WHAT HAPPENED LAST WEEKSectors at a glance…

16th September – 22nd September 2018

CONTENTS

SL. No Sector Author

1 Auto & Aviation Dhairya Patel

2 Real Estate, Infrastructure & Cement

Arpit Daga & Akshit Batra

3 Pharmaceuticals Dixit Sambyal

4 IT & Telecom Gaurav S Patole, Ankur Inani

5 Metals & Mining Siddharth Toshniwal

6 Banking Sayani Paul

7 Chemical And Paints Sukriti Hatgoankar

8 FMCG Shruti Kajaria

9 Textiles & Retail Vimal & Anoop

10 Consumer Durables Vignesh Raj G

11 NBFC Svetlana & Aashpreet

12 Auto Ancillary Koustubh Mannari

13 Ports And Logistic Ssnigdha Baidya & Sourabh Kumar

AUTO & AVIATION- WHAT HAPPENED LAST WEEK- By Dhairya Patel

Government and Private sector will join hands for operating electricbuses in CitiesThe think tank of the Government, NITI Aayog is looking forward to aPPP (Public Private Partnership) model on per kilometre costoperation basis. Nitin Gadkari, the Road Transportation and HighwaysMinister of the country urged private players to take over thecountry’s public transport. The private companies shall be required toincur the necessary capital expenditure for procurement of e-buses aswell as their operations, maintenance and infrastructure while theauthority shall incur operational expenditure on per kilometre basis.Currently, there are nearly 0.15 Million electric vehicles operational inIndia. This segment is projected to grow to 5-6% of all vehicles by2023 from just 1% of all cars sold in between the year 2017-18.

Electric Vehicles is not a viable business strategy for us in India:MercedesLack of clear policy and incentives for selling electric vehicles is thereason the German car maker is hesitant to roll out RVs for the IndiaMarket. Mercedes, which on Thursday introduced upgraded version ofits Class C sedan in the country, priced between the range of Rs 40lakh and Rs 48.5 lakh, said that due to high import duties oncompletely built units (CBUs) the pricing of electric vehicles (EVs) ishighly uncompetitive as compared with vehicles having normal petrolor diesel engines.To make Electric Vehicles suitable in India, the company hasrequested the government to consider reducing the import duty onEVs so that they can compete with other locally produced cars.

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Government refuses to waive off Air India’s working Capital debt ofINR 30,000 Crore in a single Instalment.The finance ministry has rejected a proposal from the Ministry ofAviation to waive off Air India’s working capital debt of Rs 30,000crore in a single instalment, although it is still in negotiation for abailout for the national carrier. The oil companies also have issued anultimatum to the airline to clear its bill of Rs 20 crore on a daily basis.Air India owes nearly Rs 5,000 crore to the oil companies and aboutRs 3,000 crore to the airport operator AAI. The aviation ministry hadasked for the waiver of Rs 30,000-crore debt and a cash infusion of Rs10,000-11,000 crore for Air India after the government failed to findbuyers for a 76% stake in the national carrier. While disinvestment hasbeen ruled out for now, the government wants the airline to be inshape for sale after the 2019 Lok Sabha elections.

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References

• https://economictimes.indiatimes.com/industry/auto/auto-news/government-may-team-up-with-private-companies-to-operate-electric-buses-in-cities/articleshow/65894071.cms

• https://economictimes.indiatimes.com/industry/auto/auto-news/launching-evs-in-india-not-a-viable-business-case-right-now-mercedes/articleshow/65888246.cms

• https://economictimes.indiatimes.com/industry/transportation/airlines-/-aviation/finance-ministry-refuses-to-waive-off-air-indias-rs-30000-crore-debt-at-one-go/articleshow/65894072.cms

REAL ESTATE, INFRASTRUCTURE & CEMENT-

WHAT HAPPENED LAST WEEK- Arpit Daga & Akshit Batra

Seasonally weak September quarter for cement industry[Sep 21, 2018]Cement prices across India remained weak in the past two monthsand has declined further in September. All India prices declined by ₹3per bag in September 2018. This trend is mainly due to the lack ofadequate demand, heavy rainfall in few states and floods in Kerala.Profitability of the cement companies is likely to be under pressuredue to relentless cost pressures. Prices of petroleum coke (pet coke),a key input for cement makers, is still elevated and so is the cost ofcoal. Around 30% of the costs of cement firms are affected byfluctuation in foreign exchange rate. Demand form the housing sectoris still muted.

GMR Infrastructure gets letter of award for airport in Greece[Sep 21, 2018]GMR Infrastructure’s airport holding company in a consortium withGreece’s TERNA Group received the letter of award for thedevelopment, operations and management of the second largestairport in Greece -Heraklion International Airport.The award reinforces the position of GMR Airports Ltd as a majorglobal airport operator and this will provide a fillip to the growth ofthe company. The group’s airport portfolio has around 159 million-passenger capacity in operation and under development. The group isalso developing smart cities adjacent to Delhi and Hyderabad airports.

