India raises foreign shareholding limit in Indian stock exchanges

Jul 27, 2016 0

New Delhi– The Union Cabinet on Wednesday approved a proposal to raise foreign shareholding limit in Indian stock exchanges from 5 to 15 per cent, an official statement said.

The decision, taken at a meeting of the cabinet, chaired by Prime Minister Narendra Modi, will increase shareholding limits for foreign stock exchanges, depositories, banks, insurance companies and commodity derivative exchanges.

Jaitley-US“The cabinet has also approved the proposal to allow foreign portfolio investors to acquire shares through initial allotment, besides secondary market, in the stock exchanges,” the statement said.

“The move will help in enhancing global competitiveness of Indian stock exchanges by accelerating, facilitating the adoption of latest technology and global best practices which will lead to overall growth and development of the Indian capital market,” it said, adding that the approval was in pursuance of implementation of the union budget 2016-17 announcement made by Finance Minister Arun Jaitley regarding reforms in FDI (Foreign Direct Investment) policy in Indian stock exchanges.

The National Stock Exchange (NSE) welcomed the Union Cabinet’s decision.

“NSE has always aligned itself with global best practices. Exchange believes that government’s decision is in sync with the spirit of globalisation,” said its Managing Director and Chief Executive Chitra Ramkrishna.

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Capital needs of Indian public sector banks much higher

Jul 22, 2016 0

Chennai– The additional capital infusion of Rs 22,915 crore into 13 weak banks announced recently by the central government is positive for them but the actual capital needs were much more higher, said global credit rating agency Moody’s Investors Service.

In its sectoral comment on Indian public sector banks on Friday, Moody’s said as per its analysis an external capital requirement of about Rs 1.2 trillion for the rated 11 government owned banks as of the beginning of this fiscal far exceeds the remaining Rs 450 billion the government budgeted for disbursal to the banks by March 2019.

“Therefore, unless the government increases the planned amount of capital for infusion, the capital needs of public sector banks remain significantly above the amount budgeted by the government,” Moody’s said.

In August 2015, the government announced that Rs 700 billion will be allocated to public sector banks over a four-year period to help improve their capitalisation, Moody’s said.

Of this amount, the government has already allocated about Rs 250 billion in the fiscal year 2015.

For fiscal 2016, the government has budgeted another Rs 250 billion (from which the Rs 229 billion was disbursed) and consequently, the remaining amount of Rs 21 billion will be allocated to the banks at a later date, Moody’s said.

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Federal Bank partners with Reliance Jio Money

Jul 21, 2016 0

Mumbai– Federal Bank here on Thursday said it has signed an agreement with Reliance Jio Money for one-click payment service.

Reliance Jio Money is a wallet application that will be launched soon for mobile devices where Federal Bank will enable a direct payment option for its customers.

Through this service, the leading private sector bank’s customers can complete a transaction without funding the wallet. The bank’s customers will get a facility to directly pay from their account for the services offered through the wallet (without pre-loading their wallet).

This arrangement will help customers retain cash in their account and use it only when a transaction is made unlike other instances where a wallet will require the user to maintain balance exclusively in the wallet. Once launched, the bank’s customers will be able to perform a variety of transactions across numerous merchants in just a click.

“This arrangement would empower customers to retain the funds with their accounts while enjoying the host of services available in the app,” said Shalini Warrier, Chief Operating Officer, Federal Bank.

She added: “The bank is very keen on improving customer experience in the digital space and will be coming up with a lot more arrangements and innovations to excite the customers.” (IANS)

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Kotak Mahindra Bank grows its net profit, to raise Rs.5,000 crore

Jul 21, 2016 0

Chennai– Kotak Mahindra Bank Ltd on Thursday announced that it closed the first quarter of the current fiscal with a net profit of Rs 741.97 crore as compared to Rs 189.78 crore for the same period last year.

In a regulatory filing in BSE, the bank also said its total income has increased from Rs 4,583.86 crore for the quarter ended June 30, 2015 to Rs 5,120.03 crore for the quarter ended June 30, 2016.

The Bank’s board of directors have approved the proposal to seek the consent of shareholders by postal ballot for issuance of unsecured, redeemable, non-convertible debentures/bonds up to Rs 5,000 crore.

