We have created 5 list of Companies to understand which are the companies, and how will they get impacted on account of rupee depreciation. These lists can be used as ready reckoner. In case of most of the companies, financial data relates to FY12, being the most recent year for which audited annual accounts are available. The Lists are as follows:
List of Companies which are ‘Huge Importers’.
List of Companies which has ‘Significant foreign debt interest expense’.
List of Companies which has ‘Significant FX Capital outflow as % of Net Assets’.
List of Companies which are ‘Foreign Exchange Earner’.
List of Companies which are ‘FX Earner but also has outflow on account of Interest or Capex’.
Background: Recently, Rupee against USD has depreciated significantly. This will impact importers badly, their import cost will rise and if they are not able to pass on the rising cost it will squeeze their margins making them unviable to survive for longer. To some extent they will be able to pass on the rising cost to other producers and consumers. However, this will further fuel the inflation in the economy. In the recent past, cooling off inflation has proven to be the biggest challenge for the government, thereby deterring it to cut the interest rates, which in turn has lead to slowing down of the growth engine of the economy. On the positive side, depreciating rupee will benefit exporters and other foreign exchange earners. For a country like India which has high Current Account Deficit (CAD), depreciating rupee will have overall huge negative impact.
Alerted on 27 Aug 2013 that Now be ready for petrol, diesel price hike very soon. Now Petrol price was today hiked by a steep Rs 2.35 per litre, the sixth increase in rates in three months, and diesel by 50 paise per litre on falling rupee and firming international oil prices. The increase in rates, which will be effective midnight tonight, are excluding local sales tax or VAT, Indian Oil Corp, the nation's largest fuel retailer, announced. The actual hike will be higher and will vary from city to city. Petrol price in Delhi will go up by Rs 2.83 to Rs 74.10 per litre while it will cost Rs 81.57 per litre in Mumbai as against Rs 78.61 currently. This is the sixth increase in rates since June and in all petrol prices have gone up by a massive Rs 9.17 per litre, excluding VAT. Price of petrol in Delhi has gone up by over Rs 11 per litre after including state tax since June 1. In a parallel move, diesel price was hiked by 50 paise, excluding VAT, in line with the January decision of the government allowing oil companies freedom to raise prices in small doses every month to wipe out mounting losses. Diesel price in Delhi has been hiked by 57 paise to Rs 51.97 per litre while it will cost Rs 58.86 in Mumbai from tomorrow as compared to Rs 58.23 currently. Today's hike in the eighth since the January 17 and most of the losses on diesel sales should have been wiped off by now to make the fuel market priced. But the fall in rupee, around 25 percent since April, has worsened the situation and oil firms are losing Rs 12.12 per litre despite prices being raised by a cumulative Rs 4.75 this year. Oil firms had on June 1 raised petrol prices by 75 paise, excluding VAT, and followed it with a Rs 2 per litre increase on June 16, a Rs 1.82 increase on June 29, Rs 1.55 hike on July 15 and 70 paise increase from August 1. IOC said since the last revision in rates effective August 1, the rupee-US dollar exchange rate has deteriorated sharply, from Rs 59.49 to a US dollar to Rs 63.88, necessitating this price increase. "Currently, the rupee-dollar exchange rate continues to be extremely volatile. Also, geopolitical situation in the Middle-East is leading to pressure on international oil prices as well," it said in a statement. The movement of prices in international oil markets and exchange rate were being closely monitored and subsequent price changes will reflect developing trends of the market, it added. Deteriorating exchange rate has led to widening of losses on diesel from Rs 10.22 in first fortnight of August to Rs 12.12 per litre loss. The same has also led to widening of under-recoveries on kerosene to Rs 36.83 per litre from Rs 33.54 at the beginning of the company and on LPG to Rs 470 per cylinder from Rs 411.99. For the full fiscal, IOC estimated total revenue loss or under-recovery of Rs 144,000 crore on sale of diesel, LPG and kerosene for the industry. Diesel prices may be hiked by Rs 3-5 per litre, kerosene by Rs 2 and LPG by Rs 50 per cylinder as Oil Minister M Veerappa Moily urged