DOCSLIB.ORG

Our Comp of Compa Limited Co on Febru U72900D 94 of This

Total Page：16

File Type：pdf, Size：1020Kb

Download full-text PDF Read full-text
Our Comp of Compa Limited Co on Febru U72900D 94 of This Draft Prospectus Dated: August 20, 2021 Please read Section 26 of Companies Act, 2013 100% Fixed Price Issue VIVO COLLABORATION SOLUTIONS LIMITED Our Company was incorporated on January 30, 2012 as a private limited company under the provisions of Companies Act, 1956 with the Registrar of Companies, Delhi in the name and style of Vivo Collaboration Solutions Private Limited. Subsequently, our Company was converted into public limited company pursuant to which the name of our Company was changed to “Vivo Collaboration Solutions Limited” vide shareholder’s approval on February 18, 2021and fresh certificate of incorporation dated March 11, 2021 The Corporate Identification Number of our Company is U72900DL2012PLC230709. For further details please refer to chapter titled ‘Our History and Certain Other Corporate Matters’ beginning on page 94 of this Draft Prospectus. Registered Office: 315, Third Floor, HB Twin Tower, Netaji Subhash Place, Pitampura, North Delhi, Delhi-110034 Tel No: 91-7838651690; E-mail: [email protected]; Website: www.vivo.ooo Contact Person: Mr. Sanjay Mittal, Managing Director Promoter of our Company: UC IT Managed Services Private Limited THE ISSUE PUBLIC ISSUE OF 5,36,000 EQUITY SHARES OF FACE VALUE OF RS. 10/- EACH FULLY PAID UP OF VIVO COLLABORATION SOLUTIONS LIMITED (“VIVO” OR THE “COMPANY” OR THE “ISSUER”) FOR CASH AT A PRICE OF RS. 82/- PER EQUITY SHARE (THE “ISSUE PRICE”) (INCLUDING A SHARE PREMIUM OF RS. 72/- PER EQUITY SHARE AGGREGATING RS. 439.52 LAKHS (THE “ISSUE”) BY OUR COMPANY, OF WHICH 27,200 EQUITY SHARES OF FACE VALUE OF RS. 10/-EACH FULLY PAID UP WILL BE RESERVED FOR SUBSCRIPTION BY MARKET MAKER TO THE ISSUE (“MARKET MAKER RESERVATION PORTION”). THE ISSUE LESS THE MARKET MAKER RESERVATION PORTION I.E. ISSUE OF 5,08,800 EQUITY SHARES OF FACE VALUE OF RS. 10/- EACH FULLY PAID UP IS HEREINAFTER REFERRED TO AS THE “NET ISSUE”. THE ISSUE AND THE NET ISSUE WILL CONSTITUTE 26.60% AND 25.25% RESPECTIVELY OF THE POST ISSUE PAID UP EQUITY SHARE CAPITAL OF THE COMPANY. THE FACE VALUE OF THE EQUITY SHARES IS RS. 10/- EACH. THE ISSUE PRICE IS RS. 82/- PER EQUITY SHARE. THE ISSUE PRICE IS 8.2 TIMES THE FACE VALUE. In terms of SEBI Circular No. CIR/CFD/POLICYCELL/11/2015 dated November 10, 2015 and the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018, all investors other than retail individual investor shall participate in this Issue mandatorily through the Applications Supported by Blocked Amount (“ASBA”) process by providing details of their respective bank accounts which will be blocked by SCSBs. Further, pursuant to SEBI Circular No. SEBI/HO/CFD/DIL2/CIR/P/2019/76 dated June 28, 2019, Retail Individual Investors applying in public issue shall compulsorily use UPI payment mechanism by providing UPI ID in the Application Form which is linked from Bank Account of the investor. For details in this regard, specific attention is invited to the chapter titled “Issue Procedure” beginning on page 180 of this Draft Prospectus. A copy of Prospectus will be delivered to the Registrar of Companies for filing in accordance with Section 26 of the Companies Act, 2013. THIS ISSUE IS BEING IN TERMS OF CHAPTER IX OF THE SEBI (ICDR) REGULATIONS, 2018 (AS AMENDED FROM TIME TO TIME) (“SEBI (ICDR) REGULATIONS”). For further details please refer to “Section VIII - Issue Information” beginning on page 172 of this Draft Prospectus. RISK IN RELATION TO THE FIRST ISSUE This being the first issue of Equity Shares of our Company, there has been no formal market for the Equity Shares of our Company. The face value of the Equity Shares is Rs.10/- and the Issue Price is 8.2 times of the