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Monday, January 27, 2020

economic news of india - world economic news - economics news for students - indian economy news

economic news of india - world economic news - economics news for students - indian economy news


Rakesh Jhunjhunwala being probed for insider trading

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Mumbai: Billionaire investor Rakesh Jhunjhunwala is being probed by Sebi for alleged insider trading in the shares of Aptech Ltd, an education firm owned by him and family, said two people familiar with the development.The markets regulator is also investigating the role of other family members who are shareholders, as well as some board members, including investor Ramesh S Damani and director Madhu Jayakumar, the persons added.ET couldn't ascertain the details of the Sebi probe, such as the period during which the alleged trading took place or the information based on which it was carried out. In its notice to Jhunjhunwala and others, the regulator has sought cooperation in its investigation. 73682551 Besides Jhunjhunwala, wife Rekha, brother Rajeshkumar and mother-in-law Sushiladevi Gupta were called for questioning by Sebi on January 24. Jhunjhunwala appeared before Sebi's investigating officer and was questioned for at least a couple of hours at the regulator's headquarters in Mumbai's Bandra-Kurla Complex.Bought into Aptech in '05Jhunjhunwala, along with his lawyers, told the investigating officer that he was representing his family.Jhunjhunwala's sister, Sudha Gupta, was called for questioning on January 23. Ushma Sheth Sule, sister of Rare Enterprises CEO and Aptech director Utpal Sheth, has been asked to appear for questioning on January 28. Rare Enterprises is Jhunjhunwala's asset management firm.Jhunjhunwala, often referred to as India's Warren Buffett for his ace stock-picking skills, is one of the country's richest individual investors, holding shares worth almost Rs 11,140 crore, according to Bloomberg estimates. He first bought into Aptech in 2005 at Rs 56 a share. Since then, his stake — along with his family members — has risen to 49% with a market value of Rs 690 crore based on Aptech's closing price of Rs 173 on the BSE on Monday. Aptech is Jhunjhunwala's only investment where he wields management control.In response to an emailed query, Jhunjhunwala's office called to say that he and his wife had "no comments" to offer. His brother Rajeshkumar, in an emailed response, also said he had no comments to make. Sushiladevi Gupta, Ramesh Damani, Madhu Jayakumar, Sudha Gupta, Ushma Sheth Sule, Aptech and Sebi didn't respond to emailed queries.Also summoned by Sebi on January 20 were Rare Enterprises' employee Amit Shah and Geojit Financial Services' Satish Anam. Shah and Anam didn't respond to queries. Geojit's role in the affair is not clear as of yet. This is not the first time Jhunjhunwala has come under Sebi's scanner. The regulator had questioned him in 2018 for suspected insider trading in Geometric, which is now a part of HCL Technologies. Jhunjhunwala later settled the case through consent by paying Rs 2.48 lakh. Consent is a mechanism through which alleged violations can be settled by paying a fee to Sebi without admission or denial of guilt.

