Thursday, 13 August 2020

Combat Volatility like a pro with Mahindra Manulife Arbitration Yojana mutual fund


















Who would have thought that a majority of Indian PSU banks would be trading below Rs 50? Who would have predicted that Pharma shares would be touching sky high within a few months? There were only a few market gurus who could predict the unprecedented move of RIL in just 50 days. Analysing our sensitive stock market in tough especially in the unprecedented & unseen times like these. But investing must not stop as Ups & Downs are a part of our lives as well as markets.

Market analysts rely on INDIAVIX index during such strange times. Basically its an index which charts the future trajectory of the market cycle. When the lockdown was announced, the INDIAVIX index jumped from 10 to 80 within a fortnight. As they say, only 5% of investors make the most of such occurrences and the rest 95% end up losing their hard earned money. The damage was such that most investors even today think twice before averaging their pre-covid investments. People who traded each minute, each day during the market hour were afraid to check their trading portals.

It’s funny when they say, “When the bulls climb they take the stairs & when the bears fall they jump through the window”. The general perception was so skewed that when the market media cried a No Buy on a certain stocks and funds there were investors who took a leap of faith & made it big!

Are you aware that there is a mutual fund which can make money on both rise and fall of the market cycle? Mahindra Manulife Arbitrage Yojana is an open ended scheme for investment in arbitrage opportunities available in equity, derivatives, debt and invIT markets. Arbitrage Mutual Funds are moderately low risk investment that can generate you an income through arbitrage opportunities in cash and derivative segment. Volatility gives an investor more opportunity in cash & futures/options market. Arbitrage Mutual Funds though they invest in equity are generally considered as safe investment pick and investors making loss in this kind of investment is yet unheard of.

Depending the upon the market conditions, Mahindra Manulife Arbitrage Yojana can hedge the risk by switching between Debt & Equity investment. At times a stock is available at different prices in two exchanges. For instance, stock A is trading at Rs 1000 on NSE & Rs 950 on BSE at the same time, then the spread of Rs 50 between both exchanges acts as your profit.

Another strategy that is often used by fund managers is cash & carry arbitrage. For example, buy stock B at Rs 1000 in spot market and sell the same contract of stock B in futures market at Rs 1020 with a lock-in profit of Rs 20. It is one of the least volatile hybrid schemes that is suitable for investment across market cycles.

What differentiates Mahindra Manulife Arbitration Yojana from other liquid funds is that when you exit the fund, the credit is reflected in your account the very next day. Being an equity based fund hybrid arbitrage mutual fund, the market position gets closed immediately giving investors an instant margin facility. The scheme offers better tax efficiency on returns compared to other short-term debt funds. Also, there’s no exit load after the period of 30 days.

It’s a win-win-win situation wherever the market heads. Mahindra Manulife Arbitration Yojana is best suited for investors who are looking out for Short Term investment parking pool with investment period varied from 1 month to 6 months.

The NFO opens for subscription on August 12 and closes on August 19. The scheme will reopen for continuous sale and repurchase from August 25.

Investors can invest online in the scheme from here.


Mahindra Manulife Arbitration Yojana MF scheme details

Fund House: Mahindra Manulife Mutual Fund

Issue opens: 12 August 2020

Issue close: 19 August 2020

MF category: Hybrid

Type: Open ended

Minimum Investment: Rs 1,000

Exit Load: Nil, after 30 days.

Plans: Growth, Dividend

Benchmark: Nifty 50 Arbitrage Index TRI

Riskometer: Moderately Low

Fund Managers: Srinivasan Ramamurthy & Rahul Pal


Disclaimer: Investment subject to market risk. Please consult your financial advisor before investing.

Thursday, 2 July 2020

Amid lockdown, Maharashtra reports fall in April GST revenue by just 1%.



Maharashtra, the worst affected state with 8,000 plus deaths may pose a gloomy picture but things ain't that bad when we see the data points of April 2020. While it may be true that retail shop owner and specialty businesses like wedding, sports have taken an 80% fall in business, the latest GST figures shared by FM Sitharaman on her official twitter handle has surprised me. Maharashtra, India's financial capital has reported a fall of just 1% in GST Revenue when compared with April 2019.

In April 2020, Maharashtra had collections of Rs 15,143 crore which came down to Rs 14,987 crore in April 2020 because of stringent national lockdown. A fall of just 1% may be the result of our robust financial system which pays GST state share in Maharashtra. State Bank of India in its filing at BSE said that 90% of clients are paying loan EMI is time. This feat wouldn't have been possible without our 'Honest Janata'.

