Tag: Stock market tips India

PhonePe Group has turned adjusted profit after tax positive, reporting an adjusted profit after tax of Rs 197 crore for FY24, compared to a loss of Rs 738 crore for FY23. This marks the first time the company has reported a profit on consolidated numbers. Revenue for the company grew 74 per cent year-on-year to Rs 5,064 crore for FY24, up from Rs 2,914 crore in FY23.

The company stated that this achievement of top-line growth, coupled with sustainable bottom-line improvement, is a result of PhonePe’s focus on driving operating leverage through automation and cost efficiencies.

“We believe that a focus on disciplined financial management will help us continue progressing towards the profitability of our payments business, which by itself is a unique feat in the Indian context. We also believe that the optimisation of investments and capital allocation, combined with building a diversified revenue model and remaining customer-focused, will provide a solid foundation for sustained future success,” said Sameer Nigam, founder and CEO of PhonePe.

The standalone payments business recorded an adjusted profit after tax (PAT) of Rs 710 crore for FY24, compared to a loss of Rs 194 crore in FY23.
“Our financial strategy is anchored on three key pillars: predictable and sustainable growth in revenue, diversification of revenue streams, and continued improvements to the bottom line. These pillars have guided our strategic decisions, enabling us to scale rapidly while maintaining a focus on profitability and a healthy financial position,” said Adarsh Nahata, CFO of PhonePe.

PhonePe is the largest player in the UPI ecosystem and has also expanded into financial services, including insurance, lending, and wealth management.
The group also operates a consumer tech business called Pincode.

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The Securities and Exchange Board of India (Sebi) issued show-cause notices to Vijay Shekhar Sharma, founder of One 97 Communications Ltd (Paytm parent company), and board members who served during its initial public offering in November 2021 for alleged misrepresentation of facts, it was reported. The notices pertain to Vijay Shekhar Sharma’s alleged non-compliance with promoter classification norms. The Reserve Bank of India gave inputs for the probe, the report added.

One person in the know told the outlet, “Sebi is taking the view that Sharma should have been classified as a promoter, and it was also the fiduciary duty of board members of the company to verify the accuracy of the claims made by the founder and attest the same.”

The source added, “Although Sebi has gone after directors of a company in the past, they have been mostly cases of financial fraud. This is one of the rare cases where Sebi is trying to hold the directors responsible for a potential compliance lapse, which was also not pointed out either by bankers or statutory auditors.”

Another person in the know said as per the report, “A key issue in the case is that Sebi has initiated action three years after the listing. Sebi had known about the shareholding arrangement ever since the offer document was filed in 2021. In fact, subsequently, proxy advisory firms have also red-flagged the issue. However, Sebi initiated action only after the Paytm Payments Bank saga.”

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The Adanis on Friday sold close to 2.80 per cent of Ambuja Cements Ltd (ACL) for ₹4,250.64 crore, with Rajiv Jain-led GQG Partners picking up part of the shares.

Bulk deals data from the NSE showed Holderind Investments Ltd, a promoter entity, divesting 6.79 crore shares at ₹625.5 per share.

During the quarter ended June 30, 2024, Holderind held 50.90 per cent in the company at the end of the first quarter, with the total promoter stake at 70.33 per cent.

The Holderind stake is now down to around 48.14 per cent.

The data showed GQG purchasing 1.70 crore shares at ₹625.50 per share for nearly ₹1,068 crore, increasing its stake to 2.70 per cent from 1.35 per cent.

Other buyers were Axis Mutual Fund, Baroda BNP Paribas MF and ICICI Prudential MF.

Invesco MF, Mirae Asset MF, Canara HSBC Life Insurance Company, SBI Life Insurance, and National Pension System (NPS) Trust also bought Ambuja Cements shares.

Morgan Stanley and The Vanguard Group as well as Norway government’s pension fund bought shares.

While there have been speculations that the Adani family will use the proceeds to trim debt, sources close to the group denied such a move.

They said it is an “adjustment’’ done to keep the promoter interest at a desired level.

Gautam Adani had acquired the cement business of Holcim in 2022 which catapulted him as the country’s second largest player after UltraTech Cements.

