No improvement seen on bad loan front; PSBs to blame: Icra

Icra said the RBI's proposed framework for the early detection of NPAs and better management of bad assets can be a positive for the sector.

Gross NPA ratio of India's public and private sector banks is expected to deteriorate further to 4.2-4.4 percent in March from the preceding quarter's 4.1 percent, dragged down by a poor show by state-run lenders, rating agency Icra today said.

"The gross NPA percentage for banking system as a whole could rise further to 4.2-4.4 percent as on March 31, from 4.1 percent as on December 31, 2013," it said in a note. Within the spectrum, the 26 public sector banks (PSBs) are likely to perform badly than their private peers on the asset quality front. The gross NPAs for this grouping will go up to 5 percent from the 4.7 per cent in December.

The rating outfit blamed this expected slippage on the current business slowdown, stretched working capital cycles of corporates and slow pace of economic recovery. Icra said the RBI's proposed framework for the early detection of NPAs and better management of bad assets can be a positive for the sector.

"The RBI framework is expected to strengthen banks' monitoring process and joint efforts for resolution/recovery and could have a positive impact on their asset quality over the medium to long term."

The rise in the bad assets, coupled with other factors like lower net interest margins, lower non-interest income, higher credit provisions and depreciation on fixed income investments, is expected to drag the PSU banks' profits by 30-40 percent in FY14 from the FY13 levels, it noted.

The agency said there are contrasts between the government banks and their private counterparts when it comes to asset quality. The 16 private sector banks' gross NPA ratio had stood at only 1.9 percent at the December quarter-end.

Highlighting the PSU banks' need to raise Rs 2-2.2 trillion in capital till FY18, Icra said they will have to show improvement on the asset quality front in order to mobilise the required capital from external investors. "Private banks are expected to be comfortable on capital, given their higher level of current capitalisation and better earnings," it said, adding this grouping will need around Rs 1 trillion in capital till FY18.

There are several banks, including the largest lender SBI, which have gross NPA ratios above 5 percent . State-run  United Bank of India has been in the news over its bad loans. The Kolkata lender has had to take several tough decisions after its gross NPA ratio ballooned to over 10 percent in December.

United Bank stock price

On February 24, 2014, United Bank of India closed at Rs 25.80, up Rs 1.45, or 5.95 percent. The 52-week high of the share was Rs 68.15 and the 52-week low was Rs 23.40.

The latest book value of the company is Rs 94.89 per share. At current value, the price-to-book value of the company was 0.27.

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Merill Lynch buys FTIL shares for Rs 9.77 cr

This was in addition to 2.35 lakh shares purchased by the entity yesterday in the open market.

Foreign fund house Merrill Lynch Capital Markets Espana today acquired 2.64 lakh shares in Jignesh Shah-led  Financial Technologies for an estimated Rs 9.77 crore in an open market transaction.

This was in addition to 2.35 lakh shares purchased by the entity yesterday in the open market.

Also Read: Sebi plays hardball with Financial Technologies

According to the bulk deal information with the stock exchanges today, Merrill Lynch bought a total of 2,64,159 scrips of Financial Technologies (India) Ltd.

Financial Technologies shares were bought at an average price of Rs 370.07 apiece, amounting the transaction to Rs 9.77 crore.

On Wednesday, Merrill Lynch had picked up 2.35 lakh shares in Financial Technologies for over Rs 8 crore.

Financial Technologies and Multi Commodity Exchange of India Ltd (MCX) are under scanner of market regulator Sebi as well as other agencies for various violations.

Shares of Financial Technologies stock today surged 4.99 percent to close the day at Rs 370 apeice - its upper circuit limit on the BSE.

Financial Tech stock price

On March 06, 2014, Financial Technologies closed at Rs 370.00, up Rs 17.60, or 4.99 percent. The 52-week high of the share was Rs 870.30 and the 52-week low was Rs 102.05.

The company's trailing 12-month (TTM) EPS was at Rs 50.03 per share as per the quarter ended December 2013. The stock's price-to-earnings (P/E) ratio was 7.4. The latest book value of the company is Rs 580.93 per share. At current value, the price-to-book value of the company is 0.64.

