ICICI Bank Shares Surge 10% On Strong Q2 Numbers

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Investment

oi-Sneha Kulkarni

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ICICI Bank’s stock soared over 10.63% to $840 today after the lender announced a nearly 30% increase in net profit in the second quarter to a new high, boosted by strong loan growth.

In the three months to September, ICICI Bank’s bad loan ratio fell to 4.82 percent, down from 5.15 percent the previous quarter. In the September quarter, the bank set aside a total of 2713 crore in provisions, down from a total of 2852 crore three months prior.

ICICI Bank Shares Surge 10% On Strong Q2 Numbers

According to the private sector lender, the reported net profit of 5,511 crores for the quarter was a record high. It’s reassuring that it came on the heels of a strong 25 percent increase in core revenue.

The stock returned 135.19 percent over three years, compared to 76.81 percent for the Nifty 100. Over a three-year period, the stock returned 135.19 percent, while the Nifty Bank provided investors a 61.47 percent return.

ICICI Bank is one of Motilal Oswal’s top choices for the sector, with a target price of 1,000 rupees. “ICICI Bank has COVID-19-related provisions of Rs 6425 crore (0.8 percent of loans), which provides us confidence in consistent credit cost trends,” says the bank. “We raise our FY22/FY23 projections by 5%/2.5 percent, and project a RoA/RoE of 2%/16.6 percent by FY24E,” the brokerage added.

“Even amid increased opex and no Covid provision reversal, ICICI once again reported a beat on PAT at 5500 crore- up 30% yoy on solid core profitability,” according to Emkay. Solid loan growth of 17% yoy, historically high NIMs of 4%, strong fees and dividend, and better asset-quality outcomes drove this.” It has recommended the stock with a target price of 962, ICICI Bank remains one of its top banking recommendations.

“On the back of (1) better margins as we expect further improvement led by unwinding of surplus liquidity and increasing share of high margin unsecured portfolio (2) lower provisioning as asset quality improves further,” Nirmal Bang has raised its earnings predictions for ICICI Bank.

Story first published: Monday, October 25, 2021, 11:21 [IST]



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3 Stocks To Buy According To Motilal Oswal for Long-term Investors

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Buy ICICI Bank, says Motilal Oswal

The brokerage is bullish on the stock of ICICI Bank and has set a target price of Rs 1,000 on the stock, post quarterly numbers of the bank, as against the current market price of Rs 847.

“ICICI Bank reported a strong 2QFY22, led by healthy NII growth (11 basis points NIM expansion), strong fee income trends, and controlled provisions. The bank reported a 5%/9% beat to our PPOP/net earnings estimate and is progressing swiftly towards earnings normalization,” the brokerage has said.

“The additional COVID-19 provision buffer (0.8% of loans) provides a comfort on credit cost. Restructured loans increased to 1.3% of loans. The bank carries 20% provisions on this portfolio. We increase our estimates for FY22/FY23 by 5%/2.5% and expect RoA/RoE to improve to 2%/16.6% by FY24E. We maintain our Buy rating with a revised SoTP-based target price of Rs 1,000 per share (2.8x Sep’23E ABV for the bank). ICICI Bank remains our top pick in the sector,” Motilal Oswal Institutional Equities has said in its report.

Buy Reliance Industries

Buy Reliance Industries

The broking firm also has a buy call on the stock of Reliance Industries with a price target of Rs 2,900, as against the current market price of Rs 2,597.

“Using SoTP, we value the Refining and Petrochemical segment at 7.5x FY24E EV/EBITDA to arrive at a valuation of INR775/share for the standalone entity. We ascribe an equity valuation of Rs 880 per share to RJio and Rs 1,200 per share to Reliance Retail, factoring in the recent stake sale. Our higher EV/EBITDA multiple of 33x/19x for Retail/Digital Services underscores new growth opportunities in the Digital space, along with the rationalization of tariffs in RJio. We reiterate our Buy rating with a target price of Rs 2,900 per share,” the brokerage has said.

Buy HDFC Life Insurance

Buy HDFC Life Insurance

Motilal Oswal Institutional Equities also has a buy call on the stock of HDFC Life Insurance. According to the brokerage, the management remains focused on maintaining a balanced product mix across the business, with an emphasis on product innovation and superior customer service.

