FPIs invest Rs 10,689 cr in August; pace of investment slows

After infusing a staggering amount in Indian equities in the past three months, the pace of inflow from foreign investors ebbed in August with a net investment of Rs 10,689 crore on higher crude oil prices and resurfacing of inflation risks.

Further, markets could remain volatile in the coming week due to macroeconomic uncertainty and rising US bond yields. This has been prompting FPIs to flee emerging market equities, including India, and park funds in haven US securities, said Shrikant Chouhan, Head of Research (Retail), Kotak Securities Ltd.

According to the data with the depositories, Foreign Portfolio Investors (FPIs) invested a net amount of Rs 10,689 crore in Indian equities this month (till August 26).

This figure includes investment through the primary market and bulk deals, which have been gathering momentum recently. Before this investment, FPIs invested over Rs 40,000 crore each in the past three months in Indian equities.

The net inflow was at Rs 46,618 crore in July, Rs 47,148 crore in June, and Rs 43,838 crore in May. Before that, the inflow was Rs 11,631 crore in April and Rs 7,935 crore in March, data with the depositories showed.

The lower quantum of net inflow this month could be attributed to FPIs adopting a wait-and-watch approach ahead of the lined-up event at the Jackson Hole for further insights on the upcoming monetary policy by the US Federal Reserve, Himanshu Srivastava, Associate Director – Manager Research, Morningstar India, said. The next Federal Open Market Committee (FOMC) meeting is scheduled for September 19-20.

Additionally, higher crude oil prices and resurfacing of inflation risks, firming up of bond yields in the US, would have led some foreign investors to drift away from riskier markets in favour of greater certainty and better risk-reward profile offered by US treasuries, Srivastava said. Also, the recent rally in the Indian equity markets could have resulted in its valuation going beyond the comfort level of a few investors, he added.

“The pace of FPI investments is influenced by the expectations of the endowments and pension funds that sponsor them. With the US 20-year bond rate at 4.65 per cent, FPIs’ willingness to invest in riskier Indian equities could be dampened, as these funds usually target a return of about 6 per cent, ” Mayank Mehraa, smallcase Manager and Principal Partner at Craving Alpha, said.

This caution is driven by the availability of safer investments offering comparable returns without the higher risks associated with equities. Consequently, while FPI investments continue, their moderation reflects the intricate interplay of global market dynamics, investor preferences, and potential returns, he added.

Apart from equities, FPIs invested Rs 5,950 crore in the country’s debt market during the period under review. With this, the total investment by FPIs in equity has reached Rs 1.37 lakh crore and Rs 26,400 crore in the debt market so far this year. In terms of sectors, FPIs are consistently buying capital goods. And, of late, they have started selling in financials.

Monsoon hits Delhi-NCR! People wake up to cooler temperatures, water-logged roads- See Photos

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Monsoon came and with it came a breeze of relief for the people of Delhi-NCR as they woke up to cooler temperatures. The heavy rainfall led to the India Meteorological Department (IMD) issuing an ‘orange’ alert for the city. The alert hints at the possibility of traffic and waterlogging in the city. Several parts of the city saw water-logged roads.Besides Delhi-NCR, Mumbai has also received a ‘yellow’ alert from the IMD, pointing at a possibility of heavy to very heavy rainfall in isolated pockets across the city.

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Commuters during Monsoon rainfall in New Delhi. (Image: PTI)

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The IMD issued an ‘orange’ alert for the city. (Image: Express/Abhinav Saha)

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A minimum temperature of 23.8 degrees Celsius was recorded today morning. (Image: Express/Abhinav Saha)

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Commuters wade through a waterlogged road during Monsoon rainfall in New Delhi. (Image: PTI)

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The Red Fort during monsoon rains in New Delhi on June 29. (Image: PTI)

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People making their way through a waterlogged road in New Delhi. (Image: PTI)

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Vehicles move on a road amid rainin Mumbai. (Image: PTI)

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Commuters on a waterlogged road amid rainin Mumbai. (Image: PTI)

EU looking at petroleum products made from Russian crude oil in India finding way to its market

The EU on Saturday voiced concerns over “rapid” rise in refined petroleum products made from Russian crude oil in India finding way to the European market, saying it defies the purpose of the sanctions against Moscow that are aimed at reducing its ability to finance the war with Ukraine.The European Union’s Executive Vice-President and Commissioner for Trade, Valdis Dombrovskis, said oil products processed from Russian crude oil are arriving at the European market in “large quantities” and the grouping is looking at ways to deal with it.

