Mubadala picks up 1.4% stake in Reliance Retail for Rs 6,247 crore

Mubadala picks up 1.4% stake in Reliance Retail for Rs 6,247 crore

Reliance Industries (RIL) on Thursday said Abu-Dhabi-based sovereign fund Mubadala would invest Rs 6,247.5 crore into subsidiary Reliance Retail for a 1.4 per cent stake.

This is the fifth deal to be announced by the Mukesh-Ambani-led firm in three weeks, stepping up its stake sale process that has seen marquee investors back the firm so far. The valuation of the firm, however, remains at Rs 4.2 trillion, a worrying sign, said, sector experts.

Analysts were expecting the valuation of the firm to touch at least Rs 4.5 trillion, as the stake sale process proceeded. It hasn’t happened.

On Thursday, RIL closed trade at Rs 2225.05 per share on the BSE, down 0.39 per cent over the previous day’s close. So far, Reliance Retail has raised Rs 24,847.5 crore in five rounds offloading 5.65 per cent stake to investors. Analysts said Reliance would likely complete small deals with financial investors before inducting a strategic investor into the company, critical if it requires a strong partner for its backend and supply-chain management.

On Wednesday, the company announced two transactions, one by General Atlantic for Rs 3,675 crore, who would pick up a 0.84 per cent stake in the company. The second was by the co-investors of private equity giant Silver Lake, who would invest an additional Rs 1,875 crore into Reliance Retail.

This would take the combined investment by Silver Lake and its co-investors in Reliance Retail to Rs 9,375 crore in exchange for a 2.13 per cent stake.

Last week, KKR had put Rs 5,550 crore for a 1.28 per cent in the firm. Speculation is rife that Abu Dhabi Investment Authority could be next in line. However, a RIL spokesperson said it could not comment on market speculation.

“As a policy, we do not comment on media speculation. Our company evaluates various opportunities on an ongoing basis. We have made and will continue to make necessary disclosures in compliance with our obligations under Sebi and our agreements with the stock exchanges,” the spokesperson said.

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Reliance Retail though has given the option to investors in Jio Platforms to consider backing the former as it seeks to unlock value. So far, the investors in Reliance Retail are those that have invested in Jio Platforms earlier. Reliance Retail remains the largest organised retail player in the country, with the company recently announcing the acquisition of the retail, wholesale and logistics assets of the Future group in a Rs 25,000-crore transaction.

In a statement, Ambani, who is chairman and managing director of RIL, said Mubadala was a “valued investor”, who was committed to the Indian market.

Along with Jio, retail contributes 35 per cent to RIL’s consolidated earnings before interest tax depreciation and amortisation (Ebitda), Ambani had said at the firm’s annual general meeting in July. Reliance had offloaded nearly 33 per cent stake in Jio Platforms to 14 investors for Rs 1.52 trillion between April and June, emerging as the only company in the country to go in for a massive monetisation exercise during the lockdown.

Ambani had indicated at the AGM that “global partners and investors” were also keen to invest in Reliance Retail and that they would be inducted into the company in the forthcoming quarters.

THE DIFFERENCE BETWEEN MARKET VOLATILITY AND MARKET RISK?

  the difference between Market Volatility and Market Risk?

One of the most commonly mixed-up concepts in investing is market volatility and market risk. Many people think they are identical, and that’s not true. Let’s be clear on these terms through this blog.

What are Risk and Volatility?

Volatility is the upward and downward trend swings in market indices/interest rates. An investor doesn’t have any control over it. Market risk, on the other side, is a personal matter like possibility or chance of an injury, loss or hazard, or how much financial uncertainty an investor can tolerate. The person’s psychological state is responsible for the risk.

Volatility in the stock market can be measured in different ways. The difference between the maximum return and the minimum return is the simplest way. But the more accurate method preferred by analysts is to measure using “Standard Deviation”.

But in case of risk, there is no such measure to calculate. In financial terminology, risk refers to the potential permanent loss of money. Technically risk tolerance means different things to different people. “You don’t really know your tolerance for risk unless and until you have knowingly been through it.

How is Risk different from Volatility?

While they are closely related, it’s important to not confuse market risk with market volatility.
Market risk cannot be measured, while volatility can be measured in various ways. Risk can be defined by the capital loss while volatility cannot be defined by capital loss. Capital risk can be minimised as it depends on an individual psychological state while volatility cannot be minimised. Volatility is a historical concept while the risk is relayed to the future. Risk is subjective to nature while volatility is objective in nature.

