FIIs look past political gloom to invest $10 bn in Jan-Mar

India may be facing some tough macro headwinds. And the ongoing political uncertainty is not helping ease investor-concerns. But foreign investors, it seems, are looking beyond. CNBC-TV18's Nimesh Shah and Animesh Das report on the record inflow of USD 10 billion into the equity markets in the January-March quarter alone.

Finance minister P Chidambaram has a good reason to smile. His aggressive exercise in hard-selling India to foreign investors in an attempt to ramp up investments and fuel growth is starting to pay off.

The first quarter of 2013 has seen foreign investors pick up equity worth a whopping US 10 billion which makes up 22 percent of the total market capitalisation in the Indian equity markets — the highest level ever reached by foreign investors.

Also Read: Invested more in India now than last 2 decades: JPMorgan

Of course, a lot of this interest comes on the back of the fact that in 2012, Indian equities generated returns of over 25 percent to become one of the best performing markets in Asia.

Another reason for this interest is that with political tension and a tough macroeconomic situation, domestic investors have stayed away and this has made India a cheaper opportunity.

FII-buying has been seen in every sector and in 7 of the 10 sectors, especially private banks, healthcare and IT, FII holdings surged to record highs.

A sluggish global economy has also helped India. Experts point to a sudden surge in liquidity, as investors withdraw from hard-hit markets and India's performance has helped draw this money in.

Austin Foregy, MD, JPMorgan Asset Management, says, "We have more money invested in India now than at any time in the last 20 years as a proportion of our total funds, certainly for funds that I am responsible for. We are starting to see the beginnings of interest rates coming down and the inflation cycle in the last two-to-three years has started to fall and is probably going to decline. There are still a lot of businesses with quite a lot of scope for growth once demand picks up and in India the consumer demand certainly seems pretty robust."

This enthusiasm has also glossed over the fact that in the January-March quarter, India's GDP growth and current account deficit was much worse than expected. And this helped limit the underperformance of the equity markets to just 2 percent against the MSCI Emerging Markets Index — better even that China or Korea.

Stocks that saw the most buying by foreign investors during the first quarter of 2013 include Shriram Transport Finance , which saw foreign holding rise by 7.7 percent, and Strides Arcolabs , where holding went up by 8,2 percent.

Manappuram Finance , Axis Bank , Tech Mahindra , Jaiprakash Power Ventures and Suzlon Energy haver also generated plenty of FII interest. But a few firms lost out— Housing Development & Infrastructure , IVRCL , Hindalco , Voltas , Crompton Greaves and LIC Housing Finance .

So, if this overall buying trend holds strong, India is definitely in for a rip-roaring 2013.

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Godrej Properties to raise Rs 700cr through rights issue

Godrej Group real estate arm Godrej Properties plans to raise around Rs 700 crore through rights issue to fuel its growth plans, a top company official said today. "We have planned to raise around Rs 700 crore through rights issue mainly to fund our growth plans," GPL Managing Director and Chief Executive Pirojsha Godrej told reporters while announcing the fourth quarter numbers. He said the issue was expected to be launched in the second quarter of this financial year 2013-14.

"Despite challenging macro-economic environment and the real estate sector under-performing, we have been able to achieve a significant growth in FY13. We want to keep up with this growth momentum and launch new projects in this fiscal year," Godrej said. GPL plans to launch nearly 15 projects, some of which may come up in Mumbai, Delhi NCR, Bangalore and later in Pune and Chennai.

"The funds raised through the issue will be utilised for ongoing projects as well as new projects. It will give us good visibility to sustain performance," he added. Godrej further said though FY'13 was challenging, 2013-14 will be a better year both for the economic growth as well as for the sector. "We expect the growth momentum to return mainly due to various initiatives in reforms as well as interest rate cut.

Therefore, it makes sense to raise funds at this moment to increase business as well as to strengthen our balance sheet," he added. Shares of Godrej Properties closed 2.69 per cent down at Rs 601.70 apiece on the BSE today.

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Railway minister skips Cabinet meet due to bribery case row

Railway minister Pawan Kumar Bansal skipped a Cabinet meet at Prime Minister Manmohan Singh's residence on Thursday even as Law Minister Ashwani Kumar attended it. Both Bansal and Ashwani are under fire over the Railway Board bribery case and the coal scam probe respectively.

