Month: November 2021

ICICI Lombard ties up with Vega Helmets

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ICICI Lombard General Insurance has partnered with Vega to offer personal accident insurance cover on every online purchase of Vega helmet.

“The personal accident insurance policy will provide individuals with the benefit of accidental death with sum insured of ₹1 lakh. The cover is applicable on a worldwide basis,” it said in a statement.

Sanjeev Mantri, Executive Director, ICICI Lombard said, “ICICI Lombard has always been a stout supporter of road safety and has undertaken several activities under our ‘Ride to Safety’ initiative which aims at creating awareness about safety rules. Taking the spirit ahead, this tie-up takes us one step closer to ensuring an individual’s personal security.”

Girdhari Chandak, MD, Vega Helmets said, “We are glad that through our tie-up with ICICI Lombard General Insurance, we are able to protect both the riders’ physical and financial well-being and provide them with a holistic and well-rounded bundle of protection.”

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Rupee inches higher by 8 paise to 74.79 against US dollar in early trade, BFSI News, ET BFSI

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Mumbai: The rupee inched higher by 8 paise to 74.79 against the US dollar in opening trade on Tuesday ahead of the US Fed and other central bank meeting this week. At the interbank foreign exchange, the rupee opened strong at 74.83 against the dollar and inched further to 74.79 in early deals, a rise of 8 paise over its previous close.

On Monday, the rupee had settled at 74.87 against the US dollar.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, fell 0.03 per cent to 93.84.

Most emerging market and Asian currencies have started mixed this Tuesday, while crude continued to remain firm and could appreciation bias, Reliance Securities said in a research note.

Global oil benchmark Brent crude futures rose 0.08 per cent to USD 84.78 per barrel.

On the domestic equity market front, BSE Sensex was trading 20.46 points or 0.03 per cent higher at 60,158.92, while the broader NSE Nifty advanced 9.35 points or 0.05 per cent to 17,939.00.

Foreign institutional investors were net sellers in the capital market on Monday as they offloaded shares worth Rs 202.13 crore, as per exchange data.

According to Anil Kumar Bhansali, Head of Treasury, Finrex Treasury Advisors, before the US Fed meeting, OPEC and the NFPR, all markets are trading in a small range.

Rupee is expected remain in a range of 74.60 to 75.20 with flows from IPOs getting absorbed by oil buying/RBI, he said.

“Euro and GBP unable to move up against the dollar and now markets awaiting Fed comments on Wednesday. Importers are likely to buy near 74.80 fearing a hawkish Fed and bullish oil, while exporters may sell for the near term above 75.00 levels,” he noted.



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3 Stocks To Buy As Recommended By The Morning India Report

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Buy the stock of Indian Oil, says the Morning India report

Motilal Oswal sees an upside of nearly 22% on the stock of Indian Oil for a target price of Rs 160. “The company reported a beat on our estimates owing to better than expected reported GRM (USD6.6/bbl) and marketing margin (Rs 7/liter), although refining throughput and marketing sales volumes were lower than our estimate. Petchem margin for Indian Oil fell by 23% QoQ, in line with the softening of PE/PP cracks in 2QFY22 (averaging 15-19% lower QoQ),” the brokerage has said.

“Indian Oil is likely to benefit the most from an uptick in refining margin, further aided by robust petchem margin in the near term (as mentioned above). We maintain our Buy rating on the stock,” the Morning India report has said.

Buy HDFC Stock

Buy HDFC Stock

The Morning India report has recommended buying the stock of HDFC for a 17% upside. The company reported 2QFY22 PAT (in-line) of INR37.8b, up 32% YoY / 26% QoQ. According to Motilal Oswal, the increase was primarily driven by lower credit costs of 31 basis points (which stood at Rs 4.5 billion, against the expectation of Rs 6 billion).

Individual disbursements in Oct’21 were the highest ever in a non-quarter-end month. Growth in home loans was seen in affordable housing as well as high-end properties. The increasing sales momentum and new project launches are positive developments for the Housing Finance sector

“We have largely maintained our estimates. We now model assets under management growth of 13% (v/s 11% earlier) in FY22E. We estimate HDFC to deliver core RoA/RoE of 2%/13% in FY23E. We reiterate our Buy rating, with SOTP-based target price of Rs 3,370 (Sep’23 SOTP-based),” the brokerage has said.

