Credit growth of retail NBFCs to halve in 2013-14: ICRA

Gold loan demand has been constrained due to regulatory policies of having lower loan to value ratios for a better part of the fiscal, which has now been raised.

Rating agency Icra today said difficulties being experienced in commercial vehicle, construction equipment and gold loans will result in non-bank lenders' credit growth from retail segment to halve in FY'14 to 8-10 percent.

"Overall, ICRA expects NBFCs to report an 8-10 percent growth in retail credit in FY2014, as against the 19 percent achieved in FY2013," it said in a note.

Also Read: Icra sees home finance cos' asset quality stress rising

According to the rating agency's estimate, the credit by the sector has grown by only 5 percent during the first nine months of the fiscal ending December 31, 2013 as against the 15 percent which was achieved during the same period last year.

The dip in credit growth can be attributed to "the significant slowdown being caused mainly by de-growth in the commercial vehicle (CV), construction equipment (CE), and gold loan segments", it said.

It can be noted that the dip in economic growth - experts are suspecting if we would even get to the 5 percent mark for FY14 - coupled with government's inability to kick start projects and judicial interventions like the ban on mining, have resulted in difficulties for the the CV and CE sectors.

Gold loan demand has been constrained due to regulatory policies of having lower loan to value ratios for a better part of the fiscal, which has now been raised.

The agency also expressed concern on the asset quality front for the NBFCs, saying the 90 days past due delinquencies on retail loans - the trigger for classifying an asset as a NPA at a bank - have moved up to 4.3 percent in December 2013 from the 3.5 percent in March 2013.

The more than 180 days past due delinquencies, when a NBFC classifies an asset as a NPA, have also moved up to 1.7 percent in December from the 1.3 percent in March, it said.

Following the RBI coming out with regulations over restructured assets for the NBFCs, Icra said the overall restructured advances of retail-focused NBFCs are expected to be in the range of 1.25-1.50 percent, which is the same level as private sector lenders.

ILandFS stock price

On March 12, 2014, ILandFS Investment Managers closed at Rs 12.44, down Rs 0.25, or 1.97 percent. The 52-week high of the share was Rs 15.11 and the 52-week low was Rs 9.41.

The company's trailing 12-month (TTM) EPS was at Rs 1.15 per share as per the quarter ended December 2013. The stock's price-to-earnings (P/E) ratio was 10.82. The latest book value of the company is Rs 2.75 per share. At current value, the price-to-book value of the company is 4.52.

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Sebi tightens norms to check money laundering

Market regulator Sebi on Wednesday tightened norms aimed at countering money laundering and terror financing through the capital markets and asked market entities to conduct detailed risk assessment of their clients, including those linked to countries facing international sanctions.

Also Read: EC forms intelligence grid to check black money in polls

The market intermediaries have also been told to appoint designated directors to ensure compliance with new norms, who would face penal action for any lapses.

Besides, stock exchanges have been asked to monitor the compliance of various entities through half-yearly internal audits and inspections and keep Sebi informed on these issues.

The new norms have come ahead of general elections scheduled for April-May. Such periods typically see a spurt in money laundering, including through the capital markets.

Norms for record-keeping by market entities have been streamlined and would require client details to be "preserved and maintained" for five years after the business relationship has ended or the account is closed.

So far, client details had to be preserved for 10 years.

Details that now need to be stored include evidence of the identity of clients and their beneficiary owners, such as copies of passports, driving licences and other identity cards, and account files and business correspondence.

Market intermediaries can use a third party to carry out due diligence and determine the identity of clients and the beneficial owners of funds being handled by them.

While a strong defence mechanism exists in the Indian capital market regulatory system against money laundering or terror financing activities, a review became necessary to consolidate various initiatives undertaken by Sebi and the government over the years on this front.

Besides, certain changes and additional safeguards made it necessary to tackle challenges thrown up by technological and market advances and to harmonise the guidelines with new standards set by global bodies such as the FATF (Financial Action Task Force).

