RBI makes online filing of FDI forms a must from Feb 8

The Reserve Bank of India (RBI) asked banks to file forms related to foreign direct investment (FDI) only online on the e-Biz portal from February 8, said the PTI report.

With a view to "promoting ease of reporting" of such transactions, RBI, under the e-Biz project of the government, has enabled online filing of three returns -- ARF, FCGPR and FC-TRS -- with RBI.

Advance Remittance Form (ARF) is used by companies to report FDI inflows to RBI while a company submits Foreign Collaboration General Permission Route(FCGPR) Form for reporting issue of eligible instruments to overseas investor against the FDI inflow. Foreign Collaboration Transfer of Shares (FC-TRS) Form relates to transfer of securities between a resident and a person outside India.

"Based on the experience, it has been decided that beginning February 8, 2016, the physical filing of forms ARF, FCGPR and FC-TRS will be discontinued and forms submitted in online mode only through e-Biz portal will be accepted," the RBI said in a notification.

At present, both the options (online and physical) for filing of the forms are available to users.

While launching the FC-TRS module on e-Biz portal on August 24, 2015, banks were informed that the facility of physical filing will be discontinued in three months.

The decision to completely switch over to online filing of forms has been taken after assessing the readiness of banks to file these forms online, RBI said.

Prepared for a pause! Market to trade in a range, unless Rajan surprises

Whenever you find yourself on the side of the majority, it is time to pause and reflect. - Mark Twain
 
The market has more or less factored in a pause by the RBI on any monetary policy activity till the budget gets out of the way. After a cumulative 125 basis points cut in the repo rate by RBI during past 12 months, slowing economic conditions definitely demand further fall in the interest rates. However, growing concerns over fiscal prudence and rise in food inflation has left this option less desirable for now. Elsewhere, ECB president Mario Draghi expressed his concern over the state of EM economies terming them a ‘risk.’ 
 
The outlook is a flat start. After hitting intra-day high of 7600 in early trades on Monday, indices constantly struggled to find any specific direction. A lot will hinge upon what the RBI governor does and says today. Bank stocks will again be in focus given the policy meeting event. The currency movement will also be closely tracked. Key results in focus will be Amara Raja Batteries, Cera Sanitaryware, Crompton Greaves, Cummins India, DLF Ltd, Godrej Properties, HSIL Ltd, OCL India, Navneet Education, Shree Cement, Snowman Logistics, Tata Communications and Welspun India.
 
US indices erased steep early losses to close nearly unchanged amid fresh signs of weakness in the Chinese economy and lingering worries over plunging oil prices. US crude oil price crashed over 6%. Weak US manufacturing PMI data fueled expectations of a protracted status quo on interest rates by the Federal Reserve.  The Institute for Supply Management (ISM) said that its manufacturing index rose to 48.2 in January from 48, above forecasts but still below the reading of 50 that signals expansion.
 
The Dow Jones Industrial Average reversed a 160-point loss to close 17.12 points, or 0.1%, lower at 16,449. The S&P 500 index closed flat at 1,939. The Nasdaq Composite index gained 6.41 points, or 0.1%, to settle at 4,620.
 
India Ratings and Research (Ind-Ra) has maintained a stable outlook on the auto industry for FY17. This is based on the resilient financial profiles of industry players, likely sustained growth in car demand, bottoming out of the sales decline in light commercial vehicles and continued growth in medium heavy commercial vehicles (MHCV) although at a lower rate than seen in FY16. The stable outlook is also supported by the improved profitability and higher cash flows of original equipment manufacturers (OEMs) on the back of low commodity prices.
 
Grasim Industries Ltd. will spend more than Rs. 4,000 crore on capacity expansion of its various businesses - cement, chemicals and VSF - in the coming financial year.
 
Life Insurance Corporation (LIC) has invested Rs. 53,000 crore in the equity markets so far in FY16, up 36 per cent over the amount invested in FY15, Chairman S.K. Roy said on Monday.
 
ASSOCHAM expects the Reserve Bank of India (RBI) to at least take note of the fact for well over a year, the Wholesale Price Index (WPI) for several industrial products has remained in a deflationary mode, requiring an urgent infusion of life –saving consumer demand.
 
