Viewpoints of Spokespersons on the recent RBI Monetary policy

 Views of Ms. Anagha Deodhar – Chief Economist,
ICICI Securities on the RBI Monetary policy

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As expected, the MPC voted unanimously to keep repo rate unchanged and the stance of monetary policy ‘accommodative as long as necessary’. The decision to hold rates came on the back of a difficult backdrop of slowing growth are rising inflation. The MPC upped inflation forecast for better part of FY22 by 20-30bps and lowered GDP growth forecast sharply to 9.5%, mainly due to lower than expected growth in H1FY22. This shows that the committee’s priority is supporting growth recovery. The RBI also announced on-tap liquidity window of Rs 150bn for contact-intensive sectors, additional liquidity facility of Rs 160bn to SIDBI and enhanced the threshold for resolution. Moreover, it announced purchase of government securities worth Rs 1.2trn under GSAP 2.0 in Q2FY22. All these measures together are likely to keep financial conditions in the economy benign and support recovery.

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 Client: Muthoot Finance

“RBI left the policy rates unchanged for sixth straight time and has avowed to continue accommodative stance as long as necessary to revive growth and help sustain it on a durable basis. This commitment by the central bank was supported by additional measures announced today such as a separate liquidity window of Rs. 15,000 crore for certain contact-intensive sectors and enhancing exposure threshold to Rs. 50 crore from Rs. 25 crore for MSMEs, small businesses and individuals for business loan purposes under Resolution Framework 2.0. Such steps will help borrowers to better mitigate the impact of pandemic’s second wave and we stand resolutely with every Indian to support all finance needs for a truly Atmanirbhar Bharat.”

Views of Indranil Pan, Chief Economist - YES BANK on the RBI Monetary policy

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As was expected, there were no change in the headline monetary policy rates as also the stance. In his statement, the Governor acknowledges the growth risks and now projects a lower real GDP growth for the year at 9.5%. Inflation projections have been raised too. Given the current evolution of the growth-inflation dynamics, there was absolutely no scope for the RBI to change its policy rates. Instead, the RBI endeavoured to keep the system fluid with adequate liquidity and also targeting rescue operations for the most stressed sectors in the economy. Consequently, a liquidity window was opened up for the contact intensive sectors that continue to totter with the burden of the pandemic. SIDBI was provided with a special liquidity facility to on-lend to MSMEs, specially the smaller ones. To enable the government to borrow at attractive rates, another round of bond buying was announced under G-SAP 1.0 while a G-SAP 2.0 was announced. We think that over the current FY, the RBI will not have any leeway to change its interest rates to provide support to the economy. Instead, it will do whatever necessary to push credit and liquidity to the stressed areas of the economy so as to prevent erosion of the supply chains in the economy.

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Client: Bank of India

Policy a fine balancing act between growth and inflationary expectations

Policy yet again proved to be a fine balancing act between growth and inflationary expectations. Expanding the scope of Covid 2.0 resolution framework coupled with the recent ECLGS modification is a welcome move to support the needy segments.

Shri A. K. Das, Managing Director & CEO, Bank of India

Client: Shriram Transport Finance

RBI’s monetary policy today was along expected lines with status quo on rates and continued accommodative stance. While the central bank acknowledged that the spread of Covid-19’s second wave into rural areas had brought forth downside risks and a slight reduction in GDP estimates for the year, the forecast of a normal monsoon bodes well for pickup in demand indicators going ahead. In continuation of a slew of measures taken by RBI since the start of the pandemic to better mitigate its impact on businesses & economy, there were additional ones announced today such as a separate liquidity window of Rs. 15,000 crore for certain contact-intensive sectors like supply chain, private bus operators, rent-a-car service providers, vehicle repair services among others. Such steps will keep liquidity abundant and financing conditions congenial necessary for preserving financial stability of all stakeholders.

Client: CREDAI

“RBI continues to maintain an accommodative stance as it is crucial to mitigate the impact of COVID Pandemic. Focus on equitable distribution of liquidity is expected to solve the fund shortage crisis to an extent. Modifying the ECLGS scheme and clear instructions to banks & other financial institutions on sanctioning funds to labour intensive sectors like Real Estate is the need of the hour. Moratorium on principal & interest for 6 months and freezing of SMA classification for another year will aid revival of businesses and thus the economy. The impact of the second wave on large businesses which provide millions of livelihoods is a lot deeper than it appears. MSMEs are staying afloat with the much needed support from the Government. Growing retail inflation coupled with increasing unemployment rates call for immediate & drastic measure from the Central bank.”

