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Mini Ipe has taken charge as Managing Director of Life Insurance Corporation of India.
LIC divestment: It’s like killing the golden goose
She was named by the Centre on July 5 this year.
Ipe was previously Executive Director of LIC’s Legal Department.
A postgraduate in Commerce from Andhra University, Ipe had joined LIC in 1986 as a direct recruit officer.
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Investment
oi-Vipul Das
Suryoday Small Finance Bank (SSFB) has introduced a “Health and Wellness Savings Account” that offers a 6.25 percent interest rate, free insurance, and healthcare benefits, unlimited free ATM transactions, and more. To open this savings account, you must comply with the bank’s KYC standard and maintain an average monthly balance of Rs 3 lakh. Keep on reading to know more about Suryoday Small Finance Bank’s Health and Wellness Savings Account.
According to the official website of the bank, one must fall under the below-listed eligibility criteria to open this savings account:
The objective of the Health and Wellness Savings Account is to secure both your health and your wealth. The following are the three key health and wellness features and perks on this account according to the bank:
Here are the other features and benefits of the Health and Wellness Savings Account, according to the website of Suryoday Small Finance Bank.
Here are the most recent interest rates on savings accounts of Suryoday Small Finance Bank which are in force from June 1, 2020.
| Daily Closing Balance Slabs (Domestic) | % rate per annum |
|---|---|
| Up to and including Rs. 1 Lakh | 4.00% |
| Above Rs. 1 Lakh up to & including Rs. 10 Lakhs | 6.25% |
| Above Rs. 10 Lakhs | 6.00% |
| Source: Bank Website |
Story first published: Wednesday, August 4, 2021, 11:40 [IST]
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Q: What is your take on the IBC regulation? Five years gone, would you read it as a success or a work in progress?
IBC is one of the deepest economic reforms adopted in India. In the last five years, it has brought about a significant change in the corporate landscape of India in terms of credit culture, unlocking of value from the non-performing assets, and the equation between debtors and creditors. This has resulted in putting a large amount of money back into productive channels. It is a nascent law.
Five years in the journey of a law of critical importance is too short, so in a way, there are constant restructuring / amendment of several provisions of the IBC to make it conducive so as to achieve its objectives. So it’s been a success but still the provisions of individual insolvency, cross border insolvency, group insolvency are yet to be notified / operationalised, and to that extent, one can say that it is a work in progress..
Q: What’s your view on 90% haircuts seen in three high profile cases, Jet, Videocon, and Siva?
The objective of IBC is primarily rescuing a company in distress and not recovery. So the outcome of various cases under IBC till now has to be seen in that context. Moreover, the haircut depends upon the stage of distress at which the company is brought into the IBC framework. All these companies were brought under the umbrella of IBC at a much later stage of distress, by which time most of the value of the assets of the company had already been eroded.
Q: Would you say IBC has its limitations and can’t satisfy everyone at the end of the day?
The law stands on its principles and objectives and all the stakeholders accordingly may not have similar outcomes from an IBC matter.
it may be noted that the law is not adversarial in nature where one party wins and the other loses. It seeks to balance the interest of all stakeholders to the extent possible whereby it is not possible to make everyone happy..
Q: What three challenges exist in the current IBC framework? What changes would you propose?
First, the timelines provided under IBC are not being met in the majority of the cases due to litigation and also lack of capacity of NCLT / NCLAT to deal with the large number of cases brought up before them. The NCLT / NCLAT should be strengthened in terms of manpower. Maybe separate benches could be created to deal with IBC matters.
Second, cross border insolvency provisions have not yet been notified. There are many companies that have assets located in multiple jurisdictions. It is suggested that the government should give this matter priority to further enhance the scope of IBC.
Third, individual insolvency provisions have not yet been notified. This should be operationalised sooner to provide succour to the Individuals facing financial hardships.
It is well settled law that once a resolution plan is approved by the adjudicating authority it becomes binding on all stakeholders. There is enough clarity in this regard.
