Tag: No. 1 SEBI registered tips provider

Best SEBI registered Intraday tips provider and Best SEBI registered stock advisory company

Telegram | Facebook | Twitter

Call: +91 9624421555 / +91 9624461555

Zerodha’s Nithin Kamath not looking to raise funds even as unicorns mushroom; wants this instead

India’s largest retail broker Zerodha will not join the likes of Cred, Groww and other promising startups who recently raised funds from investors. Zerodha’s founder Nithin Kamath took to Twitter to explain why his company is not looking to rope in investors even though funds have been lining up to invest. “Right now, is probably the stupidest time for fintech firms like Zerodha to be raising money. It is quite crazy the number of folks reaching out & the different deals,” Nithin Kamath said.

Zero debt, no marketing spends

Zerodha currently has over 32 lakh customers, beating traditional stockbrokers such as ICICI Securities, HDFC Securities and even new age brokerage firms such as Angel Broking. Kamath said that Zerodha does not need the money and will not raise funds “just because someone is ready to give it to you”. “We are profitable, have zero debt. And we don’t spend on marketing and advertising which is probably the single biggest reason for folks raising money,” he added.

Right now, is probably the stupidest time for fintech firms like @zerodhaonline to be raising money. It is quite crazy the number of folks reaching out & the different deals. We might regret it in the future, but we are not raising & here are the counterintuitive reasons why. 1/7
— Nithin Kamath (@Nithin0dha) April 7, 2021

Although he conceded that Zerodha might regret not raising funds in the future but remained adamant about not doing so. Nithin Kamath added that he does not want Zerodha to “grow just for sake of growth with random businesses”, but instead wants to build things around the company’s core competency.

Hard to continuously grow

Zerodha is the leading player in India’s stock brokerage industry by the number of active clients. Nithin Kamath, who is also the CEO of Zerodha, said that the business he runs is directly linked to the fortunes of the stock market. “The hotness of our industry can disappear overnight with a 20% fall in the markets,” he warned, adding that taking investor obligations to continuously grow would be hard in such an industry.

The discount brokerage has recently introduced steps that help customers from making trades that could result in significant losses using its ‘Nudge’ feature. Nithin Kamath said that this reduces their trading volumes but his company is focusing on getting the “right product for the customer”. “…all of these theses may be wrong. But the freedom of not being obligated to an investor is much more valuable than the biggest cheque,” he added. Zerodha has nearly 25% retail volume share in India and has one of the highest daily trades globally, according to a recent Bernstein report. Zerodha had self-assessed its value at $1 billion in 2020 when it went for an Espo buy-back.

Eqwires Research Analyst

Best SEBI registered Intraday tips provider and Best SEBI registered stock advisory company

Telegram | Facebook | Twitter

Call: +91 9624421555 / +91 9624461555

Reserve Bank sets up G-SAP for orderly functioning of G-Sec market

Reserve Bank of India (RBI) on Wednesday said it is putting in place a secondary market government securities acquisition programme or G-SAP 1.0 for this financial year to enable an orderly evolution of the yield curve.

According to the central bank, the endeavour through the programme will be to ensure congenial financial conditions for the recovery to gain traction.

Under the programme, which will be for the current financial year, RBI “will commit upfront to a specific amount of open market purchases of government securities with a view to enabling a stable and orderly evolution of the yield curve amidst comfortable liquidity conditions,” Governor Shaktikanta Das said while announcing the monetary policy.

For the first quarter of 2021-22, RBI will conduct a G-SAP of Rs one lakh crore and the first purchase of government securities for an aggregate amount of Rs 25,000 crore will be conducted on April 15, Das said.

“The positive externalities of G-SAP 1.0 operations need to be seen in the context of those segments of the financial markets that rely on the G-Sec (Government Securities) yield curve as a pricing benchmark,” he noted. He also said that extension of Held-to-Maturity (HTM) dispensation opens up space for investments of more than Rs 4 lakh crore.

