Cholamandalam Investment strengthens on plan to mop up Rs 300 crore

Cholamandalam Investment & Finance Company is currently trading at Rs. 227.00, up by 7.00 points or 3.18% from its previous closing of Rs. 220.00 on the BSE.

The scrip opened at Rs. 231.75 and has touched a high and low of Rs. 233.90 and Rs. 227.00 respectively. So far 740 shares were traded on the counter.

The BSE group 'B' stock of face value Rs. 10 has touched a 52 week high of Rs. 307.50 on 28-Feb-2013 and a 52 week low of Rs. 198.10 on 05-Sep-2012.

Last one week high and low of the scrip stood at Rs. 233.90 and Rs. 217.00 respectively. The current market cap of the company is Rs. 3249.52 crore.

The promoters holding in the company stood at 57.72% while Institutions and Non-Institutions held 35.29% and 6.98% respectively.

Cholamandalam Investment and Finance Company is planning to mop up around Rs 300 crore through private equity, QIP and other routes. The company is looking to grow at around 15-20% during the current fiscal. Further, the company has decided to withdraw gold loan offering which it had started in 2012 fiscal as a pilot project.

The company, in 2012-13, raised equity capital of Rs 300 crore through QIP route. The company also raised Rs 698 crore through perpetual debt and subordinated debt instruments to meet the CAR and business volumes.

Cholamandalam Investment is among the top 5 NBFC’s in the country operating in vehicle finance, home equity, corporate and mortgage finance segments with subsidiaries in the broking and wealth advisory space. It is emerging as a high growth company in the retail lending space with a branch network of over 220.

Reliance General Insurance launches “Reliance HealthGain”

The product is a first-of-its-kind comprehensive Health Insurance plan specially designed to focus and support the healthcare needs of women.

Reliance General Insurance Company (RGI), a part of Reliance Capital Limited and one of India’s largest selling private general insurers, today announced the launch of its innovative and unique Health Insurance Plan - Reliance HealthGain - for the retail segment.

The product is a first-of-its-kind comprehensive Health Insurance plan specially designed to focus and support the healthcare needs of women. The launch was announced by Rakesh Jain, CEO, Reliance General Insurance, here today.

“Our assessment indicates that about 20 per cent of workforce in India is women and out of which only 10 per cent ( ie 2 per cent) end up having healthcare protection on their own. We have made an effort to encourage them to take health coverage by incentivizing their inclusion in our new plan”, said Jain.

The new plan provides special pricing benefits to single women, widows and divorcees. The product comes with wide range of sum insured. The policy can be renewed till the customer desires with no exit age.
Reliance HealthGain offers pricing benefits on the total family premium in case of the inclusion of girl child. 
“The plan is also aimed at supporting the girl child at a time when the gender ratio is highly skewed against the girl child. We are extending pricing benefits on the total family premium in case a family decides to add a girl child in the policy. This is our small effort to welcome a girl child in the family,” said Jain.

The policy also offers Re-instatement of Sum Insured on unrelated diseases, wherein the company will double the Base sum insured in case of exhaustion of basic sum. This ensures that you have requisite coverage at all times and reduces the need for multiple policies. 

The Policy offers auto extension wherein the policy automatically gets extended for 1 year without charging any premium in the event of insured policyholder getting diagnosed with a specified critical illness like cancer, stroke etc. 

“HealthGain plan brings unique policy service guarantee that will entitle the customer additional monetary/coverage benefits if for some reason the company is unable to fulfill its commitments on policy and claims servicing within the agreed time” said Jain. 

The policy also offers Call Option and has an inbuilt Accidental Death Cover for the insured policyholder. Policyholders can also include their extended family under the same policy.

The Call Option allows the customer to enhance the base sum insured at pre defined intervals with continuity benefits.

“A customer, with say Rs 3 lakh insurance, can earn upto 100 per cent cumulative bonus after three claim-free years. At the fourth renewal under the Call Option, the customer can increase his base sum insured, in this case to Rs 6 lakh, with full continuity benefits”, said Jain.  

RGI also offers a widespread network of over 4000+ hospitals for cashless treatment under this policy. 

Mutual Funds decline amid volatile market

Equity Mutual Funds recovered slightly and ended with mixed returns. Performance wise, Diversified Equity funds emerged as the star performer by closing with positive returns. Large Cap funds delivered better performance than its counterpart Small & Mid cap and Index funds.

Amid volatile market, sector funds stood strong. Barring Banking & Finance and FMCG, all the other funds closed in the positive territory.

Equity Mutual Funds are likely to remain volatile as markets will become choppy further according to experts. The yesterday’s session closed with Sensex at 19345.70 down 2.64 points and Nifty slipped 13.05 points to finish at 5742.