How to Optimize market volatility?

Market volatility is seen as a security’s tendency to noticeably spiral up and down within a short period of time. But this movement may not always have a downside. Once people stop seeing this phenomenon as detrimental, they will see it as opportunistic. Short-term fears cloud an investor’s judgment and strategizing ability. Market volatility is inevitable and one needs to find a way around it.

When a storm hits, it does not call for an exit strategy. It’s vital to understand the potential advantage of investment opportunities that arise from market volatility. Below are two strategies to help in leveraging volatility for one’s own benefit

Sachin Tendulkar pads up as brand ambassador for Paytm First Games

Sachin Tendulkar pads up as brand ambassador for Paytm First Games

Digital payments company Paytm said that its gaming subsidiary Paytm First Games (PFG) has roped in cricket legend Sachin Tendulkar as the brand ambassador. Tendulkar would be instrumental in creating awareness about the genre of fantasy sports in the country. Other than ‘fantasy cricket’ he would help PFG also promote other sports including kabaddi, football, and basketball. The firm said the partnership with Tendulkar will increase its reach in smaller cities and towns. PFG’s parent company Paytm is India’s highest-valued unicorn, at $16 billion.

“Cricket is an engaging sport, and we all tend to have opinions about the game – right from player selection to playing strategies. Paytm First Games will allow fans to don their thinking hats and experience the thrill of making the correct choices and getting their teams to win,” said Sachin Tendulkar. “I am happy to partner with Paytm First Games to enable cricket fans to engage more with the ever-popular game of cricket.”

“Sachin (Tendulkar) is the pride of our country and the true embodiment of excellence, tenacity, and hard work,” said Vijay Shekhar Sharma, founder and CEO of Paytm. “This association is based on many of the values we share with the greatest sportsperson of all time.”

PFG has also set aside Rs 300 crore for investing in growing the market for fantasy sports and other online gaming events during this financial year. It said that over the next six months, 200 plus live events would be featured on the platform including international and domestic cricket tournaments and soccer leagues.

“As India’s homegrown gaming platform, our vision is to get the sports fans closer to the action with fantasy sports,” said Sudhanshu Gupta, chief operating officer, Paytm First Games. “Most of us have grown up watching (Tendulkar) in action. With Sachin (Tendulkar) as a brand ambassador, we wish to inspire mobile gaming enthusiasts to experience fantasy sports which are about tactics, strategic planning and research.”

PFG said it offers over 50 games, where players apply research and strategy to engage with live sporting events. The platform currently engages with over 80 million gaming enthusiasts with the majority of them from smaller cities and towns. The firm said it is aiming to reach 100 million users in the upcoming T20 league.

Facebook India names ex Ola exec Arun Srinivas Head for Global Business

Facebook India names ex Ola exec Arun Srinivas Head for Global Business

Social media giant Facebook on Monday said it has appointed former Ola executive Arun Srinivas as the Director of Global Business Group in India.

In this role, Srinivas will lead the strategy and delivery of the India Marketing Solutions charter that is focused on large advertisers and agencies, a statement said.

He will spearhead the company’s strategic relationship with the country’s leading brands, agencies, and partners to drive Facebook’s revenue growth in key channels in India, and partner the media and creative ecosystems for accelerating adoption of digital tools by businesses, it added.

Srinivas will have the company’s key business vertical teams, agency teams, and business solutions teams reporting into him, the statement said.

Srinivas comes with 24 years of experience in senior sales and marketing roles at companies including Ola, Unilever and Reebok. He also had a stint at investment firm WestBridge Capital Partners where he led the consumer vertical.

His last assignment was with Ola as the ride-hailing company’s chief operating officer and global chief marketing officer (CMO).

Facebook is committed to enabling economic opportunities for businesses, and this charter is more important than ever before as we navigate COVID-19 and the economic crisis, Facebook India Director and Head of Global Marketing Solutions Sandeep Bhushan said.

“Large businesses and agencies play a crucial role in the country’s digital economy and are critical to driving ecosystem standards for media, he added.

Bhushan welcomed Srinivas to lead the mandate to shape the role the Facebook family apps can play in enabling businesses, supporting India’s economic recovery, and building the digital advertising ecosystem of the country.

