3 Tata Group stocks including Voltas tumble up to 13% in 6 sessions, wipe out ₹43,300 crore

MUMBAI, May 14: In recent sessions, Tata Group stocks have faced significant selling pressure, resulting in a sharp drop in share value. The group stocks, including Voltas, Tata Power, and Tata Motors, were the biggest laggards, and the sell-off was triggered following the release of their March quarter and full-year performance of FY24.

Analysts expect stocks to witness some more selling pressure in the near term. In the previous trading session, shares of Tata Motors tumbled 9.4% in intraday trade before finishing the trade with a drop of 8.30% to log the biggest single-day drop in 2 years.

During the past six trading sessions, Tata Motors' shares experienced a 6.70% decline, causing a loss of ₹22,592.60 crore in market value. Similarly, Tata Power witnessed a 9.4% drop in the same period, resulting in a ₹14,731 crore reduction in market capitalisation.

Additionally, Voltas saw its market capitalisation decrease by ₹5,985.83 crore as its stock dropped by 12.8%. Collectively, these stocks have suffered a loss of ₹43,310 crore in market capitalisation.

Tata Motors delivered a record-breaking financial performance in FY24, yet it signaled a cautious sales outlook for the ongoing fiscal year within its Jaguar Land Rover division. This cautious outlook prompted analysts to downgrade the stock, leading to a sharp decline in value.

Jaguar Land Rover (JLR) announced on Friday that it anticipates margins on earnings before interest and taxes (EBIT) for fiscal 2025 to be similar to the 8.5% reported in the previous financial year. The company mentioned that it would need to increase spending to attract customers, although it did not provide specific details.

As for Jaguar, the order book shrank to 133,000 units as of March 31, from 148,000 units at the end of December.

Following the company's announcement, global brokerage firms such as Goldman Sachs Group and Morgan Stanley downgraded their recommendations. Goldman Sachs shifted its rating from ‘buy’ to ‘neutral’ and revised its 12-month price target down to ₹1,040 a share from ₹1,080. Morgan Stanley also adjusted its rating from 'overweight' to ‘equal weight’.

Domestic brokerage firm Motilal Oswal has also revised its EPS estimates downward by 3% and 5% for FY25 and FY26, respectively. The firm has reaffirmed its 'Neutral' rating on the stock while reducing the target price to ₹955 per share, down from the previous ₹970.

The company's shares in CY23 delivered a multibagger return of 101%, making it the only Nifty 50 stock to achieve this feat in the year after a turnaround at JLR, the company's British luxury unit, helped India's No. 3 carmaker return to profit in Q3 FY24.

Back in March, the company greenlit a demerger plan for Tata Motors, dividing it into two separate listed entities. The first entity will focus on the Commercial Vehicles business and its associated investments, while the second entity will house the Passenger Vehicles segment, comprising PV, EV, JLR, and their related investments.

Godrej Family Announces Split After 127 Years: Who Gets What

NEW DELHI, May 1: The founding family of 127-year-old Godrej Group, which spans from soaps and home appliances to real estate, has reached an agreement to split the conglomerate, with Adi Godrej and his brother Nadir keeping Godrej Industries that has five listed firms, while cousins Jamshyd and Smita getting unlisted Godrej & Boyce and its affiliates as well as a land bank, including prime property in Mumbai.

The group has been split between two branches of the founding family, with Adi Godrej (82) and his brother Nadir (73) on one side and their cousins Jamshyd Godrej (75) and Smita Godrej Crishna (74) on the other, according to a statement issued by the group.

Godrej Enterprises Group -- comprising Godrej & Boyce and its affiliates that have a presence across multiple industries spanning aerospace and aviation to defence, furniture and IT software -- will be controlled by Jamshyd Godrej as chairperson and managing director. His sister Smita's daughter Nyrika Holkar, 42, will be the executive director.

Their families will control this arm that also will hold the land bank, including 3,400 acres of prime land in Mumbai.

Godrej Industries Group -- which includes the listed companies - Godrej Industries, Godrej Consumer Products, Godrej Properties, Godrej Agrovet and Astec Lifesciences -- will have Nadir Godrej as chairperson and will be controlled by Adi, Nadir and their immediate families.

Pirojsha Godrej, 42, son of Adi, will be the executive vice chairperson of GIG and will succeed Nadir as the chairperson in August 2026, the statement said.

In the statement, the Godrej family termed the split as "an ownership realignment" of the shareholdings in the Godrej companies.

"The realignment has been arrived at in a respectful and mindful way to maintain harmony and to better align ownership in acknowledgement of the differing visions of the Godrej family members," it said.

