US Tariff Imposition: Impact on Indian Auto Stocks

Shares of leading Indian auto component manufacturers, including Sona BLW Ltd. and Samvardhana Motherson Ltd., fell sharply on Monday, with declines of up to 8%. The downturn follows US President Donald Trump’s announcement of a 25% tariff on imports from Canada and Mexico, effective Tuesday, February 4, 2025. Additionally, a 10% tariff has been imposed on imports from China.

Auto Component Exports to Mexico: A Small but Significant Share

India exports auto components worth $21.2 billion globally, of which exports to Mexico contribute approximately 3%, amounting to $656 million. Industry experts indicate that the primary components exported to Mexico are metallurgical products such as forgings and casting materials.

With a significant portion of automobiles sold in the US being manufactured in Mexico and Canada, the tariff hike is expected to disrupt global supply chains and raise vehicle production costs. Automakers such as General Motors, Toyota, and Volkswagen could see major impacts, as 30-40% of GM and Toyota’s US sales, and nearly 60% of Volkswagen’s, come from Mexico-produced vehicles.

Impact on Samvardhana Motherson

For Samvardhana Motherson, Mexico accounts for approximately 4% of its total revenue as per news report. While the direct impact remains uncertain, it is expected to increase volatility as automakers reassess their supply chains. A key concern is whether OEMs (original equipment manufacturers) shift production to avoid the tariff-driven cost surge, which could impact Motherson’s operations in Mexico.

Impact on Sona BLW

Mexico contributes about 2% to Sona BLW’s total revenue. Although a major portion of value addition happens in India, Mexico serves primarily as an assembly hub. If OEMs decide to relocate production to the US, Sona BLW could restructure its supply chain to directly serve US-based manufacturing facilities.

China Tariffs and India’s Potential Opportunity

The US’s 10% tariff on China could further increase component costs for American automakers. This could push US companies to seek alternative suppliers, potentially benefiting India’s auto ancillary industry in the long run as per news report. However, the modalities of these tariffs and their impact on global trade remain subject to further evaluation.

Share Price Reaction

As of 11:32 AM on February 3, 2025, shares of Samvardhana Motherson were down by 8%. 

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions. 

Investments in the securities market are subject to market risks, read all the related documents carefully before investing

Invesco India Business Cycle Fund NFO to Open from February 6

The Invesco India Business Cycle Fund is a new open-ended equity scheme that follows a business cycle investing theme. This means it dynamically allocates capital between sectors and companies depending on the prevailing economic cycle. The fund aims to capture opportunities at different stages of the business cycle, offering investors exposure to companies that are well-positioned for growth.

Investment Objective

The primary objective of the fund is to achieve long-term capital appreciation by investing in equity and equity-related instruments. The strategy involves dynamically adjusting sectoral and stock allocations based on business cycle trends, enabling the fund to identify opportunities across various phases of economic growth. However, there is no guarantee that the investment objective will be achieved.

Benchmark Index

The fund follows the Nifty 500 Total Return Index (TRI) as its benchmark, ensuring a broad-based representation of the Indian equity market.

Fund Managers

The fund will be managed by Mr. Aditya Khemani and Mr. Amit Ganatra, who bring extensive experience in equity market investments.

NFO Period

The New Fund Offer (NFO) is open from February 6 to February 20, 2025.

Investment Framework and Approach

Key Considerations for Investment

The fund takes a comprehensive view of business cycles and company lifecycles to identify promising investment opportunities. Key economic indicators such as GDP growth, inflation, and credit cycles play a crucial role in the selection process.

Stock Selection Strategy

  • Pro-cyclical Investments (~70%): Companies demonstrating revenue growth exceeding nominal GDP growth, typically in the growth phase of their lifecycle.
  • Counter-cyclical Investments (~30%): Companies with revenue growth below nominal GDP but with potential for recovery.

Sector and Market Capitalisation Approach

  • A mix of top-down and bottom-up approaches to identify growth-oriented sectors and companies.
  • Exposure across large-cap, mid-cap, and small-cap stocks to diversify risk.
  • Sector weightings may significantly differ from the benchmark, depending on economic trends.

Key Themes Influencing Business Cycle Investing

The fund aims to benefit from structural changes in the economy by investing in sectors and companies aligned with major macroeconomic trends, such as:

  • Premiumisation: Companies focusing on high-end consumer goods and services.
  • Clean Energy Transition: Shift from internal combustion engines (ICE) to electric vehicles (EVs) and renewable energy.
  • Make in India: Manufacturing-led growth in electronics and defence sectors.
  • Digitisation and Financialisation: Growth in fintech, digital services, and expanding financial markets.
  • Healthcare Innovation: Investment in pharmaceutical contract development (CDMO), health, and wellness.
  • Travel and Leisure: Revival of tourism and hospitality industries.