Chinese firms cross the Great Wall to India

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BENGALURU: Over a dozen new China-domiciled corporations, venture funds and family offices are aggressively stepping up investment conversations with Indian startups as they look to move beyond the slowing market for technology investment in Asia's largest economy.The heightened interest in early-to-growth-stage Indian firms coincides with fewer Chinese startups going public, uncertainty caused by the country's ongoing trade war with the US and overall sobering of valuations after the WeWork debacle, said multiple founders and startup investors.Take part in ETRise Top MSMEs, India's definitive ranking for Micro, Small & Medium EnterprisesBoyu Capital, Horizons China, Sinovation Ventures, Legend Capital, ZhenFund, XVC Capital and Integrated Capital are among the new funds scouting for deals, people who have engaged with these companies told ET.Corporate venture capitalists such as "Jingdong, Kunlun, Kuaishou, Ping An and YY.com, which have been evaluating India from the sidelines, are also looking at the country as a top investment market beyond China", said one of the persons.To be sure, India is not a fresh hunting ground for Chinese investors. Mega corporations, from Alibaba's Alipay to Didi Chuxing, Xiaomi and Tencent, are well-entrenched in the Indian startup ecosystem, having backed the likes of Paytm, Swiggy and Ola.But now these tech giants and other early entrants such as CDH Investments, BAce Capital, Qiming Venture Partners, Morningside Ventures, Fosun, Hillhouse Capital, GGV Capital and Meituan are also accelerating investment activity.This has led to a near-doubling of Chinese investments in Indian startups to $3.9 billion in 2019 up from $2 billion in the previous year, as reported earlier by ET."These investors have seen a similar bull cycle play out in China 5-8 years ago, and believe that India is now at an inflection point with enormous potential for technology and consumer investing," said Pratik Poddar, principal at Nexus Venture Partners, an early-stage fund. 73683491 India-based investors believe slowing returns from venture and private equity deals in China over past five years is also a big reason why Chinese firms are looking away from their home country. In the fourth quarter of 2019, venture investments in tech startups in China dropped 51.5% over the previous year, according to the China Academy of Information and Communications Technology, a government-backed research institute."At the same time, early investors such as Shunwei Capital, Xiaomi, Fosun, Ant Financial and their large investments in (India's) Zomato, Delhivery, ShareChat and Paytm have spurred interest in the Indian ecosystem," said Anup Jain, managing partner, Orios Venture Partners.Though India is also seeing some rationalisation in valuations, political stability and positive macro indicators like smartphone penetration, implementation of GST as well as the network created by Aadhaar have boosted investor confidence, said experts.MOVING FASTER ON DEALSIndian entrepreneurs are of the view that Chinese investors are now moving faster on deals, matching up valuations and are open to striking more flexible investment rights. This is especially true in sectors such as fintech, social commerce and content, said a founder who recently raised money from Tencent. The tech major, which operates messaging app WeChat, is one of the most active strategic investors in India, having taken fresh wagers on insurance marketplace PolicyBazaar, business-to-business ecommerce portal Udaan and video streaming platform MX Player, aside from writing smaller cheques.MX Player is owned by Times Internet, a part of The Times Group, which publishes ET.With a portfolio of more than a dozen companies, Tencent is in talks to back education technology startup Doubtnut and online self-publishing platform Pratilipi."Most of these funds already have a small exposure to India, and the intent is to accelerate their presence wherever they see parallels with China," said a fund manager.While Qiming made its first bet in India last year with Pratilipi, GGV backed KhataBook and Udaan, and CDH invested in startups such as Cashify and GlowRoad."Some funds and corporate VCs have tasted success in fintech, social commerce, gaming and content businesses in China, and want to leverage those learnings and take a similar path in India," said Ashish Sharma, CEO at venture debt fund InnoVen Capital India. "However, even with this exposure, their India allocation is quite small compared with the overall corpus," he added.HIRING PROSOver the past few months, Chinese venture funds like Shunwei Capital, CDH Investments, Hillhouse, GGV, Mount Judi Ventures, Morningside Ventures, Tencent and Fosun have hired investment professionals in India as they look to step up deals.Others are relying on investment banks and networks to reach out to entrepreneurs. In October, ET had reported that China's investment banking majors, including TH Capital, China International Capital Corporation and Industrial & Commercial Bank of China, are on the lookout for deals in India. Also keen on investing are emerging investment banks such as Fanzhou Capital and Fusion Capital.