Earlier this week, the Adani group said it has enough cash to cover more than 30 months of debt payments. The cash balance accounted for 24.8 per cent of gross debt of ₹2.41 lakh crore from 17.7 per cent a year earlier.

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IT major Cognizant’s subsidiary TriZetto has slapped a lawsuit on Infosys in a US federal court, accusing the Bengaluru-headquartered company of stealing trade secrets and information related to healthcare insurance software.

Infosys, in a statement, denied all allegations. The company asserted it is aware of the lawsuit and will defend its position in the court.

Cognizant in a lawsuit filed in Texas federal court has accused Infosys of illegally accessing data from TriZetto’s software, Facets and QNXT, and using the same to develop and market a competing product.

Cognizant offerings include TriZetto’s Facets and QNXT, which healthcare insurance firms use to automate tasks. Teaneck, New Jersey-based Cognizant has the bulk of its employees in India. Cognizant has reportedly alleged that Infosys misused TriZetto’s software to create “Test Cases for Facets,” which repackaged its data into an Infosys product.

Further, it has reportedly alleged that Infosys created software to extract data from QNXT, that contained confidential TriZetto information.

It is interesting to note that just this week, Cognizant named former Infosys executive Rajesh Varrier as global head of operations and India Chairman and Managing Director, following the resignation of Rajesh Nambiar, who is set to take over as Nasscom president.

Moreover, Cognizant’s Chief Executive Officer Ravi Kumar S is also an Infosys veteran, whose 20-year career at the Bengaluru-based firm saw him holding various leadership roles, including as President from January 2016 through October 2022.

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Markets regulator Securities and Exchange Board of India (Sebi) has barred industrialist Anil Ambani and 24 other entities, including former key officials of Reliance Home Finance from the securities market for five years for diversion of funds from the company.

Sebi has imposed a Rs 25 crore penalty on Ambani and banned him from any association with the securities market, including serving as a director or Key Managerial Personnel (KMP) in any listed company or intermediary registered with the regulator, for a period of five years.

Additionally, the regulator barred Reliance Home Finance from the securities market for six months and fined it Rs 6 lakh.

In its 222-page final order, Sebi revealed that Anil Ambani and RHFL’s top executives orchestrated a fraudulent scheme to divert funds from RHFL under the guise of loans to entities connected to him.

Despite the RHFL Board of Directors issuing firm directives to halt such lending practices and regularly reviewing corporate loans, the management disregarded these instructions.

Sebi concluded that the fraudulent scheme was executed by Ambani and the KMPs of RHFL, funnelling funds through credit-unworthy conduit borrowers, all of whom were linked to Ambani himself.

The market regular also said that Anil Ambani leveraged his position as the “chairperson of the ADA group” and his indirect shareholding in RHFL’s holding company to execute this scheme.

Sebi noted that loans worth hundreds of crores were approved for companies with little to no assets, cash flow, or revenue, suggesting a deliberate intent behind these loans. Most of these borrowers defaulted, resulting in RHFL’s own debt default and its eventual resolution under the RBI Framework. This left public shareholders, including over 9 lakh investors, with significant losses.

RHFL’s share price, which stood at Rs 59.60 in March 2018, plummeted to Rs 0.75 by March 2020 as the fraud unravelled.

Sebi imposed penalties on 24 restrained entities, including former RHFL officials Amit Bapna, Ravindra Sudhalkar, and Pinkesh R Shah, who played key roles in the fraud. Ambani was fined Rs 25 crore, Bapna Rs 27 crore, Sudhalkar Rs 26 crore, and Shah Rs 21 crore.

It also imposed Rs 25 crore fines on several other entities, such as Reliance Unicorn Enterprises, Reliance Exchange Next Ltd, Reliance Commercial Finance Ltd, Reliance Cleangen Ltd, Reliance Business Broadcast News Holdings Ltd, and Reliance Big Entertainment Pvt Ltd.

These entities were either recipients of the siphoned funds or intermediaries in the fraudulent diversion of RHFL’s resources.

The ruling comes after Sebi’s interim order from February 2022, which had already barred RHFL, Anil Ambani, and three others from the securities market for allegedly siphoning off funds from the company.

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