“In the near term, Non-PAR/Annuity/Credit Life is likely to witness healthy growth. Demand for ULIP has bounced back strongly, but growth depends upon the performance of the capital market. Persistency trends remain steady across cohorts and will continue to aid robust renewal trends. We estimate VNB margin to reflect stable trends, driving 22% VNB CAGR over FY21-24E, with margin to sustain 27% over FY24E. We estimate FY24E operating RoEV 19%. We maintain our Neutral rating with an unchanged target price of Rs 750 per share, corresponding to 3.8 times Sep’23E EV,” the brokerage has said.

Disclaimer

Disclaimer

The above stocks are picked from the brokerage report of Motilal Oswal Institutional Equities. 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 Best Performing BSE Consumer Durables In The Past 3 Years

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Dixon Technologies

Dixon Technologies (India) Ltd, situated in Noida, is an Indian electronics manufacturing services company. It works as a contract manufacturer for Samsung, Xiaomi, Panasonic, and Philips, producing televisions, washing machines, smartphones, LED bulbs, battens, downlighters, and CCTV security systems. Only 3.65% of trading sessions in the last four years had intraday gains of more than 5%.

Dixon Technologies (India) Ltd., founded in 1993, is a mid-cap business in the Consumer Durables category with a market capitalization of Rs 30,082.54 crore.The company’s yearly sales growth of 46.41 percent surpassed its three-year compound annual growth rate (CAGR) of 31.0 percent. The stock returned 1075.78 percent over three years, compared to 90.6 percent for the Nifty Midcap 100. Over a three-year period, the stock returned 1075.78 percent, compared to 62.39 percent for the S&P BSE Capital Goods index.

Vaibhav Global

Vaibhav Global

Vaibhav Global Limited, originally Vaibhav Gems, is a multi-national electronic retailer and fashion jewellery and lifestyle accessory producer. It offers its products through Shop LC in the United States and TJC in the United Kingdom, which are both home shopping channels. In the last five years, the company has regularly raised ROE, with the majority of profits being added to reserves last year. Annual sales growth of 27.82 percent surpassed the company’s three-year CAGR of 17.2 percent. Stock returned 456.57 percent over three years, compared to 90.6 percent for the Nifty Midcap 100.

Vaibhav Global Ltd., founded in 1989, is a Mid Cap business in the Gems & Jewellery industry with a market capitalization of Rs 11,407.91 crore.

Amber Enterprises

Amber Enterprises

Only 1.85 percent of trading sessions in the last three years had intraday drops of more than 5%. The stock returned 281.2 percent over three years, compared to 90.6 percent for the Nifty Midcap 100. Sales have decreased by 22.85%. For the first time in three years, the company’s revenue has decreased. In comparison, the S&P BSE Consumer Durables index returned 140.26 percent to investors over a three-year period. Over a three-year period, the stock returned 281.2 percent, compared to 140.26 percent for the S&P BSE Consumer Durables index. Amber Enterprises India Ltd., founded in 1990, is a Mid Cap business in the Consumer Durables sector with a market capitalization of Rs 11,272.24 crore.

Orient Electric

Orient Electric

Orient Electric Limited, situated in New Delhi and owned by the CK Birla Group, is an Indian multinational electrical equipment company. Fans, lighting, home appliances, and switchgears are all manufactured by the company. In Kolkata, Faridabad, and Noida, Orient Electric has manufacturing facilities. The company has enough cash on hand to cover its contingent liabilities. 1.31 percent decrease in sales. For the first time in three years, the company’s revenue has decreased. In the fiscal year ended March 31, 2021, the company spent 1.02 percent of its operational revenues on interest charges and 8.81 percent on staff costs.

Stock returned 172.94 percent over three years, compared to 90.6 percent for the Nifty Midcap 100. Over a three-year period, the stock returned 172.94 percent, while the S&P BSE Capital Goods index returned 62.39 percent.

Bajaj Electrical

Bajaj Electrical

Bajaj Electricals Ltd, situated in Mumbai, Maharashtra, is an Indian consumer electronics manufacturer. It is a subsidiary of the Bajaj Group, which has a market capitalization of 380 billion rupees. Lighting, luminaries, appliances, fans, LPG-based generators, engineering, and projects have all become part of its portfolio. Only 3.3 percent of trading sessions in the last 14 years had intraday drops of more than 5%. Stock returned 136.55 percent over three years, compared to 90.6 percent for the Nifty Midcap 100. Over a three-year period, the stock returned 136.55 percent, compared to 62.39 percent for the S&P BSE Capital Goods index.

