In the week gone by, global stock markets rallied on anticipation that more fiscal I spending under the Biden administration will revive economic growth and bolster corporate earnings. Joseph Robinette Biden Jr. was sworn in as the 46 President of the US. Meanwhile, fresh tensions surfaced between U.S. companies and Beijing. China’s three biggest telecommunications firms said they requested a review of the New York Stock Exchange’s decision to delist their shares. With more than a trillion Euros in stimulus still in the pipeline to the economy, the European Central Bank left its key bond-purchase program unchanged Thursday as the 19-country Eurozone endures a winter economic slowdown due to the pandemic. Moreover, European Central Bank President Christine Lagarde warned the virus continues to pose a serious risk after policy makers voted to keep pumping unprecedented amounts of stimulus into the economy. Japan’s core consumer prices slumped in December at the fastest annual pace in a decade, a sign of intensifying deflationary pressures that sharpen the case for the central bank to come up with better ways to combat the deepening impact of the COVID-19 pandemic. On the virus front, global fatalities hit a daily record, with a U.K. official comparing some hospitals there to a “war zone”. The head of the International Monetary Fund said the global economic outlook remained highly uncertain given the coronavirus pandemic, and a growing divergence between rich and poor countries required the IMF to find more resources.
Back at home, domestic markets rallied and Sensex touched 50,000 levels on persistent buying by foreign players, growth optimism amid other positive global cues. However the enthusiasm faded away soon and market witnessed profit booking during the end of the week. The Finance Ministry on Monday released the 12th installment of Rs 6,000 crore to states to meet the GST compensation shortfall, taking the total amount released so far under this window to Rs 72,000 crore. The Reserve Bank of India expects a quick V shaped recovery. Moreover, it also said that if growth momentum continues and inflation stays benign there would be room for policy action to support growth. RBI also said the growing economic optimism is a result of the country's efforts to avoid a second wave of the Covid-19 pandemic. Going forward market is expected to take direction from the budget announcement, which is scheduled on 1st Feb, 2021. It seems to be a tightrope walk for the government to increase spending without going overboard. In this budget, buoyancy in tax collections, disinvestment, and borrowings are expected to be the major sources from where the government would raise funds. The government may set the most aggressive disinvestment and asset monetisation programme for the FY22 budget. Besides, the corporate earnings result, global cues, Rupee movement, mood of the foreign and domestic players and crude oil prices will continue to give direction to the market.
On the commodity market front, Commodities traded in a tight range due to lots of ambiguity in the week gone by. Market participants were reluctant to take aggressive position ahead of power transfer in US. The U.S. currency continued its losses as increased hopes for massive U.S. stimulus measures under the newly inaugurated Joe Biden administration eroded demand for safe-haven currencies. Risk sentiment is positive for 2021 when we talk about base metals and with growth expected to rebound quite strongly. Base metals may see further rally but buying should be done on correction. Bullion counter may trade sideways with some downside bias. It may touch 48500-48000 levels on lower side whereas silver has support between 63500- 63000 levels. Consumer Confidence, GDP, Core PCE Price Index, PCE Price Index, Michigan Consumer Sentiment Finaland Durable Goods Orders of US, Employment Change of UK, Inflation Rate of Australia and Germany, Unemployment Rate and GDP of Germany are few important triggers for the market.
SMC Global Securities Ltd. (hereinafter referred to as “SMC”) is a registered Member of National Stock Exchange of India Limited, Bombay Stock Exchange Limited and its associate is member of MCX stock Exchange Limited. It is also registered as a Depository Participant with CDSL and NSDL. Its associates merchant banker and Portfolio Manager are registered with SEBI and NBFC registered with RBI. It also has registration with AMFI as a Mutual Fund Distributor.