Sebi has studied practices followed by its peers in some countries to understand the best regulatory framework to check money laundering and terror funding.

Besides, regulators are being extra watchful because of elections and the dealings of market entities with politically exposed persons are under greater scrutiny.

Sebi mandates that market entities deploy a "high risk" approach towards such clients, including individuals entrusted with prominent public functions, heads of governments, senior politicians, senior government/judicial/military officers, senior executives of state-owned corporations and important political party officials.

A similar approach is needed for accounts of the family members or close relatives of politically exposed persons.

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Titan eyes jewellery exports as gold curbs hit sales

India's biggest jewellery retailer  Titan Co hopes to start exports in the next fiscal year to perk up sales that have been dampened by the country's strict curbs on gold imports, a senior company official said on Wednesday.

Struggling with a ballooning trade deficit, India last year imposed a record high duty of 10 percent on overseas purchases of gold, the second-biggest expense in its import bill, and introduced a rule tying import quantities to export levels.

Titan, which has a direct gold import licence but no export business, has been caught on the wrong side of the so-called 80/20 rule that means a fifth of all imports must be exported.

"The 80/20 rule has triggered this change of strategy," C K Venkataraman, chief executive of Titan's jewellery division, told Reuters, referring to the firm's export plans.

"If there are more restrictions, or for example if the government makes it 70/30, if we are exporting it will be easy. It's a pre-emptive step," said Venkataraman, who does not expect the government to remove gold import curbs anytime soon.

Finance Minister P Chidambaram has indicated that curbs can be revisited only after the final current account deficit numbers, which are expected to be published in early June.

Titan is in discussions with potential partners in Singapore and Dubai, and hopes to begin exports in the year starting April, Venkataraman said, but declined to give more details.

The company currently gets more than 75 percent of its revenue from the jewellery segment that caters solely to the domestic market valued at USD 30 billion.

Sluggish domestic market

Venkataraman expects diamond jewellery sales in the quarter ending March to grow by 15 to 20 percent from a year ago in the domestic market, but said the growth in gold jewellery sales will be sluggish.

"The fundamental factors like inflation affecting discretionary spending are not changing. For inflation to ease it will take a long time, so I expect overall industry demand to be sluggish," Venkataraman said.

For gold, prices have been an issue as the company has been paying a hefty premium due to scarce stocks, he said, which has led to higher retail prices and lower demand.

But the company should be able to minimise price risks as it has received permission from the Reserve Bank of India to hedge gold on overseas exchanges like COMEX and expects to start the process "soon", Venkataraman said.

"It makes it far simpler to hedge overseas and we are totally protected in terms of price risk, so that headache is gone," he said.

Titan Company stock price

On March 12, 2014, Titan Company closed at Rs 252.05, up Rs 2.95, or 1.18 percent. The 52-week high of the share was Rs 302.00 and the 52-week low was Rs 200.00.

The company's trailing 12-month (TTM) EPS was at Rs 8.11 per share as per the quarter ended December 2013. The stock's price-to-earnings (P/E) ratio was 31.08. The latest book value of the company is Rs 22.13 per share. At current value, the price-to-book value of the company is 11.39.

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McAfee offers free security for Indian mobile users

The solution, which supports Android and iOS mobile devices, has a host of enhanced protection and privacy features including anti-theft, anti-virus and web protection and call and SMS filtering.

Security software maker McAfee today said Indian consumers can now avail of its mobile solution free of cost.

The solution, which supports Android and iOS mobile devices, has a host of enhanced protection and privacy features including anti-theft, anti-virus and web protection and call and SMS filtering.

"A full-featured version of its award-winning McAfee mobile security solution is now available for Indian users as a free offering," the company said in a statement.

McAfee said the proliferation of devices such as mobile phones and tablet computers and the resultant explosion of applications have increased potential vulnerabilities and made 'mobile' a significant threat vector.

