The Importance of Understanding Debt while Stock-picking
Debt is truly a four-letter word. In moderation, it could help to improve shareholder returns. An excess, generally, leads the company to the debt recovery courts or repeated doses of equity infusion which keeps diluting shareholder returns. The one important requirement for taking on debt is that the business should generate a return on capital employed (RoCE—profits before interest and...
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  • Nifty, Sensex will continue to move in a range – Monday closing report

    We had mentioned in Friday’s closing report that Nifty, Sensex might move in a narrow range. The major indices of the Indian stock markets were range-bound on Monday and closed with gains over Friday’s close. On the NSE, there were 1,249 advances, 541 declines and 317 unchanged. The trends of the major indices in the course of Monday’s trading are given in the table below:

     

     
    The BSE Sensex on Monday touched a record high and crossed the 39,000 mark for the first time. A rise in the Asian indices, along with buying in the auto, capital goods and metal stocks supported the gains in the domestic indices, analysts said. 
     
    Benchmark indices ended higher but off day's high on the back of last hour selling pressure on first day of the financial year 2020. The Sensex touched a record high of 39,115.57 during the day, while Nifty also closed above 11,650 level. The Sensex rose 164.27 points at 38,837.18, while Nifty was up 31.70 points at 11,655.60. About 1,685 shares have advanced, 918 shares declined, and 145 shares are unchanged. Tata Motors, Hindalco Industries, Wipro, Bharti Airtel and Maruti Suzuki were the top gainers on the Nifty, while Zee Entertainment, UPL, IOC, Eicher Motors and IndusInd Bank were among major losers. Among sectoral indices, except bank and FMCG (fast moving consumer goods) all other indices ended in green led by metal, IT (information technology), infra, auto and pharma. Mishra Dhatu Nigam has recorded a turnover of over Rs701.50 crore (provisional and unaudited) for the financial year ended on March 31, 2019 (corresponding figure for the previous year was Rs661.69 crore).
     
    Bank of Baroda (BoB) has allotted Rs52.42 crore worth of shares to the shareholders of the Vijaya Bank and Rs24.84 crore shares to those of Dena Bank as the merger of the three banks came into effect on Monday.
     
    With the amalgamation, the branches of both Vijaya and Dena Bank would function as the branches of the BoB. "The bank (BoB) is in the process of filing listing applications with the stock exchanges and the aforesaid equity shares will either be credited to the demat accounts or share certificates will be dispatched to the eligible shareholders of Vijay Bank and Dena Bank," BoB said in a regulatory filing. Further, in terms of the amalgamation scheme, bank accounts of eligible shareholders of Vijaya Bank and Dena Bank as registered with the depositories and bank will be either credited or fractional cash warrants will be issued with amount arising out of fractional entitlements, it added. Post the merger, the BoB is now the third largest bank in the country. Bank of Baroda shares closed at Rs132.30, up 2.84% on the NSE. 
     
    State-run Bharat Electronics Ltd (BEL) on Monday reported a revenue of Rs11,700 crore (provisional) for financial year 2018-19, registering a 16% annual growth over the revenue of Rs10,085 crore in fiscal 2017-18.
     
    "We have achieved a sustaining double digit growth of 16% over the previous fiscal in sales turnover," said the city-based defence behemoth in a statement here. The company earned $21.9 million (Rs152 crore) from export sales during the fiscal under review. Major products exported during the fiscal were coastal surveillance system spares, accoustic test facility, compass, cable looms and electro mechanical parts. The order book of Rs51,600 crore, includes an all-time high order of Rs23,200 crore. BEL shares closed at Rs95.95, up 2.84% on the BSE.
     
    The top gainers and top losers of the major indices are given in the table below:
     
     
    The closing values of the major Asian indices are given in the table below:
     
     
  • User

    Nifty, Sensex may move in a narrow range – Weekly closing report
    We had mentioned in last week’s closing report that Nifty, Sensex might give up some gains. The major indices of the Indian stock markets were range-bound during the week and closed on Friday with gains over Friday’s close. The trends of the major indices in the course of the week’s trading are given in the table below:
     
     
     
    The indices suffered a correction on Monday and closed with losses over Friday’s close. On the NSE, there were 434 advances, 1,329 declines and 339 unchanged. The S&P BSE Sensex closed 356 points or 0.93% lower at 37,808.91, while the broader Nifty finished 103 points or 0.90% lower at 11,354.
     
