Tag: T+1 settlement system

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Infosys Launches Metaverse Foundry – Top Indian Market News

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Infosys launches Metaverse Foundry; to help enterprises with metaverse adoption

Infosys Ltd has launched a Metaverse Foundry to ease and fast-track enterprises’ exploration of the metaverse. The exploration also includes virtual and augmented environments for the customers, workplace, products, and operations. The IT company has already developed 100 use cases and is actively working with clients on the same. The Foundry utilizes the power of technologies like AR/VR, blockchain, NFT, IoT, applied AI, cybersecurity, and 5G to advance value exploration in the metaverse.

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Bharti Airtel acquires stake in blockchain tech startup Aqilliz

Bharti Airtel Ltd has acquired a strategic stake in Aqilliz, a ‘Blockchain as a Service’ company. The telecom major aims to deploy Aqilliz’s blockchain technologies at scale across its fast-growing adtech (Airtel Ads), digital entertainment (Wynk Music and Airtel Xstream), and digital marketplace (Airtel Thanks App) offerings. Aqilliz has developed a patented hybrid blockchain platform called ‘Atom’. It integrates differential privacy and federated learning on a distributed digital ledger.

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Bharat Forge to acquire JS Autocast Foundry India

Auto component manufacturer Bharat Forge Ltd announced that it will acquire JS Autocast Foundry India. The company, along with its subsidiary, BF Industrial Solutions, has entered into a definitive agreement to acquire JS Auto. JS Auto is a leading supplier of machined ductile iron castings for wind, hydraulic, off-highway, and automotive applications.

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Indian stock exchanges to implement T+1 settlement cycle from Feb 25

Indian stock exchanges will be moving to T+1 settlement from February 25 in a phased manner. T+1 means that trade-related settlements will be done within one day of the completion of a transaction. Currently, trades on Indian stock exchanges are settled in two working days after the transaction is completed (T+2). Initially, only 100 small-cap stocks will be placed under the new settlement cycle. You can read more about the T+1 settlement cycle here.

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TCS launches Cyber Defence Suite

Tata Consultancy Services (TCS) has announced the launch of its Cyber Defense Suite. It is a set of modular cybersecurity services offered on a platform. The integrated platform will secure enterprises amid their digital transformation journeys. It provides 360-degree visibility and predictive intelligence to proactively defend and respond against evolving risks. TCS has over 10,000 cyber specialists and more than 12 Threat Management Centers distributed across the world.

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IOC buys first Russian Urals crude in two years after prices fall

Indian Oil Corporation Ltd (IOC) has bought Russian Urals crude for the first time in two years after spot differentials declined sharply. The opportunity for India to buy more of the Russian flagship-grade crude arose after its discount to global benchmark Brent fell to the lowest since 2005. Global oil prices surged after Russia invaded Ukraine, aggravating concerns of oil supply disruption. 

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Ashoka Buildcon secures project worth Rs 693 crore from Northeast Frontier Railway

Ashoka Buildcon Ltd has received a Letter of Acceptance (LoA) from Northeast Frontier Railway for a project involving electrification of railway lines in Assam. The accepted offer of the project is Rs 692.50 crore. The contract period is 900 days.

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Centre signs Rs 1,075 crore contract with BEL for T-90 tank retro-modification

The Ministry of Defence has signed a contract for Rs 1,075 crore with Bharat Electronics Ltd (BEL) for the retro-modification of Commander Sight of Battle Tanks-T-90. The retro-modification will be carried out in 957 T-90 tanks of the Indian Army. This will provide a further boost to the ‘Make in India’ initiative of the Indian government.

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Apollo Hospitals partners with VR platform company 8chili Inc

Apollo Hospitals Group has announced a collaboration with 8chili, Inc to enable engagement in the metaverse. The initiative will enable patient counseling in virtual reality (VR) and help increase patient outcomes. It will also engage users in VR-mediated activities to empower their abilities to regulate emotion. US-based 8chili is a deep-tech startup that builds the underlying infrastructure for metaverse content creation and distribution.

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Market News Top 10 News

Centre to Buy 1 Crore Shots of Zydus Cadila’s Covid-19 Vaccine – Top Indian Market News

Centre to buy 1 crore shots of Zydus Cadila’s Covid-19 vaccine

The Central government has placed a purchase order of 1 crore doses of Zydus Cadila’s three-dose Covid vaccine ZyCoV-D at Rs 265 per dose. The needle-free vaccine will cost Rs 93 per dose (excluding GST). The complete dose of the vaccine will cost Rs 1,128. ZyCoV-D was approved by India’s drug regulator in August 2021 for emergency use in adults and children aged 12 years and above.