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SMC or its associates including its relatives/analyst do not hold any financial interest/beneficial ownership of more than 1% in the company covered by Analyst. SMC or its associates and relatives does not have any material conflict of interest. SMC or its associates/analyst has not received any compensation from the company covered by Analyst during the past twelve months. The subject company has not been a client of SMC during the past twelve months. SMC or its associates has not received any compensation or other benefits from the company covered by analyst or third party in connection with the research report. The Analyst has not served as an officer, director or employee of company covered by Analyst and SMC has not been engaged in market making activity of the company covered by Analyst.
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SAFE HARBOR STATEMENT: Some forward statements on projections, estimates, expectations, outlook etc are included in this update to help investors / analysts get a better comprehension of the Company's prospects and make informed investment decisions. Actual results may, however, differ materially form those stated on account of factors such as changes in government regulations, tax regimes, economic developments within India and the countries within which the Company conducts its business, exchange rate and interest rate movements, Impact of competing products and their pricing, product demand and supply constraints. Investors are advised to consult their certified financial advisors before making any investments to meet their financial goals.
The company is doing well and according to the management, higher profitability to be supported by an improving balance sheet position and stronger volume growth. Further According to the management of the company, the Company has registered profit in Q2 FY'21 by braving all odds and exhibiting substantial growth in the operational performance. The Company is determined to perform better in future and is geared up to take all necessary actions to remain a world-class domestic steel producer towards building an Atmanirbhar Bharat. Thus, it is expected that the stock will see a price target of Rs.65 in 8 to 10 months’ time frame on current P/Bv of 0.59x and FY22 BVPS of Rs.110.87
The company continues to focus on areas critical to better financial performance such as cost control, improved asset utilization, reduce debt levels, and overall improvement in productivity is expected to lead to a stronger balance sheet in the years to come. Finolex Cables Limited is well poised to take advantage of any future growth opportunity. Thus, it is expected thatthe stock will see a price target of Rs.456 in 8 to 10 months time frame on a currentthree year average P/E of 18.04x and FY22 EPS of Rs.25.26.
The stock closed at Rs 3303.10 on 22nd January 2021. It made a 52-week low at Rs 1506.05 on 13th March 2020 and a 52-week high of Rs. 3327.95 on 20th January, 2021. The 200 days Exponential Moving Average (DEMA) of the stock on the daily chart is currently at Rs 2542.96.
Short term, medium term and long term bias are looking positive for the stock as it is trading in higher highs and higher lows on charts which is bullish in nature. Apart from this, it has formed a “Bull Flag” pattern on daily chart and has given the breakout of same during the last week, closed above the same so buying momentum may continue for coming days. Therefore, one can buy in the range of 3270- 3280 levels for the upside target of 3500-3550 levels with SL below 3140.
The stock closed at Rs 521.95 on 22nd January, 2021. It made a 52-week low of Rs 240.10 on 07th April, 2020 and a 52-week high of Rs. 535 on 22nd January, 2021. The 200 days Exponential Moving Average (DEMA) of the stock on the daily chart is currently at Rs 450.26.
After registering yearly low of 240 in early April, 2020, stock recovered sharply and formed an “Inverted Head and Shoulder” pattern on weekly charts and trading higher. From past few weeks, stock has consolidated in narrow range with positive bias, has given the breakout of consolidation with high volumes and also closed with positive bias so further upside is expected in coming days. Therefore, one can buy in the range of 510-515 levels for the upside target of 560-570 levels with SL below 480.
Disclaimer : The analyst and its affiliates companies make no representation or warranty in relation to the accuracy, completeness or reliability of the information contained in its research. The analysis contained in the analyst research is based on numerous assumptions. Different assumptions could result in materially different results.
The analyst not any of its affiliated companies not any of their, members, directors, employees or agents accepts any liability for any loss or damage arising out of the use of all or any part of the analysis research.