Voltas

Voltas

Voltas Limited is an Indian multinational electronics firm that specialises in air conditioning and cooling technology and manufactures home goods. The company was founded in Mumbai on September 6, 1954, as a joint venture between Tata Sons and Volkart Brothers. The stock returned 138.01 percent over three years, compared to 75.82 percent for the Nifty 100. Over a three-year period, the stock returned 138.01 percent, while the S&P BSE Consumer Durables index returned 140.26 percent. Voltas Ltd., founded in 1954, is a Large Cap business in the Consumer Durables category with a market capitalization of Rs 38,589.43 crore.

Crompton Greaves Consumer Electricals

Crompton Greaves Consumer Electricals

Crompton Greaves Consumer Electricals Ltd., founded in 2015, is a Mid Cap business in the Consumer Durables category with a market cap of Rs 28,763.11 crore.

The stock returned 133.59 percent over three years, compared to 90.6 percent for the Nifty Midcap 100.

Revenue fell by 30.63 percent on a quarter-over-quarter basis, the lowest level in the last three years. Over a three-year period, the stock returned 133.59 percent, compared to 62.39 percent for the S&P BSE Capital Goods index.

7 Best Performing BSE Consumer Durables In The Past 3 Years

7 Best Performing BSE Consumer Durables In The Past 3 Years

Company Price 3-Y Return
Dixon Technologies 4,911.20 1039.95
Vaibhav Global 677.35 461.15
Amber Enterprises 3,235.30 290.80
Orient Electric 317.85 166.28
Bajaj Electrical 1,128.30 141.51
Voltas 1,168.60 134.62
Crompton Greaves Consumer Electricals 462.05 137.47

Disclaimer

Disclaimer

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. This article is only for educational purpose.



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Reserve Bank of India – 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) 488,637.22 3.36 1.50-3.65
     I. Call Money 11,762.45 3.33 2.00-3.60
     II. Triparty Repo 366,349.15 3.37 3.05-3.54
     III. Market Repo 109,178.62 3.33 1.50-3.65
     IV. Repo in Corporate Bond 1,347.00 3.53 3.47-3.55
B. Term Segment      
     I. Notice Money** 89.10 3.17 2.75-3.25
     II. Term Money@@ 41.50 – 3.25-3.30
     III. Triparty Repo 2,013.00 3.42 3.25-3.49
     IV. Market Repo 91.87 3.60 3.60-3.60
     V. Repo in Corporate Bond 900.00 3.76 3.75-3.80
  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 Fri, 22/10/2021 3 Mon, 25/10/2021 140,873.00 3.35
    (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 418,395.00 3.99
  (II) Fine Tuning Operations          
     (a) Repo          
     (b) Reverse Repo          
3. MSF Fri, 22/10/2021 3 Mon, 25/10/2021 461.00 4.25
4. Special Long-Term Repo Operations (SLTRO) for Small Finance Banks (SFBs)£          
5. Net liquidity injected from today’s operations
[injection (+)/absorption (-)]*		       -567,172.00  
II. Outstanding Operations
1. Fixed Rate          
    (i) Repo          
    (ii) Reverse Repo          
    (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 Wed, 20/10/2021 6 Tue, 26/10/2021 200,008.00 3.95
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 (-)]*     -92,670.2  
F. Net liquidity injected (outstanding including today’s operations) [injection (+)/absorption (-)]*     -659,842.2  
G. Cash Reserves Position of Scheduled Commercial Banks
     (i) Cash balances with RBI as on 22/10/2021 638,588.93  
     (ii) Average daily cash reserve requirement for the fortnight ending 22/10/2021 630,289.00  
H. Government of India Surplus Cash Balance Reckoned for Auction as on¥ 22/10/2021 0.00  
I. Net durable liquidity [surplus (+)/deficit (-)] as on 08/10/2021 1,192,495.00  
@ 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: 2021-2022/1091

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Shiba Inu crypto falls from record after Musk damps speculation

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Elon Musk helped Shiba Inu vault up the ranks of the largest cryptocurrencies by market value by tweeting a photo of his puppy. Now the meme token is down after he said he doesn’t own any.

