Month: August 2021

Canara Bank allots over 16.73 cr shares in ₹2,500 cr QIP

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State-run Canara Bank on Tuesday said it has approved allotment of over 16.73 crore shares in the ₹2,500 crore qualified institutions placement (QIP) that closed a day earlier.

The QIP opened on August 17 and closed on August 23, 2021.

The sub-committee of the board, capital planning process of the Board of Directors of the bank, at its meeting held on August 24, 2021, approved the allotment of 16,73,92,032 equity shares to eligible qualified institutional buyers at an issue price of ₹149.35 per equity share, aggregating up to ₹2,500 crore, Canara Bank said in a regulatory filing.

With this, the paid-up equity share capital of the bank stands increased to ₹1,814.13 crore from ₹1,646.74 crore, it said.

A total of seven investors have been allotted more than 5 per cent of the equity offered in the QIP issue, said the Bengaluru-based lender.

LIC subscribed to 15.91 per cent; BNP Paribas Arbitrage 12.55 per cent; Societe Generale 7.97 per cent; Indian Bank and ICICI Prudential Life Insurance – 6.37 per cent each.

Morgan Stanley Asia (Singapore) Pte-ODI bought 6.16 per cent of the shares issued in QIP and Volrado Venture Partners Fund II 6.05 per cent.

Canara Bank stock traded at ₹154.80 apiece on BSE, up by 1.31 per cent from its previous close.

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High attrition, provisioning to weigh on Ujjivan Small Finance Bank after MD’s exit, BFSI News, ET BFSI

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High provisions and uncertainty over the appointment of a new managing director will weigh on the valuation of Ujjivan Small Finance Bank in the near future following the abrupt exit of current MD Nitin Chugh, according to analysts.

The stock has dropped 31% in the last one month and is currently trading at around Rs 19,

However, during the conference call with analysts, the management sounded confident about tackling the issue, with the help of new board members, appointment of a special officer and interim CEO for better coordination between the board and business teams, according to analysts.

Asset quality issues

Chugh’s resignation comes at a time when the company is grappling with asset quality problems. The CFO had also resigned a month ago. Ujjivan SFB could see more near-term correction, with a KMP resigning. Compared to listed peers, USFB saw more stress formation, as indicated by the spike in gross non-performing asset coupled with existing and likely restructuring. This may suggest that asset quality pain for Ujjivan SFB has not ended yet and the bank could see more balance sheet stress emanating. During more stable times, overall gross stress was 1% of loans that surged to 15.3% in Q1FY22 in wake of the pandemic, as GNPA further escalated to 9.8% with restructuring being at 5.5% of loans.

Chugh’s tenure

When he assumed the office of the MD & CEO in December 2019 Ujjivan faced four major challenges, — hold-co dilution, opex control, retail deposit build-up, and improving secured loan share. The bank was on path to sort three of these four issues. On the hold-co dilution issue, the RBI via letter dated 9th July 2021 permitted SFBs and holding companies to apply for reverse merger, which signalled that UFSL could be reverse merged with Ujjivan SFB. During Chugh’s tenure, the bank did well on deposits, as CASA ratio consistently increased from 11.6% in Q3FY20 to 20.3% in Q1FY22. Opex was also controlled, with opex to assets in FY21 seeing a sharp reduction to 6.2% from 8.2% in FY20. While transition towards a secured loan profile was progressing, with secured share rising from 21% to 32% on a YoY basis in Q1FY22, material exposure (estimated 80% of loans) to MFI and secured SME severely affected asset quality.

Asset quality challenges for Ujjivan SFB

Collection efficiency (CE) dropped sharply in May/June 2021 to 72%/78% which improved to 93% in July 2021. In June, collections in the South/East were 63%/78% compared to 92%/83% in North/West. Under OTR-1, CE that was 75% dropped to 33%/37% in May 2021/Jun’21, which improved to 50% in July 2021. 150,000 customers, who were NPAs as of June 2021 started paying in July and saw overall upgrades of Rs 300 crore excluding restructuring. Restructured pool stood at Rs 780 crore (5.5% of loans versus 5.8% last quarter) and further Rs 500 crore entered one-time restructuring (OTR) in July 2021. Additionally, Rs 300 crore could enter OTR by September 2021. However, total restructuring could be somewhat less than Rs 1,600 crore, as there could be an overlap between OTR-1 and OTR-2. Gross stress as at Q1FY22 was 15%, with a cover of 60% (was 13% last quarter, with a 50% cover).