Modi may let go of some silverware in Budget

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NEW DELHI: Budget 2020 is expected to give a renewed push to disinvestment and asset monetisation as the government strives for capital creation and investment promotion in the economy by augmenting non-tax revenue.A top official told ET that the budget is likely to relax long-term capital gains tax and dividend distribution tax norms, besides setting a clear road map for the government to sell or significantly cut its stake in select PSUs and giving the proceeds to other shareholders for funding their capex. "The focus will be to create more space for private sector through disinvestment and asset monetisation," the official said. Finance minister Nirmala Sitharaman will present the Union Budget on February 1."Disinvestment proceeds from listed PSUs with other stakeholders cannot be sent to the Consolidated Fund of India. This money should go back to them to help fund their expansion plans," the official explained. 73674749 NITI Aayog had proposed disinvestment in 26 sick PSUs, out of which the Cabinet has approved almost 20. However, delays at line ministries have meant disinvestment in the current financial year so far has remained low.While work has started on divestment of Air India, Bharat Petroleum and Concor, efforts are being made to bring down stakes in other PSUs to below 51%, including in BEML, Pawan Hans and Projects India.Against the disinvestment target of Rs 1.05 lakh crore for FY20, the government has raised Rs 18,094.59 crore so far. That compares with Rs 84,972.16 crore obtained from disinvestment in FY19 against the budget estimate of Rs 80,000 crore.With two months to go, the government is aggressively pushing to monetise assets of the Centre and central public sector enterprises, including guest houses, office space, apartments, factories, land, power transmission assets and sports stadiums.Stock market experts have sought abolition of long-term capital gains tax on equities and mutual funds, and a shift from dividend distribution tax levied on companies to taxing dividend in the hands of investors. According to the official, pushing investment demand in the domestic market and increasing exports can help improve the economy. "The worst is over and the economy will start looking up in the fourth quarter."India's exports fell 1.96% to $239.29 billion in the April-December period and imports declined 8.9% to $357.39 billion, leaving a trade deficit of $118.10 billion. It is estimated that overall exports for the current financial year will be $330-$340 billion, compared with last year's level of $331 billion.Economic growth fell to a 26-quarter low of 4.5% in the second quarter. The government has projected FY20 growth at 5%, which is a multi-year low. 73675960

Meet the brains behind Budget 2020

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By Vrishti Beniwal and Siddhartha SinghIndia's Prime Minister Narendra Modi has taken a keen interest in the preparation of the government's upcoming budget to help spur growth in Asia's third-largest economy.Modi and his Finance Minister Nirmala Sitharaman have separately held meetings with dozens of economists, industry leaders and farmers' groups, among others, to hear views on measures needed to solve the growth slowdown puzzle.As Sitharaman prepares to deliver her budget speech on Feb. 1, here's a look at five key people in the government who are working behind the scenes to draw up the income-and-spending plan.Rajiv Kumar, Finance SecretaryKumar, the top bureaucrat in the finance ministry, has overseen bold banking reforms, including a plan to merge state-run banks and a massive recapitalization drive to help lenders laden with one of the worst bad-loan ratios in the world. He is expected to provide vital inputs to steer the shadow banking sector out of crisis, and give a push to credit growth to boost consumption in the economy.Atanu Chakraborty, Economic Affairs SecretaryChakraborty, a government-assets sale expert who took charge of the economic affairs department in July, consigned India's maiden overseas sovereign bond sale plan to the back-burner. While economic expansion slipped below 5% under his watch, a panel led by him prepared a more than $1 trillion infrastructure investment program to revive growth. His inputs are critical to determining India's budget deficit goal, as also raising resources to pump- prime the economy.T.V. Somanathan, Expenditure SecretarySomanathan, the latest entrant to the finance ministry, has his task cut out: rationalizing government spending in a manner that it boosts demand and minimizes wasteful expenditure. Having worked in the prime minister's office earlier, he would probably understand better what kind of a budget Modi would like to see.Ajay Bhushan Pandey, Revenue SecretaryPandey is assigned with raising resources and is probably the bureaucrat most under pressure, given lower-than-estimated revenue collection amid a slowdown. With $20 billion worth of corporate tax cuts last year yet to yield results in terms of investments, he might influence the adoption of some of the proposals in the Direct Tax Code, which has suggested doing away with some of the exemptions.Tuhin Kanta Pandey, Disinvestment SecretaryHe is responsible for the strategic sale of Air India Ltd. and other state-owned companies, with divestment forming a major chunk of the government's income mobilization efforts. Although the current year's target of 1.05 trillion rupees is likely to be missed by a mile, a huge target next year isn't ruled out.