In an interaction with a small group of journalists, the EU Vice President, currently on a visit to India, accused Russia of using its energy supplies, and food as “tools” of “war and manipulation” to continue its attack on Ukraine.On the issue of food, Dombrovskis cited Russia withdrawing from the Black Sea grain initiative and blocking Ukraine’s export of food grain to the world market.Since Russia’s invasion of Ukraine in February last year, the Western powers have imposed a series of sanctions on Moscow including a price cap on Russian oil by G7-plus nations, in order to reduce its ability to finance the war on Ukraine.

Dombrovskis said a series of sanctions were imposed against Russia, including in the area of exports of oil and oil products as energy supply is Russia’s “biggest source” of revenue.”We want to reduce Russia’s ability to finance the war,” he said.On EU’s trade ties with India, the Trade Commissioner said the grouping is looking at significantly expanding economic engagement with New Delhi.”

The EU is India’s second largest trading partner, accounting for some 120 billion euros worth of trading last year, which is 10.8 per cent of total Indian trade.”And India is the EU’s 10th largest trading partner, accounting for 2 per cent of EU total trade. But at the same time, we see that there is still lots of untapped potential,” he said.Dombrovskis said the EU is looking at making sure that its trade and investment cooperation with India becomes “much more intense”.”We know that we are currently working in a conflictual geopolitical situation. And in this context, the value of trust and reliability has increased substantially,” he said.”So, we also see Russia’s instrumentalisation of its energy supplies and now food as tools (of) weapons of war and manipulation – there is no such thing as just goods or political trade,” the trade official said.”So it’s all linked together, trade matters, geopolitics. But also friendships matter. So that’s why the EU-India strategic partnership is so important,” he said.

India-Central Asia: Advancing Regional Collaboration and Security

At the Second Meeting of the India-Central Asia Secretaries/National Security Advisers of the Security Councils’ several vital aspects of the India-Central Asia relationship were highlighted.

On October 17, 2023, in Kazakhstan, National Security Adviser Ajit Doval, and National Security Advisers and Secretaries of the Republic of Kazakhstan, the Kyrgyz Republic, the Republic of Tajikistan, and the Republic of Uzbekistan were present. Turkmenistan was represented through its Embassy in Astana.

Furthermore, in his address Doval stated that both regions face shared security challenges and threats from malicious actors within interconnected networks, endangering the collective neighbourhood.

This meeting, according to sources, marked a significant milestone in fostering cooperative efforts between India and Central Asian nations. And was built upon the foundation laid during the first India-Central Asia Summit on January 27, 2022.

Connectivity

Connectivity and economic integration emerged as a central priority for India, recognizing that well-executed initiatives could strengthen ties, explained sources. Yet, it was emphasized that any efforts in this direction should prioritize consultation, transparency, and participation, while respecting the sovereignty and territorial integrity of each nation involved. Moreover, according to sources quoted above environmental considerations and financial viability should guide these initiatives to prevent them from becoming burdensome.

During the meeting the absence of direct land access between Central Asia and India was highlighted as an anomaly, stemming from a deliberate policy of denial by a specific country. It was underscored that this situation not only undermines the interests of that country but also hampers the collective well-being of the entire region.

According to sources, India’s membership in both the International North-South Transport Corridor (INSTC) and the Ashgabat Agreement was noted, with invitations extended to Central Asian neighbours to utilize the Chabahar port for maritime trade. “This initiative is set to expand further, with Uzbekistan and Turkmenistan poised to join the INSTC, encompassing all five Central Asian countries.”

Digital Payment Security & Digital Public Infrastructural

Addressing digital public infrastructure and payment security, India offered to provide the United Payment Interface (UPI), patented by its Central Bank, to Central Asian nations at no cost. This technology could help establish sovereign, real-time digital payment systems tailored to their specific needs, fostering commercial linkages and aiding medical travellers, businessmen, and Indian students in Central Asia.

Strategic Mineral Collaboration & Rare Earths Cooperation

In a bid to bolster strategic mineral collaboration, India proposed the creation of an India-Central Asia Rare Earths Forum, aimed at fostering partnerships in rare earth and strategic mineral domains. Such collaboration would be based on mutual benefit, transparency, and long-term objectives.

Photo: MEA

Terrorism & Drug Trafficking

The ever-pressing issues of terrorism and drug trafficking were addressed, with a commitment to fully funded capacity-building programs in a range of areas to tackle these menaces effectively.