face value. The Issue Price (as determined and justified by the Company and the Lead Manager as stated under chapter titled “Basis for Issue Price” beginning on page 60 of this Draft Prospectus) should not be taken to be indicative of the market price of the Equity Shares after the Equity Shares are listed. No assurance can be given regarding an active and/or sustained trading in the Equity Shares of our Company or regarding the price at which the Equity Shares will be traded after listing. GENERAL RISKS Investment in equity and equity related securities involve a degree of risk and investors should not invest any funds in this Issue unless they can afford to take the risk of losing their investment. Investors are advised to read the Risk Factors carefully before taking an investment decision in this Issue. For taking an investment decision, investors must rely on their own examination of our Company and the Issue including the risks involved. The Equity Shares offered in the Issue have not been recommended or approved by the Securities and Exchange Board of India (“SEBI”) nor does SEBI guarantee the accuracy or adequacy of this Draft Prospectus. Specific attention of the investors is invited to the section titled “Risk Factors” on page 19 of this Draft Prospectus. COMPANY’S ABSOLUTE RESPONSIBILITY Our Company, having made all reasonable inquiries, accepts responsibility for and confirms that this Draft Prospectus contains all information with regard to our Company and the Issue, which is material in the context of this Issue; that the information contained in this Draft Prospectus is true and correct in all material aspects and is not misleading in any material respect; that the opinions and intentions expressed herein are honestly held and that there are no other facts, the omission of which makes this Draft Prospectus as a whole or any of such information or the expression of any such opinions or intentions misleading in any material respect. LISTING The Equity Shares offered through this Draft Prospectus are proposed to be listed on the SME Platform of NSE (NSE EMERGE) in terms of the Chapter IX of the SEBI (ICDR) Regulations, 2018 as amended from time to time. Our Company has received an approval letter dated [●] from National Stock Exchange of India Limited (“NSE”) for using its name in the Offer Document for listing of our shares on the SME Platform of NSE. For the purpose of this Issue, the Designated Stock Exchange will be the National Stock Exchange of India Limited (“NSE”) LEAD MANAGER TO THE ISSUE REGISTRAR TO THE ISSUE SARTHI CAPITAL ADVISORS PRIVATE LIMITED BIGSHARE SERVICES PRIVATE LIMITED 401, 4th Floor, Manek Plaza, 167, Vidyanagari Marg, Bharat Tin Works Building, 1stFloor, Opp. Vasant Oasis, Kalina, Santacruz (E),Mumbai-400098 Makwana Road, Marol, Andheri East, Mumbai – 400059 Tel: +91 2226528671/72 Tel: +91 22 62638200 Fax:+91 22 26528673 Fax: +91 22 62638299 Investor Grievance Email: [email protected] E-mail: [email protected] Website: www.sarthi.in Website: www.bigshareonline.com Contact Person: Mr. Deepak Sharma Contact Person: Mr. Swapnil Kate SEBI Registration No.: INM000012011 SEBI Registration No.:INR000001385 ISSUE PROGRAMME ISSUE OPENS ON :[●] ISSUE CLOSES ON :[●] CONTENTS SECTION I – GENERAL…………………………………………………………...…………………. 3 DEFINITIONS AND ABBREVIATIONS…………………………………………….………………… 3 PRESENTATION OF FINANCIAL, INDUSTRY AND MARKET DATA…………………………… 13 FORWARD - LOOKING STATEMENTS……………………………………………………………… 14 SECTION II- SUMMARY OF OFFER DOCUMENT….…………………..………………………… 15 SECTION III - RISK FACTORS………………………………………..…………………………….. 19 SECTION IV - INTRODUCTION……………………………………...……………………………. 32 THE ISSUE………………………………………………………………………..……………………. 32 GENERAL INFORMATION…………………………………………………………..………………. 33 CAPITAL STRUCTURE……………………………………………………………….……………… 41 OBJECTS OF THE ISSUE…………………………………………………………………………….. 