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ETMarkets Morning Podcast: Carlyle strikes gold on SBI Cards stake

Good Morning.

>> Markets all glued to Fed rate-setting meeting
>> India-focused venture funds raise record money
>> Carlyle to sell 4% stake in SBI Cards, make a killing
>> Withholding tax returns to haunt FIIs

Hi there. Welcome to ETMarkets Morning, the show about money, business and markets. I am Sandeep Singh.

Let’s start with a quick glance on the state of the markets.

Equity markets treaded water this morning as investors weighed the strength of the economic recovery ahead of US Fed’s policy as treasury yields hovered near their highest levels in over a year. However, Nifty futures on Singapore Exchange traded some 25 points higher ahead of the opening of Indian markets, signalling a likely positive start for Dalal Street. On Wall Street, benchmark indices snapped record-breaking gains. The dollar traded stronger versus most major peers — another risk factor for emerging markets. Bitcoin traded above $56,000, down from a weekend peak above $61,000.
Crude oil was steady below $65 a barrel.

That said, here’s what else is making news.

The US Fed’s new projections for rates and the economy later on Wednesday are taking centerstage for markets globally, as the global recovery gains traction. Fed Chair Jerome Powell is widely expected to reaffirm his steady policy stance. But rates markets are positioned for a hike sooner than the central bank’s current guidance suggests, with rising inflation expectations boosting bond yields and sparking a rotation from growth to value stocks. Seasoned bond investor Bill Gross predicted that inflation will rise to 3-4% in the coming months.

Here is a piece of good news. Investors globally are turning gung-ho on the India story. India-focused venture capital funds raised $3 billion in 2020, the highest in five years, and around 40% more compared with 2019. A report by Bain & Company showed marquee investors including Sequoia Capital, Elevation Capital, Falcon Edge and Lightspeed Venture Partners closed funds for India investments last year, with Sequoia itself accounting for about 40% of the quantum raised.

Meanwhile, the bond market turmoil, SBI has returned the money it raised 10 years ago from retail investors through bonds ahead of schedule. Investors, who put money into the 15-year SBI Retail Bonds in March 2011 that paid an interest rate of 9.95% annually, have got their investments back after the country’s biggest lender exercised the Call option in the 10th year, allowing it to return the funds prematurely.

Another withholding tax has returned to haunt FIIs. Foreign funds betting on Indian bonds may be in for a tax shock now. The tax on FPI funds dealing in debt securities is set to surge to as much as 20% with effect from April 1 from 5% currently. The fine print of the Budget notification showed that a special law allowing lower taxes to them has been removed. The move will impact at least 4,000 foreign funds that together hold debt paper worth Rs 4 lakh crore in the Indian market.

LASTLY…

Srei, one of the country’s largest non-banking finance companies, is hurtling towards a tricky terrain. RBI is understood to be weighing various options including board-level monitoring of the two companies, Srei Equipment Finance and Srei Infrastructure Finance, through either induction of new directors or appointment of an e xternal agency. The suggestions were given during a recent meeting between the regulator and the firm it engaged to conduct a special audit of the Srei companies.

NOW Before I go, here is a look at some of the stocks buzzing this morning…

CA Rover Holdings, an arm of global PE giant Carlyle, is selling about 4% stake in SBI Cards & Payment Services for up to Rs 3,900 crore, translating into a little over $500 million, through block deals on Wednesday, thus netting 970% returns in four years.

Piramal Capital & Housing Finance is raising up to Rs 3,000 crore through an issue of bonds offering interest at 9.25% per annum

RBI is understood to be weighing options, including a board-level monitoring of Srei Equipment Finance and Srei Infrastructure, through either induction of new directors or appointment of an external agency.

Indiabulls Real Estate’s promoter Sameer Gehlaut has started taking steps to move out as the promoter of the company that he had founded over a decadeand-a-half ago.

RBI has slapped a Rs 2 crore penalty on SBI for contravention of norms, including specific directions to the lender on remuneration to its employees in the form of commission

The non-retail portion of the Tata Communications offer for sale (OFS) was subscribed 1.36 times on Tuesday, the first day of the bidding

Anil Agarwal-led Vedanta Resources on Tuesday raised the open offer price for buying shares in its flagship Indian firm to Rs 235 per share, nearly 4 per cent higher than the current trading price.

Do also check out over two dozen stock recommendations for today’s trade from top analysts on ETMarkets.com.

That’s it for now. Stay put with us for all the market news through the day. Happy investing!



Source: ETMarkets Morning Podcast: Carlyle strikes gold on SBI Cards stake

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