British health insurance company Bupa will acquire an additional 23% stake in Max Bupa Health Insurance from its Indian joint venture (JV) partner Max India, the latter said in a stock exchange filing.

UK’s Bupa will pay Analjit Singh-promoted Max India Rs 191 crore in an all-cash transaction. Max India’s board has approved the divestment and new agreements will come into force after receiving requisite regulatory clearances from the Foreign Investment Promotion Board and the Insurance Regulatory and Development Authority of India (Irdai).

“To further strengthen the relation with the JV partner in Max Bupa, the board of directors has decided to divest 23% stake in favour of UK’s Bupa,” the company stated in stock exchange filing. Max India’s shares closed at Rs 555.65 per share, down Rs 22.90 or 3.96%.

Max Bupa is a 74:26 joint venture between Max India and Bupa. After the deal, Max India’s holding in Max Bupa will decline to 51%, while Bupa’s holding will rise to 49%.

The UK health care group was the first foreign insurer to announce its intent to increase its stake to 49% in its Indian health insurance subsidiary after the government relaxed FDI participation rules for insurance companies.

Overall, this will be the fifth deal by a foreign partner in the Indian insurance space. In August, Standard Life had announced plans to buy an additional 9% stake in its Indian insurance venture HDFC Life to raise its ownership to 35%, valuing HDFC Life at Rs 18,951.4 crore.

In the same month, FIPB approved Tokio Marine’s plan to raise stake in its Indian JV partner Edelweiss Tokio Life Insurance to 49% from 26%. British insurer Aviva also announced its plan to raise stake in its Indian joint venture with Dabur Invest to 49%.

Canada-based insurance and investment company, Fairfax Financial Holdings promoted by Prem Watsa, last month announced it would buy an additional 9% stake of ICICI Lombard General Insurance from ICICI Bank. Fairfax will increase its ownership to nearly 35% stake in ICICI Lombard from 25.7%. The deal is expected to close in the first quarter of 2016.

Hale & hearty
* UK’s health insurer will shell out Rs 191 crore in an all-cash transaction for an additional 23% stake
* Max Bupa is a 74:26 JV between Max India and Bupa. Post deal, Max India stake in Max Bupa will decline to 51%
* Overall, this will be the fifth deal by a foreign partner in the Indian insurance space

Responding to a query on apprehensions that P-Notes are being misused, Sebi chief UK Sinha had last month said the regulator has all the data about entities who are using this.

Investment through Participatory Notes (P-Notes) into India’s capital market grew to over Rs 2.58 lakh crore (about USD 39 billion) at the end of October.

P-Notes, mostly used by overseas HNIs (High Net Worth Individuals), hedge funds and other foreign institutions, allow such investors to invest in Indian markets through registered foreign institutional investors (FIIs).

This saves time and cost for them, but the flip side is that the route can also be used for round—tripping of black money.

According to Sebi data, total value of P-Notes investment in Indian markets (equity, debt and derivatives) increased to Rs 2,58,287 crore at October end, from Rs 2,53,875 crore in the previous month.

This was the second successive month when investment through this route increased.

The total outstanding value of P-Notes witnessed a steady rise since January and the momentum continued till March.

However, investments through this route registered a drop in April, but hit a seven year high in May. The inflows slipped in the subsequent three months (June-August) but marginally rose in September and again grew in October.

The drop in investment via P-Notes during June-August comes amid Supreme Court-appointed Special Investigation Team (SIT) on black money asking Sebi to review its regulations on participatory notes to help identify the end users of these instruments.

However, the government later said it has no intention of banning this financial instrument overnight.

Responding to a query on apprehensions that P-Notes are being misused, Sebi chief UK Sinha had last month said the regulator has all the data about entities who are using this.

The quantum (percentage) of FII investments via P-Notes remain unchanged at 11 per cent.

Till a few years ago, P-Notes used to account for more than 50 per cent of total FII investment, but their share has fallen over the years after Sebi tightened disclosure norms and other related regulations.

As things stand, P-Notes make up around 15-20 per cent of the total FII investment in India since 2009. While it used to be much higher 25-40 per cent in 2008, the reading was as high as over 50 per cent at the peak of stock market bull run in 2007.

In absolute terms, the value of P-Notes investment rose to a record of Rs 4.5 lakh crore in October 2007, but dropped to Rs 3.22 lakh crore in February 2008 and Rs 60,948 crore in February 2009.

Britannia share price gained as much as 1 per cent in the morning trade on Monday after the FMCG major aimed at Rs 20,000 crore turnover within 5-6 years.

Britannia share price gained as much as 1 per cent in the morning trade on Monday after the FMCG major aimed at Rs 20,000 crore turnover within 5-6 years.

At 11.51 am, the share price of Britannia Industries was up 0.75 per cent at Rs 2990.05. The scrip opened at Rs 2,975 and had touched a high and low of Rs 2996.40 and Rs 2974.35, respectively, in trade so far. Sensex was marginally up 0.15 per cent at 25,906.46.