Cipla, PAG eye Wockhardt’s formulations business

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New Delhi| Mumbai: Cipla and Asian buyout fund PAG are vying with each other to acquire a big chunk of Wockhardt's domestic formulations business for Rs 2,100-2,800 crore ($300-400 million) as the indebted pharmaceutical company looks to deleverage its balance sheet, said people aware of the matter.Both submitted binding offers recently, they said. Habil Khorakiwala-led Wockhardt is expected to finalise one bidder and begin final negotiations to conclude the transaction.The company has a significant presence in major therapeutic segments including cardiology, dermatology, diabetes, respiratory diseases and ophthalmology. A carveout of the portfolio is being planned, said the people cited above. The stock surged 20% on Monday to end at Rs 358.80.Co Posts Q3 Net of Rs 19 crIn the nine months ended December 2019, the company repaid ?768 crore toward various long-term debt obligations as per schedule, up from Rs 750 crore in the year earlier. Debt repayment in the December quarter was Rs 359 crore, up from Rs 347 crore a year earlier. The gross debt-equity ratio on December 31 was 0.95. Total debt at end of September 2019 was Rs 2,211 crore. ET was the first to report on July 4 last year that Khorakiwala had appointed investment bank Moelis to initiate a formal process for a stake sale in the business. Last year, the company tried to raise money through foreign bonds, sale of its hospital division and a private equity fundraise in its listed entity.Lack of investor interest forced the company to eventually spin off its cash cow — and sell it to raise capital.The company didn't respond to queries. Spokespersons for PAG and Cipla declined to comment.Wockhardt, which launched nine new products for the domestic market in FY19, has incurred losses in the past three years on a consolidated basis. On Monday, however, it reported a consolidated net profit of Rs 19.21 crore in the December quarter against a net loss of ?71 crore in the year-ago period. This is the company's first quarterly profit in three years. 73683754 Revenue though dropped to Rs 869 crore from Rs 1,046 crore. Wockhardt said business performance showed a marked improvement with sales growth of over 8% from the previous quarter. Earnings before interest, taxes, depreciation and amortisation (ebitda) for the quarter showed a substantial improvement to Rs 109 crore in the December quarter from Rs 19 crore in the year earlier. Ebitda in the first nine months of FY20 improved to Rs 208 crore from Rs 100 crore.BACK IN BLACK"While the company has been reporting steady ebitda quarter-on-quarter, the company bounced back into profit for the first time in the past three years due to a marked improvement in operational performance and cost rationalisation," it said in a statement.Earlier in the month, the drugmaker announced it had received approval from the country's drug regulator to market Emrok IV and Emrok (oral) to treat acute bacterial skin infections, including diabetic foot, caused by superbug methicillin-resistant staphylococcus aureus (MRSA). Their launch is expected in the next few months and will be primarily used on the critically ill.Wockhardt employs more than 7,000 people and has a presence in the US, Britain, Ireland, Switzerland, France, Mexico, Russia and other countries. It has manufacturing and research facilities in India, the US and Britain, and a plant in Ireland.For Asia-focused private equity fund PAG, this could be its first buyout in India after its 2019 entry. PAG is looking at deploying more than $1 billion in India over the next three years, a senior company executive told ET in a recent interview.SPENDING ON MEDICINESAs per an August 2019 research report by ICICI Securities, Cipla currently has a 5% share of the domestic formulations business. The company has been trying to expand its market share organically and inorganically."With this transaction, Cipla will be able to speed up its growth. Cipla has a significant presence in urology, respiratory and antibiotics segments. However, it is facing incremental challenges. They need a portfolio and this acquisition will help boost its domestic presence," a pharma analyst said.ET could not independently verify the portfolios for divestment.Spending on medicines in India is projected to grow 9-12% over the next five years, putting it in the top 10, according to the Indian Brand Equity Foundation's October 2019 report on the country's pharmaceutical sector. India's pharmaceutical industry is expected to expand at a compound annual growth rate (CAGR) of 22.4% in 2015–20 to reach $ 55 billion."Going forward, better growth in domestic sales would also depend on the ability of companies to align their product portfolio towards chronic therapies for diseases such as such as cardiovascular, anti-diabetes, anti-depressants and anti-cancers that are on the rise," the report said.

