Latest news with #AnirudhGarg
Mint
3 days ago
- Business
- Mint
RBI Policy Outcome: How should investors position themselves as central bank keeps repo rate unchanged?
The Reserve Bank of India (RBI) Monetary Policy Committee (MPC), chaired by Governor Sanjay Malhotra, kept the repo rate unchanged at 5.5 per cent and maintained the policy stance as "neutral" in its latest meeting. This decision follows a surprise 50 basis points cut in June and signals a cautious approach amid an evolving global environment marked by easing inflation and resilient economic growth. RBI noted the country's growth outlook remains healthy and inflation is expected to be under control this year, largely due to a healthy monsoon. However, the RBI Governor pointed out that the global environment continues to be challenging. "Although financial market volatility and geopolitical uncertainties have abated somewhat from their peaks in recent months, trade negotiation challenges continue to linger," the central bank said. While retail inflation is forecast to rise modestly in the final quarter of FY2026, headline Consumer Price Index (CPI) inflation estimates were revised downward to 3.1 per cent from 3.7 per cent earlier. The central bank also retained its real GDP growth forecast at 6.5 per cent for the year. Market reaction to the announcement was subdued, with the Sensex falling over 260 points and broader markets underperforming. The move, however, has important implications for investors seeking to navigate this period of monetary stability. The BSE Sensex fell around 261 points to the day's low of 80,448.82, while the Nifty50 was down 105 points to hit the lowest level of 24,544.15 in intraday deals today. Broader markets underperformed benchmark indices, with the Nifty Midcap and Nifty Smallcap indices down over 1.2 per cent each. Market experts see the RBI's decision as a positive sign for equities, especially domestic cyclicals. Anirudh Garg, Partner and Fund Manager at INVasset PMS, believes that the combination of a dovish inflation outlook, solid growth, and policy continuity creates a supportive environment for equities. 'However, vigilance remains key, especially given potential imported inflation risks from global trade frictions,' he warns. Sonam Srivastava, Founder and Fund Manager at Wright Research PMS, recommends a selective investment approach, focusing on sectors such as financials, industrials, and consumption. These areas are expected to benefit from eventual monetary easing and possible fiscal stimulus ahead of the 2026 general elections. Similarly, Anil Rego, Founder & Fund Manager of Right Horizons PMS, highlights that rate-sensitive sectors like banking, real estate, and automobiles could gain from the sustained accommodative stance. 'The RBI's balanced tone supports growth without compromising inflation control, making it a favourable backdrop for these industries,' he adds. Stay selective and focused: Prioritise sectors likely to benefit from economic growth and future policy easing, especially financials, industrials, and consumer discretionary. Prioritise sectors likely to benefit from economic growth and future policy easing, especially financials, industrials, and consumer discretionary. Monitor global risks : Keep an eye on global trade tensions and supply chain developments that could trigger inflationary pressures. : Keep an eye on global trade tensions and supply chain developments that could trigger inflationary pressures. Long-term view : Embrace a strategic, long-term investment horizon amid monetary policy stability. : Embrace a strategic, long-term investment horizon amid monetary policy stability. Balance caution with opportunity: While the policy stance is neutral, the RBI's flexibility signals readiness to act if needed, so be prepared to adjust portfolios accordingly. Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.
