Month: July 2021

RBI to conduct Rs 20,000 crore bond purchase on July 8, BFSI News, ET BFSI

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Mumbai: The Reserve Bank of India (RBI) will conduct the open market purchase of government bonds worth Rs 20,000 crore under the G-sec Acquisition Programme (G-SAP 2.0) on July 8.

The RBI said in a statement that it reserves the right to decide on quantum of purchase of individual securities, accept bids for less than the aggregate amount, purchase marginally higher/lower than the aggregate amount due to rounding off and accept or reject any or all the bids either wholly or partially without assigning any reasons.

On July 4, RBI Governor Shaktikanta Das had announced that the central bank will conduct the open market purchase of government securities of Rs 1.2 lakh crore under the G-SAP 2.0 in Q2 of the current financial year to support the market.

The next purchase under G-SAP 2.0 will be conducted on July 22 for Rs 20,000 crore. The government securities to be purchased in the auction will be communicated in due course, said the RBI.

The government raises money from the market to fund its fiscal deficit through dated securities and treasury bills.

The RBI has said it remains committed to use all instruments at its command to revive the economy by maintaining congenial financial conditions, mitigate the impact of Covid-19 and restore the economy to a path of sustainable growth while preserving macroeconomic and financial stability.



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AU Small Finance Bank surges 9% after Q1 update, BFSI News, ET BFSI

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New Delhi: Shares of AU Small Finance Bank soared 9 per cent in early trade on Tuesday following the June 2021 quarter update by the lender.

The numbers gave a relief to the investors who were expecting a worse impact of the Second Covid Wave on the small finance lenders. The restrictions on mobility and business during the second wave were less stringent than those during the nationwide lockdown.

The gross advances showed a growth of 31 per cent on year-on-year basis (YoY) to Rs 34,688 crore in the quarter ended on June 30, 2021 from Rs 26,534 crore in the June 2020 quarter. The loans in the March 2021 quarter were Rs 35,356 crore.

Shares of AU Small Finance Bank soared 9 per cent to Rs 1,126 on Tuesday at the time of writing this report. BSE Sensex was trading at 52,960.83, up by 83.83 points or 0.15 per cent higher at the same time.

Disbursements in Q1FY22 were at Rs1,896 crore (including Rs 302 crore of ECLGS disbursements) compared to disbursement of Rs 1,181 crore (including Rs 23 crore of ECLGS disbursements) in Q1FY21.

Total Deposits in the bank were Rs 37,014 crore, as of June 30, 2021, 38 per cent higher than the deposits at Rs 26,734 crore on June 30, previous year. The deposits inched up 3 per cent on quarter-on-quarter basis (QoQ).

The small finance bank has delivered over 32 per cent in the year 2021 so far. The counter has soared over 90 per cent in the last one year.

The CASA Ratio stood at 26 per cent in the June 2021 quarter, compared to Rs 14 per cent in the quarter a year ago. Average cost of funds decreased to 6.3 per cent to 7.2 per cent during the period under review.

The global brokerage firm Morgan Stanley is bullish on AU Small Finance Bank. It has maintained an ‘overweight’ stance on the lender with a target price of Rs 1,150. “The AUM growth for the lender is stable on a YoY basis and down 3 per cent QoQ.” it added.



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Indian bond yields spike to near 4-month highs; crude surge hurts, BFSI News, ET BFSI

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MUMBAI – Indian bond yields jumped on Tuesday as a rally in global crude oil prices raised worries about higher imported inflation, while a selection of papers for this week’s bond buyback by the central bank also disappointed investors.

The most-traded 6.64% 2035 bond was up 6 basis points at 6.79%, while the second-highest traded 5.63% 2026 paper rose 7 bps to 5.83%. Both bonds were trading at levels last seen in mid-March.

The 10-year bond, which is likely to be soon replaced as the benchmark paper, was up 6 bps at 6.15%, its highest since April 16.

HDFC Bank said rising oil prices and lack of liquid papers in this week’s government securities acquisition programme (GSAP) or a form of quantitative easing programme of the Reserve Bank of India, is weighing on bond prices.

“The market was hoping for the inclusion of the 5-year paper in the upcoming debt purchase given the recent devolvement of the paper by the RBI.” HDFC economists wrote.

Underwriters to the auction or the primary dealers had to buy 104.95 billion rupees ($1.41 billion) worth of the 5.63% 2026 bonds at the debt sale last week.

The central bank is scheduled to sell 260 billion rupees worth of bonds on Friday, including 140 billion rupees worth of a new 10-year paper.

