NON BANK FINANCE COMPANIES
Union Bank freezes accounts of state-run telecom firm MTNL over non-payment of dues
According to the details shared by MTNL, it has defaulted on the payment of Rs 155.76 crore on debt raised from Union Bank of India, Rs 140.37 crore from State Bank of India, Rs 40.33 crore from Bank of India, Rs 40.01 crore from Punjab & Sind Bank, Rs 41.54 crore from Punjab National Bank, and Rs 4.04 crore from UCO Bank.
EU and China launch mechanism to facilitate industrial data flows
The European Union and China have started discussions under a new system designed to streamline cross-border data flows. This initiative will help European businesses transfer non-personal data internationally while complying with Chinese data laws. It is crucial for sectors such as finance, insurance, pharmaceuticals, automotive, and ICT. The EU had previously expressed concerns over China's data regulations, citing their clarity and lengthy processes.
Centre wants to beat dues blues by strengthening processes to speed up NPA resolution
Separately, a set of amendments to the Insolvency and Bankruptcy Code (IBC) is being considered to fix any shortcomings in the law. "These reforms are aimed at expeditious loan recoveries, giving more legal backing to recovery tribunals, and addressing delay tactics by borrowers in the recovery process," said a government official aware of the developments.
Yes Bank ties up with Newtap Finance to Offer Financing Solutions
Yes Bank has entered into a co-lending partnership with Newtap Finance to offer personalized financing solutions on CRED. Dreamplug Technologies Private Limited (DTPL), the operator of CRED, will act as the Lending Service Provider (LSP) for Yes Bank and Newtap Finance in this partnership.
Asset light with possible annuity income stream: 5 non IT, services sector stocks with upside potential of up to 31%
Service companies beyond the IT sector have gained prominence, with several getting listed in recent years. Firms like Teamlease, SIS, and Quess Corp offer essential backend services for industries such as banking, logistics, and real estate. They operate using asset-light models, ensuring steady revenue and market interest, despite competition risks and changing market dynamics.
Centre moots NBFC under Sagarmala to tide over shipping woes
The shipping ministry planned to launch a non-banking finance company under the Sagarmala initiative to address the financing needs of the shipping and shipyard sectors. Awaiting finance ministry approval, this NBFC aimed to provide competitive financing options to these sectors, which faced challenges in obtaining bank loans and lacked infrastructure status.
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NBFCs beat high cost of funds by increasing rates and reducing dependence on bank loans
For the June 2024 quarter margins for most non-bank lenders remained under pressure due to increased borrowings and lower fee income. NBFCs saw a mixed June quarter with some moderation in AUM growth led by weak disbursements and some marginal weakness in asset quality and credit costs due to seasonality, elections, and heatwave in northern states.
Aye Finance raises about $25 million from Goldman Sachs (India) Finance
Aye Finance raised $25 million from Goldman Sachs through a Rs 212 crore securitisation deal. The funding will aid in business expansion for the fintech company that lends to micro enterprises in India. Aye Finance has provided over Rs 10,000 crore in credit to 9 lakh businesses. Their FY24 net profit surged to Rs 161 crore.
Problems of over-lending in microfinance surface again
Overleveraging in microfinance has resurfaced despite RBI's regulations from two years ago. Issues include unreliable household income measurement and over-reporting by field officers. Industry bodies are pushing for stricter loan exposure limits. Increased delinquency rates have led lenders to take tighter measures for new-to-credit customers, aiming to mitigate emerging credit risks.
RBI tightens guidelines for NBFC P2P lending
RBI barring them from selling insurance products that are in the form of credit enhancement and prohibiting P2P platform from providing any assurance or guarantee on the recovery of loans.
RBI tightens norms for P2P lending platforms
The RBI issued guidelines for P2P lending in 2017. Such a platform acts as an intermediary providing an online marketplace/platform to the participants involved in peer-to-peer lending. However, it has been observed that some of these platforms have adopted certain practices, which were violative of the provisions of Master Direction 2017.
IREDA may set up arm to help finance small biz, retail clients
Indian Renewable Energy Development Agency Ltd (IREDA) announced plans to establish a subsidiary to finance small businesses and retail customers involved in renewable energy projects. The subsidiary will partner with microfinance firms and other non-banking finance companies to provide support in areas lacking adequate banking services.
Stocks to buy: Consider reasonably valued companies; 5 stocks with up to 38% upside potential
Out of 2,506 stocks with market caps greater than Rs.100 crore, 60.8% or 1,523 companies are trading at a TTM PBV multiple higher than their respective five-year average; 1,042 companies’ (41.5% of total) current TTM PBV multiple is at over 25% premium to their respective five-year average multiple. The stocks that are trading at a valuation discount in terms of their PBV multiple relative to their respective five-year average were identified. To look for fundamental soundness, only those that have surpassed analysts’ estimates in the June 2024 quarter were considered.
India’s biggest shadow bank Bajaj seeks up to $500 million loan
Bajaj Finance Ltd. intended to raise up to $500 million from overseas markets. The company is negotiating with at least four foreign banks for terms of the loan, which will be priced against the Secured Overnight Financing Rate. This move comes after new RBI rules limited domestic borrowing options for shadow financiers.
