IndusInd Bank raises Rs 2,800 cr debt capital via bonds, BFSI News, ET BFSI

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New Delhi: Private sector IndusInd Bank on Friday said it has raised Rs 2,800 crore by issuing bonds on private placement basis.

The Finance Committee of the board of the bank in its meeting approved allotment of 2,800 rated, listed, non-convertible, subordinated and unsecured Basel III compliant bonds in the nature of debentures towards non-equity regulatory tier 2 capital (T2 bonds) for cash aggregating to Rs 2,800 crore, the bank said in a regulatory filing.

The bonds, sto mature in 10 years, bear a coupon rate of 8.11 per cent payable annually.

The bonds are rated AA+ by Crisil and India Ratings.

IndusInd Bank stock traded at Rs 1150.50 apiece on BSE, down 2.12 per cent from previous close.

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RBI board reviews economic situation, BFSI News, ET BFSI

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The Central Board of Directors of the RBI on Friday reviewed the current domestic and global economic situation and challenges.

The board also deliberated upon possible measures for addressing the emerging challenges, the Reserve Bank of India (RBI) said in a release.

The 591st meeting of the board was held under the Chairmanship of Governor Shaktikanta Das. His tenure as the Governor has been extended by three years up to December 2024.

“The board also congratulated the Governor on his reappointment,” the central bank said.

According to the release, the board also discussed the working of sub-committees of the central board and activities of a few Central Office Departments, including the nationwide survey among bank customers regarding banks’ grievance redress system and the functioning of the Ombudsman schemes.

Deputy Governors Mahesh Kumar Jain, Michael Debabrata Patra, M Rajeshwar Rao, and T Rabi Sankar attended the meeting. Other directors on the board — N Chandrasekaran, Satish K Marathe, S Gurumurthy and Sachin Chaturvedi — were also present.

Besides, Debasish Panda, Secretary, Department of Financial Services and Ajay Seth, Secretary, Department of Economic Affairs, attended the meeting.

Das was appointed the RBI’s 25th Governor on December 11, 2018 for a period of three years after the abrupt resignation of his predecessor Urjit Patel.

He is the first RBI Governor to get extension after the BJP-led government came to power in 2014.



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‘Rural economy is in a good position for the next 2-3 years’

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Sentiments in rural India has turned positive with the ebbing of the second Covid wave and a good harvest, said Ramesh Iyer, Vice-Chairman and Managing Director, Mahindra & Mahindra Financial Services.

The company is back on the growth track with a consolidated net profit of ₹1,102.94 crore in the second quarter of the fiscal and 61 per cent year on year growth in disbursements. Going forward, the availability of vehicles will be a key factor, he said in an interview with BusinessLine. Edited Excerpts:

Has business normalised after the second Covid wave?

After the first quarter, I had said things are returning back to normal in the rural economy. Of course, that time we were still using the term subject to the third wave, but it seems there has not been a severe third wave impact and the sentiments have definitely turned positive. Most of the businesses are slowly and steadily getting back to normal, which automatically means there is a better utilisation of vehicles.

Also read: Mahindra & Mahindra Financial Services Q2 net profit up at ₹1,103 crore

This trend is likely to continue and with good monsoons, good harvest and support price, we expect the farm cashflow to be good. Third, now even the infrastructure will open up in the rural market. So, with these three factors, I believe that the rural economy is in a good position for the next two to three years. The only two issues at this stage are the availability of vehicles for which the supply side has to improve.

Once that improves, you know, the business volumes will pick up. And the second is that diesel petrol prices gone up, and that has had some impact on the viability of the operators. But if the price is going to be at this level, then even the freight rates and the passenger fares will go up.

How far does the supply issues in the auto sector and diesel prices impact consumer sentiment?

We would have done another 15 per cent to 20 per cent more in disbursements, if the inventory had no problem. If the supply continues to remain like this, obviously the loss of volume will be higher.

High diesel prices are a very recent phenomena and it should not have a major impact on the sales because anyway vehicles are in short supply, people are willing to wait. The real impact will be on the commercial use of the vehicle – taxi and goods transportations. Unless they are able to price the customer or the freight rates, it can act as some pressure.

What is your expectation on disbursements?

We are back in growth in disbursement. Disbursements grew by 61per cent year on year on year to ₹6,475 crore in the second quarter of the fiscal. Going forward, asset growth will begin to happen. Growth in the second half will depend on vehicle availability. Otherwise, the growth rate will be in the same range that we are seeing already. Being one of the best borrowers, we also have a good benefit of cost of funds and our margins are healthy.