Nationally, the gross GST revenue collected in the month of June 2020 is Rs. 90,917crore of which CGST is Rs. 18,980crore, SGST is Rs. 23,970crore, IGST is Rs. 40,302crore (including Rs. 15,709crore collected on import of goods) and Cess is Rs.7,665 crore (including Rs. 607crore collected on import of goods).

The government has settled Rs. 13,325crore to CGST and Rs. 11,117crore to SGST from IGST as regular settlement. The total revenue earned by Central Government and the State Governments after regular settlement in the month of June 2020 is Rs. 32,305 crore for CGST and Rs. 35,087 crore for the SGST.

The revenues for the month are 91% of the GST revenues in the same month last year. During the month, the revenues from import of goods were 71%and the revenues from the domestic transactions (including import of services) were 97% of the revenues from these sources during the same month last year. During the month of June, returns of February, March, and April 2020 have also been filed in addition to some returns of May 2020 since the Government has allowed a relaxed time schedule for the filing of GST returns. Some returns of May 2020, which would have otherwise got filed in June 2020, will get filed during first few days of July 2020.

The revenues during the financial year has been impacted due to COVID-19, firstly due to the economic impact of the pandemic and secondly due to the relaxations given by the Government in filing of returns and payment of taxes due to the pandemic. However, figures of past three months show recovery in GST revenues. The GST collections for the month of April was Rs. 32,294 crore which was 28% of the revenue collected during the same month last year and the GST collections for the month of May was Rs. 62,009 crore which was 62%of the revenue collected during the same month last year. The GST collections for the first quarter of the year is 59%of the revenue collected during the same quarter last year. However, a large number of taxpayers still have time to file their return for the month of May 2020.

As India unlock, lets hope that our GST collections rise back to Rs 1,00,000 crore.

Source - PIB.

Monday, 10 February 2020

Nirma Group's Nuvoco Vistas acquires 100% stake of Emami Cement for Rs 5500 crores.

Nuvoco Vistas acquires Emami Cement for Rs 5500 crores


Nuvoco Vistas Corporation Limited, India’s leading building materials company and part of the Nirma Group, announced that it has entered into a share purchase agreement with Emami Group for the acquisition of 100% shareholding of Emami Cement Limited (ECL) for an enterprise value of INR 5500 crores. 

The proposed transaction is subject to approval by the Competition Commission of India (CCI) and is expected to be consummated in next 3-4 months.

Emami Cement is one of the fastest-growing Companies in the cement sector and has established its presence with a strong network in a very short span of time. ECL operates one integrated cement plant in Risdah, Chhattisgarh; and 3 grinding units in Bihar, West Bengal and Odisha with a total installed capacity of 8.3 million tonnes per annum; and with mining leases in Chhattisgarh, Rajasthan and Andhra Pradesh.
 
With the merger of the Nirmax business in Rajasthan and completion of this acquisition; Nuvoco will become one of the leading cement players in the country and specifically in the East. This will bring its total cement capacity in Eastern, Northern and Western India to 23.5 million tonnes (which includes the ongoing capacity expansion project in its Jojobera plant) and over 60 ready-mix plants. The Company has a substantial presence in slag cement in the East while reinforcing a strong portfolio of PPC and OPC products. The combined operations will span 3 facilities in Chhattisgarh, 2 each in Rajasthan and West Bengal, and 1 each in Bihar, Jharkhand, Odisha, and Haryana. Nuvoco’s cement sales will spread across 12 states: Chhattisgarh, Odisha, West Bengal, Bihar, Jharkhand, Rajasthan, Madhya Pradesh, Gujarat, NCR region, Punjab, Uttar Pradesh and Haryana.

Shardul Amarchand Mangaldas acted as the legal advisor, Deloitte Touche Tohamatsu India
LLP acted as the financial diligence advisor and Arpwood Capital acted as the financial
advisor.

Source: Press Release

Note: The owner of TheIndianCapitalist.com is a shareholder of Emami at the time of publishing of the article.

Thursday, 6 February 2020

France's Total buys 50% stake in Adani Green's 2GW solar portfolio for $500 million.



As part of its strategy to develop renewable energies, Total is expanding its partnership with Adani Group, India's largest privately-owned energy and infrastructure conglomerate, in order to contribute to the growth of solar power generation in the country.

The Indian government has a strong policy to support the renewable energy growth. India is a founding member for International Solar Alliance and is committed to increase its capacity from 81 gigawatts (GW) in 2019 to 225 GW by 2022.