Sources had earlier said that the Congress wanted the PM to decide on Ashwani's fate. Sources said the PM was seriously considering the possibility of replacing Ashwani.

The PM met President Pranab Mukherjee and discussed the political situation. But before that meet, there was high drama as Ashwani Kumar turned up at the PMO, but was denied a meeting with Manmohan Singh.

Earlier in the day, Attorney General GE Vahanvati met the PM. Vahanvati had told the Supreme Court on Wednesday that he met CBI officials over the coal block report at the Law Minister's instance.

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Wall St flat after rally, Barnes Noble soars

US stocks edged lower on Thursday despite stronger-than-expected data on the labor market, with Wall Street coming off a sustained rally that took the S&P 500 to record closing highs for five straight sessions.

Aslo read: World stocks slip off their multi-year highs

Jobless claims unexpectedly fell in the latest week by 1,000 to 323,000, their lowest in more than five years. Analysts had expected claims to jump to 335,000.

The data added to a positive tone set by Friday's payroll report, which was much stronger than expected and suggested that fears of slowing growth may be overdone. The S&P 500 has risen every session since then, adding 3.2 percent over the period, while the Dow has also set records.

The claims data "is more fuel to send shares higher," said Todd Schoenberger, managing partner at LandColt Capital in New York. "While we may get a pullback at these levels, that would make for an excellent entry point for investors. There are no major headwinds out there right now, and stocks should continue their upward pattern."

The market's uptrend has been boosted by strong corporate earnings and an accommodative monetary environment from the Federal Reserve, which analysts say makes stocks cheaper than other asset classes on a valuation basis. Investors have used any market declines in 2013 as a buying opportunity.

The Dow Jones industrial average was down 4.75 points, or 0.03 percent, at 15,100.37. The Standard & Poor's 500 Index was down 1.43 points, or 0.09 percent, at 1,631.26. The Nasdaq Composite Index was down 1.40 points, or 0.04 percent, at 3,411.86.

The S&P 500 has climbed 14.5 percent so far this year, while the Dow has advanced 15.3 percent and the Nasdaq has gained 13 percent. Still, the market remains below overbought territory, with the relative strength index on the S&P slightly below 70.

While moves have been slight this week - the S&P rose just 0.5 percent on its strongest day - the three major US stock indexes have ended sessions higher than where they began, an indication that positive momentum will continue. Trading volumes have been below average, however, which could indicate a lack of conviction.

Shares of Barnes & Noble Inc soared 25 percent to $22.15, hitting a fresh 52-week high after web publication TechCrunch reported that Microsoft Corp was considering an offer to acquire all of Nook Media's digital assets for USD 1 billion.

Tesla Motors Inc jumped 25 percent to USD 69.57 a day after posting adjusted earnings that were three times what analysts were expecting as the company sold more cars than it had initially forecast.

News Corp reported earnings late Wednesday that beat expectations while revenue rose 14 percent. Rupert Murdoch's media company also said it was on track to split off its slow-growing publishing business by the end of June. Shares rose 5.9 percent to USD 33.74.

Groupon Inc posted revenue growth of 7.5 percent in the first quarter, more than analysts had expected. Shares jumped 13 percent to USD 6.31.

With about 440 S&P 500 components having reported, earnings have largely been better than expected this quarter, with the majority of companies surpassing estimates. Still, most companies have missed revenue expectations.

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SBI gains on hopes for improving asset quality

Shares in State Bank of India (SBI) ended 1.6 percent after state-run rivals Punjab National Bank and Union Bank of India Ltd reported a sequential improvement in asset quality for the January-March quarter.

The results are raising expectations that SBI, India's biggest state-run bank, also saw flat or improving non-performing assets in the previous quarter.

Both Punjab National and Union Bank have a strong positive correlation with SBI's share prices.

PNB shares ended up 4.6 percent, while Union Bank shares rise 1.4 percent.

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Indian pharmas gain on N America boost: Q4 earnings review

The performance of big participants in the Indian healthcare business has been as varied as the drugs they manufacture. But CNBC-TV18's Archana Shukla reports that the pharma sector's fortunes in the January-March quarter were dictated by the US market.