"This will help maximize strategic direction, focus, and agility, and will accelerate the process of creating long-term value for shareholders and all other stakeholders." Both Groups will continue to use the Godrej brand and are committed to growing and strengthening their shared heritage.

Lawyer-turned-serial entrepreneur Ardeshir Godrej and his brother in 1897 succeeded at locksmithing after failed ventures into hand-fashioned medical devices.

Ardeshir did not have any children, and so the group was inherited by his younger brother Pirojsha. Pirojsha had four children - Sohrab, Dosa, Burjor and Naval.

Over the years, the helm of the group came to the children of Burjor (Adi and Nadir) and Naval (Jamshyd and Smita) as Sohrab had no children while Dosa had one child Rishad, who had no children.

To enable the split, the two sides quit the boards of companies in rival camps. So, Adi and Nadir Godrej resigned from the Godrej & Boyce Board, while Jamshyd Godrej left his seat on the boards of GCPL and Godrej Properties.

Unconfirmed reports say Adi and Nadir Godrej will divest their stakes in Godrej & Boyce to the other branch. Jamshyd Godrej and his side of the family will transfer interests in Godrej Consumer Products (GCPL) and Godrej Properties to their cousins through a family arrangement.

Real estate worth crores of rupees, mostly in prime land in Mumbai suburbs, will remain under Godrej & Boyce (G&B), and a separate agreement will be worked out to govern the ownership rights.

It owns 3,400 acres of land in Mumbai, including a 3,000-acre parcel in Vikhroli, Mumbai. The Vikhroli land by some estimates has a development potential of over ₹ 1 lakh crore. It can develop 1,000 acres, while about 1,750 acres are covered with mangroves and is the destination of rare plants and birds. About 300 acres of land have already been encroached upon.

The Vikhroli property was bought by Pirojsha at a public auction from the Bombay High Court receiver in 1941-42. It was previously owned by a Parsi merchant Framjee Banaji, who bought it from the East India Company in the 1830s.

Adi is currently chairman of Godrej Group. His brother Nadir is chairman of Godrej Industries and Godrej Agrovet. Their cousin Jamshyd is chairman of the unlisted Godrej & Boyce Manufacturing company. His sister Smita Crishna and Rishad Godrej also hold a stake in Godrej & Boyce, which owns most of the property in Vikhroli.

A couple of years back, Jamshyd roped in investment banker Nimesh Kampani and lawyer Zia Mody to advise him on separating the land ownership. Kotak Mahindra Bank's Uday Kotak and Cyril Shroff of legal firm Cyril Amarchand Mangaldas were assisting Adi.

According to the statement, the realignment will be implemented after the relevant regulatory approvals have been obtained.

"Godrej Enterprises Group (GEG) comprises Godrej & Boyce (G&B) and its affiliates, which have a presence across multiple industries spanning aerospace, aviation, defence, engines and motors, energy, security, building materials, construction, green building consulting, EPC services, intralogistics, healthcare equipment, durables, furniture, interior design, architectural fittings, IT, software as well as infrastructure solutions.

"This group will now be controlled by Jamshyd Godrej, chairperson and managing director, Nyrika Holkar, Executive Director, and their immediate families," it said.

Godrej Industries Group (GIG), which includes the listed companies, Godrej Industries, Godrej Consumer Products, Godrej Properties, Godrej Agrovet and Astec Lifesciences will have Nadir Godrej as Chairperson and will be controlled by Adi Godrej, Nadir Godrej, and their immediate families.

"Pirojsha Godrej will be the Executive Vice Chairperson of GIG and will succeed Nadir Godrej as the Chairperson in August 2026," it said.

Commenting on the future outlook, Jamshyd Godrej said: "Since 1897, Godrej & Boyce has always been driven by the strong purpose of nation building. With this future-facing family agreement now in place, we can further drive our growth aspirations with fewer complexities and focus on leveraging our core strengths in high-tech engineering and design-led innovation across our strong portfolio of strategic, consumer and emerging businesses".

Nadir Godrej said, "Godrej was founded in 1897 to help build economic independence for India. This deep purpose of innovating for a cause - the values of trust and respect and the belief in trusteeship and making communities that the companies operate in stronger and better - continue to form the bedrock of who we are 125 years later. We look forward to building on this legacy with focus and agility".

RBI Curbs On Kotak Mahindra Bank: No New Online Customers, Credit Cards

NEW DELHI, April 24: Citing data security concerns and deficient IT infrastructure, the Reserve Bank of India has barred Kotak Mahindra Bank from onboarding new customers online and issuing new credit cards with immediate effect. The bank can, however, continue to serve its current customers, including those holding credit cards.

