Author: root

4 mantras to help you borrow wisely

Personal Finance

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There’s plenty of personal finance advice on saving and investing wisely. But for most young folks, borrowing to fund their lifestyle often precedes investing.

Biting off more loans than you can chew early in life can put a spoke in your wealth creation plans even before you get started. With many lenders jostling for the retail loan pie, loan products today come in slick disguises too. So here are some tips to avoid the pitfalls and borrow wisely.

Borrowing for a good purpose

Any kind of borrowing entails taking on future hardship in the form of loan obligations to gratify an immediate need. But getting into the habit of instant gratification for all your needs, wants and luxuries locks up your future incomes in EMIs and robs you of the flexibility to make career or life decisions.

This makes it important for you to put some thought into the kind of spending for which you will borrow. To ensure that loans don’t deplete your wealth, distinguish between appreciating assets and depreciating ones.

When you borrow to invest in an appreciating asset such as land, a home, or an educational degree, returns you earn in the long run can compensate, at least partly, for the interest costs you incur.

But if you borrow to fund depreciating assets, you face the double whammy of interest costs on top of eroding asset value. Folks who take loans to replace their smartphone every year would know the pain of paying EMIs, long after an item has outlived its usefulness.

Don’t step-up EMIs

When assessing if they can afford a new car, consumer appliance, or home loan, most folks look at only the EMI or equated monthly installment. Knowing this, lenders obligingly structure their EMIs ‘flexibly’ as step-up or balloon EMIs, so that the initial EMIs are small, but expand as time goes by.

But this gimmick hurts more than helps you as a borrower. Lower EMIs at the beginning of your loan term merely postpone your repayment and help the lender load extract additional interest, adding to your total outgo.

Take the case of a ₹10 lakh car loan for 5 years, at a fixed rate of 7.5 per cent. The EMI based on the old-fashioned fixed calculation would be ₹20,038 per month. This essentially means a total outgo of ₹12.02 lakh including interest on the ₹10 lakh loan at the end of 5 years.

Should you opt for a step-up EMI, where you pay ₹8,990 for the first six months and ₹22,240 for the next 54 months, you end up shelling out ₹12.55 lakh for the same term. In a balloon repayment scheme, which stretches your loan tenure to 7 years, you start with an EMI of ₹11,110 in the first year, going up to ₹12,220 in the second year, and so on until your EMI hits ₹99,990 in the last month. In this case, you’d end up shelling out ₹14.12 lakh to the lender. That’s 17 per cent more than the simple EMI.

Shop around for better rates

When it comes to investment products, most folks are constantly on the hunt for better rates. But with loans, they carry a misplaced sense of loyalty to their lender and pay EMIs like clockwork.

Worries about processing charges and paperwork are also deterrents to making any switch.

However, Indian lenders are no longer allowed to charge prepayment penalty on floating rate loans.

Most lenders are quite willing to offer attractive deals with minimal paperwork to customers jumping ship from their competitors because they like to add new clients with a readymade repayment record.

Your existing lender may take his own sweet time to reset your interest rate when market interest rates are falling.

But most lenders are quite willing to offer much lower rates to their brand-new customers. This makes transferring your home loan balance to a new lender the best way to expedite rate resets.

Given the size and tenor of home loans, a simple switch from one lender to another can make quite a difference to your wealth in the long run. Switching a ₹30 lakh home loan with a remaining tenure of 15 years, from a bank charging 8 per cent interest to one charging 6.75 per cent, can reduce your EMI outgo from ₹28,670 a month to ₹26,547 and your total loan repayment from ₹51.6 lakh to ₹47.7 lakh.

Prepay at every opportunity

Loans, as we explained earlier, can rob you not just of the ability to spend, but also of career and financial flexibility. This makes it important for you to pay down your loan whenever you accumulate a reasonable lump sum.

If you’ve built up significant sums in your bank deposits from salary cheques, bonus from your employer, or a windfall from the stock market, use that to prepay your loans as soon as you can.