Q: How can CMAs play a role in the resolution of assets under IBC? Today a lot of insolvency professionals are CMAs…
Many CMAs have become insolvency professionals and are regularly handling various cases under IBC. Besides acting as the interim resolution professional / resolution professional, CMAs can also assist in carrying out due diligence, forensic audit, preparation of Information Memorandum, and preparation of resolution plan.
Q: Last, CMAs as RPs have been or are being litigated against quite a lot by promoters or dissenting lenders over haircuts. How should the RPs deal with such a situation?
Many promoters, who find themselves on the verge of losing control of their companies, try to find some way out or at least try to drag the matter longer and thus involve resolution professionals in litigation. The RP should have confidence in his actions, maintain proper documents relating to CIRP, and justify his action appropriately before the adjudicating authority.
ALSO READ: ‘IBC can’t make everyone happy, Videocon case will help law mature further’
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A large part of the loans to the lender is in the form of guarantees with public sector banks having a lion’s share of the debt. Some private lenders with a funded exposure have already started making provisions.
The debt
According to official data, VIL had an adjusted gross revenue (AGR) liability of Rs 58,254 crore out of which the company has paid Rs 7,854.37 crore and Rs 50,399.63 crore is outstanding.
VIL’s gross debt, excluding lease liabilities, stood at Rs 1,80,310 crore as of March 31, 2021. The amount included deferred spectrum payment obligations of Rs 96,270 crore and debt from banks and financial institutions of Rs 23,080 crore apart from the AGR liability.
The scenario
If fails to repay its dues to the government and these guarantees are invoked, it would immediately turn into debt and would soon be classified as a non-performing asset.
The hit on PSU banks will not be as large as their exposure because in recent years lenders have been demanding a substantially higher cash margin for their guarantees. IDBI Bank is understood to have up to 40% margins for the guarantees it has extended. But even then it will be large enough to wipe out profits for many.
What ahead?
The insolvency process can work only when there are buyers. In the case of Vodafone, the Rs 53,000-crore AGR (adjusted gross revenue) dues to the Centre are a deterrent. This is despite Birla being willing to write down his entire equity. The government dues cannot be avoided as the Centre cannot make an exception for one company. Even in insolvency cases, the department of telecom has claimed its dues to be that of a financial creditor although there have been attempts to mark them as operational creditors.
The uncertainty over DoT’s claims, which is already being experienced by lenders in the Reliance Communications
insolvency case, would make telecom resolutions a challenge. Lenders do not want to risk insolvency as this
would result in the exit of customers which was the case with RCom.
With the the company’s debt obligations being equal to 1.5% of the banking sector’s credit, experts have suggested the debt be converted into equity shares, the company be nationalised and perhaps merged with BSNL and MTNL. However, it seems highly unlikely the government will nationalise the company. On balance, they would reckon it is better to give up the revenues than act politically incorrectly in bailing out a private sector player—one with a foreign promoter.
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| Current market price | Rs 603 |
|---|---|
| Target price | Rs 714 |
| Upside | 18.00% |
Broking firm, Motilal Oswal has said to buy the stock of Dabur India with an upside target of 18% on the stock. According to the broking firm, the management’s confidence remains double-digit sales growth prospects for FY22, despite a challenging base for the Healthcare business in the remaining quarters. It also has a target of maintaining or growing FY22 EBITDA margin YoY, despite the ongoing rise in material costs, is encouraging.
“Dabur has delivered double-digit topline growth in two of the past three years, unlike most peers, and is likely to do so again in FY22.
New products now contribute 5-6% of sales. Earnings growth, after the ongoing investment in these initiatives, will be even stronger than topline growth after completion of the investment phase for the above mentioned initiatives (and a temporary reset on account of a step up in taxation levels to 22% in FY22 from 17.6% in FY21). We maintain our buy rating,” the brokerage has said.