Are the restructured accounts an issue? Will you consider writing back some of the provisions?

We have restructured 1,04,130 contracts. But people don’t want to only pay as per the restructured contract. They will pay more than the restructured EMI if they start earning more. Then there is a possibility for us to reclassify these accounts.

Also read: Tech Mahindra looking to hire talent from Tier-2 cities and overseas markets

We have classified 96,391 contracts in Stage whereas they could have stayed typically been classified in the zero stage or Stage 1. Once we see they start paying regularly, then it’s an opportunity to restate the restructuring. On writing back of provisions, it is too early to say. We will wait for two or three quarters performance. Once the gross NPA continues to keep coming down the way we have seen in this quarter, then definitely we may not require a substantial overlay to be carried forward.

What is your view on the scale based framework for NBFCs announced by the RBI?

There was already a draft paper on this and I do not see too much of a regulatory change in the framework. FIDC had requested the RBI to give time to the smaller NBFCs for stage wise moving to 90 days, which the RBI has done. Most NBFCs like us will be in category two or NBFC-upper layer and we are already subject to a lot of on-site inspections, regulations and capital adequacy requirement.

Also read: IT firms poaching talents to meet 5G service demand

It’s good that NBFCs of different sizes get classified differently and the big ones will not have to suffer if something goes wrong with a smaller NBFC or vice versa. Also, today all NBFCs are looked at as one in terms of borrowings. Maybe tomorrow, there will be a carve out separately for each category of NBFC with a separate limit. We have to wait and see how this classification gets utilised going forward.

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Paytm IPO; Subscription To Open On November 8, Check Other Details

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Investment

oi-Sneha Kulkarni

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One97 Communications, the parent company of digital payments business Paytm, will launch its Rs 18,300 crore initial public offering (IPO) on Monday, November 8, 2021, and subscriptions will be accepted until Wednesday, November 10, 2021.

The IPO’s price band has been set at Rs 2,080-2,150 per share with a face value of Rs 1. Sebi, the markets regulator, gave the corporation the green light last week.

Paytm IPO; Subscription To Open On November 8, Check Other Details

The deal intends to generate Rs 18,300 crore for the digital payments giant. The company has boosted the size of its IPO from Rs 16,600 crore to Rs 1,700 crore, with the rise completely due to existing owners selling more shares.

Vijay Shekhar Sharma sold up to Rs 402.65 crore, Antfin (Netherlands) Holdings sold up to Rs 4,704.43 crore, Alibaba.com Singapore E-Commerce sold up to Rs 784.82 crore, and Elevation CapitalV FII Holdings sold up to Rs 75.02 crore in the OFS.

According to the IPO paperwork, Elevation Capital V Ltd would offer up to Rs 64.01 crore, Saif III Mauritius will provide up to Rs 1,327.65 crore, Saif Partners will offer up to Rs 563.63 crore, SVF Partners will offer up to Rs 1,689.03 crore, and International Holdings will offer up to Rs 301.77 crore.

The book running lead managers for the IPO are Morgan Stanley India Company, Goldman Sachs (India) Securities, Axis Capital, ICICI Securities, J.P. Morgan India, Citigroup Global Markets India, and HDFC Bank. The issue’s registrar is Link Intime India.

One97 stated in its Draft Red Herring Prospectus (DRHP) that the cash raised will be used to expand the Paytm ecosystem by attracting and keeping consumers and merchants. Consumers and merchants have been attracted through marketing, cashback, and incentives, according to the company, which also provides merchants with technology through its consumer and business app, payment platforms, and payment instruments.

IPO Open Date: Nov 8, 2021
IPO Close Date: Nov 10, 2021
Basis of Allotment Date: Nov 15, 2021
Initiation of Refunds: Nov 16, 2021
Credit of Shares to Demat Account: Nov 17, 2021
IPO Listing Date: Nov 18, 2021



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Reserve Bank of India – Tenders

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Reserve Bank of India invites online e-tenders for Supply, Installation, Testing and Commissioning of full height single lane turnstile gate at VIP Entry Bank’s Main Office Building, Mumbai

1. Online Tenders by e-tendering process are invited for above work at Bank’s Mumbai Regional Office at Mumbai. The e-tender is to be submitted through the website www.mstcecommerce.com. The work is estimated to cost Rs. 6.25 lakhs (Rupees Six Lakhs Twenty-Five Thousand Only) and is to be completed within 60 days from 14th day from the date of award of work.

