-Bail to Wadhawan brothers in #DHFL bank loan scam revoked
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-#Instagram, #Facebook could lose legal immunity in India
Tune in to top stories of the day on 'The Reporter'. #NDTVProfitLive
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TVTranscript
00:00 Hello and welcome, you're watching The Reporter on NTTV Profit.
00:13 Now at the beginning of the show, we have an NTTV Profit exclusive just for you.
00:18 The recent sell-off in HDFC Bank may have been due to a handful of hedge funds spreading
00:23 negative sentiments.
00:25 And that's what sources are telling us.
00:27 The bank has seen nearly a 15% drop in prices over the last few trades as well.
00:32 We have Vishwanath Nair joining in with more on this.
00:36 Yeah, Pragati, so what we understand from our sources is that there is a group of select
00:43 hedge funds which has been active in spreading some negative sentiments, especially through
00:48 the central bank.
00:49 And this is what sources are telling us about the situation at HDFC Bank now.
00:53 We know that since the merger, the bank has seen some bad trading days on the exchanges,
01:00 primarily because some of the negative news has been amplified beyond any normal sense
01:08 of the news.
01:09 So what we are seeing right now is largely being led by the hedge funds.
01:13 Of course, that is also leading to effective drop in the domestic market as well, because
01:19 the domestic investors, because of the selling pressure, are selling those shares.
01:24 That is what sources are telling us about HDFC Bank.
01:26 Of course, we'll have more updates on the story in the coming few hours.
01:31 All right, Vishy, thanks so much for bringing us those details.
01:34 That was the NDTV Profit exclusive for you.
01:38 HDFC Bank has been a big story over the last couple of days as well.
01:42 We also have Tech Mahindra's numbers going on.
01:47 But we'll bring you the updates very soon from the management's press conference.
01:51 Let's take a quick look at how the markets fared during the day.
01:55 My colleague Neeraj Shah joins in with more on this.
02:00 Interesting day of trade because one was anticipating that maybe there could be some bearish moves
02:03 in continuation to what happened yesterday.
02:06 And we came out smelling like a pack of roses, you could argue, considering the expectations
02:10 about a percent higher.
02:11 So nothing too dramatic.
02:13 Still, after the carnage that we had seen yesterday, I think this was a very pleasant
02:17 move on the indices.
02:18 In fact, the broader end of the spectrum was even stronger, while banks weren't, but the
02:22 mid caps and small caps were.
02:23 So the Bank Nifty, flat, but the mid cap and the small cap indices had some pretty strong
02:29 moves.
02:30 1.7% for the Nifty mid cap, 150.
02:32 The small cap index too showing some gains, 1.76, 250 points higher.
02:36 So clearly there were gains at the broader end of the spectrum, which is why the market
02:40 breadth was looking very strong in the session.
02:43 Now the market breadth on the Nifty too looked okay.
02:46 Just about seven stocks in the red, most stocks in the green.
02:51 And while metals and to an extent even IT took center stage, look at the gains that
02:57 happened in Hindalco, Tata Steel, or for that matter, even at the broader of the spectrum
03:01 stocks like Hindustan Copper, et cetera, did well.
03:06 But yeah, and this is a metals pack.
03:08 So you look at that, SAIL, Nalco, Hind Copper, NMDC, et cetera.
03:12 But if we can go back to the heat map, you will see what I'm talking about.
03:16 And while those two did well, which is Hindalco and Tata Steel, a clutch of others participated.
03:20 Dr. Reddy is up 4%, HCL Tech about 3.5%, IndusInd Bank had some gains.
03:25 There was some strength in Power Grid and BPCL as well.
03:29 And more importantly, defenses like HUL came to the fore, up about 3% after the fall that
03:34 we saw in HUL yesterday.
03:36 What didn't do well?
03:37 Surprise, surprise, ICSA Bank and then Access Bank reacting to numbers.
03:42 So both of these were the principal culprits in addition to maybe small losses to Asian
03:46 Paints as well as Adani Ports.
03:48 So that was the nature of the Nifty.
03:50 Now we showed you what metals did.