Sun Pharma  announced the launch of Imatinib Mesylate Tablets (therapeutic equivalent to Gleevec for indications approved by the FDA) in US market. Sun Pharma’s subsidiary received final approval for Imatinib Mesylate from FDA in December 2015. Being a First-to-File product, it was granted 180 days of marketing exclusivity by FDA from the time of its launch.
 
Petrol price was reduced by 4 paise a litre and diesel by 3 paise a litre as the government raised excise duty.
 
Among stocks to watch include: 
 
Wipro: Wipro Ltd’s new CEO Abidali Neemuchwala has set an ambitious target of expanding the company's revenue to US$15 billion, with operating margins of 23%, by 2020, reports a business daily.
 
Tech Mahindra: Tech Mahindra reported consolidated net profit of Rs. 759.24 crore for the quarter December 31, 2015, registering decline of 5.71% yoy.
 
DLF: DLF Ltd, a real estate major, will announce its Q3 results today. IIFL forecasts the company’s net profit for Q3 FY16 to increase to Rs. 174.10 crore, growing at 32.1% yoy 32.4 qoq.  
 
Ajanta Pharma: The company posted a net profit of Rs. 1113 mn for the quarter ended December 31, 2015 compared with Rs. 930.60 mn for the quarter ended December 31, 2014.
 
Abbott India: The company’s standalone revenue stood at Rs. 667.29 crore, up 16.31% yoy and 3.45% qoq.
 
Jindal Saw: Jindal Saw reported a 36.6% decrease in net profit at Rs.39.24 crore for the third quarter that ended on December 31, 2015.
 
Dr. Reddy’s Lab: The pharma company announced the U.S. Food and Drug Administration (US FDA) tentative approval for Zenavod(doxycycline) Capsules, 40 mg.
 
Godrej Properties: Godrej Properties Ltd will announce its Q3 results today. IIFL forecasts the company’s net profit for Q3 FY16 to fall to Rs. 38.80 crore, at a rate of 17.8% yoy and 63.4% qoq.
 
Steel Strips: Steel Strips Wheel Ltd's Total wheel rim sales stood 11.28 lakhs for Jan'16 as against 10.03 lakhs in Jan'15 representing a 12% growth.
 
Tata Communications: Tata Communications Ltd will announce its Q3 results today. IIFL forecasts the company’s net profit for Q3 FY16 to decline to Rs. 33 crore, at a rate of 69.6% yoy; however, it is expected to rise 448.8% qoq.
 
VIP Industries: VIP Industries Ltd, Mumbai-based luggage maker, reported standalone net profit of Rs.11.30 crore for the quarter ended December, registering growth of 32.94% yoy, but decline of 28.03% qoq.
 
BHEL: BHEL has bagged this prestigious order for setting up a supercritical thermal power project involving one unit of the country’s highest rating 800 MW sets, in Tamil Nadu.
 
Adani Enterprises: The company posted a net profit of Rs. 1957.90 mn for the quarter ended December 31, 2015 whereas the same was at Rs. 4438.50 mn for the quarter ended December 31, 2014.
 
Ipca Labs: The US Food & Drug Administration (US FDA) has issued a warning letter to Ipca Laboratories for not complying with the drug regulator’s quality standard at three of the company's manufacturing plants.
 
Suzlon: Suzlon Group announced the opening of its new Blade Science Center in Vejle, Denmark.
 
Transport Corp: The company reported a 10.5% increase in net profit at Rs.18.9 crore for the third quarter that ended on December 31, 2015.
 
Maharashtra Seamless: The company reported a fall of 85.7% in standalone net profit to Rs.5 crore for the quarter ended Dec. 31, 2015 as compared to Rs.35 crore in the same period last year.
 
M&M: M&M's farm and equipment sector, a part of the $16.9bn Mahindra Group, announced its January 2016 sales numbers for tractors.
 
Aban Offshore: The company has posted a net loss of Rs.887.34 mn for the quarter ended December 31, 2015 compared with Rs. 1,299.89 mn for the quarter ended December 31, 2014.
 