Clashing dreams of MDR and digital

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Digital payments growth in India in the past five years has registered a CAGR of 128%. But on a larger base and with increased penetration, the drive toward a digital economy is showing signs of plateauing. Last year, growth was 35% across all channels.The number of debit cards has stagnated at 900 million, while the number of UPI transactions — nearly doubling every month until 2018 — has also stabilised at singledigit monthly growth rates."But it is to be noted that growth is on a higher base; much more sustainable and assured. There are more industry players now and stronger fundamentals," said Vijay Shekhar Sharma, chief executive and founder, Paytm. "Any which way, the business of digitisation of retail and wholesale payments will allow incremental addition of financial services to reach places where they have not."It is natural for growth to slow on a larger base due to compounding effects. But it also means that customer acquisition will become more expensive. Now, in the absence of merchant discount rate (MDR) charges, these companies will have to evolve models that depart from the traditional fee-based income. That shift in business strategy is necessary to ensure profitability for these companies, and establish them as attractive investment options. In 2019 alone, payment companies attracted $1.6 billion worth of investments.However, collective losses for leading payment companies, backed by Alibaba, Walmart and Amazon, exceeded $1 billion in FY19. In all likelihood, FY20 would also be the same."The debate on how zero MDR will help in expansion of payment networks is for another day. There is no doubt, however, that operating a payment company without any fee income would eat into revenues, at least in the short run," a senior executive at a leading payments company told ET, requesting anonymity.The size of the player and nature of its operations would determine losses suffered. "Different players will be impacted in different ways," the official said.Paytm is the largest payments gateway in the country by far, with over 40% market share in terms of the number of transactions processed. In FY19, just its cost of acquiring new customers and merchants exceeded its revenue. The SoftBank-backed payments major had spent almost half its total expenditure on customer acquisition, at Rs 3,508 crore, which is Rs 275.88 crore more than its total operational revenue of Rs 3,232 crore. Net loss came at Rs 4,217 crore.Similarly, Google Pay spent Rs 1,028 crore just for cashback on daily transactions in FY19. PhonePe's loss of Rs 1,905 crore was nearly five times its revenue, whereas Amazon Pay had Rs 1,161 crore loss."Only those companies would survive that can provide a layer of value-added services for its customers," said Ashneer Grover, cofounder, BharatPe. "Without a flexible and evolving business strategy, where new merchant and customer acquisition cannot be monetised, it would be hard for most companies to survive in these tough market conditions."BharatPe, for instance, has tied up with non-banks to provide credit facilities to the 6 lakh-plus merchants it has acquired. It uses transactional data on its platform to underwrite loans for these merchants, providing them easy credit and debt facilities.Such neobanking services may become the norm as the payments industry moves away from bread and butter solutions. Today, all major payments companies are trying to diversify product portfolios, either offering or piloting services related to credit, insurance and even wealth management.The challenge is not just to keep acquiring customers at hefty costs, but to face the reality that the payments business in India will fetch no gains as long as the revenue model is primarily fee-based."While, I am on the side of MDR becoming zero being a good thing for the merchant, the government should reimburse the people who are acquiring merchants," Sharma told ET in a recent interview. "Traditionally, the acquiring side has worked on a thin margin, which is the reason it has not spread to nooks and corners. If you look at Paytm's merchant acquisition model, it has come at the cost of our equity. And we have invested ?15,000 crore in the past."As opposed to those with deep pockets and funded by global giants, several domestic payment services providers are more modest and circumspect. "Why would anyone, or rather, who is that anyone that is going to acquire merchants now? On the acquiring side, who will bell the cat and give merchants POS terminals without any remuneration?" asked Anand Bajaj, chief executive, PayNearby, a payments company.To be sure, MDR is the collective transaction fee levied from merchants processing the digital transactions by payments companies, banks and network providers such as Visa and Mastercard. Until 2019, this was capped at 0.3% of the transaction amount on payments made through UPI above Rs 1,000 and 0.6% for debit card transactions above Rs 2,000.Finance minister Nirmala Sitharaman all but ruled out budgetary support on MDR losses at a recent private meeting with a delegation of top payments firms executives that included Paytm's Sharma and PhonePe's Sameer Nigam. That would raise the pressure on payments companies to alter revenue models. The message that was delivered to the six-member representation was the same given by Sitharaman in her debut budget speech in July: "Banks will be asked to invest the money they save on account of having to handle less cash, on their acquiring business and deploying POS machines," she had then said.