 

  

 

RBI Monetary Policy Quote From Our Clients

“RBI’s MPC expectedly stood pat on policy rates and reiterated accommodative stance as long as necessary to ensure economic activities are fully supported for durable recovery despite second wave of Covid-19 cases. The central bank retaining its 10.5% GDP growth forecast for FY22 shows faith in contribution to economic revival by key sectors and its liquidity measures along with bank lending to NBFCs being extended till September 30, 2021 is an acknowledgement of the systematically important role NBFCs have played in lending to the last mile. We remain steadfast and true to our promise of 

‘Containing fresh infections and boosting vaccinations are the 2 important steps to counter the socio-economic fallout of the pandemic. The pace of vaccination drive must be increased many folds and should cover younger population too. 

 

By keeping the repo rates unchanged, RBI has maintained an accommodative stance. The RBI Governor’s assurance to provide adequate credit by ensuring ample liquidity & announcement of Rs 10,000 Cr addl. liquidity to NHB must be passed onto the real estate  as the sector has been struggling to source funds for projects.

 

Real Estate sector is one of the key drivers of the economy and needs multi-faceted support from the Central bank and the Government to recover and bounce back to pre-COVID levels.’

Shriram Transport Finance

Please find below monetary policy views of  Mr. Umesh Revankar, Vice Chairman & MD, Shriram Transport Finance.

“RBI’s first monetary policy of FY22 was on expected lines with rates unchanged and accommodative stance retained. The Governor’s underlying commentary was dovish with continued priority on supporting economic revival measures through ample liquidity to all productive sectors. Recognising the key role played by NBFCs in making credit available to the last mile, on tap TLTROs and bank lending to registered NBFCs for on lending to priority sector has been extended by 6 months to September 30, 2021 and this will be particularly useful in supporting & nurturing financial needs of rural economy and semi-urban businesses, micro/small/individual operated businesses amid the current Covid-19 protocols.

ICICI Securities

Views of Ms. Anagha Deodhar – Chief Economist, 

ICICI Securities on the RBI Monetary policy

  

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The MPC’s decision to pause and maintain accommodative stance is along expected lines. However, it retained GDP growth projections for FY22 at 10.5% despite large stimulus in other countries and its potential impact on global growth. In this policy, the biggest announcement was GSAP 1.0 under which the RBI plans to buy government securities worth Rs 1trn in Q1FY22. Along with GSAP, the RBI also announced extension of several liquidity facilities. Together, these measures are aimed at keeping financial conditions benign, ensure orderly evolution of the yield curve and supporting the nascent recovery.

Mrs Bectors Food's Rs 540-cr IPO to open on

Mrs Bectors Food's Rs 540-cr IPO to open on 15^th Dec 2020

 

Mrs Bectors Food Specialities initial public offer of Rs 540-crore will open on Tuesday, 15^th December 2020 for public subscription. The price band has been fixed at Rs 286-288 per share for the initial public offering. The IPO comprises fresh issuance of shares worth Rs 40.54 crore and offer for sale to the tune of Rs 500 crore by existing shareholders.

 

The initial share-sale will open on December 15 for public subscription and close on December 17. Net proceeds of the issue would be utilised for financing the project cost towards expansion of the Rajpura manufacturing facility by establishing a new production line for biscuits and for general corporate purpose

 

Mrs Bectors Food manufactures and markets a range of products such as biscuits, breads and buns. It markets a wide variety of biscuits and bread under the flagship brand "Mrs Bector''s Cremica" and the "English Oven" respectively.

 

Linus Private Limited, Mabel Private Limited , GW Confectionary Pte Ltd and GW Crown Pte Ltd will be offering stocks in the initial share-sale. SBI Capital Markets, ICICI Securities and IIFL Securities will manage the company''s initial public offer (IPO).The equity shares will be listed on BSE and NSE.