Economic Times
01-08-2025
- Business
- Economic Times
NSDL IPO GMP hints at 17% listing gains but pre-IPO investors still nursing losses
In a move that blindsided many investors, National Securities Depository Ltd (NSDL), India's oldest depository, has set the price band for its Rs 4,011.6 crore initial public offering at Rs 760–800 per share, a sharp 22% discount to its last unlisted market valuation of Rs 1,025. The markdown has left early investors nursing notional losses, even as grey market premiums of around 17% point to potential listing gains for public market participants. ADVERTISEMENT As of August 1, in the grey market, NSDL shares were trading at a premium of 16.75% over the IPO's upper price band, suggesting a potential listing gain of Rs 134 and an estimated debut price of around Rs 934 per share. The demand for the Rs 4,011.6 crore IPO has remained strong, which was subscribed 3.56 times by the second day of bidding. Non-institutional investors led with 6.84 times subscription, followed by retail investors at 3.26 times and qualified institutional buyers at 1.59 times. 'The market response signals that the IPO price was set with a deliberate safety margin — not 'too low' per se, but purposefully discounted to foster solid demand and deliver tangible upside,' said Nitin Jain, Senior Research Analyst at Bonanza. 'The strong GMP and oversubscription both reinforce the notion that the pricing left money on the table for new investors, a move that may benefit long-term secondary market stability.'In contrast, investors who bought NSDL shares off-market, some paying as much as Rs 1,275 apiece, are now sitting on deep paper losses. ADVERTISEMENT Anirudh Garg, Fund Manager and Partner at INVasset PMS, said the sharp discount 'stems from a shift in investor sentiment and a recalibration of inflated unlisted valuations.' According to Garg, 'Between April and June 2025, NSDL's unlisted shares soared to Rs 1,275, fueled by regulatory tailwinds and heightened institutional interest. However, by July, prices cooled to Rs 1,025—signaling that prior valuations may have factored in speculative exuberance rather than grounded fundamentals.' Garg said that 'the IPO pricing reflects a more realistic entry point based on financial metrics,' highlighting NSDL's FY25 revenue of Rs 1,535.18 crore, profit after tax (PAT) of Rs 343 crore, and return on equity (ROE) of 17.1%. With Rs 464 trillion in assets under custody and a 68% market share in demat value, NSDL remains 'a systemic infrastructure play.' ADVERTISEMENT Anirudh Garg called the pricing 'strategic,' aimed at ensuring 'robust investor participation, smooth listing, and long-term alignment with fundamentals.'Nitin Jain, Sr. Research Analyst at Bonanza, echoed similar concerns about inflated grey market expectations. 'Unlisted share prices are often driven by hype, scarcity, and anticipation of an IPO, rather than by fundamentals,' he said. 'The unlisted market is less liquid, and a few participants can push prices higher, resulting in valuations that aren't always sustainable or based on rigorous earnings multiples.' ADVERTISEMENT The IPO is a pure offer for sale (OFS), with existing shareholders exiting part of their holdings. There is no fresh capital being raised, which analysts believe also contributed to the conservative pricing. 'The full OFS structure does contribute to more conservative pricing, as IPO investors recognize there is no 'growth money' coming into the company,' said Jain. 'It encourages benchmarking valuation to public market comparables and often results in a more moderate price to ensure post-listing stability and appeal, compared to unlisted or pre-IPO exuberance.' ADVERTISEMENT "'In an OFS, existing shareholders exit partially or fully, and no new money flows into the business. As such, there's a greater emphasis on offering fair value to public investors, especially when there's no immediate growth capital deployment. The discount also aligns with the broader IPO trend of recalibrating inflated unlisted premiums," Anirudh Garg asking price implies a price-to-earnings (P/E) multiple of 46.6, considerably below its listed peer CDSL, which trades at a P/E of 66.6. While the difference has raised questions, analysts argue that the discount is not said, 'The P/E gap between NSDL (46.6) and CDSL (66.6) largely reflects structural and performance differences between the two depositories.' He noted that while both operate as regulated duopolies, CDSL's stronger profitability and leaner, retail-focused model justifies its higher explained that 'NSDL is a diversified infrastructure institution with deep regulatory integration and a broader scope of services.' However, 'over 50% of its revenue comes from banking services (like e-KYC and CRA for NPS), but this contributes only 1% of profits—pointing to thinner margins in these segments.'Despite that, Garg said, 'NSDL's FY25 financials remain strong… While the lower P/E reflects relatively modest profitability, it also offers investors a valuation cushion.'For pre-IPO investors who entered at the Rs 1,200+ levels, the IPO price has been a bitter pill. But analysts say the reaction may be short-lived.'The initial markdown in NSDL's IPO pricing caused short-term discomfort for pre-IPO investors,' Garg said. 