According to the Internet and Mobile Association of India, the country is the world's fastest-growing smartphone market and is slated to have 185 million mobile Internet users by June 2014.

McAfee's recent 'Love, Relationships and Technology' survey on Indian mobile consumption behaviour revealed threats arising from indiscriminate usage of mobile phones and sharing of private content on mobile devices.

The survey showed 98 percent of the Indian respondents polled use smartphones to take pictures and more than 66 percent claimed to share their mobile content.

"With India placed on the tip of mobile device explosion, there is an overwhelming need of adoption of security and privacy protection in our digital lives," McAfee Managing Director (India and SAARC) Jagdish Mahapatra said.

With free access to the McAfee solution, Indian consumers will be empowered to access all the benefits of the connected world and enjoy a safe mobile life, he said.

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GMR to bid for all 6 airports that govt plans to privatise

GMR is not planning to tie up with any player as the company feels it will be eligible to bid alone this time. However as per government guidelines on airport privatisation while one single entity can bid for all the airports it can not win in more than two.

Airport major  GMR is set to bid for all six airports that the government will privatise. According to company sources, GMR will aggressively bid for these upcoming airports.

Importantly, it is not planning to tie up with any player as the company feels it will be eligible to bid alone this time. However as per government guidelines on airport privatisation while one single entity can bid for all the airports it can not win in more than two.

GMR sources also said that Fraport - its partner for the Delhi Airport - cannot dilute its 10% stake and exit DIAL as it's contractually bound.

GMR Infra stock price

On March 12, 2014, GMR Infrastructure closed at Rs 22.60, down Rs 0.1, or 0.44 percent. The 52-week high of the share was Rs 25.35 and the 52-week low was Rs 10.65.

The company's trailing 12-month (TTM) EPS was at Rs 0.07 per share as per the quarter ended December 2013. The stock's price-to-earnings (P/E) ratio was 322.86. The latest book value of the company is Rs 18.46 per share. At current value, the price-to-book value of the company is 1.22.

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'Corp bonds pvt placement dip 29% till Dec to Rs 1.8 tn'

Higher interest rates and the weak economic environment have led to a steep 29 percent fall in fund mobilisation through corporate bonds on private placements during the first nine months of the outgoing fiscal, says a study. During the April-December period, banks, financial institutions, and corporates together raised Rs 1,81,808 crore through debt private placements as against Rs 2,56,327 crore mobilised last year," Pranav Haldea, managing director of Prime Database, which released the study, said today.

"There was reluctance from institutions and corporates to raise debt funds due to higher interest rate scenario and also as overall economic condition remained weak. Probably, we can see an increase in issuance post election," Haldea said. The study said Rs 1,81,808 crore was mobilised by 188 institutions and corporates, from the deals which had a tenor and put/call option of above 365 days. The biggest mobilisation in the period was made by the financial institutions and banks at Rs 98,145 crore in comparison to Rs 1,35,379 crore in the year-ago period, a decrease of 27 percent, the study said.

Also Read: NHB tax free bond: Why is it attractive?

Private sector issuance of coporate bond via private placements witnessed a decrease of 25 percent at Rs 66,632 crore as against Rs 88,336 crore in the previous year. Mobilisation by state financial institutions also decline by 73 percent at Rs 1,251 crore compared to Rs 4,569 crore. PSUs' mobilisation also declined 43 percent at Rs 13,069 crore in the period compared to Rs 23,052 crore last year. State-level undertakings also saw a major fall of 46 percent at Rs 2,711 crore in mobilisation of funds through issuance of corporate bonds on private placement basis, the study said.

Government organisations and financial institutions put together mobilised 50 per cent of the total amount, same as corresponding period of the previous year. As per the data, among government organisations, financial institutions, banks led with an 82 percent share, followed by 14 per cent share by PSUs, 3 percent by SLUs and 1 percent by SFIs.