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Britannia Industries Q2 Results: Net profit falls 23% YoY to Rs 384 crore

Britannia Industries Ltd reported a 23% YoY decline in consolidated net profit to Rs 384.22 crore for the quarter ended September (Q2 FY22). Its revenue from operations rose 5.5% YoY to Rs 3,607.4 crore during the same period. The FMCG company’s raw material cost stood at Rs 1,914.7 crore in Q2, an increase of 8% YoY. Britannia said it is witnessing unprecedented inflation in market prices of key ingredients such as palm oil, industrial fuel, and packaging material.

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JBM Auto secures order for 200 low-floor electric buses from Delhi govt

JBM Auto Limited has received an order for 200 electric buses from Delhi Transport Corporation (DTC). The order has been placed under the central government’s FAME II electric vehicle policy. The company will supply, operate and maintain 200 air-conditioned fully built low-floor electric buses of 12-meter length. Gurgaon-based JBM Auto is a leading manufacturer of key auto systems, electric vehicles, and buses.

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Sobha Q2 Results: Net profit jumps 198% YoY to Rs 48 crore

Sobha Ltd reported a 198% YoY jump in consolidated net profit to Rs 48.3 crore for the quarter ended September (Q2 FY22). Net profit jumped 347% compared to the previous quarter. Its total income rose 52% YoY to Rs 832.3 crore during the same period. The realty firm’s board has approved the issue of unlisted, secured, non-convertible debentures (NCDs) worth up to Rs 140 crore on a private placement basis.

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L&T’s construction arm secures orders worth up to Rs 2,500 crore

Larsen & Toubro’s (L&T) construction arm has secured significant orders (in the range of Rs 1,000-2,500 crore) from the metal industry and Defence Research & Development Organisation (DRDO). The order from DRDO consists of constructing a flight control system facility at Aeronautical Development Establishment, Bengaluru. L&T has also received an engineering, procurement, and construction (EPC) order for a 12 million ton per annum (MTPA) dry circuit system for a screening plant (SP-III) from NMDC Limited in Chhattisgarh.

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Shyam Metalics Q2 Results: Net profit jumps 159% YoY to Rs 414 crore

Shyam Metalics & Energy Ltd (SMEL) reported a 159.22% YoY jump in consolidated net profit to Rs 414.18 crore for the quarter ended September (Q2 FY22). Net profit fell 9% compared to the previous quarter. Its revenue from operations rose 87% YoY to Rs 2,494.34 crore during the same period. EBITDA stood at Rs 689 crore in Q2, an increase of 96% YoY. SMEL is a leading integrated metal producing company in India.

Exchanges to launch T+1 settlement cycle from Feb 25

The National Stock Exchange (NSE) and other Market Infrastructure Institutions (MIIs) are bracing to launch T+1 trading settlement cycle from February 25, 2022. All listed stocks across stock exchanges (BSE, NSE & MSEI) will be ranked in descending order based on daily market capitalization averaged for the month of October 2021.

Currently, if an investor buys or sells a stock on Monday, they receive the money or shares on Wednesday (T+2 working days). With T+1 settlement, the transfer will be completed on Tuesday itself. You can learn more about T+1 settlement cycle here.

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Balrampur Chini Mills Q2 Results: Net profit rises 6% YoY to Rs 83 crore

Balrampur Chini Mills Ltd reported a 6.1% YoY increase in consolidated net profit to Rs 83.1 crore for the quarter ended September (Q2 FY22). Its revenue from operations fell 5.9% YoY to Rs 1,213.8 crore during the same period. EBITDA stood at Rs 134.8 crore in Q2, an increase of 5.6% YoY.

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DCM Shriram to invest over Rs 350 crore on expansion of sugar business

DCM Shriram Ltd has announced an investment of over Rs 350 crore to expand the capacity of its sugar mills. The company approved three investment proposals for its sugar business to capitalise on the increase in sugarcane availability in its catchment area. These investments will help enhance production capacity for refined sugar production and build flexibility of feedstock for its distilleries.

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Paytm IPO subscribed 18% on first day of bidding

The Rs 18,300 crore initial public offering (IPO) of One97 Communications Ltd (Paytm) was subscribed 18% on the first day of bidding. The IPO has received bids for 88.23 lakh equity shares against the issue size of 4.83 crore shares. Retail investors have subscribed 78% against their reserved portion. Non Institutional investors (NIIs) and Qualified Institutional Buyers (QIBs) have subscribed 2% and 6%, respectively, against their reserved portions. 