Total and Adani Green Energy Limited (AGEL) will create a 50/50 joint venture into which AGEL will transfer its solar assets in operation. These projects are spread over 11 Indian states and have a cumulative capacity of over 2 GW. All the projects benefit from nearly 25-year power purchase agreements (PPA) with national and regional electricity distributors, with a fixed rate.

“Total is fully engaged in the energy transition and to supporting India, a key country in the fight against climate change, in diversifying its energy mix through partnerships in natural gas and now in solar energy," said Patrick Pouyann√©, Chairman & CEO of Total. “This interest in over 2 GW of solar projects represents another big step of our investment in India's energy sector. It will support our ambition to contribute to the deployment of 25 GW of renewable capacities by 2025. We are thrilled to extend the partnership with the Adani Group to renewable energies, which will allow us to benefit from its in-depth knowledge of the Indian electricity market.”

“We are delighted to extend our long term partnership with TOTAL to our renewable energy business in AGEL. The investment reinforces the immense potential in India’s renewable energy sector, as well as Adani group commitment towards sustainable development. This is a pivotal step in our journey towards building the world’s largest solar power company by 2025 and the world’s largest renewable power company by 2030.” - Gautam Adani, Chairman, Adani Group.

This transaction has a value of approximately $500 million and is in line with the Group’s objective of double-digit returns on renewable projects. It remains subject to the approval of the relevant authorities.

Adani Green is one of the largest renewable companies in India, with a current project portfolio of 6 GW including under construction capacity. Additionally, AGEL participated, as successful bidder in SECI’s tender of manufacturing linked development project for a capacity of 8 GW and awaiting its award.

In October 2019, Total had announced that it was acquire 37.4% stake in Adani Gas for approx Rs 6000 crores.

Source - BSE.

Wednesday, 5 February 2020

European Investment Bank to invest EUR 600 Million in Pune Metro Line 1 & 2.

Pune Metro Maha Metro


The European Investment Bank will invest EUR 600 million in construction of two new lines of the metro rail and acquisition of 102 modern metro cars in the city of Pune, India. The new metro rail system will reduce commuting hours for more than three million people living in the city. This is the fourth EIB investment in metro rail systems in India; to date the EU`s Bank supported metro rail systems in Bhopal, Bangalore and Lucknow. With the Pune investment, the total amount of the EIB approved support for metro rail systems in India reached EUR 2 billion.

Pune metro system will have 31 km of tracks, both over- and underground, with 30 stations, and increase the coverage of the public city transport network. Once completed, the Pune metro rail will create 900 new jobs and allow around 600,000 safer, affordable, punctual, and faster commutes each day.

Pune Metro's Line 1 will be 16.5km long connecting PCMC to Swargate. 14.6km Line 2 will connect Vanaz to Ramwadi.

“Pune metro rail will improve the living conditions of three million people in Pune. It will enable more accessible and affordable access to workplaces, healthcare, education and markets, while protecting the environment and improving the quality of air in the city. This is a good example of how international cooperation and local know-how can make tangible improvement for people and businesses alike, and at the same time contribute to climate action and protection of the environment. I am very proud to see cooperation between Europe and India growing through projects like this.” - Andrew McDowell, Vice President, European Investment Bank.

On top of creating affordable and accessible public transport network and a reliable alternative to heavily congested streets, the new metro will reduce pollution and greenhouse emissions and improve the quality of air across the city. With easier access to the local job market, healthcare and education for the people, Pune metro rail will make a positive impact on the quality of life and doing business.

Maha Metro will be constructing Line 1 and Line 2 whereas PMRDA will be constructing Line 3 on PPP mode. India's Titagarh Wagons Ltd will be providing 102 aluminium rakes for Line 1 and 2 within 30 months under Make In India Metro Rail policy. Pune Metro's Reach 1 (approx 5km) is likely to open for public in April 2020.

Source - EIB. InfraStory.com

Friday, 31 January 2020

Sudden surge in demand for N95 masks as Wuhan coronavirus turns into global contagion.



A virus with no cure has raised panic across the governments of the globe. Some countries are closing borders with China, while others are awaiting approval from the Chinese authority to fly back their possible patients. As the Wuhan coronavirus outbreak continues to spread, officials in China are urging citizens to wear N95 masks in public to stop the spread of the virus -  and cities in China, as well as other parts of Asia, are reportedly running out of face masks.

Why only N95 masks?