Tata Motors: Tata Motors continued to witness year-on-year growth in the M&HCV segment in January 2016, with a growth of 30%. Total sales of Tata Motors passenger and commercial vehicles (including exports) were at 47,034 vehicles, higher by 10%, over 42,595 vehicles, sold in January 2015.
 
Grasim Industries: Grasim Industries Ltd. will spend more than Rs. 4,000 crore on capacity expansion of its various businesses - cement, chemicals and VSF - in the coming financial year.
 
Maruti Suzuki: Maruti Suzuki posted lesser than expected sales numbers with the start of the new year. The January 2016 total sales volume of the company declined by 2.6% to 1.13 lakh units.
 
ITC: ITC plans its first overseas hotel at Colombo, Sri Lanka, in 2018, reports a business daily, adding that the Sri Lankan property will be a super-premium one and it will be branded as “ITC”.
 
Mahindra & Mahindra: Mahindra & Mahindra posted 10% YoY growth in sales, and stood at 43,789 units sold during January 2016. The company sold 22,088 units of PV at 13% YoY growth.
 
Vakrangee: The company announced that Corporate Agency has tied up with Tata AIG General Insurance Company.
 
Ashok Leyland: Ashok Leyland's total sales for Jan'16 total rose 30% yoy to 13,886 units as against 10,643 units of Jan'15. M&HCV sales were up 40% yoy at 11,208 units.
 
Dalmia Bharat Sugar: Dalmia Bharat Sugar & Industries, leading cement suppliers in India, reported standalone net profit of Rs.16.95 crore for the quarter ended December 31, 2015.
 
Atul Auto: Atul Auto posted a sales growth of 2% for the month of January,2016 at 3,708 units as against 3,636 units for same period corresponding year.
 
Sun Pharma: Sun Pharmaceutical Industries announced that all the necessary formalities for Closure of the said transaction have been completed and the aforesaid transaction has been successfully closed on February 01, 2016.
 
VRL Logistics: The company reported a 1.6% decrease in net profit at Rs.24.7 crore for the third quarter that ended on December 31, 2015.
 
Results: DLF, Crompton Greaves, Amara Raja Batteries,Godrej Properties,Torrent Power, Bayer Cropscience,United Breweries, Jindal Stainless, Adani Transmission,Kalyani Forge, KRBL, Cera Sanitaryware,HSIL, Escorts,Forbes & Company,Majesco,Navneet Education, OCL India,Oudh Sugar Mills, Oudh Sugar Mills, Ad-Manum Finance, Arshiya, Cantabil Retail India, Ashish Polyplast, Century Enka, Cummins India, Cummins India, Dcm Shriram, Dhunseri Tea & Industries, Dion Global Solutions, Ema India, Funworld & Tourism Development, Grindwell Norton, Indian Link Chain Manufactures, Jai Corp,Jsw Holdings, Maharashtra Scooters, Makers Laboratories, Manali Petrochemical, Minda Industries, Pritish Nandy Communications, Polychem, Rpg Life Sciences, Saurashtra Cement,Shree Cement, Simplex Realty, SNL Bearings, Snowman Logistics, Soma Textiles & Industries, SRS Real Infrastructure, Tamil Nadu Newsprint & Papers, Transcorp International, Tube Investments Of India, Tvs Electronics, Uflex, Ufo Moviez India, Welspun India
 
Global Data: ANZ Commodity Price (Jan) NZD, RBA Interest Rate Decision AUD, RBA Rate Statement  AUD, Cash Reserve Ratio INR, Reverse Repo Rate INR, RBI Interest Rate Decision (Repo Rate) INR, Unemployment Change (Jan) EUR, Real Retail Sales (YoY) (Jan) CHF, Unemployment Change (Jan) EUR, Unemployment Rate s.a. (Jan) EUR, Unemployment (Nov) EUR, PMI Construction (Jan) GBP, Unemployment Rate (Dec) EUR, Producer Price Index (MoM) (Dec) EUR, Producer Price Index (YoY) (Dec) EUR, 10-y Bond Auction EUR, Redbook index (YoY) (Jan 29) USD, Redbook index (MoM) (Jan 29) USD, ISM New York index (Jan) USD, IBD/TIPP Economic Optimism (MoM) (Feb) USD, GDT Price Index NZD, 52-Week Bill auction USD, 4-Week Bill Auction USD, Fed's George Speech  USD, Total Vehicle Sales (Jan) USD, API Weekly Crude Oil Stock USD, Employment Change (Q4) NZD, Unemployment Rate (Q4) NZD, Participation Rate (Q4) NZD, Labour cost index (YoY) (Q4) NZD, Labour cost index (QoQ) (Q4) NZD, AiG Performance of Services Index (Jan) AUD
 