Dalmia Cement aims to be carbon negative by 2040[Sep 17, 2018]The group is increasing its low-carbon product portfolio andenhancing the use of green fuels, green raw material and green powerin all its 14 cement plants in India. The Dalmia group has been able to

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reduce carbon dioxide emissions to 526 Kg per tonne of a cement ona group average and to 342 Kg per tonne in the eastern operations.

Motilal raises Rs 575 cr for its India Realty Excellence Fund IV[Sep 17, 2018]

Motilal Oswal Real Estate(MORE) arm raised Rs 575 crore for its latestfund through which it will be investing into affordable residentialprojects across 6 cities in India. Around 20% of fund amount will alsobe used in commercial activities. The fund is AIF category II fund,raised from HNI’s and family offices and plans to take up structuredequity or debt investments with established developers. Theseinvestments would be made in 12-15 transactions valuing 80-150crores each. This is the fourth fund started by MORE after havingthree successfully running funds. MORE currently manages Rs 2100crores of assets.

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References

• https://www.livemint.com/Money/OWca0QvtNlKJdJevlUZQ3M/Profitability-of-cement-firms-to-take-a-hit-due-to-weak-pric.html

• https://economictimes.indiatimes.com/industry/indl-goods/svs/construction/gmr-terna-gets-letter-of-award-for-airport-in-greece/articleshow/65903129.cms

• https://economictimes.indiatimes.com/industry/indl-goods/svs/cement/dalmia-cement-aims-to-be-carbon-negative-by-2040-group-ceo/articleshow/65841415.cms

• https://www.livemint.com/Companies/WUZwF71jj118iNUfjZHcGI/Motilal-Oswal-real-estate-arm-raises-575-crore-for-latest-f.html

PHARMACEUTICALS-WHAT HAPPENED LAST

WEEK- By Dixit Sambyal

Strides Pharma gets ACCC nod for Arrow Pharma and ApotexAustralia & NZ mergerStrides Pharma Science Ltd, which operates its business under theArrow brand in Australia, and Canada’s Apotex Inc.’s Australiana andNZ, announced their intention to merge both the entities into a newcompany that will provide Australian customers with unparalleledservice and support.The Australian Competition and Consumer Commission (ACCC) gaveclearance to the merger of Arrow and Apotex. The ACCC reviewed theproposed acquisition and found that the transaction would notsubstantially lessen the competition in the market.The new entity would supply around half the demand for genericprescription drugs to the Australian pharmacies. Arrow contributedaround one-third of Stride’s revenue and the new entity is nowexpected to contribute to almost half of the company’s revenue.

Sun Pharma gets approval from Australian health regulator forplaque psoriasis drugSun Pharmaceutical received an approval for its speciality productILUMYA on 21st September from the Therapeutic GoodsAdministration (TGA), the Australian health regulator. ILUMYA is usedfor the treatment of adults with plaque psoriasis. ILUMYA, one of thekey speciality products of Sun Pharma already got approval from UShealth regulator, USFDA in March 2018 and from the EuropeanCommission earlier this month.Sun Pharma said, in Australia, the number of severe chronic plaquepsoriasis patients receiving treatment through the PharmaceuticalBenefit Scheme (PBS), increased by more than 60 per cent between2014 and 2016. The total PBS expenditure on biologicals for chronicplaque psoriasis was Australian dollars 121 million in 2016.

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CCI investigation finds unfair practices adopted by threepharmaceuticals companies

An initial investigation by the Competition Commission of India hasfound three pharma companies along with a few regional chemistbodies using unfair trade practices for the distribution of drugs. Thecompanies involved are Torrent Pharmaceuticals, IntasPharmaceuticals and Macleod Pharmaceuticals. They have beenaccused of violating the Competitions Act of 2002 by appointing theirfavoured ones as stockists.The hearing has been started by the competition regulator and averdict is likely to be out soon. A further probe may also be orderedafter the hearing. The companies could face hefty penalties if foundguilty.

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References

• https://www.thehindubusinessline.com/companies/australian-competition-panel-clears-arrow-pharma-apotex-merger/article24993161.ece

• https://www.moneycontrol.com/news/business/sun-pharma-gets-australia-tga-nod-for-plaque-psoriasis-treatment-drug-2972621.html

• https://economictimes.indiatimes.com/industry/healthcare/biotech/pharmaceuticals/cci-probe-finds-unfair-practices-by-three-drug-companies/articleshow/65878146.cms