Buy Tata Motors

Buy Tata Motors

Motilal Oswal has set a target price of Rs 565 on the stock of Tata Motors. The company’s 2QFY22 performance was heavily impacted by the semiconductor shortage in JLR and India.

“Demand remains strong in JLR, with a record order book of 127k units. The semiconductor shortage situation remains dynamic. However, JLR expects a gradual recovery starting 2HFY22, with higher production (by 50k units) in 3Q from 2QFY22 levels,” the brokerage has said.

“Operating performance beat in JLR was driven by a favorable mix and lower fixed cost. India CV business missed our estimates due to commodity cost pressures. We expect a strong recovery/traction in JLR/India businesses from 3QFY22E onwards,” the brokerage has said.

Nifty company results better than expectations

Nifty company results better than expectations

According to the Morning India report, the 2QFY22 earnings are marginally ahead of expectations as the companies benefitted from a) strong revenue growth in the technology sector b) steady recovery in loan growth, as well recovery and upgrade in the asset quality of most private sector banks (except Bandhan), c) higher commodity prices and volume growth in the energy and metal sectors, and d) opening up of the economy which boosted consumer and retail growth. Nifty profit for the 34 companies that have announced their results grew 22% YoY (v/s estimate of 13% YoY). On the other hand, for the 127 companies in the Motilal Oswal Universe, profit grew 26% YoY (v/s estimate of 19% YoY).

Disclaimer

Disclaimer

The above stocks are picked from the brokerage report of Motilal Oswal. 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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Deutsche Bank ready to be NPS custodian for just Rs 100 per year, BFSI News, ET BFSI

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In an ultra-aggressive bid, Deutsche Bank is willing to accept a fee of just ₹100 a year for being the custodian of India’s pension fund which has total assets under custody of more than ₹6 lakh crore across various schemes.

The existing custodian, Stock Holding Corporation of India, a large depository participant owned by public financial institutions, charges close to ₹19 crore for the job.

Other institutions in the race for the custody mandate of the National Pension Scheme (NPS) include Citi, SBI-SG Global Securities Services (a joint venture between SBI and Societe Generale Securities Services), and ICICI. The fees quoted by these organisations are more than ₹1crore.

NPS, launched by the central government and involving multiple asset managers handling one of the largest fund pools in the country, is regulated by the Pension Fund Regulatory and Development Authority.

“It’s a prestigious mandate. So, Deutsche has probably taken a call to make money from a transitory float it could enjoy as a custodian,” said an official of a bank that has not put in a bid.

A Deutsche India spokesman said the bank would not comment on a client mandate.

“Beyond fees, there could be other ways to earn. Discount brokers charge little or nothing from stock traders. But, with so much liquidity available, earnings from float have come down with the fall in overnight rates. It may further shrink with T+1 (settlement in stock exchanges),” said an official of a financial intermediary.

A custodian has the opportunity to enjoy a day’s float by parking some money with the Reserve Bank of India under the reverse repo facility or in the inter-bank market.

Funds into NPS move from the employer (when salaries are paid) to the collection banks following which the money is transferred to custodians when an asset manager decides to invest in bonds and equities. Since investments happen within a day or two, custodians have a limited float.

The Deutsche bid has to pass the test laid down by the finance ministry.

According to the government’s ‘Manual for Procurement of Consultancy & Other Services’, “An abnormally Low bid is one in which the bid price, in combination with other elements of the bid, appears so low that it raises material concerns as to the capability of the bidder to perform the contract at the offered price. Procuring entity may in such cases seek written clarifications from the bidder, including detailed price analyses of its bid price in relation to scope, schedule, allocation of risks and responsibilities and any other requirements of the bid document. If, after evaluating the price analyses, (the) procuring entity determines that the bidder has substantially failed to demonstrate its capability to deliver the contract at the offered price, the procuring entity may reject the Bid/Proposal.”

Recently, a similar bid from another MNC bank for the custody mandate of postal life insurance was rejected on this ground.

While custody is a stable and sought after business, a few institutions have recently changed tack in choosing custodians. Life Insurance Corporation of India (LIC) recently shut the doors to foreign banks in selecting the custodian for its ₹10 lakh crore holding of stocks and corporate bonds. MNC banks lost out as LIC’s condition was that if the bidder was a foreign company or MNC, any of its securities had to be listed in India.