While prepaying, prioritize high-rate loans and keep tax benefits in mind. But ultimately, if you have sufficient sums saved up to prepay your home loan, don’t let tax considerations nudge you into continuing with EMIs.

The tax saving on a home loan repayment only lets you save on your interest costs and doesn’t really bolster your income or wealth.

This is a free article from the BusinessLine premium Portfolio segment. For more such content, please subscribe to The Hindu BusinessLine online.)

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GAME, BFSI News, ET BFSI

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New Delhi: To overcome the job crisis and tackle the economic challenges facing the country, it needs to exponentially increase the number of job creators — and this would entail more robust participation of the MSME sector which is the hotbed for entrepreneurship in India, asserted Madan Padaki, co-founder, Global Alliance for Mass Entrepreneurship (GAME) today.

To unlock the potential of youth entrepreneurship, India needs to nurture an entrepreneurial mindset, map career pathways based on skills, passion and opportunities, design structured internship models, enable access to financing and build structured mentoring programs, Padaki said.

Coinciding with World Entrepreneurs’ Day, (GAME) and YuWaah!, a UNICEF-initiated multi-stakeholder global platform had hosted the Youth Entrepreneurship (YE) summit. The aim of the meet was to build collaborations and partnerships to fuel youth entrepreneurship as a viable and aspirational career path.

The event also marked the official launch of the joint taskforce’s Youth Entrepreneurship program – ‘Yuvoudhyami’.

As an ecosystem facilitator, GAME plans to expand knowledge and learning through increased collaboration amongst individuals/institutions in the youth entrepreneurship space.

We can create impact at scale only when there is a collaborative, structured and consistent effort, padaki added.

GAME has also partnered with Head Held High (HHH) Foundation to work with rural young women in Karnataka, providing them training in key skill areas, and nurturing opportunities for them to explore entrepreneurial ideas at the village/taluk level.

Entrepreneurship is one of the most important conversations in the current ecosystem, but the real challenge is to create local heroes,” said Mohammad Azhar, Lead – Government Initiatives, Villgro, one of the panellists at the programme.

Lauding the Student Startup and Innovation Policy (SSIP), M Nagarajan, IAS, Director – Higher Education Dept, Govt of Gujarat and ED – iHub, stated that it’s very important to instil entrepreneurial thinking at a young age so that t becomes a career of choice at the age of 15,16,17 for youth to help push their entrepreneurial journey. “Sandbox in colleges and teachers are mentoring and supporting them taking the idea to the market. This policy makes it reach mass scale,” he said.



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Taxes on fuel trigger worry at RBI policy panel’s meet, BFSI News, ET BFSI

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MUMBAI: The government’s move to pass on increases in global crude oil price to consumers, but prevent corrections through higher taxes, has raised concerns on inflation among the Reserve Bank of India‘s (RBI’s) monetary policy committee (MPC) members.

The minutes of the MPC meeting released on Friday reveal that, worried by inflation, one member, J R Varma, had voted to raise the reverse repo, the rate at which banks lend to the RBI. This rate is outside the remit of the MPC, which votes only on the repo rate, the rate at which banks borrow from the RBI.

High domestic price of fuels has triggered worries over stubborn price pressures and there have been demands to reduce taxes to help calm prices of petrol and diesel across the country.

Finance minister Nirmala Sitharaman has blamed the burden of UPA-era oil bonds as an obstacle to bringing down fuel prices. She has said that if she did not have the burden to service the oil bonds, she would have been in a position to reduce excise duty on fuel.

Earlier, RBI governor Shaktikanta Das had also said that diesel and petrol prices act as cost-push factors across a range of activities. “It’s not just that passengers who use cars and bikes. High fuel prices also have an impact on the cost of manufacturing, transportation and other aspects,” Das had said in a speech in February.

