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Dec 10 2020 . ISSUE 28
THE DAILY NEWSLETTER

Good morning folks! As we watched nifty breach the 13,500 mark yesterday, bulls are sure in action. Will they keep running to new heights?


If you do choose to invest in a share, invest for the lifetime.


– Sandeep Sahajpal


GAINERS & LOSERS

NIFTY

13529.10

+ 136.10

SENSEX

46103.50

+ 494.99

CRUDE OIL

3,377.00

+ 6.00

GOLD

49,190.00

- 919.00

HOT STOCKS IN NEWS

TCS's Rs 16,000-cr buyback offer to open on Dec 18. The approved buyback amount is Rs 3000/ share.

Maruti Suzuki launches India's first multi-financier, online car financing platform in NEXA.

Hindustan Aeronautics Limited board recommends 1st interim dividend of Rs. 15.

DAILY FLICKS
RTGS system to become 24x7 from December 14
Documents in a folder with Trump Organization insignia

The RBI has released the date for the commencement of one of the main proposals of RBI's Monetary Policy 2020.


RTGS System 


Real Time Gross Settlement (RTGS) system will become 24/7 for 365 days from December 14 throughout the nation. Making RTGS 24x7x365 was one of the main agendas on the 2020 RBI monetary policy. 


What is RTGS? 


RTGS refers to a funds transfer system that allows for the instantaneous transfer of money and/or securities. India will become one of the few countries in the world to operate its RTGS system round the clock throughout the year. 


RTGS is meant to make transactions easy for businesses by enabling easy high-value transactions ( Amounts greater than Rs. 2 lakhs). It is a transfer system wherein the transfer of money takes place from one bank to any other bank on a “real-time” and a gross basis.


‘Real Time’ means the processing of instructions at the time they are received and ‘Gross Settlement’ means that the settlement of fund transfer instructions occurs on a one-to-one basis.


The minimum amount to be transferred via RTGS is ₹2,00,000/- and there is no maximum RTGS limit as RTGS service is meant for high-value transactions.


Bottom line: This is a massive push to digital payments, as more and more people start shifting towards digital payments facilities. 

Draft rules for dividend pay by NBFCs
walmart shopping

Keeping in view the increasing significance of NBFCs in the financial system, The RBI had decided to formulate guidelines on dividend distribution by NBFCs and the draft rules were proposed on December 9 2020


Major highlights of the draft..


Deposit taking NBFCs should have a Capital to Risk (Weighted) Assets Ratio (CRAR) of at least 15 per cent for last three years, including the year for which it proposes to declare dividend.. CRAR is the ratio of bank's capital to risk. Higher the CRAR, better capitalized the bank is. 


Also, the net non-performing (NPA) asset ratio should be less than 6 percent in each of the last three years, including the year for which it proposes to declare dividend. NPA is basically the bad loans.. the lower, the better.


Non-Systemically Important Non-Deposit taking NBFC, that is NBFCs with total assets less than 500 crore, should have leverage ratio of less than 7 for the last three years, including the year for which it proposes to declare dividend. Leverage ratio indicates the debt. Obviously, the NBFC has to have low debt. to function smoothly. 


How will it play out?  


In accordance to a set of conditions, different categories of NBFCs would be allowed to declare dividend as per the given parameters. The proposed dividend should be paid out only from the NBFCs current year's profit. 


Bottom line: Comments on the draft circular are invited from NBFCs, industry participants and other interested parties by December 24, 2020.


Govt to sell close 20% stake in IRCTC
walmart shopping

It kind of looks as if the government is selling shares of everything it owns. Now, the IRCTC might join the list. 


Railways on the market.  


The government of India is fiddling with the idea of selling up to 3.2 crore shares of IRCTC, which represents 20% stake of the company. Of the 30%, 5% stake could be sold in the event of oversubscription. The floor price for the offer shall be ₹1367 per share. 


The sale will take place on December 10 and December 11. Only retail investors shall be allowed to place their bid on December 11.


Bottom line: Railway travels might've taken a hit during the pandemic, but with the vaccine around the corner it won't be that long before they start operating at pre-covid levels. 


OTHER FLICKS
  • Govt to launch public Wi-Fi networks, with no fees or licence. The cabinet has also approved the laying of undersea cables to provide high-speed broadband to Lakshadweep
  • Pfizer Covid-19 vaccine to have differential pricing across countries.On the other hand, subject expert committee of the Central Drugs Standard Control Organisation (CDSCO) did not clear the proposals submitted by Bharat Biotech and Serum Institute of India (SII) seeking emergency use approval due to inadequate safety and efficacy data, according to reports.
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