2. Online Tenders will be available to view/download for all firms from 11:00 AM on October 29, 2021 but only those contractors who have minimum 5 years’ experience in the field of undertaking similar works of “Supply, Installation, Testing and Commissioning of full height single lane turnstile gate” shall be eligible for participation in the tender.

3. The contractor should have also executed successfully similar works on or after October 31, 2016 individually costing as under:

(a) Three works each costing not less than 40% of Rs. 6.25 Lakh

OR

(b) Two works each costing not less than 50% of Rs. 6.25 Lakh

OR

(c) One work costing not less than 80% of Rs. 6.25 Lakh

AND

(d) Have a minimum yearly turnover of 100% of the Rs.6.25 Lakh during the last 3 financial years

AND

(e) Have a service set up in Mumbai for rendering after sales service. Only tenderers who qualify as above will be eligible to participate in the tender for the work.

The required documents evidencing compliance of all the above criteria (Pre-Qualification Papers) shall be submitted by the firm on or before November 22, 2021 by 05:00 PM at Fort Office Estate Cell.

4. The contractors shall also be required to furnish, at the time of submitting Pre-Qualification papers the following information in writing along with documents to satisfy the Bank about their eligibility for participating in the tendering process:

(a) Composition of the firm Full particulars (whether contractor is an individual or a partnership firm or a company etc.) of the composition of the firm of contractors in detail should be submitted along with the name(s) and address(es) of the partners, copy of the Articles of association/power of Attorney/any other relevant document
(b) Work experience and completion of similar works of specified value during the specified period Copies of the detailed work orders for the qualifying works indicating date of award, value of awarded work, time given for completing the work, etc. and the corresponding completion certificates indicating actual date of completion and actual value of executed similar works should be enclosed in proof of the work experience.

The details along with documentary evidence of previous experience if any, of carrying out works for the Reserve Bank of India at any centre should also be given.

(c) Creditworthiness of the contractor & their Turn over during the specified period Copies of the Income Tax Clearance Certificates/Income Tax Assessment orders along with the latest final accounts of the business of the contractor duly certified by a Chartered Accountant should be enclosed in proof of their creditworthiness and turnover for last three financial years.
(d) Name(s) and address(es) of the Bankers and their present contact executives Written information about the names and address of their bankers along with full details like names, postal addresses, e-mail IDs, telephone (landline and mobile) nos., fax nos. etc. of the contact executives (i.e. the persons who can be contacted at the office of their bankers by the Bank, in case it is so needed) should be furnished
(e) Details of bank accounts Full particulars of their bank accounts, like account no., type, when opened etc. should be given
(f) Name(s) and address(es) of the Clients and their present contact executives. Written information about the names and addresses of their clients along with full details, like names, postal addresses, e-mail IDs, telephone (landline and mobile) nos., fax nos. etc. of the contact executives (i.e. The persons who can be contacted at the office of their clients by the Bank in case it is so needed) should be furnished.
(g) Details of completed works The client-wise names of work(s), year(s) of execution of work(s), awarded and actual cost(s) of executed work(s), completion time stipulated in the contracts (s) and actual time taken to complete the work(s), names and full contact-details of the officers/authorities/departments under whom the work(s) was/were executed should be furnished.

5. In the event of intending tenderer’s failure to satisfy the Bank, the Bank reserves the right to refuse their participation/reject their tender.

6. Tender forms will be available for download on MSTC Website http://www.mstcecommerce.com from 11:00 AM on October 29, 2021. A pre-bid meeting of the eligible bidder (who meets the PQ criteria) will be held on December 03, 2021 at 03:30 PM in the Bank’s Office Building, Estate Cell, Fort Office, Mumbai

7. The Pre-Qualification papers super scribed as “Pre-Qualification documents for “Supply, Installation, Testing and Commissioning of full height single lane turnstile gate at VIP Entry Bank’s Main Office Building, Mumbai addressed by name to Shri. Ajay Michyari, Regional Director, Reserve Bank of India, shall be submitted to AGM (Admin) Estate Cell, Fort Office Mumbai latest by November 22, 2021 till 05:00 PM for Bank’s examination. Alternatively, the scanned copy of all the PQ document may be forwarded to mail id: abhayjoshi@rbi.org.in and anandmahadevan@rbi.org.in latest by November 22, 2021 till 05:00 PM. However, those firms who have forwarded the scanned copies through mail has to submit the original copies of PQ documents on or before December 03, 2021 by 12:30 PM.