As part of the strategy, the company, which had posted consolidated net sales of Rs 7,775.09 crore in the last fiscal, will finalise in the next six months its plans to expand in dairy segment besides introducing new variants of its value segment biscuit brand Tiger.

Moreover, in the next two years and beyond the company plans to expand into ready-to-eat, ready-to-cook and drinks category in a phased manner.

“We have the core strength…our brands are very strong and our understanding of the food industry is very deep…Our idea to become a total food company is to move from the side of the plate to the middle,” Britannia Industries Managing Director Varun Berry told PTI.

In the past one year, the share price of Britannia Industries surged 77.25 per cent to Rs 2967.75 on November 20. The scrip was at Rs 1674.30 on November 21 last year.

(With inputs from PTI)

For the quarter, benchmark index BSE Sensex skid 5.85 per cent to 26154.83 on September 30. The index was at 27780.83 on June 30. The broad-based NSE Nifty slid 3.61 per cent during the same period. (Photo: Reuters)

The performance of India Inc for the period ended September 2015 has been muted once again with growth in net sales being negative for the fourth successive quarter while net profit growth has been marginally higher than June quarter but lower than September 2014, says Care Ratings.

Net sales of Indian companies fall 5.9 per cent for the quarter ended September 2015 as against growth of 7 per cent in the same period of last year. On the other hand, net profit of India Inc jumped 4.1 per cent against 12.6 per cent growth registered in the corresponding quarter last year. The negative growth in net sales is largely attributed to weakness in demand and pricing power. Despite negative producer’s inflation as measured by the WPI signalling lower raw material cost.

For the quarter, benchmark index BSE Sensex skid 5.85 per cent to 26154.83 on September 30. The index was at 27780.83 on June 30. The broad-based NSE Nifty slid 3.61 per cent during the same period.

Below are 5 stocks on which brokerage houses are looking bullish post their second quarter(Q2) earnings.

Aurobindo Pharma
Recommended By: IndiaNivesh Securities
Target Price: Rs 980
Market Price*: Rs 817.35
Why Buy: Aurobindo Pharma has cumulative filing of 382 ANDAs at the end of 2QFY16. The cumulative ANDAs pending for approval stands at 168, which has good mix of complex molecules which would enable not only enhanced sales growth but also improved profitability for sustained period. The upside in earnings is subject to regulatory approval. The company has around 51 products pending for approval in injectables space and 16 products in controlled substance space. According to IndiaNivesh Securities, Aurobindo’s R&D effort towards peptides, microspheres as well as hormones would also deliver better growth over 3-5 year period. The faster turnaround of acquired Actavis operation in Europe would also help in further improvement in overall margins of the company. ARBP has maintained its guidance of shifting 50 per cent of Actavis products to India facility by FY17. The brokerage house expects the second half of the ongoing financial year (2HFY16) will be better than the first half (1HFY16) on the back of increased business from approved products as well as new approvals expected in 2HFY16.

Coal India
Recommended By: IndiaNivesh Securities
Target Price: Rs 467
Market Price*: Rs 333.75
Why Buy: After a couple of years of stagnant production levels in the past, Coal India (CIL) finally delivered strong performance in FY15. Production and offtake jumped by 9.2 per cent and 9.9 per cent respectively in 7MFY16 on the back of a concerted push by the government. The government has set a gross output target of one billion tonnes of coal by 2019-20, which is around double the current production. In near term the company has guided 12 per cent off take volume growth to 550 MT and 11 per cent production volume growth to 550 MT in FY16. However, IndiaNivesh forecast FY16 production at 529 MT (+7% YoY); off-take 523 MT (+7%). The company has a strong balance sheet, with cash equivalents of Rs 61,800 crore (Rs 98/share) at end of H1FY16. The company has dividend payout ratio of near 100 per cent in previous two years. The brokerage house believes the dividend payout will remain healthy. According to IndiaNivesh, Coal India is likely to show strong performance in medium to long term (expect CAGR production growth of 7 per cent in next five years) due to strong domestic coal demand and monopoly in coal production in India.

State Bank of India
Recommended By: IndiaNivesh Securities
Target Price: Rs 370
Market Price: Rs 243.85
Why Buy: SBI, being the largest bank in Indian banking sector, remains the biggest beneficiary of revival in economy by way of pick up in loan growth and improvement in asset quality. In Q2FY16, loan growth of SBI picked to 10.3 per cent year-on-year (yoy) from 7 per cent yoy in Q1FY16. The brokerage house believes, the bank can easily grow its loan book at 13 per cent CAGR over FY15-17E with upward bias if corporate capex picks up significantly. With market leadership positioning in Home and Auto loan segment, growth in retail for SBI continues to remain higher.