Musk, who has repeatedly touted Dogecoin on social media and frequently commented on cryptocurrencies more broadly, responded to a query from a Twitter user asking how much Shiba Inu he holds with, “None.” In a follow-up tweet, he said he has bought Bitcoin, Ether and Dogecoin, and “that’s it.”

As of 9.30 a.m. on Monday, SHIB, as the crypto is known, was down 15 per cent from its all-time high reached on Sunday Hong Kong time, according to pricing from CoinGecko.com. The token – centered around a breed of Japanese hunting dogs – has risen more than 400 per cent in the past 30 days to be the 11th-largest by value.

Also read: Bitcoin and why its value has rocketed once again

Dogecoin has climbed about 10 per cent in the past 24 hours, according to CoinGecko. Shiba Inu has rallied amid factors including a push to get it listed on Robinhood, its ecosystem’s foray into non-fungible tokens and general enthusiasm for meme assets.

However, many market observers say there’s often little reason for its movements and caution that the token may struggle to maintain its current momentum. It was founded in 2020 by an anonymous person going by the name Ryoshi.

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3 Best Bluechip Funds For SIP In 2021 Based On 5-Star Rating of Value Research

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Axis Bluechip Fund Direct Growth

It is an open-ended equity fund that invests mostly in large-cap stocks and was established by the fund house Axis Mutual Fund in 2013. According to the figures of the fund house, Axis Bluechip Fund Direct Plan-Growth returns over the previous year have been 54.34 percent, and it has provided 18.02 percent average annual returns since its inception as of September 30, 2021.

The fund’s expense ratio is 0.48 percent, which is comparable to the other funds in the same category. The fund’s top 5 equity allocations are the Financial, Technology, Services, Healthcare, and Construction sectors. Bajaj Finance Ltd., HDFC Bank Ltd., Infosys Ltd., ICICI Bank Ltd., and Tata Consultancy Services Ltd. are the fund’s top five holdings.

The fund’s Net Asset Value (NAV) was Rs 52.96 as of October 22, 2021, and its Asset Under Management (AUM) is Rs 33,153.71 Cr as of September 30, 2021. Systematic Investment Plan (SIP) can be started with as little as Rs 500, and the fund imposes a 1% exit load if units worth more than 10% are redeemed within a year of the investment date.

Period Annualised(%) Nifty 50 TRI Benchmark(%) S&P BSE SENSEX TRI Additional Benchmark(%)
Since inception 01 Jan 2013 18.02% 14.61% 14.98%
5 Years 19.64% 16.81% 17.60%
3 Years 22.27% 18.58% 19.03%
1 Year 54.34% 58.54% 56.96%
Data as of September 30, 2021. Source: axismf.com

Canara Robeco Bluechip Equity Fund Direct Growth

Canara Robeco Bluechip Equity Fund Direct Growth

It is a large-cap mutual fund scheme from Canara Robeco Mutual Fund, and the fund’s 1-year returns are 56.01 percent, and it has provided 16.50 percent average annual returns since its debut. The financial, technology, energy, construction, and healthcare sectors account for the majority of the fund’s equity exposure. Infosys Ltd., HDFC Bank Ltd., Reliance Industries Ltd., ICICI Bank Ltd., and Housing Development Finance Corpn. Ltd. are the fund’s top five holdings.

The fund has an expense ratio of 0.35% and an exit load of 1%. As of October 22, 2021, the fund’s Net Asset Value (NAV) was Rs 47.13, and its Asset Under Management (AUM) was Rs 4701 Cr as of September 30, 2021. With a minimum amount of Rs 100, you can begin a systematic investment plan (SIP).

Period Canara Robeco Bluechip Equity Fund – Dir – Growth Scheme Benchmark (S&P BSE 100 TRI) Additional Benchmark (S&P BSE Sensex TRI)
CAGR since Inception 16.50 % 14.70 % 14.90 %
1 Year 56.01 % 58.92 % 56.96 %
3 Year 23.19 % 18.51 % 19.03 %
5 Year 18.78 % 16.54 % 17.60 %
Data as of September 30, 2021. Source: canararobeco.com

Mirae Asset Emerging Bluechip Fund Direct Growth

Mirae Asset Emerging Bluechip Fund Direct Growth

It’s an open-ended equity fund with a 2010 launch date that invests in both large and mid-cap companies. The fund invests 35-65 percent of its capital in the top 100 large-cap companies and 35-65 percent in the top 250 mid-cap companies, according to the market capitalization.