SOURCE: RELIABLE SOFTWARE
Charts by Reliable software
It’s been a highly volatile week for Indian markets as Nifty indices witnessed record high levels during the week but on the back of profit booking markets shed all its gains and settled the week on negative note. Sell off was seen in most of the sectors which further pulled the markets down. The Implied Volatility (IV) of calls closed at 21.81% while that for put options closed at 23.19. The Nifty VIX for the week closed at 22.18%. PCR OI for the week closed at 1.17 indicates more puts writing than calls. From derivative front, put writers at 14600 strike were seen unwinding their positions while call writers added hefty open interest at 14550 & 14500 strikes. Recent development in derivative data suggests that profit booking at higher levels could continue in coming sessions as well. On downside, 14200- 14150 zone would act as immediate hurdle for Nifty while 14550-14600 would be strong hurdle.
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**The highest call open interest acts as resistance and highest put open interest acts as support.
# Price rise with rise in open interest suggests long buildup | Price fall with rise in open interest suggests short buildup
# Price fall with fall in open interest suggests long unwinding | Price rise with fall in open interest suggests short covering
Turmeric futures (Apr) is looking bullish and lower level buying is recommended in this commodity as it has the potential to test 6700 levels. According to the traders of the spot markets, turmeric prices are holding up in primary agricultural markets on pickup in demand and fears of lower production this year. During the 2019-20 season (July-June), India’s turmeric production was estimated at 9.46 lakh tones as compared to 9.61 lakh tonnes the previous year, despite the area under the crop rising by 4,000 hectares to 2.57 lakh hectares. The turmeric crop has begun arriving in Telangana and Andhra Pradesh since early this month, while it will start in other parts of the country in a month’s time. Exports have helped turmeric prices gain. Jeera futures (Mar) is expected to consolidate in the range of 13100-13500 levels. On the spot market, all the jeera varieties are quoting steady. Traders are focusing on the ongoing sowing in Gujarat. The weather conditions remain supportive and traders are keeping out of buying large quantities in wholesale markets ahead of new arrivals from next month. Dhaniya futures (Apr) may facing resistance near 6150 since past two weeks, with upside getting capped and a similar trend can be seen in days to come. Coriander crop arrivals are picking pace in mandis of Rajasthan, Gujarat and Madhya Pradesh. The new crop has a moisture content of 12-14%, due to which it is priced at Rs 5000 - 5500 per quintal. Prices are weighed upon by new coriander arrivals in Uttar Pradesh as well. Demand from South Indian spice millers is under wait-andwatch mode in mandis of Rajasthan.
Bullion prices rose to their highest in nearly two weeks as the U.S. dollar eased on hopes of further stimulus under President Joe Biden's administration, although some profit booking checked the metal's gains. Gold has some more upside in the slightly longer horizon, given that global central banks are likely to stay dovish for an extended period of time. ECB President Christine Lagarde kept the central bank's policy unchanged, but said it was prepared to provide more support to the economy if needed. Benchmark 10-year U.S. Treasury yields held firm above 1%, helping the dollar trade steady. Market focus was also on Biden's $1.9 trillion stimulus plan as he gears up to jump-start his response to the COVID-19 pandemic, which has claimed more than 400,000 lives and upended the world's largest economy. However, there is potential for the stimulus package to be watered down as it passes through the Senate, which will be negative for gold as it will strip down some of the inflation expectations. The virus mutation is a big wild card and if vaccine development, manufacturing and rollout can't catch up to the pace of the mutation, the pandemic could last much longer than we'd previously thought. The dollar, on the other hand, slipped to a one-week low against key rivals, making greenback-denominated bullion cheaper for investors holding other currencies. Ahead in this week, we may continue to witness huge volatility and gold may trade in the range of 47500 -50900 and Silver may trade in the range of 62800-68800. Whereas on COMEX gold may trade in the range of $1810- $1890 and Silver may trade in the range of $23.40-$27.10.