IT & TELECOM- WHAT HAPPENED LAST WEEK- By Gaurav S Patole, Ankur Inani

IT:HCL TechHCL Tech signs 3-years contract with UK retailer AsdaOn September 20th, HCL Tech signed a 3-years contract with UK basedGrocery retailer Asda to drive its IT Transformation. According to 3years application service contract HCl will transform Asda’s ITapplication services with a new DevOps delivery model. The IT giantwill also help Asda in improving its insight and analytical capabilities.As Asda is UK’s third largest grocery retailer the move will help HCL inincreasing its presence worldwide.InfosysInfosys asked to pay Ex-CFO Rajiv Bansal over Rs.12 crore asSeveranceIn its verdict on 18th September, Arbitral Tribunal has ordered Infosysto pay its former Chief Financial Officer(CFO) Rajiv Bansal a heftyamount of Rs.12 crore along with interest. The move comes after Co-Founder Narayan Murthy had last year, in a public spat questioned theheavy package approved to Mr. Bansal by the then management ledby Vishal Sikka. Infosys will take legal advice for the necessary actionsto be taken after the verdict.WiproWipro to amalgamate 4 unitsWipro has shared its plan to amalgamate four of its business entitiesinto Wipro Limited. In a notification to the major stock exchanges,Indian I.T. major said that Wipro Technologies Austria, WiproInformation Technology Austria, New Logic Technologies SARL andAppirio India Cloud Solutions will be integrated within Wipro Limited.TCSTCS Ion partners with UK Firm Training Room to provide skillingplatforms to studentsTata Consultancy Services (TCS) has partnered with the Training Room,

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a leading provider of technical training courses and careers support inUK. The Training room will use TCS Ion digital learning hub to providea platform for students from and beyond the UK seeking skills andtechnical courses. The platform will also be helpful for employerslooking for dynamic solution for recruitment, in house training andstaff retention. The Training Room will bring an enhanced version ofits own courses on the new platform, starting with health and fitnesscourses followed by IT courses.Tech MahindraTech Mahindra recognized as a leader in Dow Jones SustainabilityIndices 2018Tech Mahindra, a leading provider of digital transformation andconsulting services has been recognized as a leader in Dow Jonessustainability indices 2018. The Indian firm has found place in theindices for the fourth consecutive year. It is one of only fourcompanies from India to be included in DJSI World Index. The DJSIranking validates Tech Mahindra’s focus and commitment towardssustainable development. The company was also included in DJSIemerging markets category

Telecom:Vodafone IdeaVodafone Idea wants DoT to recalculate spectrum feeThe newly formed telecom giant wants telecom department torecalculate the Rs.3926.34 crore it had paid as spectrum price to getthe Government’s approval for the merger. The company has writtento the telecom department that it was overcharged, especially forsome circles. Vodafone Idea’s letter to the DoT suggested that therewere double calculation for spectrum related dues for Chennai andthe rest of Tamil Nadu. Dot charged a similar amount for both circles.The company said that the rate should be based on the populationand therefore cannot be the same.

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Sterlite TechnologiesSterlite Technologies, Airtel, two investments firms in race to buyAircel assetsThe assets of the beleaguered telecom company Aircel are up for saleand Sterlite Tech, Airtel and two investment firms have bid toseparately purchase those assets. Aircel Cellular Limited and DishnetWireless Limited which is known as Aircel owes Rs.15,545 crore tofinancial creditors and about Rs. 35000 crore to operational creditors.Bids for the assets is already closed on 17th September 2018.

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References

IT: • https://www.thehindubusinessline.com/info-tech/hcl-technologies-signs-

deal-with-uk-grocery-retailer-asda/article24997389.ece

• https://www.ndtv.com/business/infosys-says-abitrator-rules-in-favour-of-ex-cfos-severance-pay-1918175

• https://www.thehindubusinessline.com/info-tech/headerwipro-to-amalgamate-4-unitsheader/article24998323.ece

• https://economictimes.indiatimes.com/tech/ites/the-training-room-and-tcs-ion-partner-to-launch-international-training-and-careers-platform/articleshow/65884318.cms

• http://bwcio.businessworld.in/article/Tech-Mahindra-Recognized-as-a-Leader-in-the-Dow-Jones-Sustainability-Indices-2018/18-09-2018-160238/

Telecom:• https://telecom.economictimes.indiatimes.com/news/vodafone-idea-

wants-dot-to-recalculate-fee-it-paid-for-spectrum/65894996

• https://www.livemint.com/Industry/EZKjIt2YmzprJ3zZM5Vw5H/Airtel-Jio-Sterlite-Tech-among-bidders-for-Aircel-assets.html

METALS & MINING- WHAT HAPPENED LAST WEEK- By Siddharth Toshniwal

Primary aluminium producers are facing severe coal crisis: AAIAccording to the Aluminium Association of India, there is severe fall incoal supply. The captive power plants are not receiving sufficientamount of coal. A sharp fall in availability of coal has left aluminiumproducers, having captive plants to import dry fuel, thereby sharplyincreasing the cost of production. Primary aluminium producers arefacing severe crisis of coal. On top of it, power rates have also gone up.Power constitutes almost 40% of the total cost of production ofaluminium. The cost of producing 1 tonne of aluminium has gone up byUSD 237.