8. An EMD of Rs 12,500/- (Rupees Twelve Thousand Five Hundred Only) shall be submitted by the eligible tenderer on or before December 13, 2021 by 02:00 PM in the form and manner as prescribed in the Part-I of the tender.

9. Tender in prescribed form shall be submitted in two parts in online mode. Part-I tender will contain an online undertaking towards acceptance of Bank’s standard technical and commercial conditions for the proposed work, tenderers’ covering letter (scanned copy to be uploaded) and Part-2 (Price bid) to be filled online.

10. Part I of the tenders will be opened on December 13, 2021 at 03:00 PM in the online mode. Part II of the online tender will be opened on subsequent date, with due intimation to the eligible tenderers.

11. The applicants /tenders have to submit in a sealed envelope /cover:

  1. Client’s certificate as per format mentioned in the tender.

  2. Banker’s certificate as per format mentioned in the tender.

The certificates should be addressed to Shri. Ajay Michyari, Regional Director, Reserve Bank of India, Estate Office, Fort Cell, 2nd Floor, Mumbai- 400 001 and shall be submitted on or before November 22, 2021 till 05:00 PM in a sealed envelope/cover to AGM (Admin), Estate Cell, Fort Office, Mumbai. The client’s certificate shall be accepted only when the same is signed by an official of the rank of Executive Engineer or equivalent in respect of a Government/Semi Government organization or a PSU. The client’s certificate issued by the private organizations shall also accompany Tax Deducted at Source (TDS) certificates. Applications/tenders received without the above certificates are liable for rejection. The Bank shall have the right to independently verify these certificates.

The Bank shall evaluate the said reports before evaluation of price bid of the tenderers. If any tenderer is not found to possess the required eligibility for participating in the tendering process at any point of time and/or his performance reports received from his clients and/or his bankers are found unsatisfactory, the Bank reserves the right to reject his offer even after opening of Part-I of the tender. The Bank is not bound to assign any reason for doing so.

12. The Bank is not bound to accept the lowest tender and reserves the right to accept either in full or in part any tender. The Bank also reserves the right to reject any or all the tenders without assigning any reason thereof.


SCHEDULE OF TENDER (SOT)

a. e-Tender no RBI/Mumbai/Estate/174/21-22/ET/235
b. Mode of Tender e-Procurement System
(Online Part I – Techno-Commercial Bid and Part II – Price Bid through www.mstcecommerce.com/eprochome/rbi)
c. Date of NIT available to parties to download 29.10.2021 at 11:00 AM onwards
d. Pre-Bid meeting 03:30 PM on 03.12.2021 at 2nd Floor, Estate Cell, Fort Office, Mumbai 400001
e. Earnest Money Deposit ₹12,500/- (Rupees Twelve Thousand Five Hundred only) by NEFT or in the form of DD on or before 2:00 PM on December 13, 2021.

The DD shall be submitted in sealed cover addressed by name to Shri Ajay Michyari, Regional Director, Main Office Building, Reserve Bank of India, Fort, Mumbai -400001 so as to reach Estate Office, Second Floor, Main Office Building, Reserve Bank of India, Fort, Mumbai- 400001

NEFT Details

A/c No – 04861436206

IFSC CODE – RBIS0MBPA04

f. Last date of submission of EMD December 13, 2021 till 2.00 PM
g. Last date of submission of Pre-Qualification (PQ) papers 22.11.2021 till 5:00 PM
h. Date of Starting of e-Tender for submission of online Techno-Commercial Bid and price Bid at www.mstcecommerce.com/eprochome/rbi October 29, 2021 from 11:00 AM onwards
i. Date of closing of online e-tender for submission of Techno-Commercial Bid & Price Bid December 13, 2021 till 2.00 PM
j. Date & time of opening of Part-I
(i.e., Techno-Commercial Bid)

Part II of the online tender will be opened on same day or subsequent date, which will be intimated to the tenderers in advance.

December 13, 2021 at 3.00 PM

Shall be intimated to the eligible bidders subsequently

k. Transaction Fee Rs.1000 /- plus GST @18%
To be paid through MSTC payment Gateway/ NEFT/RTGS in favour of MSTC Ltd.

