63 Moons Technologies that has a claim of Rs 200 crore from Dewan Housing Finance, which is being taken over by the Piramal Group for as low as Rs 37,500 crore against a total claim of close to Rs 85,000 crore, on Tuesday said it will challenge the resolution at the NCLAT shortly. On Tuesday, making an about-turn, the Mumbai bench of the National Company Law Tribunal (NCLT) chaired by HP Chaturvedi and Ravikumar Duraisamy, allowed Piramal Group to take over DHFL under the bankruptcy code for as low as Rs 37,500 crore against a claim of close to Rs 85,000 crore. It had on May 25 asked the committee of creditors to consider the Wadhawans offer of paying back almost Rs 93,000 crore to the lenders and creditors, which was stayed by the NCLAT after the Pirmal group challenged it.
Amid slowdown blues, the government has unveiled a raft of measures over the past few months aimed at improving liquidity in the system, moderating interest rates as well as credit growth apart from addressing stress in the NBFC sector.
Fitch reaffirmed India's rating at 'BBB-' with a Stable Outlook saying the rating balances a still strong medium-term growth outlook compared with similar category peers and relative external resilience stemming from solid foreign-reserve buffers against high public debt, a weak financial sector and some lagging structural factors, including governance indicators and GDP per capita.
A lot depends on how Srei shapes up under the new administrator and his team, which is critical for investors' interest.
The demand environment is expected to improve over the next three quarters, aided by a recovery in demand from the construction sector, following release of payments to contractors after elections.
After banks, it is now the turn of non-banking finance companies (NBFC) to see a spike in loan defaults and provisioning for non-performing assets ( NPAs ).
A series of steps taken by the government to promote ease of doing business and liberalisation of foreign direct investment norms have helped India receive record FDI inflows so far this year, and implementation of measures like PM Gati Shakti, single window clearance and GIS-mapped land bank are expected to further push investments in 2022. Notwithstanding the global slowdown and the COVID-19 pandemic, total foreign direct investments into India rose to a record $81.72 billion in 2020-21. During April-July this fiscal, FDI (foreign direct investment) into the country increased by 62 per cent to $27.37 billion.
Nearly three-fourths of the debt money, as of April 30, 2019, was invested in securities with duration of less than three years.
The Nifty Bank index has come off 15 per cent from its peak in February, underperforming the benchmark Nifty which is down 6%.
In HDFC Life, the company has to pare 1.43 per cent, and in HDFC Ergo, it has to pare only 0.58 per cent.
While lenders create a hype around the services offered on digital platforms, customers think otherwise, given that frustration due to the quality of service has only increased, over the years.
The Indian financial system's asset quality improved despite the pandemic, but it could be due to special dispensations by the regulator, and banks would likely see increased stress on their books once the schemes expire. According to the annual trend and progress report of the Reserve Bank of India (RBI) released on Tuesday, the data available for this financial year so far indicate that banks' bad debts have moderated while provision coverage ratios (PCRs), capital buffers as well as profitability indicators have improved relative to pre-pandemic levels.
'The economy is expected to bounce back and things are expected to recover faster than what we previously thought.'
A bunch of CEOs in their mid-30s and early 40s are trying to rectify the scenario where shady lending applications trap hapless borrowers with astronomically high interest rates and even bodily harm if the money was repaid. Anup Roy reports.
What is a non-banking financial company (NBFC)? How does it differ from a bank? Get the answers to these and many more questions on NBFCs.
Prime Minister Narendra Modi will on Friday launch two schemes of the Reserve Bank of India (RBI) that may go a long way in changing how the household sector invests, and complains if anything goes wrong with their savings. These schemes - retail direct and an integrated ombudsman - will be launched by the Prime Minister virtually, in the presence of Finance Minister Nirmala Sitharaman. With the introduction of retail direct, a common man can directly take a position in government securities (G-Sec), considered to be the safest asset class a sovereign can offer.
The Reserve Bank has revoked the deposit-taking status of Dewan Housing Finance (DHFL), the first financial services firm to go for bankruptcy proceedings, and has reclassified it as a non-deposit taking housing finance company, before approving the Piramal group's bid to take over it towards the end of the resolution process. The revelation comes in the June 7 NCLT Mumbai order that has approved the Rs 35,250-crore bid for the once second largest mortage lender by Piramal Capital & Housing Finance, forcing over 65 per cent haircut on the creditors and just Re 1 to its NCD holders to whom it owes more than Rs 45,000-crore. On the 14th page of the 86-page NCLT order by HP Chaturvedi and Ravikumar Duraisamy, it says DHFL no longer is a deposit taking NBFC but a non-deposit taking one.