While retail inflation has shown some signs of moderation in July, wholesale price inflation continued to remain in double digits for the fourth consecutive month. Stubborn inflationary pressures have prompted the RBI to pause its rate-cutting cycle, although it has promised to keep an easy stance to help support growth and nurse the economy to a high growth trajectory.

The minutes reveal that Das made a strong pitch for continuing monetary policy support, citing slack in the economy and inflation being driven by supply-side factors. “Continued policy support with a focus on revival and sustenance of growth is indeed the most desirable and judicious policy option at this moment,” said Das, making a case for maintaining status quo. “On the whole, the economy still requires support in terms of maintaining congenial financial conditions and fiscal boosters. At such a critical juncture, can we really pull the rug and let the economy tumble?” said Das.

RBI ED Mridul Saggar estimated that the excise duty hike itself may have pushed headline inflation higher by 60-80 basis points (100bps = 1 percentage point), adding to cost-push inflation. Saggar, who along with the others voted for status quo, highlighted the significance of narrative economics in difficult times in producing business cycle movements endogenously.

The views of external members reveal that, while all are keen to support the economy, there is some divergence in respect of their view on inflation. External member Ashima Goyal said that if indirect taxes impart persistence to inflation, it could de-anchor inflation expectation and pose challenges to monetary policy. Pointing out that fuel prices do not fall with international prices, she said, “A persistent rise in Indian fuel prices is at odds with inflation targeting.”

Varma, who argued for withdrawing the accommodative stance, said, “Persistent high inflation means that the monetary accommodation has to be somewhat restrained and, therefore, I argued for raising money market rates towards the repo rate of 4%.”

Barclays economist Rahul Bajoria said that the minutes indicate a shift within the MPC’s narrative and, while the overarching view remains consistently to support the economic recovery, the comfort with inflation dynamics is certainly shifting within the MPC members. He added that there also appears to be a slight divergence visible on inflation persistence between the internal and external members. “But we reckon this gap is unlikely to be sustained, as more inflation prints come through,” he said.



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DCB Bank Revises Interest Rates On Fixed Deposit: Check Current Rates Here

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DCB Bank Regular FD Rates

After the most recent revision of interest rates on FD, the bank offers an interest rate of 4.35% on deposits maturing in 7 days to 90 days. For FDs maturing in 91 days to less than 6 months and 6 months to less than 12 months, the bank offers an interest rate of 5.05% and 5.45% respectively. For term deposits maturing in 1 year, the bank is now offering an interest rate of 5.55%. The private lender is providing a 5.30 percent interest rate on FDs with a maturity period ranging from more than 12 months to less than 15 months.

DCB Bank is currently offering a 5.50 percent interest rate on FDs maturing in 15 months to less than 18 months and 18 months to less than 700 days. For term deposits maturing in 700 days, the bank is now promising an interest rate of 5.95%. For FDs maturing in more than 700 days to less than 36 months, the private lender is providing a 5.50 percent interest rate on FDs. DCB Bank is currently offering a 5.95 percent interest rate on FDs maturing in 36 to 120 months.

Tenure Regular Deposit Interest Rate (p.a.) Effective Annualised Yield (% per annum)
7 days to 14 days 4.35% 4.35%
15 days to 45 days 4.35% 4.35%
46 days to 90 days 4.35% 4.35%
91 days to less than 6 months 5.05% 5.05%
6 months to less than 12 months 5.45% 5.56%
12 months 5.55% 5.67%
More than 12 months to less than 15 months 5.30% 5.41%
15 months to less than 18 months 5.50% 5.65%
18 months to less than 700 days 5.50% 5.73%
700 days 5.95% 6.22%
More than 700 days to less than 36 months 5.50% 5.89%
36 months 5.95% 6.46%
More than 36 months to 60 months 5.95% 6.87%
More than 60 months to 120 months 5.95% 8.05%
Source: Bank Website, with effect from 17th August 2021.

