Bandhan Bank IPO subscribed 42% on opening day

Mar 15, 2018 0

Kolkata– Private lender Bandhan Bank’s Rs 4,473 crore initial public offer was subscribed 42 per cent on the opening day of the bidding on Thursday.

Over 2.38 crore shares reserved for qualified institutional buyers (QIBs) were oversubscribed 1.26 times while the portion offered for non-institutional investors was subscribed one per cent and retail investors 12 per cent.

Of the total size, the lender allocated over 3.57 crore equity shares at a price of Rs 375 a piece aggregating to Rs 1,341.91 crore to 65 anchor investors.

According to data available with the NSE till 5 p.m., the offer of over 8.34 crore shares has received bids for over 3.5 crore shares.

The lender had set a price band of Rs 370 to Rs 375 per equity share of face value Rs 10 each and of the total issue size of over 11.92 crore shares, it offered fresh equity shares to the tune of 9.76 crores and an offer for sale of up to 1.40 crore shares by the International Finance Corporation (IFC) and 75.65 lakh shares by IFC FIG Investment Company.

The offer will close on March 19. (IANS)

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Private investment decline worrisome: World Bank

Mar 14, 2018 0

New Delhi– The World Bank on Wednesday said it was worrisome that the rate of private investment in India had remained low, despite all enabling factors including improvement in macroeconomic stability and increased public investment.

In its India Development Update report which takes stock of the Indian economy, the World Bank said the investment rate had declined and remains low “despite the fact that macroeconomic stability is much higher, public investment has picked up and its quality has improved”.

It added that business environment had also improved in the country and the global liquidity had continued to remain positive.

Not only that, the Indian equity markets have also done well offering good valuations to the companies looking to raise money. “All these factors should have helped spur private investment, yet it has been enigmatically subdued,” the report said.

Offering insights into the reason behind this contradiction, the World Bank report said the slow pace of investment growth could be due to deleveraging.

“Indian businesses over invested and over leveraged during the boom years. Yet due to slow pace of resolution, business cannot deleverage quickly and start investing afresh.”

There may also be sectoral constraints to investments in sectors such as construction, leather, infrastructure, telecom and energy sector, it added.

“Going forward, de-risking the private sector may be important, as it may be to ensure an environment of policy certainty. Understanding and relieving the generic, spatial or sector specific constraints to investment growth is important,” the report said.

The World Bank, in its biannual flagship publication, also took note of the high balance sheet stress in the banking sector especially the non-performing assets crisis.

It said the genesis of the prevailing issue could be traced to the period of exuberance in bank credit growth during 2004-08, followed by the evergreening of loans in response to the crisis.

It said the new Insolvency and Bankruptcy Code (IBC) was an important step toward changing the credit culture but the policy would take time to be effective in cleaning the balance sheets and ultimately changing the credit discipline in the country.

The report added the IBC was unlikely to improve credit adequacy of banks on its own.

The World Bank also made a case for making Indian exports competitive in the global market. It said that despite an acceleration in export growth, India had “barely managed to keep pace” with it since the global financial crisis, reflected in its stagnant or even declining share of world exports.

“Significant improvement in the competitiveness of Indian firms is key to developing its role as a global exporter,” it said. (IANS)

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Crypto players not unduly worried over HDFC ban on card use for purchases

Mar 14, 2018 0

By Vatsal Srivatsava

New Delhi– Even as HDFC Bank, India’s largest bank by market capitalisation, banned its customers from using debit, credit and prepaid cards to purchase cryptocurrencies such as Bitcoin, stakeholders in the crypto universe are not unduly bothered by the move.

In an email sent out to customers on March 13, the bank noted that “the Reserve Bank of India has also cautioned the public regarding the potential economic, operational, legal and security related risks associated in dealing with such currencies”.

It is important to remember that price movements in the crypto universe are led primarily by retail participation. Large institutional money is still sitting on the sidelines. Thus, not allowing customers to use their debit and credit cards for crypto transactions is a clear sign that banks and regulators in India are still discouraging investors from entering the crypto universe and maintain a negative bias.

The move has, however, been welcomed as “constructive” by Rahul Raj, Founder & CEO, Koinex, India’s leading cryptocurrency exchange.

”We feel it is a fair move to discourage the use of credit cards for trading in cryptocurrency because the risk of non-payment towards the bank is a pertinent issue. Even the stock market does not allow use of credit cards to transact,” Raj told IANS.

Noting that even globally banks have discouraged the use of credit cards for crypto transactions, he added: “We do not see it as a hindrance, as it is a constructive move to sustain a more amicable environment for traders.

“The banks lend money on credit cards with the intention of getting it back, but as you know the cryptocurrency ecosystem is very volatile and if prices fall, credit card users could be left with large balances that they may be unable to repay. We want to protect the interest of retail credit card holders leveraging their credit capacity to invest in cyptocurrencies in the hope of making quick money.”