03:52 It is interesting to see what banks did as well because all the contribution made by
03:56 HDFC Bank in the positive was negated by ICSA Bank in the negative.
04:00 And those two kind of stood out.
04:02 So here ICSA Bank was the top loser.
04:04 HDFC Bank, 2 percentage points higher.
04:07 In points contribution on the Nifty, both were about 50 odd points.
04:10 But banks had some other gainers as well today.
04:13 IndusInd Bank did well.
04:14 PSU Banks like PNB, BOB, SBI had a good move in the session today and strong move as a
04:20 pack which was interesting.
04:23 Now the mid-cap end of the market had some interesting gainers.
04:26 So REC and PFC were up about 6% and 7% apiece or 7% and 6% apiece if I can use that term.
04:32 So the renewable story may be catching up to them.
04:35 And there was a bounce back day for Z.
04:38 Now we don't know if this becomes a trend, but today there's clearly a bit of a relief
04:42 rally after the severe, severe 30% down move that we saw in trade yesterday.
04:48 There were other winners.
04:49 Like we said, metals did well.
04:51 So Salen and NMDC on pretty strong volumes by the way I must add.
04:54 And Polycap had a bit of a strong move, about 4.5% as well.
04:58 So this was the nature of the move in the session today.
05:00 It will be interesting to see if tomorrow on the monthly expiry day we continue the
05:04 momentum or we succumb to some bit of pressure.
05:07 That was the market wrap for you.
05:09 A relatively better day compared to Tuesday considering when markets closed in red.
05:14 Now SBI Card will be announcing its Q3 earnings tomorrow.
05:17 We have Mimansa Varma joining in with what is expected ahead of the numbers.
05:22 Yeah, hi.
05:23 So SBI Card is expected to report an 18% year-on-year rise in net profit in the December quarter
05:30 to Rs. 600 crore according to Bloomberg estimate.
05:33 The net interest income is expected to rise due to an increase in receivables income this
05:38 quarter amid festive demand in Q3.
05:41 The net interest margin is expected to moderate slightly as revolver mix or the revolving
05:47 credit line as we call it remains sticky at 24% according to Motila Loswal.
05:54 Coming on to asset quality, the pressures are likely to keep credit costs elevated.
05:59 This is due to higher write-offs and the requirement to set aside higher standard asset provisioning
06:05 due to rise in loan growth.
06:07 Kotak Institutional Equities expects provisions to increase by around 60% on year as incremental
06:14 provisions are mainly on account of higher spends and other credit costs.
06:19 If we talk about the key monitorables this quarter, the cost ratios are likely to remain
06:23 elevated, but there will be a keen eye on revolver mix or the revolving credit line
06:29 and margin outlook this quarter.
06:30 Right, Mamansa.
06:31 Thanks so much for bringing us those updates and we will come back to you tomorrow as soon
06:35 as the numbers are also out.
06:37 Now let's move on to the insurance pack as well.
06:40 SBI Life Insurance will be sharing its Q3 numbers tomorrow.
06:44 My colleague Monal is standing by to help us understand that what is expected in this
06:49 quarter's numbers.
06:51 Well, private life insurers have been in discussion since last week as their VNB margins are seeing
06:58 pressure because of the non-part policies coming under scanner in the budget.
07:03 And now it's SBI Life Insurance that's going to come out with its results and we need to
07:08 understand what is the kind of expectations the analysts have.
07:11 So they expect the VNB margins to be up at 28.5% versus 27.8% that was there in the same
07:19 quarter last year.
07:21 PAT is expected to be up around 41% at 430 crore as per Bloomberg consensus estimates.
07:27 AP is also expected to be up by 14% and VNB is expected to be up 17% at 1764 crore rupees.
07:35 Now what are the key monitorables that are to be watched out for in the results that
07:40 are expected?
07:42 First is the impact on the VNB margins whether they are in expectations as the analysts put
07:47 them at a higher pedestal as compared to what it was last year.
07:51 That is one.
07:52 If that comes lower, we might see some pressure on the stocks.
07:57 Now also with regards to growth commentary, where are they planning, what is the kind
08:01 of product mix the company is looking at, whether the protection share will be higher,
08:07 that is one thing to look out for.
