Saturday, 30 April 2016

HDFC Bank plans to raise Rs 50,000 crores via bonds

Private sector lender HDFC Bank today said it plans to raise Rs 50,000 crore through bonds over one year to fund business growth.

The board has accorded approval for seeking shareholders nod at the annual general meeting (AGM) for issue of perpetual debt instruments, tier-II bonds, senior long-term infra bonds up to a total amount of Rs 50,000 crore in the period of next 12 months through private placement, HDFC Bank said in a regulatory filing.
The board meeting will be held on May 19 to decide about the date for the AGM.
For the fourth quarter, HDFC Bank reported a 20.2 per cent jump in March quarter net at Rs 3,374.2 crore, helped by a healthy rise in core net interest income (NII).
The bank, which registered around 30 per cent profit growth for over a decade till 2013-14, posted a 20.4 per cent growth in post-tax profit at Rs 12,296.2 crore for the fiscal.
For January-March, NII rose 24 per cent to Rs 7,453.3 crore, while the non-interest income was up 11.8 per cent to Rs 2,865.9 crore.
On the asset quality front, gross non-performing assets (NPAs) were flat at 0.94 per cent of gross advances.
Net non-performing assets were at 0.3 per cent of net advances as on March 31, 2016. Total restructured loans were at 0.1 per cent of gross advances at the end of 2016-17.
Provisions and contingencies for the quarter ended March were Rs 662.5 crore as against Rs 576.7 crore in the corresponding quarter of the last year.

FIPB clears Rs 13K cr FDI proposals, Axis Bank cleared

Government panel FIPB today cleared Rs 13,030 crore worth of foreign direct investment (FDI) proposals, including that of hiking foreign investment limit in Axis Bank.

Government panel FIPB today cleared Rs 13,030 crore worth of foreign direct investment (FDI) proposals, including that of hiking foreign investment limit in Axis Bank.
“FDI proposals for more than Rs 13,000 crores recommended for approval. Inflow of investments continue,” Economic Affairs Secretary Shaktikanta Das said.
The Foreign Investment Promotion Board (FIPB) in its meeting today cleared 5 out of 14 proposal, a finance ministry official said.
The proposal of Axis Bank was to hike foreign shareholding limit from 62 per cent currently to 74 per cent. The proposal entails foreign investment worth Rs 12,900 crore.
At present, private banks have a total foreign limit of 74 per cent, of which FII limit is 49 per cent.
The other proposals which were cleared include that of Pharma firm Wockhardt and Aurobindo.
Inter ministerial panel FIPB can clear proposals worth up to Rs 5,000 crore. The ones above that amount go to the Cabinet Committee on Economic Affairs (CCEA).
Foreign direct investment (FDI) into the country increased by 40 per cent to USD 29.44 billion during April- December of 2015-16.
The foreign investment inflows were at USD 21.04 billion in the same period of previous fiscal.

Q4 results: Dabur India hopes to sail in Patanjali’s wake

If Dabur can deliver better sales growth and maintain margins, it may be able to meet the high expectations that investors have set

Squeeze the honey out of Dabur. Now Baba Ramdev did not say this, when he recently said he will take the gate out of Colgate and coined similar fates for other foreign-owned brands. But he may well have. Dabur India Ltd said its health supplements business grew in single digits in the March quarter, as its honey sales were affected by Patanjali honey’s aggressive launch. Patanjali’s 500g honey bottle has a list price of Rs.135 versus Dabur’s Rs.199 (exclusive of discount) on
Dabur’s management says it will not compete on price ( is offering the 500g bottle at a discounted price of Rs.169.15); instead it has launched a “squeezy” honey bottle and will launch value-added variants next month. The initial impact has been harsh but surprisingly, Dabur has only words of praise for its competitor. It sees Patanjali as prising open a huge opportunity for products with a herbal/Ayurvedic tilt.
Chief executive Sunil Duggal said Patanjali may actually help in products such as chyawanprash, which they have struggled to grow in recent years. Warm weather—it sells most in winter—is one reason, but he said the product also lacked the kind of “evangelism” or “disruptive influence” that Ramdev has brought.
Duggal’s logic is Patanjali may initially eat into incumbents’ markets but Ramdev’s efforts can grow the market too. In oral care, for instance, Dabur’s growth has benefited from more demand for Ayurvedic/herbal toothpastes. Though Dabur does not sell ghee, Duggal remarked that Ramdev appears to have added new consumers for this product. As disruptive change goes, there’s no knowing what will happen but Dabur’s view is one possibility, an optimistic one at that.
Dabur’s March quarter results show better sales growth, up by 8.5% in value terms and by 7% in volume. Value sales growth is better than the December quarter’s fall of 2.5%. The end of the blockade on the India-Nepal border has seen its food business come back strongly. That had affected growth in the preceding quarter.
Apart from food and oral care, the home care business did well too. Dabur’s international business saw organic growth (excluding the impact of acquisitions/divestitures) of 19.3% compared with 10.7% growth in the preceding quarter. The recovery in sales growth, some support from price increases, slower increase in costs, all contribute to an increase in its Ebitda (earnings before interest, taxes, depreciation and amortization) margin, both from a year ago and the preceding quarter. A higher tax rate lowered net profit growth to 16.6% compared with a pre-tax profit growth of 20%.
Dabur’s management expects the second half of FY17 to see better sales growth, contingent on a good monsoon. It is still seeing weak rural growth and no significant support from the urban general trade channel (kirana shops). Modern trade is selling well, however. Although some input costs are moving up, the company is not expecting to see significant price increases. It’s a cautious outlook, justifiable considering that past optimism in the sector has not always played out, and what with a hungry competitor on the prowl.
Dabur’s share fell by 1.05% on Thursday. It trades at 38 times the price-to-earnings ratio for the year ended 31 March. FY16 was a tough year but the current fiscal year looks to be a better one, although not if the company’s cautious outlook proves right. If Dabur can deliver better sales growth and maintain margins, it may be able to meet the high expectations that investors have set.