Indian residents can still deposit money into their accounts at local exchanges via online banking. In fact, customers can only deposit funds on Koinex via netbanking for buying cryptocurrencies. Each individual has his/her bank account linked to Koinex after a thorough KYC process.

Today, most major exchanges around the world require completion of KYC before being able to buy or sell cryptocurrencies — this links the very first transactions of most individuals to their real-world identities.

This addresses the issue of anonymity — it is a common belief that Bitcoin transactions are impossible to track and can aid terrorists, criminals, tax evaders, etc., in avoiding detection by government agencies.

Price volatility will, however, exist in the crypto universe as it is still a relatively new asset class. Further, Bitcoin dominance is still 40 percent and its volatility is one of the main drivers of prices of other crypto currencies.

From a money supply and money demand framework, this volatility can be attributed to the fact that the above money supply rule cannot respond fast enough to changes in money demand, leading to high price fluctuations.

Indian regulators and financial institutions must welcome the use of blockchain technology and cryptocurrencies. State governments are already adopting blockchain. Andhra Pradesh has become the first state to adopt blockchain in two key departments- road transport and land registrations.

Non-believers in cryptocurrencies have a standard answer: Blockchain is the big idea. Digital currencies are a bubble. It is important to highlight the importance of decentralisation in the world of blockchain and how cryptocurrencies are a result of that since that is what incentivised the coders.

Global banking giants are already moving fast to secure competitive advantage in this space. In February, a Goldman Sachs backed start-up, Circle, acquired Poloniex, a digital token exchange, for $400 million. JP Morgan has created Quorum, an enterprise focused version of Ethereum.

Indian banks and regulators must soon adapt to the changing landscape of finance where cryptocurrencies will play a dominant role. It is high time we see a change in rhetoric from our leading banks and economic policymakers. (IANS)

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Allahabad Bank sanctions Rs 1,003 cr MSME loans

Mar 14, 2018 0

Kolkata– State-run Allahabad Bank on Wednesday said it has sanctioned Rs 1,003 crore in loans to 8,289 beneficiaries for micro, small and medium enterprises (MSME) through a special drive.

“The bank organised a mega camp for MSME loans on Monday. Through the said camp, MSME loans aggregating Rs 1,003 crore were sanctioned to 8,289 beneficiaries, which included Rs 55.42 crore (1,794 beneficiaries) under Pradhan Mantri Mudra Yojana (MUDRA) and Rs 35.04 crore (160 beneficiaries) under Stand-Up India Scheme,” the lender said in a statement.

The lender claimed it has been offering “competitive rate of interest for MSME and retail loans” and has always endeavoured to offer its customers various products at attractive rates, adding in the process more than 5 million new customers during the last one year.

Total outstanding under retail credit as on December 31, 2017 stood at Rs 19,849 crore registering a year-on-year growth of 20.50 per cent from Rs 16,473 crore year-ago.

However, the bank posted a net loss of Rs 1,263.79 crore in the third quarter of 2017-18 due to higher provisions made for aging NPAs (non-performing assets) and NCLT (National Company Law Tribunal) referred accounts and also losses incurred in treasury operations during the quarter. (IANS)

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Value buying lifts equities; Sensex closes over 600 points up

Mar 12, 2018 0

Mumbai, March 12 (IANS) Value buying by investors, along with positive global cues, pushed the BSE Sensex index to over 600 points and the Nifty50 of the National Stock Exchange (NSE) by almost 200 points on Monday.

According to market observers, hopes of easing inflation in the Consumer Price Index (CPI) data slated for release later in the evening too lifted investors’ risk-taking appetite.

On the NSE, the wider Nifty50 edged higher by 194.55 points, or 1.90 per cent, to provisionally close trade at 10,421.40 points (at 3.30 p.m.).

The barometer 30-scrip Sensitive Index (Sensex) closed at 33,917.94 points — up 610.80 points, or 1.83 per cent, from the previous session’s close.

The Sensex touched a high of 33,962.48 points and a low of 33,468.16 points during the intra-day trade.

The BSE market breadth turned marginally bullish with 1,370 advances and 1,339 declines.

Last week, a sudden sell-off during the last hour of trade trimmed Friday’s entire gains and led the equity indices to close on a flat note with marginal losses.

The NSE Nifty50 fell by 15.80 points, or 0.15 per cent, to close at 10,226.85 points, while the BSE Sensex closed at 33,307.14 points — down 44.43 points or 0.13 per cent. (IANS)

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Equities record mega intra-day gain in 2 years

Mar 12, 2018 0

Mumbai– The key Indian equity indices on Monday witnessed the biggest intra-day gains in around two years with the benchmark BSE Sensex index surging by over 600 points and the Nifty50 of the National Stock Exchange (NSE) by almost 200 points.