08:09 Cost ratios, any pricing changes and of course regulatory changes with regards to surrender
08:14 charges continues to be an overhang on all these life insurance company stocks.
08:19 So that is something that is to be watched out for.
08:22 Now there's one more point as per reports last week, it is expected that Bharti Aksa
08:27 Life Insurance might be in talks for a merger with SBI Life and if that were to happen,
08:34 Jefferies did come out with a note which said that they could expect in terms of if the
08:38 ramp up is good, then it's not a point.
08:40 But if that is not the case, the stock might see some pressure.
08:44 So we'll have to watch out on the management commentary for that as well.
08:49 Thanks so much, Monal, for bringing us those updates.
08:51 Tomorrow is definitely going to be quite a busy day in terms of the earnings and we'll
08:55 keep bringing you more updates on that.
08:58 Now moving on to another big story of the day.
09:01 The Supreme Court has cancelled the bail granted to DHFL's Wadhawan Brothers in the bank loan
09:06 scam case.
09:08 Now we are joined by our colleague who will tell us more about this.
09:13 So yeah, the Supreme Court has cancelled the bail granted to former promoters of the DHFL
09:18 group Kapil Wadhawan and Dheeraj Wadhawan in a case pertaining to a multi-crore bank
09:22 loan scam.
09:23 The top court said that the Delhi High Court and the trial court both committed serious
09:27 errors in law in granting a bail to the duo and has further held that the duo was not
09:32 entitled to a statutory right of a default bail.
09:35 Subsequently, the court has now ordered that the Wadhawan Brothers be taken into custody
09:40 and has also directed that the trial court have the bail applications afresh.
09:45 A quick refresher of the law we're dealing with here.
09:48 Under the Code of Criminal Procedure, an accused is entitled to a statutory bail if the investigating
09:53 agencies fail to file a charge sheet at the conclusion of an investigation within a period
09:58 of 60 to 90 days.
10:01 In this case, CBI had filed a charge sheet 88 days after the FIR was lodged.
10:06 However, the trial court granted a statutory bail to the brothers and this order of the
10:12 trial court was subsequently upheld by the Delhi High Court as well.
10:16 A little background to the case.
10:18 In July 2022, the CBI had booked the Wadhawan Brothers in a Rs 34,615 crore bank loan scam.
10:27 The action came on a complaint from the Union Bank of India, leader of a 17-member lender
10:33 consortium which had extended credit facilities to the tune of nearly Rs 43,000 crores between
10:39 2010 and 2018.
10:42 The bank had alleged that Kapil and Dheeraj Wadhawan, in criminal conspiracy with others,
10:47 misrepresented and concealed facts, committed criminal breach of trust and abused public
10:53 funds to cheat the consortium to the tune of nearly Rs 35,000 crores by defaulting on
10:58 loan payments from 2019 onwards.
11:01 Well, it's time for a short break but please stay tuned because we have lots more lined
11:06 up for you.
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13:30 Welcome back, you're watching The Reporter on NDTV Profit.
13:33 Now, another exclusive for you.
13:35 Sources are now telling NDTV Profit that granular details of FPI's beneficial ownership are
13:42 likely to be much less than what SEBI had estimated and these may also have a limited
13:48 impact.
13:49 Let's go across to our colleague Sajid for more on this.
13:51 Thanks Pragati.
13:52 What we understand is that there is no immediate deadline or a cliff which would mean that
13:59 FPI's will have to liquidate their positions in the market.
14:04 To give you a perspective, there is a circular which has been issued by SEBI wherein ultimate
14:09 beneficial ownership has to be brought in for a fund which has more than 50% of the
14:14 AUMs in India or if their fund has a size of more than 25,000 crores of assets in India.
14:20 In that case, SEBI had asked for an enhanced disclosure.
14:24 That deadline is supposed to come by the end of Jan 31st and thereafter there is a timeline
14:32 which is given to the FPI's who have not been able to meet the disclosure to come out
14:37 with a disclosure by mid of March.
14:39 If they are not able to meet, they have to liquidate the position in the next six months
14:43 which takes the entire timeline to mid of September or end of September there.