Prime Minister Manmohan Singh to take steps to tackle a record Rs 180,000 crore of losses arising from dipping rupee and surging oil rates. Moily, who had on Thursday met Finance Minister P Chidambaram on the issue, on August 30 wrote to Singh saying without a price increase the government will have to shell out a record Rs 97,500 crore to subsidise diesel and cooking fuel. "If the present position persists, the total under- recovery (revenue loss) would reach to a level of Rs 180,000 crore in the current financial year as compared to Rs 161,000 crore during 2012-13," he wrote to the Prime Minister. A 25 per cent drop in rupee value has resulted in losses on diesel sales widening to Rs 10.22 per litre despite prices being raised by 50 paise a litre every month since January. This coupled with Rs 33.54 a litre loss on kerosene and Rs 412 on sale of ever 14.2-kg cooking gas (LPG) cylinder, the total revenue loss this fiscal comes to Rs 180,000 crore, he said adding even after upstream firms like ONGC chip in Rs 70,500 crore, a gap of Rs 97,500 crore would be left. An increase in rates is possible after monsoon session of Parliament ends on September 6. Moily, who sent an almost identical note to Chidambaram, said a one rupee increase in diesel price will cut loss by Rs 4,522 crore in remainder of current fiscal while a Rs 3 per litre increase would trim losses by Rs 13,565 crore. If rates are raised by a one-time Rs 5 per litre, the losses would be cut to Rs 29,390 crore. The hikes proposed are one-time and are outside monthly revision in rates of 50 paisa happening since January. Similarly, a Rs 50 per cylinder increase in LPG rates would trim cooking gas losses by Rs 2,604 crore. Besides, a possible Rs 2 per litre hike in kerosene price would cut losses by Rs 1,014 crore. The three price increases together would bring down government's subsidy outgo to Rs 50,928 crore, he argued.
Alerted on 27 Aug 2013 that Now be ready for petrol, diesel price hike very soon. Now Petrol price was today hiked by a steep Rs 2.35 per litre, the sixth increase in rates in three months, and diesel by 50 paise per litre on falling rupee and firming international oil prices. The increase in rates, which will be effective midnight tonight, are excluding local sales tax or VAT, Indian Oil Corp, the nation's largest fuel retailer, announced. The actual hike will be higher and will vary from city to city. Petrol price in Delhi will go up by Rs 2.83 to Rs 74.10 per litre while it will cost Rs 81.57 per litre in Mumbai as against Rs 78.61 currently. This is the sixth increase in rates since June and in all petrol prices have gone up by a massive Rs 9.17 per litre, excluding VAT. Price of petrol in Delhi has gone up by over Rs 11 per litre after including state tax since June 1. In a parallel move, diesel price was hiked by 50 paise, excluding VAT, in line with the January decision of the government allowing oil companies freedom to raise prices in small doses every month to wipe out mounting losses. Diesel price in Delhi has been hiked by 57 paise to Rs 51.97 per litre while it will cost Rs 58.86 in Mumbai from tomorrow as compared to Rs 58.23 currently. Today's hike in the eighth since the January 17 and most of the losses on diesel sales should have been wiped off by now to make the fuel market priced. But the fall in rupee, around 25 percent since April, has worsened the situation and oil firms are losing Rs 12.12 per litre despite prices being raised by a cumulative Rs 4.75 this year. Oil firms had on June 1 raised petrol prices by 75 paise, excluding VAT, and followed it with a Rs 2 per litre increase on June 16, a Rs 1.82 increase on June 29, Rs 1.55 hike on July 15 and 70 paise increase from August 1. IOC said since the last revision in rates effective August 1, the rupee-US dollar exchange rate has deteriorated sharply, from Rs 59.49 to a US dollar to Rs 63.88, necessitating this price increase. "Currently, the rupee-dollar exchange rate continues to be extremely volatile. Also, geopolitical situation in the Middle-East is leading to pressure on international oil prices as well," it said in a statement. The movement of prices in international oil markets and exchange rate were being closely monitored and subsequent price changes will reflect developing trends of the market, it added. Deteriorating exchange rate has led to widening of losses on diesel from Rs 10.22 in first fortnight of August to Rs 12.12 per litre loss. The same has also led to widening of under-recoveries on kerosene to Rs 36.83 per litre from Rs 33.54 at the beginning