Business News Highlights: LIC Hosing, Bajaj Finance, 15 Other Large NBFCs To Comply With Enhanced Regulatory Requirements, Says RBI
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On Wednesday, the two key equity benchmarks, Sensex and Nifty, closed in the green amid mixed global trends ahead on US inflation data. The indices got a boost from the investors following a better-than-expected domestic retail inflation data for August. The S&P BSE Sensex jumped 246 points to close at 67,467. On the other hand, the Nifty50 settled at 20,070, up 77 points.
The US Labor Department said the consumer price index rose 3.7 per cent in August from a year ago. Excluding the fluctuating food and energy sectors, core prices, often referred to as "core inflation," increased by 4.3 per cent. This represents a decrease from the 4.7 per cent recorded in July and marks the smallest rise in nearly two years, according to a CNBC TV18 report. It's important to note that this figure remains significantly above the Federal Reserve's target of 2 per cent inflation.
The reports suggest that the rise in August inflation can be attributed to the recent surge in petrol prices. Both Saudi Arabia and Russia are actively working to boost oil prices, aiming for the $100 per barrel mark. As a result, Brent crude has already reached a 10-month high, sitting at approximately $92.50.
Following the inflation data Financial markets responded with caution, as seen in the minimal movement of the yield on the interest rate-sensitive two-year Treasury, remaining nearly unchanged. Additionally, the S&P 500 stock index experienced a slight decline of 0.2 per cent, according to an FT report.
In other news, the European Central Bank (ECB) is set to reveal its decision from the monetary policy meeting on Thursday, September 14. This comes after the ECB had raised interest rates by a quarter-point in its previous July meeting, bringing them to their highest level in 23 years. The ECB had indicated its readiness to take further action as necessary to combat rising inflation amid a deteriorating economic environment. This suggests that the central bank is willing to increase interest rates once more in its ongoing efforts to address global inflationary challenges.
IPO Update
Zaggle Prepaid Ocean Services is launching its IPO on September 14, with a subscription window until September 18. The price band for the IPO is set between Rs 156 to Rs 164 per share, with a lot size of 90 shares and multiples thereof. Anchor investor allocation took place on September 13. The IPO consists of a fresh issue worth Rs 392 crore and an offer for sale (OFS) of Rs 171.38 crore, with a total issue size of Rs 563.38 crores. The funds raised will be used for various purposes including customer acquisition, product development, corporate expenses, and loan repayment.
Samhi Hotels' IPO, valued at Rs 1,370.10 crores, is also set to open for subscription on September 14 and will run until September 18. The company boasts a portfolio of 4,801 keys across 31 operational hotels located in 14 prominent urban consumption hubs in India as of March 31, 2023. The price band for the issue is set at Rs 119 to Rs 126 per share.
LIC Hosing, Bajaj Finance, 15 Other Large NBFCs To Comply With Enhanced Regulatory Requirements: RBI
The Reserve Bank of India (RBI) has announced that 15 large Non-Banking Finance Companies (NBFCs), including, LIC Housing Finance, Bajaj Finance, Shriram Finance, and Tata Sons, will now be subject to enhanced regulatory requirements. These NBFCs fall under the Upper Layer category, as per the RBI's categorisation. It also includes L&T Finance, Piramal Capital & Housing Finance, and Cholamandalam Investment and Finance Company, among others.
Interestingly, TMF Business Services Ltd (formerly Tata Motors Finance Limited), although eligible for classification as NBFC-UL based on scoring methodology, is not included in the current list due to ongoing business reorganization. The RBI employs a specific methodology to determine NBFCs in the Upper Layer based on asset size and scoring criteria.
Samhi Hotels IPO Subscribed 7% On First Day Of Bidding
Samhi Hotels IPO was subscribed to 7 per cent on Thursday. The IPO, valued at Rs 1,370 crore, garnered bids for 43,32,076 shares against the 6,25,29,831 shares on offer, as per NSE data, reported PTI. The retail individual investors' segment saw a 34 per cent subscription rate, while non-institutional investors' participation reached 2 per cent.
Samhi Hotels, based in Gurugram, priced its IPO in the range of Rs 119-126 per share. The three-day bidding period will conclude on September 18. Samhi Hotels secured Rs 616.54 crore from anchor investors.
In a pre-IPO placement, external investor Blue Chandra sold 10.32 million shares, equivalent to 8.4 per cent of its stake, to renowned investor Madhusudan Kela's wife, Madhuri Kela, along with Nuvama Crossover Opportunities Fund and TIMF Holdings, for a total consideration of Rs 130 crore.
Indian Oil Companies Exploring To Use $600 Million Stranded Divided Income To Buy Russian Oil
Indian oil companies are considering using nearly $600 million of dividend income stuck in Russia to purchase oil from the country, reported PTI citing an official. India's top four oil companies, including the Indian Oil Corporation (IOC) and BPCL, have been unable to repatriate their dividend income from Russian investments due to Western sanctions. To address this, they are exploring options such as loaning the funds to entities purchasing oil from Russia, with repayments made in India.
"We are studying legal and financial implications of such a move," an official said, as per PTI. Adding "We are mindful of the sanctions and do not want to do anything that may in any way attract any breach."
Russia has become India's largest crude oil supplier, accounting for over a third of its imports. Indian state oil companies have invested $5.46 billion to acquire stakes in four Russian assets. These investments encompass a 49.9 per cent stake in the Vankorneft oil and gas field and a 29.9 per cent stake in the TAAS-Yuryakh Neftegazodobycha fields. These investments grant them dividends based on the profits generated by the operating consortium from the sale of oil and gas extracted from these fields.
R R Kabel IPO Subscribed 1.39 Times On Second Day Of Bidding
R R Kabel IPO was subscribed 1.39 times on the second day of bidding. The IPO, valued at Rs 1,964 crore, received a total of 1,85,71,364 bids for its shares, surpassing the 1,33,17,737 shares that were on offer, according to NSE data, reported PTI.
Among the investor categories, the non-institutional investors' segment recorded a subscription rate of 2.1 times, while the Qualified Institutional Buyers (QIBs) segment was subscribed 1.65 times. The Retail Individual Investors (RIIs) portion achieved a subscription rate of 95 per cent. This IPO comprises a fresh issue of up to Rs 180 crore and an offer for sale involving up to 17,236,808 equity shares. The share price for R R Kabel's IPO falls within the range of Rs 983 to Rs 1,035 per share.
Notably, R R Kabel's IPO had a subscription rate of 25 per cent on the first day of its bidding process. Additionally, the company secured Rs 585.62 crore from anchor investors on Tuesday.
Former SBI Head Rajnish Kumar Appointed As Master Card India Non-Executive Chairman
Mastercard India on Thursday appointed the former SBI chief Rajnish Kumar as non-executive chairman. Mastercard India in a statement said that in this critical, non-executive advisory role, Kumar will guide Mastercard's South Asia executive leadership team led by Gautam Aggarwal, Division President for South Asia & Country Corporate Officer, India, in navigating the vibrant domestic payments landscape.
"Kumar will be keenly involved in augmenting the local leadership team in its efforts to expand our domestic footprint, while bolstering Mastercard's ongoing commitment to forging strategic partnerships with stakeholders across the payments ecosystem – from banks to fintechs to governments, non-profits and more," said Ari Sarker, President, Asia Pacific, Mastercard.
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