Among Fixed income funds, long and short term funds stumbled owing to liquidity crunch in the debt market. The debt funds are likely to deliver volatile performance owing to thin volumes in the debt market and weak rupee condition.

Economy news of the day

Finance Minister released additional funds of Rs 20bn in the form of interest sops for clearing dues and a rise in the rate of interest subvention.

The Home Ministry may vet all foreign direct investment (FDI) proposals beyond 49% across sectors for mandatory security clearance once the new FDI rules are approved. (BL)

The oil marketing companies have raised petrol and diesel prices by Rs0.7 a litre and Rs0.5 paise a litre (excluding taxes), respectively effective Wednesday midnight. (BL)

Finance Minister released additional funds of Rs 20bn in the form of interest sops for clearing dues and a rise in the rate of interest subvention. (BL)

The infrastructure sector’s output growth in June was a near-static 0.1% against 7.9% in June 2012, according to data issued by the ministry of commerce and industry. (BS)

Markets open higher tracking gains in Asia

Markets opened higher on Thursday, amid firm Asian cues, helped by a rebound in financial shares.

At 9:30AM, the 30-share Sensex was up 186 points at 19,532 and the 50-share Nifty was up 51 points at 5,793.

Overnight, US stocks ended flat as the Federal Reserve gave no hint that a reduction in the pace of its bond-buying program is imminent. The Dow Jones industrial average slipped 21.05 points, or 0.14 percent, to end at 15,499.54. The Standard & Poor's 500 Index dipped 0.23 of a point, or 0.01 percent, to finish at 1,685.73. However, the Nasdaq Composite Index rose 9.90 points, or 0.27 percent, to close at 3,626.37.

Asian shares and commodity prices firme up on Thursday after China's official manufacturing activity data came in better than expected, easing some concerns of a sharp slowdown in the world's second-largest economy. The Shanghai Composite, Nikkei, Straits Times and Hang Seng are up 0.5-1.1% each.

Strides stock plunges 14% on US FDA notice

The Strides Arcolab stock on Wednesday took a 14.4 per cent knock on the National Stock Exchange, closing at Rs 580.05, on information the US Food & Drug Administration (USFDA) had raised observations over a key line at the company’s manufacturing plant in Bangalore.

This has led to apprehension among a few investors that Strides’ $1.8-billion transaction with global pharmaceutical company Mylan, expected by September-end, may be delayed. Earlier this year, Strides had signed a deal to sell its specialty injectables business for $1.8 billion. It is learnt FDA had made observations on a production line that would be part of this transaction. After a recent inspection of Strides’ unit,  FDA issued a Form 483 to the company. The company’s management said it had addressed the issue.

An FDA Form 483 is issued to a company after an inspection, in case it is felt any condition at the unit may violate the Food, Drug and Cosmetic Act, as well as related Acts. The form indicates any food, drug, device or cosmetic has been adulterated or is being prepared, packed, or held under conditions in which it may be adulterated or rendered injurious to health. After the receipt of a Form 483, a company has to respond to the concerns within 15 days. If FDA is unsatisfied withe response, the issue might lead to a warning letter and subsequently, snowball into an import alert.

Arun Kumar, vice-chairman & managing director, said the company had a strong track record of FDA approvals — so far, it had 15 inspections and seven of these didn’t record Form 483s. The rest had observations that were addressed to the satisfaction of the agencies. “With our past experience, we are confident these Form 483s would be addressed in a diligent manner,” Kumar told investors.

He was, however, categorical on the Mylan deal time frame. He said the company was awaiting the Foreign Investment Promotion Board’s approval and a Form 483 wouldn’t affect the transaction.

Markets continue to languish;FMCG weigh

Meanwhile, Bharti Airtel up 5.5% along with IT majors buck trend

Markets continued to trade in the negative territory with FMCG, banks and Oil & Gas majors weighing on the indices in noon deals. At 1315 hrs, the Sensex was down 127 points at 19,221 and the Nifty slipped 55 points to trade around the levels of 5,699.

In the broader markets, the selloff worsened, with both the smallcap and the midcap indices losing 2% each.

The rupee approached a record low on Wednesday on doubts about whether the central bank can defend the currency with its existing cash-draining measures unless policy makers take additional steps. The rupee dropped by 61 paise to 61.08 in the late noon deals.

In Asia, Chinese shares rose after Beijing pledged to keep economic growth stable in the second half of the year, while the dollar held onto slight gains as market momentum stalled ahead of the outcome of the U.S. Federal Reserve policy meeting on Wednesday.

China's CSI300 index rose 0.5% after authorities pledged to keep growth stable in the second half of 2012 while pressing ahead with reforms and restructuring. The index is still down nearly 13% this year.