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Suzuki deal over Guj plant beneficial for MSIL: Bhargava

Suzuki last month decided to take over Maruti's proposed plant in Gujarat and invest in the unit through wholly-owned unit Suzuki Motor Gujarat Pvt Ltd.

Seeking to assuage investor concerns,  Maruti Suzuki India Chairman R C Bhargava today said the deal to give its Gujarat plant to Suzuki for operations was "inheritingly beneficial" for the company and issues will get resolved gradually.

Seven mutual fund houses including ICICI Prudential MF ,  Reliance MF and UTI MF , are opposing Maruti's Japanese parent Suzuki Motor Corp's move to make a Gujarat unit its wholly-owned subsidiary as the deal would transform MSIL into a distribution company from a manufacturing one.

Also Read: Maruti plant stand-off: Will minority shareholders matter?

When asked about concerns raised by fund houses, Bhargava said, "I am sure as time goes by gradually these concerns will get resolved and we will do our best to resolve concerns for everybody."

"I am confident that when something is inheritingly beneficial it may take time for it to be appreciated but it will get known and things will work," he added.

Suzuki last month decided to take over Maruti's proposed plant in Gujarat and invest in the unit through wholly-owned unit Suzuki Motor Gujarat Pvt Ltd.

State-run Life Insurance Corp (LIC), which holds 6.93 percent stake in the company, has also sought clarifications on the matter.

While the market regulator is yet to hear officially from the fund houses, it is already looking into the matter on suo motu basis.

Last month, the fund houses had written a letter to MSI: chairman saying the decision is clearly "neither fair nor in the interest of shareholders".

Shares of MSIL took a beating on bourses following the reports falling by up to 6 per cent last week. The scrip, however, rose by 1.51 per cent to close at Rs 1,622.40 on the BSE today.

Maruti Suzuki stock price

On March 05, 2014, Maruti Suzuki India closed at Rs 1622.40, up Rs 24.10, or 1.51 percent. The 52-week high of the share was Rs 1864.00 and the 52-week low was Rs 1217.00.

The company's trailing 12-month (TTM) EPS was at Rs 106.68 per share as per the quarter ended December 2013. The stock's price-to-earnings (P/E) ratio was 15.21. The latest book value of the company is Rs 615.03 per share. At current value, the price-to-book value of the company is 2.64.

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NTPC signs Rs 500 crore term-loan agreement with SBBJ

The loan has a tenure of 15 years and will be used to part-finance capital expenditure, NTPC said.

NTPC  has signed an agreement with State Bank of Bikaner & Jaipur for a term loan of Rs 500 crore to fund expansion. "The loan facility is extended at the base rate of the bank, which is the bare minimum rate at which a bank can lend the loan," the company said in a statement.

State Bank of Bikaner & Jaipur has a base rate of 10.25 percent, according to its website.
The loan has a tenure of 15 years and will be used to part-finance capital expenditure, NTPC said.

State-owned NTPC has an installed capacity of 42,964 MW, including plants operated through joint ventures and three renewable energy projects. The company plans to invest Rs 1.5 lakh crore in the five-year period ending March 2017. Shares of NTPC closed at Rs 114, up 0.13 per cent, on the BSE today.

Also Read: NTPC to set up Rs 17K cr power project in Madhya Pradesh

NTPC stock price

On March 05, 2014, NTPC closed at Rs 114.00, up Rs 0.15, or 0.13 percent. The 52-week high of the share was Rs 162.80 and the 52-week low was Rs 110.90.

The company's trailing 12-month (TTM) EPS was at Rs 14.87 per share as per the quarter ended December 2013. The stock's price-to-earnings (P/E) ratio was 7.67. The latest book value of the company is Rs 97.49 per share. At current value, the price-to-book value of the company is 1.17.

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Fiat launches new Linea, holds Jeep plan on elections

Fiat today rolled out a new version of its sedan Linea in both petrol and diesel variants, with a starting price of Rs 6.99 lakh, ex-showroom, New Delhi. The company plans to launch three more new models this year but has deferred the much-awaited rollout of its Jeep brand, due to subdued economic growth and uncertainty about the outcome of forthcoming general elections, Fiat India President and Managing Director Nagesh Basavanhalli said here after the launch.

