FII net sellers of Rs 463 cr in cash segment on Friday
Foreign institutional investors (FIIs) were net sellers of Rs 463.03 crore (provisional) in the cash segment on Friday, as per the information posted on the BSE website. While FIIs made gross purchases of Rs 1,824.15 crore, their gross sales amounted to Rs 2,287.18 crore.
Domestic institutional investors (DIIs) were net buyers of Rs 649.26 crore (provisional) on the same day. While DIIs made gross purchases of Rs 1,181.59 crore, their gross sales aggregated Rs 532.33 crore.
ITI to float tender for overseas collaboration for telecom equipment
Government-promoted telecom equipment major Indian Telephone Industries (ITI) is set to float a tender inviting foreign collaboration for manufacturing state-of-the-art telecom equipment. The Cabinet Committee on Economic Affairs, earlier this week, had cleared the proposal to revive the ailing telecom major.
ITI plans to foray into manufacturing Wireless Interoperability for Microwave Access (WiMAX) equipment, optical transmission and switching equipment, and IP core network systems. The company has initiated preliminary talks with a couple of Chinese equipment manufacturers towards this end.
The government-owned company, which supplies equipment to BSNL and MTNL, had an order book of Rs 8,900 crore in 2008 with the mobile segment contributing Rs 6,000 crore. ITI has a staff strength of 12,745 employees.
Analysis of restrictions on cross-ownership in broadcasting and distribution in media
To ensure that delivery platforms owned by broadcasters don’t block competition /contents from others.
- Limit of restriction to increase from Company based to Entity based – If TRAI has to PUT restrictions on Crossholding ownership, then it has to take this move because no listed companies in media companies, is having direct ownership into distribution segment, ownership is based on group levels.
- Imposed 20% as an Upper Limit – Impact on the stock prices would be minimal as the authority has provided ample time of 3 years to an entity for restructuring their cross- holdings in distribution segment.
- No restriction on horizontal expansion – This move was more towards Print and Media companies because current global economic slowdown has severely impacted their advertising revenue than broadcasting companies.
Additionally, According to the recommendation, players like Essel group (via Dish TV and WWIL), Sun TV group (via Sun Direct in DTH and Sumangali cable Network in cable), Network 18 (via stake in DEN) and Star India (via Tata Sky in DTH and Hathway in cable), which are both TV broadcasters and distributors; have to restructure their holdings in their business within 3 years.
The players like Sun TV can be impacted as it can face competition going forward though at present the barriers to entry are quite high for other players as it is operating through Sun Direct (DTH) and Sumangali cable Network (Cable
distribution)
Impact of allowing MVNOs in India on MNOs
The DoT has permitted Mobile Virtual Network Operators to operate in India. We would like to analzue the impact of MVNOs operations on MNOs [Mobile Network Operator].
CDMA operator Reliance Communications and Tata Teleservices who plan to have pan-India dual technology network will be benefited due to lower operating costs and better network utilizations. Established players like Bharti Airtel & Vodafone may be benefited due economies of scale & effective product bundling and cross selling.
New entrants would be able to garner market share faster by partnering MVNOs with established brand & distribution networks. As the net realizations of MVNOs are expected to be lower than MNOs, they are not expected to compete significantly on the price front.
The entry of MVNOs could coincide with MNP implementation resulting in increased customer churn, customer acquisition & servicing costs & hence reduced profitability for the industry as a whole. Finally, Foreign players who succeed in getting 3G spectrum in some circles will be able to provide pan-India services by being an MVNO in other circles.
Sandip Sabharwal separates from services of JM Financial AMC
JM Financial Mutual Fund has announced that Sandip Sabharwal has separated from the services of JM Financial Asset Management [Or is he Fired ?] Following this, the schemes managed by him will now be managed by the existing Equity Fund Management team. Sandip Sabharwal was charge sheeted by the CBI in the Ketan Parekh Scam when he was the fund manager of SBI Mutual Fund.
Asit Bhandarkar has been selected as the fund manager of JM Core 11 Fund – Series 1 and JM Emerging Leaders Fund. JM Multi Strategy Fund will be managed by Sanjay Chhabaria. Similarly, the role of fund manager for JM Tax Gain Fund will be handled by Sandeep Neema.
JM Contra Fund will be managed jointly by Sandeep Neema and Sanjay Chhabaria. All other features of the mentioned schemes remain unchanged.
We think [not sure] that he maybe sentenced soon in the Case and that’s why he is separating.
Lower GDP takes its toll, Market declines with the news
India’s gross domestic product (GDP) growth for the December quarter has been estimated by the Central Statistical Organisation at 5.3% compared with 8.9% growth achieved in same quarter a year ago. The figure is also lower compared to 7.6% growth achieved in September quarter and around 6% growth being expected by most of the economists.
This is a pathetic number as the office of the PM and Finance Ministry kept on giving voval promises of higher GDP growth and to some extent backed by the RBI Governor.
The BSE Sensex crashed by 250 points as soon as the data was out.
Shoppers Stop closes its three Crossword stores
In Jan-09, Shoppers Stop JV for Catalog Retailing in India, Hypercity Argos went out of Business. Several retailers have shutdown shop since then.