Cybersecurity

Cybersecurity cooperation was identified as a cornerstone of the relationship between India and Central Asia. India pledged to collaborate closely with Central Asian nations to bolster their defences against cyber threats, with an invitation extended to the Heads of the Cyber Security Agencies of Central Asian countries for a strategic cyber experience in India.

Afghanistan

The situation in Afghanistan remained a cause for concern, with shared priorities of providing humanitarian assistance, ensuring an inclusive government, combating terrorism and drug trafficking, and safeguarding the rights of women, children, and minorities. India’s active role in providing humanitarian aid was acknowledged, and the presence of the Afghan Cricket Team in India for ICC World Cup matches highlighted India’s support for sports in Afghanistan.

People to People Ties

People-to-people linkages and cultural ties were recognized as the strongest bonds between India and Central Asia. India proposed a seminar to foster deeper understanding of the history and context of Islam, contributing to peaceful coexistence and social harmony.

In a world beset by significant challenges, the meeting emphasized the value of dialogue as the primary means of resolving differences and disputes, with diplomacy at its core. India’s commitment to deep, meaningful, and sustainable engagement with Central Asian nations was reaffirmed, and the proposals presented by India to strengthen India-Central Asia linkages were appreciated by the participating Central Asian countries.

The meeting underscored the importance of regular dialogue between the Security Councils of the participating countries, given the common challenges of terrorism, extremism, and radicalization in the region. It was agreed that the third meeting of the India-Central Asia National Security Advisers/Secretaries of the Security Councils would be held in the Kyrgyz Republic in 2024, further cementing the commitment to regional security and cooperation.

Invesco marks up Swiggy valuation to $7.85 billion

Invesco, a US-based fund manager, which had slashed the valuation of Swiggy twice in four months, has finally pushed up the fair value of the food and grocery delivery platform. According to newly-published US regulatory disclosure, Invesco has valued the company at $7.85 billion, an increase from $5.5 billion previously, as of July 31, 2023.

While the latest move represents a 42% increase from what Invesco had last valued Swiggy at, the startup’s valuation is still 30% lower than what it was in January 2022.When Invesco led the $700-million fundraise in Swiggy in January last year, it valued the food tech platform at a staggering $10.7 billion, given that the food delivery market was riding on a high.

In August, Baron Capital, a US-based asset management company (AMC), had marked up the fair value of Swiggy by 34% effectively valuing it at $8.5 billion.

With the increase in fair value, Swiggy’s valuation of $7.85 billion was closer to rival Zomato, which was valued at around $7.7 billion as of July.

Since then, Zomato has, however, seen its share price zoom by over 30%, and is now valued at over $11 billion, due to an improvement in its financial health.

Invcesco holds 24,844 shares in Swiggy and each share was worth $7,666 in January 2022.

The share price reduced to $3,306 in January this year, when Invesco said Swiggy was worth $5.5 billion. As of July 31, Swiggy’s shares are worth $4,703 apiece.

Infra investments to double to Rs 143 trn in FY24-FY30

Infrastructure investments in India – public and private – will more than double in the seven-year period ending March 2030, to Rs 143 trillion, as compared to Rs 66.7 trillion between 2017 and 2023, according to a report.

These investments could play a crucial role in doubling the size of the economy to $6.3 trillion by FY31.

According Crisil’s Infrastructure Yearbook 2023, 70% of the initial NIP goal may be achieved by the end of FY25.

The report, however, identified a few policy impetuses required for ambitious goals to be realised. These include elaborate legal arrangements to ensure proper distribution of pay-offs and risk sharing to align incentives. It is also essential to develop new instruments, deepen the secondary corporate bond markets and tap into ESG funding (investments that are decided based on environmental, social and governance principles), it added.

The next phase of infrastructure development will be marked by growth in the average ticket size of projects and a significant number of mega-scale projects, Crisil said.

Appropriate and consistent policy and regulatory interventions and focus on timely execution build an attractive case for various stakeholders to accelerate investments across infrastructure sectors, it added.

“While the lion share of investments will come from the government in roads, railways and urban sector, the private sector is increasingly focussed on energy and transportation sectors,” senior director (transport, mobility and logistics) at Crisil Jagannarayan Padmanabhan said.

As for NIP, the Centre so far contributed 49% of the total investments, state governments 29% leaving the balance to be covered by the private sector. While roads, railways, urban and other infrastructure have drawn on government funding the private sector has dominated power and industrial sectors in terms of investments.

