Rise With Profit: Finance Ministry's Dividend Revision, Punit Goenka's Resignation, NTPC Green IPO | Podcast

This is the daily morning update from NDTV Profit and I’m Alex Mathew. Over the next few minutes, we’ll bring you up to speed with everything you need to know at the start of your day.

You can listen to this as a podcast here.

Let’s first look overseas as we normally do. Elevated bond yields and dollar have continued to put pressure on risk assets, but equity markets in the US managed to end mostly in the green. In the week ahead, on Wednesday, investors in the US are awaiting results from Nvidia Corp. They’ll look for signs that the bullishness on artificial intelligence is not inflated. And of course, looking a little further, there’s also the next meeting of the Federal Reserve Open Market Committee in a few weeks.

Ahead of that meeting, as I’ve pointed out in recent days, the dollar index has climbed to over $106. That, coupled with higher bond yields, has proven negative for emerging equities. Of course, for India, there’s also been the gravitation of funds to China and out of other markets like India. But there are more signs that there is some fatigue and lowering of expectations on China.

After CLSA, Morgan Stanley and Goldman Sachs were the next to turn more cautious on Chinese stocks. According to a Bloomberg report, they’ve cited persistent deflationary pressures and geopolitical tensions that are making earnings difficult to predict. Basically, some of the factors that have pushed the dollar and yields higher have also put the brakes on China’s stock market rally. Chief among them is Donald Trump’s win in the presidential election and his anticipated hard stance against China next year. Already, the MSCI China Index has fallen about 15% from a recent peak.

As things stand, we have a positive start for equities in the Asia Pacific region, with the three early risers beginning with narrow gains. And that bodes well for Indian equities, which have been on their worst losing streak in 20 months. With selling by foreign institutions continuing, the Nifty 50 yesterday hit its lowest level since June 5.

Turning to the top stories from back home, the finance ministry has revised its 2016 guidelines on dividend payment by Central Public Sector Enterprises. The move follows CPSEs’ strong balance sheet and improved market capitalisation over the past few years. As per the revised guidelines, every CPSE would pay a minimum annual dividend of 30% of PAT or 4% of the net worth, whichever is higher. Essentially, the net worth requirement has gone down from 5%.

There’s also a change in the requirement for these companies to undertake a buyback. The thresholds that force this buyback has now risen. Companies with a net worth of Rs 3,000 crore and cash balances of Rs 1,500 crore will be required to make a buyback of shares.

In other corporate news, Zee Entertainment Enterprises Ltd.'s Chief Executive Officer Punit Goenka has resigned as managing director of the company, according to a stock exchange filing. Goenka will continue to hold the position of CEO and shall entirely focus on his operational responsibilities, the statement said. Goenka intends to dedicate his time entirely towards the future of the company by enhancing its performance and profitability levels, in line with the direction given by the board, according to the statement.

In the primary market, NTPC Green Energy raised Rs 3,960 crore from anchor investors a day before its initial public offering opens for bidding. The company allotted 36.66 crore shares at an issue price of Rs 108 apiece to 107 anchor investors, according to an exchange filing. The big story here is that Life Insurance Corp. emerged as the top investor, securing 12.63% of the total issue for Rs 500 crore. Other investors include Goldman Sachs India, the Government of Singapore, and Capital Group affiliate New World Fund Inc.

In other news, the Competition Commission of India has imposed a penalty of Rs 213.1 crore on Meta Platforms Inc., the parent entity of WhatsApp, for "abusing its dominant position" in the implementation of the messaging platform's privacy policy in 2021. The action against Meta relates to how the privacy policy was implemented and how user data was collected and shared with other Meta companies.

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