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Here’s what you need to know, BFSI News, ET BFSI

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Barclays‘ Chief Executive Jes Staley unexpectedly left the bank on Monday due to a dispute with British financial regulators over how he described his ties with convicted sex offender Jeffrey Epstein.

He will be replaced by C.S. Venkatakrishnan, widely known as Venkat, who was previously Head of Global Markets.

Here are five facts about Venkat.

ANOTHER JPMORGAN ALUM

Venkat is one of a cadre of Barclays senior executives poached from rival JPMorgan along with Staley. They include Global Head of Investment Banking Paul Compton, who was also Staley’s right-hand man in the reorganisation and streamlining of Barclays’ various group entities in recent years.

Others include Tushar Morzaria, who was Chief Financial Officer of the U.S. lender’s investment bank before taking up the CFO role at Barclays under Staley, and Ashok Vaswani who worked at a JPMorgan-funded private equity firm and now heads Barclays’ consumer banking division.

BEHIND-THE-SCENES SUCCESSION PLAN

Although Staley’s departure is sudden, the British lender says it has had succession planning “in hand for some time”. The bank said in its stock exchange announcement on Monday that it had reviewed potential external candidates for the top role but identified Venkat as its preferred candidate over a year ago.

Barclays shook up its top ranks in September 2020, promoting Venkat from group chief risk officer to head up global markets to give him a run at leading the lender’s critical investment banking unit.

SAFE PAIR OF HANDS

Barclays will be hoping Venkat’s experience as group chief risk officer – from 2016 to 2020 – will make him a safe pair of hands after Staley’s controversial tenure.

While in a senior risk job at JPMorgan, he flagged the potential for massive losses from a derivatives trade – a scandal later known as the “London Whale” that led to a $6.2 billion loss.

A U.S. Senate investigation found some losses could have been averted if JPMorgan had listened to Venkat’s warning, Bloomberg reported this month, adding Venkat was known for his unflappability and fondness for emojis even in a crisis.

Venkat has a bachelor’s degree, a master’s and a PhD from the Massachusetts Institute of Technology.

BIG MONEY

Venkat will be on a higher base salary than his predecessor, amid a red hot recruitment market as banks largely put COVID-19 costs behind them. Venkat will receive 2.7 million pounds ($3.69 million) in fixed pay – half in cash and half in shares. Although that tops Staley’s 2.4 million pounds a year, it’s still a cut from Venkat’s – undisclosed – fixed pay as head of global markets, Barclays’ board said.

Venkat will also be eligible for a bonus up to a maximum of 93% of his fixed pay and long term incentives up to 140% of fixed pay per year, as well as a cash payment in lieu of pension of 135,000 pounds a year.

Staley’s overall pay package came to 4 million pounds last year.

PROTEGE

Venkat is likely to pursue the same strategy as Staley at least in the near term, according to an internal memo to staff seen by Reuters on Monday.

“Jes has been my manager, mentor and friend for many years,” he wrote.

“The strategy we have in place is the right one, and we will continue our existing plans to transform our organisation and build on our financial prowess.”



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4 Stocks To Buy As Suggested By ICICI Securities After Q2FY22 Results

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IDFC First Bank- Improved performance on most parameters

The brokerage has set a price target of Rs 60 on IDFC First Bank‘s stock, representing a 22% upside potential over the current market price of Rs 49.

Q2FY22 Results:

  • Consistent operational results.
  • NII increased by 27.4% year on year to Rs 2272 crore, while NIMs increased by 25 basis points quarter on quarter to 5.76 percent.
  • Provisions are down 74 percent year over year. Net profit increased by 49% year on year to $ 151.7 crore.
  • GNPA fell 34 basis points from the previous quarter to 4.27 percent, with 2.9 percent of loans restructured.
  • Advances are up 3.1 percent quarter over quarter and 9.8 percent year over year, deposits are up 19 percent year over year, and the CASA ratio is at 51.3 percent.

Target and Valuation

“The IDFC First stock has jumped over 65% in the past one year. Gradual improvement in margin, pick up in loan growth, and operational performance is expected to aid return ratios. We retain our BUY rating on the stock Target Price and Valuation: We value IDFC First Bank at ~1.6x FY23E ABV and maintain target price of Rs 60 per share,” the brokerage has said.