'However, the subsequent market response has made it clear that this is not a reflection of any structural weakness.'Jain added that 'the pain for late-stage, pre-IPO investors arises largely from market cycles and the shift from speculative unlisted pricing to more disciplined public valuations.' NSDL's case is not an anomaly. Recent IPOs like HDB Financial Services and Tata Technologies have followed a similar trajectory. HDB's issue, for instance, was priced at Rs 740, a 40% discount to its Rs 1,225 unlisted value, and listed at Rs 835. Today, it trades around Rs 760, still below the entry price for many grey market investors.'The steep discounts in recent IPOs, including NSDL's 22% markdown... signal a broader market recalibration,' said Garg. 'These discounts are not merely about timing but reflect a correction of inflated valuations that had built up in the unlisted space.'Jain concurred that 'the deep IPO discounts are a correction of prior unsustainable premiums in the unlisted market… The era of easy, pre-IPO arbitrage appears to be over—for now, realism and caution are firmly back.'As India's primary markets mature, analysts caution investors to look beyond grey market whispers and focus on said, 'The discounting trend is a sign of normalization, not distress, and reflects a healthier, data-driven approach to primary market pricing.'In the end, the message is clear: in the unlisted market, 'strong stories don't always mean strong returns—especially when your investing horizon ends on listing day.' Also read | NSDL IPO subscribed over 5.03 times on Day 3, GMP rises to 17%. Check reviews, other details (Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of the Economic Times) (You can now subscribe to our ETMarkets WhatsApp channel)
Time of India
21-07-2025
- Business
- Time of India
SIP boom & market rally push AMCs into spotlight: 4 Analyst-backed stocks to watch
Should you buy a mutual fund (MF) scheme's unit or its Asset Management Company's (AMC) equity share ? This question may well be asked by many when ICICI Prudential AMC, India's second largest fund house with assets under management (AUM) worth Rs.10.3 lakh crore (at the end of June 2025), gets listed. The fund house has recently filed its papers to go public. The AMC is planning an offer for sale of 1.76 crore equity shares, where the foreign JV partner, Prudential Corporation Holdings, will offload around 10% of its stake. But what can investors gain from buying an AMC's shares, as opposed to its well-performing schemes that can diversify your money across multiple asset classes? Explore courses from Top Institutes in Select a Course Category Design Thinking Leadership Product Management Artificial Intelligence Data Analytics CXO Project Management Public Policy PGDM Data Science Others Degree Finance others Technology Operations Management Healthcare Cybersecurity healthcare Management MCA MBA Data Science Digital Marketing Skills you'll gain: Duration: 25 Weeks IIM Kozhikode CERT-IIMK PCP DTIM Async India Starts on undefined Get Details Skills you'll gain: Duration: 22 Weeks IIM Indore CERT-IIMI DTAI Async India Starts on undefined Get Details How an AMC makes money? A fund house earns through the asset management fees it collects from investors for running the MF schemes. The AMC fees are a part of the total expense ratios (TERs) that fund houses deduct from their schemes' net asset values. The TER consists not just of AMC fees, but also comprises other charges like distributor commission, registrar and transfer fees, auditor fees, and so on. TERs vary from scheme to scheme; equity funds tend to charge higher TER (and by virtue earn more for the AMCs) than debt funds. The TER, and therefore the AMC fees, is charged as a percentage of AUM. Best MF to invest Looking for the best mutual funds to invest? Here are our recommendations. View Details » by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Mountain Gear for Extreme Conditions Trek Kit India Learn More Undo Anirudh Garg, Partner and Fund Manager at INVasset, PMS, explains that the AMC companies benefit from operating leverage as the AUM grows, and the fee income scales up. With minimal capital requirement and low fixed costs, most of the incremental revenue flows directly to the bottom line, resulting in a high return on equity (RoE). Share of equity AUM has jumped over last 10 years Live Events Equity-led growth drives profits. The revenues and the profitability of these companies are closely tied to market movements and investor sentiment. Bullish market cycles drive AUM growth via NAV appreciation and fresh inflows, especially through SIPs. Conversely, bearish phases lead to redemptions and stagnant or declining AUMs. After corrections of 8.3% and 0.9% in the December 2024 and March 2025 quarters, respectively, the domestic equity benchmark, Nifty 50, bounced back by 10% in the first quarter of 2025-26 (or the June quarter). AMCs are likely to be a beneficiary of the rebound in the equity market and are expected to report a