Brokerage firm, Motilal Oswal also has a buy call on the stock of Castrol, with a 22% upside target from the current levels.
| Current market price | Rs 140 |
|---|---|
| Target price | Rs 170 |
| Upside | 17.00% |
According to the brokerage firm, the management guided that demand momentum has picked up since June’21 and is expected to continue (although a potential third wave may be a critical development).
“Castrol has always enjoyed its brand equity heritage, and we believe it would be able to secure its profitability with a better product mix, cost control, and the launch of advanced products with better realization. We value the stock at 20 timesJune’23E EPS to arrive at target price of Rs 170. Maintain Buy,” the brokerage has said.
Motilal Oswal has a neutral call on the stock of Punjab National Bank, but, sees an upside of 11% on the stock from current levels.
| Current market price | Rs 40.40 |
|---|---|
| Target price | Rs 45 |
| Upside | 11.00% |
Punjab National Bank reported a healthy performance, supported by a pick-up in net interest income, higher other income, and lower operational expenditure, even as provisions stood stable QoQ.
“Business growth remains muted, however margin witnessed a sequential uptick. The bank expects growth to pick up, led by RAM segments, while the Corporate book too would undergo a gradual recovery. Asset quality was largely stable, despite higher slippages, supported by recoveries and upgrades. SMA 1 and 2 book stands elevated at 3.9% of loans, while restructured book, at 2.02% of loans (expect a further restructuring of Rs 15-20 billion), keeps us watchful over the near term. We estimate a RoA/RoE of 0.6%/8.8% by FY23E. We resume coverage with a Neutral rating and a target of Rs 45 (0.6 times FY23E ABV),” the brokerage has said.
The brokerage is also bullish on the stock of Bharti Airtel. The brokerage says that Africa will remain the underdog and the business saw strong 9% EBITDA growth QoQ, backed by all-round growth in Data and Airtel Money consistently over the last few quarters. It generates Rs 400-500m FCF and remains a business that exhibits low leverage and healthy growth. Motilal Oswal says that despite robust data traffic volumes of 108b GB (18.9 GB/user), data traffic/subscribers are 50% that of RJio.
According to Motilal Oswal the EBITDA has been 30% higher for the last year, highlighting that the healthy subs/ARPU equation is showing gains. All this without any tariff hikes, the brokerage has said. It has a buy on the stock, but has not indicated any target prices for the same.
The above stocks are based on the report Motilal Oswal. Investing in stocks is risky and investors should do their own research. The author, the brokerage firms or Greynium Information Technologies are not responsible for any losses incurred due to a decision based on the above article. Investors should hence exercise due caution as are at record peaks. Please consult a professional advisor.
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With a minimum investment of Rs 10,000 and a term ranging from 7 days to 10 years, one can open a fixed deposit account in Yes Bank. Yes Bank is presently providing the following interest rates on fixed deposits of less than Rs 2 crore, effective June 3, 2021.
| Tenure | Regular FD Rates | Senior Citizen FD Rates |
|---|---|---|
| 7 to 14 days | 3.25% | 3.75% |
| 15 to 45 days | 3.50% | 4.00% |
| 46 to 90 days | 4.00% | 4.50% |
| 3 months to less than 6 months | 4.50% | 5.00% |
| 6 months to less than 9 months | 5.00% | 5.50% |
| 9 months to less than 1 Year | 5.25% | 5.75% |
| 1 year less than 3 years | 6.00% | 6.50% |
| 3 years to less than 5 years | 6.25% | 7.00% |
| 5 years to less than equal to 10 years | 6.50% | 7.25% |
| Source: Bank Website |
Fixed Deposit interest rates for Domestic, NRO, NRE, and Flexi Fixed Deposits as of July 02, 2021 are listed below.