Valuation, view and risks

“Resignation of a key managerial personnel could lead to near-term pressure until someone is appointed, though stress formation is partly priced in. We had downgraded FY22E earnings by 76% due to loss in Q1FY22 and likely provisions in FY22. MFI/MSE loan exposure at 80% is affecting USFB, leading to stress build-up and protracted recoveries,” Centrum Broking said in a report.



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Reserve Bank of India – Press Releases

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(Amount in ₹ crore, Rate in Per cent)
  Volume
(One Leg)		 Weighted
Average Rate 		Range
A. Overnight Segment (I+II+III+IV) 438,320.56 3.13 0.25-3.40
     I. Call Money 8,560.00 3.22 1.95-3.40
     II. Triparty Repo 340,801.15 3.12 2.91-3.15
     III. Market Repo 88,959.41 3.15 0.25-3.30
     IV. Repo in Corporate Bond 0.00   –
B. Term Segment      
     I. Notice Money** 550.80 3.16 2.50-3.40
     II. Term Money@@ 284.50 – 3.10-3.47
     III. Triparty Repo 0.00 – –
     IV. Market Repo 195.00 2.74 2.50-3.00
     V. Repo in Corporate Bond 80.00 5.35 5.35-5.35
  Auction Date Tenor (Days) Maturity Date Amount Current Rate /
Cut off Rate
C. Liquidity Adjustment Facility (LAF) & Marginal Standing Facility (MSF)
I. Today’s Operations
1. Fixed Rate          
     (i) Repo          
     (ii) Reverse Repo Mon, 23/08/2021 1 Tue, 24/08/2021 558,567.00 3.35
     (iii) Special Reverse Repo~          
     (iv) Special Reverse Repoψ          
2. Variable Rate&          
  (I) Main Operation          
     (a) Reverse Repo          
  (II) Fine Tuning Operations          
     (a) Repo          
     (b) Reverse Repo          
3. MSF Mon, 23/08/2021 1 Tue, 24/08/2021 0.00 4.25
4. Special Long-Term Repo Operations (SLTRO) for Small Finance Banks (SFBs)£          
5. Net liquidity injected from today’s operations
[injection (+)/absorption (-)]*		       -558,567.00  
II. Outstanding Operations
1. Fixed Rate          
     (i) Repo          
     (ii) Reverse Repo          
     (iii) Special Reverse Repo~ Fri, 13/08/2021 14 Fri, 27/08/2021 4,481.00 3.75
     (iv) Special Reverse Repoψ Fri, 13/08/2021 14 Fri, 27/08/2021 352.00 3.75
2. Variable Rate&          
  (I) Main Operation          
     (a) Reverse Repo Fri, 13/08/2021 14 Fri, 27/08/2021 250,029.00 3.43
  (II) Fine Tuning Operations          
     (a) Repo          
     (b) Reverse Repo          
3. MSF          
4. Long-Term Repo Operations# Mon, 17/02/2020 1095 Thu, 16/02/2023 499.00 5.15
  Mon, 02/03/2020 1094 Wed, 01/03/2023 253.00 5.15
  Mon, 09/03/2020 1093 Tue, 07/03/2023 484.00 5.15
  Wed, 18/03/2020 1094 Fri, 17/03/2023 294.00 5.15
5. Targeted Long Term Repo Operations^ Fri, 27/03/2020 1092 Fri, 24/03/2023 12,236.00 4.40
  Fri, 03/04/2020 1095 Mon, 03/04/2023 16,925.00 4.40
  Thu, 09/04/2020 1093 Fri, 07/04/2023 18,042.00 4.40
  Fri, 17/04/2020 1091 Thu, 13/04/2023 20,399.00 4.40
6. Targeted Long Term Repo Operations 2.0^ Thu, 23/04/2020 1093 Fri, 21/04/2023 7,950.00 4.40
7. On Tap Targeted Long Term Repo Operations€ Mon, 22/03/2021 1095 Thu, 21/03/2024 5,000.00 4.00
  Mon, 14/06/2021 1096 Fri, 14/06/2024 320.00 4.00
8. Special Long-Term Repo Operations (SLTRO) for Small Finance Banks (SFBs)£ Mon, 17/05/2021 1095 Thu, 16/05/2024 400.00 4.00
  Tue, 15/06/2021 1095 Fri, 14/06/2024 490.00 4.00
  Thu, 15/07/2021 1093 Fri, 12/07/2024 750.00 4.00
  Tue, 17/08/2021 1095 Fri, 16/08/2024 250.00 4.00
D. Standing Liquidity Facility (SLF) Availed from RBI$       23,295.80  
E. Net liquidity injected from outstanding operations [injection (+)/absorption (-)]*     -147,274.20  
F. Net liquidity injected (outstanding including today’s operations) [injection (+)/absorption (-)]*     -705,841.20  
G. Cash Reserves Position of Scheduled Commercial Banks
     (i) Cash balances with RBI as on 23/08/2021 601,867.28  
     (ii) Average daily cash reserve requirement for the fortnight ending 27/08/2021 627,870.00  
H. Government of India Surplus Cash Balance Reckoned for Auction as on¥ 23/08/2021 0.00  
I. Net durable liquidity [surplus (+)/deficit (-)] as on 30/07/2021 1,095,060.00  
@ Based on Reserve Bank of India (RBI) / Clearing Corporation of India Limited (CCIL).
– Not Applicable / No Transaction.
** Relates to uncollateralized transactions of 2 to 14 days tenor.
@@ Relates to uncollateralized transactions of 15 days to one year tenor.
$ Includes refinance facilities extended by RBI.
& As per the Press Release No. 2019-2020/1900 dated February 06, 2020.
* Net liquidity is calculated as Repo+MSF+SLF-Reverse Repo.
# As per the Press Release No. 2020-2021/287 dated September 04, 2020.
^ As per the Press Release No. 2020-2021/605 dated November 06, 2020.
€ As per the Press Release No. 2020-2021/520 dated October 21, 2020, Press Release No. 2020-2021/763 dated December 11, 2020 and Press Release No. 2020-2021/1057 dated February 05, 2021.
¥ As per the Press Release No. 2014-2015/1971 dated March 19, 2015.
£ As per the Press Release No. 2021-2022/181 dated May 07, 2021.
~ As per the Press Release No. 2021-2022/177 dated May 07, 2021.
ψ As per the Press Release No. 2021-2022/323 dated June 04, 2021.
Ajit Prasad
Director   
Press Release: 2021-2022/733