"The Jeep is an iconic brand. So we want to launch it at the right time," he said, adding neither the market condition nor the consumer sentiment is conducive for a big launch. "With the elections also round the corner, we have decided to wait and watch," he added. Basavanhalli, however, reiterated that the plans to first import the vehicles under the Jeep brand as completely built units and later introduce completely knocked down units, remain on track.

The company had earlier planned to introduce the Wrangler and the Cherokee Jeep brands last October. Currently, Fiat's product portfolio consists of the hatchback Punto and the sedan Linea. It will be launching a Punto variant, the Avventura and the Abarth 500 during this year , he said. The Linea comes with better ground clearance, which is the longest in the segment and better interiors, Basavanhalli said.

"With the launch of new Linea, we are optimistic about our growth here and are strengthening our commitment to our existing as well as prospective customers...The launch of the new Linea is a start of a new chapter in Fiat's journey in the country," he said.  The Linea Classic, which was launched last year, would cater to the C-segment while the new Linea will cater to the high end of the segment.

Fiat's Ranjangaon plant near Pune has the capacity to produce 2 lakh units and 3 lakh engines and transmissions annually. The Italian auto major, which is on a comeback trail after the forgettable experiences of the past, including a failed sales network partnership with the Tatas, is trying to re-establish its base in the country after going solo last year.

The company also plans to add another 42 new outlets this year to take the total number of dealerships to 150, he said.

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Bharti Airtel to buy Essar Telecom Kenya for USD 100 mn

This is second acquisition of Airtel within a month of it acquiring business and assets of Mumbai base Loop Mobile for about Rs 700 crore.

After exiting telecom business in India, Essar Telecom is now in talks to sell its Kenya business to Indian telecom major Airtel and Kenya's leading operator Safaricom for about USD 100 million.

" Airtel Networks Kenya Limited has sought an approval from the Communications Authority of Kenya to acquire the telecommunications licenses and subscribers of Essar Telecom Kenya Limited, which operates under the brand name 'yuMobile," Airtel said in a statement.

Industry sources said that Kenya's leading operator Safaricom has made bid to acquire the infrastructure of the company. The total deal is estimated to be between USD 90-100 million.

"The proposed arrangement envisages over 2.7 million customers of Essar Telecom Kenya becoming part of Airtel Kenya's mobile network," Airtel said.

This is second acquisition of Airtel within a month of it acquiring business and assets of Mumbai base Loop Mobile for about Rs 700 crore.

When contacted, yuMobile said it has filed application to transfer its mobile business yuMobile with the Communications Authority of Kenya (CAK) for an intended transaction to transfer its part of telecom business in Kenya.

In the application filed today, the company indicated, without naming Airtel and Safaricom, that it is engaged in substantive talks with "two potential suitors" who are willing to takeover its subscriber base and assets.

"We believe this proposed transaction will benefit all stakeholders and the Telecom Industry in Kenya," a yuMobile spokesperson told PTI.

The company did not comment on deal size. In March 2011, Essar exited from telecom business in India by selling its 33 percent stake to Vodafone in Vodafone Essar, now Vodafone India, for USD 5 billion.

No immediate comments were received from Safaricom.

Bharti Airtel stock price

On March 04, 2014, Bharti Airtel closed at Rs 287.60, up Rs 1.10, or 0.38 percent. The 52-week high of the share was Rs 373.50 and the 52-week low was Rs 266.95.

The company's trailing 12-month (TTM) EPS was at Rs 14.07 per share as per the quarter ended December 2013. The stock's price-to-earnings (P/E) ratio was 20.44. The latest book value of the company is Rs 135.70 per share. At current value, the price-to-book value of the company is 2.12.

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IDBI Bank to divest its stake in SHCIL

IDBI owns 18.9 percent equity in SHCIL, with the other shareholders being IFCI 33 per cent, GIC 14 percent and SUUTI and LIC with 17 percent each.

