As the government's Budget moves unfold, market participants are treading with caution. As a result, the open interest (OI) positions have taken a beating during June, especially during the last few weeks.
The Securities and Exchange Board of India is discussing a proposal to make it mandatory for brokers to collect margins from clients in the cash market. This is now practised only in the derivative segment.
Life Insurance Corporation of India intends to pump in around Rs 1,05,000 crore into non-convertible debentures and equity in the current financial year, nearly 20 per cent more than the Rs 88,000 crore it invested in these instruments in 2008-09.
The rally was over before they could even blink.
Move aimed at strengthening Sebi's powers to investigate market-related offences.
Though the overall environment seems to be improving, Reliance Capital CEO Sam Ghosh tells Business Standard that the company is opting to be cautious.
The total number of agents of Reliance Life at the end of September stood at 211,293. By December-end, the numbers were down by 68,450 to 142,843, according to an investor presentation made by the company.
Investment banking experts and capital market advisors, who are engaged in talks with companies that are looking at fund-raising options, said that while 13 large-cap companies were looking at raising capital to the tune of Rs 30,000 crore through QIPs, rights issues and NCDs, 20 other companies had initiated talks to raise about Rs 15,000-20,000 crore. At least 10 NCD issuances are expected during the first half to raise a total of Rs 10,000-15,000 crore.
It hopes to enter the business in 9-15 months. "We have plans to enter diesel generator, petrol, LPG and kerosene segment, but it will be too early to comment on any specific deal," said Kalyan Bhattacharya, president and CEO, Birla Power Solutions. "The size of the acquisition will depend on the horse power of the engines manufactured by the company. BPSL is looking at a company manufacturing diesel engines of capacities ranging between 25 horse power and 200 horse power."
Market experts said on an average around 80,000 accounts were opened every month during 2008-09 as against 0.3 million accounts monthly in 2007-2008. "Investors are closing their accounts as brokerage houses have started levying annual maintenance charges. Even the depositories have increased their transaction fees. We currently open about 25,000 accounts on an average per month as compared to over 40,000 accounts during 2007-08," said an official at a large securities house.
Tech Mahindra, the highest bidder for Satyam Computer Services, has tied up Rs 875 crore funding from mutual funds and insurance companies and is in talks with banks to mobilise Rs 1,000 crore bridge loans.
Total MF investments in debt papers like certificate of deposits, commercial papers and collaterised borrowing and lending obligations stood at around Rs 184,000 crore at the end of February. Industry experts said that by March-end, this corpus had depleted by over 50 per cent. "The industry would have lost around Rs 1 lakh crore as banks and institutions redeemed their investments during the last week of March," said Jaideep Bhattacharya of UTI Asset Management Company.
Interestingly, mutual funds had increased their holdings in Satyam to 38.6 million shares in December, after its controversial proposal to acquire promoter-family firms Maytas Infra and Maytas Properties was blocked by institutional players. Fund managers believed then that Satyam was available cheap. However, on January 7, Ramalinga Raju delivered a fatal blow by declaring he had fudged the company's balance sheet for seven years.
Depressed markets, Sebi queries, change in guidelines halt launches.
Most of these deals include outstanding payments for acquisitions or stakes in companies. Market experts explained that these Indian firms were keen to settle their deals, even at a discount as they feared that payments might get delayed indefinitely, in case the matter reached court. Lehman's assets in India are currently valued at over Rs 500 crore (Rs 5 billion).
In a few months, private sector lender IndusInd Bank may have a new identity. The move was in line with the repositioning exercise initiated by the new management team led by Managing Director and Chief Executive Officer Romesh Sobti.
Cash-strapped Royal Bank of Scotland is reviewing its branding agreement with cricketer Sachin Tendulkar a year into the deal.
Public sector banks could see higher pressure on their net interest margins in the coming months as they have mopped up large amounts of deposits at higher rates and have also effected steep cuts in lending rates between November 2008 and January 2009.
With real estate prices moving southwards, several banks and financial institutions are buying their own properties and shifting from rented and leased premises.
The country's largest life insurer has been inundated with applications from companies, including heavyweights such as Reliance, as the deepening credit crisis forces India Inc to look for new sources of funds. Many companies are issuing NCDs largely to meet their working capital requirements as well as long-term capital expenditure plans.
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