Asian Paints extends fall, down 7% in four days as competition flares up

NEW DELHI, Feb 28: Shares of Asian Paints continued its downward spiral, falling around 7 percent in the past four days as Grasim's foray into the paints business has sparked fears of increased competitive intensity in the sector.

At 11.54 am, shares of Asian Paints were trading at Rs 2,807 on the NSE.

Grasim launched its paint brand, Birla Opus, last week, which aims to attain the second position in the decorative paints market, which is currently being dominated by Asian Paints.

Not just that, Grasim also targets to achieve profitability and a gross revenue of Rs 10,000 crore within three years of commencing full-scale operations. While the bullish targets set by Grasim and an equally comprehensive strategy by the management to make it a reality has ushered optimism from the Street, it has heated things up for Asian Paints.

Even though brokerages believe Asian Paints will emerge as the industry leader after the shake-up, they also feel that it is not the guaranteed winner, hinting towards increased competition. These concerns have also triggered a flurry of downgrades and cuts in price targets for Asian Paints.

In anticipation of an expected increase in competitive pressure within the industry, brokerage firm CLSA has downgraded Asian Paints to a 'sell' rating. Additionally, the firm also reduced their price target for the stock by close to 25 percent to Rs 2,425. Furthermore, CLSA has adjusted its earnings estimates for Asian Paints for FY25/26, lowering them by 8-10 percent.

CLSA also foresees a potential de-rating for Asian Paints, with its stock price projected to align more closely with its 15-year average multiple.

Goldman Sachs also shares the same concern and thereby reduced its price target for the stock by approximately 14 percent to Rs 2,850, while maintaining a 'neutral' call. Moreover, the firm has decreased its target multiple for the stock from the previous 58x to 52x. Additionally, Goldman Sachs has adjusted its earnings-per-stock estimates for FY25/26, lowering it by 5.2 percent and 10.9 percent, respectively.

Moreover, the stock's expensive valuations have also prompted brokerages to see limited upside in the stock from a near term perspective.

RIL announces Rs 70,352 crore JV with Disney to merge streaming, TV assets in India

NEW DELHI, Feb 28: Reliance Industries Ltd has struck a lucrative bargain to become the senior partner in a joint venture with the Walt Disney Co., putting itself atop the leaderboard in one of the world’s fastest-growing media and entertainment markets.

On Wednesday, RIL subsidiary Viacom18 and Star India, Disney’s Indian unit, announced the merger of their businesses to create one of India’s largest TV and digital streaming platforms.

Under the terms of the agreement, Viacom18’s media operations will be merged with Star India Pvt Ltd (SIPL) through a court-approved scheme of arrangement. The joint venture, valued at Rs 70,352 crore ($8.5 billion) on a post-money basis, will see RIL injecting Rs 11,500 crore ($1.4 billion) into the venture to support its growth strategy.

“Post completion of the above steps, the JV will be controlled by RIL and owned 16.34% by RIL, 46.82% by Viacom18 and 36.84% by Disney,” according to the joint announcement by RIL and Disney.

Vijay Shekhar Sharma Steps Down From Paytm Payments Bank Board Amid Crisis

NEW DELHI, Feb 26: Paytm said on Monday that Vijay Shekhar Sharma would step down as non-executive chairman and board member of its payments bank's unit, as the embattled digital payments company overhauls its board after a central bank clampdown.

The action against Paytm Payments Bank followed "serious supervisory concerns", including inadequate customer identify and a lack of arms-length distance with Paytm, sources said.

The Reserve Bank of India has asked the banking unit to wind down its operations by March 15 due to persistent non-compliance and continued material supervisory concerns, triggering a meltdown in Paytm's stock.

Srinivasan Sridhar, former chairman of state-owned Central Bank of India, former Bank of Baroda Executive Director Ashok Kumar Garg and two retired Indian Administrative Service officers will join the board, Paytm said in an exchange filing.

The new board members' expertise will be "pivotal in guiding us toward enhancing our governance structures and operational standards, further solidifying our dedication to compliance and best practices", Paytm Payments Bank CEO Surinder Chawla said.

Paytm supports its banking unit's move of opting for a board with only independent and executive directors by removing its nominee, it said, adding Sharma was also stepping down from the board to "enable the transition".

Sharma owns a 51 per cent stake in Paytm Payments Bank, while One 97 Communications, as Paytm is formally known, owns the rest.

Byju's Investors Vote To Oust CEO In Hours-Long Zoom Call Crashed By Staff

NEW DELHI, Feb 23: Major Byju's shareholders including Prosus NV and Peak XV Partners voted Friday to oust its founder as chief executive officer, escalating a battle over the fate of the once high-flying online tutoring startup that is fighting to remain in business.

Byju's rejected the resolutions, which also sought to remove Byju Raveendran from the board of the company he founded in 2015, the company said in a statement on Friday.

"The resolutions passed during the recently concluded extraordinary general meeting - attended by a small cohort of select shareholders - are invalid and ineffective," according to the statement.

A spokesperson for Prosus declined to comment, while Peak did not immediately respond to a request for comment.