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SBI report, BFSI News, ET BFSI

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Mumbai, Aug 24 (PTI) The country’s gross domestic product (GDP) is expected to grow at around 18.5 per cent with an upward bias in the first quarter of the current financial year, according to SBI research report Ecowrap. This estimate is lower than the Reserve Bank of India’s GDP growth projection of 21.4 per cent for the April-June quarter.

“Based on our ‘Nowcasting’ model, the forecasted GDP growth for Q1 FY22 would be around 18.5 per cent (with upward bias),” the report said.

Higher growth in the second quarter of 2022, or Q1 FY22 is mainly on account of a low base.

State Bank of India has developed the ‘Nowcasting Model’ with 41 high-frequency indicators associated with industrial activity, service activity, and the global economy.

The report expects gross value added (GVA) to be at 15 per cent in Q1FY22.

The corporate results announced so far indicate that there is a substantial recovery in corporate GVA EBIDTA (earnings before interest, taxes, depreciation, and amortisation) + employee cost) in Q1 FY22, it said.

The report said the corporate GVA of 4,069 companies registered a growth of 28.4 per cent in Q1 FY22. However, this is lower than growth in Q4 FY21, thereby corroborating the lower GDP estimate than what was thought earlier, it said.

The report further said it is globally noted that lower mobility leads to lower GDP and higher mobility to higher GDP, but the response is asymmetric.

With the decline in mobility, the economic activity declines and thus GDP growth, however, with an increase in mobility the GDP growth does not increase in the same proportion, it said.

“The relationship between the two has become weaker as can be seen in Q1 FY22 when mobility has declined, however, GDP growth is high and positive. But higher y-o-y growth is mainly on account of the base effect,” the report said.

Meanwhile, the business activity index based on ultrahigh-frequency indicators show a further increase in August 2021, with the latest reading for the week ended August 16, 2021, at 103.3, it added.

RTO (regional transport office) collection, electricity consumption along with mobility indicators have revived in Q2 FY22, indicating positive momentum in economic activity going forward, the report said.