In days to come, further selling can be seen in soybean futures (Feb) and likely to test 4400 owing to lack of demand from poultry sector due to outbreak of birdflu and also bearish sentiments on CBOT. In India, Avian flu has significant economic impact. When chicken prices crash, they tend to bring down maize and soybean meal prices too. Chicago soybean futures poised for its first weekly decline in more than a month, as rains in South American key growing areas improved crop yield prospects and assuaged worries about global supply. Argentine soybean planting sped forward over the last week, helped by rain that moistened fields parched by months of dry weather. The correction phase in edible oils is likely to get continued owing to lack of physical demand in the spot market and softness in oilseeds counters in both domestic and domestic market. Soy oil futures (Feb) can see downside level of 1050-1040, while CPO futures (Feb) may fall towards 900-890. Malaysian palm oil futures (Apr) is declining on tepid January exports and weak prices of rival soyoil weighing on sentiment. The market is expected to remain on a downtrend until we see an improvement in demand from big buyers such as China and India. RM Seed futures (Feb) is expected to hold the support near 5565 and trade with an upside bias. Upward trend is intact in spot market of Rajasthan and other producing states as millers and processors rushing for buying at lower prices. The sentiments are positive as millers and processors were buying the oil seed to fill up their stocks. They need to maintain their stock for regular crushing operation. New crop will take some time to hit the market.
Crude Oil prices slipped after industry data showed a surprise increase in US crude inventories that revived pandemic-related fuel demand concerns, while US stimulus hopes buoyed prices. Compliance with a deal to cut output from the Organization of the Petroleum Exporting Countries and its allies fell in December from November. Meanwhile, rising coronavirus cases in China, the world's largest crude oil importer, weighed on prices. Beijing plans to impose strict virus testing requirements during the Lunar New Year holiday season, when tens of millions of people are expected to travel, as it battles the worst wave of new infections since March 2020. Among his first actions as president, Joe Biden announced America's return to the Paris climate accord to combat climate change and revoked a permit for the Keystone XL oil pipeline project from Canada. The administration is also committed to ending new oil and gas leasing on federal lands. Ahead in this week crude price may witness huge volatility within the range of 3570-4060, where buying near support and sell near resistance would be strategy. U.S. natural gas futures fell over 3% to a three-week low on forecasts for milder weather and lower heating demand through early February. That small decline came even though higher gas prices around the world continued to prompt buyers to purchase near record amounts of U.S. liquefied natural gas. Even though the weather will remain milder than normal through early February, and week ahead (26th30th Jan) is still expected to be much colder than this week. Ahead in this week we may expected prices may trade with sideways to bearish bias where support is seen near 168 and resistance is seen near 197.
Cotton futures (Feb) is on the verge of giving a breakout and test 22500-22700 owing to bullish fundamentals prevailing in both the domestic as well as on the international market. The Cotton Corporation of India (CCI) plans to export at least 10 lakh bales of cotton during the current season. The governments of India and Bangladesh are expected to sign a memorandum of understanding in this regard. ICE cotton futures rose to more than a two-year high on the back of a weaker dollar. Lower level buying would be suggested in guar seed and guar gum as both of these commodities have come out of the long consolidation phase showing bullish moves and in days to come can test 4150 and 6700 levels respectively. There are hopes for better demand for crude oil grade guar gum powder after change in US presidency. US president Joe Biden may discourage chemical usage in crude oil and gas exploration as per his new policy for climate protection. It is expected that crude oil and gas companies will shift to guar gum so demand will pick up. Rubber futures (Feb) is expected to take support near 15000 and trade steady taking positive cues from the spot markets. RSS 4 was quoted steady at Rs.153 per kg by traders and the Rubber Board. The trend was partially mixed as Latex improved mainly on enquiries from the general rubber goods sector. Meanwhile, Kerala’s move to incentivise rubber growers by increasing the support price to Rs.170 per kg from Rs.150 in the State Budget for 2021-22 will provide some respite to small and marginal farmers, who are reeling under high cost of production, stakeholders.
