Month: September 2021

SBI Hits Fresh Life Time High: What’s The Next Short Term Target For The Scrip?

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Investment

oi-Roshni Agarwal

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State Bank of India in line with the breakout on the Nifty Bank has hit a fresh life time high of Rs. 471.9 per share. As per experts, the current run in the SBI stock is owing to the approval of Rs. 36,000 crore guarantee by the government for receipts issued by the NARCL or National Asset Reconstruction Company as an element of the bad loan resolution plan. The short term target for the scrip is Rs 500 per share.

SBI Hits Fresh Life Time High: What's The Next Short Term Target For The Scrip?

SBI Hits Fresh Life Time High: What’s The Next Short Term Target For The Scrip?

Analyst opinion on SBI stock:

“Financials of SBI is already strong and after the announcement of Government of India’s (GoI’s) guarantee for security receipts issued by NARCL, SBI is going to emerge major beneficiary of this GoI move. This rally should be seen in the wake of this bad bank announcement made by the GoI yesterday and it will have long-term impact on the bank. Positional buyers can buy SBI shares for long-term once there is a dip in this counter”, said Head of Research at Profitmart securities.

“SBI hits its fresh all-time high along with Bank Nifty after recent developments of relief package for telecom and bad bank announcement. The overall outlook is very bullish for SBI as it is the strongest bank in the PSU space whereas it has better fundamentals compared to most of the private banks. It is trading at 1.5 P/B, which is very attractive as compared to big private banks like HDFC and Kotak Mahindra Bank. Investors are advised to stick with SBI in the PSU basket to create good wealth as the outlook is looking very bullish for this bank on the back of significant improvement in asset quality, strong NII growth, and value unlocking through its subsidiaries”, iterated Head of Research at Swastika Investmart Ltd.

For buying the scrip, positional buyers can enter the scrip at Rs. 460 as the huge profit booking in the counter is expected, and keep on accumulating the scrip till it is above Rs. 440. The stock is seen to scale to Rs. 500 in 3 months time, nevertheless you should place stop loss at Rs. 440.

Charts indicate that after a consolidation spanning nearly 10 years and the pattern depicted is similar to 2003 when then the stock moved 10 times in the next 5 years.

GoodReturns.in



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Top 3 Banks Offering The Cheapest Interest Rates On Home Loan In 2021

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State Bank of India

State Bank of India (SBI) would impose 6.7 percent for new home loans of Rs 75 lakh and above, down from 7.15 percent previously. Regardless of the loan amount, the country’s largest lender will provide credit score-linked home loans at 6.7 percent. Furthermore, SBI has announced that potential house loan borrowers will not be charged an occupation-related interest rate.

Only with the launch of festive deals, borrowers can now get a home loan for any amount at a rate as low as 6.7 with a concession of 45 basis points. Processing costs have been waived and balance transfer loans are also eligible for the 6.7 percent home loan deal of the bank. Buying a house will be now attainable for Indian citizens this year thanks to free processing costs and low loan rates throughout the festive season of the bank. Check the latest interest rates of home loans of State Bank of India below.

Loan amount Term loan Maxgain
Up to Rs 30 Lacs EBLR+ 15 bps, ER: 6.80% (ER: Effective Rate) EBLR+ 50 bps, ER: 7.15%
Above Rs 30 Lacs to Rs 75 Lacs EBLR+ 40 bps, ER: 7.05% EBLR+ 75bps, ER: 7.40%
Above Rs 75 Lacs EBLR+ 50bps, ER: 7.15% EBLR + 85bps, ER: 7.5%
Source: Bank Website, W.e.f. 01.05.2021

Kotak Mahindra Bank

Kotak Mahindra Bank

Kotak Mahindra Bank has cut its home loan interest rates by 15 basis points (bps) from 6.65 percent to 6.50 percent per annum, effective September 10, 2021. This attractive rate of 6.50 percent p.a. is only available for a limited time during the festive season, from September 10 to November 8, 2021, according to the official announcement of the bank. “It’s bigger, luxurious, more spacious, and looks amazing! No, it’s not a phone, it’s your new home. Kotak Home Loans starting at surprisingly low interest rates of 6.5%* p.a! Now get your dream home in reality,” the bank has said via its release on Twitter. In another Tweet, the bank has announced that “We are serious! Kotak Home Loans starting at surprisingly low interest rates of 6.5%* p.a! Now get your dream home in reality. Hurry! Offer valid from 10-Sep to 8-Nov-21. To know more, visit: https://bit.ly/2Up1WrM.” Check the below-listed home loan interest rates of Kotak Mahindra Bank.