14:49 That's what our sources are saying.
14:52 Firstly, the amount which was mentioned in the SEBI board meet paper which said that
14:59 roughly around 3 lakh crores are at high risk.
15:01 It's a very miniscule amount because the regulator it seems have given a lot of exemptions to
15:07 many of the FPI's which fall under the category of sovereign wealth fund or the pension fund
15:11 or any fund which is listed on a stock exchange or regulated entity in that sense.
15:19 And that's where the entire clarification it seems coming from that there isn't much
15:25 of a risk which is there associated with the market and if at all there is going to be
15:31 liquidation that's not going to happen immediately and will take at least six months and the
15:35 FPI's have enough time to bring in either liquidate or come in with additional disclosures.
15:41 Right Sajeev, thanks so much for bringing us those updates.
15:44 Now, IPO Bound Car Dekho also expects to maintain its 60% year on year growth in the new year
15:51 as the group continues to diversify within the auto space.
15:55 Now, the company also exited the used car retail business while prepping for profitability
16:01 ahead of going up on the bourses.
16:03 Here's Shaak Amit Jain in conversation with NDTV Profit.
16:08 We exited because of unit economics.
16:10 I did not see a large profit pool getting created.
16:13 Unless the GMV of the vehicle actually becomes twice of what it is today, then it can have
16:20 some profits out there.
16:21 But at the average ticket size of auctions which we were doing or retail we were doing
16:25 was around 5-6 lakh rupee a vehicle.
16:27 It needs to go to around 12-15 lakh.
16:29 It is still a matter of time, maybe a decade out, maybe seven years out when that happens.
16:34 We will re-enter maybe at that point.
16:37 But we did evaluate it from all dimensions.
16:39 I did not find it viable.
16:41 I won't comment on the competition and why they are pursuing it.
16:44 But obviously there has to be a purpose there also.
16:47 Got it.
16:48 Amit, you are an IPO Bound company.
16:51 What's your metric for gauging when Car Dekho Group is ready for an IPO?
16:56 Is it a certain level of revenue that you are looking at or are you looking at say back-to-back
17:00 quarters of profitability?
17:02 How do you gauge when a company is ready for an IPO?
17:05 There are a lot of learnings from other tech companies which have gone public.
17:09 So, I think what we have picked is a leap from their playbook only on what worked, what
17:13 did not work.
17:14 So, what I realized is taking a company out which is profitable is a good idea and having
17:18 a trailing track record.
17:19 Not like that I become profitable this quarter, I go public.
17:22 I want to have at least four quarters to six quarters of track record of profitability.
17:26 That's one.
17:27 Number two is go out with a story which is not unviable or unbelievable.
17:33 Let's say I am making one rupee profit and I am claiming I will make hundred in next
17:37 five years.
17:38 If you want to make hundred, go at twenty.
17:41 So, that's the way I look at the problem statement.
17:44 So, make the story more believable with trajectory and track record and that will make the people
17:50 who are investing in the stock more believable.
17:52 Go at the right valuation, don't overprice the IPO.
17:55 So, that's the plan and depending on the macro obviously time it right.
18:00 Well, that was Kardeco's management for you.
18:03 Now, Zerodha MS first growth liquid ETF, Zerodha Nifty one day rate liquid ETF had its debut.
18:11 My colleague caught up with Zerodha fund house CEO Vishal Jain on the sidelines of the event.
18:18 In the market as of today there are around seven liquid ETFs and together they have an
18:24 EMF of about 15,000 crores or so.
18:27 All these ETFs paid dividend on a daily basis and at times it can be difficult for investors
18:33 to track the returns in these ETFs.
18:35 What we have done is we have innovated on this product, on this structure and the ETF
18:40 that we have launched is the Zerodha Nifty one day rate growth ETF, growth liquid ETF.
18:46 The difference between this ETF and other ETFs is that here because it's a growth ETF,
18:52 the NAV will reflect the returns of the product on a day to day basis and therefore it becomes
18:57 much more easier for investors to track returns on the product.
19:01 Right, you know, I mean you are pretty new in the passive mutual fund business.