Mirae Asset Emerging Bluechip Fund Direct-Growth returns over the last year have been 67.88 percent, with an average annual return of 26.11 percent since its inception, according to the date of Groww. The fund’s top 5 equity allocations are allocated across the Financial, Healthcare, Technology, Automobile, Energy sectors. HDFC Bank Ltd., ICICI Bank Ltd., Axis Bank Ltd., Infosys Ltd., and State Bank of India are the fund’s top five holdings.

The fund has an expense ratio of 0.68% and a minimum SIP can be started from Rs 1000. The fund’s Net Asset Value (NAV) was Rs 108.81 as of October 22, 2021, and its Asset Under Management (AUM) was Rs 21,263.17 Cr as of September 30, 2021.

3 Best Bluechip Equity Funds In 2021

3 Best Bluechip Equity Funds In 2021

Funds 1 mth returns 6 mth returns 1 Yr returns 3 Yr returns 5 Yr returns Since inception
Axis Bluechip Fund 1.13% 26.58% 50.71% 25.93% 19.96% 18.05%
Canara Robeco Bluechip Equity Fund 2.01% 25.25% 52.33% 26.77% 18.87% 16.68%
Mirae Asset Emerging Bluechip Fund 3.07% 30.18% 67.88% 30.71% 21.58% 26.11%
Source: Groww

Disclaimer

Disclaimer

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



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Many Indian expats turn to crypto to remit money, BFSI News, ET BFSI

Personal Finance

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Abir Roychaudhary, a 39-year-old engineer working in Qatar, has transferred around ₹2 lakh to his family based in Mumbai every month using traditional cross-border, cross-currency players.

In October for the first time, Roychaudhary bought cryptocurrencies worth half that amount – ₹1 lakh – and his wife who has access to his wallet could use the sum when needed.

Roychaudhary like many Indian, Pakistani, Bangladeshi and Filipino expats are increasingly experimenting with cryptocurrencies to remit money to their families back home and save on commissions charged by wire transfer companies and other middlemen.

Industry trackers say that the sudden growth in the crypto investments even in smaller towns across India has also led to people exploring various uses.

“The process of remittances through cryptocurrencies into India is a lot more efficient and faster than the conventional process, and all transactions are visible on the blockchain network from a regulatory point of view,” said Edul Patel, CEO of Mudrex, a Global Crypto Investing Platform.

“Looking at current hype in crypto assets like Bitcoin, Ethereum, Binance Coin, United Farmers Finance and Grain, it should be easy to remit money to India and anywhere in the world, more over you can earn more from this crypto by staking or by providing liquidity in our ecosystem,” said Santhosh Bhhandarii, co-founder, United Farmers Finance, a crypto farming platform.

Remittances in India are pegged at about $80 billion which are mainly transferred through banking or other financial channels.

Industry trackers say that the way Indians are warming up to crypto assets as well as decentralised finance, remittances through crypto assets is only set to grow, especially because transferring smaller amounts can be expensive through the traditional services.

Globally, several blockchain startups like Satoshi Citadel in the Philippines have started offering services to facilitate bitcoin remittances in a user-friendly way.

There are close to 1.5 crore crypto investors in India holding digital assets worth ₹15,000 crore. All the large cryptocurrency exchanges saw at least 100% increase in their trading and investment in the last few months.

Experts say that though Bitcoin was the preferred choice for remittances but its transaction costs are rising, currencies like Ripple and Dash are good replacements due to substantially lower fees.

Cryptocurrency remittances became a lifeline for Afghans after Western Union ceased operations for some time after the US withdrew from Afghanistan.

Experts also say that crypto is becoming popular in places with high inflation like Lebanon, Turkey and Venezuela.

Experts point out that remittances in crypto are finding favour because people want to protect themselves against hyperinflation.

Most of those looking to remit money are doing so through some of the less volatile crypto assets such as Stablecoins, say industry trackers. “While remitting money, users would want the value to remain as intended, unhindered by market volatility. Stablecoins pegged to the US dollar are the preferred choice for doing such transactions. Users mostly use stable currencies like USDT/USDC to do these transfers,” said Patel.

The RBI has had a faceoff with cryptocurrency exchanges in the past. It had asked banks to stop dealing with cryptocurrency exchanges, but had to back off following a Supreme Court order.