Special Balance Transfer Rate (Salaried and Self Employed)

Segment Loan amount Efffective rate of interest
Salaried Any loan amount 6.50% onwards
Self Employed Any loan amount 6.60% onwards

Salaried – Non Balance Transfer

Loan amount Effective Rate Of Interest
Any loan amount 6.50% – 7.10%

Self Employed – Non Balance Transfer

Loan amount Effective Rate Of Interest
Any loan amount 6.65% – 7.25%
Source: Bank Website, Terms & Conditions Apply

Bank of Baroda

Bank of Baroda

On Thursday, Bank of Baroda announced an interest rate concession of 0.25% on the existing rate of interest on home loans. Furthermore, the bank has waived processing fees on home loans. Home loan rates at Bank of Baroda will now commence at 6.75 percent, with the deal available till December 31, 2021. “This festive season, Karo Khushiyon Ka Shree Ganesh as Bank of Baroda is offering a concession of 0.25% on the existing Rate of Interest. Get Home Loan at 6.75% & Car Loan at 7.00%. Offer valid till 31 Dec, 2021,” the bank has announced via its Twitter handle. The term of home loans at BoB fluctuates depending on the loan amount and the borrower’s salary, with a maximum term of 30 years. On housing loans, there is also a moratorium duration of up to 36 months. At Bank of Baroda, home loans are available to all Indians, including residents and non-residents, between the ages of 21 and 70.



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2 Stocks To Buy With Upside Up To 22%, Says HDFC Securities

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Buy Solar Industries with upside of 16.24%

Solar Industries (SIL) is a dominant participant in the Indian industrial explosives market, with a global manufacturing base in six nations.

The brokerage expects a gain of up to 16.64 percent in the shares of the chemicals company, with a target price of Rs. 2290 per share, up from the last trading price of Rs. 1963.25 per share for the next two quarters.

According to HDFC Securities, the company’s exports and foreign division has been a key growth driver, with a 19 percent CAGR from FY12 to FY21. Apart from that, in 2010, SIL entered the defence market and began producing highly synergic consumable items such as multi-mode hand grenades, HMX (High Melting Explosives) & HMX compounds, composite propellants, pyros, igniters, fuses, and rocket integration, among others.

Valuation & Recommendation:

Valuation & Recommendation:

“We believe, within the Industrial explosives space, SIL is a unique company which has strong pricing power and has been exhibiting consistent better than industry performance for more than 2 decades. Going forward, we expect SIL’s revenue, EBITDA & PAT to report a growth of CAGR 23/24.5 and 31% respectively over FY21-23E.

Segment-wise we expect Defense revenues to reach Rs. 500Cr by FY23 up 4x over FY21 while exports and overseas are expected to grow by 20.7% CAGR for next 2 years. Apart from these, domestic business like CIL/ institutional and trade channel are expected to grow at a CAGR of 12.5/13.9 and 13.5% respectively over FY21-23E, ” the brokerage has said.

The stock, according to HDFC Securities, is currently valued at 37 times FY23E earnings. It believes the stock’s fair value is Rs. 2130 (40x FY23E) in the base scenario and Rs. 2290 in the bull case (43.5x FY23E).

Buy Indian Bank with upside of 22.49%

Buy Indian Bank with upside of 22.49%

Indian Bank is one of the better-managed PSU banks, requiring only modest government assistance to generate cash. It has a long track record of outperforming the rest of the PSU banking group.