of the company and on LPG to Rs 470 per cylinder from Rs 411.99. For the full fiscal, IOC estimated total revenue loss or under-recovery of Rs 144,000 crore on sale of diesel, LPG and kerosene for the industry. Diesel prices may be hiked by Rs 3-5 per litre, kerosene by Rs 2 and LPG by Rs 50 per cylinder as Oil Minister M Veerappa Moily urged Prime Minister Manmohan Singh to take steps to tackle a record Rs 180,000 crore of losses arising from dipping rupee and surging oil rates. Moily, who had on Thursday met Finance Minister P Chidambaram on the issue, on August 30 wrote to Singh saying without a price increase the government will have to shell out a record Rs 97,500 crore to subsidise diesel and cooking fuel. "If the present position persists, the total under- recovery (revenue loss) would reach to a level of Rs 180,000 crore in the current financial year as compared to Rs 161,000 crore during 2012-13," he wrote to the Prime Minister. A 25 per cent drop in rupee value has resulted in losses on diesel sales widening to Rs 10.22 per litre despite prices being raised by 50 paise a litre every month since January. This coupled with Rs 33.54 a litre loss on kerosene and Rs 412 on sale of ever 14.2-kg cooking gas (LPG) cylinder, the total revenue loss this fiscal comes to Rs 180,000 crore, he said adding even after upstream firms like ONGC chip in Rs 70,500 crore, a gap of Rs 97,500 crore would be left. An increase in rates is possible after monsoon session of Parliament ends on September 6. Moily, who sent an almost identical note to Chidambaram, said a one rupee increase in diesel price will cut loss by Rs 4,522 crore in remainder of current fiscal while a Rs 3 per litre increase would trim losses by Rs 13,565 crore. If rates are raised by a one-time Rs 5 per litre, the losses would be cut to Rs 29,390 crore. The hikes proposed are one-time and are outside monthly revision in rates of 50 paisa happening since January. Similarly, a Rs 50 per cylinder increase in LPG rates would trim cooking gas losses by Rs 2,604 crore. Besides, a possible Rs 2 per litre hike in kerosene price would cut losses by Rs 1,014 crore. The three price increases together would bring down government's subsidy outgo to Rs 50,928 crore, he argued.
If USD/INR increases more from the current level say 73 or 77 then Gold
will be around 36000 to 38000, if Gold price in International Market
remain same as currently trading @ $1417 per troy ounce. 1 troy ounce =
31.1035 grams. If Gold price increases further from the current level
in the near future say up to $1575 - $1650, then Gold Price in India
will be around 40000, if USD/INR rallies on up side remain same in the
near future like current rally is going on.
For Silver, it can
touch 60000 - 65000, if USD/INR increases from the current level as
suggested above. Now in International Market currently it is trading @
$24.55 per troy ounce, if it increases from the current level in the
near future say $26 - $28 then we will silver silver @ 70000 also if
USD/INR rallies remain same like currently is going on.
For
Crude, If in International Market,it increases from current level say
$115 - $120 and USD/INR rallies remain same as current is going on the
crude oil price in Indian terms will be around 8500.
Now
on MCX price of Gold is 33555 per 10 grams, day's high @ 33788. Silver @
56851 per kg, day's high @ 57500. Crude oil @ 7356 per barrel, day's
high @ 7486. Copper @ 498, day's high @ 502.30. Means there is no demand
of Gold, Silver, Crude and Copper
as the price of these commodities are increasing very fast. The reason
is only and only USD/INR appreciation because these commodities are
international based commodities and international based commodities are
always valued in dollars and our exchange rate in terms of dollars is
decreasing means to say our purchasing power is decreasing in terms of
value of money in international market against dollar , means suppose if
someone want to purchase something from international market then he
has to pay in dollars but he is having Indian currency so that what he
will do he will purchase the dollars by giving Indian currency. Earlier
say in Feb 2012, if someone want to buy 1 dollar the he had to pay Rs
.49 only means by paying Rs. 49 he can take 1 dollar but now today need
to pay Rs. 67.13 to take one dollar means purchasing power efficiency of
Indian rupee has decreased much bigger. means to say to buy commodities
from international market is very costly in terms of Indian currency
because less unit of dollars will have by paying more unit of Indian
currency.