The government is planning to define cryptocurrencies in the new draft bill and could treat it as an asset/commodity for all purposes, including taxation.
Many Indian expats turn to crypto to remit money



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P2P lending machine fires on all cylinders amid slackened bank loan disbursals, BFSI News, ET BFSI

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It has never been better for peer-to-peer (P2P) lending platforms, which are seeing a considerable increase in the number of people wanting to lend or borrow money. While slackened loan disbursals by banks and other institutional lenders have driven borrowers to peer-to-peer lenders, low fixed-income returns are prompting rich investors to lend money on these platforms at rates ranging from 10% to 18% per annum.

P2P lending is the practice of lending money to individuals via an online platform that connects lenders with borrowers. This mode is useful for both lenders and borrowers because the former can earn a higher interest rate (than bank savings account or many other debt instruments) and the latter can obtain funds (unsecured loans) at lower rates than what banks or nonbanking financial companies (NBFCs) offer. India has nearly 20 P2P lenders, with a combined outstanding loan book of around ₹5,000 crore. These entities are regulated by the RBI.

“We do nearly ₹130 crore worth of loan disbursals every month. Over the past one year, we have grown over 30 times,” said Rajat Gandhi, founder and CEO of Faircent, which claims to have a loan book worth ₹2,000 crore. “Our volumes shot up after we rolled out a string of new products for both lenders and borrowers. At a portfolio level, we are able to deliver 12-15% returns, after adjusting for expenses and defaults,” he adds.

The bulk of the lenders filling up the rosters of prominent P2P platforms are return-hungry retail investors and traders with surplus cash flows. Several high net worth individuals and family offices are writing large cheques favouring borrowers on these platforms.They are prompted to lend on platforms because their traditional fixed-income investments – such as bank fixed deposits, savings accounts, debt MFs, debentures and corporate FDs – are yielding 3-7% on an annual basis.

Diversifying Investment Portfolio

“Apart from P2P lending, there’s no asset class that is yielding 14-16% annual returns in the current scenario,” said V Shankar, founder-director, I-lend, a P2P platform that is planning to restart operations after it stopped loan disbursals last year, when the first wave of Covid-19 struck the country. “We have lenders asking us to resume operations. There’s a lot of interest now. With macroeconomic factors looking good, and people having enough savings due to WFH, there’s more willingness to lend at a higher interest rate.”

For lenders (investors), giving loans on a P2P platform is a way to diversify their investment portfolios even further. Many a time, they route their stock market gains or monthly surpluses to generate higher returns. A lot of financial advisors and wealth managers are also advising their clients to lend on P2P platforms, but they do not recommend an exposure exceeding 10% (of the total investment portfolio) to this asset class.

Borrowers are flocking to P2P lenders because most banks and NBFCs have gone slow on disbursing personal loans to customers with relatively lower credit scores. Also several fintech and digital lenders (especially those that did small-ticket, short-tenure, pay-day loans) have been put out of business by law enforcement agencies a few months ago, as they indulged in unethical collection methods to recover loans. This has forced borrowers to tap the peer-to-peer network for funds. The loan ticket size of most P2P lenders ranges between ₹50,000 and ₹70,000 – often given for a period of 12 months. These loans are disbursed at 10-18% interest rates, depending on the credit profile of the borrower.

“The quality of borrowers has gone up because we get a lot of bank/NBFC customers as well these days. There is a lot of awareness about credit now,” said Bhavin Patel, founder-CEO of LenDen Club, which currently has a loan book worth ₹700 crore. “Even new-to-credit customers are knowledgeable about various loan products. This has helped P2P business grow considerably over the past three years. Compared with pre-Covid levels, we are doing 12 to 15 times more transactions now,” he adds.



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Analysts, BFSI News, ET BFSI

Personal Finance

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NEW DELHI: The ongoing quarterly earnings will be the major factor driving market trends going ahead and benchmark indices may face volatility this week amid derivatives expiry, analysts said.

Markets will also track global equities for further direction, they added.

Santosh Meena, head (research) at Swastika Investmart, said, “If we talk about the cues for this week then the next batch of earnings season and the October month F&O (futures and options) expiry may cause volatility in the market.”

Meena added that the market will react to earnings of Reliance Industries and ICICI Bank on Monday.

Tech Mahindra, Ambuja Cement, Axis Bank, Kotak Mahindra Bank, Adani Ports, L&T, Bajaj Auto, ITC, Maruti Suzuki, DLF, Indigo and Tata Power will come out with their earnings during the weak, Meena said.