The brokerage expects a gain of up to 22.49 percent in the shares of the chemicals company, with a target price of Rs. 170.50 per share, up from the last trading price of Rs. 139.20 per share for the next two quarters.

According to the brokerage, due to the high corporate book, we remain cautious on the asset quality front. It has a high BB & below rated book with a lot of exposure to infrastructure, NBFCs, and other sectors. For the next few quarters, even management is cautious about the retail and MSME segments. However, the low cost of capital, in combination with the low valuation, gives us confidence in the long run.

Valuation & Recommendation:

Valuation & Recommendation:

“We expect Indian Bank to grow its loan book at 9% CAGR while NII and Net profit are expected to grow at 7.5% and 39.5% (due to lower base) CAGR respectively over FY21-23E. ROAA is estimated to improve to 0.8% in FY23E from the current 0.6% in FY21 and RoE could rise to 12.4% from 9.9% in FY21.

We expect healthy recoveries and upgrades in next two years. Asset quality trend of corporate and MSME would be the crucial monitorables. Most of the concerns arising out of pending writeoffs out of restructured/SMA accounts are already in the price. We have assumed higher recoveries and lower slippages going forward. NIMs may also start stabilizing around 3% level,” the brokerage has said.

According to HDFC Securities, over the next two quarters, investors can buy Indian bank at Rs.139 (0.46xFY23E ABV) and add more at Rs.121 for a base case fair value of Rs.158 and a bull case fair value of Rs.170.5.

Disclaimer

Disclaimer

The above stocks are picked from the brokerage reports of HDFC Securities. 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. Please consult a professional advisor.



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Reserve Bank of India – Press Releases

Press Releases

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April 14, 2015




Dear All




Welcome to the refurbished site of the Reserve Bank of India.





The two most important features of the site are: One, in addition to the default site, the refurbished site also has all the information bifurcated functionwise; two, a much improved search – well, at least we think so but you be the judge.




With this makeover, we also take a small step into social media. We will now use Twitter (albeit one way) to send out alerts on the announcements we make and YouTube to place in public domain our press conferences, interviews of our top management, events, such as, town halls and of course, some films aimed at consumer literacy.




The site can be accessed through most browsers and devices; it also meets accessibility standards.



Please save the url of the refurbished site in your favourites as we will give up the existing site shortly and register or re-register yourselves for receiving RSS feeds for uninterrupted alerts from the Reserve Bank.



Do feel free to give us your feedback by clicking on the feedback button on the right hand corner of the refurbished site.



Thank you for your continued support.




Department of Communication

Reserve Bank of India


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1 PSB, 1 Chemical & 1 Auto Stock Suggested As A ‘Buy’ By ICICI Direct

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1. Buy Bank of Baroda in the range of Rs. 83-85 for a target price of Rs. 91

ICICI Direct recommends buying the PSU Bank for 7 days time frame and suggests a stop loss of Rs. 80. As per the brokerage, PSU Bank index is seeing fresh upmove after 2 months of breather. It is one of the most preferred pick among the PSU Banks and the share price of Bank of Baroda has recently generated a breakout above the falling supply line joining the previous highs of Rs. 89 seen in June 2021 and August 2021 of Rs. 85 signaling resumption of up move and offers fresh entry opportunity.

The stock will extend the current gains and move towards Rs. 91 levels as it is the 123.6% external retracement of the last 2 months breather.A faster retracement signals a positive price structure • The daily 14 periods RSI is in up trend and is seen rebounding taking support at its nine periods average thus supports the positive bias, added the brokerage report.

Jamna Auto: Buy Jamna Auto for a target price of Rs. 101

Jamna Auto: Buy Jamna Auto for a target price of Rs. 101

The share price of Jamna Auto is at the cusp of breaking above last one months highs (Rs. 95) as buying demand emerged at the 61.8% retracement of previous up move (| 79-95) signaling resumption of up move and offers fresh entry opportunity. Going ahead, we expect the stock to extend the current up move and head towards Rs. 101 levels as it is the 161.8% external retracement of the last two weeks breather (Rs. 95-84), adds the brokerage firm.