Of the total projected infrastructure spend till 2030, Rs 36.6 trillion or 26% will be green investments. This will be five times more than the amount invested in 2017-2023. “The biggest share in green investments of Rs 30.3 trillion will be in renewable energy followed by Rs 6.3 trillion in transportation,” Crisil said.

Of the total green investments in the power sector, non-fossil fuel additions will account for 78% of the share at Rs 22.4 trillion. Green infrastructure investments of Rs 3.9 trillion are expected till 2030 and the remaining will be in efficiency improvements and smart meters.

The green investments would be up to 75% financed by debt. Rest will some from equity, asset monetization and foreign direct investment. Debt will include overseas bonds and external commercial borrowings and loans from non bank finance companies and banks themselves. Tax incentives for investments in green bonds should also be considered.

Out of the total investments of Rs 7 trillion in the transport sector, 90% will be in green. The sharp increase in investments will be led by electrification of transportation sectors which will see investments increase in sectors like battery manufacturing, electric charging infrastructure and component manufacturing for electric vehicles. The hydrogen sector is expected to attract investments of Rs 1.5 trillion.

Among the sectors with the highest investment attractiveness score, roads and highways tops the list followed by power transmission, renewable energy and ports. At the bottom are conventional power generation, power distribution and urban infrastructure. Sandwiched between the two extremes is oil and gas, mining, airports, electric vehicles ecosystem and railways.

Management churn at Shoppers Stop leaves investors jittery

Shoppers Stop, the country’s oldest department store chain, saw its stock price tank over 12% on Friday on the Bombay Stock Exchange, after news emerged of the resignation of MD & CEO Venu Nair from the company. While the retailer has elevated Homestop head Kavindra Mishra as its new MD & CEO, effective September 1, Shoppers Stop has seen three heads in five years. This includes Rajiv Suri (June 2018-July 2020), Nair (Nov 2020-Aug 2023) and now Mishra, who has been appointed for three years only.

Shoppers Stop offered no reason for Nair’s exit, saying he was moving on for personal reasons. BS Nagesh, chairman, Shoppers Stop, said that Mishra, who has over 24 years behind him in the domestic retail industry, was an “excellent fit” for leading the company. “In the last five months, he has taken over the charge of Homestop and the commercial part of the Shoppers Stop business,” Nagesh said.

“Brands are finding it unfeasible to supply at 40-45% margins on consignment to department stores,” says Jaydeep Shetty, a Mumbai-based retail expert and consultant.

“Also, malls have become conservative about signing up department stores as their tenants because consumers are preferring single-brand showrooms instead where the shopping experience is different from a multi-brand showroom. All of this is putting pressure on the department store model,” Shetty says.

Nair was in the midst of revamping operations at Shoppers Stop including bringing the focus on value retail and giving a boost to its beauty retail operations. Under Nair, Shoppers Stop had forayed into value retail with ‘Intune’, taking on larger players such as Trent’s Zudio and Landmark group-owned Max Fashion in June. It was also billed as a bold bet for a retailer such as Shoppers Stop, which has traditionally positioned itself as a premium retailer of brands.

The move had also prompted the country’s largest organised retailer Reliance Retail to step into the value retail segment with Yousta, which was announced on Thursday. Like Intune, Yousta began its operations in Hyderabad, with plans to expand across the country. Intune has three stores – two in Hyderabad and one in Dombivli, near Mumbai, with plans to add another three more outlets in the coming months.

Nair had admitted on a recent earnings call that the apparel segment in general was witnessing moderation and that the value retail foray by Shoppers Stop could help the company tap into the growing trend for affordable fashion and lifestyle products, aiding sales growth.

That was an important statement for Shoppers Stop, which reported a nearly 37% year-on-year drop in net profit to Rs 14.5 crore in the June quarter of FY24, even as revenue grew only 4.8% versus the previous year to nearly Rs 994 crore.

On a yearly basis, the company had last reported a net profit of nearly Rs 114 crore in FY23 after three consecutive years of loss between FY20 and FY22 due to the Covid-19 pandemic. FY23 topline also jumped nearly 60% year-on-year to Rs 4,022 crore, the highest in six years, its results showed.

PhonePe launches stock broking platform

Walmart-owned Indian payments firm PhonePe on Wednesday said it had launched a stock broking platform Share.Market that went live with stocks and exchange trading funds, as it expanded its range of financial services.