DCB Bank FD Rates For Senior Citizens

DCB Bank FD Rates For Senior Citizens

After the latest revision, elderly persons would continue to receive an additional rate of 0.50% than the general public. For a deposit amount of less than Rs 2 Cr, senior citizens will get the following interest rates on their deposits.

Tenure Rate for Senior Citizens (% per annum) Effective Annualised Yield (% per annum)
7 days to 14 days 4.85% 4.85%
15 days to 45 days 4.85% 4.85%
46 days to 90 days 4.85% 4.85%
91 days to less than 6 months 5.55% 5.55%
6 months to less than 12 months 5.95% 6.08%
12 months 6.05% 6.19%
More than 12 months to less than 15 months 5.80% 5.93%
15 months to less than 18 months 6.00% 6.18%
18 months to less than 700 days 6.00% 6.28%
700 days 6.45% 6.77%
More than 700 days to less than 36 months 6.00% 6.47%
36 months 6.45% 7.05%
More than 36 months to 60 months 6.45% 7.54%
More than 60 months to 120 months 6.45% 8.96%
Source: Bank Website, with effect from 17th August 2021.

DCB Bank Penalty Rates On Premature Closure of Resident Deposits

DCB Bank Penalty Rates On Premature Closure of Resident Deposits

On premature withdrawal of deposits, DCB Bank will impose the following penalty rates.

Penalty for Premature Closure of Resident Deposits
Size of Deposit 7 – 13 days 14 – 29 days 30 days & above
Less than Rs. 2 crore No Interest 0.50% less than the applicable rate 0.50% less than the applicable rate
Rs. 2 crore and above No Interest No Interest 2% less than the applicable rate
Source: DCB Bank



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This World Senior Citizens Day Invest For Your Golden Years With ICICI Bank FD: Check Details

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Investment

oi-Vipul Das

|

For covering inflation-adjusted living expenditures during retirement days, a typical retirement plan with a smart investing strategy for seniors is centered on retirement goals, risk tolerance attitude, steady income in the form of assured returns, easy exit or withdrawal rules, and so on. To guarantee steady income after retirement, it is critical for a retiree to budget and park his or her regular sum of money in a secure or safe investment vehicle. And, when it comes to safe investments for elderly folks, investing in fixed deposits is always the smartest and safest option for guaranteed returns.

To celebrate “World Senior Citizens Day”, ICICI Bank, a leading private sector lender, has exclusive benefits for senior citizens. Regarding the same the bank via its Twitter handle has today said that “This World Senior Citizens Day, invest for your golden years with ICICI Bank and enjoy an exclusive additional interest rate.” Only for the convenience of senior citizens, the bank today has said that “This World Senior Citizens Day Open An ICICI Bank Golden Years Fixed Deposit And Enjoy Your Golden Years Worry-Free.” Now let’s talk briefly about the special fixed deposit of the bank.

Golden Years Fixed Deposit From ICICI Bank

Golden Years Fixed Deposit From ICICI Bank

Last year on 21st May 2020, ICICI Bank had introduced a special FD scheme for senior citizens. ‘ICICI Bank Golden Years FD’, the scheme offers senior citizens an interest rate of 6.30% per annum for deposits up to Rs 2 crore with a tenure of more than five years to 10 years, according to the bank. According to the official statement of the bank “ICICI Bank Golden Years FD offers 80 basis points (bps) more than what is applicable to the general public (non-senior citizens) for the same deposit amount and tenor. Also, it is 30 bps more than the previous rates offered by the Bank. Resident senior citizens can avail the benefit of this scheme for new FDs as well as renewal of old FDs.” Here are the key benefits of the special fixed deposit scheme of ICICI Bank that senior citizens should need to know:

Exclusive additional interest rate: Indian senior citizens over the age of 65 will receive an additional 0.30 percent interest rate on their term deposits, including the existing additional rate of 0.50 percent per annum for deposit terms ranging from 5 years and 1 day to 10 years.