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3 Best Focused Equity Funds For SIP In 2021 Based On 1 Year Returns Over 70%

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Should I Invest?

Although diversification allows investors to optimize returns while reducing risk potential and market unpredictability, these funds can only be a viable pick in the current market scenario if you have a long-term financial objective of more than 5 years. The rationale for choosing focused equity funds for your first SIP is that this fund category achieved a portfolio record of 45,34,024, a net positive inflow of Rs 114.45 Cr, a net Assets Under Management (AUM) of Rs 91,829.12 Cr, and an average net AUM of Rs 91,656.51 Cr as of September 30th, 2021.

These funds can be a strong choice for maximising risk-adjusted returns because they have their equity allocation across selected companies based on a precise study by the fund managers. The risk associated with these funds is higher than that of well-diversified mutual funds, since focused funds may perform well for investors who are willing to accept a higher risk by investing in handpicked stocks in consideration to create long-term wealth.

In this volatile market, here are the top three focused equity funds that have performed well and generated over 70% returns in the previous year, and you may also consider them for initiating a SIP-based on your risk tolerance capacity.

Nippon India Focused Equity Fund Direct-Growth

Nippon India Focused Equity Fund Direct-Growth

It is a focused equity fund from the fund house Nippon India Mutual Fund. The 1-year returns for Nippon India Focused Equity Fund Direct-Growth are 75.38 percent. As of September 30th, 2021, it had provided 15.10 percent average yearly returns since its inception. The fund’s equity allocation is massively skewed toward the financial, services, FMCG, construction, and technology sectors. State Bank of India, ICICI Bank Ltd., Infosys Ltd., HDFC Bank Ltd., and Axis Bank Ltd. are the fund’s top five holdings.

The fund’s expense ratio is 2.01%, which is higher than the expense ratios of most other funds in the same category. The fund’s Net Asset Value (NAV) is Rs 78.96 as of October 28th, and its Assets Under Management (AUM) is Rs 5,818.16 Cr as of September 30th, 2021. Value Research has given the fund a three-star rating, and SIPs can be started in the fund with as little as Rs 500.

Particulars 1 Year CAGR % 3 Year CAGR % 5 Year CAGR % Since Inception
Nippon India Focused Equity Fund 75.38 20.99 N.A 15.1
B: S&P BSE 500 TRI 63.1 19.73 N.A 16.17
AB: S&P BSE Sensex TRI 56.96 19.03 N.A 17.99
Source: mf.nipponindiaim.com. Data as on 30/09/2021

Franklin India Focused Equity Fund Growth

Franklin India Focused Equity Fund Growth

Franklin India Focused Equity Fund Direct-Growth is a focused mutual fund scheme from Franklin Templeton Mutual Fund with a 1-year return of 85.29% and since its inception it has generated a yearly average return of 14.12% as of 30/09/2021. The fund has its major equity allocation across the financial, construction, energy, healthcare, and communication sectors. State Bank of India, ICICI Bank Ltd., Axis Bank Ltd., National Thermal Power Corp. Ltd., and Larsen & Toubro Ltd. are the fund’s top five holdings.

The fund’s expense ratio is 1.91 percent, which is higher than the expense ratios of most other funds in the Focused Equity Fund category. As of October 28th, the fund’s Net Asset Value (NAV) is Rs 66.51, and its Assets Under Management (AUM) is Rs 7835.97 Cr as of September 30th, 2021. The fund has a three-star rating from Value Research, and SIPs may be started with Rs 500 in the fund.

Compounded Annualized Growth Rate Performance Fund Nifty 500 Nifty 50
Last 1 Year 85.29% 32.50%
Last 3 Years 20.37% 15.79%
Last 5 Years 15.48% 13.54%
Last 10 Years 19.20% 12.60%
Last 15 Years 11.02%
Since Inception (26/07/2007) 14.12%
Data as of 30/09/2021. Source: franklintempletonindia.com

HDFC Focused 30 Fund Direct Plan Growth

HDFC Focused 30 Fund Direct Plan Growth

HDFC Focused 30 Fund Direct Plan-Growth is a focused mutual fund plan offered by HDFC Mutual Fund, with a one-year return of 75.48 percent. It has provided 15.37 percent average yearly returns since its inception. The fund has its major equity allocation across the Financial, Energy, Construction, Engineering, Technology sectors. The top five holdings of the fund are ICICI Bank Ltd., State Bank of India, HDFC Bank Ltd., Reliance Industries Ltd., and Infosys Ltd.