Japan's Nikkei share average dropped 1.5% in light trading, giving up some of the previous session's 1.5% gain. Still, the benchmark is up 31.5% in 2013, underpinned by the government's aggressive stimulus policies aimed at reviving the world's third-largest economy.

Back home, only IT index was in the green with gains of nearly 1%. Among the ones in the red were Realty, Bankex, Power, FMCG, PSU and Capital Goods losing 1-4%.

The top gainers among the Sensex-30 were Bharti Airtel up 5.5% after its net profit fell to 6.89 billion rupees for the fiscal first quarter ended June 31, beating analyst expectations, helped by better operating performance at home.

IT majors TCS, Infosys and Wipro gained 0.1-3%.

Dr Reddys Lab, Coal India, Tata Power, ONGC, Tata Motors, Mahindra & Mahindra and Bajaj Auto which added 0.2-3% rounded off the gainers.

Among the losers were NTPC, Jindal Steel, ICICI Bank, ITC, Gail India, Hindustan Unilever, Tata Steel and Cipla which slipped 2-5%.

The market breadth was negative. 1,522 stocks declined while 526 stocks advanced on the BSE.

Rupee breaches the perilous 61/$ level on persistent month-end dollar demand

Indian rupee, prolonging its freefall, has yet again breached the perilous 61/$ level on persistent month-end dollar demand from importers and on the back of strengthening in the US currency overseas. Lingering doubts on whether the central bank can defend the currency with its existing cash-draining measures unless policy makers take additional steps is mainly hurting sentiment. Meanwhile, negative local equities also added to the pressure of Indian currency. On the global front, US dollar advanced slightly in the early trade as investors prepared for a statement on monetary policy from the US Federal Reserve, as well as the preliminary estimate of second-quarter growth for the world's largest economy.

The partially convertible currency is currently trading at 61.05, weaker by 57 paise from its previous close of 60.48 on Tuesday. The currency has touched a high and low of 61.20 and 60.83 respectively. The Reserve Bank of India’s (RBI) reference rate for the dollar stood at Rs 59.82 and for Euro it stood at Rs 79.32 on July 30, 2013. While, the RBI’s reference rate for the Yen stood at 60.84, the reference rate for the Great Britain Pound (GBP) stood at 91.7582. The reference rates are based on 12 noon rates of a few select banks in Mumbai.

IOC strengthens on raising $500 million through issue of dollar-denominated bonds

Indian Oil Corporation (IOC) is currently trading at Rs. 196.00, up by 0.65 points or 0.33% from its previous closing of Rs. 195.35 on the BSE.

The scrip opened at Rs. 194.00 and has touched a high and low of Rs. 197.40 and Rs. 186.20 respectively. So far 90,000 shares were traded on the counter.

The BSE group 'A' stock of face value Rs. 10 has touched a 52 week high of Rs. 375.00 on 18-Jan-2013 and a 52 week low of Rs. 194.00 on 30-Jul-2013.

Last one week high and low of the scrip stood at Rs. 227.45 and Rs. 194.00 respectively. The current market cap of the company is Rs. 47272.23 crore.

The promoters holding in the company stood at 78.92% while Institutions and Non-Institutions held 6.43% and 14.65% respectively.

State-owned Indian Oil Corporation (IOC) has raised $500 million by selling 10-year dollar-denominated bonds. The senior unsecured bonds were priced at 3.224% points over comparable US Treasuries and the paper carries a coupon of 5.75%.

The company received bids for around $3.5 billion from over 400 investors, comprising 64% from fund managers, 17% from banks, 11% from insurance and sovereign wealth funds and 8% from private banks.

IOC is the largest enterprise in the country and the foremost ranked Fortune Global 500 Company in India and has presence in the complete hydrocarbon value chain from downstream refining & marketing, pipeline transportation, Petrochemicals, E&P and Gas Marketing.

Pipavav Defence to raise $150mn through London Stock Exchange listing

Pipavav Defence is targeting to list its stock on London Stock Exchange by October, 2013.

Pipavav Defence and Offshore Engineering Company Ltd on Wednesday announced that that the company plans to raise US$150mn through listing it London Stock Exchange. It has received provisional approval from FIPB to raise $200mn. The company has shortlisted Investment Bankers for listing it on London Stock Exchange.
The investment will be used in subsidiaries to build wide spectrum defence manufacturing facilities and infrastructure for the global demand.
The company is currently working with nearly 12 countries to build warships and offshore assets and it expects to become a global defense and offshore company over the next 4 to 5 years.
It is looking forward to joint marketing initiatives to tap growing global demands of warships and submarines through its prestigious Joint Venture with Mazagon Dock Ltd. It has submitted the bids worth $2bn in various countries with respective local partners.
The investment will reduce overall debt equity and strengthen the balance sheet significantly. Pipavav Defence is targeting to list its stock on London Stock Exchange by October, 2013.