    In line with most Asian markets, Sensex and Nifty declined further on Monday owing to weak manufacturing data from the US and Europe, fuelling fresh concerns of global growth slowdown. Besides, the investor sentiments also took a beating over uncertainty around Brexit and initial weakness in the rupee. Except for oil and gas and power stocks, all the sectoral stocks logged steep fall. Market observers, who have the financial stamina to wait are expecting more trouble.
     
    After returning to black in the last quarter, lending major Punjab National Bank (PNB) has set a recovery target of Rs10,000 crore for the concluding Q4, the company's Managing Director and Chief Executive Officer Sunil Mehta told IANS in an interview. The state-owned lender has recovered about Rs16,000 crore in the last three quarters of the current fiscal. Apart from a separate stressed asset vertical, the bank has exercised a large number of steps to resolve the non-performing asset (NPA) issue. The bank runs a special "one time settlement" (OTS) scheme for NPA-2018 which deals with accounts of up to Rs25 crore (outstanding as on March 31, 2018). "OTS camps are held throughout the country where borrowers and the bank try to arrive at a suitable negotiated amount," Mehta said.
     
    The major indices of the Indian stock markets rallied on Tuesday and closed with gains over Monday’s close. On the NSE, there were 991 advances, 754 declines and 340 unchanged. The S&P BSE Sensex closed 425 points or 1.12% higher at 38,233.41, while the broader Nifty finished 129 points or 1.14% higher at 11,483.25.
    Both Sensex and Nifty advanced over 1% each during the afternoon session of trade on Tuesday owing to a recovery in the Asian markets. The Nifty PSU Bank index, up 2.31%, led the gains on the NSE while the IT index was the only sectoral index trading in the red.
     
    Jet Airways CEO Vinay Dube on Tuesday said that the stakeholders of the cash-strapped airline were optimistic about the airline's future. Speaking on the sidelines of a meeting on Jet, he said: "We are optimistic."  State Bank of India Chairman Rajnish Singh, DGCA chief B.S. Bhullar and Civil Aviation Secretary Pradeep Singh Kharola were also present in the meeting held to discuss the future of Jet.  The meeting came a day after Jet Chairman Naresh Goyal resigned and lenders of the bank agreed to provide immediate funds of Rs1,500 crore.
     
    Larsen & Toubro Ltd (L&T) made an open offer on Tuesday to acquire a 31% stake in IT services firm Mindtree Ltd for Rs5,030 crore ($730.20 million). L&T said it has offered to buy 51.3 million Mindtree shares at Rs980 apiece. Last week, L&T said it will buy a 20.32% stake in Mindtree for Rs3,269 crore ($476.57 million). The company, which is acquiring the shares from Indian coffee baron V.G. Siddhartha and companies related to him, said it had also placed an order with its broker for an on-market purchase of up to 15% of Mindtree’s shares at 980 rupees apiece.
     
    The major indices of the Indian stock markets were range-bound on Wednesday and closed with losses over Tuesday’s close. On the NSE, there were 801 advances, 958 declines and 326 unchanged. The S&P BSE Sensex closed 101 points or 0.26% lower at 38,132.88, while the broader Nifty finished 38 points or 0.33% lower at 11,445.05.
     
    GMR Infrastructure on Wednesday said Tata Group, along with an affiliate of Singapore's sovereign wealth fund "GIC" and SSG Capital Management, would invest Rs8,000 crore in GMR Airports Ltd (GAL). The investment marks the entry of the Tata Group into the airport business. "The investment amount of Rs8,000 crore will consist of Rs1,000 crore equity infusion in GAL and Rs7,000 crore towards purchase of GAL's equity shares from GIL and its subsidiaries," it said. After the investment, GMR Infrastructure and its subsidiaries will hold 54% stake in GAL, Tatas will hold 20% stake, GIC will hold 15%, SSG will hold 10%, and Employee Welfare Trust will have 2%. 
     
