Nearly a year after it attained the market capitalisation milestone of Rs 5 lakh crore, Tata Consultancy Services (TCS) now boasts twice the market value of Reliance Industries (RIL), once considered the ultimate representative of the Indian capital market, reports fe Bureau in Mumbai.

On Monday, the TCS share closed with gains of Rs 13.30 or 0.5% at Rs 2,593.70, representing a market capitalisation of Rs 5.08 crore. The RIL scrip, on the other hand, closed down by a similar extent at Rs 834.35, for a market value of Rs 2.7 lakh crore. At its peak, TCS commanded an m-cap of Rs 5.43 lakh crore.

Even as it toppled RIL to become India’s most valued firm more than three years ago, to grow twofold in market capitalisation compared to the oil and gas major is not an ordinary feat given that it has happened just a decade after TCS made its secondary market debut. RIL was listed on exchanges in the late 1970s and was regarded the bluest of Indian blue chips, till it began to fail outshining benchmarks after the global financial crisis. Unlike TCS, which has posted a CAGR of 25% between 2007 and 2014, RIL has underperformed the market each year since 2008.

Earlier, in the quarter ended December 2014, TCS also briefly replaced RIL as the country’s most profitable company when it reported net earnings of Rs 5,328 crore. Again unlike RIL, for which other income accounts for more than 35% of its net profit, most of TCS’ profit was driven by core operations with investment-led other income representing only 18% on average in the last four quarters.

After a 20%+ correction in the share price over the past three months (vs BSE index -7.3%), we believe Container Corporation of India (Concor) is more than factoring in our concerns over the near-term weakness in traffic growth.

Following our recent interaction with the Dedicated Freight Corridor (DFC) project officials and management, we remain confident over the long-term attractiveness of the company’s business, especially after the likely game-changing DFC commissioning by 2018/19.

We raise our TP to Rs 1,695 as we roll over our TP to Sept 2016 from March 2016 and cut our earnings estimates by 3% for FY16-18F to factor in the near-term traffic weakness.

Our revised TP implies a 25% upside from current levels, thus driving our rating upgrade to buy. Our bull-case scenario, which assumes doubling of Concor’s market share over 10 years after DFC’s completion, yields a fair value of Rs 2,016/share. Weakness in traffic, tariff hike by railways and a delay in DFC are key risks.

Almost 43% of the civil contracts have already been awarded on the western DFC, while the balance will be awarded by June 2016. Completion timelines have been pushed back to December 2018 and December 2019 now, but work has gathered pace and we do not foresee any risk to the new timelines.

With its new route strategy entailing a shift from the point-to-point to hub-and-spoke model, Concor will be the single-largest beneficiary of DFC and benefit from revenue growth pick-up, margins and reducing asset intensity.

JPMorgan Asset Management Company has received the approval from a majority of its unitholders to segregate illiquid assets of JPMorgan India Treasury Fund and JPMorgan India Short Term Income Fund. The split will allow investors to redeem liquid units from both schemes.

The vote was announced by JPMorgan AMC on September 14. The move came after investments in Amtek Auto went bad. As investors started pulling out their money, JPMorgan capped redemptions at 1% of total outstanding units on both schemes, on August 28.

According to a notice on JPMorgan AMC website, 98.98% of the valid votes were received from unitholders of JPMorgan India Treasury Fund and 98.69% of votes were received from unitholders of JPMorgan Short Term Income Fund to the proposal to segregate the assets of the two schemes.

After the proposed segregation, one set of units will have investments made in Amtek Auto, while the other will comprise all other investments and cash holdings. “The unitholders of respective schemes are hereby informed that for the implementation of the proposed segregation, the segregation effective date will be September 28, 2015, and the record time will be 9 a.m. (IST) on September 28, 2015,” the notice said.

Both schemes have exposure to a secured redeemable non-convertible debenture issued by Amtek Auto, which is currently illiquid in the market owing to credit concerns of the issuer. On August 27, the credit rating of Amtek’s previously rated other non-convertible debentures was downgraded from “BWR A+” to “BWR C” by Brickwork Ratings.

Immediately thereafter, the reference price of the bond held by the two JPMorgan schemes was reduced to 75% by Crisil and Icra. This change in price was reflected in each scheme’s NAV on August 28 and subsequently the two schemes received an unexpectedly high level of redemption requests.

Indian equities have been hammered over the last couple of months amidst global volatility. (Photo: PTI)

Indian equities have been hammered over the last couple of months amidst global volatility arising out of the confusion around the US Fed hike, China recession fears as well as disappointment over domestic economic data.

IANS spoke to Shankar Sharma, vice-chairman and joint managing director of First Global, for his expectations from the upcoming RBI monetary policy announcement and the impact of the Bihar elections on the markets – as also to get his thoughts on the current global macro trends. Sharma is one of Dalal Street’s most respected voices and, more importantly, a man who has proved very accurate in calling major turns and inflection points in the markets over the years.

Q. We last spoke shortly prior to the budget session. You expected a short term correction but were bullish on India for one reason alone: a sharp fall in interest rates. Do you think Raghuram Rajan has done enough in terms of monetary easing? What are your expectations for September 29th RBI meet?
A. My position remains the same: the sole reason to buy India is a view that rates will come down dramatically over the next 2 years. If that’s not your bet, then you should not be looking at India. If you are coming to India to buy growth, then it’s going to be a long wait. So India is a pure cost of capital trade. And I expect RBI to cut rates in the September 29 meet.

