Part 10 of our 'Word on the Street' column, which gets you the unreported chatter from the world of business and markets, put together by our fly-on-the-wall reporters.
When nothing works, trust in God
Things have been pretty bleak for most stock market players for a while now. And for the ones whose portfolios are in the black, the returns would barely match bank fixed deposit rates. From the look of it, the trend is unlikely to change for the better any time soon. That could perhaps explain why a top honcho at a domestic broking firm, who also happens to be an avid Buffett follower, has chartered an aircraft and is planning to visit a few pilgrimage spots, accompanied by dozen-odd friends from the market. The government does not seem particularly sympathetic to the cause of stock market investors, and that hurts all the more because this section of voters strongly believed that a stable government was the solution to every problem facing the markets and the economy. As for the value investor and his buddies, who are setting out on a pilgrimage, they seem to believe in the saying that when everything else fails, there is always God.
Who will finally say ‘Yes’?
The stock price of a one-time darling of the markets from the banking index has slipped below the three-figure mark in the last month. Clearly, the zeal displayed by the new management to raise ‘confidence capital’ and shrug away governance concerns hasn’t impressed impatient investors so far. But the beleaguered lender is not giving up hope yet. A little birdie tells us that discussions with private equity investors will be fast-tracked after the company’s quarterly results and the bank’s top brass will push for early closure of the deal. Four marque PE funds are believed to be in the fray. But their biggest concern is the bank’s exposure to certain notorious stressed accounts. Will that hit deal valuations? Watch this space for more…
Good times on the horizon?
Budget 2019 was an event eagerly awaited by a lot of South East Asian insurers. After the 49 percent FDI limit in insurance came with the dampener – that of ensuring full Indian management control, many prospective entrants from Asia stepped back. Now that the finance minister has promised a re-look into the FDI cap, initial activity has begun. HR consultants have been sounded off on the numbers that could be needed and real estate firms are also being approached for lucrative deals. One player that had brought a small property in South Mumbai about seven years ago is particularly happy as it can now rekindle potential deals from the base.
An online portal of a leading media house which allows investments in direct mutual funds, and tax saving schemes, and claims it as a ‘one-stop shop for all personal finance needs’ is on the SEBI’s radar.
The portal recently did a mailing campaign for investments via direct plans offered by mutual funds and charged fund houses a commission on their inflows. SEBI has asked the portal to return the commission since the regulatory norms do not allow online portals to charge a fund house on such MF campaigns.
One can relate to the story of Elder Pharma whenever there’s mention of a failed company. The company was built by a first generation entrepreneur that hit payday with calcium carbonate (chuna) plus vitamin D combination called Shelcal. The drug was a big hit with doctors and patients alike. The company made a fortune, but the sudden demise of its entrepreneur and wrong bets (including producing films) by the second generation pushed the company into debt, forcing it to sell its top brand. Now, the company's title Elder too has become a bone of contention, with another party claiming rights to it.
At arms length from Amazon
If you are an avid online shopper, you will have seen the name of Cloudtail, the largest seller on Amazon India, pop up while buying goods.
But it's unlikely you would have heard of its parent, Prione Business, whose executives have recently been seen doing the rounds of the corridors of power.
The CEO of the hitherto-unknown company recently attended an industry meeting conducted in the "interests of SMEs". He also kept his distance from executives from Amazon at the meeting.
What's with the sudden change? It's learnt that Commerce Minister Piyush Goyal recently made it clear that companies violating clauses of Press Note 2 will be dealt with severely.
The Press Note 2 tightened norms that define the relationship between e-marketplaces and their vendors.(Contributed by Santosh Nair, M Saraswathy, Ashwin Mohan, Viswanath Pilla, Himadri Buch and Priyanka Sahay)