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Indian National Stock Exchange says total asset under management surpassed the Rs 10,000 crore mark

Jul 21, 2016 0

Mumbai–The National Stock Exchange (NSE) on Thursday said total Asset under Management (AUM) of the Nifty 50 ETFs (Exchange Traded Funds) has surpassed the Rs 10,000 crore mark.

“India is catching up with the global trend in ETF segment, where ETF industry is worth $3.2 trillion as on June 30, 2016. We are pleased to see a surge in investors’ interests in ETF products,” said NSE MD and CEO Chitra Ramkrishna.

India’s first ETF, or group of securities which are traded like individual stocks on an exchange, and can track equity indices, bonds, commodities etc, was launched in December 2001 and based on Nifty 50. Currently, there are 13 ETFs on the index listed in India. A total of 35 out of 45 equity ETFs traded in India are benchmarked to Nifty family of indices, the exchange said in a statement.

There is a good demand for Nifty 50 ETF amongst issuers in the international markets also. it added.

“India specific products tracking Nifty indices are very popular among the global investors. In the past one year, we have seen very strong demand for Nifty 50 based products in Asian countries including Korea, Taiwan, Japan and Hong Kong,” said NSE’s group company, IISL’s CEO Mukesh Agarwal.

ETFs covering Nifty family of indices are traded in 19 exchanges covering 16 countries.

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Capital infusion will lead to book value dilution for banks: Jefferies

Jul 20, 2016 0

Chennai– The recapitalisation of 13 government-owned banks, announced by the central government, will result in dilution of their book value per share for banks with larger capital infusion, investment banking firm Jefferies said on Wednesday.

In a report, Jefferies said: “Banks with larger capital allocations relative to their Common Equity Tier 1 (CET1) are typically the ones to see a steeper dilution of book value per share, given that stock prices for the SOE (State Owned Enterprise) banking space have remained largely depressed for the last several quarters now.”

Based on current market prices, the largest book value per share hit will be seen for Indian Overseas Bank at 28 per cent followed by United Bank of India at 20 per cent. Among other banks affected will be Bank of India (12 per cent) and Dena Bank (12 per cent).

At current market prices, the book value dilution is zero per cent for State Bank of India and three per cent for Punjab National Bank.

The key beneficiaries in terms of CET1 jump are IOB, United Bank of India, Central Bank of India and UCO Bank.

The central government on Tuesday announced capital infusion of Rs.22,915 crore for 13 banks.

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In India, Rs 58,792 crore bank loans wilfully defaulted

Jul 19, 2016 0

Chennai– The total quantum of loans wilfully defaulted by borrowers is Rs 58,792 crore, the All India Bank Employees’ Association (AIBEA) said on Tuesday.

In a statement, the major union in the banking sector said out of the total loans wilfully defaulted, a whopping Rs.47,351 crore are accounted by government owned banks-nationalised, State Bank of India (SBI) and its five associate banks.

The union said the total quantum of bad loans of the government owned banks stands at Rs 539,995 crore as on March 31, 2016.

“But the government and the RBI (Reserve Bank of India) are not taking tough measures to recover the bad loans. Even their (defaulters’) names are not being published,” said AIBEA General Secretary C.H. Venkatachalam.

“Loans are given from public money. Hence people should know who the loan defaulters are. When poor borrowers are harassed, corporate defaulters are given all concessions. The number of willful defaulters is also on the increase,” AIBEA said.

The AIBEA has uploaded the names of wilful defaulters bank wise. (IANS)

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India to recapitalize 13 banks with Rs 22,915 crore

Jul 19, 2016 0

New Delhi- The Ministry of Finance on Tuesday announced the much-awaited capital infusion of Rs 22,915 crore towards the recapitalisation of 13 public sector banks during 2016-17.

The largest amount of Rs 7,575 crore was earmarked for the country’s largest lender, the State Bank of India.

“In line with the announcements made under ‘Indradhanush’ and the Union Budget, the government has undertaken an exercise to assess the capitalisation needs of public sector banks during 2016-17,” a ministry statement said.

“The capital infusion exercise for the current year is based on an assessment of need as calculated from the compounded annual growth rate of credit for the last five years, banks’ projections of credit growth and an objective assessment of the growth potential of each public sector bank.”

Indian Finance Minister Arun Jaitley

Indian Finance Minister Arun Jaitley

Following this assessment, 75 per cent of the amount collected for each bank is being released now to provide liquidity support for lending operations as also to enable banks to raise funds from the market.