According to him, RBI will continue to deploy its regular operations under the LAF, longer-term repo/ reverse repo auctions, forex operations and open market operations, including special OMOs, to ensure liquidity conditions evolve in consonance with the stance of monetary policy and financial conditions are supportive for all stakeholders. LAF is Liquidity Adjustment Facility while OMO refers to Open Market Operations.

The central bank also announced that it will conduct 14-day Variable Rate Reverse Repo (VRRR) auctions of longer maturity as indicated in the Revised Liquidity Management Framework announced on February 6, 2020.

The amount and tenor of these auctions will be decided based on the evolving liquidity and financial conditions, RBI said.

“This is a part of RBI’s liquidity management operations and should not be read as liquidity tightening. In fact, by paying a higher rate of interest on liquidity absorptions through the VRRR auctions, RBI is indirectly expanding liquidity,” Das emphasised. While laying out the liquidity management strategy for 2021-22, Das said RBI’s endeavour is to ensure orderly evolution of the yield curve, governed by fundamentals as distinct from any specific level thereof.

“Our objective is to eschew volatility in the G-Sec market in view of its central role in the pricing of other financial market instruments across the term structure and issuers, both in the public and private sectors,” he said. This is a necessary prerequisite for the nascent and hesitant recovery to firm up and become durable. Das also urged market participants to pay heed to RBI’s actions, communication and signals in a balanced manner.

“Together, we can overcome the challenges and lay the foundations for a durable recovery beyond the pandemic. Let us prepare for our tryst with our potential firmly,” he added.

Besides, the central bank has extended on-tap Targeted Long Term Repo Operations (TLTRO) by six months till September 30. The scheme was announced in October last year and was available till March 31, 2021.

To ensure continued flow of credit to the real economy, RBI has also extended fresh support of Rs 50,000 crore to All India Financial Institutions (AIFIs) for new lending in the current financial year.

Accordingly, Rs 25,000 crore will be provided to NABARD; Rs 10,000 crore to National Housing Bank (NHB) and Rs 15,000 crore to Small Industries Development Bank of India (SIDBI). Further, the timeline for banks to on-lend through non-banking finance companies has been extended by six months to September 30.

Eqwires Research Analyst

Best SEBI registered Intraday tips provider and Best SEBI registered stock advisory company

Telegram | Facebook | Twitter

Call: +91 9624421555 / +91 9624461555

Refiners deepen cuts to Saudi oil purchases in May, say sources

Indian state refiners will buy 36% less oil from Saudi Arabia in May than normal, three sources said, in a sign of escalating tensions with Riyadh even after the Kingdom supported the idea of boosting output from OPEC and allied producers last week. Energy relations between India, the world’s third-biggest oil importer and consumer, and Saudi Arabia have soured as global oil prices spiked.

New Delhi blames cuts by the Saudis and other oil producers for driving up crude prices as its economy tries to recover from the pandemic. State-run refiners have placed orders to buy 9.5 million barrels of Saudi oil in May, compared with the previously planned 10.8 million barrels, three sources said.

The refiners – Indian Oil Corp, Bharat Petroleum Corp, Hindustan Petroleum Corp and Mangalore Refinery and Petrochemicals Ltd – normally buy 14.8 million barrels of Saudi oil a month. The decision to place nominations for less oil was taken on Monday, within two days of a telephone conversation between Indian oil minister Dharmendra Pradhan and his Saudi counterpart Prince Abdulaziz bin Salman on Saturday, three sources said.

Contents of the conversation between the two ministers is not known. A source familiar with Saturday’s conversation between the ministers said the talks were “positive”. The Indian companies did not respond to Reuters’ requests for comment. Saudi Aramco declined to comment.

The Organization of the Petroleum Exporting Countries (OPEC) and its allies, known as OPEC+, agreed on Thursday to a gradual easing of their oil output cuts from May after the new U.S. administration called on Saudi Arabia, the de facto leader of the producer group, to keep energy affordable for consumers.