| Tenure | Regular FD Rates | Senior Citizen FD Rates |
|---|---|---|
| 7 days to 14 days | 3.25% | 3.75% |
| 15 days to 45 days | 3.75% | 4.25% |
| 46 days to 90 days | 4.00% | 4.50% |
| 91 days to 180 days | 4.50% | 5.00% |
| 181 days to 240 days | 5.00% | 5.50% |
| 241 days to 364 days | 5.40% | 5.90% |
| 12 months to less than 24 months | 6.10% | 6.60% |
| 24 months to less than 36 months | 6.10% | 6.60% |
| 36 months to less than 60 months | 6.30% | 6.80% |
| 60 months to 60 months 1 day | 6.50% | 7.00% |
| 60 months 2 days to less than 120 months | 6.00% | 6.50% |
| 120 months to 240 months | 6.00% | 6.50% |
| Tax Savings Fixed Deposit (60 months) | 6.50% | 7.00% |
| Source: Bank Website |
With effect from 15 May 2021, DCB Bank is offering the following interest rates to both regular and senior citizens.
| Tenure | Regular FD Rates | Senior Citizen FD Rates |
|---|---|---|
| 7 days to 14 days | 4.55% | 5.05% |
| 15 days to 45 days | 4.55% | 5.05% |
| 46 days to 90 days | 4.50% | 5.00% |
| 91 days to less than 6 months | 5.25% | 5.75% |
| 6 months to less than 12 months | 5.70% | 6.20% |
| 12 months to less than 15 months | 5.80% | 6.30% |
| 15 months to less than 18 months | 6.00% | 6.50% |
| 18 months to less than 700 days | 6.00% | 6.50% |
| 700 days | 6.40% | 6.90% |
| More than 700 days to less than 36 months | 6.00% | 6.50% |
| 36 months | 6.50% | 7.00% |
| More than 36 months to 60 months | 6.50% | 7.00% |
| More than 60 months to 120 months | 6.50% | 7.00% |
| Source: Bank Website |
On deposits of less than Rs 2 crore, IndusInd Bank is offering the following interest rates as of July 23, 2021.
| Tenure | Regular FD Rates In % | Senior Citizen FD Rates In % |
|---|---|---|
| 7 days to 14 days | 2.50 | 3.00 |
| 15 days to 30 days | 2.75 | 3.25 |
| 31 days to 45 days | 3.00 | 3.50 |
| 46 days to 60 days | 3.25 | 3.75 |
| 61 days to 90 days | 3.40 | 3.90 |
| 91 days to 120 days | 3.75 | 4.25 |
| 121 days to 180 days | 4.25 | 4.75 |
| 181 days to 210 days | 4.60 | 5.10 |
| 211 days to 269 days | 4.75 | 5.25 |
| 270 days to 354 days | 5.50 | 6.00 |
| 355 days to 364 days | 5.50 | 6.00 |
| 1 year to below 1 Year 6 Months | 6.00 | 6.50 |
| 1 Year 6 Months to below 1 Year 7 Months | 6.00 | 6.50 |
| 1 Year 7 Months to below 2 Years | 6.00 | 6.50 |
| 2 years to below 2 years 6 Months | 6.00 | 6.50 |
| 2 years 6 months to below 2 years 9 Months | 6.00 | 6.50 |
| 2 years 9 months upto 3 years | 6.00 | 6.50 |
| Above 3 years upto 61 months | 6.00 | 6.50 |
| 61 months and above | 5.50 | 6.00 |
| Indus Tax Saver Scheme (5 years) | 6.00 | 6.50 |
| Source: Bank Website |
IDFC First Bank is now offering the following card rates for domestic, NRE, and NRO deposits of less than INR 2 crores.
| Tenure | Regular FD Rates | Senior Citizen FD Rates |
|---|---|---|
| 7 – 14 days | 2.75% | 3.25% |
| 15 – 29 days | 3.00% | 3.50% |
| 30 – 45 days | 3.50% | 4.00% |
| 46 – 90 days | 4.00% | 4.50% |
| 91 – 180 days | 4.50% | 5.00% |
| 181 days – less than 1 year | 5.25% | 5.75% |
| 1 year – 2 years | 5.50% | 6.00% |
| 2 years 1 day – 3 years | 5.75% | 6.25% |
| 3 years 1 day – 5 years | 6.00% | 6.50% |
| 5 years 1 day – 10 years | 5.75% | 6.25% |
| Tax Saver Deposit (5 Years) | 5.75% | 6.25% |
| Source: Bank Website |
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The India International Bank was originally a three-way joint venture between the Bank of Baroda (40 per cent stake), the IOB (35 per cent) and Andhra Bank (25 per cent). The Andhra Bank was taken over by the Union Bank of India as a part of the megabank merger scheme last year.
