Muthoot Finance NCD issue opens

Gold loan company Muthoot Finance opened a public issue of non-convertible debentures (NCDs) on Monday.

The company plans to mop up Rs 150 crore, with an option to retain oversubscription for another Rs 150 crore, through the issue.

The NCDs have a face value of Rs 1,000 each.

The minimum application size is 10 NCDs. The issue will close on September 16. The NCDs will be listed on the BSE, a company press note said.

There are ten investment options for the secured NCDs and one for the unsecured. They will have an effective yield of up to 12.55 per cent a year.

The company said the funds raised through the NCD issue will be used for lending and investment, repay loans and other liabilities, and capital expenditure and working capital requirements.

Source: thehindubusinessline

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Karnataka Bank ups NRE deposit rates

Karnataka Bank has raised interest rates on Non-resident External (Rupee) deposits by 50 basis points of three years to 10 years maturity with effect from September 2. The new rates are 9.50 per cent (9 per cent) for three years to five years maturity, and 9.25 per cent (8.75 per cent) for above five years to 10 years maturity.

Source: thehindubusinessline

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Falling Re pushes up cost of raising funds: Exim Bank chief

The lack of direction in corporate investment strategies is leading to a rise in bad loans of banks, feels T.C.A. Ranganathan, Chairman and Managing Director, Export Import Bank of India.

“There is something wrong, somewhere. It’s time for a complete internal reorientation (for the industry),” Ranganathan said while addressing a seminar on growth opportunities for the Indian banking industry organised by FICCI.

According to him, there is a need for increasing production capacity and focussing on investment in research and development. Currently, R&D expenditure in India stands at 0.85 per cent of GDP. Use of technology in manufacturing should be another important area of focus, he said. On devaluation, he said a free fall of the rupee against the US dollar has impacted the Exim Bank “indirectly” as the cost of raising funds has gone up.

“Rupee depreciation is impacting us indirectly. Cost of raising funds is going up. The bonds market has frozen. But, at the moment, Exim Bank has enough liquidity,” he said.

He pointed out that decline in the value of rupee would not hit the Bank directly, since “60 per cent of its balance sheet is foreign currency (dollar) denominated”.

Exim Bank currently has 168 lines of credit across more than 73 countries in Africa, Latin America, Europe, Oceania and the CIS, with a credit commitment totalling more than $8.69 billion to finance exports from India.

While there is “slight easing” in Europe on project exports, situations are stable Africa and Latin American countries, according to him. He added that fresh contracts in West Asia have come down.

ayan.pramanik@thehindu.co.in

Source: thehindubusinessline

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LIC's loss in PSU stake buy put at Rs 3,000 cr

Salvaging government’s disinvestment programme has cost state-owned LIC dearly as it has incurred notional loss of over Rs 3,000 crore on purchases of PSU equity through the OFS route since March 2012.

The shares of the nine PSUs - ONGC, Hindustan Copper Ltd (HCL), NMDC, NTPC, Rashtriya Chemicals and Fertilizers (RCF), Nalco, SAIL, MMTC and National Fertilisers - in which LIC had purchased stake, are trading below their issue prices.

While Life Insurance Corporation (LIC) has purchased shares worth about Rs 16,372 crore in the disinvestment programme through the Offer for Sale (OFS), at the current market price the investment is valued at Rs 13,230 crore.

This leads to a Mark-To-Market (MTM) or notional loss in investment to the tune of Rs 3,142 crore for the insurance behemoth.

In case of ONGC, LIC purchased 40.03 crore shares for Rs 12,179 crore. At the current market price, the shares are valued at Rs 9,979 crore.

In case of HCL, it bought over five crore shares for Rs 588 crore. These are now valued at about Rs 289 crore.

Similarly in case of NTPC, LIC bought 12 crore shares for Rs 1,764 crore. These shares are now valued at Rs 1,569 crore.

In order to speed up the disinvestment, the government has started the OFS or auction route for selling its stake in public sector companies.

For the current fiscal, the government proposes to raise Rs 40,000 crore through PSU disinvestment. So far this fiscal, it has raised only Rs 1,325 crore. Last fiscal (2012-13), the government raised Rs 23,920 crore through disinvestment.

Source: thehindubusinessline

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Melwyn Rego elevated to Deputy MD of IDBI Bank

Melwyn Rego has been appointed by the Government as Deputy Managing Director of IDBI Bank. He took charge on August 30. Prior to his elevation, Rego was Executive Director.

With this appointment, IDBI Bank has two DMDs who are whole-time directors on the board.

B. K. Batra is the senior-most DMD.

According to reports, Batra is expected to be elevated as the chief of either a public sector bank or a financial institution.

Source: thehindubusinessline

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