Daily Market Update – 24th March 2021



Untitled 5 Daily Market Update   24th March 2021

                                                            Previous Market Closed 

                                                  Nifty Closed at 14814.75 up by 78.35

                                                  Sensex Closed at 50,341.29 by 289.85


After setting an initial threshold of Rs.2.50 lakhs for tax-free PF interest, the government has upped the limit to Rs.5 lakhs. However, this would only be applicable to those cases where no contribution is made by the employer; which is the caveat. So, for provident fund plans that also enjoy employer contribution, the limit will continue to be Rs.2.50 lakhs. In her budget speech, Nirmala Sitharaman had emphasized that the PF rule would only impact 1% of provident fund holders. One of the observations made by the FM was that a large number of HNIs and high income earners were using the PF just to earn hefty tax-free income.

Minister of State for Finance, Anurag Thakur, confirmed that NPAs of banks had fallen to Rs.5.70 trillion in December 2020 with nearly Rs.2.74 trillion being recovered due to a slew of measures taken by the government to ensure better compliance. Thakur underlined that the IBC had also helped significantly in the reduction of gross NPAs of the banking system from Rs.8.96 trillion in 2018 to Rs.5.70 trillion in December 2020. Thakur also pointed out that tighter controls had resulted in incidents of frauds falling from 1.01% in 2013-14 to 0.23% in the present day. He also stressed that 7 out of the 12 PSU banks had taken up digital initiatives on a war footing and hope to be able to compete with private banks soon. Of course, this excludes the moratorium loans and the real picture of NPAs may only be clear after that.

Airtel Africa will sell 1424 towers in Madagascar and Malawi to Helios Towers for $119 million. This was disclosed by Bharti Airtel in a regulatory filing. In addition, tower assets in African nations like Chad and Gabon are also in the process of being hived off. Airtel Africa has a tower portfolio of 1229 towers in Madagascar and Malawi, which they plan to monetize. Airtel Africa also has a portfolio of 1000 towers in Chad and Gabon put together. The transaction is slated to close in the last quarter of 2021. The proceeds will be used to reduce Airtel Africa’s external debt and invest in network and sales infrastructure.

It would be advantage REITs in the coming years if the projections of JLL are anything to go by. JLL estimates that a total of $36 billion worth of real estate is currently suitable to be listed under REITs. India currently has only three listed REITs viz. Embassy Office Parks, Mindspace Business Parks and the recently listed Brookfield India Real Estate Trust. REITs have done well in India, thanks to the quality of promoters in all the 3 cases. JLL estimates potential space of 284 million SFT that can be securitised with an estimated value of $36 billion. REITs are pass-through structures that hold commercial realty as a portfolio of assets.

Supreme Court on Tuesday told the lenders that interest on interest cannot be charged on loan amounts granted moratorium between March and August 2020. Lenders have been asked to refund the said amount, which comes to around Rs.7,500 crore. The earlier Supreme Court order had asked banks to refund interest on interest on loans below Rs.2 crore. At that time, the banks had taken a hit of Rs.6,500 crore and now an additional hit of Rs.7,500 crore is envisaged, as per a research report by ICRA. Supreme Court ruled that interest cannot be waived off and rejected extension of moratorium beyond 6 months.

After INVITs made their presence felt in roads and power, it is the turn of the oil sector. India’s oil sector PSUs will float INVITs as part of asset monetisation plans announced in Budget 2021. GAIL is expected to be the first to set up the INVIT, which will house some of its gas pipeline infrastructure. This INVIT is likely to help GAIL mobilise Rs.20,000 crore, which they can reinvest in developing new pipeline infrastructure in India. HPCL will also look to monetize its pipeline infrastructure to raise money upfront. However, IOCL is expected to monetize its hydrogen-producing units and product pipelines into an INVIT. Typically, INVITs are created to hold income-generating infrastructure assets like roads, power transmission lines, gas pipelines etc. In the power sector, Power Grid has already monetized some of its assets through INVITs.

World Indices  at9AM%name Daily Market Update   24th March 2021

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