Maintain ‘buy’ on Titan with a target price of Rs 420 per share. Titan current stock price (FY17 P/E of 29.6x), builds in long term earnings growth expectations of a modest c11%, which in our view are undemanding and revival in jewellery growth will be an immediate catalyst for stock performance.

We use a DCF methodology to derive our target price. For our DCF valuation, we have used a cost of equity of 10.7%, which includes a risk-free rate of 7.7%, market risk premium of 5%, beta of 0.6 and terminal growth of 5%, all unchanged. We have marginally revised our estimates as we increase FY16-18 earnings estimates by c1%.

We reiterate ‘buy’ as risk-reward looks quite favorable at current levels for the expected revival in jewellery growth from Q3 onwards.

Firstly, Q2 will be the last quarter of Golden Harvest scheme (GHS) impact, which is discounted already. Foreclosure of GHS in Q2 last year, impacted the festive quarter of Q3FY15 as well along with poor demand making base quarter of Q3FY16 a benign base. In our view, Titan is making all its effort to spruce up growth in Q3, which can potentially mark a significant inflection point in the growth trajectory and will likely be a catalyst for stock performance.

Secondly, new GHS (deposit of which will be capped to 25% of net worth) is gaining traction and first significant impact in jewellery growth will be seen in Q4, when in excess of Rs 4 billion of new GHS will mature and will give super normal boost to revenue and earnings growth.

Investors continued to enter the Indian mutual fund industry despite volatility in the domestic equity markets. The latest data from the Securities and Exchange Board of India (Sebi) show the industry added 6.02 lakh new folios in September.

Market participants say rise in folios can be attributed to strong performance of equity funds in the past few months.

The data from Sebi also show that equity mutual funds added 4.66 lakh folios in equity-oriented schemes in September.

Total folios of equity-oriented schemes stood at 3.38 crore in September, while the figure was 4.44 crore for the overall mutual fund industry.

G Pradeepkumar, chief executive officer at Union KBC Asset Management Company, said, “In the last few months, we have seen investors have put in more money into equity funds when markets have turned red. I think it’s very mature move as earlier they used to enter during high markets and move out when they were down.”

Even the numbers shows that investors have not been dismayed by inconsistent equity markets and there has been consistent rise in systematic investment plans (SIPs), market players said. Equity mutual funds continued their positive momentum and saw net inflows of R5,014 crore in September. According to the data from the Association of Mutual Funds in India (Amfi), mutual fund industry saw net outflows of R77,142 crore in September due to redemption into debt funds. Apart from equity funds, equity-linked saving schemes (ELSS) witnessed inflows of R430 crore in September. In the current financial year, equity funds have seen flows of R51,000 crore.

Market participants also say in spite of average performance of the equity markets, mutual funds have been able to deliver better returns and attract new investors. “It’s quite surprising that there has been rise in equity assets and folios. Though flows into equity funds have slowed down in September compared to the first five months of the current financial year, we assume that there is more money to come in at every dip,” said a CEO of a top fund house.

DLF promoters KP Singh family will sell their 40 per cent stake in the company’s rental arm DLF Cyber City Developers for an estimated Rs 14,000 crore to institutional investors. (Photo: PTI)

DLF promoters KP Singh family will sell their 40 per cent stake in the company’s rental arm DLF Cyber City Developers for an estimated Rs 14,000 crore to institutional investors.

The promoters will re-invest a significant part of the amount realised from the sale in DLF Ltd.

The decision was taken by the DLF’s board of directors in its meeting held here today based on the recommendation by the audit committee, which was set up last year to suggest ways to drive the growth of rental business.

According to market sources, the valuation of promoters’ 40 per stake in DLF Cyber City Developers Ltd (DCCDL) could be around Rs 12,000-14,000 crore.

In late 2009, DLF had announced merger of its subsidiary DCCDL with promoters’ firm Caraf Builders and Constructions.

DCCDL had then issued CCPS (compulsorily convertible preference shares) worth Rs 1,597 crore to promoters. Post— conversion, promoters would have 40 per cent stake in DCCDL, which holds bulk of the DLF’s commercial assets.

“With this proposed transaction, DLF will be able to achieve three of its main objectives — removal of conflict of interest, creation of a rental platform with large financial investors and reducing substantial portion of debt. It’s killing three birds with one stone,” DLF Senior Executive Director Finance Saurav Chawla told PTI.

DLF would be able to create REITs in the capital market in partnership with the long term financial investors, he added.

The promoters stake in DLF, which stands at 75 per cent, could increase post this investment, sources said.

To resolve the issue of CCPS held by promoters in DCCDL DLF in a filing to the BSE said that the board approved the recommendations made by the audit committee to sell promoters’ stake in DCCDL to institutional investors.

The filing did not give any valuation of the promoters’ equity stake in DCCDL. “The audit committee today evaluated several options available to the company to reduce the conflict of interest with the CCPS Holders in relation to the rental business and after deliberations, recommended to the Board to consider the proposal that CCPS Holders sell the CCPS to unrelated third party institutional investor(s),” DLF said.

The panel suggested DLF to finalise the strategic terms of transaction including selection of third party institutional investor(s) and also oversee and facilitate the transaction, in consultation with promoters.

It also recommended DLF to appoint bankers, transaction advisors, tax and legal advisors etc to assist in the transaction.

Promoters should invest back in the company, a substantial amount (net of taxes/other charges) of the consideration received from the sale of CCPS, the panel said.