The highest mobilisation through debt private placements was by Power Finance Corporation at Rs 18,648 crore, followed by  HDFC at Rs 16,675 crore,  LIC Housing at Rs 14,170 crore and  Rural Electrification Corporation at Rs 14,113 crore. In the previous fiscal, total fund mobilisation through private placements stood at Rs 3,52,169 crore and this year it could dip to Rs 2.2 lakh crore, Haldia said.

Power Finance stock price

On March 10, 2014, Power Finance Corporation closed at Rs 173.30, down Rs 0.05, or 0.03 percent. The 52-week high of the share was Rs 209.50 and the 52-week low was Rs 97.40.

The company's trailing 12-month (TTM) EPS was at Rs 40.15 per share as per the quarter ended December 2013. The stock's price-to-earnings (P/E) ratio was 4.32. The latest book value of the company is Rs 182.22 per share. At current value, the price-to-book value of the company is 0.95.

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Bright future for steel industry: SAIL chief

Though India's per capita consumption has increased from 29 kg in 2000 to 59 Kg in 2012-13, in rural areas, home to around 70 percent of the population, per capita consumption is approximately one-fifth of the national average at 12 Kg.

Notwithstanding poor growth in steel demand this year, state-owned  SAIL believes the future of the industry is bright as India's per capita consumption is low and the government is planning to increase infrastructure spending.

India's steel demand grew by just 0.5 percent to 53.78 million tonnes during the April-December period of the current fiscal, impacted by economic slowdown.

Though India's per capita consumption has increased from 29 kg in 2000 to 59 Kg in 2012-13, in rural areas, home to around 70 percent of the population, per capita consumption is approximately one-fifth of the national average at 12 Kg.

This is miles apart from the world average (216.9 kg) and it is where the opportunity lurks, SAIL Chairman C S Verma said.

"The future of the Indian steel industry is indeed very bright and there are several enablers which indicate this and includes low per capita consumption and government's plan to hike infrastructure spending," he said.

Stating that government plans to increase infrastructure spending from the current 5 per cent of GDP to 10 per cent by 2017, he said India is committed to investing USD one trillion in infrastructure during XIIth Five Year plan.

"Taking 15 per cent as steel component in the total investment, then it can generate additional demand worth USD 75 billion of steel in the next few years or USD 15 billion worth of additional demand a year or in terms of quantity, an additional demand of 18.75 million tonnes per annum," he said.

Besides, the National Manufacturing Policy envisages the share of manufacturing in GDP to increase from 14 per cent in 2012-13 to 25 per cent by 2025 with manifold increase in steel intensity translating into finished-steel consumption of
230-255 MTPA by 2025, Verma said, adding all these augur well for the steel industry.

Indian steel industry has also grown at a handsome pace from less than 22 million tonnes (MT) in 2000 to about 81MT in 2012-13 at a CAGR of 11 per cent. While it achieved the first 27 MT of production capacity in 50 years between 1951-52 to 1999-2000, the next 27 MT came production in next 10 years - from 2000-01 to 2009-10.

The country proposes to achieve 300 MTPA capacity by 2025.

SAIL stock price

On March 10, 2014, Steel Authority of India closed at Rs 59.75, down Rs 1.6, or 2.61 percent. The 52-week high of the share was Rs 74.80 and the 52-week low was Rs 37.65.

The company's trailing 12-month (TTM) EPS was at Rs 6.32 per share as per the quarter ended December 2013. The stock's price-to-earnings (P/E) ratio was 9.45. The latest book value of the company is Rs 99.32 per share. At current value, the price-to-book value of the company is 0.60.

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India can quadruple revenue from Africa by 2025: Report

According to the report, India can aspire to capture almost 7 percent of the African IT services market, 5 percent of its FMCG space, 10 percent of the power sector and 2 to 5 percent of the agri-allied services.

India can quadruple revenue from Africa to USD 160 billion by 2025 through expanding its presence in sectors like information technology, agriculture, infrastructure, pharmaceuticals and consumer goods, says a McKinsey report.