55 BASIS FOR ISSUE PRICE……………………………………………………………………………... 60 STATEMENT OF TAX BENEFITS…………………………………………………………………… 62 SECTION V – ABOUT THE COMPANY…………………………………………………………. 64 OUR INDUSTRY……………………………………………………………………………………..... 64 OUR BUSINESS……………………………………………………………………………………….. 73 KEY INDUSTRY REGULATION AND POLICIES………………………………………………….. 90 OUR HISTORY AND CERTAIN OTHER CORPORATE MATTERS……………………………….. 94 SHAREHOLDERS AGREEMENT AND OTHER AGREEMENTS………………………………….. 97 OUR MANAGEMENT………………………………………………………………………………… 98 OUR PROMOTERS AND PROMOTER GROUP……………………………………………………... 111 OUR GROUP ENTITIES……………………………………………………………………………..... 116 RELATED PARTY TRANSACTIONS………………………………………………………………... 117 DIVIDEND POLICY…………………………………………………………………………………… 118 SECTION VI – FINANCIAL INFORMATION…………………………………………………….... 119 FINANCIAL STATEMENT, AS RESTATED………………………………………………………… 119 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND 140 RESULTS OF OPERATIONS…………………..……………………………….…………………….. CAPITALISATION STATEMENT………………………………………………………………... 151 FINANCIAL INDEBTEDNESS……..………………………………………………………………… 152 SECTION VII – LEGAL AND OTHER INFORMATION………………………………………..... 153 OUTSTANDING LITIGATIONS AND MATERIAL DEVELOPMENTS……………………………. 153 GOVERNMENT AND OTHER STATUTORY APPROVALS………………………………………. 157 OTHER REGULATORY AND STATUTORY DISCLOSURES……………………………………… 160 SECTION VIII – ISSUE INFORMATION…………………………………………………………… 172 TERMS OF THE ISSUE………………………………………………………………………………... 172 ISSUE STRUCTURE……………………………………………………………………………...…… 177 ISSUE PROCEDURE…………………………………………………………………………………... 180 RESTRICTION ON FOREIGN OWNERSHIP OF INDIAN SECURITIES…………………………… 200 SECTION IX – MAIN PROVISION OF ARTICLES OF ASSOCIATION……………………… 203 SECTION X – OTHER INFORMATION…………………………………………………………... 221 MATERIAL CONTRACTS AND DOCUMENTS FOR INSPECTION……………………………….. 221 DECLARATION……………………………………………………………………………………….. 223 1 The Equity Shares have not been and will not be registered under the U.S Securities Act of 1933, as amended (U.S. Securities Actǁ) or any state securities
Load more

Recommended publications
  • Working Paper No: 449
    WORKING PAPER NO: 449 Inflation Targeting in India Saakshi Mahajan PGP Student Indian Institute of Management Bangalore Bannerghatta Road, Bangalore – 560076 [email protected] Souvik Kumar Saha PGP Student Indian Institute of Management Bangalore Bannerghatta Road, Bangalore – 560076 [email protected] Charan Singh RBI Chair Professor Economics & Social Science Indian Institute of Management Bangalore Bannerghatta Road, Bangalore – 5600 76 Ph: 080-26993818 [email protected] Year of Publication –February 2014 1 Inflation Targeting in India1 Abstract: Inflation targeting (IT), since its inception, has been a topic of much debate for economists all around the world. In this paper, the suitability of inflation targeting for an emerging economy like India is explored, pitching it against the multi-variable approach currently being followed. One of the foremost challenges in the present context of global economic crisis is the debate whether priority should be accorded to IT or financial stability. Also, in India, there is still another dimension and that is, which of the multiple price indices would be most appropriate for fixing as an anchor of IT. Therefore, this paper also evaluates different forms of CPI, WPI and PPI in order to find which amongst them would be the best indicator of inflation in the Indian scenario. Through analysis of conditions prevalent in India, this paper justifies why inflation targeting would not be an appropriate policy for India at this juncture, and recommends certain changes in the present multi-variable approach that would make it more robust and effective. Keywords: Inflation targeting, price indices, multi-indicator policy, transmission mechanism 1The authors are grateful to Mr.