Q. How are you reading the domestic inflation dynamics currently? Do you attribute the fall in prices to the Government policies or it is totally function of collapsing oil prices?
A. It’s in part due to oil. But it’s also due to not raising minimum support prices (MSPs). I don’t think monetary policy has contributed much, if anything at all, to lower inflation. However, bear in mind that not raising MSP has had a major negative fallout by increasing rural misery massively.

Q. Which structural reform undertaken by the Modi Government can help revive a cyclical recovery in India’s investment cycle?
A. If they start spending big time on infrastructure building, that will propel a cyclical recovery. However, that eventually may lead to over investment, as has happened elsewhere in the world. And that leads to a sharp increase in the Debt/GDP, which the pre government managed to bring down substantially to 67 per cent of GDP from 87 per cent‎ in 2004.

Q. You think the upcoming Bihar elections can set the tone for the Nifty? Does a clear BJP mandate in Bihar lead to a big rally?
A. If at all there is a rally, it won’t be worth buying. Think about it: whoever bought the May 14 election outcome rally, is still repenting. So why get so excited about a state verdict if it’s positive for the BJP.

Q. What are your thoughts on China? Can the dragon lead the world economy into a recession as many fear or you still have faith in a potential bazooka Beijing stimulus?
A. China has no real bullets left to use to stimulate its economy. They spent it foolishly in 2008-9 in trying to keep up with the Joneses. That was the stupidest economic decision I have seen from any government in a long time. And everybody still kept saying the Chinese leadership had a plan! We now know better. The only bullet left is a bigger devaluation of the Yuan, which I think will happen over the next year.

Q. The US Fed maintained status quo at its September meet. You think this decision was only a function of problems arising out of China and EMs or is the US Fed having a domestic growth scare as well?
A. The Fed is confused. I see no sign of inflation in the western world, so they were trying to be too cute in talking about a rate hike. I think markets will keep a gun to their head, and the Fed listens primary to the market.

Q. If US monetary normalisation works, we will be fine. But suppose it falters what next? What’s the next policy action by global central banks? Negative interest rates? Helicopter drops? More fiscal stimulus? What’s your best guess?
A. Yeah, more of the same. It’s almost comical how easy it is to predict what the Fed will do. Always has been, save for the surprise hike in 1994. Wall Street is Main Street as far as the Fed is concerned.

Q. Are you expecting more QE in Europe and Japan? Can this keep the global equity landscape cheerful even if US stocks maintain their current downtrend?
A. Look: it’s incontrovertible that despite all the QE in the world, equities have been a terrible asset class last several years. US flat over 15 years. Europe flat over 7. Japan long way away from highs, probably won’t get there for a long long time.  Emerging Markets are almost at a 10 year low in US Dollar terms.

So there you are: free money, and yet no longer term returns.  The whole equity story has come unstuck but again, you won’t find anybody talking about it, because equity sells papers, magazines, TV ad spots.

Q. Do you believe in the decoupling theory? Can India decouple? 
A. Why do we Indians believe India belongs to some other planet? We are just another market. And just another country. We are looking good right now because of a conservative policy stand by our policy makers. Period. But to expect India to decouple and run up while the rest of the world struggles is to expect the near impossible. That said, India will outperform the global bear market, but by falling less.

Vatsal Srivastava is consulting editor with IANS. 

Sebi had first passed order against Saradha in April 2013 after a massive ponzi scheme like fraud came to light.(PTI)

To recover the investors’ money, collected illegally by Saradha Realty, regulator Sebi has ordered attachment of 134 properties of the West Bengal-based firm and its chief Sudipta Sen to recover Rs 774.3 crore along with other dues and the applicable interest.

The properties being attached include land parcels, buildings, flats, resorts, as also furniture, televisions, refrigerators, generators and computers along with all other “movable assets” held by the two defaulters.

Most of these assets are located in West Bengal, as per the attachment order wherein Sebi has also asked Saradha Realty India Ltd and Sudipta Sen to provide full details of all their movable and immovable properties.

Sebi had first passed order against Saradha in April 2013 after a massive ponzi scheme like fraud came to light. Sebi had ordered Kolkata-based Saradha Realty India to close all its collective schemes and refund the money collected from investors within three months. Besides, the company and its chief were also barred from the markets.

In further action, Sebi in June this year attached various bank and demat accounts of the two defaulters, but funds available in those accounts were not sufficient for recovery of the dues.

The recovery proceedings were initiated on June 4, 2015, Saradha Realty India Ltd and its Managing Director Sudipta Sen for their failure to pay a sum of Rs 774.3 crore (as a partial amount) “along with returns due to investors, along with further interest, all costs, charges and expenses incurred in respect of all the proceedings taken for recovery”.

Sebi said the defaulters failed to pay the amount and did not even respond to the recovery notices.

The regulator said it has learnt that the defaulters are in possession of certain properties and they may dispose, transfer or alienate the assets to obstruct or delay the recovery of investors’ money and therefore it was ordering the attachment.

Giving a list of all such properties, Sebi said that “all persons are hereby prohibited from taking any benefit under such disposal, transfer, alienation or charge in respect of the properties mentioned above, which stand attached in execution of the Recovery Certificate”.