Mahindra Logistics- Expect margin bounce-back in Q3

Mahindra Logistics- Expect margin bounce-back in Q3

The brokerage has set a price target of Rs 750 on Mahindra Logistics‘s stock, representing a 17% upside potential over the current market price of Rs 640.

Q2FY22 Results:

  • Profitability was harmed because margins were lower than expected.
  • Revenues increased by 22% year on year to Rs 1019 crore, owing to better-than-expected performance in the SCM business.
  • EBITDA increased by 34% to 50 crore, with margins of 4.9 percent (vs. expected 5.6 percent )
  • PAT, on the other hand, fell 37% YoY to Rs 9 crore, as increased interest and depreciation weighed on operating performance.

Target and Valuation

“While the company has been facing challenges w.r.t. auto sector in the short run (non-passage of crude oil price, optimisation of SCM, etc), the company is adding customers on the 2-W and non-auto segment (more warehousing) and continuously improving its service mix. We remain positive on the long term growth prospects of the stock and maintain our BUY recommendation. Target Price and Valuation: We value the stock at Rs 750 i.e. 49x P/E on FY23E EPS,” the brokerage has said.

Key triggers for future price performance:

Increased storage space requirements and 3PL importance due to a shift in buying behaviour (more online shopping).

Customers will benefit from increased investment in technology and a multi-modal transportation option.

Gail (India)- Rebound in gas trading segment drives profitability

Gail (India)- Rebound in gas trading segment drives profitability

The brokerage has set a price target of Rs 180 on Gail’s stock, representing a 20% upside potential over the current market price of Rs 150.

Q2FY22 Result

  • On the profitability front, Gail’s performance were better than predicted.
  • Revenue increased by 57.7% year over year to | 21511 crore (our estimate: 21439.2 crore).
  • While LPG/LLH performance was below expectations, all other segments-gas transmission and trade, petchem, and LPG-reported higher profits than predicted.
  • Following that, EBITDA increased by 159.7% YoY to Rs 3475.1 crore (our estimate: | 2882.9 crore). PAT was reported at Rs 2862.9 crore, increasing 130.9 percent year over year (our estimate was | 2158.2 crore).

Escorts-Robust capital efficiency, healthy b/s merit upgrade

Escorts-Robust capital efficiency, healthy b/s merit upgrade

The brokerage has set a price target of Rs 1900 on Escorts’s stock, representing a 23% upside potential over the current market price of Rs 1550.

Q2FY22 Results:

  • The corporation had a good second quarter of FY22.
  • Total operating income was up 1.4 percent year on year at Rs 1,622 crore.
  • EBITDA margins fell 131 basis points QoQ to 12.6 percent, which was lower than projected.
  • PAT fell by 24.5 percent year on year to Rs 173 crore.

Target and Valuation

“The share price of Escorts has grown ~4x over last five years from ~| 380 levels in October 2016, vastly outperforming Nifty Auto Index. We upgrade Escorts to BUY amid robust capital efficiency, net cash b/s. Target Price and Valuation: We value Escorts at revised SOTP-based TP of | 1,900 (20x P/E on core FY23E EPS, 20% discount on treasury shares; previous TP | 1,325),” the brokerage has said.

Key triggers for future price-performance:

Construction equipment (CE) and railways (RED) growth to be faster amid expected economic activity and positive outlook for mining, construction, road building, and general infra push by government Operating leverage gains to expand EBITDA margins to 14% by FY23E Optimal utilisation of surplus cash on b/s, possible stake increase by Kubota Corporation (currently 10%) could be a large value driver

4 Stocks To Buy As Suggested By ICICI Securities After Q2FY22 Results

4 Stocks To Buy As Suggested By ICICI Securities After Q2FY22 Results

Price in Rs.

Upside Potential GAIL India 180 20% Mahindra Logistics 750 17% IDFC First Bank 60 22% Escorts 1900 23%

Disclaimer

Disclaimer

The above stocks are picked from the brokerage report of ICICI Direct. 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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7 Stocks To Buy From Broking Firm Motilal Oswal For Long Term Investors

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Buy State Bank of India stock

According to Motilal Oswal among PSU Banks, State Bank of India remains the best play on a gradual recovery in the Indian economy, with a healthy PCR, Tier I of 11.3%, strong liability franchise and improved core operating profit. It appears well positioned to report strong uptick in earnings, led by normalization in credit cost.