    [Show full text]
  • Banking Sector Reforms and the Goals of Nationalised Commercial Banks in India
    fșă Theoretical and Applied Economics Volume XXVII (2020), No. 2(623), Summer, pp. 241-262 Banking Sector Reforms and the Goals of Nationalised Commercial Banks in India Kubendran NARAYANASAMY NMIMS University, India [email protected] Abstract. The main aim of the study is to analyse the role of Nationalised Commercial Bank (NCB) on economic growth and development in India during pre and post-reform periods (Restrictive and liberalised regime). The study also aims to analyse the performances and associations of nationalised commercial banks with the RBI in the same period. For this purpose, the study first uses Augmented-Dickey Fuller unit root test. After assessing stationary conditions, the study uses Engel-Granger Causality test and Trend line analysis. Based on the empirical results, the study found that the role of NCB on economic growth is higher in the post-reform period compared to the pre-reform period. But their role in poverty eradication and employment generation is less in the post-reform period even though the average GDP growth rate is high in the post-reform period. Similarly, the performances of NCBs are also declining due to the increasing trend in their NPAs. The study also found that the monetary policy is not much effective in India, especially after 2000 where fall in the interest rate failed to influence GDP. So the study strongly recommended frequent interference and instructions of RBI to enhance the performances of NCBs and the effectiveness of monetary policy to achieve macroeconomic goals. Keywords: monetary policy, non-performing asset, money supply, granger causality, poverty, unemployment, GDP growth.
    [Show full text]
  • Impact of Inflation and Gdp on Cnx Nifty
    IMPACT OF INFLATION AND GDP ON CNX NIFTY *Dr. J K Raju **Mr. Manjunath B R ***Mr. Pradeep Kumar S Abstract : Inflation and GDP are the two main important macro-economic variables. GDP is an economic indicator of the market value of all finished goods and services produced over a period (Quarterly or yearly) of time. There has been a decline in the GDP growth rate in the year 2017 compared to previous year. Several factors including global situation are responsible for the decline in GDP growth rate. Inflation is a continual growth in the universal worth of goods and services in an economy over a period of time. When the price level increases, each component of currency buys fewer goods and services. This paper mainly deals with the impact of Inflation and GDP on Indian market that is National stock exchange (NSE). For this we have collected 10 years quarterly data and also applied E-views statistical package. Unit root test for stationary, co-integration test, vector error correction model, and granger causality test, were conducted. Keywords: Inflation, Gross domestic product, National stock exchange, E-views. Introduction Gross domestic product (GDP) is an Economic indicator of the market value of all The National stock exchange (NSE) was finished goods and services produced over a established in 1992 as a tax-paying company period (Quarterly or yearly) of time. Gross and was recognized as a stock exchange in domestic product includes all private and 1993 under the Securities Contracts public consumption, government outlays, and (Regulation) Act, 1956. NSE commenced investments.
    [Show full text]
  • Understanding Inflation in India
    NBER WORKING PAPER SERIES UNDERSTANDING INFLATION IN INDIA Laurence Ball Anusha Chari Prachi Mishra Working Paper 22948 http://www.nber.org/papers/w22948 NATIONAL BUREAU OF ECONOMIC RESEARCH 1050 Massachusetts Avenue Cambridge, MA 02138 December 2016 Prepared for the Brookings-NCAER India Policy Forum. We would like to thank Pami Dua, Subir Gokarn, Ken Kletzer, and participants at the India Policy Forum conference for comments, and Edmund Crawley, Manzoor Gill, Jianhui Li, Wasin Siwasarit, and Ray Wang for excellent research assistance. The views represent those of the authors and not of the Reserve Bank of India, any of the institutions to which the authors belong, or the National Bureau of Economic Research. NBER working papers are circulated for discussion and comment purposes. They have not been peer-reviewed or been subject to the review by the NBER Board of Directors that accompanies official NBER publications. © 2016 by Laurence Ball, Anusha Chari, and Prachi Mishra. All rights reserved. Short sections of text, not to exceed two paragraphs, may be quoted without explicit permission provided that full credit, including © notice, is given to the source. Understanding Inflation in India Laurence Ball, Anusha Chari, and Prachi Mishra NBER Working Paper No. 22948 December 2016 JEL No. E31,E58,F0 ABSTRACT This paper examines the behavior of quarterly inflation in India since 1994, both headline inflation and core inflation as measured by the weighted median of price changes across industries. We explain core inflation with a Phillips curve in which the inflation rate depends on a slow-moving average of past inflation and on the deviation of output from trend.