Banks led by SBI had asked ArcelorMittal to clear dues of two firms:NuMetal to SCNuMetal, which was asked to establish its "subterfuge" charge againstrival bidder ArcelorMittal, on Wednesday told the Supreme Court thatcontrary to the claims, a consortium of banks led by State Bank ofIndia had written to the L N Mittal group company to pay the dues ofdebt-ridden Uttam Galva. A bench of justices had earlier asked NuMetalto establish the fact that there was "subterfuge" on part of rivalArcelorMittal in divesting its shares in two debt-ridden firms beforebidding for Essar Steel. Senior advocate Mukul Rohatgi, appearing forNuMetal, referring to the legal provisions, said that ArcelorMittalsuffered "triple disqualifications" on three counts as it was thepromoter in Uttam Galva and was managing, controlling the company.

Coal India wants a coal export policyAccording to a senior Coal India Ltd. official, Coal India wants a policy oncoal exports before it could finalize commercial contracts for exportingthe dry fuel. There is high domestic demand for coal and currently theaim of the coal producer is to fulfill that. The company is currently inprocess of dialogue for export to Nepal, Bangladesh and Bhutan to

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create a market for long term. Through bilateral agreements,currently, a very small quantity of coal has been exported toneighboring countries. Earlier, government was planning to exportcoal that had high ash content or were of higher grades. Coal Indiawas scouting for export opportunity at the time when pithead coalstock was as high as close to 70 million tonne in May 2017. Coal Indiahad to revise its internal production target to 652 million tonne from630 million tonne, following pressure from the ministry to increaseproduction.

Tata Steel GDR falls; ThyssenKrupp says merger on track

Tata Steel GDR price fell sharply by 12.81% on Friday on the LondonStock Exchange, even as ThyssenKrupp top executive reiterated thatthe merger of the European steel operations is progressing well. TheTata group management blames this fall to the liquidity crunch in theGDR market & does not want investors to pay much heed. Recentmedia reports had suggested that ThyssenKrupp is going slow on itsproposed joint venture with Tata Steel Europe in the wake ofmanagement changes at the German industrial conglomerate.

Anil Kumar Chaudhary takes charge as SAIL chairmanAnil Kumar Chaudhary who was earlier the Director, Finance of SAILhas now taken over as the Chairman of the state owned SteelAuthority of India (SAIL). SAIL is one of the seven Maharatnas of theCentral Public Sector Enterprises. Chaudhary joined SAIL in 1984 asjunior manager (F&A) & worked his way up to the rank of ExecutiveDirector (Finance & accounts) at Bokaro Steel Plant in 2010.

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References

• economictimes.indiatimes.com/articleshow/65913287.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst

• economictimes.indiatimes.com/articleshow/65908161.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst

• economictimes.indiatimes.com/articleshow/65827318.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst

• economictimes.indiatimes.com/articleshow/65876528.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst

• economictimes.indiatimes.com/articleshow/65883286.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst

BANKING- WHAT HAPPENED LAST WEEK- By Sayani Paul

Ray of hopes - Forex reserve rises $1.2 billion to $400.5 billionForeign exchange reserve has risen by $1.2 billion to $400.5 billion inthis week after facing a decline of $819.5 million last week as per thedata shared by RBI. According to forex analysts, the dip in reserves ison account of RBI's intervention in forex reserves to stem fall in therupee. The reserve position of the country with IMF has also seen anincrease of $4.9 million.

RBI notifies guidelines for co-origination of loans by banks, NBFCsfor priority sectorThe Reserve bank of India declared guidelines for co-origination ofpriority sector loans by banks and NBFCs to enhance flow of funds tothe sector at competitive rates. As per the norms issued by the RBI,the sharing of risks and rewards between these entities should be in amanner that enables appropriate alignment of respective businessobjectives, as per their mutual agreement.

G-SEC bond slips lowering call ratesThe 7. 7.17 per cent 10-year benchmark bond maturing in 2028 slid toRs 94.14 from Rs 94.15 due to continuous selling pressure and lack ofdemand from borrowing banks amid comfortable liquidity in thebanking system.

Merge of Bank of Baroda, Vijaya Bank and Dena Bank results in thirdbiggest lender of the nationThe government has proposed the merge of Bank of Baroda, VijayaBank and Dena bank giving rise to the third largest lender of thecountry. Two well performed banks are yet to absorb a smaller bankand create a sustainable bank with higher lending ability. The capitaladequacy ratio of the combined entity would be 12.25%, significantly

above the regulatory norm of 10.875% and it would be betterpositioned to tap capital markets.

SBI plans to go green – 10000 ATMs to run on solar power in nexttwo yearsIn order to reduce carbon footprint, India’s largest public sector bankhas set sail to go green by installing solar panels on around 10000ATMs in the next two years. The bank is trying to implement this plansince 2008 and it has already installed solar panels in 1200 ATMs.These ATMs powered by solar energy are not only cost effective butalso scalable and adaptable.