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IDBI Bank Revises Interest Rates On FD: Check New Rates Here

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Investment

oi-Vipul Das

|

Industrial Development Bank of India (IDBI) a leading private sector bank has revised interest rates on fixed deposits with effect from 16th August 2021. IDBI Bank offers two types of fixed deposit schemes which are Suvidha Fixed Deposit and Tax Saving Fixed Deposit. Both these deposits allow a minimum deposit amount of Rs 10,000, auto-renewal facility, monthly, quarterly, and annual income plans, 0.50% additional interest rate for senior citizens, overdraft facility, sweep in, and so on. Under the Suvidha Fixed Deposit scheme, one can choose a tenure ranging from 7 days to 10 years whereas in the Tax Saving Fixed Deposit scheme one is required to stay invested for a lock-in period of 5 years to get tax benefits under section 80C. Apart from all these factors here is all you need to know about the most recent interest rates on fixed deposits of the bank.

IDBI Bank Regular Fixed Deposit Interest Rates

IDBI Bank Regular Fixed Deposit Interest Rates

IDBI Bank is currently offering a 2.70 percent interest rate on FDs maturing in 7 to 30 days after the latest adjustment. The bank is providing a 2.80% interest rate on term deposits with a maturity period of 31-45 days. IDBI Bank offers interest rates of 3.00 percent and 3.50 percent on deposits maturing in 46 days to 90 days and 91-6 months, respectively. The bank offers 4.30 percent on deposits maturing in 6 months to less than a year.

The bank is offering a 5.05 percent interest rate on FDs with a one-year maturity period. The bank is currently offering 5.15 percent and 5.20 percent interest rates on term deposits maturing in one to two years and two to less than three years. Interest rates for FDs maturing in more than 3 years but less than 5 years will be 5.40 percent. IDBI Bank is giving a 5.25 percent interest rate on deposits maturing in 5 to less than 10 years, and a 4.80 percent interest rate on deposits maturing in 10 to 20 years to the general public.

Maturity Slab Interest Rates In % For General Customers
0-6 Days NA
07-14 days 2.70
15-30 days 2.70
31-45 days 2.80
46- 60 days 3.00
61-90 days 3.00
91-6 months 3.50
6 months 1 day to 270 days 4.30
271 days upto 4.30
1 year 5.05
> 1 year – 2 years 5.15
>2 years to 5.20
3 years to to 5.40
5 years (Tax Saving FD) 5.25
> 5 years – 7 years 5.25
>7 years – 10 years 5.25
>10 years – 20 years 4.80
Source: Bank Website, Retail Term Deposits (

IDBI Bank Fixed Deposit Interest Rates For Senior Citizens

IDBI Bank Fixed Deposit Interest Rates For Senior Citizens

For a deposit amount of less than Rs 2 Cr, senior citizens will continue to get an additional interest rate of 0.50% respectively. Here are the latest interest rates on fixed deposits of IDBI Bank for senior citizens.

Maturity Slab Interest Rates In % For Senior Citizens
0-6 Days NA
07-14 days 3.20
15-30 days 3.20
31-45 days 3.30
46- 60 days 3.50
61-90 days 3.50
91-6 months 4.00
6 months 1 day to 270 days 4.80
271 days upto 4.80
1 year 5.55
> 1 year – 2 years 5.65
>2 years to 5.70
3 years to 5.90
5 years (Tax Saving FD) 5.75
> 5 years – 7 years 5.75
>7 years – 10 years 5.75
>10 years – 20 years 5.30
Source: Bank Website, Retail Term Deposits (

IDBI Bank Bulk Deposit Rates

IDBI Bank Bulk Deposit Rates

Here are the bank’s updated interest rates, effective April 16, 2021, for Bulk Deposits of Rs. 2 crore and above, up to Rs. 5 crore.

Maturity Slabs Rate of Interest (% p.a.)
0-6 Days NA
07-14 days 2.50
15-30 days 2.50
31-45 days 2.75
46- 60 days 2.75
61-90 days 2.90
91-6 months 2.90
6 months 1 day to 270 days 3.00
271 days upto 3.10
1 year 3.50
> 1 year – 2 years 3.50
>2 years to 3.75
3 years to 3.75
5 years 3.75
> 5 years – 7 years 3.75
>7 years – 10 years 3.75
Source: Bank Website

Story first published: Tuesday, August 24, 2021, 13:12 [IST]



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RBI panel, BFSI News, ET BFSI

Banking & Finance

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Well governed large urban cooperative banks (UCBs) which meet parameters should be allowed to function along the lines of small finance banks (SFBs) and universal banks, a Reserve Bank of India (RBI)-appointed expert panel has suggested.

