Teji Mandi: Three things investors should know on January 19, 2021
Teji Mandi

Higher sugar production estimate :

India’s sugar output rose by 31% to 142.70 Lakh Tn in the first three-and-a-half months of the 2020-21 marketing year. Indian Sugar Mills Association (ISMA) has projected sugar output to increase by 13% for the whole year. Sugar production was at 108.94 lakh tonnes till January 15 last year.

Sugar production in Uttar Pradesh has remained slightly lower so far. The production in Maharashtra rose to 51.55 lakh tonne from 25.51 lakh tonne in the said period.

Domestic sugar production has been far more than demand. Hence, India is currently sitting on a pile of buffer stock of sugar. With bumper production in the current year, the stock is going to inch up further.

In this scenario, the industry will have to find a way to increase exports. The government had recently announced subsidies for sugar exporters. It was a helpful move. However, the industry will be expecting additional measures to boost exports.

HDFC Bank's outrage control plan :

HDFC Bank has submitted a plan to RBI, outlining the plans to resolve the glitches in its technology platform.

The bank is working on many immediate and long-term solutions currently. The action plan could take anywhere between 10-12 weeks to implement. But, the bank is likely to invite the regulator soon to review the progress made so far.

Last month, RBI had instructed HDFC Bank to resolve the glitches in its tech platform. The central bank had also suspended new retail card acquisition till the issue is resolved.

In our view, the tech issue is unlikely to resolve soon. As per the Macquarie Capital report, it could be resolved by Q2 of FY22. However, if RBI is satisfied with the progress, they could lift the ban on new credit card acquisition.

The long wait for Franklin Templeton's Investors :

Franklin Templeton has informed that the unitholders of its six taunted schemes have voted overwhelmingly to wind up the schemes. However, several objections are being raised against the e-voting process. The supreme court has decided to hear the objections and the court till then has put a hold on any further decision.

The Supreme Court has given three days to submit all the objections against the voting process. Till then, the decision taken via voting will be put on hold. As per the reports, over 90% of unitholders had voted in favor of winding up the scheme.

Earlier the fund house had closed the scheme abruptly, citing deteriorating asset quality. The decision had met with high resistance. A voting process was conducted to resolve the matter.

We believe the Supreme court will have a couple of options. It can, for one, ask to reinitiate the voting process. Or the court can withhold the current decision of liquidating the scheme.

If the voting process is reinitiated, then it will restart the whole process. But, if the supreme court holds the validity of the current voting process, it will also have to decide on the process of liquidation.

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