The fund’s expense ratio is 2.67 percent, which is much higher than the expense ratios of most other Focused funds. The fund’s Net Asset Value (NAV) is Rs 125.10 as of October 28th, and its Assets Under Management (AUM) is Rs 838.19 Cr as of September 30th, 2021. With a minimum monthly contribution of Rs 500, you can start SIP in this fund.

Fund Name 3 Months 6 Months 1 Year 3 Years 5 Years
HDFC Focused 30 Fund (G) 15.35% 29.25% 75.48% 17.35% 11.84%
S&P BSE 200 11.96% 20.45% 56.69% 20.75% 15.41%
NIFTY 13.17% 19.89% 53.19% 20.32% 15.67%
SENSEX 13.92% 20.53% 51.08% 20.75% 16.53%
Data as of 30th September 2021. Source: hdfcsec.com

3 Best Focused Equity Mutual Funds In 2021

3 Best Focused Equity Mutual Funds In 2021

Funds 1 mth returns 6 mth returns 1 Yr returns 3 Yr returns 5 Yr returns Since inception
Nippon India Focused Equity Fund 2.36% 22.20% 76.86% 24.53% 14.50% 14.93%
Franklin India Focused Equity Fund 2.35% 25.21% 76.74% 24.25% 15.41% 14.20%
HDFC Focused 30 Fund 7.79% 29.97% 76.01% 19.46% 12.99% 13.69%
Source: Groww

Disclaimer

Disclaimer

The views and investment tips expressed by authors or employees of Greynium Information Technologies, should not be construed as investment advice to buy or sell stocks, gold, currency, or other commodities. Investors should certainly not take any trading and investment decision based only on information discussed on GoodReturns.in We are not a qualified financial advisor and any information herein is not investment advice. It is informational in nature. All readers and investors should note that neither Greynium nor the author of the articles, would be responsible for any decision taken based on these articles. Please consult a professional advisor. Greynium Information Technologies Pvt Ltd, its subsidiaries, associates, and authors do not accept culpability for losses and/or damages arising based on information in GoodReturns.in



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Fino Payments Bank IPO: Mixed Rating For The New Investment

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Investment

oi-Roshni Agarwal

|

After Nykaa garnered a strong investor interest and saw over-subscription on the 1st day, there is another IPO that has hit the primary market. The IPO by payments bank Fino is open for subscription and here is a take on by brokerages and market experts. But before that here’s some of the key notes on the IPO in nut shell:

Fino Payments Bank IPO: Mixed Rating For The New Investment

Fino Payments Bank IPO: Mixed Rating For The New Investment

1. About the company:

The digital financial institution was incorporated in the year 2007 offers a whole lot of services and is a subsidiary of Fino Paytech. The primarily customers targeted and catered by the institution are underserved as well as unserved people of India.

2. IPO details:

The IPO issue is being made for mopping Rs. 1200 crore. The issue includes fresh equity shares worth Rs 300 crore and an offer for sale (OFS) of 15,602,999 equity shares by promoter Fino Paytech. Price band for the issue has been fixed at Rs. 560-577 per share for this issue and Investors will be able to bid for a minimum of 25 equity shares and in multiples of 25 thereafter.

3. Brokerages’ take:

There is one view that subscription should be made in the IPO for a long term view and the positives highlighted are big investors, strong anchor book, positive outlook, profit making start up etc. Nonetheless, key challenges are highly competitive business and possible government’s change in policy.

Angel Broking is also ‘Neutral’ on the IPO and cites in its report “Fino payments bank has posted strong a 46.0% CAGR in total revenues between FY2019-21 and has also turned around its operations and reported profits of 20 crore for the first time in FY2021. At the higher end of the price band the stock would be trading at P/E of 220x FY2021 fully diluted EPS of 2.6 which is expensive. Despite strong growth prospects, we believe that valuations do not justify the premium and hence we have a NEUTRAL recommendation to the IPO”.

Religare Securities has given a subscribe rating with a long-term view on the issue and said the IPO is valued at 21.8x FY21 EV to sales, which is about 20 per cent discount compared to the other two recently-listed unicorns, CarTrade and Zomato, despite generating superior RoE.