“After deliberation and upon the CCPS holders conveying their consent, the Board accorded its approval for the transaction. Upon completion of the proposed transaction, the company will continue to hold 60 per cent equity interest in DCCDL, on a fully diluted basis,” the filing said. India’s largest realty firm DLF earns an annual rental income of Rs 2,400 crore by leasing its commercial properties, including office and shopping malls comprising 30 million sq ft of area.

As promoters stake could increase post re-investment of amount realised from proposed sale of their 40 per stake in DCCDL, DLF said it would take required steps to adhere to the minimum public shareholding requirements of 25 per cent.

Investment by the promoters in DLF would help the realty major to reduce its debt, which stood at Rs 21,600 crore at the end of the first quarter of this fiscal.

DLF’s promoters in March this year decided to defer till March next year conversion of CCPS into equity shares and also slashed the coupon rate from 9 per cent to 0.01 per cent. The deadline to convert CCPS into shares was 19 March this year.

The Board authorised the audit committee to finalise strategic terms of proposed transaction including selection of institutional investors in consultation with CCPS Holders, to finalise the transaction documents and also to facilitate the transaction, the filing said.

With real estate market facing huge slowdown from last 2-3 years, DLF has been selling its non-core assets to boost its cash flow and reduce debt.

The company has exited from hotel, insurance, wind power and cinema businesses besides selling non-core land parcels. It has raised more than Rs 10,000 crore through this process.

Recently, the company sold about 50 per cent stake in its housing project at central Delhi for about Rs 2,000 crore.

DLF has a land bank of nearly 300 million sq ft, of which about 50 million sq ft is under construction.

Shares of Reliance Industries Ltd fell nearly 3 per cent, wiping out Rs 7,817.22 crore from its market valuation today, amid reports that the probe in its dispute over natural gas with state-owned ONGC was seen turning against the company.

Shares of Reliance Industries Ltd fell nearly 3 per cent, wiping out Rs 7,817.22 crore from its market valuation today, amid reports that the probe in its dispute over natural gas with state-owned ONGC was seen turning against the company.

RIL’s stock was down 2.70 per cent to settle at Rs 889.15 on BSE. During the day, it fell 2.98 per cent to Rs 886.60.

The stock was the worst performer among the 30-Sensex components.

At NSE, shares of the company ended at Rs 889.10, down 2.7 per cent.

Weakness in the stock pulled down the company’s market valuation by Rs 7,817.22 crore to Rs 2,87,944.78 crore.

On the volume front, 2.94 lakh shares of the company changed hands on BSE and over 24 lakh shares were traded at NSE during the day.

“Shares of market bluechip Reliance Industries were in news today after the ongoing probe in its dispute with ONGC was seen turning against RIL,” said Achin Goel, Head: Wealth Management & Financial Planning, Bonanza Portfolio Ltd.

A reputed international consultant D&M is believed to have opined that some natural gas from ONGC’s idling Bay of Bengal gas fields may have flown out through the adjoining, connected KG-D6 fields of Reliance Industries.

DeGolyer and MacNaughton (D&M) in its preliminary observations stated that ONGC’s Godavari Block (known as G-4) is contiguous to RIL-operated Block KG-DWN-98/3 (KG-D6), sources privy to the development said.

The reservoir in the two neighbouring blocks is connected, which means there exists one big gas resource several meters below sea bed and does not recognise man-made boundaries that demarcate blocks of ONGC and RIL.

Sources said D&M, which was jointly appointed by ONGC and RIL to find if the neighbouring fields are connected, is of the opinion that there is no unconnected area in G-4 — i.e there exists no independent gas reservoir in the ONGC block and all the resources are shared with KG-D6.

ONGC had in 2013 claimed that RIL had deliberately drilled wells close to the common boundary of the blocks and that some gas it pumped out was from its adjoining block.

RIL has maintained that it had followed the Production Sharing Contract (PSC) in letter and spirit and done no wrong. It has drilled all wells within its boundary walls.

The residual deficit of Tata Steel UK Ltd (TSUK), an indirect subsidiary of Tata Steel, stood at around 550 million pound (over $842 million) for the period ended March 31, 2011. (Photo: Reuters)

Shares of Tata Steel rose by 2.5 per cent on Thursday after the company said its UK arm has concluded the actuarial valuation of British Steel Pension Scheme (BSPS) and the deficit in the scheme has reduced to 90 million pound (around $138 million) as on March 31, 2014.

The stock gained 2.36 per cent to Rs 242.40 at BSE. On NSE, it went up by 2.49 per cent to Rs 242.70.

The residual deficit of Tata Steel UK Ltd (TSUK), an indirect subsidiary of Tata Steel, stood at around 550 million pound (over $842 million) for the period ended March 31, 2011.

Trustee of BSPS and TSUK have concluded the triennial actuarial valuation of the scheme as of March 31, 2014, the company had said in a regulatory filing.

“As a result of measures agreed between the Trustee and TSUK and benefit changes implemented following consultation between TSUK, its employees and their representatives, the on-going residual deficit has been reduced from around 550 million pound as on March 31, 2011 to 90 million pound as on March 31, 2014,” it added.

BSPS is the largest defined benefit scheme within Tata Steel Europe’s portfolio. On account of low interest rates in the UK, the valuation placed on the scheme’s liabilities increased significantly since the last actuarial valuation in 2011 leading to a greatly increased funding deficit.