strong performance in the June 2025 quarter. Costs down,markets volatile The jump in equity markets could be a positive trigger for AMC stocks. The June quarter delivered strong results. Aided by the equity market rally, mutual fund industry AUM grew 13.2% quarter-on-quarter, while SIP inflows rose 2.9% to `80,539 crore. A decline in discontinued SIPs versus new registrations (for the second straight month in June 2025), along with a steady rise in folios, signals robust retail participation and adds momentum to the industry's performance. Experts are optimistic about the long-term growth prospects of mutual funds. A recent report by Antique Stock Broking suggests that AMC stocks are poised for a re-rating, backed by improving RoEs, strong operating cash flows, low capex requirements, and steady earnings. The report projects a 20% compounded annual growth in active fund AUM over the medium term. Resilient SIP flows and the untapped mutual fund potential in both T30 (Top 30 cities) and beyond, driven by fintech expansion, are expected to bolster AMC revenues. A possible rise in discretionary income following tax cuts, along with improved liquidity from repo rate reductions, could further accelerate equity inflows. Kranthi Bathini, Equity Strategist, WealthMills Securities, says that the mutual fund investing culture is becoming stronger day by day in India with penetration into semi-urban and rural areas. This trend is expected to outpace the AUMs of AMCs in the coming years. Party spoilers Experts, however, advise investors to consider the risks involved. 'AMCs are marketlinked businesses—prolonged corrections can dampen flows and hurt profitability,' adds Garg. A key challenge facing the AMC industry is the persistent pressure to cut costs. TERs have steadily declined over the years. The latest review of TERs by the markets regulator Securities and Exchange Board of India (Sebi), proposed in May 2023, remains in limbo and, according to market chatter, is unlikely to materialise. The proposal marks the most significant overhaul since the 2018 reforms. The Antique Stock Broking report expects that AMCs are likely to face the least regulatory risks within the non-lending financial space as most major regulations regarding the telescopic nature of TERs are already implemented. However, the report also asserts that any changes to the TER cap, benchmarking norms, or distributor incentive rules can squeeze margins or require abrupt business model adjustments. The June 2025 quarter preview report from Prabhudas Lilladher also points to higher operating expenditures on a sequential basis as a risk that might impact performance. AMC heavyweights The optimism is visible in the returns generated by the biggest four listed AMC players: UTI AMC, HDFC AMC, Aditya Birla SunLife AMC and Nippon Life India AMC. The group of these four companies generated an equal-weighted average return of 37.9% compared to the 8.8% and 11.3% returns by the Nifty 50 and Nifty 500 indices between 1 April 2025 and 11 July 2025. Here is how the four listed AMC players are placed. Nippon Life India AMC Expected first quarter 2025-26 revenue growth of 18.7% and Profit After Tax (PAT) growth of 6.4% year-on-year as per analyst consensus. Strong AUM growth and declining operating expenses driving performance. Gaining market share through better scheme performance, distributor engagement , and rising SIP flows, according to ICICI Securities report. Strong passive investing position with ETFs at 28% of total AUM. Distributor commission rationalisation in 2024-25 expected to boost future yields, according to Antique Stock Broking report. Key strengths: Strong brand, parent backing, robust equity franchise, high operating leverage, and digital focus. Aditya Birla Sun Life AMC Expected June quarter 2025-26 revenue growth of 15.3% and PAT growth of 12.5% year-on-year per as per Centrum Broking. Enhancing direct channel sourcing and expanding to 543 locations (from current 300), according to a ICICI Securities report. Expanding alternate business (AIF/PMS) and offshore operations to boost profitability. Focusing on debt fund investor awareness given strong market share in this segment. HDFC AMC Revenue and PAT growth in June 2025 quarter: 24.9% and 23.8% year-on-year respectively. Gaining market share through stable positioning, enhanced fund management team, and strong product performance driving new customer acquisitions. Strengthened prospects via retail focus, wider distribution network, and smaller city expansion. Alternative business (PMS, AIF, private credit) and global expansion through GIFT City expected to drive growth. UTI AMC Expected first quarter 2025-26 revenue growth of 5% but PAT decline of 31.3% due to lower other income, as per Prabhudas Lilladher Net equity inflows declined in 2024-25, but targeted fund launches and improved performance reviving equity flows. Efficient cost management with 8% operating expenditure on compounded basis (FY21-25) vs peers' 11-14%. Positive outlook driven by improving scheme performance, growing retail/SIP franchise, passive segment pickup, low cost escalations, and attractive valuations.