Siddhartha Khemka, head (retail research) at Motilal Oswal Financial Services, said: “On Monday, investors will react to Reliance and ICICI Bank results along with global cues.”

ICICI Bank on Saturday reported its highest-ever quarterly profit on a standalone basis at Rs 5,511 crore for the September 2021 quarter, on the back of healthy loan growth across verticals, aided by a fall in bad loans.

Billionaire Mukesh Ambani’s Reliance Industries on Friday reported a 43 per cent jump in its September quarter net profit, as its businesses from oil to retail fired on all cylinders, growing both sequentially and on a year-on-year basis.

Yesha Shah, head (equity research) at Samco Securities, said: “The market may struggle to hold its footing this week and is likely to stay range-bound. With the monthly expiry this week, market volatility may linger.”

Last week, the 30-share BSE benchmark declined 484.33 points or 0.79 per cent.

“In the week ahead, domestic markets will continue to track Q2 results for further direction. Any, further inconsistency, as seen in recent numbers, can lead to further fall in the short term,” Vinod Nair, head (research) at Geojit Financial Services, said.

Trading in the markets will also be influenced by movement in rupee, Brent crude oil and foreign institutional investors.



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Is tokenisation the way forward? Here’s what the industry thinks, BFSI News, ET BFSI

Banking & Finance

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Tokenisation will help bring huge value to the digital payments space, and is likely to gain momentum in the coming months, said Ravi Varma Datla, Mastercard‘s vice president – digital products, South Asia.

Last month, the Reserve Bank of India issued guidelines, allowing card-on-file tokenisation. Tokenisation helps consumers to enter and save a 16-digit token on e-commerce or merchant platforms, instead of storing their card details.

“Card-on-File tokenisation enhances the safety and security of the entire transaction value chain in e-commerce payments. It builds trust and can significantly increase convenience for consumers and create efficiencies for merchants. It means there is no need for a consumer to enter his card number every time he transacts, or to login to an online shopping account to update their details due to redundant card credentials,” Datla said.

Last week, National Payments Corporation of India (NPCI) announced the tokenisation system for RuPay cards. The NPCI Tokenisation system will support tokenisation of cards as an alternative to storing card details with merchants.

“We are confident that the NPCI Tokenisation System (NTS) for the tokenisation of RuPay cards will instill further trust in the millions of RuPay cardholders to carry out their day-to-day transactions securely,” said Kunal Kalawatia, chief of products at NPCI.

Also read: What is tokenisation, and how can it ensure safe transactions?

When buying a product or service online, consumers are usually forced to store their credit or debit card details. This is where tokenisation plays a significant role in ensuring consumers’ safety.

“What makes this type of token unique is that it can be used just like your normal card for online payments but only by the merchant that requested it. This means that if a bad-guy or hacker gets their hands on a token – it simply cannot be used. For the sake of identification and reconciliation, RBI has permitted merchants to display the last 4 digits of the original card number to the consumers,” Datla said.

Datla added that as of today, customers have no single view of all the merchants where they have saved their card number. With tokenisation, customers can reach out to their respective banks and view the list of all the tokens saved at merchants and also request to delete or update them.

Recently, Visa launched its card-on-file tokenisation service in India. The company has enabled its tokenisation services across 130 countries. As a large number of shoppers make the shift to online payments, Sujai Raina, Visa’s India business development head, believes it will ensure a frictionless checkout experience for consumers, and drive higher payment success rates for merchants and issuers.

“We believe the RBI’s directive to roll out card-on-file tokenisation in addition to the earlier device-based tokenisation protocols, will help build a safe, secure and seamless environment for digital payments, thus enhancing consumer trust across digital platforms,” he said.

When asked Mastercard about its plan to launch its tokenisation services in India, Datla said the company is working with its partner banks, merchants, payment aggregators, and other stakeholders towards a smooth rollout.

So far, Mastercard has rolled out tokenisation for consumers in over 2,500 banks across the globe. The company has found that the tokenisation has enabled a safer payment ecosystem, and has also increased transaction volume across the digital channel to return greater revenue for merchants, Datla said.

Datla also believes that tokenisation will help make digital payments seamless. “By replacing sensitive payment data with digital tokens, a superior ecommerce experience is created which provides increased security, approval rates and a frictionless consumer experience,” Datla said.



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