19:06 You have already launched this third fund if I am not wrong.
19:08 So, can you help us understand how is the business term been, you know, kind of clients
19:12 that you are seeing and of AUMs also especially after launching the third fund.
19:16 Right, so we have had an overwhelming response till now.
19:19 We are a passive only fund house focusing only on retail investors and as you said it's
19:27 our third product.
19:28 We have got an overwhelming response.
19:30 I mean we had an NFO of the first two products and we raised about 104 crores in that NFO
19:35 and our AUM has already crossed about 250 crores in both these products, you know, in
19:40 a short span of about three months or so.
19:42 So, we are very excited about the journey.
19:45 This is again, you know, one of the products that we feel we have created especially for
19:51 retail investors and we think that, you know, the journey has just begun for us and you
19:55 will see a lot more coming from us in the coming few weeks.
19:58 Now, as the interim budget comes closer, here is a quick explainer by my colleague Malika
20:04 on what an interim budget and vote on account is.
20:07 What is an interim budget and vote on account?
20:11 In an election year, the elected government is responsible to come up with a union budget
20:16 for that financial year.
20:17 However, until elections happen and the new government is formed, the current government
20:22 comes up with a temporary financial plan which is referred to as the interim budget because
20:27 the current government's union budget is valid only until the end of the fiscal year
20:31 which is March 31st.
20:33 So, to meet the financial needs of the country until the new government is formed, an interim
20:38 budget is presented.
20:39 Nirmala Sitharaman, the Finance Minister of India will be presenting the interim budget
20:43 on the 1st of February.
20:45 Now, vote on account is a formal permission from the parliament to spend money for short-term
20:49 requirements from the consolidated fund of India.
20:52 Now, the consolidated fund of India deserves all the revenue generated by the central government
20:57 in terms of interest on loans, taxes and portion of state taxes.
21:02 And money from this fund cannot be withdrawn until it has been appropriated by the law.
21:07 Therefore, vote on account is the permission procedure to do just that.
21:11 That was a quick explainer for you.
21:14 Now, a quick look at a very important stock that happened or reacted in the market during
21:20 the day.
21:21 KEI Industries gained on the back of a strong set of Q3 numbers.
21:25 We spoke to the management on the company's capacity expansion plans and more.
21:31 We are not in a race to emulate the market leader or number one player.
21:39 We are not in the number one or number two race.
21:43 We are growing steadily over the last 15 years.
21:46 And to maintain the growth momentum, we are doing brownfield and greenfield capex in our
21:54 existing plants, as well as our new plant coming up at Sanand near Ahmedabad.
21:59 So, the overall capex of the company from this year to the FY28 will be close to around
22:10 1200 crore rupees.
22:11 So, that will boost our capacity to buy around 4,500 to 5,000 crore rupees per year.
22:21 So, we should be able to grow 15 to 17% year after year with the augmentation of the capacity.
22:30 Now, with that, it's a wrap on this show.
22:33 As we get closer to the interim budget, we get to the top corporate voices from the industry
22:38 on what they expect ahead of the budget.
22:41 Here's what Mayank Shah of Parle Products has to say about his expectations from the
22:45 budget 2024.
22:47 Thank you so much for watching.
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22:53 It is increased spends on infrastructure by government, higher allocation on infrastructure,
23:00 especially rural infrastructure, and higher allocation to rural employment generating
23:08 schemes.
23:09 This is one major expectation that we have from government.
23:12 What this will do is it will put money in the hands of consumer, higher spending by
23:17 government would also help in terms of generation of employment, both in urban as well as rural India.
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24:09 I'll say thanks to the people who have been with us through the pandemic.
24:10 I'm sure they've been with us through the pandemic as well, and I'm sure they've been
24:11 with us in the pandemic.
24:12 I'm sure they've been with us in the pandemic as well.
24:13 And I'm sure they've been with us in the pandemic as well.
24:14 And I'm sure they've been with us in the pandemic as well.
24:15 And I'm sure they've been with us in the pandemic as well.
24:16 I'm sure they've been with us in the pandemic as well.
24:17 And I'm sure they've been with us in the pandemic as well.
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