Time of India
18-07-2025
- Business
- Time of India
EU sanctions Rosneft's Nayara refinery in Gujarat; lowers Russian oil price cap to $47.6 per barrel
New Delhi: The European Union has sanctioned the Rosneft-owned Nayara Energy 's 20 million metric tonne refinery in Vadinar, Gujarat, and reduced the price cap on Russian oil to USD 47.6 per barrel from the earlier USD 60, in a fresh round of measures targeting Moscow's energy revenue. The latest sanctions package includes restrictions on 105 additional vessels involved in transporting Russian crude oil through the so-called shadow fleet. This takes the total number of sanctioned vessels to 444, all of which will face a port access ban and prohibition on receiving maritime-related services. "We are standing firm. The EU just approved one of its strongest sanctions package against Russia to date. We're cutting the Kremlin's war budget further, going after 105 more shadow fleet ships, their enablers, and limiting Russian banks' access to funding. For the first time, we're designating a flag registry and the biggest Rosneft refinery in India," said Kaja Kallas, EU High Representative for Foreign Affairs and Security Policy, on X. The Council of the European Union said in its statement, 'Full-fledged sanctions (asset freezes, travel bans, bans on providing resources) target Russian and international companies managing shadow fleet vessels , traders of Russian crude oil and a major customer of the shadow fleet – a refinery in India with Rosneft as its main shareholder.' The move is expected to impact Rosneft's export operations and possibly its shareholding in Nayara Energy. In March 2025, The Economic Times had reported that Rosneft, which holds a 49.13 per cent stake in Nayara, was exploring options to exit the Indian venture due to its inability to repatriate earnings amid existing sanctions. "With today's package, the EU is curtailing Russia's energy revenues through a number of different measures. The EU is lowering the price cap for crude oil from USD 60 to USD 47.6 per barrel, to align it with current global oil prices and is introducing an automatic and dynamic mechanism to modify the oil price cap and ensure that this price cap is effective. Oil exports still represent one third of the Russian government's revenues," the EU Council said. India imported around 1.75 million barrels per day (bpd) of discounted Russian crude in the first half of 2025, accounting for 35 per cent of the country's total imports. In June 2025 alone, Russian imports surged to 2 million bpd, while imports from the Middle East declined. 'The EU's move to sanction a Rosneft-linked refinery in India—a key crude-supply hub for IOCL and BPCL—is a strategic jolt for the domestic downstream sector,' said Anirudh Garg, Partner and Fund Manager at INVasset. 'Even though the measure targets a single facility, it may trigger ripple effects—restricting access to Russian crude via banking channels, shipping insurance, or logistical bottlenecks. That would undercut the premium discount India's refiners currently enjoy and strain refining margins,' he added. Garg said IOCL and BPCL, which refinanced over a third of their crude requirement from Russia, may face incremental costs if they have to substitute Russian barrels with costlier alternatives from the Middle East or the US. 'With earnings season around the corner, investor sentiment may turn cautious until clarity emerges on policy support, sanction waivers, or alternative supply routes. For now, this sanction is a downside risk—firm but containable, provided mitigating measures follow swiftly,' Garg said.