North America is the largest pharmaceutical market for the drug firms of the world. And the importance of this market has been highlighted by the quarterly numbers posted by Indian pharmaceutical giants.

For Lupin , revenues from the US market grew a staggering 33 percent  which pushed overall net sales up 35 percent, and led to profits more-than-doubling to Rs 408 crore. And though its Indian business grew 24 percent in FY13, the big boost over the year still came from the US where a 47-percent growth in revenue was driven by the launch of 10 new products.

The stock surged to a 52-week high of over Rs 735 per share especially after the company said the performance was sustainable. Kamal Sharma, MD, Lupin says, "Cumulatively, costs came down by about 3 percent. I hope we will be able to maintain this level and improve further. In this particular quarter and year, our EBITDA margin, which was around 21 percent last year, is over 24 percent this year. The 6-percent improvement on our base of Rs 9,600-crore has resulted in a substantial boost in performance."

Glenmark has a similar tale to tell.  A 39-percent surge in sales in the US helped. It reported a 25-percent growth in FY13 sales and a 33.5 -percent jump in net profits.

Leading the charge for Glenmark are its oral contraceptives and dermatology products which found a firm footing in the US markets. And with at least four new launches on the anvil for FY14, the company is confident it will maintain a 20-percent revenue growth. That's counting a sluggish Indian market and a longer approval process in the US.

Glenn Saldanha, MD and CEO, Glenmark Pharma adds, "The slump in the Indian pharmaceutical market which has made it difficult to post growth over 20 percent. We are not sure about the kind of filings and approvals in the current year in the US because there is a huge slowdown in FDA approval process."

But it's this very same US market that has spelt trouble for Ranbaxy . Sales fell 15 percent in the region as it no longer had the cushion of an exclusivity period associated with some of its blockbuster drugs like cholesterol-lowering Atorvastatin.

And so the quarterly performance was disappointing with consolidated net profit down 90 percent and net sales down 34 percent. Arun Sawhney CEO and MD, Ranbaxy, says, "Developed market sales were impacted by the absence of exlusivities as compared to the corresponding quarter last year. Primary sales in India grew 11 percent during the quarter. US-based business sales excluding first-to-file grew over 40 percent."

But Ranbaxy is not losing hope. It is betting on a slew of recently launched drugs like dermatology-drug Absorica and anti-depressant Pristiq to keep its US business growing. Ranbaxy also says it may get to fall back on the 180-day exclusivity on hypertension drug Diovan, for which FDA approval is pending.

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Tulip Telecom gets formal approval for CDR proposal

Enterprise data services provider Tulip Telecom today said it has received formal approval for restructuring its debt by the Empowered Group of the Corporate Debt Restructuring (CDR) Cell. The company's domestic lenders, a consortium of 13 banks and financial institutions, approved its CDR package, which includes a 30-month moratorium on principal and 18-month moratorium on interest, Tulip said in a statement.

The promoters of Tulip Telecom have already infused the required promoter's contribution of Rs 60 crore as required by the approval, which shall be converted into equity, it added. The CDR programme will cover about Rs 3,000 crore of debt. On FCCB redemption, Tulip said its ongoing engagement with bondholders "continues to be constructive and progressive." It added that it "expects to reach an acceptable solution for all stakeholders at the earliest possible date." Tulip had issued FCCBs worth USD 140 million in 2007, which came up for redemption in August last year.

However, it has been unable to repay the FCCBs and has been engaged in discussions for repayment of the same. Foreign Currency Convertible Bonds (FCCBs) are a loan instrument used to borrow money from overseas markets. "Tulip has built a strong infrastructure for its enterprise data business and this approval shows the long term commercial viability of our business. This CDR package will enable the company to quickly return to a position of strength," Tulip Telecom CMD H S Bedi said. Shares of Tulip Telecom fell by nearly 4.9 per cent to Rs 18.50 per share, valuing the company at Rs 268 crore on BSE.