Exit Load Structure

  • 0.50% exit load if units are redeemed/switched within 3 months from allotment.
  • No exit load if redeemed after 3 months.

Investment Plans and SIP Options

The fund offers:

  • Regular and Direct Plans with Growth and IDCW (Income Distribution cum Capital Withdrawal) options.
  • Minimum lump sum investment: ₹1,000 (in multiples of ₹1 thereafter).
  • Systematic Investment Plan (SIP):
    • Monthly SIP: Minimum ₹500 (12 instalments).
    • Quarterly SIP: Minimum ₹1,000 (6 instalments).
    • Half-yearly SIP: Minimum ₹1,500 (4 instalments).

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Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions. 

Mutual Fund investments are subject to market risks, read all scheme-related documents carefully.

ITI Bharat Consumption Fund NFO: Key Details You Should Know

ITI Mutual Fund has announced the launch of the ITI Bharat Consumption Fund, an open-ended equity scheme that invests in companies benefiting from India’s growing consumption demand. The fund’s New Fund Offer (NFO) will be open from February 6, 2025 to February 20, 2025.

Fund Objective

The primary objective of the ITI Bharat Consumption Fund is to generate long-term capital appreciation by investing predominantly in equity and equity-related securities of companies operating in consumption-related industries.

Investment Strategy & Portfolio Construction

The ITI Bharat Consumption Fund is market-cap agnostic, meaning it does not limit itself to large, mid, or small-cap stocks. Instead, it follows a mix of top-down and bottom-up stock selection strategies.

The portfolio is structured into three major categories:

  1. Established and Robust Businesses (30-40% allocation)
    • Companies with strong distribution networks, high return on equity (ROE), and predictable cash flows.
  2. Emerging Trends (30-40% allocation)
    • Businesses experiencing rapid growth, benefiting from rising income levels and a shift towards the organised sector.
  3. High Growth Potential and Disruptive Models (20-30% allocation)
    • New-age business models that have the potential to disrupt existing consumption patterns.

Key Features of the ITI Bharat Consumption Fund

Fund Details

  • Type of Scheme: Open-ended equity scheme following the consumption theme.
  • Benchmark Index: Nifty India Consumption TRI
  • Fund Managers:
    • Rohan Korde – Fund Manager (Equity)
    • Dhimant Shah – Senior Fund Manager (Equity)
    • Rajesh Bhatia – Oversees the overseas portion of the scheme

Investment Details

  • Minimum Lumpsum Investment: ₹5,000 and multiples of ₹1 thereafter.
  • Systematic Investment Plan (SIP): Starts from ₹500 per month.
  • Exit Load:
    • 0.50% if redeemed/switched out within 3 months of allotment.
    • Nil if redeemed/switched out after 3 months.

Why Focus on Consumption?

India’s Rising Per Capita Income

With India’s per capita income projected to increase from USD 2,000 to over USD 7,500 by 2040, discretionary spending is expected to grow significantly.

Changing Consumer Preferences

Consumers across different generations are shifting spending patterns:

  • Millennials and Gen Z prefer online shopping, premium brands, travel, OTT subscriptions, and convenience-driven purchases.
  • Urbanisation and nuclear families are boosting demand for household appliances, food delivery, and wellness products.

Industry Diversification Beyond FMCG

While Fast Moving Consumer Goods (FMCG) remains a significant part of consumption, the fund will also invest in:

  • Consumer Durables – Electronics, white goods, and luxury products.
  • Automobiles – Cars, 2-wheelers, and electric vehicles (EVs).
  • Healthcare & Wellness – Hospitals, pharmaceuticals, and diagnostic services.
  • Telecom & Digital Services – Internet providers, e-commerce, and entertainment platforms.

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Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions. 

Mutual Fund investments are subject to market risks, read all scheme-related documents carefully.

Sovereign Gold Bond (SGB) Scheme May Be Discontinued: What It Means for Current Investors

The Sovereign Gold Bond (SGB) scheme, introduced in 2015 as an alternative to physical gold, is set to be discontinued. Finance Minister Nirmala Sitharaman confirmed this decision during the post-Budget media briefing on February 1. The government cited the high cost of borrowing associated with the instrument as the primary reason for its discontinuation. This move raises concerns about the future of existing investors and the broader implications of the decision.