"The Reserve Bank of India has today, in exercise of its powers under Section 35A of the Banking Regulation Act, 1949, directed Kotak Mahindra Bank Limited (hereinafter referred to as 'the bank') to cease and desist, with immediate effect, from (1) onboarding of new customers through its online and mobile banking channels and (II) issuing fresh credit cards. The bank shall, however, continue to provide services to its existing customers, including its credit card customers," the central bank said in a release.

The RBI said the actions are based on "significant concerns arising out of Reserve Bank's IT Examination of the bank for the years 2022 and 2023 and the continued failure on part of the bank to address these concerns in a comprehensive and timely manner".

A statement from Kotak Mahindra Bank said it had taken "measures for adoption of new technologies to strengthen its IT systems" and that it would work with the RBI to "swiftly resolve balance issues at the earliest".

"We have received an order from the RBI which directs us to temporarily pause onboarding of new customers though our online and mobile banking channels and issuance of fresh credit cards. The bank has taken measures for adoption of new technologies to strengthen its IT systems and will continue to work with RBI to swiftly resolve balance issues at the earliest," Kotak Bank said.

"We want to reassure our existing customers of uninterrupted services, including credit card, mobile and net banking. Our branches continue to welcome and onboard new customers, providing them with all the Bank's services, apart from issuance of new credit cards," it said.

It said there were "serious deficiencies" in the way Kotak Mahindra Bank manages its IT inventory and secures its data. "Serious deficiencies and non-compliances were observed in the areas of IT inventory management, patch and change management, user access management, vendor risk management, data security and data leak prevention strategy, business continuity and disaster recovery rigour and drill, etc. For two consecutive years, the bank was assessed to be deficient in its IT Risk and Information Security Governance, contrary to requirements under Regulatory guidelines," the RBI said.

"During the subsequent assessments, the bank was found to be significantly non-compliant with the Corrective Action Plans issued by the Reserve Bank for the years 2022 and 2023, as the compliances submitted by the bank were found to be either inadequate, incorrect or not sustained," it added.

The RBI noted that due to the absence of a robust IT infrastructure, the bank's digital banking channels have suffered frequent outages and inconvenienced customers.

"In the absence of a robust IT infrastructure and IT Risk Management framework, the bank's Core Banking System (CBS) and its online and digital banking channels have suffered frequent and significant outages in the last two years, the recent one being a service disruption on April 15, 2024, resulting in serious customer inconveniences. The bank is found to be materially deficient in building necessary operational resilience on account of its failure to build IT systems and controls commensurate with its growth," it said.

"In the past two years, the Reserve Bank has been in continuous high-level engagement with the bank on all these concerns with a view to strengthening its IT resilience, but the outcomes have been far from satisfactory. It is also observed that, of late, there has been rapid growth in the volume of the bank's digital transactions, including transactions pertaining to credit cards, which is building further load on the IT systems," the RBI said.

The central bank has said it has decided to place some curbs on the bank in the interest of the customers. "The Reserve Bank, therefore, has decided to place certain business restrictions on the bank as mentioned above, in the interest of customers and to prevent any possible prolonged outage which may seriously impact not only the bank's ability to render efficient customer service but also the financial ecosystem of digital banking and payment systems," the RBI said.

The curbs, the central bank said, will be review after an audit and corrective steps. "The restrictions now being imposed will be reviewed upon completion of a comprehensive external audit to be commissioned by the bank with the prior approval of RBI, and remediation of all deficiencies that may be pointed out in the external audit as well as the observations contained in the RBI Inspections, to the satisfaction of the Reserve Bank. Further, these restrictions are without prejudice to any other regulatory, supervisory or enforcement action that may be initiated against the bank by the Reserve Bank," the RBI said.

Kotak Mahindra's journey started in 1985 when Uday Kotak founded Kotak Capital Management Finance as an investment and financial services company. The next year, Anand Mahindra and his father Harish Mahindra invested in the company, and it was renamed Kotak Mahindra Finance.

In 2003, Kotak Mahindra Finance Ltd. received banking licence from the RBI and became the first non-banking finance company in India to convert into a bank. The bank currently offers services ranging from commercial banking to stock broking to mutual funds to insurance and investment banking.

As on December 31 last year, the bank has 4.8 crore customers, 1,869 branches and 3,239 ATMs.

Hero MotoCorp Gets Demand Notice Of ₹ 605 Crore From Tax Body

NEW DELHI, April 4: The country's largest two-wheeler maker Hero MotoCorp on Thursday said it has received demand notices from the Income Tax department for around ₹ 605 crore, including interest, for six assessment years.

On April 3, 2024, the company received assessment orders/ demand notices dated March 30, 2024, pertaining to six assessment years from the Income Tax department, the company said in a regulatory filing.