"There is a large opportunity for Indian retailers in Africa, more in terms of apparel, fashion products, etc," Vice-Chairman of Trent Ltd, Noel Tata said at a CII event where this report was released . According to the report, India can aspire to capture almost 7 percent of the African IT services market, 5 percent of its FMCG space, 10 percent of the power sector and 2 to 5 percent of the agri-allied services.

"Returns to FDI in Africa in the last 5 years have been the highest in the world," Director at McKinsey & Company Rajat Gupta said. However, the report said that to be a true solutions partner for Africa, Indian industry needs to continually engage with governments and businesses, proactively surface opportunities, build an open consortia of interested companies and use funding from low cost countries like Japan for large projects where Indian cost of funds is a disadvantage.

"Areas where the Indian industry needs assistance are infrastructure and construction, to be able to access long-term funding for the projects we wish to participate in Africa. India is not the cheapest source of funds in the world. We need to find sources of third country funding," Tata added.

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Belgian co Puratos to invest Rs 250 cr in India

Belgium's Puratos, the second biggest bakery major globally, will spend Rs 250 crore for expanding its business in India, a top official said today.

The 95-year old company, which supplies ingredients to bakers, confectioners and retailers worldwide, has presence in 100 countries. It entered Indian market five years ago.

Puratos has manufacturing facility and R&D unit in Mumbai.

"India is an important market for us and we are planning to expand our business here. We will invest about Rs 250 crore in three phases," Puratos India, Country Head, Dhiren Kanwar told PTI after the launch of its new products at 'Aahar 2014'.

The business-to-business (B2B) company aims to set up another plant in Mumbai and one innovative centre each in Bangalore and Delhi, he said without elaborating further.

Stating that there is huge market in India, Kanwar said, "We have a research and development centre here to develop products as per Indian taste. We are growing 4-5 times faster than the industry and we plan to launch more products."

Puratos India today launched 'Tegral Puravita whole wheat mix' and 'Carat coverdark compound chocolate', taking their total product range in India to 80 across three verticals - bakery, patisserie and chocolate. The company plans to launch four more products in the coming months.

Currently, the company supplies a wide range of products to firms including McDonald's, Subway, KFC, Cafe Coffee Day, Starbucks, Dunkin Donuts and Krispy Kreme, Kanwar said.

Puratos Group, a family-owned business, is selling around 6,000 products across the globe. The company feels that there is more scope in India as the market is evolving very fast with people having an open mind and keen on exploring new products and taste, he added.

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Essar Steel prepays Rs 205 cr loans taken from Axis Bank

The company had issued secured redeemable non-convertible debentures of Rs 10 lakh each aggregating Rs 205 crore to the private sector lender.

Ruias-promoted Essar Steel today said it prepaid Rs 205 crore of loans taken from Axis Bank.

The company had issued secured redeemable non-convertible debentures of Rs 10 lakh each aggregating Rs 205 crore to the private sector lender.

Also read: UBS reiterates sell on Axis Bank, SBI, IDFC

The coupon rate on the securities had been revised to 16.5 percent from 13.4 percent originally.

The company has prepaid 2,050 debentures of Rs 10 lakh each held by Axis Bank , the sole holder, after taking its consent and approval, the steel maker said in a BSE filing.

Essar Steel has a capacity of 14 million tonnes per annum with presence in India, Canada, the US, West Asia and Asia.

Axis Bank stock price

On February 24, 2014, Axis Bank closed at Rs 1235.50, up Rs 45.75, or 3.85 percent. The 52-week high of the share was Rs 1549.00 and the 52-week low was Rs 764.00.

The company's trailing 12-month (TTM) EPS was at Rs 126.33 per share as per the quarter ended December 2013. The stock's price-to-earnings (P/E) ratio was 9.78. The latest book value of the company is Rs 705.26 per share. At current value, the price-to-book value of the company is 1.75.

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