There is seen strong volume in the scrip which has been three times the 200 days average volume of 15 lakhs share on a daily basis. The daily RSI has generated bullish crossover above its nine period average and is in rising trajectory thus validates positive bias in the stock, adds the brokerage.

Stop loss recommended for the scrip is Rs. 85. Note the stock is recommended for a period of 14 days.

NOCIL:

NOCIL:

Arvind Mafatlal group company NOCIL is the largest rubber chemicals manufacturer in India. The company’s brands include PILFLEX® Antidegradants, PILNOX® Antioxidants, PILCURE® Accelerators, Post Vulcanization Stabilizer and PILGARD® Pre Vulcanization Inhibitor.

ICICI Direct has recommended buying the scrip of NOCIL for a target price of Rs. 328. This implies gains of over 7% from the current market price of Rs. 306.9.

The company’s share price trend is forming higher peak and higher trough in all time frame. “The stock is seen breaking above the last five weeks consolidation range (Rs. 293- 230) signaling resumption of up move and offers fresh entry opportunity . Going ahead, we expect the stock to extend the current up move and head towards Rs.| 328 levels as it is the 161.8% external retracement of the last five weeks consolidation range ( Rs. 293-230).The daily MACD is in up trend and is seen rebounding taking support at its nine periods average thus validates positive bias in the stock.

Disclaimer:

Disclaimer:

The scrips mentioned in the story are taken from the brokerage report. The investments listed out should not be construed for investment purpose.

GoodReturns.in



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NARCL will empower lenders, but recovery from 26 accounts is not easy, industry says, BFSI News, ET BFSI

Banking & Finance

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The National Asset Reconstruction Company Ltd (NARCL) will kill all communication gaps that bank consortiums face, and will speed up the process. But chances are high that the NARCL will face a tough time recovering from the 26 accounts that have been identified.

Finance Minister Nirmala Sitharaman on Thursday said that the government has allocated more than Rs. 30,600 crore to the NARCL. The government will transfer the funds to the bad bank, according to their calendar. The Cabinet has approved to set up the NARCL, backed by the government securities, she added.

Read: Finance Minister Sitharaman announces bad bank, Cabinet approves backing of up to Rs 30,600 crore on securities receipts

NARCL – sole decision maker

Industry veterans believe that NARCL will strengthen the recovery process.

“The first and foremost advantage is that the NARCL will provide consolidation of the debt. The debt, which is spread out in 10-20 different entities of the consortium or the multiple banking arrangement, will be consolidated into one entity, providing ease of resolution. In a multiple banking arrangement, there is always a difference of opinion, which makes it difficult to reach a resolution plan,” said Sunil Mehta, chief executive officer at Indian Banks’ Association.

The biggest benefit banks will have is that they will get 15% funds upfront from the NARCL as soon as they transfer the assets. In the current scenario, it takes months for bankers to get their first cheque after a rigorous process either at the National Company Law Tribunal or at Debt Recovery Tribunals.

Read: What are NARCL and IDRCL? How do they work and what is the plan?

“The intention and the idea behind bad banks is that all the bad loans of the banks are concentrated at one place so there will be one common decision making entity. This will make the execution of asset resolution far faster,” said Jyoti Prakash Gadia, managing director at Resurgent India.

NARCL will empower lenders, but recovery from 26 accounts is not easy, industry says
Operations and recovery

Public sector banks will hold 51% stake in the NARCL, while debt management and other financial institutions will hold 49%. NARCL will be managed by professionals, and non performing asset accounts, which are larger than Rs. 500 crore, will be transferred to it. Currently, banks have identified 26 accounts, worth around Rs. 90,000 crore, which the NARCL will take over from them.

The hope is that the government-backed bad bank will bring in the right value for the banks. Because in the current situation, liquidation is much higher compared with resolution, and lenders have taken more than 90% haircuts in many accounts, including Videocon Industries, Siva Industries etc.