PhonePe, which already offers insurance policies and allows users to invest in mutual funds through its payments app, will look to capitalize on its approximately 400 million user base as it enters a crowded Indian online stock broking platforms space with notable competitors such as Zerodha, Groww, and traditional names like Angel One and IIFL Securities.

The platform will charge users an onboarding price of 199 rupees ($2.40), while there will be no charge for trades of up to 400 rupees, the company said in a statement.

Gold Price Today, 30 August: Gold climbs on declining US yields, traders eye US GDP, Private payroll data

Gold Price Today, Gold Price Outlook, Gold Price Forcast: MCX Gold prices ascended on Wednesday, while silver rates tumbled 0.13%. On the Multi Commodity Exchange, gold October futures were trading at Rs 59,325 per 10 grams, up by Rs 59 or 0.10%. Silver September futures were trading down by Rs 96 at Rs 74, 589 per kg on the MCX.

Gold prices on Wednesday hovered near their highest levels in three weeks after lacklustre US jobs openings and consumer confidence data assuaged bets of interest rate hikes by the Federal Reserve this year, according to Reuters. Spot gold held its ground at $1,936.59 per ounce, trading close to its highest levels since Aug. 7 hit on Tuesday. US gold futures steadied at $1,964.30.

“Gold has support at $1922-1910 and resistance at $1948-1960, while silver finds support at $24.52-24.38 and resistance at $24.82-25.00. In INR, gold’s support is at Rs 59,100 and Rs 58,950, with resistance at Rs 59,450 and Rs 59,610. For silver, support in INR is at Rs 73,910 – 73,250, and resistance at Rs 75,440 – 76,040, Rahul Kalantri added.

Traders eye US GDP, Private payroll data

“Gold inched higher hitting a three-week peak as the dollar and Treasury yields slipped amidst weak economic data points. The dollar fell against its major crosses, reversing from earlier gains, after data showed that US job openings fell in July; benchmark 10-year Treasury yields also ticked lower from 10-month highs. The downbeat Job Openings and Labor Turnover Survey and consumer confidence reports suggest the Fed may not raise rates as much as previously anticipated, and that’s supporting bullions. US consumer confidence data was reported at 106.1 against the expectations of 116, raising questions on consumer spending and overall confidence in economic activities,” said Manav Modi, Analyst, commodity and currency, Motilal Oswal Financial Services.

“The probability for a pause in September Fed meeting has also increased from 80% to 88%, according to CME Fed-Watch tool, increasing safe-haven appeal for gold and silver prices. Investors this week will keep an eye on US personal consumption expenditures price index, and nonfarm payrolls for further clues on interest rate trajectory. Today’s focus will be on US GDP and Private payroll data, which if are reported lower than expectations it could further support gains for gold and silver prices,” Manav Modi added.

IPO irregularities: Sebi initiates third tranche of distribution of disgorged amount to 2.58 lakh investors

Capital markets regulator Sebi on Thursday said it has initiated the third tranche of distribution of nearly Rs 15 crore to 2.58 lakh investors from the disgorged amount in the matter of IPO irregularities observed during 2003-2005.

The regulator has already distributed Rs 23.28 crore in April 2010 and Rs 18.06 crore in December 2015, according to a release.

The regulator had investigated certain irregularities in the shares issued through 21 IPOs during the period 2003-2005 before their listing on the stock exchanges. Following the completion of the investigations, the Securities and Exchange Board of India (Sebi) directed certain persons to disgorge the illegal gains.

Under the chairmanship of former Judge of the Supreme Court of India D P Wadhwa, a committee was set up which recommended the procedure of identification of persons who have been deprived in the said IPOs and the manner in which reallocation of shares to such persons should take place.

As per the recommendations of the Wadhwa committee, 13.57 lakh persons had been identified as eligible investors for distribution.

Of 13.57 lakh investors, 10.02 lakh investors were paid the full eligible amount and 97,657 investors were excluded due to the costs involved.

“Sebi has initiated the third tranche for distribution of Rs 14.87 crore to 2.58 lakh investors from the disgorged/recovered amount in the matter of IPO irregularities on August 17, 2023,” the regulator said.

In the current exercise, Sebi is distributing amounts to those investors to whom partial amounts were paid earlier and are entitled to receive additional amounts.

Of 2.58 lakh investors, 1.15 lakh investors would be paid the eligible amount in full and the remaining 1.43 lakh investors would be paid in part.

Sebi said that wherever the bank details of the eligible investors are available, the amount is being credited to their bank accounts with an intimation to the investors. In cases where bank details are not available, payment warrants are being sent to the last known address of the investors.