Base metals may trade with weak bias on worries that demand from top consumer China will be dampened due to the country's rising coronavirus cases that could trigger further restrictions. China has been dealing with its biggest coronavirus outbreak since March 2020. Copper may trade in the range of 580-620. Global copper smelting activity climbed in December, led by top producer China, while North America extended its decline as coronavirus cases surged, data showed. Zinc may trade in the range of 207-218 while Lead can move in the range of 155-170. According to the World Bureau Of Metal Statistics, the global lead market recorded a deficit of 86 kt in January to November 2020 as compare to deficit of 264 kt recorded in the whole of 2019. The zinc market was in surplus by 356 kt during January to November 2020 which compares with a deficit of 76 kt recorded in the whole of 2019. Nickel may trade in the range of 1270-1340. As per WBMS, the global nickel market was in surplus during January to November 2020 with production exceeding apparent demand by 53.6 kt. Aluminum may move in the range of 155-168. Global primary aluminum production grew to 5.67 million mt in December, up 4.22% on the year, the IAI reported. In the whole of 2020, global primary aluminum production reached 65.27 million mt, slightly up from 63.66 million mt in 2019. China's two biggest aluminium makers issued a joint proposal on how their industry should seek to reduce emissions, conserve energy and produce low-carbon metal, as part of a national plan to achieve carbon neutrality.
COPPER (FEB) contract closed at Rs. 610.25 on 21st Jan’2021. The contract made its high of Rs.629.75 on 08th Jan’2021 and a low of Rs.593.00 on 31st Dec’2020. The 18-day Exponential Moving Average of the commodity is currently at Rs.608.34 On the daily chart, the commodity has Relative Strength Index (14-day) value of 51.55.
One can sell around Rs. 214 for a target of Rs.195 with the stop loss of Rs.222.
NATURAL GAS MCX (FEB) contract closed at Rs. 181.90 on 21st Jan’2021. The contract made its high of Rs. 216.80 on 23rd Nov’2020 and a low of Rs. 169.00 on 28th Dec’2020. The 18-day Exponential Moving Average of the commodity is currently at Rs.190.10 on the daily chart, the commodity has Relative Strength Index (14-day) value of 30.02.
One can sell around Rs.188 for a target of Rs. 172 with the stop loss of Rs. 196.
RMSEED NCDEX (FEB) contract was closed at Rs. 5636 on 21st Jan’2021. The contract made its high of Rs. 6423.00 on 06th Jan 2021 and a low of Rs. 5353.00 on 18th Dec’2020. The 18-day Exponential Moving Average of the commodity is currently at Rs. 5770.11 on the daily chart, the commodity has Relative Strength Index (14-day) value of 43.66.
One can sell at Rs. 5800 for a target of Rs.5400 with the stop loss of Rs 5970.
Commodities traded in a tight range due to lots of ambiguity in the week gone by. Market participants were reluctant to take aggressive position ahead of power transfer in US. The U.S. currency continued its losses as increased hopes for massive U.S. stimulus measures under the newly inaugurated Joe Biden administration eroded demand for safe-haven currencies.Riskier commodity currencies gained after as Biden, who has laid out plans for a $1.9 trillion COVID-19 relief package, was sworn into on Wednesday. Gold held gains as the dollar extended declines and Joe Biden was sworn in as U.S. president, with investors looking ahead to the potential delivery of fiscal stimulus. Silver was also in focus after global exchange-traded fund holdings hit an all-time high. Biden is planning to re-engage with the WHO and will dispatch the government’s top infectious-disease expert to speak to the group. Oil erased its increase after an industry report showed U.S. stockpiles grew in previous weeks, heightening concerns over lackluster consumption. Worldwide fuel use is expected to take another hit as new virus outbreaks in China added to a wave of infections in Europe and other parts of the world.Base metals market was in fix. The market will remain tight over the next six to 12 months, with new supply delayed because lockdowns and mobility restrictions last year led copper producers to suspend projects in progress. Bullish demand from the battery sector in 2020, which contributed 5pc growth in overall nickel demand — has underpinned the steep price gains, with demand from the stainless steel sector estimated to be up by just 2pc in 2020.