TYPES OF EQUITY MUTUAL FUNDS 

types of equity mutual funds

Mutual funds are considered to be one of the most popular investment options these days. It’s an investment facility formed when an asset management company (AMC) or fund house pools investments from several individuals and institutional investors with common investment objectives.
A financial expert is known as fund manager Managers the total cumulated investment. Mutual funds are an excellent investment option for individual investors to get exposure to expert managed portfolios. Also, one can diversify their portfolio by investing in mutual funds as the asset allocation would cover several instruments.

Equity Mutual Funds

Through equity funds, investors invest in shares of companies across all market capitalisations. A mutual fund is categorised under equity fund if it invests at least 65% of its portfolio in equity instruments. Equity funds usually offer the highest returns among all categories of mutual funds. The profit from equity mutual funds depends on market movements which are influenced by many factors like geopolitical and economic factors. Equity funds are further classified. In this blog, we are going to describe what are the types of equity mutual funds in India are.

Small-Cap Funds

In India, Companies with a market capitalisation less than Rs. 500 Crore is considered as small-cap companies. The stocks issued by such companies are termed as small-cap stocks. Small-cap funds are those equity funds that invest in shares of companies with small market capitalisation.

Mid-Cap Funds

An Indian company with a market capitalization between Rs.5000 crores and Rs.20000 crores are considered as a midcap company. As the name indicates mid-cap company falls in the middle of the pack between large-cap and small-cap companies. An Indian company with a market capitalization between Rs.5000 crores and Rs.20000 crores are considered as a midcap company. As the name indicates mid-cap company falls in the middle of the pack between large-cap and small-cap companies.

Large-Cap Funds

The market capitalization of Large-cap companies is above Rs 20,000 crore. Large-cap companies are market leaders. Large-cap funds are those equity funds that invest in shares of companies with large market capitalisation.

Multi-Cap Funds

Multi-Cap Funds invest across stocks of companies of all market capitalisations. The asset allocation would be changed by the fund managers according to the market conditions. This is done to reap the maximum returns for investors.

Sector or Thematic Funds

Sectoral funds invest in stocks of a particular sector like software or automobile. Thematic funds invest in stocks of companies that operate with a similar theme like travel and tourism.

Index Funds

Equity funds having the intention of tracking and emulating the performance of a popular stock market index such as BSE Sensex and NSE Nifty is called an index fund.

ELSS

Equity-linked savings scheme (ELSS) is the only kind of mutual funds covered under Section 80C of the Income Tax Act, 1961. Investors can claim tax deductions of up to Rs 1,50,000 a year by investing in ELSS.

Adani ranks as the largest solar power generation owner globally: Mercom

Adani ranks as the largest solar power generation owner globally: Mercom

The latest ranking of global solar companies by Mercom Capital ranks the Adani Group as the number one global solar power generation asset owner in terms of operating solar projects.

Adani said its renewable energy portfolio exceeds the total capacity installed by the entire United States solar industry in 2019 and will displace over 1.4 billion tonnes of carbon dioxide over the life of its assets.

The group is one of the most fully integrated solar players in the world, manufacturing solar cells and modules, undertaking project development, construction, financial structuring and owning and operating its assets through its internal asset management platform.

According to the ranking, Adani is roughly 70 per cent larger than the next largest global solar power generation company.

Adani Green Energy Ltd (AGEL) established its first solar project in 2015. It 2017, the company completed two solar projects. It went public in 2018 and has accelerated its presence to reach the current milestone of being the largest solar player in the world in a short span of just five years with a stated target of reaching 25 gigawatts of renewable power by 2025.

“Achieving this ranking is a direct result of our commitment to creating the infrastructure needed for a clean-powered future,” said Chairman Gautam Adani.

“While we are pleased to be ranked the largest solar player in the world, we recognise that there is a lot more that remains for us to do as the world transitions into an increasingly decarbonised energy landscape,” he said in a statement.

Adani anticipates that over the next decade several existing business models will be impacted as a result of the disruption caused by the intersection of the plummeting cost of renewable energy and the ability of technology to rescale industries.

“We expect our renewable energy platform will create new possibilities for our core business and we will be able to address some of the most intractable problems that humankind has faced, including affordable decentralised energy, availability of distributed clean water, green hydrogen as an alternate fuel, and micro agriculture, among others,” he said.