Why is the SGB Scheme Being Discontinued?

Economic Affairs Secretary Ajay Seth elaborated on the rationale behind the decision, stating that the scheme was originally introduced to raise funds from the market and to curb gold imports. However, in recent years, SGBs have proven to be a relatively expensive borrowing mechanism for the government. Despite an allocation of ₹18,500 crore for SGBs in the FY25 Budget (down from ₹26,852 crore in the interim Budget), no fresh tranches of SGBs have been issued in the current fiscal year. The last issuance of SGBs took place in February 2023, amounting to ₹8,008 crore.

The Evolution of the SGB Scheme

The SGB scheme was launched in November 2015 as a means to provide an alternative to physical gold while offering an interest-bearing instrument to investors. The bonds had an 8-year maturity period, with partial redemption allowed after 5 years. Initially, the interest rate was set at 2.75% per annum, later reduced to 2.5%, which remained fixed for the entire tenure.

What Will Happen to Current Investors of SGB?

With the discontinuation of the scheme, existing investors may be concerned about the status of their holdings. However, the government has not announced any changes to the redemption and interest payment schedule for outstanding SGBs. Investors holding SGBs will continue to receive the promised 2.5% annual interest until maturity, and redemptions will proceed as per the original terms.

Since its inception, the total issuance under the scheme has amounted to ₹45,243 crore as of FY23, with an outstanding amount of ₹4.5 lakh crore by March 2023. Investors looking to exit early may still do so via the secondary market, where SGBs are listed on stock exchanges. The discontinuation mainly impacts new investors who were considering future tranches.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions. 

Investments in the securities market are subject to market risks, read all the related documents carefully before investing

India’s Consumer Market to Reach $ 4.3 Trillion by 2030, Becoming World’s 2nd Largest

As per news reports, India’s consumer spending is set to witness a 46% surge over the next 6 years, reaching a staggering ₹372 lakh crore (US$ 4.3 trillion) by 2030, up from ₹208 lakh crore (US$ 2.4 trillion) in 2024. This growth is attributed to rising incomes, a young workforce, and increased digital penetration, making India the world’s 2nd largest consumer market after China.

Rising Incomes and a Young Workforce to Drive Growth

India’s median age of 28 years is significantly lower than that of China and the US, ensuring a growing working-age population. Additionally, women’s labour force participation is increasing, adding to household incomes and expanding discretionary spending. These demographic advantages are expected to fuel consumption across sectors.

Urbanisation and Digital Revolution Reshaping Consumer Behaviour

With rapid urbanisation, Indian consumers are shifting from unorganised retail to branded and organised sectors. The move from unbranded to branded products alone is expected to unlock ₹52 lakh crore (US$ 600 billion) in additional consumer spending.

Moreover, e-commerce and digital payments are reshaping buying habits, making transactions seamless and widening market accessibility. As financial inclusion deepens, digital platforms are bridging the gap between urban and rural markets, leading to increased demand for premium products and services.

Rural Markets: An Untapped Consumer Opportunity

While urban areas remain the primary drivers, rural India holds immense potential. With rising incomes and improved financial access, rural consumers are increasingly investing in consumer durables and branded goods. As digital penetration expands, credit availability and aspirational spending in rural regions are expected to rise sharply.

The Road Ahead: India’s Shift Towards Premium Consumption

Easy access to credit and financing options is encouraging Indian consumers to upgrade to premium products in categories such as automobiles, electronics, fashion, and FMCG.

As India’s per capita income rises, the structural shift towards branded products and organised retail is laying the foundation for an unprecedented consumer boom. With favourable economic conditions, digital adoption, and a growing middle class, India is set to become a global consumption powerhouse by 2030.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions. 

Investments in the securities market are subject to market risks, read all the related documents carefully before investing

India to Unveil Its Own AI Model Within 10 Months, Says Union Minister

As per news report, India is gearing up to launch its own large language model (LLM) within the next 10 months, as announced by Union Minister of Information & Broadcasting, Railways, Electronics & IT, Mr Ashwini Vaishnaw. This initiative is part of the India AI Mission, aiming to develop an AI ecosystem that aligns with the country’s diverse cultural and linguistic landscape.

Building a Strong AI Infrastructure

The India AI Compute Facility, a dedicated computing resource for AI research and development, is at the core of this mission. The facility has procured 18,693 high-performance Graphics Processing Units (GPUs), of which nearly 10,000 are already operational. These GPUs will provide computational power to startups, researchers, and developers working on AI innovations.