ICICI Securities assists 25 Fintech startups

ICICI Securities assists 25 Fintech startups on their pre-incubation journey

NSRCEL, the startup hub at the Indian Institute of Management Bangalore (IIMB), today announced the list of 25 shortlisted fintech startups for a 15-month extensive program, which could see many of them receiving funding from the CSR fund of ICICI Securities, India’s leading financial services firm.

The selected ventures will undergo a 3-month pre-incubation journey during which they will be engaged in various sessions, workshops, peer-to-peer learning activities while they receive regular one-on-one mentoring and advisory sessions. Networking events, connects with industry experts, mock-pitches and interaction with investors will be major highlights of the program.

Post this, the ventures will be given an opportunity to pitch for incubation and funding and the selected ventures will be taken forward for a further 12-month incubation journey.

The initiative was launched in association with ICICI Securities as part of its CSR activity in April 2020, and received over 240 applications from across the country. The selection panel comprising of Mr. Rajiv Sawhney, COO, NSRCEL and Prof. Venky Panchapagesan, Chairperson, NSRCEL, evaluated all applicants and interviewed over 60 entrepreneurs, before handpicking the finalists.

The ventures selected are early-stage startups working in areas like trading, lending, payments, wealth advisory, insurance tech, accounting and financial management, billing software and auxiliary sector-logistics. The cohort covers the participants from nine cities across India including Bangalore, Pune, Mumbai, Guragaon, Raipur, Noida, Udaipur and Hyderabad.

ICICI Securities has undertaken to partner the initiative as it believes that fintech have immense potential in jobs creation and economic growth, something which is a need of the hour for India, which has a large population entering the workforce every year.

The selected startups are:

Insurtech Startups	Trading	Lending
·         Wellmo ·         WIMWISURE ·         Zimyo	·         Tradebeat ·         Purpletrades	·         WhatsLoan ·         Credochain ·         Mudra Circle

Wealth Advisory/ Investment Platforms	Payments	Accounting and Billing SAAS	Auxiliary
·         7Prosper  ·         Jarvis ·         Capital Quotient ·         Patten Effect Labs	·         MinksPay ·         Paperking ·         Paymatrix ·         Phi-Commerce ·         Zopnote ·         KhaaliJeb ·         NearPe	·         GIM Books ·         IDOS India ·         Hylo Challenger	Docboyz

ICICI Securities - Q4 FY 20 results

PAT at ` 156 crore, up 28% YoY

• Retail equities and allied revenue at ` 292 crore, up 35% YoY
• 1.48 million active clients; ~1.1L new clients added in Q4FY20
• NSE active market share up 40 bps YoY to 10%
• Private Wealth Management revenue up 53% to ` 87 crore YoY
• Final dividend @ ` 6.75/ share, amounting to full year dividend of ` 11/share

FY20 Performance Highlights

• Revenue at ` 1,725 crore, almost flat YoY
• PAT at ` 542 crore, up 10% YoY
• Return on Equity (RoE) at ~ 48%.

ICICI Securities (I-Sec), a part of the ICICI Group and India’s leading retail led equity franchise, distributor of financial products, and investment banker, today announced the financial results for the quarter (Q4FY20) and 12-month (FY20) period ending March 31, 2020.

Q4FY20 Performance

The company reported consolidated revenue of ` 482 crore in Q4FY20, against ` 428 crore in Q4FY19, up 13%, aided by growth in retail equities & allied business. Consolidated Profit After Tax (PAT) for Q4FY20 stood at ` 156 crore, Vs ` 122 crore in Q4FY19, up 28%, on account of growth in revenue and changes in statutory tax rates.

The company announced a final dividend of 135%, amounting to ` 6.75 per share (of `5 face value), taking the full year dividend to 220%, or ` 11 per share.

Business Highlights

I-Sec has 4.8 million operational accounts, of which about 1.1L were added during the quarter. The company has 1.48 million active clients (those having traded in the last 12 months) and ~1.08 million NSE active clients (those having traded on the NSE in the last 12 months), up 16% and
27% respectively. During the quarter, I-Sec’s NSE active market share grew ~40 basis points on-year to 10%.

In a major path-breaking initiative during the quarter, I-Sec opened up the I-direct platform, allowing even non ICICI Bank account holders to trade on I-direct almost instantly post completing a completely digital onboarding process. This allows I-sec to target even non ICICI Bank customers to achieve its growth objectives. The existing arrangement of acquiring ICICI Bank customers, working in tandem with ICICI Bank, continues and is ramping up well, reflecting in active client growth and market share.