The four-tiered structure

A Reserve Bank-appointed committee has suggested a four-tier structure for UCBs depending upon the deposits and prescribed different capital adequacy and regulatory norms for them based on their sizes.

The RBI committee said that UCBs can be split into four categories — Tier-1 with deposits up to Rs 100 crore; Tier-2 with deposits between Rs 100-Rs 1,000 crore, Tier-3 with deposits between Rs 1,000 crore to Rs 10,000 and Tier-4 with deposits of over Rs 10,000 crore.

It suggested that the minimum Capital to Risk-Weighted Assets Ratio (CRAR) for them could vary from 9 per cent to 15 per cent and for Tier-4 UCBs the Basel III prescribed norms.

The panel said tier-3 urban cooperative banks with deposits of Rs 1,000 crore to Rs 10,000 crore must function like SFBs if they meet a capital adequacy ratio of 15%. The loan portfolio of tier-3 urban cooperative banks shall conform to the stipulations made for SFBs, it added.

Tier-4 UCBs with deposits of over Rs 10,000 crore should be allowed to function like universal banks if they meet the 9% capital adequacy ratio requirement, leverage ratio and has a fit and proper board and chief executive. Such UCBs can be given operational freedom for branch expansion and authorized dealer licence on a par with universal banks.

Smaller UCBs with deposits of up to ₹100 crore will be categorized as tier-1 UCBs and those with deposits of ₹100-1,000 crore will be categorized as tier-2 UCBs.

The RBI panel has also prescribed separate ceilings for home loans, loan against gold ornaments and unsecured loans for different categories of UCBs.

In February, the RBI had the constitution of the Expert Committee on Primary (Urban) Co-operative Banks under the chairmanship of N S Vishwanathan, former RBI Deputy Governor.

Mergers of UCBs

The committee emphasised that all-inclusive directions (AID) should be treated on a par with moratorium under Section 45 of the Banking Regulation Act.

If AID is imposed, a bank should not continue thereunder beyond the time permitted to keep a bank under moratorium — three months extendable by a maximum of another three months.

Currently about 50 UCBs are under AID, causing lot of hardship to depositors as deposit withdrawals are capped.

On consolidation of UCBs, the panel said that RBI should be largely neutral to voluntary consolidation except where it is suggested as a supervisory action.

“However, the RBI should not hesitate to use the route of mandatory merger to resolve UCBs that do not meet the prudential requirements after giving them an opportunity to come up with voluntary solutions,” it said.

The minimum capital stipulation provides an embedded size to a UCB.

The committee said that under the Banking Regulation (BR) Act, the RBI can prepare scheme of compulsory amalgamation or reconstruction of UCBs, like banking companies.

This may be resorted to when the required voluntary actions are not forthcoming or leading to desired results.

The panel further said Supervisory Action Framework (SAF) should follow a twin-indicator approach — it should consider only asset quality and capital measured through NNPA and CRAR — instead of triple indicators at present. The objective of the SAF should be to find a time-bound remedy to the financial stress of a bank.

If a UCB remains under more stringent stages of SAF for a prolonged period, it may have an adverse effect on its operations and may further erode its financial position, it said.

The RBI may also consider superseding the board if the bank fails to submit a merger/conversion proposal within the prescribed timeframe and take steps to avoid undue flight of deposits once the news becomes public. A Stage III UCB is one where its capital to risk-weighted assets ratio/CRAR is less than 4.5 per cent and/or net non-performing assets/NNPAs is greater than 12 per cent.

Housing loans

On housing loans, the panel said the maximum limit on housing loans may be prescribed as a percentage of Tier 1 capital, subject to RBI-prescribed monetary ceiling for Tier 1 UCBs (but higher than the present ceiling) and respective board of directors-approved ceiling for Tier 2 UCBs.

For Tier 2 UCBs, the risk weight on housing loans may be prescribed based on size of the loan and loan-to-value (LTV) ratio, in line with SCBs.

The panel has also made recommendations regarding loan against gold ornaments with bullet repayment option.

It also said that umbrella organisation (UO) is expected to play a crucial role in the strengthening of the sector.