“We have asked Union Bank of India to buy our stakes. The valuation exercise is going on,” IOB Managing Director & CEO Partha Pratim Sengupta told reporters.
According to him, the IOB had decided to exit the Malaysian joint venture as part of its plan to come out of the Reserve Bank of India‘s (RBI) Prompt and Corrective Action (PCA) fold.
Though Sengupta said the IOB is expecting to be out of the PCA fold as it fulfills the RBI’s conditions, the decision to exit the India International Bank continues to hold.
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Total income during Q1FY22, however, was down at Rs 5,155 crore as against Rs 5,234 crore in Q1FY21, Indian Overseas Bank said in a regulatory filing.
The interest income was down by 5.6 per cent at Rs 4,063 crore during the quarter. The non-interest income rose by 17.2 per cent at Rs 1,092 crore due to increase in other income, the bank said.
The Chennai-headquartered lender said it reduced non-performing assets (NAPs) worth Rs 1,616 crore during the quarter, as against Rs 1,969 crore in June 2020 quarter.
Bank’s gross NPAs (bad loans) fell to 11.48 per cent of the gross advances as of June 30, 2021, against 13.90 per cent in the year-ago period.
In terms of value, the gross NPAs were worth Rs 15,952 crore, down from Rs 18,291 crore. Net NPAs fell to 3.15 per cent (Rs 3,998 crore) from 5.10 per cent (Rs 6,081 crore).
Provisions for bad loans and contingencies for the quarter fell to Rs 868 crore from Rs 969.52 crore a year ago.
“The bank plans to come out of prompt corrective action (PCA) by focussing on recovery, low-cost deposits and less capital consuming advances,” it said.
The provision coverage ratio recorded at 91.56 per cent, it added.
Shares of the bank traded 2.7 per cent down at Rs 23.40 apiece on BSE. PTI KPM MR MR
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ICICI Direct has a buy on the stock of Gokaldas Exports, with a solid price target of 39% from the current level. Gokaldas Exports (GEL) is one of India’s largest garment exporters, with a 30-million-piece yearly capacity.
The broking firms see an impressive clientele of well-known multinational brands, with GAP and H&M contributing significantly to sales. 65 percent of sales are generated in the United States.
According to the brokerage firm, revenue fell 35% quarter-on-quarter to Rs 241.0 crore, but EBITDA margins were steady at 7.4%, with absolute EBITDA falling 35% to Rs 17.9 crore.
| Current Market Price | Rs 202 |
| Target Price | Rs 280 |
| Upside Potential | 39% |
“Since our initiation report, the stock price has appreciated ~3.4x (from Rs 60 in September 2020 to | 202 in August 2021). We like GEL as a structural long term story to play the apparel export space. We maintain our BUY recommendation on the stock Target Price and Valuation: We value GEL at Rs 280 i.e. 15x FY23E EPS,” the brokerage has said.
Production is running at maximum capacity, with a strong order book for the next six months. Demand from the US apparel sector (a key market for GEL) continues to be strong (trading ahead of pre-Covid levels). Capex of Rs 120 crore is planned over the next two years, with the potential to create additional revenue of Rs 450 crore. With a net debt/equity ratio of 0.6x, B/s strength remains constant.
Brokerage firm, ICICI Direct also has a buy on the stock of Kansai Nerolac Paints. According to the brokerage firm, a favorable base and strong demand for decorative paints helped drive revenue up by 118% YoY to Rs 1301 crore, supported by a favorable base and strong topline growth.