The remaining amount, to be released later, is linked to performance, with particular reference to greater efficiency, growth of both credit and deposits and reduction in the cost of operations, the ministry said.

Among others, Indian Overseas Bank will get Rs 3,101 crore, Punjab National Bank Rs 2,816 crore, Bank of India Rs 1,784 crore, Central Bank of India Rs 1,729 crore and Syndicate Bank Rs 1,034 crore.

The ‘Indradhanush’ scheme was announced on the eve of the Independence Day in 2015, covering seven areas — appointments, setting up of a Bank Board Bureau, capitalisation of banks, de-stressing their assets, empowerment, accountability and governance reforms.

The preparations for the first tranche of capital infusion for this fiscal began soon after the state-run banks made presentations to the Finance Ministry on their balance sheets, especially the extent of stressed assets and measures being taken to recover them, officials said.

In his Budget speech this year, Finance Minister Arun Jaitley said that while the problem of stressed assets and bad loans was a “legacy of the past”, the structural issues were already being addressed.

This was because a large portion of bad and doubtful debts were on account of the stress in sectors like power, coal, highways, sugar and steel. He, accordingly, promised adequate infusion of funds.

“To support the banks in these efforts as well as to support credit growth, I have proposed an allocation of Rs 25,000 crore in 2016-17 towards recapitalisation of public sector banks,” Jaitley said.

“If additional capital is required by these banks, we will find the resources for doing so,” he added. “We stand solidly behind these banks.”

In fact, in anticipation of such capital infusion, as also because of the steps being taken by the banks to tackle the debt issue, banking stocks have been on the rise in recent weeks.

Since June 1, the banking index of the Bombay Stock Exchange, in fact, has risen nearly 10 per cent. Some stocks, like those of Punjab National Bank, have flared up by over 50 per cent during the period.

Box: Capital Infusion in Banks

01. Allahabad Bank Rs 44 crore

02. Bank of India Rs 1,784 crore

03. Canara Bank Rs 997 crore

04. Central Bank of India Rs 1,729 crore

05. Corporation Bank Rs 677 crore

06. Dena Bank Rs 594 crore

07. Indian Overseas Bank Rs 3,101 crore

08. Punjab National Bank Rs 2,816 crore

09. State Bank of India Rs 7,575 crore

10. Syndicate Bank Rs 1,034 crore

11. UCO Bank Rs 1,033 crore

12. Union Bank of India Rs 721 crore

13. United Bank of India Rs 810 crore

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Glenmark to raise $200 million to repay debt

Jul 18, 2016 0

Mumbai– Glenmark Pharmaceuticals Ltd is planning to raise $200 million by issuing USD denominated non-convertible unsecured bonds to repay existing debt, the company said on Monday.

“..subsequent to the rating received by the leading credit agencies in the world that is Standard & Poor’s and Fitch, the company has decided to tap into the international bond market and is planning to raise around $200 million by issuing USD denominated non-convertible unsecured bonds,” the company said in a filing to Bombay Stock Exchange.

“The net proceeds will be used for repaying the existing debt,” it said.

According to the filing, these bonds are planned to be listed on the Singapore Stock Exchange in order to establish the Company’s track record in the globally recognised bond market.

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Key Indian equity indices close flat amid volatility

Jul 7, 2016 0

Mumbai–Key Indian equity market indices closed marginally higher on Thursday after a session of volatile trading as investors resorted to profit-booking on previous rises.

The indices had risen for six consecutive trading days before falling on Tuesday. The markets were closed on Wednesday for Eid-ul-Fitr.

The barometer 30-scrip sensitive index (Sensex) of the BSE, which opened at 27,209.97 points, closed at 27,201.49 points – up 34.62 points or 0.13 per cent from the previous close at 27,166.87 points.

The wider 51-scrip Nifty of the National Stock Exchange (NSE) rose by 1.95 points or 0.0242 per cent, at 8,337.90 points.

The Sensex touched a high of 27,288.22 points and a low of 27,146.95 points during the intra-day trade.

The BSE market breadth was tilted in favour of the bulls — with 1,546 advances and 1,207 declines.

Both the key Indian indices had ended on a lower note during the previous trade session on Tuesday after six consecutive sessions of gain.

The barometer index had edged down 111.89 points or 0.41 per cent to 27,166.87 points, while the NSE Nifty lost 34.75 points or 0.42 per cent to 8,335.95 points on Tuesday. (IANS)

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