The two-wheeler major is examining the orders/ notices received and shall take appropriate steps, including the filing of appeals and rectification applications, it added.

The notice pertains to six assessment years, amounting to a tax demand of ₹ 308.65 crore and interest thereon of ₹ 296.22 crore, Hero MotoCorp said.

This is on account of certain disallowances, for the assessment years 2013-14 to 2017-18 and 2019-20, it added.

"In the opinion of the management, the demand raised is unsustainable in nature, and is unlikely to have material impact on financials, operations or other activities of the company," the two-wheeler major stated.

Shares of the company on Thursday ended 0.75 per cent lower at ₹ 4,522.30 apiece on the BSE.

India’s trade reliance on China and EU rising: UN trade body

GENEVA, April 1: India’s trade reliance on China and the European Union is rising as global trade is witnessing a marked shift along geopolitical lines, says a report by the United Nations Conference on Trade and Development (UNCTAD).

This comes in the backdrop of major supply chain reset following the pandemic and the Russia-Ukraine war that had sent food and fuel prices to record highs.

The UNCTAD estimates, based on national statistics, showed that India’s dependence on China and the European Union (EU) grew by 1.2 per cent while its reliance on Saudi Arabia slid by 0.6 per cent.

This came despite India’s efforts to cut reliance on China by implementing its flagship Production-Linked Incentive (PLI) scheme and Quality Control Orders (QCOs) largely to limit entry of cheap Chinese products.

“During the last two years, the geographical proximity of international trade has remained relatively constant, showing minimal nearshoring or far-shoring trends. However, since the latter part of 2022, there has been a noticeable rise in the political proximity of trade,” the UNCTAD report said.

“This indicates that bilateral trade patterns have been favouring trade between countries with similar geopolitical stances. Concurrently, there has been an increasing concentration of global trade to favour major trade relationships, although this trend has softened in the last quarter of 2023,” the report released earlier this month said.

UNCTAD’s estimates showed a major shift in trade due to the ongoing Russia-Ukraine war. While Russia’s trade dependence on China surged by a record 7.1 per cent, its reliance on the EU slid by 5.3 per cent.

This was largely a result of Russian oil shifting from the EU to China and India. Chinese custom data showed that China’s two-way trade with Russia in 2023 had hit a record $240 billion. Russia had also increased purchasing Chinese goods when major US and European Union companies began exiting Russia after the war.

Interestingly, the US managed to cut reliance on China by 1.2 per cent in 2023 and increase its trade dependence on the EU and Mexico.

The dependence of an economy on another is calculated as the ratio of their bilateral trade over the total trade of the dependent economy. Change is computed as a four quarter average of this ratio relative to the same period in the previous year, the report said.

The report showed that global trade declined in most sectors, except for pharmaceuticals, transportation equipment, and road vehicles, particularly, electric cars.

Among the sectors where the value of trade declined by more than 10 per cent during 2023 are apparel, chemicals, energy metals, office equipment, and textiles, UNCTAD said.

The report further said that the value of global merchandise trade has experienced continuous decline since mid-2022. Trade in goods expected to contract by about US$ 1.3 trillion or 5 per cent in 2023. But services trade is expected to gain about $500 billion, or 8%.

GST Collection in March 2024 Secures 2nd Highest Since July 2017

NEW DELHI, April 1: In March 2024 Goods and Service Tax collection rose 11.5 per cent on an annual basis to Rs 1.78 lakh crore, the second highest since the regime came into force in July 2017.

In March the rise of GST collection can be attributed to the rise in GST collection from domestic transactions at 17.6 per cent,’ the Finance Ministry stated in a press release. GST revenue net of refunds in March grew 18.4 per cent on a year-on-year basis to Rs 1.65 lakh crore.

Out of the total collections, Central Goods and Services Tax (CGST) stood at Rs 34,532 crore, State Goods and Services Tax (SGST) was Rs 43,746 crore, and Integrated Goods and Services Tax (IGST) was Rs 87,947 crore, along with Rs 40,322 crore collected through the imported goods. The Cess collections stood at Rs 12,259 crore, along with Rs 996 crore collected via imported goods.

Rs 1.87 lakh crore in April 2023 is the highest-ever GST collection recorded. A growth of 12.5 per cent to Rs 1.7 lakh crore is registered in February GST collection marking the 5th highest since the GST incorporation.

An increase of 11.7 per cent at Rs 20.14 lakh crore is witnessed which is the highest ever GST collection for FY24. In FY24 the average GST collected per month rose to Rs 1.68 lakh crore from Rs 1.5 lakh crore the year before. For the entire fiscal year GST revenue net of refunds stood at Rs 18.01 lakh crore, up 13.4 per cent YoY.

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