    [Show full text]
  • The Determinants of Inflation in India: the Bounds Test Analysis
    International Journal of Economics and Financial Issues ISSN: 2146-4138 available at http: www.econjournals.com International Journal of Economics and Financial Issues, 2016, 6(2), 544-550. The Determinants of Inflation in India: The Bounds Test Analysis Md Qaiser Alam1, Md Shabbir Alam2* 1Department of Economics, D.S (P.G) College, Aligarh, Uttar Pradesh, India, 2Department of Accounting & Finance, CCBA, Dhofar University, Oman. *Email: [email protected] ABSTRACT India is facing a fast rise in the general price level for the last couple of years. This paper seeks to empirically examine the sources of inflation in India both in the long-run and in the short-run by using the co-integration method developed by Pesaran et al. (2000). The empirical findings suggests that in the long-run money supply (MS), depreciation of the rupee and supply bottlenecks puts a pressure on the domestic price level by causing inflation to rise in the country. The analysis reveals that in the long-run domestic factors as monetary growth and supply bottlenecks dominates the external factors for a rise in the domestic prices in the economy. The short-run analysis also reveals that domestic factor MS and supply bottlenecks dominate the external factor as a measure cause for a persistent rise in the price level in the country. The supply bottlenecks are though a significant factor in the short-run, but its importance in the long-run is relatively small. Keywords: Inflation, Money Supply, Exchange Rate, World Price, Gross Domestic Product Gap, Bounds Test, Error Correction Model JEL Classifications: E31, E51, D51, F43 1.
    [Show full text]
  • Inflation Targeting in India: Select Issues
    IIMB-WP N0. 475 WORKING PAPER NO: 475 INFLATION TARGETING IN INDIA: SELECT ISSUES Charan Singh RBI Chair Professor Economics & Social Science Indian Institute of Management Bangalore Bannerghatta Road, Bangalore – 5600 76 Ph: 080-26993818 [email protected] Year of Publication – November 2014 1 IIMB-WP N0. 475 Inflation Targeting in India: Select issues Charan Singh1 Abstract The adoption of inflation targeting in India has been a much debated topic which also becomes a challenge for the emerging economy. Though inflation targeting has already been adopted in many emerging and advanced countries, acceptability in India is a matter of concern. The paper argues that an emerging country like India needs to consider the composition of consumer price index; state of macro econometric models; and young demographics, unemployment rate and lack of social security before adopting inflation targeting. To modernize the monetary policy framework, India could consider introducing regular review of the regional economy; instituting a Monetary Policy Committee; and separating debt from monetary management, the paper argues. Keywords: Monetary policy framework, inflation, inflation targeting, debt management 1 RBI Chair Professor of Economics, IIM Bangalore. Views are personal. The author would like to thank Jafar Baig, Sriramjee Singh, Sharada Shimpi and Shara Bhattacharjee for their research assistance. 2 IIMB-WP N0. 475 Introduction Inflation Targeting could be the next major policy measure adopted in India as the proposal is under active consideration by the Reserve Bank of India (RBI) and the Government of India (GOI). In recent years, there has been a debate on the monetary policy framework in the country, basically anchored around the philosophy of adopting inflation targeting (IT) in India.