IDBI Bank  today said it plans to sell its part or full stake in Stock Holding Corporation of India Ltd (SHCIL). The Board at its meeting held on February 28, 2014 accorded its in-principle approval for initiating the process for part or whole divestment of bank's shareholding in SHCIL, IDBI Bank said in a filing on the BSE.

IDBI owns 18.9 percent equity in SHCIL, with the other shareholders being IFCI 33 per cent, GIC 14 percent and SUUTI and LIC with 17 percent each. It would be subject to compliance with all applicable laws, regulations and guidelines, it said.

Also Read: Sebi imposes Rs 2 lakh penalty on IDBI for violating norms

Earlier, IDBI Bank had plan of merging this with itself. SHCIL is country's first and one of the largest security custodians to financial institutions. As a custodian, SHCIL holds securities on behalf of banks, mutual funds , corporates, FIIs, venture capital funds and other institutional entities.

IDBI Bank stock price

On February 28, 2014, IDBI Bank closed at Rs 56.10, up Rs 0.35, or 0.63 percent. The 52-week high of the share was Rs 95.50 and the 52-week low was Rs 52.30.

The company's trailing 12-month (TTM) EPS was at Rs 7.22 per share as per the quarter ended December 2013. The stock's price-to-earnings (P/E) ratio was 7.77. The latest book value of the company is Rs 134.09 per share. At current value, the price-to-book value of the company is 0.42.

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Airtel, Safaricom seek to buy Kenyan rival Essar's Yu

Local newspaper reports said Safaricom, which is 40 percent owned by Vodafone , will get Yu's infrastructure such as base stations in a bid to improve the quality of its network.

Kenya's two biggest telecoms operators, Safaricom and the local unit of  Bharti Airtel , have made a joint bid for the smallest operator, Indian group Essar Coomunications' Yu, the industry regulator said on Monday.

The Communications Commission of Kenya (CCK) said it had received applications from the firms to allow the transaction that will see Safaricom and Airtel spend a combined USD 100 million.

Also Read: Nigeria says fines Airtel, others for poor service

Local newspaper reports said Safaricom, which is 40 percent owned by Vodafone , will get Yu's infrastructure such as base stations in a bid to improve the quality of its network.

Meanwhile Airtel is expected to acquire the subscriber base that Yu has built up since entering the Kenyan market in 2008, said The Sunday Nation newspaper.

Bob Collymore, the chief executive of Safaricom, told Reuters they would make a formal announcement when the deal is finalised.

Bharti Airtel stock price

On February 24, 2014, Bharti Airtel closed at Rs 282.90, down Rs 5.3, or 1.84 percent. The 52-week high of the share was Rs 373.50 and the 52-week low was Rs 266.95.

The company's trailing 12-month (TTM) EPS was at Rs 14.07 per share as per the quarter ended December 2013. The stock's price-to-earnings (P/E) ratio was 20.11. The latest book value of the company is Rs 135.70 per share. At current value, the price-to-book value of the company is 2.08.

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Taking steps to reduce NPAs: SBI

Interest rates on term deposits of three years and above but less than four years have been marginally reduced to 3.82 percent from the current 3.83 percent

State Bank of India  is taking initiatives to reduce bad loans which have reached 5.73 percent, SBI Managing Director and Group Executive (National Banking), A Krishnakumar has said.

All zones have been directed to tighten the recovery of debts and reduce Non-Performing Assets (NPAs), or bad loans, substantially, he said.

"Even the major clients including the airline operators would not be spared and legal action have been already initiated," he told reporters on the sidelines of a function here last evening.

Faced with rising bad loan problems, the country's largest lender last month had announced a new roadmap which will limit slippages and also give early warning on stressed assets.

On consolidation/merger of subsidiaries of the SBI, Krishnakumar said it has been decided in-principle and as a policy to consolidate the subsidiaries. But as of now, it is not being taken up.

"Every year, till financial 2015-16, we want to start 1,000 branches across the country, apart from the 15,550 branches we are having," he said.

"This year we have so far started 700 branches and 300 branches would be opened before March 2014."

He said 35-40 per cent staff would retire, or take retirement in the next five years, and vacancies would be filled. He said 50 per cent of the new recruits of the bank were women, and the bank was preparing to start more all women branches in the country.