US PE firm Vista unfair to us: Accelya minority shareholders

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Mumbai: Accelya Solutions' minority shareholders, including SBI Mutual Fund, VLS Finance and Alpha Alternatives Advisors, have complained to market regulator Sebi, alleging unfair treatment by US private equity firm Vista Capital Partners in the buyout of the Indian company.Minority investors claimed the open offer price announced by Vista Capital Partners for buying out Accelya is at a significant discount to the fair value of the company, and that the valuation methodology used by the valuers is wrong.Vista Capital officials could not be reached for their comment.Vista Capital Partners, a US-based investment firm focused on enterprise software, data and technology-enabled businesses, acquired 100 per cent of Accelya Topco in November last year from Warburg Pincus. Accelya Topco, in turn, holds 74.66 per cent stake in India listed Accelya Solutions (ASIL).SBI Mutual Fund and VLS Finance held 2.08 per cent and 1.75 per cent, respectively, in the company as on December 31, 2019. Shares of Accelya Solutions ended at Rs 1,050.35 on Monday.On January 9, Vista Equity Partners filed the offer to acquire 25.34 per cent shares of ASIL from public shareholders at Rs 956.09 per share. The letter by minority shareholders said that the open offer price is at a significant discount to the fair valuation of the company, and unjust to minority owners."In February 2017, Warburg Pincus had made an open offer to minority shareholders at Rs 1,250 per share. Since then the revenue/EBITDA and PAT of the company have increased by 28 per cent. Also, the company would benefit from the corporate tax cut announced in September 2019. Despite the above, the open offer price in current open offer has been reduced by 25 per cent compared to February 2017," said a letter jointly signed by SBI Mutual Fund, VLS Finance and Alpha Alternatives Advisors.Minority shareholders requested Sebi to appoint an independent valuer. For stocks not frequently traded, the valuation of shares must be done by independent merchant bankers other than the manager of the open offer, they said.