RBI cuts tenure of Yes Bank CEO Rana KapoorThe Reserve Bank of India has cut down the tenure of CEO of Yes BankMr. Rana Kapoor till 31st Jan 2019. The board of director arescheduled to meet to decide the future plan of actions on 25th Sept2018. Rana Kapoor who co-founded the bank with Ashok Kapoor in2004, has taken the bank to the success height beyond expectationswithin a very short span of time. His exit may impact the loan, feegrowth and the capital rising plan.

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References

• https://economictimes.indiatimes.com/markets/forex/forex-reserve-rises-1-2-billion-to-400-5-billion/articleshow/65904698.cms

• https://www.businesstoday.in/current/economy-politics/rbi-notifies-guidelines-for-co-origination-of-loans-by-banks-nbfcs-for-priority-sector/story/282730.html

• https://economictimes.indiatimes.com/markets/bonds/govt-bonds-slip-call-rates-turn-lower/articleshow/65904738.cms

• https://economictimes.indiatimes.com/industry/banking/finance/banking/bank-of-baroda-vijaya-bank-and-dena-bank-to-be-merged/articleshow/65844142.cms

• https://www.businesstoday.in/sectors/banks/sbi-plans-to-install-solar-panels-on-10000-atms-in-next-2-years/story/282564.html

• https://www.businesstoday.in/sectors/banks/rbi-cuts-yes-bank-ceo-rana-kapoor-tenure-decision-may-worry-private-lenders/story/282615.html

CHEMICAL AND PAINTS SECTOR - WHAT

HAPPENED LAST WEEK- By Sukriti Hatgoankar

Paints Industry expects 15% growth in sales despite fall in INRDue to good monsoon, decrease in taxes and upcoming festiveseason, Indian paints industry is expected to witness a growth of 15%in sales. This is because a good monsoon and need for renovation ofhouses for upcoming festive season usually increases the demand forpaints. Also, a decrease in taxes would increase the demand by areduction in paints’ prices. This growth is expected to outweigh theeffect of falling INR on the paints sector. However, falling rupee willpose a challenge to paints companies on the import front as about 25-26% of the raw materials in this sector are imported. This would implyan increase in input cost by 1-2% and would thereby affect thebottom line of paint companies in India.

Oil prices reduced as President Trump urged OPEC for the samePresident Donald Trump urged OPEC to reduce oil prices before itmeets in Algeria to discuss about the shortage of oil supplies fromIran. Thereafter, there was a reduction of oil prices by 3 cents at$78.67 on 21 September, 2018. A decrease in oil prices could be aboon for the paints industry, since Indian paints sector is heavilydependent on crude oil (most of which is imported) for production ofpaints. Therefore, any decrease in prices would reduce the input costfor paints companies and reflect as an increase in their profits.

Central Government is planning to make PCPIRs more attractiveOn 5th September, there was a news wherein Chemicals &Petrochemicals Secretary had mentioned of developing an integratedpolicy for chemicals sector. Further, on 21 September he mentionedwhile delivering a speech that Central Government is planning toimprove the facilities at Petroleum, Chemicals and PetrochemicalsInvestment Region (PCPIR) projects. This would be done by providingbetter infrastructure and sourcing of feedstock at reasonable prices.The government is planning to attract investors in the 4 PCPIRs of thecountry located at Gujarat, Odisha, Tamil Nadu and Andhra Pradesh.Such policy frameworks would bring in growth and operationalefficiency in the Chemicals sector.

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References

• https://www.business-standard.com/article/news-ians/despite-rupee-s-decline-paint-industry-expects-robust-growth-118091800453_1.html

• https://www.livemint.com/Industry/sNa97uXOnZ0Gk6IUJpu6QP/Oil-prices-slip-as-Donald-Trump-calls-on-OPEC-to-lower-price.html

• https://economictimes.indiatimes.com/news/economy/policy/centre-mulls-policy-intervention-to-make-pcpirs-attractive/articleshow/65901867.cms

FMCG- WHAT HAPPENED LAST WEEK- By Shruti Kajaria

Future Group to enhance supply chainKishore Biyani’s Future Group is upscaling its food and grocery supplychain to face competition from global retailers like Amazon andFlipkart. They plan to invest Rs 500-800 crore in the next four years,creating a nationwide food supply chain network, comprising ofrefrigerated trucks and temperature controlled distribution centers.The entire supply chain will eventually be managed through thisnetwork. Future group plans to change the current hybrid supplychain model to supplying its entire food and FMCG from distributioncenters which will be located within 200 kms of the retail outlets. Thedistribution channels will be backed by technology, giving real timeinventory, which will in turn help to replenish stocks at regularintervals.

Investigative authority gets three more months for probe againstPatanjaliPost GST Rates renewal, where the tax rate for most FMCG productswas reduced from 28% to 18%, Patanjali is the second FMCG major tobe accused after HUL, for not passing on the benefits of rate cut toconsumers. Patanjali is accused guilty of not pruning the prices afterGST rate cuts that were slashed in November. The items included,detergent, shampoo, and shaving cream, among other products. Thereport submission by the DG-AP will be followed by a detailedhearing.