Now
be ready for petrol, diesel price hike very soon, because Crude oil has
made new high in international market @ $108.13 on NYMEX. Last time it
was $109.32 on 19.07.2013 and after that touched $103.62 on 09.08.2013
and now again $108.13. on 24.02.2012 it was $109.77 which was future
rate on NYMEX and that date USD/INR rate was @ 49.22, so we calculate
crude oil price on that day in Indian currency then it will be $109.77 *
49.22 = 5402 and that day Crude Oil spot price in India was 5310. We
are calculating taking future rate of NYMEX because commodity exchange
in India takes future price of crude oil on NYMEX for settlement purpose
of future contract on commodity exchange in India. But now today Crude
Oil price is $108.13 and USD/INR is @ 67.11, means dollar appreciated by
+36.34% from 24.02.2012. and if you calculate crude oil price in
Indian terms then it will be $108.13 * 67.11 = 7257 and now today on MCX
crude oil is trading @ 7344 and day's high @ 7486, so crude oil price
hiked by +36%. So clear we can see that there Crude Oil Price in
International Market is same like was in Feb 2012 but Dollar appreciated
much bigger and this appreciation is affecting the Crude Oil price as
per Indian terms. Means to say earlier for 1 Barrel of crude oil, there
is need to pay RS. 5402 and now today need to pay Rs. 7344 means has to
pay RS. +1942 extra because of dollar appreciation and price of crude
oil in international market is still remain same as was in Feb 2012. So
there is lot of pressure on oil marketing companies because they are
paying more for purchasing crude from international market.
Some Important Banking Concept which always have an Impact on Market :- 1. Bank Rate :- Bank Rate is the rate at which central bank of the country (in India it is RBI) allows finance to commercial banks. Bank Rate is a tool, which central bank uses for short-term purposes. Any upward revision in Bank Rate by central bank is an indication that banks should also increase deposit rates as well as Base Rate / Benchmark Prime Lending Rate. Thus any revision in the Bank rate indicates that it is likely that interest rates on your deposits are likely to either go up or go down, and it can also indicate an increase or decrease in your EMI. This is the rate at which central bank (RBI) lends money to other banks or financial institutions. If the bank rate goes up, long-term interest rates also tend to move up, and vice-versa. Thus, it can said that in case bank rate is hiked, in all likelihood banks will hikes their own lending rates to ensure that they continue to make profit. Remember Bank Rate is not the same thing as Deposit Rates offered by banks for fixed deposits and recurring deposits. 2. Repo Rate :- Repo (Repurchase) rate is the rate at which the RBI lends shot-term money to the banks against securities. When the repo rate increases borrowing from RBI becomes more expensive. Therefore, we can say that in case, RBI wants to make it more expensive for the banks to borrow money, it increases the repo rate; similarly, if it wants to make it cheaper for banks to borrow money, it reduces the repo rate. 3. Reverse Repo rate is the rate at which banks park their short-term excess liquidity with the RBI. The banks use this tool when they feel that they are stuck with excess funds and are not able to invest anywhere for reasonable returns. An increase in the reverse repo rate means that the RBI is ready to borrow money from the banks at a higher rate of interest. As a result, banks would prefer to keep more and more surplus funds with RBI. Thus, we can conclude that Repo Rate signifies the rate at which liquidity is injected in the banking system by RBI, whereas Reverse repo rate signifies the rate at which the central bank absorbs liquidity from the banks. 3. Marginal Standing Facility Rate : Under this scheme, Banks will be able to borrow upto 1% of their respective Net Demand and Time Liabilities". The rate of interest on the amount accessed from this facility will be 100 basis points (i.e. 1%) above the repo rate. This scheme is likely to reduce volatility in the overnight rates and improve monetary transmission.
Earlier, it had alerted that "FIIs are Booking Profits in 2013 in their Long Position in NIFTY Future Rs. +9022.47 Cr @ 5351.04 at NIFTY Spot levels created in 2012.........Be Alert FIIs Selling Huge in NIFTY Future on 12 March 2013". See the full report :- "http://nifty-analysis.blogspot.in/2013/03/alert-fiis-are-booking-profits-in-2013.html"
Now FIIs are creating short position in NIFTY Future slowly slowly........Be alert.
After analyzing the above table it is clear that, till now FIIs have sold in NIFTY Future Rs. -9761.47 Cr @ 5911.11 NIFTY Spot Level.