Period: This deposit is open to senior citizens till October 7, 2021.

Deposit amount: For a deposit amount of less than Rs 2 Cr, senior citizens will be eligible to get the additional interest rates under this special fixed deposit scheme.

Loan against fixed deposit: Senior citizens can also apply for a loan and get loan amount up to 90 percent of the principal and accrued interest against their special fixed deposit.

Credit card against fixed deposit: Against their Golden Years Fixed Deposit, senior citizens can also apply for a credit card with the bank.

ICICI Bank FD Interest Rates For Senior Citizens

ICICI Bank FD Interest Rates For Senior Citizens

For a deposit amount of less than Rs 2 Cr, senior citizens will get the following interest rates on their fixed deposit.

Maturity Period Interest Rates For Senior Citizens
7 days to 14 days 3.00%
15 days to 29 days 3.00%
30 days to 45 days 3.50%
46 days to 60 days 3.50%
61 days to 90 days 3.50%
91 days to 120 days 4.00%
121 days to 150 days 4.00%
151 days to 184 days 4.00%
185 days to 210 days 4.90%
211 days to 270 days 4.90%
271 days to 289 days 4.90%
290 days to less than 1 year 4.90%
1 year to 389 days 5.40%
390 days to less than 18 months 5.40%
18 months to 2 years 5.50%
2 years 1 day to 3 years 5.65%
3 years 1 day to 5 years 5.85%
5 years 1 day to 10 years 6.30% (Golden Years FD)
5 Years (80C FD) – Max to Rs 1.50 lac 5.85%
Source: ICICI Bank, W.e.f. Oct 21, 2020

ICICI Bank Penalty Rates On Premature Withdrawal of FD

ICICI Bank Penalty Rates On Premature Withdrawal of FD

Premature withdrawal of Domestic, NRO, and NRE deposits shall result in interest being determined at the prevailing rate for the period of the deposit was kept with the bank or the contracted rate of the deposit, whichever is lower, plus the relevant penalty as follows:

Original Tenure of Deposit Penal Rates
Less than Rs 5.0 crore Rs 5.0 crore & above
Less than 1 year 0.50% 0.50%
1 year & above but less than 5 years 1.00% 1.00%
5 years and above 1.00% 1.50%
Source: Bank Website

Story first published: Saturday, August 21, 2021, 12:56 [IST]



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Govt notifies changes to FEMA

Banking & Finance

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The Finance Ministry has made changes to the Foreign Exchange Management Act (FEMA) regulations to ensure that private banks having joint venture or subsidiary in the insurance sector do not breach the 74 per cent cap on FDI.

Investment limit

Earlier this year, the government enacted a legislation to allow foreign investment limit to 74 from 49 per cent, along with foreign ownership and control with safeguards. Similarly, private banks have foreign investment limit of 74 per cent, but with a condition that no shareholder, irrespective of the shareholding, will have more than 15 per cent of the total voting right.

A notification issued by the Economic Affairs Department of the Finance Ministry said that the application for FDI in private banks having joint venture or subsidiary in insurance sector may be addressed to the RBI for consideration, in consultation with the Insurance Regulatory and Development Authority of India (IRDAI). This needs to be done to ensure that foreign investment limit in insurance is not breached.

Conditions attached

The notification also provided for maintaining conditions attached with foreign investment in insurance sector. One such conditions was that for a bank to act as an insurance intermediary, the foreign equity investment caps applicable in that sector would continue to apply. The said entity will also have to see that revenue from the primary business must remain above 50 per cent of their total revenues in any financial year.

Officials say there could be a situation where the private bank is controlled by Indian residents and its insurance business by a foreign company. As on date, many of the private sector banks have tie-ups with foreign entities for insurance business – ICICI Bank has a tie up with Prudential while PNB has partnered with Metlife.

The RBI guidelines do not permit banks to undertake insurance business with risk participation departmentally; they can do so only through a subsidiary or joint venture set up for the purpose.