Godrej’s Creamline Dairy Products Ltd strengthens footprint in TamilNaduCreamline Dairy Products Ltd., a Rs 1,200 crore subsidiary of Godrej, isstrengthening its market in Tamil Nadu, through its value addedproduct, Jersey Thickshake, targeted the on-the-go customers. Withincreased preferences for healthier beverages, Thickshake, a 100%milk product, is ideated to complement snacks consumed betweenmeals. The 180ml pack is available across Southern India, for Rs 25.Earnings from Tamil Nadu amounted to Rs 200 crore in the lastfinancial year, which the company plans to increase to around Rs 350crore in the current financial year, targeting Rs 500 crore (approx.) inthe next couple of years.

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References

• https://economictimes.indiatimes.com/industry/cons-products/fmcg/future-group-to-ramp-up-supply-chain/articleshow/65834079.cms

• https://www.thehindubusinessline.com/companies/naa-gets-more-time-for-profiteering-probe-against-patanjali/article24970270.ece

• https://www.thehindubusinessline.com/news/godrej-agrovets-creamline-dairy-on-expansion-mode-in-tn/article25009983.ece

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TEXTILES & RETAIL- WHAT HAPPENED LAST

WEEK- By Vimal & Anoop

The fall of Textile sector and prospective positive futureIn the last few quarters, the textile industry has been down for quitelong now. 166 stocks from this sector came down up to 85 per cent ofinvestor wealth in 2018. But some analysts see good times aheadwith an increase in consumption expenditure and increased exportdemand due to falling rupee making it cheaper in internationalmarkets.Textile stocks including Arvind, Bombay Dyeing & ManufacturingCompany, Monte Carlo Fashions and Raymond are down between 12per cent and 25 per cent this year. Among others, shares of SRKIndustries, JBF Industries, Blue Blends, Bombay Rayon Fashions andProvogue (India) have slipped up to 85 per cent so far this year. On theother hand, Fairdeal Filaments (up 219 per cent) and JamshriRanjitsinghji Spinning & Weaving Mills Company (up 102 per cent)have more than doubled investors’ money this year.Apparel exporters will benefit from the rupee depreciation against theUS dollar. The rupee has depreciated around 13 per cent against theUS dollar till now from start of the year and by a little less measureagainst currencies of key apparel-importing nations. Although, thepositive impact of improved demand and profitability will get affectedpartly by working capital requirements on the back of cost inflationand a steady reliance on debt. On an aggregate basis, textile playersreported a net loss of over Rs 3,000 crore in Q1 of FY19 comparedwith a net loss of Rs 450 crore reported for the corresponding quarterlast year.

Reliance Industries arm buys 16.3% in Genesis ColorsIn the last week, business fashion news, Reliance Retail VenturesLimited (RRVL), a subsidiary of the Reliance Industries Limited, haspurchased 16.31 per cent equity holding in Genesis Colors Limited(GCL) for ₹34.80 crore. Previously, the stake held was 49.46 per centequity in GCL by the Reliance Brands Limited (RBL), a subsidiary ofRRVL.Now, the aggregate equity shareholding of RRVL and RBL in GenesisColors Limited stands at 65.77 percent. This fresh acquisitions willhelp the company to strengthen its edge in the retail industry andsupport its long term strategy to enhance its value in the retailindustry.No regulatory approvals were required for the said acquisition ofshares as these investments do not fall within related partytransaction and none of RIL’s promoter / promoter group / groupcompanies have interest in these entities, RIL said.GCL made annual turnover in of ₹86.02 crore (provisional) in FY 2017-18. GCL reported a turnover of ₹80.04 crore and ₹114.16 crore in FY2016-17 and FY 2015-16, respectively. GCL was incorporated in 1998and is in the business of retailing and wholesale of brandedreadymade garments, bags, footwear and accessories directly andthrough its subsidiary/joint ventures. This acquisition by Reliance in

GCL adds to the existing portfolio of branded fashion retail outlets.

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References

• https://www.fibre2fashion.com/news/announcement/reliance-industries-arm-buys-16-3-in-genesis-colors--244444-newsdetails.htm

• https://economictimes.indiatimes.com/markets/stocks/news/this-sector-gave-150-losers-in-2018-heres-a-chance-for-bottom-fishing/articleshow/65897300.cms

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CONSUMER DURABLES- WHAT HAPPENED LAST

WEEK- By Vignesh Raj G

Consumer Electronics Imports may get costlierThe government’s move to restrict non-essential imports might leadto an increase in custom duty taxes. The taxes could be slapped onhigh-end premium electronic products such as Televisions andappliances. The consumer durable industry fears this move as it wouldincrease the cost of purchase of these appliances.The government last week said it is planning to curb non-necessaryimports to stop the steep depreciation of the rupee and restrict thecurrent account deficit. It is expected that a significant curb would beimposed on high-end electronics and gold.