RBI announced a buyback of bonds worth 200 billion rupees on Thursday under the GSAP but traders said most securities it has proposed to buy are illiquid and would not necessarily help tame yields and offset the impact of high global crude oil prices.

Oil prices hit some of their highest levels since 2018 after OPEC+ discussions were called off, heightening expectations that supplies will tighten further just as global fuel demand recovers from a COVID-19-induced slump.

India imports more than two-thirds of its oil requirements and higher prices usually translate to higher inflation.

The central bank has voiced to keep rates low to support the economic recovery but rising inflation could force its hand, traders fear.

“Another added pressure for the short end of the curve is the additional borrowing for GST (goods and services tax) compensation shortfall that is likely to be done starting July by selling bonds at shorter tenures (less than 7 years).”

In late May, the government said it will borrow an additional 1.58 trillion rupees to compensate states for their shortfall in revenues.



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Sumitomo Mitsui acquires 75 per cent stake in Fullerton India for $2 billion

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Japan’s Sumitomo Mitsui Financial Group, Inc (SMFG). will acquire 74.9 per cent stake in Fullerton India Credit Company Ltd (FICC) for about $2 billion.

The stake is being acquired from Singapore-based Fullerton Financial Holdings Pte Ltd. and is subject to regulatory approvals. SMFG will eventually acquire 100 per cent of FICC.

The deal also includes Fullerton India Housing Finance Company Ltd., a subsidiary of FICC, with over 23,000 customers across India and operates in 70 locations with over 650 employees.

“This investment brings together SMFG’s Asian push towards consumer and MSME lending, with FICC’s expertise in serving mass-market consumers and MSME customers in India. The transaction reaffirms the strength of FICC’s platform underpinned by best-in-class corporate governance, risk management, prudent liquidity management, agile technology, and advanced analytics,” said a press statement from Fullerton

Jun Ohta, President & Group CEO of SMFG said, “India is one of our focus markets where we believe in its high growth potential and want to build a deeper presence. As a long-term investor, we believe that the FICC platform’s innate strengths of multi-product focus, pan-India distribution, and strong management will enable us to build a comprehensive financial service offering in India.”

SMFG Sumitomo Mitsui Financial Group, Inc. listed on the Tokyo and New York (via ADR) Stock Exchanges and has a market capitalization of approximately $47.4 billion (as of June 30, 2021).

Fullerton Financial Holdings Pte. Ltd.is a wholly-owned independent portfolio company of Singapore-headquartered investment company, Temasek.

Fullerton India Credit Company Ltd. is a diversified NBFC registered in India and a wholly-owned subsidiary of FFH. FICC started its India operations in 2007 and has established a pan India presence – across 600 towns and over 58,000 villages through 629 branches and 13,000 plus employees offering lending products to 2.3 million bankable yet underserved retail and small business borrowers

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Mid And Small Cap Stocks On Which Mutual Funds/FIIs Are Bullish And Have Increased Their Stake In June Quarter

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1. ITI Ltd:

ITI Ltd. also referred as Indian Teleph. Ind. Ltd is a small cap stock with a market capitalization of Rs. 11,347 crore as of June 30, 2021. This PSU enterprise is now catering to newer technologies in the telecommunication space. The clientele of the company includes BSNL, MTNL as well as the defence sector.

Now as there is a push towards Aatmanirbhar mission with government putting curb on imports of these equipments, the prospects of the company have been only improving. Also, the centre is also promoting the company for its different procurements into the area.

Further as the nation forays into 5G network it is enabling its testing by manufacturing 5G enables devices.

Now coming to the FII and MF participation into the scrip, for the June ended quarter, 0.02% stake has been picked by FIIs while MFs have also bought into the company by 0.01% which for both the institutional investors for the previous period ended March 2021 stood at 0 percent.

Nippon India ETF Nifty Midcap 150 was the highest buyer in the stock of ITI.. Other mutual funds that have invested into the stock of ITI include Aditya Birla Sun Life Nifty Midcap 150 Index Fund Regular Growth.

2. Vakrangee:

2. Vakrangee:

This is another small cap company commanding a market cap of Rs. 5649.2 crore as of June 30, 2021 wherein both mutual funds and FIIs have raised their stake. FII and FPI have picked a 0.03% stake taking the total holding by them to 9.71% against the earlier 9.68%. Mutual funds on the other hand have roped in 0.01% stake raising the stake to 0.04% as at the end of June quarter.

Vakrangee is a Mumbai headquartered company offering services in the areas of e-governance, e-commerce, financial, insurance, logistics and banking services to the underserved. The company delivers services via Nextgen Vakrangee Kendras i.e. the One Stop Shop.