On Sunday Saudi Aramco, the kingdom’s state oil company, raised the official selling price, or OSP, of its oil for Asia while cutting it for Europe and American markets. “We were surprised when they announced cuts for other markets while raising OSPs for Asia,” said one of the sources. India suggested that refiners look for energy alternatives to Gulf oil, its main source of crude.

Tensions between the two countries escalated further after Abdulaziz last month advised India to use the stocks of crude it bought cheaply during the price slump in 2020. Pradhan termed Abdulaziz’s response as “undiplomatic”. To dial down the disagreement, Abdulaziz last week said that Aramco maintained normal April oil supplies to Indian refiners while cutting volumes for other buyers and conceded that voluntary output curbs have put “Aramco in some difficulty with some of its partners”.

He also said that Saudi Arabia will phase out its additional voluntary cut in stages by July. Indian state refiners, meanwhile, have begun diversification of purchases to include Brazil’s Tupi grade, Guyana’s Liza oil and Norway’s Johan Sevredrup in their crude diet.

“We’ve always believed that crude supply should be market-determined rather than artificially managed,” Arindam Bagchi, spokesman for the foreign affairs ministry, said on Friday. He said that even though OPEC+ has announced a slight easing of oil output cuts, they are still far below India’s expectations.

Eqwires Research Analyst

Best SEBI registered Intraday tips provider and Best SEBI registered stock advisory company

Telegram | Facebook | Twitter

Call: +91 9624421555 / +91 9624461555

Barbeque Nation IPO is Domino’s gain: Jubilant FoodWorks doubles its money in just two months

Barbeque Nation’s much-awaited IPO could help its rival Domino’s parent firm Jubilant FoodWorks double its money in nearly two months time. Jubilant FoodWorks, the owner of Domino’s Pizza in India, had invested Rs 92 crore in Barbeque Nation, picking up shares for Rs 252 apiece in January this year. Now, with the IPO price band fixed at Rs 498-500 apiece, Jubilant’s investment could multiply. Barbeque Nation’s Rs 453-crore public issue opens for subscription tomorrow.

Jubilant FoodWorks to double its money

Ahead of the IPO, Jubilant FoodWorks was among investors that were allotted shares for Rs 252 apiece on a preferential basis in a pre-IPO placement. Jubilant FoodWorks was allotted 36.5 lakh equity shares for Rs 92 crore in January of this year, according to the RHP filed by Barbeque Nation.

Percentage terms, Jubilant FoodWorks now owns a 10.72% stake in the company, making it the third-largest shareholder behind promoters SHKSL and Tamara Private Limited. In less than two months since the pre-IPO placement, the value of Jubilant FoodWorks’ stake has doubled to Rs 182 crore at the higher end of the IPO price band. However, it is not known if Jubilant FoodWorks is looking to sell its gains on listing or hold the stake.

Jubilant FoodWorks operates in the same industry as Barbeque Nation. Among the likes of Burger King India, Speciality Restaurants Limited and Westlife Development, only Jubilant FoodWorks has a positive P/E ratio of 140.05. All others have a negative P/E ratio. Jubilant is also the only firm operating in the industry with a positive return on net worth, according to the RHP filed by Barbeque Nation.

Rakesh Jhunjhunwala among investors

Barbeque Nation also counts Rakesh Jhunjhunwala’s Alchemy India as an investor in the firm with a 1.69% stake. Earlier last year, Alchemy India was among the shareholders looking to sell its holdings through the IPO. Now, Alchemy India has decided against it and will continue to hold its stake till Barbeque Nation makes its stock market debut.

The IPO of Barbeque Nation is an amalgamation of a fresh issue worth Rs 180 crore and the remaining is an offer for sale (OFS) by existing shareholders including promoters Sayaji Housekeeping Services. The promoter and promoter group shareholding will come down to 37.79% through the IPO while public shareholding will increase to 62.21%. Barbeque Nation is looking to raise funds to open new restaurants and repayment of borrowings made by the company.

Eqwires Research Analyst

Best SEBI registered Intraday tips provider and Best SEBI registered stock advisory company

Telegram | Facebook | Twitter

Call: +91 9624421555 / +91 9624461555