There were 180 branches/outlets abroad, and they accounted for 15 to 20 per cent of the bank's business, he said on the sidelines of a meeting organised to disburse benefits under the corporate social responsibility initiative of the bank in Madurai,Tiruchirappalli,and Coimbatore zone.

He said 65 percent of the 37,000 ATMs of the bank were onsite machines.

SBI stock price

On February 28, 2014, State Bank of India closed at Rs 1531.70, up Rs 10.05, or 0.66 percent. The 52-week high of the share was Rs 2469.25 and the 52-week low was Rs 1452.90.

The company's trailing 12-month (TTM) EPS was at Rs 149.34 per share as per the quarter ended December 2013. The stock's price-to-earnings (P/E) ratio was 10.26. The latest book value of the company is Rs 1325.34 per share. At current value, the price-to-book value of the company is 1.16.

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TAQA to buy JP Power's 2 hydel plants for Rs 10,000cr

Abu Dhabi National Energy Company (TAQA) led consortium will acquire Jaiprakash Power Ventures ' two hydroelectric power plants for about Rs 10,000 crore (USD 1.6 billion), TAQA said today.

"The total enterprise value of the two assets is approx USD 1.6 billion (approx Rs 10,000 crore). The amount of equity being invested by the consortium is approx USD 616 million (Rs 3,820 crore)... The remainder is primarily non-recourse project debt," a TAQA spokesperson said in an e-mailed reply to a PTI query.

Earlier, TAQA had said in a statement that through a consortium it will acquire Jaiprakash Power Ventures' two hydro-electric power plant, Baspa Stage II and Karcham Wangtoo, having 1,391 MW capacity.

Also Read: NTPC to set up Rs 17K cr power project in Madhya Pradesh

"The equity invested by the consortium in the acquisition of the two hydroelectric plants will amount to approximately Rs 3,820 crore (USD 616 million, based on March 1, 2014 foreign exchange rate), of which 51 percent is from TAQA.

"The consortium will also acquire the assets' non-recourse project debt," said TAQA, which is the brand name of Abu Dhabi National Energy Company.

TAQA holds 51 per cent stake in the consortium and will have control of operations and management of both the plants under the proposed deal, it said.

Its consortium partners include one of Canada's largest institutional investors, whose name was not disclosed (39 per cent stake) and IDFC Alternatives' India Infrastructure Fund II (10 per cent stake).

The two plants have a combined power generation capacity of 1,391 MW and are located in Kinnaur district, Himachal Pradesh, within two km of each other. They share support facilities and use run-of-the-river technology to convert natural water flow to electricity, eliminating the need for a reservoir.

The plants are 35 km from the Sorang hydroelectric plant, in which TAQA acquired stake last year.

According to TAQA, the acquisition will make it the largest private operator of hydroelectric plants in India. Post completion of the deal, its gross operational power generation capacity in India will rise to 1,741 MW, comprising of 3 hydel power and one lignite plants.

TAQA's Executive Officer and Head of Global Power & Water Frank Perez said: "India's economic growth depends on having ample and reliable energy supply. TAQA is pleased to add these two high quality hydro power assets to our growing India business and to support India's economic growth."

The acquisition is expected to close in 2014 and is subject to regulatory and third party approvals, TAQA said.

Jaiprakash Power Ventures Ltd is a subsidiary of Indian infrastructure conglomerate Jaypee Group. In recent times, the Jaypee group has been on a debt-pruning spree.

In September 2013, it had sold a cement plant in Gujarat to Aditya Birla group's  UltraTech having an enterprise value of Rs 3,800 crore.

Jaiprakash Pow stock price

On February 24, 2014, Jaiprakash Power Ventures closed at Rs 15.06, down Rs 0.34, or 2.21 percent. The 52-week high of the share was Rs 31.80 and the 52-week low was Rs 8.55.

The company's trailing 12-month (TTM) EPS was at Rs 0.24 per share as per the quarter ended December 2013. The stock's price-to-earnings (P/E) ratio was 62.75. The latest book value of the company is Rs 21.93 per share. At current value, the price-to-book value of the company is 0.69.

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