For that, it must be a financially strong organisation with adequate capital and a viable business plan. The minimum capital for the UO should be Rs 300 crore with CRAR and regulatory framework akin to the largest segment of NBFCs, the panel said.

Alos, in the long run, the UO may take up the role of a Self-Regulatory Organisation (SRO) for smaller UCBs.

The report said there were two broad sources of constraints because of which the sector has underperformed.

The first set of factors are internal to the sector. Many UCBs are small and do not have either the capability – financial or human resources – and/or possibly inclination to provide technology enabled financial services.

The second set of constraints are external to the banks. These emanate from the rather restrictive regulatory environment under which they have had to operate.

There were suggestions that licensing of new UCBs should be immediately opened up. There are over 1,500 UCBs already. The committee has suggested that the existing UCBs may be allowed to expand their footprint.



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Rupee rises 9 paise against US dollar in early trade, BFSI News, ET BFSI

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The rupee appreciated 9 paise to 74.13 against the US dollar in opening trade on Tuesday, following a positive trend in domestic equities. However, flight of foreign capital, a strong dollar overseas and higher crude prices restrained the rupee to gain momentum, forex dealers said.

At the interbank foreign exchange, the rupee opened strong at 74.12 against the dollar, then it weakened slightly to quote 74.13, a rise of 9 paise over its previous close.

On Monday, the rupee had settled at 74.22 against the US dollar.

On the domestic equity market front, BSE Sensex was trading 45.14 points or 0.08 per cent higher at 55,600.93, while the broader NSE Nifty rose 19.65 points or 0.12 per cent to 16,516.10.

The dollar index, which gauges the greenback’s strength against a basket of six currencies, rose 0.08 per cent to 93.04.

Global oil benchmark Brent crude futures surged 0.33 per cent to USD 68.98 per barrel.

Foreign institutional investors remained net sellers in the capital market on Friday as they offloaded shares worth Rs 1,363.36 crore, as per exchange data.

Meanwhile, Finance Minister Nirmala Sitharaman on Monday unveiled an ambitious Rs 6 lakh crore National Monetisation Pipeline (NMP) that included unlocking value by involving private companies across infrastructure sectors — from passenger trains and railway stations to airports, roads and stadiums.

“A four-year National Monetization Pipeline (NMP) to monetize Rs 6 trillion of brownfield infrastructure assets across sectors will definitely boost investors’ confidence by providing sufficient clarity on the number, size and type of assets that would be made available in the market,” Abhaya Agarwal, Partner, Infrastructure Practice, EY India, said.



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MSME ministry to support local manufacturing of toys, BFSI News, ET BFSI

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Trichy: Aimed at encouraging production of toys locally, the development institute of Micro, Small and Medium Enterprises (MSME-DI) has reached out to the MSMEs associations in Trichy with financial and technical support. Under the design scheme, the interested MSMEs will be guided to master additive manufacturing (production using 3D printers) and reverse-engineering practices to design and produce even complex toys.

As constraints in designing and mass production of components were cited as the disadvantages of MSMEs in manufacturing toys, the Union MSME ministry has formulated the design scheme to offer expert advice and cost-effective solutions. Under the scheme, the National Institute of Technology (NIT) across the country will serve as the implementing agency and will offer technical support for the MSMEs to produce toys on a large-scale. “Subsidy for technical and machinery upgradation for producing toys will be provided by the Union ministry. NIT-Trichy will serve as the implementing agency to support local MSMEs,” S Dharmaselvan, joint director, MSME DI, said.

Cuddalore, Thanjavur, Coimbatore, Dharmapuri and Krishnagiri districts that already have toy manufacturing units can focus on the design scheme, while districts such as Trichy that have a robust MSME presence has opportunities for the existing MSMEs to diversify their presence using technical support from the educational institutes in the region.

“Prospects are high for the Trichy-based MSMEs to manufacture toys made of metal and plastic materials. We are planning a series of sensitisation drives involving the MSME department to encourage the MSMEs to make toys,” N Kanagasabapathy, chairman, Trichy Trade Centre, said. The local production of toys will also reduce the cost of the products that are being imported so far. Toy tricycle has been identified as one of the viable products to design and fabricate in Trichy. The price of locally made toys will be 40%-50% lower than the imported toys, MSMEs said.

The micro and small industries can avail 60% to 70% of the design intervention cost as subsidy. Financial support will be paid in three different stages till successful completion of the design.