Trends in FII flows: The DIIs were net sellers of Rs.5.35 bn in the cash segment on Monday. The foreign institutional investors (FIIs) were net buyers of Rs.2.53 bn as per the provisional figures released by the NSE.
 
Other news of the day:
 
Emami Ltd is expecting to clear its outstanding debt of Rs 8.5bn latest by 2017-18 and will bring it down to Rs 6 bn by the end of March this year. (BS)
 
The Competition Commission of India (CCI) has approved Sun Life's acquisition of 23% more stake in Birla Sun Life Insurance. (ET)
 
Dr Reddy's Laboratories has received tentative approval from the US health regulator for anti-biotic Zenavod indicated for the treatment of a type of chronic skin disease in adult patients. (ET)
 
Vedanta Ltd is gearing up to ramp up capacity at its aluminium smelter SEZ (Special Economic Zone) at Jharsuguda from the next fiscal. (BS)
 
State Bank of India re-introduced the so-called 'teaser' home loan scheme after five years. (BL)
 
Jet Airways said it will soon be offering wireless streaming of movies, TV programmes, a wide genre of music, interactive games, and children’s programmes directly onto flyers’ Wi-Fi enabled personal devices such as smartphones, tablets and laptops on Jet Airways flights, which will be the precursor to the full internet service. (BL)
 
Wipro Ventures, the $100mn venture capital arm of Wipro, has picked up a minority stake in Pune-based big data startup Altizon Systems Pvt Ltd for Rs.97.8 mn as part of a Series A funding round, a week after cross-town arch rival Infosys parked $4 million in US-based data startup Waterline Data Science. (ET)
 
The combined output of eight crucial infrastructure sectors rose by a slight 0.9 per cent in December after contracting the month before (BS).
 
Telecom regulator Trai has recommended a public private partnership (PPP) model for rolling out government’s ambitious project BharatNet — which involves setting up of a broadband network in rural India. (BS)
 
India has signed two bilateral advance pricing agreements with the United Kingdom in its efforts to provide certainty and stability in tax policies to foreign investors. (BL)
 
The government banned duty-free import of capital goods for power generation and transmission projects under the EPCG Scheme. (BL)
 
The Reserve Bank of India (RBI) has asked banks to file forms related to foreign direct investment (FDI) only online on the e-Biz portal from February 8. (ET)

Catastrophe insurance premium may go up: Irdai

Regulator Irda has indicated that the premium in the case of a "catastrophe insurance" may go up in light of a number of natural disasters hitting various parts of the country in the recent past, reported PTI.

"The general insurance industry on a whole is not making a lot of money. It requires some base correction in premium rate, especially in a case like the recent heavy rains in Chennai, which resulted in a huge loss," Irdai Chairman T S Vijayan said as per the media report.

He was interacting with reporters on the sidelines of a global conference of actuaries.

"Suppose a disaster takes place in a desert... There may not be much of loss. The Hudhud cyclone (in 2014) didn't enter the Vizag city. Had it entered the city, the loss would have been much bigger. Hence, a base correction in premium rate is required in the catastrophe insurance sector and I'm sure insurers must be looking into it," he said.

Irdai is not content with the 1.8 per cent expansion the insurance industry during the last fiscal and is hoping for a pick-up in growth in 2015-16.

"If you look at the Indian insurance industry, 2014-15 saw a positive growth, but not to the extent which one would have expected.

"Real growth was just 1.8 per cent, and the coverage was lowest among Asian markets, which recorded a real growth of 6.5 per cent. Emerging markets grew at 7.4 per cent, advanced countries 2.9 per cent, while India could grow only by 1.8 per cent," he told the conference earlier.