    [Show full text]
  • CPI Inflation: FY12-FY21
    CPI Inflation: FY12-FY21 May 12, 2021 I Economics Headline inflation based on Consumer price index (CPI) has grown at a CAGR of 5.8% during the last ten years (i.e., FY12 to FY21). This can be viewed in the context of the Monetary Policy Committee’s approach to flexible inflation targeting from 2016 onwards with the aim of maintaining inflation at 4% with a band of 2% on both sides. Inflationary pressures have rebounded with retail inflation rising to 6.2% during FY21, exceeding the 6% limit. This has been manifested in both food inflation and core inflation. Higher food prices were due to supply shortfalls as in case of pulses as well as global trends in case of edible oils. Further, periodic disruptions caused by monsoon-related issues for vegetables caused inflation to increase sharply. Core inflation became fairly sticky as prices of various manufactured products and services increased post the unlock process. Global trends Pandemic and resultant lockdowns/restrictions imposed globally in order to restrict the spread of infections resulted in slowing down of economic activities. Global commodity and crude oil prices moved downward owing to bleak demand prospects. Central Banks turned accommodative to extend support to the economies hard-hit by the disruptions as inflation remained benign. On the domestic front, imposition of a nation-wide lockdown in March 2020 resulted in firming up of prices on the back of rising cost-push inflation and supply side disruptions. Declining global crude oil prices were partly offset by an increase in taxes which ensured that the benefit of lower prices did not fully reach the consumer.
    [Show full text]
  • Chapter 39 PRICES "Inflation Is the Form of Taxation Which the Public
    Chapter 39 PRICES "Inflation is the form of taxation which the public find hardest to evade."- Keynes 39.1 Background: Price trends reflect a complex phenomenon of demand-supply interaction, pattern and form of state intervention through determining the level of money supply, direct and indirect tax structure and the relative importance of different components of the national production basket which, in turn has been influenced by the investment priorities and policies of the yester years. Inflation, a related term in economic lexicon, indicating sustained rise in general level of prices of goods and services , assumes significance in economies ridden with disparities because of large many experiencing the phenomenon of being ‘ priced out ‘ . In situation of high inflation, with a variety of goods and services getting out reach for many, the corrosion in the well being begins to undercut the achievements in economic growth. Even though it affects all by eroding the purchasing power of income, raising the cost of living and lowering the real value of savings, it is the poor who are most vulnerable to inflation as they do not have any effective hedge against it. Hence inflation has always been one of the most closely monitored macroeconomic indicators. 39.2 The changes in prices over a period of time can be gauged by the statistical device of index number of prices. The price index can be either at the wholesale level (WPI) or at the level of the retail end of marketing channel or Consumer Price (CPI). Inflation Measures : Conceptual issues 39.3 India has a rich tradition of collection and dissemination of price statistics dating back to 1861 when the Index of Indian Prices was released.
    [Show full text]
  • Explaining Inflation in India
    EXPLAINING INFLATION IN INDIA: † THE ROLE OF FOOD PRICES Prachi Mishra Research Department, International Monetary Fund‡ Devesh Roy International Food Policy Research Institute October 31, 2011 Abstract This paper conducts a forensic examination of inflation in India with a focus on food price inflation, using a disaggregated high-frequency commodity level dataset spanning the last two decades. First, we document stylized facts about the behavior of overall inflation in India. We establish that low inflation has historically been a rare occurrence in the Indian economy in the last two decades; the long-term trend in the inflation rate exhibits a U-shaped pattern with a structural break in the trend in 2000 and an inflection point in 2002. The long-term trend in food inflation has followed a pattern similar to overall inflation. Domestic and international food price inflation rates have been moderately correlated, though there is significant variation across commodities based on their tradability. Furthermore, we find food price inflation to be consistently higher than non-food, quite persistent, and having a significant pass-through to non-food inflation. Further, the price of food relative to non-food co-moves strongly with aggregate inflation rate. Next, we explicitly quantify the contribution of specific commodities to food price inflation. We find that animal source foods (milk, fish), processed food (sugar, edible oils), fruits and vegetables (e.g. onions) and cereals (rice and wheat) are the primary drivers of food price inflation. Finally, we conduct case studies of some of the top contributors to food price inflation. Combining the insights from macro as well as micro analyses, the paper suggests specific policy implications.