Medical experts are yet to conclude the exact process of transmission of novel coronavirus but are recommending it as most airborne pathogen -  germs that can travel in particles or droplets in the air spread inside the body by touching of face or nose. The cheap (single layer) surgical masks which come in green or blue colour aren’t thick enough to prevent viruses. The N95 respirators are made of special antiviral medical textiles are found to be more superiors in the prevention of similar contagions. These come with 6 layers of medical textiles with the branded ones being certified by US-based National Institute for Occupational Safety and Health (NIOSH).

The Centre for Disease Control (CDC), a premier US government institute strongly recommends a self-controlled lockdown of self and family along with minimum intervention with outsiders or neighbours. In case of emergency, CDC recommends proper use of N95 respirators outdoor all the time. These respirators are designed to fit tightly around the nose and mouth, and, when worn correctly, block out at least 95% of small airborne particles, says a CDC guideline.

With the disease quickly spreading from Wuhan to other districts, China is running out of N95 masks. China, despite being the largest manufacturer of Medtech accessories is eyeing Indian suppliers to replenish stocks. Traditionally, India is a major importer of surgical masks but a severe shortage in Chinese markets has reversed the trade chain. There’s panic among Chinese families and demand for N95 masks has surged suddenly. Eyeing this situation, ANI reported that India’s Medtech companies are working around the clock to meet export orders. Due to excessive shortage, Indian exporters have been told to wait for at least 20 days before they ship their consignments by air.

Prevention is better than cure

India’s National Centre for Disease Control has issued a RED level warning regarding Novel coronavirus, novel because such type of virus has never been detected before. The guidelines are:

  • All non-essential travel to China to be avoided.
  • Observe good personal hygiene.
  • Practice frequent handwashing with soap.
  • Follow respiratory etiquettes - cover your mouth when coughing or sneezing.
  • Avoid close contact with people who are unwell or showing symptoms of illness, such as cough, runny nose etc.
  • Avoid contact with live animals and consumption of raw/undercooked meats.
  • Avoid travel to farms, live animal markets or where animals are slaughtered.
  • Wear an N95 mask if you have respiratory symptoms such as cough or runny nose.
  • Report to the nearest Government doctor and inform him about your travel history.

World Health Organisation has declared coronavirus as a global epidemic. Economists expect a cut of 2 to 3% in China’s GDP. This would severely affect and add to an existing global slowdown.

Source - CDC - US Government, PIB - Government of India.

Thursday, 19 December 2019

Canada Pension Plan Investment Board (CPPIB) to invest up to $600 million through NIIF.


National Investment and Infrastructure Fund (NIIF) of India and Canada Pension Plan Investment Board (CPPIB) has announced an agreement for CPPIB to invest up to US$600 million through the NIIF Master Fund. The agreement includes a commitment of US$150 million in the NIIF Master Fund and co-investment rights of up to US$450 million in future opportunities to invest alongside the NIIF Master Fund.

With CPPIB’s investment, NIIF Master Fund now has US$2.1 billion in commitments and has achieved its initially targeted fund size. In addition, NIIF Master Fund investors have co-investment rights of US$3 billion, which will enable the NIIF Master Fund to invest at the scale required for India’s large infrastructure requirements. The NIIF Master Fund invests equity capital in core infrastructure sectors in India, with a focus on transportation, energy and urban infrastructure. 

CPPIB joins Abu Dhabi Investment Authority, AustralianSuper, Ontario Teachers’ Pension Plan, Temasek, Axis Bank, HDFC Group, ICICI Bank and Kotak Mahindra Life Insurance as investors in the NIIF Master Fund, alongside Government of India.  

CPPIB will also become a shareholder in National Investment and Infrastructure Fund Limited, NIIF’s investment management company. 

Sujoy Bose, Managing Director & Chief Executive Officer of NIIF, said: “We are delighted to welcome CPPIB as an investor in the NIIF Master Fund and as a shareholder in our investment management company. CPPIB is a prominent and established investor in India, and their investment demonstrates the alignment of the NIIF Master Fund’s investment strategy with what large international investors seek in the infrastructure sector in India. With this fourth close of the NIIF Master Fund, we are pleased that the fund has achieved its initial target size of US$2.1 billion with domestic and international investors of the highest reputation and quality. We thank all our investors, and the Government of India, particularly the Ministry of Finance and the Ministry of External Affairs, for their strong support.” 

Scott Lawrence, Managing Director, Head of Infrastructure, CPPIB, said: “The opportunity to invest in, and alongside, NIIF complements our existing direct investment strategy in Indian infrastructure. Through this investment in the NIIF Master Fund, we are also able to deploy capital in additional projects and sectors across the country, providing further long-term opportunities for CPPIB to invest in Infrastructure in India.”

Source - Press Release.