Turmeric was up on steady demand against lower arrivals.Demand from domestic bulk buyers is also expected to rise from next month, when the quality of the new crop improves.Export demand of Jeera remained weak as stockists await arrivals of the new crop, which is expected to hit spot markets in February.Mustard seed prices bounced back in spot market of Rajasthan and other producing states as millers and processors rushed for buying at lower prices.The sentiments of Cotton in the international market is bullish on account of U.S. 2020/21 cotton outlook showing higher exports, and lower production and ending stocks this month. U.S cotton exports are raised 250,000 bales as rebounding world demand helps sustain a strong export pace.On CBOT, Chicago soybean futures fell as rains across South America eased supply concerns and encouraged selling after recent multi-year highs. A further slide for palm oil futures, which hit a two-month low, also weighed on other oilseed markets like soybeans.
After sworn in as the 46th President of the United States in the nation’s capital, Jo Biden, a Democrat, in his first speech, pledged to defend the nation and fight the multiple crises facing Americans. In the hours after his address, the new president took action to reverse the some of former President Donald Trump's most controversial initiatives and bolster the federal government's response to the coronavirus pandemic. Seated in the Oval Office, Mr. Biden signed a stack of executive orders and actions ranged from rejoining the Paris agreement on climate change, halting America's withdrawal from the World Health Organisation, revoking Muslim travel ban and stopping immediate construction of Mexico border wall.
Indian Rupee remained largely positive this week after record domestic equities flows to the tune of $2.7 billions from FIIs, helped rupee to lift beyond 73.00. However frequent RBI's intervention halted the domestic unit to rally sharply. We think next week FOMC meeting ending on Wednesday will be crucial for dollar move. Meanwhile negative positions in US Dollar reached to the highest level in 3 years after Joe Biden's promise of $1.9 trillion stimulus spending boosted market sentiment but that always come with high volatility. On the major side, Inflation figures for November, released on Wednesday, have also supported the pound, sending it to an eight-month high against the common currency. A faster pace of price rises reduced the pressure on the Bank of England to ease monetary policy further, a move that could have knocked the pound’s rally off course. Meanwhile, some pull-back seen in pound after lower estimates print in December retail sales. It is expected that pound is likely to get supported amid stimulus expectations keep the risk-on sentiment enhances further.
USD/INR (FEB) contract closed at 73.0325 on 21-Jan-21. The contract made its high of 73.4075 on 18-Jan-21 and a low of 72.9300 on 21-Jan-21 (Weekly Basis). The 21-day Exponential Moving Average of the USD/INR is currently at 73.4037.
On the daily chart, the USD/INR has Relative Strength Index (14-day) value of 36.70. One can buy at 72.90 for the target of 73.90 with the stop loss of 72.40.
GBP/INR (FEB) contract closed at 100.1975 on 21-Jan-21. The contract made its high of 100.3275 on 21-Jan-21 and a low of 99.2625 on 18-Jan-21 (Weekly Basis). The 21-day Exponential Moving Average of the GBP/INR is currently at 99.7030.
On the daily chart, GBP/INR has Relative Strength Index (14-day) value of 55.82. One can buy at 99.70 for a target of 100.70 with the stop loss of 99.20.
| 22th JAN | Japan PM says determined to realise Olympics, will cooperate with Tokyo and IOC |
| 21st JAN | U.S. labor market recovery fading; housing, factories underpin economy |
| 21st JAN | UK says post-Brexit paperwork will be fine once businesses adjust |
| 21st JAN | Biden seeks five-year extension of New START arms treaty with Russia |
| 21st JAN | UK PM Johnson says trade deal is new starting point for EU relationship |
| 21st JAN | Fire at India's Serum Institute kills 5, AstraZeneca vaccine output unaffected |
| 20th JAN | U.S. climate envoy Kerry, UK's COP26 chief discuss common goals |
| 19th JAN | Bank of America eyes loan growth after first decline in six years |
| 18th JAN | Lockdowns fuel fears of double-dip recession in Eurozone |
EUR/INR (FEB) contract closed at 88.6750 on 21-Jan-21. The contract made its high of 89.1125 on 21-Jan-21 and a low of 88.4250 on 18-Jan-21 (Weekly Basis). The 21-day Exponential Moving Average of the EUR/INR is currently at 89.3029
On the daily chart, EUR/INR has Relative Strength Index (14-day) value of 37.49. One can buy at 88.50 for a target of 89.50 with the stop loss of 88.00.