Building partnerships with major industrials, data centre providers and global integrated energy players that seek to reduce their carbon footprints will also continue to further accelerate the growth. “AGEL has launched just five years ago, our story is only beginning.”

AGEL also achieved a top spot in the global ranking in terms of under construction and awarded capacity with 10.1 GW of projects, making it the definitive leader in mega-scale renewable energy project deployments.

BASF India hits 52-week high after Plutus Wealth Mgmt buys 3.15 lakh shares

BASF India hits 52-week high after Plutus Wealth Mgmt buys 3.15 lakh shares

Shares of BASF India rallied as much as 15.6 per cent to hit a 52-week high of Rs 1,870 apiece on the BSE on Monday after Plutus Wealth Management bought 3,15,000 shares of the company at an average price of Rs 1,584.46, NSE data showed.

At 12:39 PM, the stock was ruling at 1,739.95 up 7.6 per cent on the BSE as compared to 0.9 per cent rise in the benchmark S&P BSE Sensex.

Last week, BASF India announced that the company has acquired 100 per cent stake in BASF Performance Polyamides India from BASF Nederland B.V. and BASF SE for an aggregate consideration of Rs 302.90 crore.

For the quarter ended June 2020, BASF India reported widening of its net loss to Rs 29.15 crore due to higher expenses. The company had posted a net loss of Rs 8.2 crore in the same quarter of previous fiscal. Net revenue rose to Rs 1,769.7 crore in April-June quarter of the fiscal year 2020-21 from Rs 1,613.7 crore in the corresponding quarter a year ago. Expenses increased to Rs 1,809.4 crore in the quarter under review from Rs 1,601.6 crore in the year-ago period.
The company said its operations were impacted during the June quarter due to the lockdown and other emergency measures imposed by governments in view of the Covid-19 pandemic. The company had announced its June quarter results on August 6.

BASF India Limited is a leading transnational company in the Indian chemical industry. The company’s portfolio is organised into four segments: Chemicals Performance Products Functional Materials & Solutions and Agricultural Solutions.

AMAZON, FLIPKART SET TO WITNESS BUSINESS WORTH $600 MN DURING SALE EVENTS

Amazon, Flipkart set to witness business worth $600 mn during sale events

E-commerce companies Amazon and Flipkart are expecting to witness a total business of about $600 million during their ongoing sale events. This is at least 25 per cent higher in terms of sales compared to the business these firms would have generated for such small scale events during pre-COVID times, according to the industry insiders and analysts. They are also witnessing an increase in volumes (number of orders) which is 40 per cent higher than the normal times. Walmart-owned Flipkart is running the 5-day ‘Big Saving Days’ sale till Monday, coinciding with Amazon’s 48-hour Prime Day sale which ended on Friday night. But Amazon started another event on Saturday called ‘Freedom Sale’ which would end on Tuesday.

“These are not dominant sale events compared to Flipkart’s Big Billion Days and Amazon’s Great Indian Festival, but these companies are expected to witness a total sales of about $600 million,” said a person familiar with the sale events of Flipkart and Amazon. “In normal times these events would not have been big, but now there is less competition as shoppers are avoiding to visit the stores due to fear of catching the virus.”

The e-commerce majors have bounced back on better delivery and improved last-mile connectivity during the ongoing sale while discounts have remained largely minimal. Sources say both Amazon and Flipkart are seeing a huge demand for electronic goods.

Amazon India witnessed bumper sales of smartphone handsets during the two-day sale with “many items getting out of stock,” according to a person familiar with the development.

“There has been a good response for brands (on Amazon and Flipkart) especially in categories such as electronics, appliances and smartphones as more number of people are working from home,” said Satish Meena, a senior forecast analyst at Forrester Research. “The sales value would look good as the ticket size of these categories is big. However, this time companies are not focusing much on discounts on these categories as they are not seeing competition from the offline stores.”

Instead of making the sellers bleed, experts say, both the e-commerce majors Amazon and Flipkart have roped in banks to offer discounts to buyers in order to make the deals more attractive.

Ankur Pahwa, partner and national leader, e-commerce and consumer internet at consultancy EY India, said the offers on the platforms and tie-up with banks, especially for discretionary spends categories are indicative of the efforts being made to reboot sales and liquidate stocks in those segments. “ Also, smaller cities are seeing a fair uptick in volumes in this sale period both from value-conscious buyers as also from new users,” said Pahwa.