    [Show full text]
  • Strategy | INDIA
    Strategy | INDIA 2011 Outlook NOMURA FINANCIAL ADVISORY AND SECURITIES (INDIA) PRIVATE LIMITED Prabhat Awasthi +91 22 4037 4180 [email protected] Nipun Prem +91 22 4037 5030 [email protected] TOP DOWN ANCHOR REPORT Under the weather Stocks for action We reckon that 2011F will be a year of below-average returns for Indian equities. Our top BUY calls are MM and PF, as Market performance is likely to be shaped by a macroeconomic environment consumption and rural demand plays, punctuated by wage pressures, rising commodity prices, return of inflationary pressures, and TATA and CAIR, for their exposure tight liquidity (in the first half, at least), slowing growth momentum, a hesitant recovery to global commodity prices. ACEM and in the investment cycle, below-average earnings growth, downward sticky interest rates, HPCL are our top REDUCE calls. tighter monetary policy and somewhat muted government expenditure — all this in the backdrop of strong domestic consumption and below-trend global economic growth. We Stock Rating Price (INR) PT M&M (MM IN) BUY 789 892* favour a defensive bias when approaching sectors for next year. We recommend a Pantaloon (PF IN) BUY 389.5 553 relative Underweight stance on rate cyclicals, construction and cement, and a relative TATA Steel (TATA IN) BUY 624 846 Overweight stance on consumer, pharma, power, oil & gas, metals and IT services. Our Cairn India (CAIR IN) BUY 327 370* Ambuja Cements REDUCE 137.9 113 top BUY calls for next year are Mahindra & Mahindra, Pantaloons, Tata Steel and Cairn. (ACEM IN) Our top REDUCE calls are Ambuja Cements and HPCL.
    [Show full text]
  • The Food Price Channel: Effects of Monetary Policy on the Poor in India
    The Food Price Channel: Effects of Monetary Policy on the Poor in India Kuhelika De∗ November, 2016 Abstract Poverty and hunger have been largely ignored in the practice and conduct of mon- etary policy. This paper studies the impact of monetary policy on food consump- tion distribution of households in India, particularly focussing on the subsistence food consumption of poor households and inequality. Using household survey data from 1996:Q1 to 2013:Q4, I estimate the dynamic effects of monetary policy shocks on rela- tive food prices and the distribution of food consumption in rural and urban India from a dynamic common factor model (Bernanke, Boivin, and Eliasz, 2005 and Stock and Watson, 2010), and identify monetary policy shocks using the sign restriction approach of Uhlig (2005). I find that an expansionary monetary policy shock increases relative food prices, reduces the subsistence food consumption of poor households, and raises inequality across households in food consumption. This paper provides evidence of the impact of a \food price channel" of monetary policy on poor households in India. To the best of my knowledge, this is the first study to empirically investigate the impact of monetary policy on poor households in India. This study may hold important policy implications for Indian policymakers as well as those in similar low-income countries. Keywords: Monetary Policy, Food Prices, Food Subsistence, Poverty, Inequality, De- velopment JEL Classification Numbers : D63, E31, E5, E63, I32, O11, O23 ∗Department of Economics, University of Georgia, email: [email protected]. I am sincerely grateful to William D. Lastrapes for his invaluable advice, guidance and support.
    [Show full text]
  • Monetary Policy Transmission in India
    Monetary policy transmission in India Rakesh Mohan1 Key to the efficient conduct of monetary policy is the condition that it must exert a systematic influence on the economy in a forward-looking sense. A priori economic theory backed by some empirical evidence has identified the main channels through which monetary policy impacts its final targets, viz, output, employment and inflation. Broadly, the vehicles of monetary transmission can be classified into financial market prices (eg, interest rates, exchange rates, yields, asset prices, equity prices) or financial market quantities (money supply, credit aggregates, supply of government bonds and foreign denominated assets). It is recognized that, whereas these channels are not mutually exclusive, the relative importance of each channel may differ from one economy to another depending on a number of factors, including the underlying structural characteristics, the state of development of financial markets, the instruments available to monetary policy, the fiscal stance and the degree of openness. Traditionally, four key channels of monetary policy transmission are identified, viz, interest rate, credit aggregates, asset prices and exchange rate channels. The interest rate channel emerges as the dominant transmission mechanism of monetary policy. An expansionary monetary policy, for instance, is expected to lead to a lowering of the cost of loanable funds, which, in turn, raises investment and consumption demand and should eventually be reflected in aggregate output and prices. Monetary policy also operates on aggregate demand through changes in the availability of loanable funds, ie, the credit channel. It is, however, relevant to note that the “credit channel” is not a distinct, free-standing alternative to the traditional transmission mechanism but should rather be seen as a channel that can amplify and propagate conventional interest rate effects (Bernanke and Gertler, 1995).
    [Show full text]