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Students can complete degree in 10 yrs under new format: DU

Students of Delhi University will now be able to finish their degrees in a span of 10 years instead of six as earlier proposed for the new four-year undergraduate programme. This was decided in a marathon meeting of the varsity's Academic Council which went on till 2 AM this morning. A total of 54 courses, including 11 foundational courses, were approved for the new four-year programme in a two-day special meeting of DU's top academic body. "Students can now finish their degrees in 10 years instead of six as proposed earlier.

They will also be eligible to get their Bachelor Honours/B Tech degrees by scoring an aggregate of 40 per cent instead of the earlier required aggregate of 50 per cent," Council member Sanjay Kumar said. Kumar said syllabus for courses will be reviewed annually and changes to be made accordingly. "The decision comes as several courses have remained same for over 10-20 years."

Other significant decisions taken in the meeting included allowing students to opt for any of the four application courses irrespective of the subject background they belong to. "A student with science background can choose an application course of the commerce department. Students will have more choice," Kumar said. Students will also be eligible for an MA under Delhi University if they choose to do six papers on the same minor subjects. During the meeting, there were six dissents in a house of over 100 council members over the decisions taken.

"Those who dissented have been consistently voicing against the four-year programme. The argument is that the four-year structure is a flawed one and the courses have been passed in a hurry," Amitav Chakrobarty, a member, said. The Council also approved changes in the university ordinances, including changes in nomenclature of degrees and admissions under reserved categories. The four-year programme with multiple degree options will entail a shift from the present 10+2+3 scheme to a four-year graduation with multiple exit points.

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Novartis hires Citigroup as broker for Indian unit shr sale

Moneycontrol Bureau

Germany based Novartis has hired Citigroup Capital Markets India as a sole broker for the proposed share sale to reduce stake in its Indian entity.

Earlier, in March Novartis India had announced that parent Novartis AG intends to reduce its stake in the Indian entity to enable it to meet Securities and Exchanges Borad of India's guidelines on the minimum public shareholding in the listed companies.

As of March 31, Novartis AG held 76.42 percent stake in Indian subsidiary. According to SEBI's norm listed companies are required to have a minimum of 25 per cent public shareholding by June this year.

Must read: No respite seen in SEBI's 25% minimum float norm: Mayaram

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SBI projects 16% loan growth for 2013-14 fiscal

Country's largest lender State Bank of India (SBI) today said it expects to register a lower loan growth rate of 16 per cent for the current fiscal as the demand for advances from the industrial sector is "weak".

"...we would like to believe that the loan growth should not be above 16 per cent and deposits growth between 14 and 16 per cent (in 2013-14)," SBI Chairman Pratip Chaudhuri told reporters here today when asked about his projections for the ongoing fiscal.

"...we feel the loan environment is rather weak and hardly any demand in the industrial sector so whatever loan demand is coming is from consumer sector," he said. He also attributed the expectation of lower growth in advances to the increasing demand from corporate sector opting for dollar loans. "Dollar loans are becoming cheap.

Many of the corporates who are thinking of long-term loans for their projects are increasingly preferring dollar loans. Dollar loan pricing is going down every year but rupee loan pricing is not going down. Demand for rupee loan from corporate sector is weak Therefore, we are pegging (loan growth) at 16 per cent," he said. Last fiscal, SBI posted 21 per cent and 15 per cent growth in advances and deposits, respectively.

Chaudhuri said the bank would announce its financial results on May 22. Upbeat over the growing demand from housing sector, SBI chairman said the bank was aiming for 25-30 per cent growth in housing loans at Rs 30,000-35,000 crore in current fiscal. He said about 25 per cent of bank's total housing loans are 'takeover loans' which are also boosting growth in outlay for housing and the NPA (non-performing asset) level in this sector was less than one per cent.

Noting that NPAs were the bank's biggest challenge at this juncture, he said that default in loan repayment was found mostly in SME, mid corporate and agriculture sectors because of "difficult" market conditions. He also said that textile sector, some steel companies and those which supply products to electricity boards and contractors were facing liquidity and profitability problems.

Chaudhuri said the gross NPA could be 4.5 per cent and net NPA 2 per cent. Asked about the liquidity problem, SBI Chairman said the bank was not facing any liquidity crunch. "Liquidity crunch is not for us, we have an excess of liquidity... as of today we have Rs 40,000 crore of excess liquidity, he said.

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