According to market observers, across-the-board buying, as well as positive cues from the global markets on easing trade war fears and hopes of easing inflation in the Consumer Price Index (CPI) data at home slated for release after market hours, lifted the indices by gains last seen in March 2016.

On the NSE, the wider Nifty50 edged higher by 194.55 points, or 1.90 per cent, to close trade at 10,421.40 points.

The barometer 30-scrip Sensitive Index (Sensex) closed at 33,917.94 points — up 610.80 points, or 1.83 per cent, from the previous session’s close.

The Sensex touched a high of 33,962.48 points and a low of 33,468.16 points during the intra-day trade.

However, the BSE market breadth remained tilted to the bearish with 1,370 declines and 1,346 advances.

“Markets rallied sharply today with the Nifty breaking out of the 10,444 resistance in the process. The gains came on the back of positive global equity markets as international trade-war concerns took a backseat to economic optimism following a stronger US jobs report released over the weekend,” Deepak Jasani, Head – Retail Research, HDFC Securities, told IANS.

“Gains were led by ITC, HDFC and Reliance Industries. Broad market indices like the BSE mid-cap and small-cap indices gained less, thereby underperforming the main indices,” Jasani added.

In terms of the broader markets, the S&P BSE mid-cap index edged higher by 0.76 per cent and the small-cap index by 0.56 per cent.

Vinod Nair, Head of Research, Geojit Financial Services, said: “Firm global cues and expectation of ease in domestic inflation to 4.74 per cent excited investors to utilise the bargain opportunity.”

“Investors are positive on blue chips on expectation of faster recovery, however, mid and small cap witnessed reluctance due to high valuation,” Nair said.

On the currency front, the Indian rupee strengthened by 13 paise to close at 65.04 against the US dollar from its last week’s close at 65.17.

Provisional data with the exchanges showed that foreign institutional investors turned net buyers and purchased scrips worth Rs 374.65 crore. However, domestic institutional investors sold stocks worth Rs 464.59 crore.

All the 19 sub-indices of the BSE closed with gains led by the S&P BSE banking index, which escalated by 437.70 points.

It was followed by the auto (up 335.17 points), metal (up 325.30 points), oil and gas (up 321.28 points), capital goods (up 228.70 points) and FMCG (up 219.37 points) indices.

Major Sensex gainers on Monday were: Bharti Airtel, up 4.68 per cent at Rs 420.75; NTPC, up 4.33 per cent at Rs 171; ITC, up 4.09 per cent at Rs 270; Tata Motors, up 3.07 per cent at Rs 352.20; and Tata Steel, up 2.82 per cent at Rs 622.70.

The Sensex losers were: Coal India, down 2.26 per cent at Rs 297.80 and State Bank of India, down 0.12 per cent at Rs 252.85. (IANS)

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Volvo Cars India to raise prices by up to 5%

Mar 9, 2018 0

New Delhi– Volvo Cars India on Friday said it plans to hike prices across its range of vehicles by up to five per cent in order to offset the impact of the increased import duty announced in the Union Budget 2018-19.

According to the company, the prices will be revised for the new stock which is in the pipeline to be custom-cleared as the new duty structure will not allow costs to be absorbed.

“The increased duty comes as a surprise and will have a short-term impact on the automobile industry. However, we are hopeful with the successful rollout of GST (Goods and Services Tax) there will be long-term industry stability,” Charles Frump, MD, Volvo Cars India, said in a statement. (IANS)

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Stock markets still over-priced, implies NSE Chief

Mar 6, 2018 0

By Rohit Vaid

New Delhi– The valuations in the stock markets are still too high and fundamentals need to catch up with them, according to a top official of the National Stock Exchange (NSE).

“Fundamentals need to certainly catch up with the valuations. So my hope is that corporate earnings and GDP growth over the next few quarters will improve and catch up with the valuations,” Vikram Limaye, Managing Director and Chief Executive Officer of NSE, told IANS.

Although he did not say in so many words that the markets were over-priced, the implication of his words is that they are.

“There is liquidity in the market which has driven valuations and, at some point of time… there is a need to have fundamentals that justify valuations,” Limaye told IANS in an interview.

On the ongoing downtrend in the equity markets and its likely impact on the key investment instrument, he said the slide was not unique to India.

“There has been a global correction and this is not unique to India. Our Indian markets also went up straight without any corrections for the last two years,” he pointed out.

“So a correction of 5-10 per cent is not the end of the world. People have to think medium- to long-term, if they have to invest in equities. Equities as an asset class outperforms any other asset class, when you are looking at a 10- to 15-year horizon.”

The massive sell-off in the global markets which began in the first few days of February, along with volatility unleashed due to the stress being faced by the domestic banking sector, has pulled Indian equity indices down sharply.