Comparing India’s progress to global benchmarks, the Minister highlighted that the country now has 15,000 high-end GPUs, bringing it closer to leading AI models like ChatGPT, which was trained on 25,000 GPUs.

Industry Partnerships & Startup Support

Several major industry players, including Jio Platforms, Tata Communications, Yotta, and NextGen Data Centre, are key contributors to this initiative. The government has also invited proposals from AI startups, with 6 developers actively working on AI models. These models are expected to be ready within 4 to 6 months, with a maximum timeline of 8 to 10 months.

Towards an AI Model Tailored for India

Emphasising India’s growing AI capabilities, Mr Vaishnaw expressed confidence that with enhanced algorithmic efficiency, the country would soon develop a world-class AI model suited to its unique requirements. This development not only positions India as a rising AI powerhouse but also strengthens its ability to support innovation, research, and indigenous technology development.

With a rapidly expanding computing infrastructure and strong industry collaborations, India is set to make a significant leap in the artificial intelligence domain within the next year.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions. 

Investments in the securities market are subject to market risks, read all the related documents carefully before investing

SBC Exports Announces 3rd Bonus Issue: 1:2 Ratio Approved by Board

SBC Exports Limited has officially approved its 3rd bonus issue, further rewarding its shareholders with additional equity. The company’s Board of Directors, in a meeting held on January 24, 2025, recommended the issuance of 1 bonus share for every 2 shares held (1:2 ratio). This move is subject to shareholder approval through a postal ballot and compliance with regulatory requirements.

This follows previous bonus issues by the company on January 19, 2024 (1:2 ratio) and February 22, 2022 (1:1 ratio), making this the 3rd such initiative in recent years.

SBC Exports shares price made an intraday high of ₹21.45. The stock was trading at ₹21.06 at 9:41 AM on NSE. 

Details of the Bonus Issue

  • Bonus Ratio: 1:2 (one bonus share for every two shares held)
  • Total Bonus Shares Issued: 15.87 crore equity shares
  • Pre-Bonus Share Capital: ₹31.74 crore
  • Post-Bonus Share Capital: ₹47.61 crore
  • Funding Source: Free reserves
  • Allotment Timeline: Within 2 months from Board approval

The bonus shares, once allotted, will carry the same rights as existing shares and will be eligible for dividends and other corporate actions declared after the issuance.

How Will Fractional Shares Be Handled?

In cases where shareholders are entitled to fractional shares, the company has outlined a process to ensure fair treatment. The Board has authorised an Independent Director to hold these fractional shares in trust, sell them at the prevailing market rate, and distribute the proceeds proportionally to eligible shareholders.

Rationale Behind the Bonus Issue

SBC Exports has consistently rewarded its shareholders with bonus issues, reflecting confidence in its financial strength and future growth potential. The latest bonus issue is backed by free reserves of ₹18.58 crore as of September 30, 2024, ensuring the company maintains a strong capital structure while enhancing liquidity for investors.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions. 

Investments in the securities market are subject to market risks, read all the related documents carefully before investing

Beta Drugs Ltd Board to Consider Bonus Issue on February 5

Beta Drugs Ltd., a prominent player in the Indian oncology (anti-cancer) pharmaceutical industry, is renowned for manufacturing an extensive array of oncology drugs. With a robust presence both domestically and in export markets, the company ranks among the top 10 oncology firms in India. Many of its flagship products are recognised as market leaders. As of now, Beta Drugs Ltd. boasts a market capitalisation of ₹1,977 crore.

Beta Drugs Ltd., Board Meeting Announcement 

The Board of Directors of Beta Drugs Ltd. will convene on Wednesday, February 5, 2025. During this critical meeting, the Board will deliberate on several key strategic initiatives, including:

  1. The proposal for an increase in the authorised share capital of the Company, alongside a consequential amendment to the capital clause in the Memorandum of Association.
  2. A discussion on, and approval for, the issuance of Bonus Shares, subject to the approval of the shareholders.
  3. The consideration and appointment of distinguished Independent Directors to further strengthen the Board’s expertise.
  4. A proposal to migrate the listing and trading of the Company’s equity shares from the Emerge platform of the National Stock Exchange of India (NSE) to the esteemed main board of NSE, in addition to the main board of BSE Ltd.
  5. Approval of the draft Notice for the e-voting process through Postal Ballot.
  6. Appointment of a Scrutiniser to oversee the Postal Ballot event, ensuring transparency and full compliance with regulatory standards.