The vote sends another clear signal of displeasure with the once-celebrated entrepreneur, who boycotted the meeting. It's an unusual twist in a long-running dispute between a company once counted among India's most valuable startups, and a clutch of influential investors that helped bankroll its pre-Covid ascent.

The shareholders' decision came after a rowdy hours-long Zoom call for investors and management on Friday that several Byju's employees tried to crash, according to two people who attended. Several times during the meeting, unknown participants tried to disrupt the proceedings with whistles and other loud noises, the people said, asking not to be identified discussing a private call.

Online-education pioneer Byju's and its creditors have been mired in a prolonged restructuring conflict after the firm missed an interest payment on a $1.2 billion loan. A unit of the company was put into bankruptcy in the US after the default.

Raveendran, whose ascent from tutor to the leader of a company once valued at $22 billion captivated a nation then enamored of charismatic tech entrepreneurs, is taking increasingly desperate measures to keep the business afloat after expanding too rapidly during the pandemic. Byju's was caught off-balance after demand for online tutoring dropped off as schools reopened.

Some board members have resigned and Raveendran has pledged his home as well as those owned by his family members to raise money for employee salaries. It's also selling new stock at a discount of more than 90% from its previous funding round to raise capital.

Raveendran's company is one of several once-lionized tech startups that have grappling with financial or legal troubles. Paytm, the firm that popularized online finance across India, is struggling to address the abrupt suspension of a key division by the central bank.

Paytm Signs New Banking Partner To Continue 'Seamless' Transactions

NEW DELHI, Feb 16: Paytm Payments Bank has been given more time by the central bank to wind down its operations, while its parent company has signed on a new banking partner to try to keep some of its popular products running and survive its current crisis.

The Reserve Bank of India (RBI) in January ordered Paytm Payments Bank, an associate of One 97 Communications (OCL) - also known as Paytm, to stop accepting any fresh deposits in its accounts, or wallets, from February 29. That deadline was extended to March 15, the RBI said on Friday.

"The company (Paytm) has shifted its nodal account to Axis Bank (by opening an escrow account) to continue seamless merchant settlements as before," Paytm said in a release.

Paytm QR codes, soundbox and card machines will continue to work as before, even beyond March 15, the company added.

The action against Paytm Payments Bank was triggered by what RBI officials called persistent non-compliance with regulations. Earlier this week, India's financial crime fighting agency began looking into details of overseas transactions on the platform.

RBI said the deadline extension was to allow customers, including merchants, "a little more time" to make alternative arrangements.

"No further deposits or credit transactions or top ups shall be allowed in any customer accounts, prepaid instruments, wallets, FASTags, National Common Mobility Cards, etc after March 15, 2024," it said.

Separately, the RBI also issued a detailed set of customer clarifications.

The regulator said customers can withdraw or use funds from their Paytm Payments Bank accounts and wallets until the time those funds are exhausted but they cannot add any fresh funds after March 15.

Customers who receive their salaries or other transfers including government subsidies into these accounts have to make alternate arrangements by mid-March.

Merchants using Paytm's QR codes for accepting payments can continue to do so if these QR codes are linked to accounts other than those held by Paytm Payments Bank.

The bank has nearly a fifth share of India's toll collections through a product called FASTag. The RBI said these FASTags cannot be recharged or topped up after March 15.

Non-executive chairman of Paytm Payments Bank Vijay Shekhar Sharma has met with RBI officials and the finance minister seeking to lobby against the crackdown, but RBI Governor Shaktikanta Das said on Monday that there would be no review of its decision.

RBI Keeps Key Lending Rate Unchanged At 6.5% For 6th Straight Time

NEW DELHI, Feb 8: The Reserve Bank of India (RBI) kept its key lending rate unchanged on Thursday for a sixth straight meeting, in line with expectations, as inflation stayed above the 4% medium-term target while economic growth continued to be resilient.

The six-member monetary policy committee, consisting of three RBI and three external members, left the key repo rate unchanged at 6.50% after having raised it by 250 basis points between May 2022 and February 2023.

Monetary policy must continue to be actively disinflationary, RBI Governor Shaktikanta Das said in his statement.

Five out of six members voted in favour of the rate decision.

India eyes $100 billion investment deal with Switzerland, Norway

NEW DELHI, Feb 8: India is close to finalizing a first-of-its-kind trade deal that could see a small group of European nations invest as much as $100 billion over 15 years in exchange for easier trade access to the world’s most populous nation, according to people with knowledge of the matter.

The European Free Trade Association, which comprises Switzerland, Norway, Iceland and Liechtenstein, made a commitment to invest in India as part of a trade pact that’s in the final stages of negotiations, the people said, asking not to be identified as the talks are still ongoing.

The contours of the deal have been agreed and deliberations currently center on the final investment amount, which could be as much as $100 billion over 15 years, some of the people said. While India wants the commitment to be legally binding, one of the European officials said the amount will likely be framed as a goal, with no legal means to claim it included in the language of the agreement.

If finalized, it would mark the first time an investment commitment of this nature is secured by India as part of a free trade agreement.

