Teji Mandi: Three things investors should know on December 7
Teji Mandi

The Deepak Parekh View on NBFC regulation:

The Reserve Bank of India (RBI) is aiming at the tightening of the regulatory norms for the NBFCs. The suggested measures include fresh audit systems, risk-based internal audits, and a scale-based approach to regulating the NBFCs.

Deepak Parekh, Non-Executive Chairman, HDFC Limited has cautioned RBI from destabilizing any NBFC or housing finance company (HFC) in its quest to improve regulatory standards. He also believes that bringing changes is a 2-3 year process.

Under the current operating norms, the NBFCs enjoy a free hand in comparison to banks. It makes them vulnerable to financial risks.

NBFCs, with assets under management worth more than Rs 50,000 crore are important for the system. Their interlink with different parts of the financial system is growing. With that, the sector needs to develop more resilience to financial shocks.

Mutual funds gearing up for AMFI's fresh reclassification:

AMFI is expected to release a fresh list of stock categorization into large-caps, mid-caps, and small-caps. ICICI Securities has come up with a high probability list of reshuffling candidates in its latest report.

According to it, YES Bank, Adani Enterprises, PI Industries, Hindustan Aeronautics, and Jubilant Food could shift from midcap to large-cap category post the reclassification. Large cap stocks like United Breweries, Container Corporation, General Insurance Corporation of India, and Bank of Baroda could slip into the midcap bracket.

Nine small caps- Laurus Labs, Indiamart Intermesh, Navin Fluorine, Dixon Technologies, Alok Industries, AstraZeneca Pharma, Deepak Nitrite, Bombay Burmah, and Suven Pharma- are likely to be reclassified as midcaps.

Nine midcaps- Kajaria Ceramics, SKF India, Apollo Tyres, JM Financial, Cholamandalam Financial, V-Guard, PVR, Symphony, and Future Retail- could be reclassified as small caps. The new list will be effective in the first week of January 2021.

This reclassification will have a direct impact on mutual fund portfolios. As per the SEBI circular dated 6th Oct’17, fund managers will have to align their portfolios as per the fresh list.

This is not sweet, Honey!

FMCG rivals Dabur and Marico are once again at loggerheads. This time, the conflict is over 'honey'. Both companies have alleged that the other is making false claims in advertisements.

The ad war is triggered after Dabur allegedly failed a nuclear magnetic resonance spectroscopy (NMR) test. Marico has accused Dabur of making a false claim that its Honey has passed the NMR test. Dabur is also planning to file the same suit against Marico.

Both the FMCG giants are at a corporate war since Dabur's entry into the coconut hair oil segment, currently dominated by Marico's Parachute Brand. In response, Marico also infiltrated Dabur's stronghold with new launches in the Ayurvedic and healthcare segments.

We see both these giants will attempt to make further inroads in the strong domain of each other. Hence, in the times to come, this rivalry is only going to intensify further.

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Free Press Journal