The quarter witnessed one of biggest quarterly fall in Nifty, which fell by 29% in Q4FY20, down 23% in March alone. The period also saw high volatility and yet the icicidirect.com platform ensured unrestricted services even with volumes touching unprecedented peaks of processing 3.2 million orders plus trades per day, up from earlier peak of 2 million. During the period, the platform successfully served 65,000 concurrent customers, compared to average 23,000, and earlier peak of 48,000 users.

During the quarter, our Retail Equities and Allied Business revenue rose 35% to ` 292 crore vs ` 215 crore in Q4FY19. The allied business comprises lending towards ESOP & MTF, and Prime subscription fees. Employee Stock Option Plans (ESOP) & Margin Trade Funding (MTF) interest income rose 78% year-on-year to ` 33 crore in Q4FY20. Prime subscription income grew 44% sequentially to ~` 8 crore in Q4FY20.

The company continues to receive encouraging response to Prime, its annual subscription based plan that provides a package of privilege pricing, exclusive research, and higher eATM (payout within 30 mins of selling stocks) limits per day. Currently there are over 3.1 lakh Prime subscribers.
Institutional equities business revenue during the quarter rose by 13% on-year to ` 37 crore due to increased traction in block deals.

Distribution revenue stood at ` 115 crore in Q4FY20 up 3% against Q4FY19.
I-Sec is India’s second largest non-bank MF distributor by revenue with a 4% revenue market share (based on FY19 revenue). It earned ` 57 crore of revenue through MF distribution during the quarter, vs ` 59 crore in Q4FY19, down 4%.

With increased focus on other products like home loans, fixed income products, corporate bonds and deposits, insurance, AIF, PMS, SGBs, NPS, etc., non-MF distribution revenue rose 13% in Q4FY20 vs Q4FY19, to ` 54 crore. During the quarter, I-Sec expanded its fixed income offering by launching distribution of ICICI Bank fixed deposits.

The company has a network of 172 ICICIdirect branches (vs 199 in Q4FY19) and a nationwide network of business partners, consisting of sub-brokers, authorized persons, IFAs & IAs, which grew by 32% to 9,400+.

I-Sec’s Private Wealth Management (PWM) business reported ` 87 crore of revenue in Q4FY20, Vs ` 57 crore in Q4FY19, up 53%. The PWM business is a home-grown franchise set up to service affluent customers. It serves over 32,000 clients with an asset base of over ` 83,000 crore.
Our Investment Banking revenue stood at ` ` 10 crore in Q4FY20, down 23% on-year, primarily due to lower number of high value deals. I-Sec is ranked second amongst domestic financial advisors by number of deals in Merger Market table. The company has strong IPO pipeline (as per SEBI filling) of 12 deals amounting to over ` 37,800 crore.

Management Commentary

Mr. Vijay Chandok, Managing Director and Chief Executive Officer, said, “We had an eventful quarter which tested the resiliency of our business model. During these testing times, we ensured safety of our employees and continuity for our customers. Our predominantly digital business model has held us in good stead with 97% of equity and 94% of MF transactions conducted online by the clients themselves. Our platform has proved its mettle by successfully serving unprecedented number of concurrent users with very high trading volumes. Our proactive and real time risk management framework ensured we dealt with market volatility satisfactorily.

“During the quarter, we saw continuing retail participation as a steep correction in such a short period of time provided many with an opportunity to enter the market at multi-year low prices. In the current environment, investors are looking at sound advice, trusted partner, and a reliable platform, and we feel I-Sec scores high on all these.

"As a virtual financial supermarket, our continuing endeavor is to meet all the three need sets of our customers - wealth management and investments, protection of life & assets, and their borrowing needs. We remain focused towards digitizing more and more of our offerings, many of which we will launch alongwith our fintech partners. This is an extremely exciting journey with enormous possibilities going forward.

FY20 Performance
The company reported consolidated revenue of ` 1,725 crore in FY20, almost flat against ` 1,727 crore in FY19. Consolidated Profit after tax (PAT) for FY20 was up 10% at ` 542 crore, Vs ` 491 crore in FY19, on account of reduction in statutory tax rates.
Return on Equity (RoE) remained robust at ~ 48%.

