ForNow,FPIsCan Hold on to Extra HDFCBank Shares
Confirmed by custodians would devolve on the stock brokers
market cap in a single day which is equivalent to the total M-cap of Idea Cellular
gained only while the Nifty delivered a return of times of FY18, nearly cheaper than when it last touched the mark stock. The tariff plan offered to retain its 100 million existing customers suggests the company will maintain the average revenue per user (ARPU) at higher than ₹ 300, which is better than the incumbents and aimed at protecting industry’s data ARPU.
According to RIL’s latest tariff plan, existing customers — including those who will subscribe till March 31 — can pay ₹ 303 per month and get unlimited data and voice usage on an upfront subscription fee of ₹ 99 per an- No further extension of the free offer is a relief for the stock
Expect conversion to paying subscribers to be high
Progress on core projects will be a key factor going ahead Jio’s capacity advantage maybe difficult for incumbents to match
Estimate Jio to have ARPU of 262 by March 2018 and 274 by March 2019
RIL stock still pricing in negative equity value for Jio, which is pessimistic Jio’s Prime membership commitment of 303/ month is a modest positive versus expectation increasing in the past six quarters, FPI holding was at in Dec 2016
of in the major MF scheme by AUM num for the plan. That will translate to a monthly ARPU of ₹ 270 post-tax, which is 33% higher than the incumbents’ ARPU. The street has been pricing in Jio’s ARPU at ₹ 262 and ₹ 274 for FY18 and FY19, respectively, which appear attainable in the new tariff structure.
The current tariff plan offered by the company is available till March 2017, which is expected to accelerate customer addition. Jio’s customer base currently accounts for nearly 22% of the data Tariff plans announced may help Jio break-even at EBITDA level by end of first year of operations
Increase in energy segment earnings, telecom business clarity to add to tailwind of increasing returns
Jio can realize monthly ARPU of 188-209 assuming mid-tier subscriber retention rates Jio coming on track for monetisation sooner than expected is a positive
Visibility of a fast ramp-up in user-base beyond April is low
Jio’s network performance should improve as data traffic normalises High retention of subscribers will be crucial in shaping up of profitability Retain rating due to reasonable valuation and likely strong earnings growth from standalone projects
customers in the country. An attractive tariff plan is likely to allow Jio to tap a sizeable chunk of high-data user without losing focus on ARPU. However, a key thing to watch out for would be how the incumbent players respond to Jio’s new tariff.
Analysts said even if the company is able to retain its existing customers under the ₹ 303 per month plan, it could result in breakeven in operating profit, or earnings before interest, tax, depreciation and amortisation (EBITDA), in the first four quarters since the commercialisation of its operation, and this allay fears of the extended period of EBITDA losses. Even if half the existing customers sign up for the ₹ 303 per month plan, it would translate into ₹ 18,000 crore in revenue per annum. Mumbai: Foreign portfolio investors can hold the shares of HDFC Bank they bought on Friday even after the stock exchange notification to stop buying mid-way through the trading session till the Reserve Bank of India (RBI) asks them to offload them, said a senior regulatory official. But trades which have not been confirmed by the custodians would devolve on the stock brokers who executed the transactions on behalf of their foreign clients on Friday.
“FII trades in which custodians have given confirmation even if the investment limit has been breached will remain as it is,” the official said. “Subsequently, an analysis will be done and RBI would issue directions to offload the stake to maintain the limit.” Rules do not permit foreign holding of more than 74% in the bank. But, this limit was breached on Friday due to hectic purchases by FPIs after the RBI the previous evening allowed fresh buying by overseas investors in the private lender with their stake dropping below the prescribed limit. While the RBI issued a circular mid-way through the trading day on Friday asking foreign investors to stop buying HDFC Bank shares, many trades had already been executed.
The central bank had asked all custodians, which handle the settlement of foreign investors, not to confirm trades in HDFC Bank done after 1:39 PM --- when the stock exchange notification to bar fresh FPI purchases was issued --- on Friday in which clients were buyers. Custodians have confirmed all trades till 1.39 PM.
Brokers say they are unlikely to be hit as bulk of the trades on Friday had taken place before the stock exchange notification time. While the RBI notification was sent to custodians on Friday around 12.56 PM after the FPI limit was breached, stock exchanges’ notification came in only by 1.39 PM.
Foreign portfolio investors invested ₹ 8,043.14 crore in Indian stocks on Friday. Brokers said majority of it flowed into HDFC Bank shares.
Brokers said they are unlikely to be hit as bulk of the trades on Friday had taken place before the stock exchange notification time