But while NARCL will reduce the gaps and speed up the recovery, experts have their own doubts on its recovery ratio, considering the quality of 26 assets, which will be transferred.

“I am not sure if NARCL will be able to fully recover all the accounts mentioned in the list. However, it is still better than individual recovery,” said Gadia.

Recovery has always been a challenge for lenders. RBI Governor Shakikanta Das had recently highlighted that the total recovery from Lokadalat is 5%, from DRT is 6% and from SARFAESI is 20%. The highest recovery was from the Insolvency and Bankruptcy Code, which was 30-45% in earlier days, is now reduced to 5% amid the pandemic, Das said.

Hence, despite having an NARCL, the industry is not hoping for a significant recovery. “The major challenge is that assets mentioned in the list are not very lucrative and buyers will also offer the cheapest rate,” said an industry expert, who did not wish to be quoted.

Siby Antony, former MD and CEO of Edelweiss Asset Reconstruction and a veteran in the sector, believes that ARCs will be better at reviving assets, but is not very sure whether the NARCL will recover.

“I am not hopeful. Because these (the 26 accounts) are bad assets, and finally all will go under liquidation,” Antony said.

Watch: Bad bank can only be a warehouse of bad assets, says Siby Antony



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Infosys wins five-year deal with US-based Frost Bank, BFSI News, ET BFSI

Banking & Finance

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Infosys said it has won a five-year deal with US-based Frost Bank to provide strategic business consulting and digital capabilities that will enable the bank, which has over $ 46.7 billion in assets, to offer mortgage loans along with its other consumer loan products.

Infosys will help design the bank’s mortgage loan process landscape from origination to servicing, design the end-customer experience, and select the most effective technology platform to run and manage operations, while driving growth for its mortgage solutions over the next five years, it said in a statement.

The company did not disclose the financial details.

Infosys and Frost Bank will work together to create a human-centric, digital-first approach to customer mortgage loans that delivers superior borrower experience along with cutting-edge efficiency of operations. The implementation strategy will focus on accelerating launch of the new product, while also streamlining the mortgage value chain for Frost Bank by taking advantage of Infosys’ access to global best practices and innovations.

“Offering mortgage loans along with our other consumer loan products is integral to meeting our customers’ evolving needs and bringing the Frost experience to more Texans,” said Phil Green, Chairman and CEO at Frost Bank. “Working with a world-class company like Infosys will allow us to be involved in the entire process from start to finish and bring our industry-leading customer service experience to mortgages.”

Infosys also has deep expertise and long years of experience in collaborating with independent mortgage solution providers and regional banks in the US. Frost Bank can leverage this to compete profitably in a rapidly transforming competitive landscape.

Mohit Joshi, President, Infosys said, “At Infosys, we have built strong capabilities in transforming mortgage businesses by providing our clients with unique solutions that meet their customers’ expectations of speed, transparency, convenience, and personalization. Our collaboration with Frost Bank sets the stage for a new era of mortgage services, and we are excited to bring to this engagement, our collective expertise.”



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DoT may return Rs 14,000-crore bank guarantees to Vodafone Idea, BFSI News, ET BFSI

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MUMBAI: The government plans to return bank guarantees worth Rs 14,000 crore to Vodafone Idea (Vi) and Rs 8,000 crore to Bharti Airtel if they opt for a four-year moratorium on payment of spectrum dues, a person aware of the development said.

The development is expected to drastically reduce Vodafone Idea’s non-fund exposure to banks that have been hesitant to furnish fresh bank guarantees (BGs) to the loss-making telco due to its precarious financial position.

“BGs in deferred annual instalment against spectrum bought in earlier auction will be returned to telcos opting for moratorium,” the source told ET. “Vi stands to get about Rs 14,000 crore and Airtel about Rs 8,000 crore.”

Bharti Airtel chairman Sunil Bharti Mittal on Thursday said the telco will opt for the moratorium while cash-strapped Vodafone Idea too is widely expected to opt for it.

Experts said return of bank guarantees will allow banks more leeway to lend to Vodafone Idea in the future.