RBI penalises CSB Bank, Union Bank of India, others
The Reserve Bank of India (RBI) has imposed penalties on five entities, including CSB Bank, Union Bank of India, and Muthoot Housing Finance, for non-compliance with regulatory norms. The penalties are based on deficiencies in regulatory compliance and are not intended to pronounce upon the validity of any transaction or agreement entered into entities.
CVC pips EQT, set to buy Aavas for Rs 7k crore
CVC and EQT were the final contenders after Bain Capital decided to take a backseat. ET had been first to report on July 28 that EQT, CVC and Bain were the last in the fray, as private equity investors look to consolidate their position in the fast-growing sector. Kedaara and Partners together hold 26.47% of Aavas, with the former owning slightly more than the latter. Their exit will trigger an open offer for the acquisition of an additional 26% from public shareholders and result in a change in control.
Moneyboxx Q1 Results: Company reports Rs 4.30 cr profit
The company said it is supported by 33 lenders, including prominent banks such as State Bank of India, HDFC Bank, Kotak Mahindra Bank, RBL and IDFC First Bank.
Public sector banks' NPAs on Mudra loans fall to 3.4 pc in 2023-24: Sitharaman
Finance Minister Nirmala Sitharaman announced that public sector banks' non-performing assets (NPAs) for Mudra loans declined to 3.4% in 2023-24 from 4.77% in 2020-21. Private sector Mudra loan NPAs fell to 0.95%. NPAs indicate banking sector health, with high levels suggesting financial instability. Monitoring mechanisms ensure fair recovery processes.
REC Ltd looking at financing overseas projects, submitted application for subsidiary at GIFT City
REC Limited, a 'Maharatna' company under the Ministry of Power, has applied to open a subsidiary in Gujarat's GIFT City to begin financing offshore projects. CMD Vivek Kumar Dewangan announced plans to start offshore financing this financial year. REC reported a 19% increase in revenue to Rs 13,023 crore and a 16% rise in net profit to Rs 3,442 crore for Q1 2024. The company aims to double its loan book to Rs 10 lakh crore by 2030, focusing on renewable energy and non-power infrastructure.
Ujjivan Small Finance Bank Q1 Results: PAT down 7% at Rs 301 crore
Provisions for the quarter were over four-fold higher at Rs 110 crore against Rs 26 crore in the year-ago period. The bank's gross non-performing assets ratio stood at 2.52% at the end of June as compared with 2.23% three months back and 2.62% a year back.
No final bids from ARCs for IDBI's Stressed Assets Stabilisation Fund assets
IDBI Bank's Stressed Assets Stabilisation Fund (SASF) is facing hurdles in its bid to recover 11.59% from the sale of non-performing loans worth ₹6,151 crore. Despite initial interest from 18 asset reconstruction companies (ARCs), no confirmed bids were received in the final round. As a result, the reserve price for the auction has been slashed to ₹642 crore, and a new bidding process has commenced. The portfolio includes 239 cases, with a mix of secured and unsecured debts. SASF, originally set up to acquire distressed assets from IDBI Bank, is now winding down after nearly two decades.
Jio Financial Services gets RBI nod to become core investment company
The Reserve Bank of India on Thursday evening approved Jio Financial's conversion from a Non-Banking Financial Company (NBFC) to a Core Investment Company (CIC), the company said in a filing.
TFCILTD in focus: Adani Group advisor and former MD & CEO of Karnataka Bank join TFCILTD
TFCILTD, an NBFC, appoints Deepak Amitabh and Dr Mahabaleshwara MS, boosting strategic capabilities. Amitabh, an Adani Group advisor, is strong in financial strategy. Dr. Mahabaleshwara, ex-MD & CEO of Karnataka Bank, enhanced digital footprint, key for financial planning, management, governance, and exploring growth avenues.
Piramal Finance plans up to $500 million debut dollar-bond issue
Billionaire Ajay Piramal’s firm is in talks with a group of global investment banks to raise $300 million to $500 million via such notes with a tenor of three to five years, the people said, asking not to be identified as the discussion are private.
Ujjivan Small Finance Bank raises secured business share
Ujjivan Small Finance Bank expanded its secured loan portfolio to 31.5%, a 440 basis point increase over the past year, aiming for 40% in three years. The total loan portfolio grew 19% to ₹30,091 crore. Despite this growth, its gross NPA ratio slightly increased to 2.3%. Deposits rose 22% to ₹32,500 crore.
Competitive intensity in used vehicle market to be on the rise: India Ratings
India Ratings and Research predicts that vehicle financiers will increase the share of used vehicles in their AUM due to rising new vehicle prices, food inflation, heat wave, moderation in capacity utilization due to elections, and slowing rural economy. The agency also expects a decrease in FY25 growth rates from FY24 levels. The agency expects non-bank finance companies to focus on used vehicles as assets class, presenting a favorable risk-return in terms of asset quality and pricing power.
FIDC urges RBI to relax draft guidelines on infrastructure provisioning
The Finance Industry Development Council (FIDC) has urged the Reserve Bank of India (RBI) to reconsider and clarify certain proposals in its recent draft circular on infrastructure provisioning, arguing for more flexibility to support the infrastructure sector, specifically addressing concerns regarding standard asset provisions during the construction phase and minimum financing limits.
Shriram Finance raises USD 468-mn multi-currency social loan
Shriram Finance Limited raised USD 468 million in multi-currency for business growth through a social loan structured by leading banks, marking the largest syndicated transaction by a private NBFC.
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