Given the shorter repainting cycle, greater urbanisation, and increased distribution reach of organised players, ICICI Direct expects decorative paint will continue to rise at a rate of 2x GDP. A recovery in 45 percent of KNL’s revenue portfolio would be aided by a rebound in passenger car sales and strong demand momentum in industrial paints.
| Current Market Price | Rs 630 |
| Target Price | Rs 750 |
| Upside Potential | 19% |
“Kansai’s share price has grown by ~2x over the past five years (from Rs 370 in July 2016 to Rs 630 levels in August 2021). We maintain our BUY rating on the stock Target Price and Valuation: We value Kansai at | 750 i.e. 48x P/E on FY23E EPS.
Demand for decorative and industrial paints was driven by a favorable base and increasing demand following the lifting of lockdown limitations. As a result, revenue increased by 118 percent year over year to Rs 1301 crore. When compared to pre-Covid sales, however, the recovery was 87 percent, owing primarily to a delayed rebound in industrial paints,” the brokerage has said.
With a total capacity of 13.3 MT, JK Lakshmi primarily serves the north, west, and eastern markets (including subsidiary).
Broking firm, ICICI Direct in its recent research report has recommended the stock of JK Lakshmi Cement
According to the broking firm, JK Lakshmi Cement has 105 MW power plant that fulfills 75% of its total power requirement. The company is now adding 2.5 MT cement capacity through its subsidiary unit UCWL at a cost of Rs 1400 crore.
| Current Market Price | Rs 678 |
| Target Price | Rs 800 |
| Upside Potential | 18% |
“JK Lakshmi’s share price has grown by ~2.5x over the past three years (from Rs 331 in August 2018 to Rs 816 in July 2021). We remain positive on the company and maintain our BUY rating Target Price and Valuation: We value the stock at Rs 800 i.e. 9.5x FY23E EV/EBITDA,” the brokerage firm has said.
ICICI Direct believes that with expected utilization of 94%+ for FY22E, we expect operating leverage benefit to continue led by fixed cost rationalization. WHRS of 10 MW to get commissioned by Q3FY22. This should help contain the power cost. B/s strength to remain strong despite newly announced capex of Rs 1400 crore for its subsidiary unit UCWL.
The above stocks are based on the report of ICICI Direct. Investing in stocks is risky and investors should do their own research. The author, the brokerage firms or Greynium Information Technologies are not responsible for any losses incurred due to a decision based on the above article. Investors should hence exercise due caution as are at record peaks. Please consult a professional advisor.
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These addresses received $2 billion in cryptocurrency from illicit sources as well, making China a large player in digital-currency related crime, it added. The report analyzes China’s cryptocurrency activity amid government crackdowns.
However, China’s transaction volume with illicit addresses has fallen drastically over the two-year period in terms of absolute value and relative to other countries, Chainalysis said. The big reason is the absence of large-scale Ponzi schemes such as the 2019 scam involving crypto wallet and exchange PlusToken that originated in China, it noted.
Users and customers lost an estimated $3 billion to $4 billion from the PlusToken scam.
The vast majority of China’s illegal fund movements in crypto has been related to scams, although that has declined as well, the Chainalysis report said.
“This is most likely because of both the awareness raised by PlusToken, as well as the crackdowns in the area,” said Gurvais Grigg, global public sector chief technology officer at Chainalysis, in an email to Reuters.
The report also cited trafficking out of China in fentanyl, a very potent narcotic pain medication prescribed for severe pain or pain after surgery.
Chainalysis described China as the hub of the global fentanyl trade, with many Chinese producers of the drug using cryptocurrency to carry out transactions.
Money laundering is another notable form of crypto-based crime disproportionately carried out in China, Chainalysis said.
Most cryptocurrency-based money laundering involves mainstream digital currency exchanges, often through over-the-counter desks whose businesses are built on top of these platforms.
Chainalysis noted that China appears to be taking action against businesses and individuals facilitating this activity.
It cited Zhao Dong, founder of several Chinese OTC businesses, pleading guilty in May to money laundering charges after being arrested last year.
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