Now, if a bank plans to set up such a subsidiary to undertake insurance business with risk participation, it will have to fulfil certain conditions – the net worth of the bank should not be less than ₹1,000 crore, Capital Adequacy Ratio should not be less than 10 per cent, NPA should not be more than 3 per cent, and should have been profitable for the last three consecutive years.

“It should also be ensured that risks involved in the insurance business do not get transferred to the bank, and that the banking business does not get contaminated by risks that may arise from the insurance business. There should be an ‘arm’s length’ relationship between the bank and the insurance outfit,” according to RBI norms.

Banks can also set up a subsidiary or JV for insurance broking or corporate agency. Here, the criteria would be different. These include net worth not less than ₹500 crore, Capital Adequacy Ratio of 10 per cent or more, NPA should not be more than 3 per cent, and the bank should have made a net profit for the last three continuous years.

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PM Kisan Samman Nidhi: These People Are Ineligible For Income Support Under The Scheme

Personal Finance

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Personal Finance

oi-Roshni Agarwal

|

The PM Kisan Samman Nidhi was brought about to supplement farmers’ income and an annual pay out under the scheme for farmers was Rs. 6000 in 3 equal installments. But there are people are wrongly taking advantage of the scheme and trying to capitalize on the amount even when they are not eligible.

PM Kisan Samman Nidhi: These People Are Ineligible For Income Support Under The

PM Kisan Samman Nidhi: These People Are Ineligible For Income Support Under The Scheme

So, thus after the latest 9th installment has been disbursed, in totality the amount paid out under the PM Kisan Scheme is Rs. 1.57 lakh crore. And as a complimentary benefit those farmers eligibles for a pay-out under the scheme can also avail loans using the KCC or Kisan Credit Card scheme.

Here thus we put in place all the people who shall ineligible to receive the grant under the PM-KISAN scheme:
a) All institutional landholders; and
b) Farmer families wherein one or more of its members belong to the following categories: –
1. Former and present holders of constitutional posts
2. Former and present ministers, State Ministers and former and present Members of Lok Sabha, Rajya Sabha, state Legislative Assemblies, State Legislative councils, former and present Mayors of Municipal corporations, former and present Chairpersons of District Panchayats.
3. All super annulated, retired pensioners whose monthly pension is Rs 10,000 or more, excluding multi-tasking staff, Class IV, Group D employees.
4. All persons who paid income tax in the last assessment year
5. All serving or retired officers and employees of Central and State Government Ministries, Offices, Departments and its field units Central or State PSEs and attached offices, autonomous institutions under Government as well as regular employees of the local bodies (Excluding Multi-Tasking staff, Class lV, Group D employees
6. Professionals like Doctors, Engineers’ Lawyers, Chartered Accountants, and Architects registered with Professional bodies and carrying out profession by undertaking practices.
So, as part of the scheme scrutiny shall be done and state government and UT administration will identify the farmer families that are eligible for support .

GoodReturns.in

Story first published: Saturday, August 21, 2021, 10:52 [IST]



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This Is What Maximum Banks’ Owe To Their Locker Customers In Case Of Damage or Loss To Their Locker Content

Personal Finance

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Personal Finance

oi-Roshni Agarwal

|

The apex banker recently announced guidelines of bank locker after Supreme Court bench of Justices including Mohan M Shatanagoudar and Vineet Saran asked the RBI to come up with uniform set of rules for all banks concerning locker management within six months.

This Is What Banks' Owe To Their Locker Customers In Case Of Loss

This Is What Maximum Banks’ Owe To Their Locker Customers In Case Of Damage or Loss To Their Locker Content

For banks the regulator has asked banks to keep a track of the bank lockers vacant and at the same provide an acknowledgement against any fresh bank locker application by the new customer. The new guidelines shall be put to effect from the new year, January 1, 2022. The set of guidelines requiring maintaining a proper list of bank lockers occupied or vacant will boost the transparency in their allotment.