Hawkins Cooker to offer FD schemes, interest up to 10.75%The pressure cooker company has come with as unsecured fixeddeposit scheme. The Stable-rated fixed deposits are offering 10.75%per annum interest rate on 36-month deposits (compounding yieldsup to 11.3% annum) and 10.25% rate per annum on 12-monthdeposits.The company in order to meet its working capital requirement is themain objective behind raisings these deposits. Hawkins Cookersclaimed in a circular released by it that “The company so far has notdefaulted on any loan from any bank or financial institution or on anyinterest thereon”.

Will Rupee deprecation have an effect on Consumer Electronics Price? With rupee hitting all-time low, wondering whether another round ofprice hike is set for televisions, refrigerator, washing machine andovens. Consumer electronics makers have already hiked the prices by5% last month due to rupee breaching Rs72 against the dollar.The price hike is unlikely to happen anytime soon as the festiveseason is approaching. Generating the demand is the key challenge tothe industry, to keep up the demand, the white good industry hasdecided to absorb any further depreciation in rupee at least till Rs74-75. Godrej Appliances business head Kamal Nandi said that “Since thecomponents and products are already there, we expect no furtherchanges in pricing till Diwali”. The Industry will absorb any furtherdepreciation of rupee so that the festive season sentiments are notaffected, he added.

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References

• https://retail.economictimes.indiatimes.com/news/consumer-durables-and-information-technology/consumer-electronics/imported-electronics-may-get-dearer/65836341

• https://retail.economictimes.indiatimes.com/news/consumer-durables-and-information-technology/consumer-electronics/heres-why-tv-and-refrigerator-prices-wont-increase-immediately/65826571

• https://www.financialexpress.com/money/hawkins-cookers-comes-out-with-new-fd-scheme-offers-up-to-10-75-interest/1317461/

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NBFC- WHAT HAPPENED LAST WEEK- By Svetlana and Aashpreet

Cholamandalam Investment raises Rs 1057 crore from ADB viabondsOn September 18, Murugappa Group’s Cholamandalam Investmentand Finance Company has secured a Rs 1057 crore funding from AsianDevelopment Bank by issuing bonds to the multi-lateral fundingagency. The company issued unlisted non-convertible debentures intenors of 3-5 years to ADB. Half of the money raised from ADB will beinvested in the lagging states of the country to improve growthaspects and employment opportunities. Chola is focused on lendingto the small road transport operators and SME borrowers. The inroadsmade by Chola in tier IV and V towns will also meet the objectives offinancial inclusion of ADB.

The Reserve Bank of India has not acquired the Manappuram’sproposed acquisition of stake in Indian School Finance CompanyRBI has rejected the proposal of Manappuram Finance for theacquisition of 85.39% stake in Indian School Finance Company.Manappuram has provided responses to the central bank requestingan opportunity to represent themselves again. This is to provide anyclarifications and request to pass the final orders. ISFC is a NBFC thatextends loans to affordable educational institutions, teachers andother educational-sector loans. If the acquisition is successful, it willhelp the company to grow on account of strategic partnership as it is aniche scalable and profitable niche sector.

BSE, NSE get SEBI approval to launch commodity derivativesBSE and NSE both get approval from the Securities and ExchangeBoard of India (SEBI) to launch trading in commodity derivativessegment from this October. SEBI announced the kick-off of unifiedexchange regime October 1, 2018, wherein stock exchanges will beallowed to offer trading in commodities derivatives. BSE plans to enterthe segment with non-agriculture commodities like metals, followedby agricultural commodities. BSE will provide its investors with an endto end, integrated transaction processing, with services ranging acrossthe spectrum: from pre-trade order management to trading, from realtime risk management to post trade clearing, and settlement via acentral counter party mechanism with a nationwide depository forfacilitating the securities, transaction in a dematerialized form.

SEBI cuts mutual fund fees, bats for small investorsThe Securities and Exchange Board of India (SEBI) cuts the fee thatmutual funds charge investors for handling their money and broughtin rules for mandatory debt market borrowings for large companies.This is aimed at making it cheaper to invest in mutual funds andprotecting the interests of small investors. SEBI also decided to gowith the HR Khan panel’s recommendations, of easing the restrictionsimposed on investments by non-resident Indians (NRIs) and someforeign funds.