Just a while ago Shoppers Stop has informed us that it has closed down its three ‘Crossword‘ stores located at Mumbai Airport, Shop in Shop store at Shopper’s Stop, Chennai and Shop in Shop store at Shopper’s Stop, MGF Saket, New Delhi
With the closure of these stores, the company now has 51 Crossword stores. Further, the company has also closed down its ‘Stop & Go’ store at Mumbai Airport.
Rupee opens at an all-time low of 50.69 on Friday
The Indian rupee opened at its record low of 50.69 per dollar on Friday, weighed down by dollar demand from oil marketing companies and importers to square up their month-end deals. It was last seen at 50.67/69 in initial deals.
The local currency had closed at its all-time low of 50.45/47 per dollar as the export policy announcement on Thursday disappointed exporters.
Update at 12:00 IST:
RBI steps in as rupee plunges to a record low of 50.78 per dollar. Traders informed us that Indian banks started offloading dollars when the local currency was seen at 50.72 propping it up to 50.67/68 per dollar.
Update at 16:00 IST:
The Reserve Bank of India (RBI) has fixed the reference rate for the dollar at Rs 50.73 on Friday over its previous rate of Rs 50.41 on Thursday.
IRDA’s Online facility for registering complaints against insurers
The Insurance Regulatory and Development Authority (IRDA) is currently developing an online platform where the policyholders can register their complaints, track its status and follow it up online.
This service would be provided for both life and non-life policyholders. It could either be a link on IRDA’s portal itself or a separate website, IRDA officials said.
The proposal is to have a website where any policyholder can log onto the site and register the complaint against the insurance company. He would have to provide details such as the name of the insurance company and the policy number.
On registering, the complainant would be given a log-in id number which can be used to trace the position of the complaint.
The site would be linked to the grievance redressal sites of insurance companies and would be automatically forwarded to them. Kindly register all your complaints on ComplaintBox.
R Systems International Volume de-growth, a concern for the company
Highlights of the call
- For the quarter ended December 2008, on sequential basis, R Systems reported 5% growth in operating revenues at Rs 96.8 crore with de-growth in US$ terms by 9% to USD 19.1 million. The EBIDTA was up 32% Q-o-Q to Rs 14.6 crore with 15.1% EBIDTA margin (12% in Q3 FY09). The PAT at the end was up 34% sequentially to Rs 8.8 crore.
- For the year ended December 2008, the company reported 45% growth in revenue to Rs 359.4 crore with 96% growth in EBIDTA to Rs 46.5 crore and PAT stood at 47% to Rs 28 crore.
- The 5.5% revenue growth was backed by 8.75% depreciation in rupee value against USD which was partially offset by 4.4% sequential dip in volumes.
- The gross margin for the quarter was at 41.5% (38.9% in Q3 FY09) with rupee depreciation benefiting 160 bps; decrease in travelling expenses benefiting 160 bps, increase in license fee revenues impacting 40 bps while increase in leave and gratuity accruals negatively impacted 100 bps.
- During the quarter company has incurred MTM loss and other forex loss due to further fall in Rupee to the tune of Rs 2.1 crore. The company has written off portfolio investments of Rs 1.30 crore and provided for bad and doubtful debts for Rs 1.7 crore during the quarter. The company has also provided for Rs 1 crore for leave and gratuity accruals.
- For December 2008 quarter, USA contributed 61% (57% in the sequential quarter), Europe 24% (25% in the sequential quarter), South East Asia contributed 6% (8% in sequential quarter), India at 4% (4% in the sequential quarter) and ROW at 5% (6% in the sequential quarter).
- At the end of quarter, the company had 2080 head count against 2161 in Q3 FY09 and 2290 in Q1 FY09.
- Offshore operations contributed 61.7% (62.5% in sequential quarter) of the revenues and onsite/onshore contributed 38.3% (37.5% in sequential quarter) of the revenues. The utilization rate stood at 69.7% against 70.6% in sequential previous quarter.
- The company has 125 active clients with 18 $ one million clients constituting 43% of revenue. For December 2008 quarter, top client (GE) contributed 8% (8.1% in the sequential quarter), top 3 clients contributed 22% (20% in the sequential quarter) and top 5 clients contributed 31% (30% in the sequential quarter). Top 10 clients contributed 44% (43% in the sequential quarter).
- The negative economic sentiments have brought near term uncertainties for the company. The company’s customers are facing 10-30% drop in demand and have become extremely cautious. Though the company has not seen any significant contract cancellations so far, but customers are tightening belt and focusing restructuring.
- On the positive side, the wage inflation has eased and USD gain is helping in margin improvement. The company is also getting encouraging opportunities in Mobility Solutions and Digital Media.
- The company has recorded volume de-growth of 4.4% on Q-o-Q. Though the management expects that it is peak of decline and volume is expected to sustain at this level, but considering the economic slowdown, it may continue to remain a concern area.
- The receivables has increased from Rs 61.3 crore to Rs 79 crore on Y-o-Y but the outstanding days has came down from 74 days to 67 days.
- The company has cash and cash equivalents of Rs 63.6 crore at the end of Dec’08. However it also include fund of Rs 4.50 crore retained with the company for leave and gratuity. Thus the company has net cash per share of Rs 44 per share.
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