“A large part of our exposure (to Vi) is towards bank guarantees to the DoT (Department of Telecommunications),” a lender said on the condition of anonymity. “If those are returned, it gets cancelled and our exposure towards Vodafone Idea will drop significantly.”

Re-rating of the company could also lead to refinancing of existing loans at lower rates.

“We will have to see how this evolves, but in all likelihood, when the operating metrics of the telco improves, we will be able to offer them lower rates and rework loan covenants depending on how the cash flow situation improves,” the lender said.

Banks have a total exposure of a little over Rs 35,000 crore to the company, of which funded exposure is close to Rs 13,800 crore while the remaining is non-funded.

Vodafone Idea had a gross debt of Rs 1.9 lakh crore at June end – mostly in obligations to the government towards deferred spectrum charges and adjusted gross revenues (AGR)-related dues – while its cash and cash equivalents are only Rs 920 crore.

The government on Wednesday rolled out a four-year moratorium on the statutory dues of telcos and opened up the automatic route for 100% foreign direct investment in the sector, which is expected to help attract global investors.

Bank guarantees have long been a bone of contention between telcos and DoT.

Airtel’s Mittal has been propagating scrapping the practice of taking BGs. “Bank guarantee is something which the DoT must reconsider because those are from historical times,” he had told ET in a recent interview. “Now that you have exposure of tens of thousands of crores of spectrum payments to these operators without any such instruments, why bother about these small bank guarantees?”

Mittal also pointed out that the Reserve Bank of India (RBI) norms mandate provisioning of that much capital allocation, thus reducing the capital pool, and the cost of bank guarantee has quadrupled.

The government had on Wednesday cut bank guarantee requirements against statutory dues such as licensee fees to 20% from 100%, and said the financial instrument won’t be required anymore to secure instalment payments in upcoming auctions.

This was over and above a four-year moratorium on AGR and spectrum payments, approved redefining AGR to exclude ‘non-telecom’ items and cut the spectrum usage charge (SUC) to zero — both prospectively — as part of wide-ranging reforms to improve the health of the debt-laden sector and make sure the market has at least three private players.

Vi stock has jumped about 30% in two days to close at Rs 11.25 on the BSE on Thursday.

Govt can also turn part of dues into equity after four-year period.



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World Bank kills ease of doing business report after probe cites undue pressure on rankings, BFSI News, ET BFSI

Banking & Finance

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The World Bank Group on Thursday said it ended publication of its “Doing Business” report on country investment climates after a probe of data irregularities cited “undue pressure” by top bank officials, including then-Chief Executive Kristalina Georgieva, to boost China‘s ranking in 2017.

The World Bank said in a statement said that the decision came after internal audit reports had raised “ethical matters, including the conduct of former Board officials as well as current and/or former Bank staff” and a board investigation conducted by the law firm Wilmer Hale.

The Wilmer Hale report cited “direct and indirect pressure” from senior staff in the office of then-World Bank President Jim Yong Kim to change the report’s methodology to boost China’s score, and said it likely occurred at his direction.

It also said that Georgieva, now the managing director of the International Monetary Fund, and a key adviser pressured staff to “make specific changes to China’s data points” and boost its ranking at a time when the bank was seeking China’s support for a big capital increase.

China’s ranking in the “Doing Business 2018” report published in October 2017, rose seven places to 78th after the data methodology changes were made, compared with the initial draft report.

The Doing Business report assesses regulatory environments, ease of business startups, infrastructure and other business climate measures.

“I disagree fundamentally with the findings and interpretations of the investigation of data irregularities as it relates to my role in the World Bank’s Doing Business report of 2018,” Georgieva said in a statement issued by the IMF. She added that she had met with the IMF’s executive board to discuss the matter.

The WilmerHale report also cited irregularities in the data used to determine rankings for Saudi Arabia and Azerbaijan in the “Doing Business 2020” report published in 2019, but found no evidence that any members of the bank’s Office of the President or executive board were involved in these changes.

“Going forward, we will be working on a new approach to assessing the business and investment climate,” the World Bank said in a statement.



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