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References

• https://timesofindia.indiatimes.com/business/india-business/chola-raises-rs-1057-crore-from-adb-by-issuing-bonds/articleshow/65843073.cms

• https://www.financialexpress.com/industry/rbi-rejects-manappurams-isfc-stake-buy-proposal/1314081/

• https://economictimes.indiatimes.com/markets/stocks/news/bse-nse-get-sebi-approval-to-launch-commodity-derivatives/articleshow/65871712.cms

• https://economictimes.indiatimes.com/mf/mf-news/sebi-cuts-mutual-fund-fees-bats-for-small-investors/articleshow/65866171.cms

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AUTO ANCILLARY WHAT HAPPENED LAST WEEK- By Koustubh Mannari

Suzuki plans to sell products made in India to the world. Ancillariesexpected to grow with it.Suzuki Motor Corporation, said in a report that it intends to expandglobally, products developed for India. It plans to manufacture fivemillion units in the next ten years. Effectively that means that Indiawould serve as the hotbed for most of Suzuki’s future models. Thiswill in turn be beneficial for its suppliers, especially to the ones whohave strategic partnership with Maruti like - JK Tyres, MRF, MothersonSumi, Exide and many others.

CEAT partners with Torino FC as official tyre partnerCeat Limited on Thursday announced its partnership with TorinoFootball Club for the next two years as the official tyre partner. Thedeal is aimed at strengthening the company’s brand in Italy andEuropean markets. "We are extremely happy to partner with TorinoF.C., which is one of the most popular clubs in Italy. Ceat was a brandborn in Turin and going back to our roots is what makes it a specialexperience for us," said Nitish Bajaj, Senior Vice President, Marketing,Ceat Limited

CFO of Steel Strips Wheels Ltd announces resignationNaveen Sorot, CFO of Steel Strips Wheels Ltd has stepped down fromhis position with effect from 18.09.2018. He later said that heresigned to pursue opportunities outside the companyShares of the company were trading in BSE at ₹ 1110.1 as comparedto the previous close of ₹1120.3

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References

• https://www.moneycontrol.com/news/technology/auto/delhi-govt-maruti-to-develop-automated-driving-test-tracks-2469075.html

• https://auto.economictimes.indiatimes.com/news/tyres/ceat-partners-torino-fc-as-official-tyre-partner/65896567

• http://equitybulls.com/admin/news2006/news_det.asp?id=235981

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PORTS AND LOGISTICS WHAT HAPPENED LAST

WEEK- By Snigdha Baidya and Sourabh Kumar

India gets access to Bangladesh ports in cargo transportThe Bangladesh Cabinet has approved the draft agreement that willallow India to use two of its port namely Chittagong and Mongla portsto transport cargo to its north-eastern states. India would have tofollow the General Agreement on Tariff and Trade (GATT) andBangladeshi regulations. They also need to pay custom duties and buytax equivalent bonds to transport freight. Under this deal a newtracking system will be used to track cargo’s movement of goods toand from India. Also, the deal stressed that goods will be transportedas per the capacity of the sea port and Bangladeshi vehicles must beused for transport within its territory. The deal is signed for five yearsand can be extended till ten years. However, India and Bangladeshmay cancel the agreement and suspend the deal with a prior notice ofsix month.

Logistics Companies eyeing Joint VenturesWith growing demand for warehousing in India, large institutional andlogistics firms are betting big either by forming Joint ventures withlocal partners or by investing in the sector. The joint fund will bedeveloping around 15 million square feet of portfolio in the next fiveyears. The increasing demands from sectors such as fast-movingconsumer goods, e-commerce, consumer durables and manufacturinghave opened up the segment for more organised and institutionalplayers.

TVS Logistics acquires majority stake in Cholamandalam UnitA flagship company of TVS Group – TVS Logistics acquired majoritystake in Cholamandalam Investment and Finance subsidiary, WhiteData Systems India Pvt. Ltd. (WDSI). TVS Logistics will be investing Rs42.20 crores for a 51% equity stake directly in WDSI. WDSI wasfounded in 2015 and is located in Chennai with operational facilities inBangalore and Coimbatore. TVS Logistics provides integrated supplychain solutions

Mahindra Logistics to expand in South IndiaThe country’s largest third-party solutions provider, MahindraLogistics Ltd. (MLL), to strengthen its presence in the South, isplanning to set up multi-modal warehouses of half-a-million squarefeet. To cater its clients in engineering, automobile accessoriesconsumer and e-commerce, MLL would set up two warehouses nearKamarajar Port and would enter the freight-forwarding business inChennai. The domestic logistics sector is projected to grow at CAGR of13% to ₹9.2 trillion by FY20 from ₹6.4 trillion in FY17. Also, the third-party logistics space will grow at 19% CAGR to reach ₹580 billion byFY20 from ₹335 billion in FY17. The warehouses would becomeoperational by March 2019 said the CEO of Mahindra Logistics.

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Reference

• https://www.thehindu.com/business/Industry/mahindra-logistics-to-expand-in-south/article24988455.ece

• https://economictimes.indiatimes.com/industry/indl-goods/svs/construction/logistics-companies-eyeing-jvs-to-tap-into-warehousing-demand/articleshow/65791352.

• https://economictimes.indiatimes.com/news/politics-and-nation/bangladesh-cabinet-clears-deal-with-india-for-port-usage/articleshow/65845913.cms

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