I-Sec supports IIT Kanpur to develop indigenized

I-Sec supports IIT Kanpur to develop indigenized, portable, affordable and invasive ventilators in fighting Covid-19

ICICI Securities, India’s leading retail-led equity franchise today said, as a part of its CSR initiatives, it has joined hands with the prestigious Indian Institute of Technology Kanpur as a ‘Technology Development Partner’, to develop indigenized, high-end yet affordable invasive ventilators.

The ventilators are essential life saving devices that are critical for COVID-19 affected patients. It becomes critical for a country like India to start designing and manufacturing completely indigenized and low-cost invasive ventilators. To achieve this, the country must encourage Indian innovators to come to the fore, especially nimble-footed start-ups.

IIT-Kanpur, along with Nocca Robotics (a start-up incubated at Start-up Incubation and Innovation Centre IIT Kanpur - SIIC IIT Kanpur), has created a consortium with bio-medical engineers, doctors, R & D leaders, supply chain, MedTech business heads, etc., to develop a completely indigenized, invasive, portable and affordable mechanical ventilator. Under this fast-track project, by mid-May 2020, the product will be ready for market, post design, development and testing of prototypes at multiple centres.

“Covid-19 has created a pandemic and has affected the entire ecosystem. While the research work on diagnosis and cure are being done, the immediate need is ensuring affordable and low-cost life saving devices. At ICICI Securities, healthcare is one important area that we focus on CSR. We are happy to partner with IIT Kanpur, as part of our CSR initiative, in the R&D and testing of prototypes of indigenized, portable affordable and invasive ventilators. The project team has some of the brightest technical minds and they have set for themselves a very tight deadline so that the nation at large is benefitted. We are hopeful that the project meets the expectations of price and functionality,” said Mr. Vijay Chandok, MD & CEO, ICICI Securities.

“At IIT Kanpur, we are doing our bit towards global efforts on fighting the Covid-19 pandemic. We learnt that ventilators will be in short supply as the number of affected patients rise and our team rose to the challenge by taking on themselves the responsibility to design ground-up an affordable yet fully functional ventilator. We are happy to partner with ICICI Securities as a Technology Development Partner to bring this project to light,” said Prof. Abhay Karandikar, Director of IIT Kanpur.

Route Mobile gets SEBI nod for Rs 600 cr IPO

Route Mobile gets SEBI nod for Rs 600 cr IPO

Omni Channel Cloud Communications Service Provider, RouteMobile, has received market regulator Securities and Exchange Board of India’s nod to raise an estimated Rs 600 crore through the Initial Public Offering (IPO) route. The company had initially filed for its IPO in January 2018, it refiled its document on 3 October 2019.

The Company was issued final observations by capital market regulator, SEBI on 24 December 2019, according to the information published on its website

According to the Draft Red Herring Prospectus (DRHP) filed by the company, the offer comprises of a fresh issue worth Rs 240 crore and an Offer For Sale (OFS) of Rs 360 cr by the promoters, Y Sandipkumar Gupta and Rajdipkumar Gupta. Additionally, a pre ipo placement of upto aggregating upto Rs 100 crores may be considered in consultation with the BRLMs which will reduce the size of the offer, retrospectively

ICICI Securities Limited, Axis Capital Ltd, Edelweiss Financial Services Ltd, IDBI Capital Markets & Securities Limited are the BRLMs to the issue.

The company will use Rs. 36.9 crore towards repayment and advance payment of certain borrowings, Rs 83 crore for acquisitions and other strategic initiatives besides the purchase of an office premise.

The company has serviced more than 27500 clients across sectors including BFSI, Aviation, Retail, E-Commerce, Logistics, Healthcare, Hospitality, Media and Entertainment, Pharmaceuticals and Telecom. It’s  total revenue increased at a CAGR of 37.87 per cent from Rs 4,575 million in FY2017 to Rs 8,446.68 million in FY 2019.

Route Mobile hasn’t any capital infusion in the company since 2007, all the growth has been funded through internal accruals and the strategy going forward would be to augment its cloud services across multiple channels of communication, cross sell and upsell multiple solutions to enterprises to become a one stop solution and adopt a bi modal go to market strategy via its developer community programme.