prices also rose 0.1% on the month, the Federal Statistics Office said, confirming its preliminary figures published earlier this month.
 
Swiss National Bank yesterday dumped its long-standing minimum exchange rate of 1.20 Swiss francs to the euro, as the cap on the franc appeared increasingly indefensible in the face of the weakening euro. This has created shockwaves across Europe and US causing higher volatility and currency losses.
 
 

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Reliance Industries December quarter net profit down 5% to Rs5,256 crore
RIL’s December quarter net profit fell 5% mainly on 20% fall in its total revenues caused by around 30% fall in benchmark oil prices and lower exports
 
Reliance Industries Ltd on Friday reported a lower third quarter net profit, mainly on 20% fall in its total revenues on around 30% fall in benchmark oil prices and lower exports.
 
For the quarter to end-December, the Mukesh Ambani-led petroleum conglomerate said its net profit on consolidated base, declined 4.5% to Rs5,256 crore from Rs5,502 crore, while its total revenues, including sales, fell 20.4% to Rs96,330 crore from Rs1.21 lakh crore, for the same quarter a year ago.
 
Commenting on the results, Mukesh Ambani, Chairman and Managing Director of RIL, said, "Our focus on operational efficiency and the superior configuration of assets helped us deliver an industry-leading performance in the refining and petrochemicals business despite sharp decline in crude and feedstock prices. We continued to advance our refining and petrochemicals business capital investments, which will come to fruition over the next 4-6 quarters. These investments demonstrate our commitment to creating value through the business cycle. During the quarter, Reliance Retail registered Y-o-Y growth of 19% in turnover with improved margins and profitability."
 
RIL, in a statement said sharp Y-o-Y fall in benchmark oil price of 30% was the key factor for the decline in revenue. Exports from India were lower by 21.5% at Rs58,507 crore ($ 9.3 billion) as against Rs74,495  crore in the corresponding period of the previous year.
 
"Benchmark crude oil prices declined by around 40% through the quarter, with consequent impact on petrochemical feedstock and product prices. While headline deltas were strong, declining feedstock prices impacted buying sentiment across product categories. Downstream converters ran down inventories, operating at minimal stock levels. RIL, in line with its operating strategy, aggressively sold down stocks to maintain optimal levels of inventory, which impacted realized deltas and margins for products. This coupled with lower holding value of closing-stock impacted performance of refining and petrochemicals businesses," the company said.
 
Cost of raw materials for RIL, declined by 32.2% to Rs62,196 crore ($9.9 billion) from Rs91,740 crore on Y-o-Y basis, mainly on account of lower crude oil prices and lower blending and trading activity in the export markets, the company said.
 
RIL said its second quarter operating profit increased 0.4% to Rs8,689 crore from Rs8,651 crore in December 2013.
 
The Mukesh Ambani-led conglomerate said its other expenditure increased by 17.2% to Rs9,811 crore from Rs8,371 crore mainly due to consolidation of Network 18 Media & Investments Ltd from current year.
 
As on 31 December 2014, the company said it had an outstanding debt of Rs1.50 lakh crore, while its cash and cash equivalents were at Rs78,691 crore.
 
Before the result announcement, RIL closed Friday marginally up at Rs869 on the BSE, while the 30-share benchmark Sensex ended the day marginally higher at 28,121.
 

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