    The SBI expects Jet to find a new financial investor by the first quarter of next fiscal. Earlier in the day, the management of airline led by state-run SBI to oversee the daily operations and cash flow drew up a plan in consultation with the Civil Aviation Ministry to address the disbursal of pending salaries of employees, sources said. Jet Airways CEO Vinay Dube on the sidelines of the meeting said that the stakeholders of the cash-strapped airline are optimistic about the airline's future.
     
    The major indices of the Indian stock markets rallied on Thursday and closed with gains over Wednesday’s close. On the NSE, there were 1,126 advances, 625 declines and 336 unchanged. The S&P BSE Sensex closed 413 points or 1.08% higher at 38,545.72, while the broader Nifty finished 125 points or 1.09% higher at 11,570.00.
    It was a largely volatile trade session. Although the indices had opened on a positive note and traded in the green for most of day, profit booking ahead of the futures and options (F&O) contracts expiry on Thursday, pulling the market down in the last two hours of trade, analysts said.
     
    Dewan Housing Finance (DHFL) settled nearly 10% higher on Thursday after touching an intra-day high of 13.64% on the BSE over reports that Piramal Group and Baring Private Equity (PE) may acquire majority stake in the housing finance company. DHFL, however, said in a regulatory filing that "on February 4, the Chairman and Managing Director or the company had mentioned that there is an intent to bring in strategic investors in the Company. "The Board or Directors had constituted a special committee to evaluate such interest. However, no further discussions or decision in relation to the same have been made by the Board of Directors of the Company."
     
    Global software major Infosys on Thursday said its consulting arm would buy 75% equity stake in Starter N.V., a subsidiary of the Dutch-based ABN AMRO Bank for Rs999 crore ($144 million) in cash for strategic partnership in The Netherlands. As a market leader in the Benelux region, Stater operates in the mortgage and consumer value chain with capabilities in digital origination, servicing and collection.
     
    State-run Punjab National Bank (PNB) on Friday said it will sell part of its stake in PNB Housing Finance (PNBHFL) to global equity firms General Atlantic Group and Varde Partners for a total of Rs1,851.60 crore. The bank has entered into agreements for the sale. Post the transactions, the PNB would continue as the promoter and hold a strategic stake of 19.78% in PNBHFL, it said in a regulatory filing. The transactions would include "sale of 1,08,91,733 equity shares held in PNBHFL to General Atlantic Group at a per share price of Rs850, aggregating to Rs925.80 crore, and the sale of 1,08,91,733 equity shares held in PNBHFL to Varde Partners at a per share price of Rs850, aggregating to Rs925.80 crore," the filing said. PNB shares closed at Rs95.25, down 0.10% on the NSE.
     
    The Indian equity indices opened on a positive note on Friday with the BSE Sensex over 100 points. The domestic indices rose in tandem with the rise in Asian markets, analysts said. Buying in all the sectoral indices, led by telecom, metal and oil and gas stocks also supported the market. 
     
    On Friday, the 31-share index closed 0.33% higher at 38,672.91 and the 50-stock index closed at 11,623.90, up 0.47%. The broader market index represented by the NSE Nifty 500 Index closed 0.64% higher. The market breadth was tilted in favour of buyers. About 970 shares advanced and 772 stocks declined on National Stock Exchange.
     
    Financially troubled Jet Airways on Friday said that the repayment of the External Commercial Borrowing (ECB) availed by the company for working capital purposes has been delayed. In a regulatory filing to the BSE, Jet Airways said: "This is to inform you that the repayment of the External Commercial Borrowing, availed by the company for working capital purposes, falling due on 28 March 2019, has been delayed owing to temporary liquidity constraints..." The airline said it has engaged with lender in relation to the issue. Jet Airways India shares closed at Rs267.00, down 0.82% on the NSE.
     
     
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