“The beauty and personal care market has a large addressable market opportunity, especially in India where millennials tend to prefer buying brands and look for easy buying options such as e-commerce,” it added. “Unique business model and first-movers advantage, Nykaa is likely to get a healthy traction ahead.”

Other listed positives or take aways

After the fund raise via capital issue, the payments bank will not be requiring for quite a few years.It has a strong leadership position in the fintech industry having the largest network of micro ATMs as of March 2021 with a market share of 55 per cent, a robust merchant network of 6.4 lakh and 25.7 lakh bank accounts. Its revenue for FY21 stood at Rs 791 crore that grew at a CAGR of 29 per cent in the last three years and the bank registered a profit of Rs 20.5 crore in FY21.



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D-Street to raise record Rs 31,000 crore from deluge of IPOs in 2 weeks, BFSI News, ET BFSI

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MUMBAI: The Indian capital market is set to witness one of the busiest fortnights in its history as six companies have lined up to together raise about Rs 31,400 crore by November 10.

The six issues include the one from tech-enabled payments major One 97 Communications, operating under the Paytm brand, which aims to raise Rs 18,300 crore.

Paytm has priced its IPO shares in the Rs 2,080-2,150 band per share, indicating the company seeks a valuation of about $20 billion. This will make the Paytm IPO the largest ever in the country’s history.

Till date the biggest IPO in India was the Rs 15,500-crore offer by Coal India in October-November 2010.

According to market sources, this could have two major implications for Dalal Street and the economy. First, there are fears among traders that the deluge of IPOs could force several investors to offload part of their portfolio and divert that money to invest in these offers, especially for listing gains. Second, the inflows from foreign funds, estimated to be about 40-50% of the total offer, could mean Rs 12,000-15,000 crore of forex inflows. This, in turn, could help appreciate the rupee.

On Thursday, despite a sharp sell-off in the stock market, the domestic currency closed 11 paise stronger at Rs 74.92 to a dollar. Usually, the day the stock market slides sharply, the rupee also weakens against major currencies like the US dollar, euro, pound sterling and the Japanese yen. Thursday’s strength in the domestic currency came despite a Rs 3,819-crore net selling by foreign funds, BSE data showed. According to a note by the forex advisory firm IFA Global, the strength of the rupee was “because foreign banks sold US dollars for overseas investments into Indian companies raising funds through initial public offerings”.

According to data collated from Sebi, merchant bankers and various brokerages, FSN E-Commerce Ventures, the company that operates under the Nykaa brand name, is raising Rs 5,350 crore while PB Fintech (under Policybazaar brand name) is raising Rs 5,200 crore, Fino Payments Bank Rs 1,200 crore, SJS Enterprises Rs 800 crore and Sigachi Industries Rs 125 crore.

In addition to the big ticket listings, three more high profile IPOs are also lined up after these got the Sebi green signal in the last few weeks. Adani Wilmar is eyeing Rs 4,500 crore, One MobiKwik is expected to raise Rs 1,900 crore and the offer size for Star Health is expected to be in excess of Rs 3,000 crore, market sources said. These offers could open anytime now, merchant bankers said.

The government is also planning to list life insurance behemoth LIC before the end of the fiscal year through its IPO. This offer is expected to garner anything between Rs 70,000 crore and Rs 1 lakh crore, merchant bankers said.



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MoS Finance Karad urges banks to improve credit penetration in NE states, BFSI News, ET BFSI

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Minister of State for Finance Bhagwat Karad has asked lenders to improve banking access points and also increase credit penetration in north-eastern states. Karad, who is on a week long tour to Assam, Tripura and Manipur, reviewed the performance of various flagship schemes of the government aimed at expediting development in the north-east.

The minister advised banks through the State Level Bankers’ Committee (SLBC) to increase general awareness about the Public Sector Banks Doorstep Banking Service (PSB DBS) that can be registered by the customers, an official statement said.

Under the scheme various services like pick-up services for cheques, drafts, pay orders and new cheque book, etc, can be availed at doorstep without visiting the branch. This facility launched earlier this year is currently limited to a few locations in the country.

With regard to greater physical presence, SLBC members promised opening 56 new bank branches and 150 bank correspondence (BC) facilities in Assam by March 2022. Among these, 34 will be established by public sector banks while the remaining 22 by private banks.

He attended Credit Outreach Program in these states and encouraged banks to give loans to required segments.