JPY/INR (FEB) contract closed at 70.6075 on 21-Jan-21. The contract made its high of 70.7475 on 18-Jan-21 and a low of 70.3600 on 19-Jan-21 (Weekly Basis). The 21-day Exponential Moving Average of the JPY/INR is currently at 70.7824.
On the daily chart, JPY/INR has Relative Strength Index (14-day) value of 44.33. One can buy at 70.40 for a target of 71.40 with the stop loss of 69.90.
(2.5/5)
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To augment company's capital base to meet future capital requirement.
To achieve share listing benefits on the exchange.
Considering the P/E valuation, on the upper end of the price band of Rs. 518, the stock is priced at pre issue P/E of 53.78x on its actual annualised FY20 EPS of Rs. 9.63. Post issue, the stock is priced at a P/E of 57.12x on its EPS of Rs. 9.07. Looking at the P/B ratio at Rs. 518 the stock is priced at P/B ratio of 4.31x on the pre issue book value of Rs.120.11and on the post issue book value of Rs. 149.41 the P/B comes out to 3.47x.
On the lower end of the price band of Rs.517 the stock is priced at pre issue P/E of 53.67x on its annualised FY20 EPS of Rs. 9.63.Post issue, the stock is priced at a P/E of 57.01x on its EPS of Rs. 9.07. Looking at the P/B ratio at Rs.517, the stock is priced at P/B ratio of 4.30x on the pre issue book value of Rs. 120.11 and on the post issue book value of Rs. 149.41, the P/B comes out to 3.46x.
Incorporated on February 3, 2010, Home First Finance Company India Limited (“Home First Finance”) is a technology driven affordable housing finance company that targets first time home buyers in low and middle income groups by offering them housing loans to construct and buy homes. It has a strong presence in economically healthier states likeGujarat(39 percent of gross loan assets), Maharashtra (21 percent of GLA), Tamil Nadu (10.5 percent of GLA), Karnataka (9.3 percent of GLA) and Rajasthan (5.1 percent of GLA. Also as of September 2020 and March 2020, its Stage-3 loan assets expressed as a percentage of gross loan assets were 0.74 percent and 0.87 percent,respectively.
Technology Driven Company with Scalable Operating Model: Home First Finance is a technology driven affordable housing finance company and has built a scalable operating model. During the 6 months ended September 30, 2020 and the last 3 financial years, The company has invested ₹ 20.12 crore in its information technology systems. Home First has posted strong growth in net interest income (NII) of 58.6 percent CAGR between FY18-20 while net profits have grown at a CAGR of 122.6 percent during the same period. Despite the COVID-19 crisis The company's asset quality has remained largely stable with gross non-performing assets (NPA) and net NPA largely stable at 0.7 percent and 0.5 percent respectively at the end of September 2020.
Customer Centric Organizational Commitment: The company’s customer centric approach has been a key driver of its growth and helped it to differentiate itself from competition and achieve superior net promoter scores. As of September 30, 2020, its customer mobile application, ‘Home First Customer Portal’ had approximately 26,098 active registrations comprising approximately 58.7% of its customer base and currently has a rating of 4.2 on the Google Play Store. It also has an application ‘HomeFirst Connect’ for its channel partners and ‘HomeFirst RM Pro’ for its relationship managers. The company has grown its Asset Under Management (AUM) from Rs 2,443.57 Crores in the previous year to Rs 3,618.36 crs as at March 31, 2020 recording a growth of 48.1%
Well-Diversified and Cost-Effective Financing Profile: The company is able to access borrowings at a competitive cost due to its stable credit history, superior credit ratings, conservative risk management policies and strong brand equity. Moreover, The company has improved its credit ratings from ‘CARE A-’ as of March 31, 2017 to ‘CARE A+’ as of September 30, 2020 and also currently has an A+ (stable) rating from ICRALimited. As of September 30, 2020, its Total Borrowings (including debt securities) were ₹ 26,36.58 Crore. During the six months ended September 30, 2020, it had proceeds of borrowings from banks and financial institutions of ₹ 1,81.10 crore.