3. The Ramco Cements:

3. The Ramco Cements:

This mid cap cement sector company has been bought by FIIs or FPIs taking the total holding to 8.64% from 8.26% as of March 2021. Also, the FPI and FII institutions invested into the stock have also increased from 144 to 149 as of June quarter.

Chennai headquartered cements firm is a flagship company of The Ramco Group. Main product of the company is Portland cement. The company stands at the fifth place in the country when it comes to cement production.

Last the stock of The Ramco Cements has been quoting at a price of Rs.1075.05

4. Aarti Industries:

4. Aarti Industries:

This is a midcap scrip with a market capitalization of Rs. 25,107 crore as of June 30, 2021. FIIs or FPIs have increased the holding in the scrip by a huge quantum of 3.18% taking the total stake to 11.84% as of June 2021.

It is a company into basic materials and engages in the manufacture of speciality chemicals and pharmaceuticals. The company manufactures chemicals that are used in the downstream manufacturing of pharmaceuticals, agrochemicals, polymers, additives, surfactants, pigments and dyes.

Recently the scrip of Aarti Industries has been given an ‘Accumulate’ rating by Geojit for a target price of Rs. 1902. Last the scrip of Aarti Industries traded higher at Rs. 854.05.

5. Alicon Castalloy Ltd:

5. Alicon Castalloy Ltd:

This is a small cap company commanding a market cap of Rs. 655.05 crore. Institutional Investors have increased holdings from 0.17% to 9.68% in Jun 2021 qtr i.e. a change of 9.5%

The company is into manufacturing of aluminium alloy castings. The Company produces parts for the automotive, agricultural equipment, marine, medical devices, locomotive, extreme sports apparatus and power industries.

The scrip of Alicon Castalloy trades at a price of Rs. 706 per share.

GoodReturns.in



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Indian Bank to finance startups in Telangana

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Indian Bank is looking forward to extend financial support to startups in Telangana and is likely to team up with T-Hub, according to its Managing Director and Chief Executive Officer, Padmaja Chunduru.

She was speaking at the formal lunch of ‘Prerana’, the flagship business mentoring programme of Indian Bank to create awareness among micro, small and medium enterprises, in Telangana on Tuesday.

“We have already started startup-financing in various States and are planning to enter into an understanding with T-Hub to do the same in Telangana,” the Indian Bank Chief said.

Prerana initiative

On the Prerana initiative, she said there were many ‘hindrances’ faced by MSMEs in the form of lack of awareness about various schemes of the government/banks, language barriers and lack of market knowledge and updates. The on-line program is intended to bridge this gulf, she said.

Referring to Telangana’s potential in MSMEs, Chunduru said there was huge scope for growth in areas like Pochampalli, Siricilla where there are hubs of weavers and other artisans.

After formally launching the scheme, KT Rama Rao, Minister for IT & Municipal Administration, Government of Telangana said the Telangana State Finance Corporation was ready to collaborate with Indian Bank to evolve some innovative mechanism to help small businessmen in the areas of providing collateral.

He also requested Indian Bank to increase lending to priority sectors especially to weaker sections and MSMEs apart from farmers.

Also read: LIC, SBI Life, Canara Bank pick up stakes in Indian Bank under QIP

The Minister had also requested Chunduru to join the board of We-Hub which has been set up by the State government to empower women.

Imran Amin Siddiqui, Executive Director at Indian Bank said despite contributing 30 per cent to the Gross Domestic Product (GDP) they were unable to derive many benefits of schemes due to lack of awareness and Prerana initiative will address the issue.

The Prerana initiative was first launched by the bank in October last year and has already been launched by the bank in Tamilnadu, Maharashtra, among other States. Going forward, Indian Bank plans to expand the program.

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Reserve Bank of India – Tenders

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(RBI/Mumbai/Others/30/20-21/ET/794 Dated June 10, 2021)

Reserve Bank of India, Protocol and Security Establishment, Mezzanine Floor, Mumbai Office, Shahid Bhagat Singh Marg, Fort, Mumbai had invited e-tender for “Supply of Bio-Compostable Bin liners of size (19”x21” & 30”x37”) to the RBI’s various Offices and Residential colonies in Mumbai” on dated June 10, 2021.

The modifications / amendments to the tender are enclosed. The Bidders are requested to submit the bid after taking into account the modifications given in corrigendum.