To bolster financial inclusion, he asked banks to promote the PM Jan Dhan Yojana (PMJDY) accounts for citizens that have recently attained majority.

The minister advised them to promote safe credit practices with sound dissemination of financial knowledge. PTI DP ANS ANS



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2 Large Cap, 1 Small Cap Company Stocks To Buy According To ICICI Direct

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SBI Life Insurance- Steady premium growth; elevated claims impact PAT

The brokerage has given a price target of Rs 1360 on SBI Life Insurance, with a 15% upside potential.

Q2FY22 Result

  • Business is gaining traction, and the forecast for claims is positive.
  • NBP rise of 17 percent YoY; gross premium growth of 14 percent YoY
  • VNB margins are solid at 21.8 percent, thanks to product mix and pricing increases.
  • Surplus increased by 1.3 times QoQ to Rs 256 crore, owing to higher investment income.
  • For H1FY22, the net Covid claim is Rs 1338 crore, with a Covid reserve of Rs 266 crore.

Target and Valuation

“SBIL’s share price has grown by ~1.6x over the past four years. Factoring distribution strength & diversified product mix, we retain our BUY rating on the stock Target Price & Valuation: We value SBIL at 3.2x FY23 EV with revised TP of Rs 1360,” the brokerage has said.

According to ICICI Direct, to help with general growth and VNB, the company has launched a non-par and protection solution. Covid claim appears to be moderate; reserves of Rs 266 crore appear to be enough. Maintaining commercial momentum requires a strong distribution network. Product mix and improved persistency will help VNB margins stay around 21-22 percent.

Astec Lifesciences- CRAMS likely to witness strong growth ahead

Astec Lifesciences- CRAMS likely to witness strong growth ahead

Astec Lifescience, founded in 1994, specialises in the development of active ingredients and intermediates for the agrochemicals industry.

The brokerage has given a price target of Rs 1575 on Astec Lifesciences, with a 31% upside potential.

Key triggers for future price-performance:

Improved herbicide plant utilisation will boost revenue growth for the CRAMS business, which is forecast to grow in the high thirties between FY21 and FY24E.

Enterprise base business is expected to increase in the mid-teens, while commercialization of critical three compounds in a $1 billion industry provides great revenue visibility for enterprise sales in the long run.

Astec recently upped their R&D spending to 4% of sales. Because the main focus is on strengthening the speciality compounds portfolio, meaningful product development with a large industry size can be expected in the medium to long term.

This would help the company’s long-term performance. A new R&D centre may serve as a stand-in for the old one.

“Astec Lifescience’s share price has grown by 32% CAGR over the past six years. We believe this is a good opportunity to play on the CRAMS business theme. We initiate coverage on the stock under Stock Tales format with a BUY rating and target price of Rs 1575 Target Price and Valuation: We value Astec Lifescience at ~25x P/E FY24E EPS to arrive at a target price of Rs 1575/share,” the brokerage has said.

United Spirits-Premiumisation trend continues to strengthen

United Spirits-Premiumisation trend continues to strengthen

The brokerage has given a price target of Rs 1080 on United Spirits, with an 18% upside potential.

Q2FY22 Results

  • On every front, USL outperformed I-direct predictions.
  • Revenues increased by 14% year on year to | 2447 crore, owing to a 4% increase in volumes and a 10% increase in realisation.
  • EBITDA increased by 58 percent to $ 426 crore, with margins of 17.4%. (12.6 percent in Q2FY21)
  • PAT doubled to Rs 273 crore as a result of a one-time reversal benefit in interest expense.

Target and Valuation

“With its broad portfolio and focus on placing existing brands in the upper prestige segment, along with introduction of its several iconic brands from Diageo stable, USL is well placed to capitalise on the rapidly growing premiumisation trend in the sector. We remain positive on the long term growth prospects of the stock and maintain our BUY recommendation Target Price and Valuation: We value USL at Rs 1050 i.e. 58x P/E on FY23E EPS,” the brokerage has said.

Key triggers for future price performance;

EBITDA performance will be boosted by a better product mix and higher RoI brands.

Strong cash generating and double-digit return ratios Newer distribution channels (e-commerce), portable packaging (Hipster) to engage with a young client base

Disclaimer

Disclaimer

The above stocks are picked from the brokerage report. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution. Greynium Information Technologies, the author, and the brokerage house are not liable for any losses caused as a result of decisions based on the article.



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