In March 2013 (Till 21 March 2013) :- FIIs Net Sell in NIFTY Future Rs. -980.70 Cr @ 5818.45 NIFTY Spot Level
Long Position was Rs. +9022.47 Cr @ 5351.04 NIFTY Spot Level in 2012 (Check Report 12 March 2013) Booked Full Profit in Long Position Rs. -9022.47 Cr. @ 5917.70 NIFTY Spot Level till 19 March 2013. Means, FIIs booked +566.66 (5917.70 - 5351.04) Points Profit in their Long Position in NIFTY Future. Fresh Short Position Created Rs. -247.01 Cr @ 5838.22 NIFTY Spot Levels on 19 March 2013. FIIs have sold more NIFTY Future after 19 March 2013 :- On 20 March 2013 :- Rs. -362.44 Cr @ 5694.40 On 21 March 2013 :- RS. -129.55 Cr @ 5658.75 Now Total Fresh Short Created in NIFTY Future Rs. -739 Cr @ 5730.45 NIFTY Spot Level or Total Long Position Rs. +9022.47 Cr in 2012 - Total Sell Position Rs. -9761.47 Cr in 2013).
After analyzing the above the chart it clear that how NIFTY Spot is following the FIIs Selling. On 11 March 2013, FIIs sold NIFTY Future Rs. -68.07 Cr and that day NIFTY Spot Day's High @ 5971.20 Closed @ 5942.35. On 12 March 2013, FIIs sold NIFTY Future Rs. -517.56 Cr and that day NIFTY Spot Day's High @ 5952, Day's Low @ 5893.65 and Closed @ 5914.10. On 13 March 2013, FIIs sold NIFTY Future Rs. -223.24 Cr and that day NIFTY Spot Day's Low @ 5842.35 and Closed @ 5851.20. On 18 March 2013, FIIs sold NIFTY Future Rs. -699.0 Cr and that day NIFTY Spot Day's Low @ 5814.35 and closed @ 5835.25. On 19 March 2013, FIIs sold NIFTY Future Rs. -805.54 Cr. and that day NIFTY Spot Day's Low @ 5724.30 and Closed @ 5745.95. On 20 March 2013, FIIs sold NIFTY Future Rs. -362.44 Cr and that day NIFTY Spot Day's Low @ 5682.30 and Closed @ 5694.40. on 21 March 2013, FIIs sold NIFTY Future Rs. -129.55 Cr and that day NIFTY Spot Day's Low @ 5647.95 and Closed @ 5658.75. After analyzing above thing, it is clear that when FIIs started selling from 11 March 2013 then NIFTY Spot became down -323.25 Points (Day's High @ 5971.20 on 11 March 2013 - Day's Low @ 5647.95 on 21 March 2013). Conclusion :- "FIIs are giving clear signal in the market that Market is not Bullish and Every up side will be selling Opportunity in the Market. As FIIs have sold huge Position in NIFTY Future as well as created Fresh Short position, Total Sell Amount is Rs. -9761.47 Cr (in 2013 till 21 March 2013) @ 5911.11 NIFTY Spot Level in which Rs. -739 Cr is Fresh Short Position in NIFTY Future created @ 5730.45 NIFTY Spot Level. In Short run NIFTy Spot is not looking above @ 5950 in any condition. And any upside in NIFTY will be sure selling opportunity in the market."