Since January 31, 2018, the Bombay Stock Exchange (BSE) Sensex has shed around 1,918 points and the NSE Nifty50 has declined by 567 points.

According to Limaye, there is a case and a need to have more start-ups to raise funds from the domestic equity markets to unlock value for initial investors.

“Indian markets have evolved quite significantly over the last five years and domestic listing is the right thing to do for an Indian business,” he asserted.

“If it (a company) is selling to Indian customers, it is logical for that company to list here, to build its brand and get the right kind of valuations because the story is well understood here, since they are doing business here,” Limaye said.

The NSE chief added that domestic mutual funds have a large corpus that can be invested in technology firms and that, initially, he wants to get some four to five companies to list for a “demonstration effect”.

“There are almost 1,500 companies funded by VCs (venture capitalists) and PE (private equity) firms for the last five to seven years. Many of them will require an exit in the next 12-24 months; so my hope is that even if a small percentage of them decide to list in India — then it will not be a small number,” Limaye added.

NSE is aggressively focusing on bringing start-ups, including “new economy, Fintechs, MSMEs and SMEs”, to list on its platform. (IANS)

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Indian equity indices fall sharply as banking stocks tank

Mar 6, 2018 0

Mumbai– Despite earlier gains, the key Indian equity indices closed in the red on Tuesday as banking stocks tanked substantially and investors also continued to trade with caution.

The barometer 30-scrip Sensitive Index (Sensex) of the BSE closed at 33,317.20 points — down 429.58 points, or 1.27 per cent, from its previous close of 33,746.78 points.

Similarly, the wider Nifty50 of the National Stock Exchange (NSE) also plummeted by 109.60 points, or 1.06 per cent, to close at 10,249.25 points.

In the intra-day, the S&P BSE Sensex touched a high of 34,060.13 points and a low of 33,209.76 points.

“Early positivity that rode on global markets’ pull back proved to be brief, as turmoil in banking sector and persistent selling by FIIs dragged stocks lower,” said Anand James, Chief Market Strategist, Geojit Financial Services.

Banking stocks fell as ICICI Bank chief Chanda Kochhar and Axis Bank’s Shikha Sharma had been summoned by Serious Fraud Investigation Office in Mumbai in the bank fraud case involving jeweller Nirav Modi and his partner and uncle Mehul Choksi.

“Market gave up gains despite positive trade in global market. Consolidation continues led by broad selling across all sector. Market has broken ye’terday’s low while banks continue to struggle due to NPA issue, higher bond yield & cost of funds. Investors are little nervous to start accumulating and are waiting for major triggers to get direction,” said Vinod Nair, Head of Research, Geojit Financial Services.

Sector-wise, almost all the sectors ended in red. Major selling pressure was seen in banking, capital goods, auto and realty sectors.

S&P BSE banking index plummeted by 1.44 per cent, capital goods index by 1.31 per cent, auto index by 1.36 per cent and realty index by 2.21 per cent.

Only consumer durables sector remained in the green.

There were only three Sensex gainers on Tuesday: IndusInd Bank, up 1.21 per cent at Rs 1,707.10; Tata Steel, up 0.79 per cent at Rs 660.50 and Hero MotoCorp, up 0.35 per cent at Rs 3,570.

The major Sensex losers were: Sun Pharma, down 2.95 per cent at Rs 531.70; State Bank of India, down 2.77 per cent at Rs 256.50; ICICI Bank, down 2.64 per cent at Rs 295.10 and Mahindra and Mahindra, down 2.52 per cent at Rs 720.35. (IANS)

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Sugar production at 230 lakh tonne as of February

Mar 5, 2018 0

New Delhi– The sugar industry in India produced 230.5 lakh tonnes during October-February 2017-2018, the Indian Sugar Mills Association (ISMA) said here on Monday

“The sugar industry has produced 67.88 lakh tonne more sugar than last year at the same time, i.e. upto February 2017,” a statement from ISMA said.

The top sugar producers of Uttar Pradesh, Maharashtra and Karnataka have produced 73.95 lakh tonnes, 84.24 lakh tonnes and 33.44 lakh tonnes respectively till February 28, it said.

All sugar mills in Uttar Pradesh are functioning so far, while those in Maharashtra and Karnataka have started shutting operations, according to ISMA.

A total of 522 sugar mills across the country started crushing sugarcane in 2017-18, of which 43 mills have shut by the end of February, the statement said.

“Considering that there is reportedly a larger sugar production in the current year… There is a need to export at least 15 lakh tonne in the current season itself over the next six to seven months” it said, adding that, this will give extra cash flow to the mills, and improve the dispersal of arrears to the farmers.

In January, the ISMA had projected India’s sugar production at 261 lakh tonne in 2017-18 (October-September), revising its previous estimate of 251 tonne. (IANS)

 

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