What’s in store for bank locker customers- An highly important issue that may arouse chaos among bank locker holders:

The new rules state that banks liability shall be maximum up to 100 times of the annual rent in case of fire, theft, building collapse or fraud even if by a bank employee.”As banks cannot claim that they bear no liability towards their customers for loss of contents of the locker, in instances where the loss of contents of the locker are due incidents (like fire, theft/ burglary/ robbery, dacoity,) or attributable to fraud committed by its employee(s), the banks’ liability shall be for an amount equivalent to one hundred times the prevailing annual rent of the safe deposit locker,” it said.

Further the RBI said the bank will provide for a Board-approved policy that outlines the responsibility they owe in case of loss or damage to the locker contents owing to their negligence. “The bank shall not be liable for any damage and/or loss of contents of locker arising from natural calamities or Acts of God like earthquake, floods, lightning and thunderstorm or any act that is attributable to the sole fault or negligence of the customer,” it said.

Furthermore, for meeting out the bank’s 3 year charges and other charges for breaking open the locker under any circumstance, banks can ask for a term deposit. However the same cannot be enforced upon current bank locker customers or those who continue to maintain a satisfactory account.

GoodReturns.in

Story first published: Saturday, August 21, 2021, 10:31 [IST]



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MPC Minutes: ‘Not for extended accommodative stance’

Banking & Finance

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Covid-19 is beginning to resemble a neutron bomb and the ability of monetary policy to mitigate a human tragedy of this nature is very limited, cautioned Jayanth R Varma, the lone member of the monetary policy committee (MPC) to vote against the accommodative stance at its meeting earlier this month.

While Varma, Professor, Indian Institute of Management, Ahmedabad, was on the same page as the other five MPC members when it came to keeping the policy repo rate unchanged at 4 per cent, he disagreed with them on the resolution to continue with the accommodative stance.

He observed that Covid-19 is beginning to look more and more like tuberculosis which kills a large number of people every year without inflicting major damage to the economy.

“The possibility that Covid-19 will haunt us (though with lower mortality) for the next 3-5 years can no longer be ruled out.

“Keeping monetary policy highly accommodative for such a long horizon is very different from doing so for what was earlier expected to be a relatively short crisis,” he said.

The Professor, in his statement, felt that the monetary policy is much less effective than fiscal policy in providing targeted relief to the worst-affected segments of the economy.

Varma felt that easy money today could lead to high interest rates tomorrow.

Reserve Bank Governor Shaktikanta Das said continued policy support with a focus on revival and sustenance of growth was the most desirable and judicious policy option at the moment. “The need of the hour is twofold: first, continue the monetary policy support to the economy; and second, remain watchful of any durable inflationary pressures and sustained price momentum in key components so as to bring back the CPI inflation to 4 per cent over a period of time in a non-disruptive manner,” he said.

Varma noted that while there is some comfort that inflation is forecast to be below the upper end of the tolerance band (6 per cent), it is important to emphasise that the inflation target for the MPC is 4 per cent and not 6 per cent or even 5 per cent.

Emphasising that he is conscious of the fact that the MPC’s mandate is supposed to be restricted to the repo rate, the Professor said: “I have for some time now being arguing that if the reverse repo rate does not fall within the remit of the MPC, then the announcement of this rate should be in the Governor’s statement and not in the MPC’s statement…”

 

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IPO bandwagon getting bigger and bigger; Aug sees 23 filings so far, BFSI News, ET BFSI

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Mumbai, The raging IPO frenzy has set a record of sorts this month with the first 20 days of August witnessing as many as 23 filings seeking regulatory permission to launch primary share sales worth around Rs 40,000 crore while eight companies already raising over Rs 18,200 crore in the month. Several of these companies are from the startup space such as fintech, e-commerce, online travel and SaaS (software-as-a- service) segments.

