Business News Highlights: LIC Hosing, Bajaj Finance, 15 Other Large NBFCs To Comply With Enhanced Regulatory Requirements, Says RBI
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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 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 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 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.
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.
Gold prices in Delhi dipped by Rs 50, reaching Rs 59,600 per 10 grams on Thursday, reported PTI citing HDFC Securities data. The decline was attributed to a drop in precious metal prices in global markets. In the previous trading session, gold had closed at Rs 59,650 per 10 grams. Additionally, silver saw a decrease of Rs 400, settling at Rs 73,000 per kg.
"The Comex gold price dropped to a fresh three-week low as fresh US inflation data indicated the Federal Reserve may implement further monetary tightening this year," Saumil Gandhi, senior analyst of commodities at HDFC Securities, said.
In the global markets, both gold and silver were trading lower, with gold at $1,906 per ounce and silver at $22.55 per ounce.
LIC announced on Thursday that it has divested 2 per cent of its stake in Sun Pharma through an open market sale, generating Rs 4,699 crore in proceeds. The government-owned insurer said that the shares were sold at an average price of Rs 973.80 per share from July 22, 2022 to September 13, 2023 through an open market sale in an ordinary course of transaction.
"Corporation's shareholding in Sun Pharma has diluted from 12,05,24,944 to 7,22,68,890 equity shares decreasing its shareholding from 5.023 per cent to 3.012 per cent of the paid-up capital of the said company," LIC said in a regulatory filing.
LIC shares closed at Rs 660.80 apiece on BSE, up by 0.27 per cent.
The economic affairs secretary Ajay Seth has said that corporate tax collections are expected to align with the budget estimates.
"We should not look at few months' data and try to find a long-term trend over there... my sense is that whatever numbers are there in terms of budget estimates and revenues, those will be realised," Ajay Seth told reporters, as per Reuters.
The report said that Government data show corporate tax collections from April to July declined by 10 per cent to Rs 1.76 trillion ($21.20 billion) compared to the last year. The government aims to achieve a fiscal deficit of 5.9 per cent of GDP for the fiscal year 2023-24.
The rupee ended Thursday trade marginally lower at 83.03 per dollar against the Wednesday closing of 82.99.
The benchmark indices saw a volatile trading session, ultimately closing with marginal gains. The Sensex closed the trading session with a gain of 52.01 points or 0.08 per cent, reaching 67,519.00, while the Nifty saw a rise of 33.10 points or 0.16 per cent, closing at 20,103.10.
Gainers on the Nifty included UPL, Hindalco Industries, ONGC, M&M, and Eicher Motors. Conversely, Asian Paints, Coal India, ITC, LTI Mindtree, and Britannia Industries were among the day's losers.
India's domestic air traffic saw a rise of 22.81 per cent compared to the same month last year. According to data from the Directorate General of Civil Aviation (DGCA) released on Thursday, domestic airlines transported 1.24 crore passengers last month.
Additionally, there was a significant overall increase in air traffic, with a rise of 30.55 per cent, totaling 10.06 crore passengers during the January to August period compared to the last year, the data showed.
India's air travel has rebounded to pre-Covid levels. In July 2019, domestic airlines transported 1.19 crore passengers. Remarkably, August marked the sixth consecutive month where domestic air traffic in India exceeded pre-Covid levels.
Wholesale price-based inflation continued its fifth consecutive month in negative territory in August, standing at (-)0.52 per cent. The wholesale price index (WPI) inflation has remained negative since April, reaching (-)1.36 percent in July. However, there was an increase in prices for food articles and fuel in the month of August.
In contrast, in August of last year, the Wholesale Price Index (WPI) stood at a high of 12.48 per cent. Notably, food article inflation remained in double digits at 10.60 per cent in August, 2023, a decrease from the 14.25 per cent recorded in July.
"The negative rate of inflation in August 2023 is primarily due to fall in prices of mineral oils, basic metals, chemical & chemical products, textiles and food products as compared to the corresponding month of previous year,” the commerce and industry ministry said on Thursday.