Mint
30-06-2025
- Business
- Mint
FY25 dividend payouts: Cash-rich BFSI and IT companies dominate
While it is raining dividends in India Inc., the shower has been far from even. Longtime dividend powerhouses—banking, financial services, and insurance (BFSI) and information technology (IT) companies tightened their grip on the dividend charts, reaffirming their status as consistent cash-returning machines. In contrast, several traditional and growth-oriented sectors including logistics, media, and retail remained on the fringes, underlining a widening gulf in dividend distribution across industries. Leading sectors A Mint analysis of 496 BSE 500 companies based on Capitaline data covering audited, unaudited, and proposed dividends revealed that BFSI alone accounted for 21.4% of total dividend payouts in FY25, followed closely by IT & ITeS at 20.5%, meaning they together accounting for more than 40% of all payouts. Meanwhile, industries such as logistics and media contributed less than 1% each, signaling a stark divergence in corporate priorities. 'The shift towards BFSI and IT leading dividend payouts is structural, not cyclical," said Anirudh Garg, managing partner at INVasset."While both sectors deliver over 40% of total dividends, BFSI offers stability through steady earnings, whereas IT's higher payouts reflect limited growth avenues. For income investors, BFSI provides consistency while IT requires more selective picking." 'Private sector companies—especially in BFSI—have shown robust balance sheets and a clear capital allocation framework," noted Saptarshi Pandey, a stock market strategist and founder of Investeem India. 'These firms don't need to reinvest aggressively, and their predictable cash flows make them ideal dividend leaders." On the flip side, Trivesh D, chief operating officer at Tradejini, said, 'Private players with leaner payout policies and stronger growth trajectories might turn out to be better long-term bets." Metals, FMCG hold steady Beyond BFSI and IT, metals & mining contributed 11.7% to these bounties, with oil & gas and FMCG accounting for 9.2% and 8.9% respectively. However, the oil & gas sector showed visible signs of pressure—dividend payouts dropped 28% year-on-year, echoing a steep 32% decline in net profits. Once a dependable dividend contributor, the sector appears to be retreating amid tightening cash flows. In contrast, metals & mining and FMCG companies turned in a strong performance with dividend payouts rising 28.4% and 12.6%, respectively, closely tracking robust profit growth of 20.3% and 35.3%. At the other end of the spectrum were the so-called marginal sectors—industries that together accounted for less than 2% of the FY25 dividend pool. Logistics, media & entertainment, textiles, travel & hospitality, retail, and consumer durables all posted payouts that barely moved the needle. Growth divide Dividend generosity was muted in several of these segments despite notable profit growth. Logistics firms, for instance, slashed dividends by a staggering 76% even as profits grew 20.5%. Media and entertainment companies reported a 171% surge in earnings but increased dividends by just 9%. In contrast, retail firms saw payouts grow 71.1% year-on-year, supported by a modest 14% rise in profits. Travel and hospitality players raised their payouts by 59% on the back of a 20% jump in profits. However, consumer durables and textiles painted a mixed picture. Dividend payouts in the consumer durables sector rose 5%, in line with a 13.6% rise in profits. Meanwhile, textile firms defied earnings pressure: despite a sharp 27% decline in profits, they still increased their dividends by 21.2%. 'Despite strong profit growth in FY25, sectors like media, travel, and retail contributed less than 1% to the dividend pool primarily because companies in these segments are prioritising reinvestment over distribution. Many are in growth or recovery phases, post-pandemic, focusing on scaling operations, expanding digital infrastructure, or improving margins," said Pandey. This is the concluding part of a four-part series of data stories on the dividends declared by India Inc. Read the first part here, second part here and third part here.