'It is easy to dramatise the events of today, but it is far more important to focus on the fact that we have a radically overvalued financial sector. It is a house of cards.'
'When an institution believes its knowledge and capability is superior to everyone, it behaves like a frog in the well.' 'And this is precisely the cause for the mess,' says J N Gupta.
HR Guru Mayank Rautela offers practical advice.
Bankrupt Infrastructure Leasing & Financial Services (IL&FS) has sold the entire stake in the waste management arm IL&FS Environmental Infrastructure & Services (IEISL) and its subsidiaries to EverEnviro Resource Management (EverEnviro), an arm of the PE major Everstone Group, the companies said in separate statements. Though the value of the deal was not specifically disclosed, the crippled IL&FS -- which is under bankruptcy proceedings in NCLT -- said the sale will reduce its overall debt by Rs 1,200 crore, which is the combined debt of entities under the group's environment businesses. IL&FS Environmental Infrastructure & Services (IEISL) is one of the leading integrated waste management companies that is into municipal solid waste management apart from presence across various segments including construction and demolition, collection and transportation and waste to energy and currently manages over 8,400 tonnes per day solid municipal waste.
'Q1 is going to bear the brunt of the second wave, exposing full-year GDP forecasts to downward revisions, unless phase-3 of vaccination is executed quickly.'
Long-term investors should consider moving into smaller stocks. Rather than try to pick stocks, it makes sense to build a diversified portfolio by exposure across midcap and small caps funds, suggests Devangshu Datta.
'As valuations of large-caps appeared to be out of whack, investors started lapping up quality mid-caps and small-caps, which were available at relatively comfortable valuations.'
Mathai George George Muthoot joined the family business as an office assistant and in 1979 he became the managing director and group chairman in February 1993.
Bajaj Finance was the top laggard in the Sensex pack, dropping over 9 per cent, followed by Axis Bank, IndusInd Bank, HDFC, ICICI Bank and M&M. Reliance Industries, however, capped the losses by rallying over 3 per cent. Sun Pharma, Hero MotoCorp, L&T, PowerGrid and Bajaj Auto were also among the gainers.
Rediff readers tell us about their first jobs and salaries.
FPIs would be classified into two categories instead of three, while the requirements for issuance and subscription of offshore derivative instruments would be rationalised.
Goldman Sachs wanted the govt to give it a blanket approval for any further investment in non-banking financial activities in India.
'It is critical that the Covid curve does not have a fat tail and the chain is broken quickly.'
RBL Bank is no Yes Bank. It's not fraught with fraud. It's a story of limitless ambition and greed for growth under a leader who doesn't want to give up, says Tamal Bandyopadhyay.
The 21st meeting of FSDC comes against the backdrop of the economy hitting a six-year low growth rate of 5 per cent in the first quarter of 2019-20. Even some of the macroeconomic data for the second quarter does not portray an encouraging picture of the economy.
Blackstone, KKR, and Bain Capital, among others, are in the race for its general insurance arm, and Bandhan Bank, Bain, and Dabur Investments have shown interest for RCap's 51 per cent stake in the life insurance business.
Experts say this is a good time to buy a house for self-use, points out Sanjay Kumar Singh.
'In the business of money, where you are regulated, the liability lies on the head of the acquirer.' 'It is not a good thing when you cannot spot the risks.'
It is easy to invest in exotic products but difficult to exit them. Think carefully before investing rather than being blown away by expected returns alone, suggests Mrin Agarwal, founder, Finsafe India.
'And the top 10 per cent will grow because they have to serve the market.'
They are small town boys who went on to make it big in global financial powerhouses.
Keki Mistry, bottom, left, vice-chairman, Housing Development Finance Corporation (HDFC), tells Joydeep Ghosh that debt fund investors could become risk-averse, leading to problems for other non-banking financial companies.
Such cold-shoulder by banks also indicates a credit freeze that is hard to overcome, unless the government comes out with credit guarantee schemes for loans given by banks. Since that is not happening, and there is no indication of that too, banks are not willing to listen to RBI prodding.
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