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QBiz: DHFL Stops Deposits, Premature Withdrawals; Jet Shares Soar

1. DHFL Stops Fresh Deposits, Puts Premature Withdrawals On Hold

Dewan Housing Finance Corporation Ltd. has decided to stop taking fresh deposits and halted premature withdrawals from existing deposit schemes as it tries to manage its tight liquidity position and deal with pressure on credit ratings.

The housing finance company would stop taking fresh deposits and renewals of existing deposits, it said in a notice sent out to its depositors and financial planners.

“In view of the recent revision in the credit rating of our fixed deposit program, acceptance of all fresh deposits, as well as renewals, has been put on hold with immediate effect,” the notice said.

(Source: BloombergQuint)

2. RBI to Step up Supervision Capabilities Through New Division

The central board of the Reserve Bank of India, on Tuesday, decided to strengthen its supervisory capabilities by creating a new cadre of officials who will be trained for supervision of banks and non-bank lenders.

The decision comes at a time when the banking regulator has been caught off-guard by troubles erupting in systemically-important institutions like the Infrastructure Leasing and Financial Services Group. The regulator has also been faulted for being unable to catch a build-up of bad loans across banks and liquidity risks across non-bank lenders.

(Source: BloombergQuint)

3. NSE Moves SAT Against Sebi Orders in Co-Location Case

The National Stock Exchange of India (NSE) has challenged the colocation orders of the Securities and Exchange Board of India (Sebi) on the ground that they are unsustainable, arbitrary, and disproportionate.

The protracted legal battle is a rare instance of an exchange challenging the market regulator’s orders.

NSE had filed petitions with the Securities Appellate Tribunal (SAT) for interim relief and full relief. This seeks staying of the Sebi order till the petition for full relief is heard as the "orders will cause grave and irreparable damage to the financials and reputation of NSE" and no additional interest is levied on the disgorgement amount. The petition for full relief involves setting aside the orders in their entirety.

(Source: Livemint)

4. Yes Bank Eyes Private Equity Funds to Raise ‘Confidence Capital’

Yes Bank Ltd is considering an equity infusion from private equity (PE) funds, similar to the Bain Capital investment in Axis Bank, as the Ravneet Gill-led lender seeks to bolster its balance sheet after taking a massive hit to cover potential loan losses, two people aware of the plan said.

Tapping PE funds is expected to help Yes Bank, which reported a surprise loss in the March quarter, not just financially but also strategically as this will boost investor confidence in the struggling lender, one of the two people cited above said, requesting anonymity.

(Source: Livemint)

5. PNB Could Take Control of OBC, Andhra Bank, Allahabad Bank: Reports

Punjab National Bank (PNB) could take control of two or three small state-run banks, that could include Oriental Bank of Commerce, Andhra Bank and Allahabad Bank, two sources familiar with the situation told Reuters.

New Delhi has been trying to merge smaller regional state-run banks with better managed larger government-owned lenders as one way to reduce bad loans that stand at more than Rs 9 trillion (130 billion dollars), or nearly 5 percent of the nation’s gross domestic output.

(Source: Business Standard)

6. Mobile User Base Dips 22 M in March, Suffers Biggest Fall Since April 2018

The number of mobile users in the country dipped by 21.87 million in March this year in the space of one month, the biggest decline since April 2018, mainly on account of operators weeding out their low-revenue subscribers.

According to the latest data from the Telecom Regulatory Authority of India (Trai), the number declined from 1.18 billion at the end of February to 1.16 billion at the end of March, registering a monthly decline rate of 1.85 percent.

Mukesh Ambani’s Reliance Jio, however, continued to add wireless subscribers. It gained 9.49 million users during the month under review. In comparison, the two incumbent telcos — Bharti Airtel and Vodafone Idea — lost 15.1 million and 14.5 million users in March, thanks to their minimum recharge plans

(Source: Business Standard)

7. India Projected to Grow at 7.1% in FY20: UN Report

India’s economy is projected to grow at 7.1 percent in fiscal year 2020 on the back of strong domestic consumption and investment but the GDP growth is a downward revision from the 7.4 percent estimated in January this year, according to a report by the United Nations. The World Economic Situation and Prospects (WESP) 2019 Mid-year Update, released Tuesday, said that the Indian economy, which generates two-thirds of the regional output in South Asia, expanded by 7.2 percent in 2018.

“Strong domestic consumption and investment will continue to support growth, which is projected at 7.0 percent in 2019 and 7.1 percent in 2020,” the report said.

(Source: Financial Express)

8. Jet Shares Soar 17% After Report That Hinduja Group May Save the Airline

Shares of debt-laden Jet Airways soared as much as 17 percent in Tuesday’s trading session after report that Hinduja group would bid for the grounded airline this week. The conglomerate has obtained approval from the key stakeholders in the airline including founder Naresh Goyal and Etihad Airlines. Today, on the BSE the shares of Jet Airways had opened at Rs 135 against the previous close of Rs 131.40. The shares settled at Rs 148.10, up 16.7 points from the last settlement on BSE.

The Hinduja Group has engaged investors led by SBI Capital Markets for the due diligence. Before taking the final decision, the group will examine the support level from government and bankers for the revival of debt-ridden airline.

(Source: Financial Express)

9. EPFO Looks to Pull Back NBFC Investments to Avert Default Risk

Worried about the spate of defaults and downgrades among non-banking finance companies (NBFCs), the Employees’ Provident Fund Organisation (EPFO) is planning to seek early re-payment of some of its investments from troubled firms in the sector, such as DHFL.

Sources close to the development said the issue was discussed by the EPFO’s Finance, Investment and Audit Committee (FIAC) at its meeting earlier this month.

“EPFO has been monitoring the downgrades of certain NBFCs. There is a view that it should seek pre-payment of its investments in any troubled NBFC to avoid any default and loss of money,” said a person familiar with the development, adding that the first priority is to ensure safety of workers’ retirement savings.

(Source: The Hindu Business Line)

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