The big-will-get-bigger thesis on D-St is bound to fail. Here’s why

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N Jayakumar, MD, Prime Securities, says those who invested in top 10-15 index stocks are in a classic Venus flytrap. If everybody invests in the same 10-15-20 stocks or the index, can everybody make money? he asks. What do you want to discuss first: coronavirus, Budget or Nifty50 numbers?The Budget is the easiest to get out of the way. Walk in with zero expectations and you will not be disappointed.But is it really that easy? The market does not seem to be going into the event with zero expectations?The market will not react to any stimulus, which it may or may not be expecting from the Budget. There are very limited expectations. The market is definitely talking about some tweaking of the taxes, and maybe hoping for a few sops in certain pockets. For instance, an income-tax cut seems to have been factored in and taken for granted. What has changed in India is the structural way of doing businesses. Zero equity or negative equity projects, where the Indian promoter did not bring in his own equity but essentially borrowed from banks and used that as his own equity, have completely gone. Capex is dramatically down, and banks are now very clearly asking searching questions on equity. Today, there is no dearth of debt. The system has to be recapitalised with more and more equity coming in from promoters. The banking system needs to be capitalised by the government and the private sector lenders bringing in their own capital. The entire lending process has undergone a dramatic change. There is surplus liquidity, but people are not lending easily as the risk appetite has gone down. You could say, animal spirits are dead. Now, for new projects to come up, there has to be a cycle. The first sign of that is old projects getting bid for. That is the IBC process, where existing capacities are being taken up by people who have got some amount of equity – be it JSW acquiring Bhushan or Tata Steel acquiring a couple of names. Once that process of resolution goes in, capacity goes back to different hands. Then over the next couple of years, people would start talking about greenfield projects and new capacities. Until that time, this system is going to be awash with debt, which will not come without equity being thrown in. That is a big structural change. People have been crying hoarse that the top 10-15 index stocks are not reflecting the economy. And why will they reflect the economy? At the end of the day, the thesis was that the big will get bigger, which is what people are playing for. How long will you keep having money flow, ratify your thought process, saying if everybody invests in the same 10-15-20 stocks or the index, everybody will make money. That thesis has to fail. This is the what I call the classic Venus flytrap, where everybody walked in and said we are feeling safe because night or day, hail or sunshine, we invest in HDFC, HDFC Bank and a bunch of such stocks and we are good to go at 15 per cent a year compounded. Our portfolio will grow! The index has got a lot of headwinds in the 12,300-12,400 range, and we may well be in a range, which to my mind stands broadly at 11,500-12,500. So we are at the top end of this range. So, where does this money move? As people realise this hiding in security numbers is not the way to move forward, people will go back to stock picking. That is why I said leave the Budget out. Coronavirus is an unknown, in a manner of speaking. We do not really know how far this can go. So that is difficult for me to talk about it. The communication from China itself is reasonably moderated and articulated, we are not sure of the impact. Among these known and unknown, what is fairly clear is that you got to go back to stock picking; instant gratification will not come. There are pockets which offer a lot of comfort, but beyond all these noisy inputs, a few green signals are emanating. If I look at the stocks that are at 52-week high, I have gone beyond Nifty50: there is an Info Edge, a Spencer, a Bata, a Relaxo, PVR, Jubilant Foodworks, Hawkins. The screen is telling you, let us move outside Nifty50. Stocks that are now at 52-week highs, even in this midcap rally, are largely consumer-facing niche brands, low debt, high return-on-equity businesses?And non-equity diluting. So you have actually answered the question in a way. You have gone back to fundamentals, where there is limited equity dilution and there is a price or a premium to pay for survival. I would not say 60 PE is not too high, but 50 PE is the right number. That is not the argument here. The argument here is, there is a price for survival. All the names you have read out are names that have not just survived, but increased market shares, maybe not grown at the pace that you would have liked, but in some sense given some sort of leg-up to the theory that some of the big will get bigger, some of the small will possibly get better. These did not perform well in the past because of Sebi recategorisation of top 100 and the next 150. Frankly, that needs to have been dispensed with a long time ago. Ultimately, people should invest in market leaders; it does not really matter whether their market is Rs 1,000 crore or Rs 10,000 crore. Having said that, you will find a lot of midcaps where value will continue to make new highs, when it is clear that they have survived, they have done own internal funding and they are not short on debt. For good companies demonstrating decent balance sheets, there is no dearth of debt. You can negotiate the terms, because banks ultimately want to lend. But that's not the case for a lot of the sectors, including the capital-intensive ones like infrastructure, where debt is vital and where companies have recently gone from AAA to D in a month. Equity, as the word itself suggests, was meant to be the buffer when times were tough. It was meant to be the cushion that banks had to dip into. And really that is the hypothesis in this Swachh Bharat sort of cleanup. We have really cleaned up much of that. We have in a sense overshot this, but none of us is really complaining or cribbing. We are in the advisory space, whether is equity raising or restructuring. I think businesses could not be better, because people are literally – I mean borrowers are -- scared that the lenders will not stop at any length to recover their money, because they are emboldened to do so. By the same logic, if the lenders in the PSU space get emboldened to lend, we are on a good wicket. So I think the worst has played out, and the market seems to have bottomed out in July-August. So, it's time to go back to the good old theory that has lasted for last 30 years. Green shoots are showing in a number of pockets, be it steel, cement or infrastructure; new orders coming. There is some activity here which indicates that the economy as a whole is turning. The real truths are beyond this noise. The signals are that the market did bottom out and the economy is turning. Can RBI use this to cut interest rates further? Two-thirds of the world is still in negative interest rates and thirsting for yields. We are in a happy position: We are searching for inflation and probably getting a little bit of it, while the rest of the world would give their right arm to have some inflation.Given all that, there are some tailwinds going into the Budget. The policymakers can realise that in between them and RBI, they can stoke this economy back into a more prosperous-looking one, if not a roaring one. In last three months, we have been seeing everybody come to you and say things are terrible and that it is an echo chamber that we need to step out of. We kind of convinced each other into believing that it was more terrible than you could imagine. It is like that famous American Economist who said you can walk yourself into recession…That is correct.That is what is happening?That is absolutely correct. I have been categorised as permabull forever in life. The big bullish takeaway here is that with the cleansing of business and the ease with which you can do business, if you got a decent balance sheet, things have never been better.

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