On the second day of the Petrol pump owners' strike demanding reduction of value-added tax (VAT) on fuel prices, petrol and diesel, Rajasthan Petrol Dealers Association Patron Sumit Beghai told ANI, "We want to make our government aware that in the entire India, Rajasthan is selling the most expensive petrol and diesel. Until the VAT is not reduced the prices of petrol and diesel will not reduce.The government raised the tax in COVID by saying that the government's financial position is bad. The entire nation has come back to the track of development. But the Rajasthan government has still not removed the tax."
More than 6,300 petrol pumps in Rajasthan shut down from 10 am to 6 pm on Wednesday, reported PTI. The strike is set to extend into Thursday, as operators protest against the state's high VAT on diesel and petrol. The Rajasthan Petroleum Dealers' Association, led by State President Rajendra Singh Bhati, organised the strike, raising their demand for VAT reduction, the report said. Bhati warned that if the state government does not meet their demands, a decision on an indefinite strike will be made on Friday.
Google has announced layoffs for hundreds of employees in its global recruiting team workforce as part of ongoing cost-cutting initiatives. These job reductions follow Alphabet, Google's parent company, slashing 12,000 positions in January. This move makes Alphabet the first "Big Tech" firm to undergo layoffs this quarter, following earlier reductions by Meta, Microsoft, and Amazon, driven by an economic slowdown.
“We continue to invest in top engineering and technical talent while also meaningfully slowing the pace of our overall hiring,” Google spokesperson Courtenay Mencini said in a statement Wednesday, according to CNN.
“To ensure we operate efficiently, we’ve made the hard decision to reduce the size of our recruiting team,” she said.
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Following the Supreme Court modified order dated July 24, the Delhi government has permitted the registration of all BS VI-compliant diesel vehicles for inter-state stage carriage in Delhi, reported PTI.
An order issued by the Delhi transport department said, "... the competent authority is pleased to allow the registration of all BS VI compliant diesel vehicles in GNCT of Delhi for inter-state stage carriage, All India Tourist Permit (AITP) holders having capacity of more than 7+1 persons, coaches, buses."
The Nepal government will import 20,000 metric tonnes (MT) of sugar from India in preparation for the upcoming festivals, including Vijaya Dashami and Deepawali, to fulfill domestic demand, reported PTI. Two companies, namely the Salt Trading Corporation (STC) and the Food Management and Trading Company, will each import 10,000 MT of sugar for the upcoming festival season, according to Dhaniram Sharma, the spokesperson for Nepal's Finance Ministry.
According to the report, the Ministry of Industry, Commerce, and Supplies had requested a customs waiver for importing 60,000 MT of sugar to meet local demand, however, the Finance Ministry has granted permission to import only 20,000 MT at this time. As per Dhaniram, the Ministry has approved a 50 per cent reduction in customs duty, reducing it from the previously imposed 30 percent.
Shares of Bombay Dyeing on Thursday rose 20 per cent to hit the 52-week high level after the Wadias-run firm announced the sale of a 22-acre land parcel to Japan's Sumitomo for Rs 5,200 crore. The stock rallied 19.97 per cent to Rs 168.50, its 52-week high, on the BSE. At the NSE, it zoomed 20 per cent to reach its 52-week high of Rs 168.60.
The BSE Sensex pared early gains and was trading at 67,422, down 45 points. The Nifty50 was at 20,073, up 3.30 per cent.
Sensex and Nifty scaled fresh highs on Thursday, tracking gains from Asian markets after US consumer price index rose in line with expectations. The BSE Sensex rose 200 points to 67,687 while the Nifty index gained 70 points to 20,139. On the 30-share Sensex platform, barring UltraCemco, Axis Bank, and ITC, all the constituents are trading in the positive zone.
Background
Business News Highlights: Hello and welcome to ABP Live's Business LIVE blog. Please follow this space for all the breaking news and latest updates from the Stock Market, economy, and the corporate world.
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.
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