"This year (2015-16), we should be able to make up for the growth and the industry needs to identify which are the things relevant for capturing the customer's mind and wallet share," he said.

Results - Feb 2 2016

The results which are expected today are DLF, Crompton Greaves, Amara Raja Batteries,Godrej Properties,Torrent Power, Bayer Cropscience,United Breweries, Jindal Stainless, Adani Transmission,Kalyani Forge, KRBL, Cera Sanitaryware,HSIL, Escorts,Forbes & Company,Majesco,Navneet Education, OCL India,Oudh Sugar Mills, Oudh Sugar Mills, Ad-Manum Finance, Arshiya, Cantabil Retail India, Ashish Polyplast, Century Enka, Cummins India, Cummins India, Dcm Shriram, Dhunseri Tea & Industries, Dion Global Solutions, Ema India, Funworld & Tourism Development, Grindwell Norton, Indian Link Chain Manufactures, Jai Corp,Jsw Holdings, Maharashtra Scooters, Makers Laboratories, Manali Petrochemical, Minda Industries, Pritish Nandy Communications, Polychem, Rpg Life Sciences, Saurashtra Cement,Shree Cement, Simplex Realty, SNL Bearings, Snowman Logistics, Soma Textiles & Industries, SRS Real Infrastructure, Tamil Nadu Newsprint & Papers, Transcorp International, Tube Investments Of India, Tvs Electronics, Uflex, Ufo Moviez India, Welspun India.

Avanti Feeds Results

AVANTI FEEDS LTD. (AVANTIFEED) - FINANCIAL QUARTERLY

FIGURES IN RS CRORE	DEC-2015	SEP-2015	JUN-2015	MAR-2015	DEC-2014
REVENUE	413.11	532.95	603.40	382.17	385.03
OTHER INCOME	4.42	5.84	7.53	1.52	3.68
TOTAL INCOME	417.53	538.80	610.93	383.69	388.72
EXPENDITURE	360.06	470.50	539.25	345.29	334.37
OPERATING PROFIT	57.47	68.30	71.68	38.40	54.34
INTEREST	0.19	0.30	0.29	0.49	0.25
PBDT	57.28	67.99	71.39	37.90	54.09
DEPRECIATION	2.22	2.53	2.60	2.24	2.34
PBT	55.06	65.46	68.79	35.66	51.75
TAX	18.35	21.50	23.08	13.39	17.25
NET PROFIT	36.71	43.96	45.71	22.27	34.50
EPS (RS)	8.08	48.40	50.33	24.52	37.99

Teamlease Services

Very expensive

The company is a leading player in providing temporary staffing services to various industries

Promoted by Manish Sabharwal and Ashok Nedurumalli in 2002, Teamlease Services (TSL) is one of the India's leading human resource services provider in the organized segment delivering a broad range of human resource services to various industries and diverse functional roles to meet the needs of small and large business clients as well as those of qualified job seekers or ‘Associate Employees'.

The company's core business is providing staffing solutions across industry sectors and diverse functional areas. Around 98% of company's total revenues come from staffing services and around 2% come from permanent recruitment, regulatory compliance, retail and institutional learning solutions including payroll. As on March 31, 2015, TeamLease has provided employment to approximately 1.12 million associate employees since 2002.

The company has a market share of 5% in terms of associate employees in 2014. As of November 30, 2015, TeamLease had 104,946 Associate employees, serving 1,021 clients and 1,218 full time employees making them as one of the India's leading people supply chain companies. The majority of their associate employees are engaged in sales, logistics and customer service functions.

The diversified client base of the company includes Vodafone, ATC Telecom Tower Corp. Pvt. Ltd, E.I.Dupont India Pvt. Ltd, Levis, Strauss India Pvt. Ltd, Godrej Industries, YOU Broadband India Pvt. Ltd, PNB Housing Finance Ltd. and ZTE Telecom India Pvt Ltd in Staffing Services and Mphasis Ltd., Nunhems India Pvt. Ltd., and Edelman India Pvt. Ltd. and India First Life Insurance Co. Ltd in the regulatory space.