Switzerland’s Economy Minister Guy Parmelin said last month that the outline of a deal had been agreed upon, without giving details. Legal clarifications are currently being rushed so the deal can be signed before India holds elections likely from April, a European official with knowledge of the matter said.

The Swiss economy ministry said in a statement that the text of the agreement is “still to be finalized and both parties have agreed not to disclose the details at this stage.” The main points where agreement has been reached include “patent protection, which was controversial in the past, as well as a new type of investment promotion chapter,” it said.

Norway’s government declined to comment on the terms of the deal.

Switzerland is by far India’s largest commercial partner among the members of the EFTA bloc, which comprises European nations which are not members of the European Union. Swiss two-way trade with India amounted to $17.14 billion in the 2022-23 fiscal year, out of $18.66 billion with the whole group.

For EFTA countries, the agreement — which has been 16 years in the making — will allow manufacturers to export processed food and beverages, electrical machinery, and other engineering products at reduced tariffs to a potential market of 1.4 billion people. The deal is also likely to benefit the pharmaceutical and medical devices industry of the bloc.

India is attracting investor interest from several countries as businesses look to diversify their supply chains from China and seek new growth markets. India expects growth of about 7% in the fiscal year beginning in April, making it one of the fastest-expanding major economies in the world. The United Arab Emirates is also considering investing as much as $50 billion in India.

The investment in India from EFTA countries would mostly come from private businesses and state-sponsored vehicles and would be targeted toward existing and new manufacturing projects, according to people familiar with the discussions. The investment will see more than 1 million jobs created in India, one of the people said.

The deal would also ensure easier movement of Indian professionals to the bloc and market access for some agricultural products, the people said. While Switzerland — the biggest economy in the EFTA bloc — is usually very protective of its farmers, easier market access for Indian rice could be acceptable since Switzerland only produces marginal quantities itself, a person familiar with the negotiations said.

GST collections in January at Rs 1.72 lakh crore, second-highest ever

NEW DELHI, Feb 1: The government's Goods and Services Tax (GST) collections rose to Rs 1.72 lakh crore in January, according to provisional data released by the Ministry of Finance on January 31.

"The data is as of 5PM today. Final collection for the month would be higher," the finance ministry said in a statement.

At Rs 1.72 lakh crore, the January GST collections is the second-highest ever and is 4.4 percent higher than the Rs 1.65 lakh crore collected in December 2023. It also takes the average monthly collection in 2023-24 to Rs 1.67 lakh crore.

GST data is normally released on the first day of every month. However, with the interim Budget for 2024-25 set to be presented on February 1, the finance ministry is releasing provisional data on January 31.

This is the 11th month in a row that the monthly GST collection has come in above the Rs 1.5-lakh-crore mark.

Monthly GST collections have risen over the years. From averaging under Rs 1 lakh crore per month in 2017-18 - its first year - collections rose rapidly after the pandemic-hit 20202-21 to average Rs 1.51 lakh crore in 2022-23.

In its statement, the finance ministry said the government has settled Rs 43,552 crore to Central GST and Rs 37,257 crore to State GST from the Integrated GST that has been collected so far this month. It did not provide final figures for Central GST, State GST, or the cess that has been collected.

"During the April 2023-January 2024 period, cumulative gross GST collection witnessed 11.6 percent year-on-year growth (till 5PM of January 31, 2024), reaching Rs 16.69 lakh crore, as against Rs 14.96 lakh crore collected in the same period of the previous year," the finance ministry added.

Paytm Payments Bank Can't Offer Services, Including Wallet, After Feb 29: RBI

NEW DELHI, Feb 1: The Reserve Bank of India on Wednesday barred Paytm Payments Bank Ltd from accepting deposits or allowing credit transactions, or top-ups, in customer accounts or prepaid instruments - such as wallets and FASTags - linked to those accounts, after February 29.

Customers can, however, continue to utilise balances from their accounts, including savings and current "without restriction (and) up to their available" limit, the Reserve Bank order said.

In addition, the nodal accounts of Paytm's parent company, One97 Communications Ltd., and Paytm Payments Bank Ltd., or PBBL, have been terminated by the central bank.

The RBI's order cited "persistent non-compliances and continued material supervisory concerns in the bank" that were flagged after a comprehensive audit of its systems by external parties.

Neither the company nor its founder/CEO, Vijay Shekhar Sharma, have responded so far.

However, sources said the Paytm app will continue to operate as normal, except for those linked to the Paytm Bank. These will only operate till February 29, or till the available balance is exhausted.

All of this follows a March 2022 order in which PBBL was directed to stop taking onboard new customers "with immediate effect".

Essentially the RBI action is against the banking operations of Paytm, meaning customers can continue to use Paytm as a digital payment option so long as their account is linked to an external bank.

In December, One97 Communication laid off hundreds of employees across verticals after it began using AI, or Artificial Intelligence, to automate certain processes in a bid to up cost-cutting.

The use of AI is meant to reduce costs, improve efficiency of operations, and remove redundant tasks, the firm said.

advertisements