So far this year, over 40 new listings have raked in around Rs 70,000 crore. The depth of investor interest, especially from the retail, is very visible with many IPOs being oversubscribed over 100 times and many brokerages say total number of issues may well top the 100-mark this year.

The IPO market is so hot that it has caught the attention of the monetary authority which in its latest bulletin says “year 2021 could well turn out to be the year of IPOs for the country”.

Some of the major filings among the total 23 in the month include the Delhi-based PB Fintech, the promoters of insurance distributor Policybazaar, that is seeking Sebi nod for a Rs 6,000-crore issue; and the Pune-based Emcure Pharma that is seeking to raise Rs 5,000 crore.

Besides, Adani Wilmar, the FMCG arm of the Adani Group, is seeking to mop up Rs 4,500 crore, and the Mumbai-based online fashion and apparel brand Nykaa, whose holding firm FSN E-Commerce, has filed for an Rs 4,000 crore issue.

The list also includes the Gurugram-headquartered Le Travenues Technology, the promoters of online travel booking firm Ixigo, which is looking to collect Rs 1,800 crore from an issue; and Rategain Travel Technologies, the first SaaS (software-as-a-service) company to go public in the country with a Rs 1,500 crore issue; and the Noida-based Rategain is the country’s largest SaaS firm in the hospitality and travel space.

Another main issue is from the Kolkata-based Tarsons Products that manufactures a range of quality lab-ware products. Tarsons has a diversified product portfolio with over 1,700 stock-keeping units across 300 products and operate five manufacturing facilities in Bengal.

Other mid-sized IPOs include the Kochi-based automobile retailer Popular Vehicles & Services which last week filed for a Rs 700-crore issue; beauty care & wellness firm VLCC; Sapphire Foods which operates all the Yum Brands outlets in the country like KFC, Pizza Hut and Taco Bell; Go Fashion India (Go Colors); Fusion Microfinance; and the payment solutions provider AGS Transact Technologies which filed a Rs 800-crore issue on Friday.

And the biggest day for the street was August 4, when four companies–Krsnaa Diagnostics (Rs 1,213 crore), Windlas Biotech (Rs 401 crore in fresh issue and the rest in OFS), Devyani International, which is the largest franchisee of Pizza Hut, KFC and Costa Coffee in the country (Rs 1,838-crore), and Exxaro Tiles that manufactures vitrified tiles (Rs 161-crore) — filed for IPOs.

The companies are buoyed by bumper listings of Clean Science & Technology, GR Infraprojects, Zomato (which was the biggest issue so far this year with Rs 9,300 crore issue) and Tatva Chintan Pharma Chem.

The AGS issue is purely an offer-for-sale of equity shares by promoter Ravi B Goyal and other selling shareholders. Goyal will sell shares worth up to Rs 792 crore through the OFS and other selling shareholders will offload shares worth Rs 8 crore.

Meanwhile, the first 15 days of August saw eight companies successfully completing IPOs and collecting over Rs 18,200 crore in proceeds.

Some of the marquee names that completed the share sale process are the Chennai-based specialty chemicals manufacturer Chemplast Sanmar which raised Rs 3,850 crore; contract development and manufacturing organization Windlas Biotech (Rs 401 crore); home financier Aptus Value Housing (Rs 2,780 crore), the online auto retailing platform Cartrade Tech (Rs 3,000 crore), and drug firm Krsnaa Diagnostics (Rs 1,213 crore), also completed share sale.

Despite an over 20.3 times oversubscription to the Rs 3,000-crore Cartrade issue, the stock made a tepid debut on the Street on Friday and tumbled nearly 8 per cent at close even it opened lower at Rs 1,600, as against the issue price of Rs 1,618.

Besides, Nuvoco Vista Corporation, which has completed the IPO and is set for listing next Monday, is part of the Nirma Group and is among the largest cement and concrete manufacturers, offering a range of products like cement, ready-mix concrete, building materials like adhesives, wall putty, dry plaster, cover blocks, among other.



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