FIIs Exposure in NIFTY future @ NIFTY Spot Level Basis on Month basis from Jan 2013 to till 11Th March 2013
As it had said earlier that FIIs ""As FIIs are selling huge in NIFTY Future near 6050 - 5890 , means to say booking profits very fast in their long position of Rs. +9022.47 Cr created in 2012. Already Booked 81.65% of long Position and remaining long position will be booked further and short position will be created very soon. So, overall trend is weak as FIIs are giving clear signal. So go always with FIIs and safe in this market." Check the Earlier Post :- http://nifty-analysis.blogspot.in/2013/03/alert-fiis-are-booking-profits-in-2013.html on "FIIs Exposure in NIFTY future @ NIFTY Spot Level Basis on Month basis from Jan 2013 to till 11th March 2013" FIIs Exposure in NIFTY future @ NIFTY Spot Level Basis on Month basis from Jan 2013 to till 19Th March 2013
Now FIIs has booked full profit in their long position in NIFTY Future Rs. 9022.47 Cr @ 5351.04 NIFTY Spot Level which had created in 2012. Till 11th March 2013, FIIs sold Rs. -7367.64 Cr. @ 5913.80 NIFTY Spot Level. After analyzing the above table regarding "FIIs Exposure in NIFTY future @ NIFTY Spot Level Basis on Month basis from Jan 2013 to till 19Th March 2013", it is clear that now FIIs have sold Rs. -9269.48 Cr. @ 5917.70 NIFTY Spot Level, Means clear indicating that FIIs have booked full profit in their long position in NIFTY Future. Long Position was Rs. +9022.47 Cr @ 5351.04 MIFTY Spot Level in 2012 Booked Full Profit in Long Position Rs. -9022.47 Cr. @ 5917.70 NIFTY Spot Level Means, FIIs booked +566.66 (5917.70 - 5351.04) Points Profit in their Long Position in NIFTY Future. Fresh Short Position Created Rs. -247.01 Cr @ 5838.22 NIFTY Spot Levels. Alerted all this things in advance on 12 March 2013. NIFTY Spot Movement after alerting from 12 March 2013 to 20 March 2013 :-
When altered on 12 March 2013, NIFTY Spot High @ 5952. After alerted NIFTY Spot Day's Low @ 5724.30 on 19 March 2013. After Alerted NIFTY Spot became down -227.30 Points, and FIIs net Selling was Rs. -1901.84 Cr. @ 5863.69 NIFTY Spot Level from 12 March 2013 to 19 March 2013. Conclusion :- Overall indication is that FIIs has started to creat fresh Short Position in NIFTY Future and this will increase more in coming session.
FIIs Exposure in NIFTY future and Cash Segment @ NIFTY Spot Level Basis on Month basis from Jan 2012 to Dec 2012
FIIs Exposure in NIFTY future @ NIFTY Spot Level Basis on Month basis from Jan 2013 to till 11th March 2013
"After Analyzing the above table, it is clear that how FIIs have traded in NIFTY over the year in 2012. And a clear Picture is showing that FIIs took Net Long Position in NIFTY Future Rs. +9022.47 Cr @ 5351.04 at NIFTY Spot Level basis and bought Rs. 127736.47 Cr. @ 5393.13 at NIFTY Spot Level in cash segment. Means FIIs took heavy buying exposure in market but they sold Rs. -7367.64 Cr @ 5913.80 at NIFTY Spot Levels in 2013 (From Jan 2013 to till 11th March 2013). Means FIIs booked the profit Rs. -7367.64 Cr @ 5913.80 at NIFTY Spot levels out of their long position Rs. +9022.47 Cr which had taken @ 5351.04 and long position of +1654.83 Cr @ 5351.04 at NIFTY Spot levels has remained and will be booked further . Means FIIs booked profit of +562.76 Points (5913.80 - 5351.04) of 81.65% of their Net long Position taken in 2012 which was Rs. +9022.47 Cr."
FIIs are booking profits in their Long Position which had taken in 2012. FIIs booked most of the portion in Feb 2013 that is Rs. -8198.37Cr @ 5893.24 at NIFTY Spot Levels. FIIs are selling continuously from near 6050 to 5693 (Jan 2013 to 28 Feb 2013).
Point to be Focus :- "There is two Intraday Highest Selling in NIFTY Future (From Jan 2013 to 11th March 2013), 1st selling Rs. -1271.04 Cr @ 5761.35 at NIFTY Spot level on 26-Feb-2013 which is before Union Budget 2013 - 2014 and 2nd selling Rs. -1498.33 Cr. @ 5693.05 at NIFTY Spot levels on 28-Feb-2013 on Union Budget 2013 - 2014, a big Indian Economic Event. " Means to say FIIs have not seen any positive action in Union Budget 2013 - 2014 which can give right direction to Indian Economy and growth and did not see any step to control Fisical Deficit also. It is very shocking that the highest selling in 2013 is on Budget Event on 28-Feb-2013."
Conclusion :- "As FIIs are selling huge in NIFTY Future near 6050 - 5890 , means to say booking profits very fast in their long position of Rs. +9022.47 Cr created in 2012. Already Booked 81.65% of long Position and remaining long position will be booked further and short position will be created very soon. So, overall trend is weak as FIIs are giving clear signal. So go always with FIIs and safe in this market."