The company's services span the entire supply chain of human resources in India covering aspects of employment, employability and education. This includes temporary staffing solutions, permanent recruitment services and regulatory consultancy for labor law compliances, retail learning and training solutions, institutional learning solutions and enterprise learning solutions.

TeamLease has grown largely organically, driven by the strong operational and technological excellence. However, it is evaluating inorganic options to grow and is currently exploring opportunities to cater to the growing information technology, healthcare and hospitality services sectors. Further, the company so far is present in general staffing which is more of a volume driven segment of human resource segment. It has plans to venture into IT staffing through inorganic or organic way which has higher potential, higher margins and scalability.

The Offer and the Objects

The issue comprises public issue of Rs 150 crore with equity shares of 0.19 crore of face value of Rs 10 each at lower price band of Rs 785 per share and equity shares of 0.18 crore of face value of Rs 10 each at higher price band of Rs 850 per share. In addition to the above, there is an offer for sale of 0.32 crore of equity shares of Rs 10 each which comprises of selling shareholders namely: Gaja Capital India Fund, Gaja Advisors Pvt ltd, GPE (India), Indian Advantage Fund S3 and HR Offshoring Ventures Pte.

The minimum bid lot is 15 equity shares and in multiples of 15 equity shares thereafter. The issue is made through a book building process and will open on 2 February and will close on 4 February with anchor investor bidding date of 1 February 2016.

In addition to achieve the benefits of listing the equity shares on stock exchanges, enhance the visibility and brand image among existing and potential customers and provide liquidity to the existing shareholders, the company intends to utilize the proceeds of the public issue (Rs 150 crore), to fund the existing and incremental working capital requirements for about Rs 80 crore, to upgrade the existing IT infrastructure for Rs 15 crore, about Rs 25 crore for acquisition and other strategic initiatives and balance for general corporate purpose.

Strengths

The entire businesses operate on an asset-light model with low capital expenditure requirements. Through a centralized office in Banglore connected with hub and spoke model with its 8 branches across India, the company works on optimizing resources.

There is strong loyalty of customers. Repeat customers accounted for about 95.81% and 93.21% of total revenues for FY 2014 and FY 2015, respectively. Five of their top 10 clients by revenue in the year ended March 31, 2015 have been with TeamLease for a term exceeding 6 years.

TeamLease has made significant investments in their proprietary technological platforms that have contributed significantly to operational efficiencies and the scale of their operations, which differentiates itself from its peers. Through this centralized platform, the company is able to utilize its man power effectively which has helped in overall increase in the operating margins for the company.

The company is debt free, with cash balance of more than Rs 120 crore as on September 2015.

Weaknesses

The company operates in a highly fragmented, competitive, low-margin and low entry-barrier industry, which is dominated by unorganized players.

The company operates its general staffing business predominately in India and thus is subject to adverse fluctuations in general economic and commercial activity in India and during period of economic downturn, temporary employees which the company recruits, often are laid out first.

The scope for margin improvement in its present kind of business is limited.

The company comes under full tax regime from FY 2016 as most of the past losses are completely absorbed.

Any change in labor laws or government regulations can affect the outsourcing business of the company.

The company is planning inorganic growth, which can lead to costly or inappropriate acquisitions and consequent pitfalls.

Valuation

For FY 2015, the consolidated net sales grew by 31% to Rs 2007.07 crore, OP was up by 200% to Rs 24.06 crore and PAT 173% to Rs 30.79 crore. For the six months ended September 2015, revenues stood at Rs 1209.65 crore up by 28% and PBT stood at Rs 16.36 crore, up by 22%. After paying Rs 5.68 crore of tax as compared to tax credit of Rs 3.76 crore for the six months ended September 2014, consolidated PAT for the six months ended September 2015 stood at Rs 34.10 crore

At a price of Rs 850, thepost-issue diluted equity share capital of the company works to Rs 17.13 crore of face value of Rs 10 each. On this equity, the EPS for FY 2015 works out to Rs 18. EPS for the six months ended September 2015 is not annualized due to seasonality of business.

At a higher price band of Rs 850, the scrip is offered at a P/E of 47.3 times its FY 2015 earnings.