Flipkart works with over 200,000 sellers and 250,000 small sellers such as artisans, weavers, and craftsmen. On Amazon.in, there are over 600,000 sellers. Industry insiders said that there is also some push from sellers to offer deep discounts on Chinese products and sell them quickly due to the campaign to boycott Chinese goods. The government has also asked these firms to make it compulsory for sellers on their e-commerce platform to reveal the ‘country of origin’ of new and existing product listings by the middle of August this year. The sellers are also making efforts to quickly sell products in categories focused on summer including vacation and travel as the season is getting over.

During the sale events, these e-commerce firms are offering deals on products ranging from smartphones, laptops to televisions and refrigerators. During Amazon’s Prime Day sale, several handsets such as the OnePlus 7 range were sold at a discount of up to Rs 10,000 on Amazon. Among Amazon devices, Echo Dot was available at up to 50 per cent discount. Headsets and speakers including that of Sony, JBL and Boat were available at a heavy discount of up to 70 per cent.

This was the first event that was handled by the Amazon India team virtually while working from home. “We had a 48-hour war room set up on Amazon Chime which went smoothly without any technical slowdowns. The employees managed to keep things up and going virtually,” said a company spokesperson.

Sachin Taparia, founder and chairman of community platform LocalCircles said while its consumer spending survey on e-commerce during Prime Day and Big Saving Days sale is still running, initial indication is that approximately 2 per cent of e-commerce shoppers have spent more than Rs 10,000, while another 9 per cent of them have spent up to Rs 10,000 to purchase the products. “Based on consumer feedback, just because the sale was on and many don’t want to visit markets and malls for non-essentials they need, they have ended up placing orders during these sales,” said Taparia

Mahindra group  will continue investing in successful biz for the future: Anand Mahindra

Mahindra group  will continue investing in successful business for the future: Anand Mahindra

Mahindra Group will continue to invest in successful businesses and prepare for the future by nurturing and investing in verticals that have a potential of over a billion-dollar market cap, while “appropriate action” is being taken on those not living up to their plans, its Chairman Anand Mahindra said on Friday.

Addressing the company’s shareholders at the annual general meeting, Mahindra said the Covid-19 pandemic has turned lives upside down and the economy faces an uncertain future. He, however, added that it has given “us an opportunity to reboot our thinking, to reinvent our approach and to recommit ourselves to our financial goals”.

Recollecting how the group navigated what it “appeared to be the worst of times” in 2002 when the share price of M&M had come down to Rs 56, he said the group took action to turn things around with a ruthless focus on financial returns.

He added that “in 2018, we were declared to be the best-performing stock on the Nifty since 2002”.

“We can turn the worst of times into the best of times. And, it is our happy experience that the worst of times is often just the trigger that propels us towards the best of times,” he said.

Today, Mahindra said, “The pendulum has swung again towards tough times. Since 2018, the upward graph has shown quite a dip. The last couple of years have been tough for the whole world and we are no exception.”

He added that side by side, with pursuing ambitious goals, “we had to battle on many fronts and face several so-called ‘black swans’. The Covid-19 crisis, however, has allowed us to reboot our thinking, to reinvent our approach and to recommit ourselves to our financial goals”.

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Reiterating that growth continues to be the group’s goal, he said, “If anything, our focus on growth is sharper than before. We have already started identifying and taking appropriate action on businesses that have not lived up to their business plans.”

Mahindra further said, “We will commit ourselves to ambitious growth by continuing to invest in our successful businesses and prepare for the future by nurturing and investing in businesses that have a potential of over a billion-dollar market cap.”

He added that far from abandoning dreams, the group is reigniting itself in a calibrated, strategic and well-thought-out manner.

“Today, our factories are humming again, we have reinvented our business, we have moved sale online (and) we are all set to rise,” Mahindra said.

He said, “I think life has led us full circle. In 2002, when we seemed to be facing the worst of times, we committed to a focus on financial returns and succeeded beyond anyone’s expectations.”

Mahindra also said that in 2020, tough times are back again and the company is rededicating itself to those financial goals and growth aspirations with a laser-sharp focus on financial returns. “I firmly believe that the worst will soon be behind us and the best of times are well within reach.