“We estimate PPOP at 14% CAGR over FY21-23E v/s 6% CAGR (FY18-21), enabling State Bank of India to achieve 15% RoE (decadal high) by FY23E,” the brokerage has said.

VIP Industries

According to Motilal Oswal VIP industries is the largest luggage manufacturing company and would immensely benefit from opening up of the economy and pick up in domestic leisure travel.

Buy Tata Motors stock

Buy Tata Motors stock

The brokerage also has a buy call on the stock of Tata Motors. “Recovery is underway in all of the three businesses of Tata Motors.

While India CV business would see cyclical recovery, JLR is witnessing both cyclical and structural, supported by a favorable product mix. This could drive recovery in JLR’s EBIT margins and leave scope for a surprise on profitability.

The India PV business (34% CAGR) would witness structural recovery aided by refreshed product portfolio and market share gains which will bring it on track to achieve FCF breakeven by FY23,” the brokerage has said.

United Spirits

United Spirits

According to Motilal Oswal Financial services, recovery post the second COVID wave has been faster than that in FY21 and continues to improve.

“The outlook appears promising with: a) on-trade channel returning to normalcy; b) increased occasions for home indulgence; c) the ongoing strategic review of half of the Popular portfolio to be concluded by Dec’21, which would offer further primacy to the Prestige & Above (P&A) segment; d) potential success in the P&A segment in terms of both growth and ; e) the new CEO taking over recently; and e) faster-than-expected deleveraging,” the brokerage has said.

Indian Hotels

Indian Hotels

Motilal Oswal Financial Services expects gradual recovery in FY22E and sharp recovery in FY23E on (a) a low base, (b) improvement in ARR once normalization is achieved, (c) improved occupancies, (d) positivity in cost rationalization efforts in FY21, (e) an increase in F&B income as banqueting and conferences resume, and (f) higher income from management contracts.

“The company is on the right track to grow its EBITDA as new revenue-generating avenues are seeing higher EBITDA margins,” it has stated.

Buy Ultratech Cement stock

Buy Ultratech Cement stock

Ultratech Cement enjoys leadership position across regions, which helps it maintain its premium pricing in most markets. Ultratech Cement is setting up Cement capacities of 19.5mtpa, which would drive sales volume CAGR of 10% over FY21-24E.

“We expect Ultatech Cement to turn cash positive in FY24E and expect RoE to improve further to 15% by FY24E on higher asset turnover, led by an enhancement in capacity utilization, continued debt reduction, and improvement in EBIT margin,” Motilal Oswal Financial Services has said.

Macrotech Developers

Lodha is one of the largest real estate developers in India, benefitting from the recent demand pick-up and the optimism behind the expected upcycle. Prices have hit rock bottomed and are expected to pick-up gradually in the near term as the supply crunch is likely to see demand exceeding launches.



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Reserve Bank of India – Press Releases