Leverage Technology to Grow Business and Drive Operational Efficiency: The company seeks to leverage technology to enhance its lead sourcing and customer fulfillment process. It intends to launch a customer self-onboarding application through which a customer can make a loan application and upload relevant documents.
xpand Branch Network in Large Affordable Housing Markets: EThe company intends to expand its business in a contiguous manner into regions with increasing urbanization, growing commercial activity and rising household incomes.
Grow the Productivity of Existing Branches: The company focuses on increasing the productivity of its existing branches to drive its growth. It categorizes its branches into large branches, mid-sized branches and small branches, on the basis of the Gross Loan Assets of each branch, and it tracks key performance indicators such as growth in Gross Loan Assets and disbursements per branch to determine branch productivity.
Home First Finance is a fastest growing mortgage lender in India. It has shown strong revenue and margin growth in the last 4 years. However at this valuation, the issue looks expensive. As affordable housing segment is set to grow more with Government of India’s drive of “HOME FOR ALL BY 2022”, investors may opt the issue with long term perspectives.
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Franklin Templeton Mutual Fund on Sunday said its six shut schemes have received Rs 13,789 crore from maturities, pre-payments and coupon payments since closing down in April. Franklin Templeton MF shut six debt mutual fund schemes on April 23, 2020 citing redemption pressures and lack of liquidity in the bond market. The schemes — Franklin India Low Duration Fund, Franklin India Dynamic Accrual Fund, Franklin India Credit Risk Fund, Franklin India Short Term Income Plan, Franklin India Ultra Short Bond Fund, and Franklin India Income Opportunities Fund — together had an estimated Rs 25,000 crore as assets under management (AUM). "The six schemes have received total cash flows of Rs 13,789 crore as of January 15, 2021 from maturities, pre-payments and coupon payments since April 24, 2020," the fund house said in a statement. Over the latest fortnight (January 1-15), these schemes received Rs 669 crore, of which Rs 617 crore was as pre-payments, it added. Individually, Franklin India Ultra Short Bond Fund, Franklin India Low Duration Fund, Franklin India Dynamic Accrual Fund, Franklin India Credit Risk Fund and Franklin India Short Term Income Plan have 63 per cent, 50 per cent, 41 per cent, 26 per cent and 9 per cent of their respective AUM in cash. Borrowing levels in Franklin India Income Opportunities Fund continue to come down steadily and currently stand at 6 per cent of AUM. Franklin Templeton MF said that cash available stands at Rs 9,190 crore as of January 15, for these five cash positive schemes, subject to fund running expenses.
SBI Mutual Fund has launched SBI Retirement Benefit Fund, a solution-oriented fund that offers four plans across risk profiles. The scheme also offers an features like life cover up to a maximum of Rs 50 lakh per investor, option of two investment facilities of auto transfer and quarterly systematic withdrawal facility. The fund opens for subscription on Jan 20 and closes on Feb 3. The fund will be managed by Gaurav Mehta (Equity), Dinesh Ahuja (Fixed Income) and Mohit Jain (Foreign Securities). The fund offers four investment plans – Aggressive (equity-oriented), Aggressive Hybrid (equityoriented), Conservation Hybrid (debt-oriented) and Conservative (debt-oriented). In addition to equity and debt instruments, every plan may take up to 20% exposure to Gold ETFs, up to 10% exposure to REITs/InVITs and foreign securities including overseas ETF to the tune, up to 35% in aggressive plan, up to 15% in aggressive hybrid plan and conservative hybrid plan and up to 10% in conservative plan.
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