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HDFC Bank will issue 3 lakh cards a month, regain lost ground, BFSI News, ET BFSI

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MUMBAI: HDFC Bank on Monday unveiled its plans to regain the market share it lost in credit cards during an eight-month ban on new issues.

The bank said that it will issue three lakh cards a month — its monthly run rate before the ban — for the next two to three quarters, following which it will scale up to five lakh cards a month.

Outlining the plans, the bank’s group head for payments & consumer finance, digital banking and IT, Parag Rao, said, “In the next three to four quarters, we will regain all our lost market share. The bank has lost close to 2% as rivals like ICICI Bank, Axis Bank and SBI Card swooped in to fill the demand.”

According to Rao, the four-pronged strategy would be to tweak the products, sell more cards to its six-crore customer base, add more partners like fintech companies, telecom, hospitality and pharma companies. It has also revamped the digital process to allow more do-it-yourself features to customers on the bank’s app.

Rao said that despite the embargo from the RBI, the bank managed to scale up spend volumes by 60% year-on-year during the first quarter.

“Our card spend is on an average one and a half times that of the industry,” said Rao. He said in the eight months the bank has been busy analysing industry trends and customer behaviour and now planned to put them to work.

“During the pandemic, we have seen cards being used for low-value transactions as well. In the past, lower credit limits resulted in inactive cards. We are now seeing active users voluntarily opting for lower limits,” Rao added.

HDFC Bank’s outstanding credit cards has declined to 1.48 crore as of June 2021 from 1.53 crore in November 2020 as a result of the ban. The same for ICICI Bank increased to 1.10 crore from 97 lakh, and SBI Card had its number increase to 1.20 crore in June 2021 from 1.12 crore in November 2020.

In a statement, the bank said that it has 20 new partnerships lined up for the next 6-9 months, including co-branded offerings. Rao said while the bank lost market share in terms of number of active cards, it has been able to retain its share by overall spending courtesy specific initiatives to prod customers.



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Buy This Pharma Stock For 23% Gains, Says Motilal Oswal

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Investment

oi-Sunil Fernandes

|

Broking firm, Motilal Oswal is bullish on the stock of Cadila Heatlhcare for 23% returns from the current levels of Rs 541. The firm has set a target price of Rs 670, thus giving potential returns of 23% from the current levels.

Vaccine opportunity for Cadila Healthcare

Cadila Healthcare has received emergency use authorization (EUA) for its plasmid DNA COVID- 19 vaccine ZyCoV-D. The latter is the first COVID-19 vaccine approved in India for adolescents in the 12-18 years age group.

“The management expects to start supplying the vaccine in India from Oct’21.
Based on our conservative estimates, we expect CDH to ramp-up production to
40 million doses from Oct’21. We expect a 75:25 split between the government and
private channel and a blended price of Rs 320 per dose for FY22,” Motilal Oswal Institutional Equities has said.

Cadila Healthcare expects to begin supplies of 100-120m doses of ZyCoV-D per annum starting mid-Sep’21. It is in discussions with the Government of India (GoI) with regard to its pricing and supply.

Cadila Healthcare is the only company manufacturing the drug substance for its vaccine. “Demand for the vaccine would be driven by requirement of an additional booster dose of other vaccines, scope for improvement in immunogenicity, and ability to protect from new COVID-19 variants. The management expects monthly sales of Rs 2-2.5 billion from Oct’21, which can be scaled up to a run-rate of Rs 5 billion per month. It has a marketing plan in place to drive demand through pediatricians/state government,” Motilal Oswal Institutional Equities has said in its report.

Valuation and view on Cadila Healthcare stock

“We arrive at an NPV of Rs 12 per share for the opportunity arising from the COVID-19 vaccine. We continue to value Cadila Healthcare base business at 25 times its 12-month forward earnings to arrive at our target price of Rs 658. We arrive at a target price of Rs 670, including the vaccine opportunity and maintain our Buy rating on the stock,” the brokerage has said.

Buy This Pharma Stock For 23% Gains, Says Motilal Oswal

Disclaimer

Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution. Greynium Information Technologies, the author, and the brokerage houses are not liable for any losses caused as a result of decisions based on the article. The above article is for informational purposes only and is picked from the brokerage report of Sharekhan. Be careful while investing as the Sensex has now crossed 55,500 points. Investors can invest small amounts and avoid putting lumpsum.

Story first published: Tuesday, August 24, 2021, 10:36 [IST]



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