To learn more about the IPO, click here.

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SEBI Proposes T+1 Settlement Cycle on Optional Basis: All You Need to Know

nse T1 holdings

Earlier this week, the Securities and Exchange Board of India (SEBI) announced that stock exchanges would have the option to move to a T+1 (Trade Date+1 Day) stock settlement cycle starting from January 1, 2022. While many have welcomed the proposal, a lot of concerns have emerged regarding the implementation of the new system. In this article, we take a closer look at how this move could impact the stock exchanges and market participants.

What is the T+1 Settlement Cycle?

Stock exchanges around the world follow a well-defined clearing and settlement system. Since 2003, India’s NSE and BSE have been offering the T+2 settlement cycle. Here, ‘T’ stands for the date of transaction, and ‘2’ denotes how many days later the transfer of stock ownership and payment to the buyer and the seller, respectively, takes place. Let us look at an example.

Suppose you buy 100 shares of ITC Limited at Rs 200 per share on September 1. The total buy value is Rs 20,000. The day you make the transaction is referred to as the trade date or ‘T Day’. An amount of Rs 20,000 (plus all applicable charges) will be debited from your trading account on that date. On T+1 (Sept 2), the amount required to purchase the shares is collected by the exchange. The exchange transaction charges and Securities Transaction Tax (STT) is also collected. On T+2 (Sept 3), the shares are debited from the Demat account of the person who sold you the shares and credited to the broker with whom you are trading. The broker will then credit the 100 shares to your Demat account. On T+2, the amount that was debited from your end is credited to the person who sold the shares.

Now, SEBI has introduced a shorter settlement cycle— the T+1. Once you place a buy order for a stock, the entire settlement process will be completed within the next day. A stock exchange will have to give at least one month’s prior notice to the public regarding the move to a T+1 settlement on any stock. After opting for a T+1 cycle for a stock, the exchange will have to mandatorily continue with the same system for a minimum of six months.

How Will This Move be Beneficial?

The move to a T+1 cycle will accelerate the entire settlement process. It would benefit retail investors as they will get quicker access to cash and securities (shares) after trades are executed. Moreover, it will reduce the risks associated with fluctuations in share prices during the settlement cycle.

A shorter settlement cycle will provide greater flexibility to the stock exchanges. It will make them more efficient, free up capital, boost liquidity, and reduce default risks. [Default risks refer to the inability to make timely payments]. NSE and BSE had moved from a T+3 cycle to T+2 on similar grounds in 2003. 

Concerns Regarding SEBI’s Proposal

Zerodha co-founder Nithin Kamath posted a tweet stating a potential complication of the move to a T+1 settlement cycle. He said the concerned authorities may need to figure out how the settlements will work if one exchange adopts T+1 and the other is on T+2 when the same stock trades on both exchanges. A mismatch in the settlement cycle will prove to be confusing and chaotic for investors and traders. It may affect trading volumes as well. However, many experts argue that either NSE and BSE will both move to the T+1 cycle, or both will stick to the current regime.

Many operational and technical challenges need to be tackled before implementing the T+1 settlement system. All institutions involved in the stock market (brokers, exchanges, banks) will have to increase their efficiency for the delivery of shares and exchange of money within one day. This move will lead to an increase in the working capital requirements for brokers. Banks and depository participants will face extended working hours. These institutions could pass down the costs to us investors and traders.

Pressure from FPIs

T+1 might prove to be difficult for certain classes of institutional shareholders. The Association of National Exchange Members of India, the Asia Securities Industry and Financial Markets Association (ASIFMA), and overseas traders have expressed concerns over the operational and technical implications of the move. Since working hours in the US and Europe are not aligned to Asia Pacific markets, T+2 settlement effectively functions as T+1. Any error or disparity in a transaction is normally discovered on T+1. Thus, shortening the settlement cycle could lead to high costs and settlement risks for Foreign Portfolio Investors (FPIs). 

A move to a T+1 cycle in India would mean that FPIs will have to keep money and shares ready with them on the day of the transaction. Thus, inflows from foreign investors would be adversely affected. FPIs have written to SEBI regarding a potential reversal of market gains due to unforeseen consequences of moving to the new system.

What are your views on SEBI’s proposal for a move to a T+1 settlement cycle? Let us know in the comments section of the marketfeed app.