Regional Director
Reserve Bank of India
Mumbai Regional Office

CORRIGENDUM

Tender for Supply of Bio-Compostable Bin liners of size (19”x21” & 30”x37”) to the RBI’s various Offices and Residential colonies in Mumbai

(RBI/Mumbai/Others/30/20-21/ET/794 Dated June 10, 2021)

I) Section II (1) (1.2) on Page no.13:

EMD Amount:

Please refer the condition (Section II (1) (1.2) on Page no.13 in this regard Bank modified the condition as below:

The tenderers should submit their proposal, as per the instructions regarding E-Tender, along with all supporting documents complete in all respects on or before 05:00 PM of 09-07-2021. Tenderers shall submit e-tender proposal along with refundable EMD of ₹ 84,000/- (Rupees Eighty Four Thousand only) complete in all respect as per the prescribed format.

Intending tenderer has to deposit Earnest Money Deposit (EMD) of Rs. 84,000/- (Rupees Eighty Four Thousand only) 2% of the estimated cost of 42,00,000/- (Rupees Forty two Lakhs only) exclusive of GST through NEFT in favour of Reserve Bank of India, Mumbai (P&SE) in the A/c No.: 04869229917 & IFS Code: RBIS0MBPA04 or furnish the Bank Guarantee in respect of the said amount. The Bank Guarantee (from SCB) submitted towards Earnest Money deposit has to be valid for the validity period of the tender plus additional 90 days (on or before the date mentioned in NIT). Tenders without EMD will not be accepted under any circumstances. EMD shall be forfeited if the bidder withdraws his bid during the period of tender validity or fails to execute the contract upon award of work and such bidder shall also be liable to be debarred from participating in any future tender or undertaking any work in the Bank for a period of two years. However, before debarring such bidder, the Bank shall give notice and consider the reply, if any, given by the bidder. EMD will not carry any interest. EMD will be refunded to the unsuccessful bidders within 10 working days of the award of the contract. In case of the successful bidder, the EMD will be refunded after submission of security deposit in the form of a valid bank guarantee and execution of the contract. Documentary evidence in support of remittance shall be submitted in sealed cover addressed to The Regional Director, Reserve Bank of India, Protocol and Security Establishment, Mumbai- 400 001 so as to reach P&SE Office on or before 09/07/2021 up to 2:00 PM super scribing as “Supply of Bio-Compostable Bin liners of size (19”x21” & 30”x37”) to the RBI’s various Offices and Residential colonies in Mumbai.”

II) Section II, (1) (1.15) (ii) on Page no.16

Annual Turnover:

Please refer the condition (Section II, (1) (1.15) (ii) on Page no.16) in this regard Bank modified the condition as below:

Tenderers should have minimum average annual turnover of Rs. 42 lakhs during the last 3 financial years supported by audited financial statements

III) Section VIII, (a) (II) on Page no.41

Annual Turnover Evaluation Marks:

Please refer the condition (Section VIII, (a) (II) on Page no.41) in this regard Bank modified the condition as below:

ANNUAL TURNOVER (Average of last three financial years) as on March 31, 2021- Max 30 Marks

a) More than Rs. 55 Lakhs – 30

b) Above Rs. 45 Lakhs and up to Rs. 55 Lakhs – 20

c) Rs. 42 Lakhs or more and up to Rs. 45 Lakhs – 15

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Japan’s SMFG nears $2-billion deal for Fullerton India

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Sumitomo Mitsui Financial Group Inc said it will buy a 74.9 per cent stake in Fullerton India Credit Co, marking the first entry into India’s retail financial business by a Japanese bank.

Japan’s second-largest lender will eventually acquire the rest of the Indian credit firm from Fullerton Financial Holdings Pte at a later stage, it said in a statement Tuesday, without providing terms of the transaction.

Citigroup to exit consumer banking operations in India, 12 other markets

ICICI Bank signs MoU with MUFG Bank

Bloomberg News earlier reported that Sumitomo Mitsui would pay about 220 billion yen ($2 billion) for the holding, according to people familiar with the matter who asked not to be identified.

Fullerton Financial is a unit of Singapore’s state investment fund Temasek Holdings Pte.

Faced with weak growth prospects at home, Sumitomo Mitsui has been allocating resources to Asia’s emerging markets in recent years. The bank took control of Indonesian lender PT Bank Tabungan Pensiunan Nasional in 2019 after acquiring a minority stake earlier. Sumitomo Mitsui is looking for targets in Vietnam, Philippines and India, Chief Executive Officer Jun Ohta said in an interview in December.

Sumitomo Mitsui in April agreed to buy a 49 per cent stake in Vietnamese consumer lender FE Credit. Last month, the bank said it will buy a 4.99 per cent stake in Rizal Commercial Banking Corp of the Philippines for 4.48 billion pesos ($91 million).

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