Triveni Turbines
Recommended By: Sharekhan
Target Price: Rs 135
Market price*: Rs 112.05
Why Buy: For Q2FY2016, Triveni Turbines reported a 14 per cent yoy growth in revenue led by a strong 21 per cent growth in product sales. The aftermarket segment has reported a marginal fall in revenue mainly due to unfavourable base effect. Lower raw material cost led to a 110 basis points improvement in operating profit margin to 23.5 per cent, highest in the past ten quarters. Overall, the net profit rose by 16 per cent to Rs 27.7 crore.
Sharekhan in a research note said, “We have downgraded our earnings estimates for FY2016 and FY2017 by 7 per cent and 11 per cent respectively mainly in view of slow order booking in its JV with GE. We expect net profit to double (CAGR of 26 per cent) in three years, FY2015-18. We like the stock for its strong competitive positioning, international marketing efforts, margin profile and healthy balance sheet (it is a debt-free company with superior return ratios). Any major order win in the GE JV in the near term would be a positive trigger for the stock.”

CESC
Recommended By: Sharekhan
Target Price: Rs 730
Market Price*: Rs 540
Why Buy: For Q2FY2016, CESC reported substantially better earnings than estimated. The revenue was in line with estimates but on account of lower other expenses, the operating profit as well as net earnings were better than estimates. During the period, power generation was lower by 20 per cent YoY as it was compensated by sourcing power from its newly commissioned Haldia power plant (under subsidiary). The power sold remained flat yoy and revenue grew by 7 per cent yoy with better tariff. The operating profit registered a 5 per cent growth but on account of higher interest cost, PAT was flat (2 per cent up yoy) at Rs 195 crore, which was substantially better than estimate.

According to Sharekhan, the negatives related to the loss in the Chandrapur plant and potential under recovery as a result of aggressive bidding for coal mines have been already priced in the stock. Nevertheless, the company continues to put efforts to cover the under recovery from exporting some power in exchange and get PPA linkage for the new plant. The drag related to retail subsidiaries is receding though slower than initially expected. Overall, the financials of FSL should improve. The brokerage house has ‘Buy’ retainin on CESC shares.

* Market price as on November 19.

(Disclaimer: The stocks are recommended by the respective brokerage houses and not a recommendation from Financial Express online)

Axis bank: Stocks of the private sector lender will be in focus as it opened a representative office in Dhaka on Sunday as part of its global expansion plan. (Photo: Reuters)

The BSE Sensex turned flat on Monday after opening 76 point up on global cues. At 9.23 am, Sensex was down 16.24 points at 25,852.25. NSE Nifty was trading 0.40 points down at 7,856.15.

Below are the stocks that are likely be in focus today:

Vedanta, Hindalco Industries: Metals and mining major Vedanta and Aditya Birla group flagship firm Hindalco Industries will shift out of the BSE benchmark Sensex from December 21.

Adani Ports and Asian Paints: Asia Index Private Ltd, a joint venture between S&P Dow Jones Indices and BSE Ltd, said it would add Adani Port and Special Economic Zone and Asian Paints Ltd to its 30-member S&P BSE Sensex index.

Axis bank: Stocks of the private sector lender will be in focus as it opened a representative office in Dhaka on Sunday as part of its global expansion plan.

GAIL: GAIL stocks are likely to be in focus as Moody’s has affirmed the Baa2 long term rating of the company and has changed the outlook to negative from stable.

Britannia: Britannia Industries is embarking on a new growth path of becoming a total food company, aiming at Rs 20,000 crore turnover within 5-6 years.

Aurobindo Pharma: Aurobindo Pharma said that the company has received final approval from the US Food & Drug Administration (USFDA) to manufacture and market generic version of Pfizer’s Revatio (sildenafil citrate) tablets, used in the treatment of high blood pressure in lungs.

Adani Power: In a major relief to Adani Power, the Supreme Court on Friday set aside a 2010 notification of the Union government which levied customs duty to the tune of Rs 300 crore on the company for electricity transfer from its thermal power plant in Mudra Special Economic Zone to domestic areas with retrospective effect.

Dr Reddy: Dr Reddy’s Laboratories, which is embroiled in a legal battle with AstraZeneca over the usage of purple colour for generic version of Nexium, has filed a complaint in a US court alleging that the latter “knew” about its plans to use the same colour in the capsules.

Maruti Suzuki: The automaker has maintained its leadership position in the domestic passenger vehicle (PV) market in October with four of its models featuring in the top 10 selling brands last month.

Petronet LNG: India’s biggest gas importer is close to renegotiating a major deal with its Qatari supplier Rasgas, lowering the cost of gas shipments and avoiding a $1.5 billion penalty fee for lifting less gas than agreed, two sources said.

Pfizer: US drug major has secured formal board approval on Sunday for its acquisition of Botox maker Allergan Plc for more than $150 billion, a deal that will create the world’s biggest drug maker, according to media reports.

Neyveli Lignite Corporation: The state-run miner has said it is set to foray into coal mining for power generation and aspires to become a 19,000 MW power company by 2025.

Sobha Ltd: The realty firm has tied up with another realtor Chintels India to develop a group housing project comprising of 1,700 flats in Gurgaon at an estimated cost of Rs 1,000 crore.