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) 4,96,545.40 3.31 1.00-5.20
     I. Call Money 10,736.42 3.31 2.00-3.55
     II. Triparty Repo 3,80,410.40 3.31 3.15-3.50
     III. Market Repo 1,05,368.58 3.32 1.00-3.60
     IV. Repo in Corporate Bond 30.00 5.20 5.20-5.20
B. Term Segment      
     I. Notice Money** 512.20 3.21 2.75-3.40
     II. Term Money@@ 110.00 – 3.10-3.50
     III. Triparty Repo 0.00 – –
     IV. Market Repo 483.22 3.71 3.65-3.75
     V. Repo in Corporate Bond 1,014.90 4.73 3.60-5.60
  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, 01/11/2021 1 Tue, 02/11/2021 2,78,854.00 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, 01/11/2021 1 Tue, 02/11/2021 300.00 4.25
4. Special Long-Term Repo Operations (SLTRO) for Small Finance Banks (SFBs)£          
5. Net liquidity injected from today’s operations
[injection (+)/absorption (-)]*		       -2,78,554.00  
II. Outstanding Operations
1. Fixed Rate          
    (i) Repo          
    (ii) Reverse Repo          
    (iii) Special Reverse Repo~ Fri, 22/10/2021 12 Wed, 03/11/2021 5,465.00 3.75
    (iv) Special Reverse Repoψ Fri, 22/10/2021 12 Wed, 03/11/2021 2,900.00 3.75
2. Variable Rate&          
  (I) Main Operation          
     (a) Reverse Repo Fri, 22/10/2021 12 Wed, 03/11/2021 4,18,395.00 3.99
  (II) Fine Tuning Operations          
     (a) Repo          
     (b) Reverse Repo Tue, 26/10/2021 7 Tue, 02/11/2021 2,00,019.00 3.99
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
  Mon, 30/08/2021 1095 Thu, 29/08/2024 50.00 4.00
  Mon, 13/09/2021 1095 Thu, 12/09/2024 200.00 4.00
  Mon, 27/09/2021 1095 Thu, 26/09/2024 600.00 4.00
  Mon, 04/10/2021 1095 Thu, 03/10/2024 350.00 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
Wed, 15/09/2021 1094 Fri, 13/09/2024 150.00 4.00
D. Standing Liquidity Facility (SLF) Availed from RBI$       21,695.80  
E. Net liquidity injected from outstanding operations [injection (+)/absorption (-)]*     -5,19,441.2  
F. Net liquidity injected (outstanding including today’s operations) [injection (+)/absorption (-)]*     -7,97,995.2  
G. Cash Reserves Position of Scheduled Commercial Banks
     (i) Cash balances with RBI as on 01/11/2021 6,00,571.29  
     (ii) Average daily cash reserve requirement for the fortnight ending 05/11/2021 6,36,507.00  
H. Government of India Surplus Cash Balance Reckoned for Auction as on¥ 01/11/2021 0.00  
I. Net durable liquidity [surplus (+)/deficit (-)] as on 08/10/2021 11,92,495.00  
@ 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, Press Release No. 2020-2021/1057 dated February 05, 2021 and Press Release No. 2021-2022/695 dated August 13, 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 and Press Release No. 2021-2022/1023 dated October 11, 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: 2021-2022/1133

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Kerala Financial Corporation announces special loans for MSMEs

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Kerala Financial Corporation (KFC), a leading State-level financial institution, has launched a special loan product to the Micro, Small and Medium Enterprise (MSME) sector, aiming to assist them execute work orders and also discount pending bills.

Under the scheme, 75 per cent of the cost of work received from government departments/agencies/PSUs will be provided as a loan, a spokesman for the corporation said.

Duration of work

Repayment will depend on the duration of work and expected receipt of funds from the work-awarding authority. The rate of interest will be linked to the credit rating score of the MSME, starting at eight per cent.

Considering the Covid-19 situation, the credit rating of the MSME will be based on analysis of the balance sheet during the pre-Covid period, the spokesman said.

Once the work awarding authority accepts the bill, MSMEs can immediately get up to 90 per cent of the bill amount through discounting. For final bills, the discounting can be done without security also.

Discounting facility

MSMEs play an important role in the economic growth of the country. But they continue to face constraints in obtaining adequate finance, particularly in terms of sourcing funds required to execute work orders or convert bill receivables into liquid funds. The new scheme from Corporation will be appropriate to address such issues during this pandemic period, the spokesman said.

The applicant should be MSME Udyam registered to become eligible for the scheme. GST registration and the latest audited balance sheet are also mandatory. However, GST registration will not apply to MSMEs exempt from registration.

An audited balance sheet may not be insisted with respect to MSMEs with annual turnover of up to ₹2 crore, paying income tax on a presumptive basis.

The loan will be sanctioned as a Line of Credit (LoC) for a five-year period during when MSMEs can avail facilities such as guarantees, work execution loans, bill discounting, government promissory note discounting and equipment finance.

Maximum assistance

Maximum assistance will be ₹20 crore for companies/registered cooperative societies and ₹8 crore for others. However, the limit for guarantees and discounting of government promissory notes will be up to ₹50 crore for all entities.

The validity of the LoC is for five years. Once the customers execute the loan agreement, they can avail all facilities throughout the five-year period with minimum formalities. The scheme will be reviewed on the basis of feedback from the MSMEs.

Kerala Financial Corporation targets to disburse at least ₹500 crore under this scheme during the current financial year itself, the spokesman added.

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