Beta Drugs Ltd. Q2 FY25 Financial Results

Beta Drugs Ltd. has announced its financial performance for the first half of the fiscal year 2025, covering the period from 1st April to 30th September 2024. The company reported a revenue of ₹1,803.03 million, reflecting a commendable 28% growth compared to ₹1,412.69 million in the same period last year. 

Net profit surged to ₹244.36 million, an increase of 23% from ₹198.73 million in the previous year. Earnings per share (EPS) reached ₹25.42, marking a solid rise from ₹20.67 in the first half of FY24.

Beta Drugs Ltd. Share Price and Performance 

At 2:29 PM today, Beta Drugs Ltd. shares traded at ₹2,042 per share on the NSE.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions. 

Investments in the securities market are subject to market risks, read all the related documents carefully before investing.

NCC Limited Received Order Worth ₹424.79 Crores

NCC Limited is one of India’s leading construction and infrastructure companies. Founded in 1978 and headquartered in Hyderabad, Telangana, NCC operates across various sectors of infrastructure development.

Got Project Value of ₹424.79 Crores

NCC Limited (formerly Nagarjuna Construction Company Limited), a prominent player in India’s construction and infrastructure landscape, has announced the acquisition of a significant contract valued at ₹424.79 crores (excluding GST) from a State Government authority. 

The project, awarded under the company’s Transportation Division, is slated for completion within a 24-month timeframe. Importantly, the engagement involves no participation from promoter groups or related parties, underscoring its status as a purely external venture.

Strategic Expansion and Infrastructure Leadership

This development reaffirms NCC Limited’s strategic ambition to expand its footprint within India’s burgeoning infrastructure sector, with a particular focus on transportation projects. The company has reiterated that the contract was awarded through the regular course of business and does not constitute an internal transaction.

Management Insights

A.V. Ranga Raju, Managing Director of NCC Limited, expressed confidence in the company’s trajectory, citing a robust project pipeline and NCC’s pivotal role in contributing to India’s infrastructure development.

Q2 FY25 Financial Performance

The company also reported a remarkable performance for Q2 FY25, ending 30 September 2024. Revenue surged by 10.1% to ₹5,196 crore compared to ₹4,720 crore during the same period last year. Net profit witnessed an extraordinary 110.7% growth, reaching ₹162.96 crore, up from ₹77.34 crore in Q2 FY24.

EBITDA rose sharply by 46% to ₹442.95 crore from ₹303.74 crore in the previous year, with the EBITDA margin strengthening to 8.5% from 6.4%.

Share Price Performance 

At 2:05 PM today, NCC Limited shares traded at ₹215.55 per share on the NSE.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions. 

Investments in the securities market are subject to market risks, read all the related documents carefully before investing.

KEI Industries Faces ₹118.07 Crore GST Demand

KEI Industries has received a tax demand for costs incurred at its corporate office that were not allocated to branches and units. The company believes the demand is unjustified and is exploring legal options to contest it.

GST Demand Order Received by KEI Industries  

KEI Industries Limited has recently received a GST demand order from the Office of the Additional Commissioner, Central Goods & Services Tax (CGST), Delhi East. The order relates to tax liabilities identified for the financial years 2017-18 to 2020-21. According to the notice, the company is required to pay a tax amount of ₹59.03 crores under Section 74(1) of the CGST Act, 2017, along with an equal penalty under Section 122(2)(b) and applicable interest under Section 50(1) of the Act.  

Alleged Violation and Financial Implications  

The tax demand is based on the allegation that KEI Industries did not properly cross-charge certain expenditures incurred at its Head Office for services provided to its branches and units. However, the company believes that the demand is not justified. KEI Industries is currently assessing the situation and considering legal options including the possibility of filing an appeal against the order.  

Company’s Response and Next Steps  

KEI Industries has assured stakeholders that this development will not have any significant financial or operational impact on the company. The company is committed to addressing the matter through appropriate legal channels and remains confident in its position. It has also formally disclosed this information as required under SEBI regulations.

About KEI Industries  

KEI Industries Limited is a well-established Indian company specializing in the manufacturing and distribution of wires and cables. With a strong presence in both domestic and international markets, the company provides high-quality electrical solutions for sectors like power, infrastructure, real estate and industrial projects. 

KEI Industries Share Performance 

As of February 03, 2025, at 11:05 AM, KEI Industries shares are trading at ₹3,915.70 per share, down 0.05% from yesterday’s closing price. Over the last month, the stock has fallen by 10.27%. The stock has a 52-week high and 52-week low of ₹5,039.70 per share and ₹2,900.10 per share respectively.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions. 

Investments in the securities market are subject to market risks, read all the related documents carefully before investing.