Thursday, 28 April 2016

Analytics firms continue to attract investments

Amidst a slowing of funds into the e-commerce and start-ups space, analytics players might buck the trend as they draw insights from raw data to help CEOs make crucial decisions.

Amidst a slowing of funds into the e-commerce and start-ups space, analytics players might buck the trend as they draw insights from raw data to help CEOs make crucial decisions. Sources say Fractal Analytics is in advanced talks to raise $100 million for a minority stake. Fractal’s performance is what will fetch it the funds; the company doubled revenues from about $35 million in 2013 to $70 million in FY15 and its operating margins are 40%.
India’s largest independent data analytics player Bengaluru headquartered Mu Sigma, raised $45 million in 2013 from Fidelity and others for around 3% stake and was reportedly valued at more than $1 billion.
The company, backed by Sequoia Capital, has been doing well; revenues crossed $300 million in 2015 and a quarterly run rate of 7% could well sustain. With the global data analytics market growing by more than 20% annually and estimated to reach a size of $124 billion by the end of 2016, analytics players seem to be on a good wicket. That’s one reason Sasha Mirchandani, who runs Kae Capital Fund, has stayed invested for more than 16 years in Fractal Analytics.
In February, 2015, Singapore’s Temasek led a $60 million investment round in Bangalore-based Manthan Software Services a provider of business intelligence and Big Data analytics solutions for enterprises in which existing investor Norwest Venture Partners ( NVP) also participated. Sohil Chand, managing director, NVP India says top players in this space have operating margins close to 50% in some segments which makes them attractive bets.
Manthan’s annual revenues are in the range of $40 million to $50 million, it is believed to be valued at $500 million. Bimal Raj, Partner, Singhi Advisors, says typically analytics firms are valued at eight times sales but a good product could result in a better valuation. Industry experts say players like Mu Sigma and Fractal Analytics, for instance are targeting Fortune 500 companies as clients. Manthan, meanwhile, is hoping to specialise in areas such as retail performance management systems.
Alokik Advani, managing director Goldman Sachs Principal Strategic Investments Group (GSPSI), the arm of the global investment bank that focusses on making long-term strategic bets in fast growing technology companies, says his firm is looking at potential investments in the data analytics space “We will invest between $2 million to $9 million in funding to promising start-ups in the fintech space,” Advani says.
In February this year, UK based Millward Brown, one of the leading global players in brand, media and communications research acquired Analytics Quotient, a Bangalore based data analytics company founded by former WNS employees. The company started as a four member team in 2008 and its team size has grown to more than 500 employees in the span of eight years with annual revenues around $30 million currently.
Earlier in January this year, Qubole which offers big data services to clients across sectors raised $30 million in series C funding from IVP Capital a US based late stage venture capital fund. Other players which have attracted investments—A series A to Cseries—include Absolute data, Latent View Analytics, Bridgei2i and Fine Analytics.

Yes Bank To Raise Over Rs 16,500 Crore Via Equity, Debt

Private sector lender Yes Bank on Wednesday said its Board has approved raising over Rs 16,500 crore through issue of equity capital as well as debt securities in one or more tranches.

"The Board of Directors...have approved raising of funds by way of issuance of equity capital up to $1 billion (Rs 6,650 crore) in one or more tranches on such terms and conditions as it may deem fit subject to approval of the shareholders," Yes Bank said in a BSE filing. 

It further said: "The issuance may be by way of qualified institutions placement (QIP) or any other international offering like global depository receipts (GDRs)/American depository receipts (ADRs), or by any other appropriate mode as decided by the Board or Committee thereof." 

The bank added that its Board also approved "raising of funds by way of issuance of debt securities including but not limited to non-convertible debentures, MTN (Medium Term Notes), bonds up to Rs 10,000 crore (in INR or FCY) by the Bank, in one or more tranches and/or series, in domestic and/or overseas market.. on private placement".

Yes Bank on Wednesday  reported 27.42 per cent rise in standalone net profit at Rs 702.11 crore for the fourth quarter ended March 2016 as against net profit of Rs 550.99 crore in the corresponding quarter of 2014-15

Wednesday, 27 April 2016

After RBI push, DCB Bank lowers lending rates

Private lender DCB Bank today reduced both base rate or the minimum lending rate and the marginal cost of funds-based lending rate (MCLR), a move which will lower EMIs for its borrowers.

While MCLR has been reduced by up to 0.5 per cent, the base rate has been cut by 0.06 per cent.

MCLR for overnight lending has been slashed by 0.5 per cent to 9.32 per cent while it has been lowered by 0.2 per cent to 9.72 per cent effective May 4, DCB Bank said in a statement.

MCLR rate for other maturities has been left unchanged, it said.

DCB Bank revised its base rate to 10.64 per cent per annum from the earlier base rate of 10.70 per cent, effective May 4.

RBI had asked banks to price fixed rate loans of up to three years based on marginal cost of funds from April 1.

The lending rate based on marginal cost of funds is lower than base rate in some cases, resulting in lower EMIs for borrowers. Most banks earlier decided lending rates based on their average cost of funds.

Sun Capital

How Gujarat’s co-op bank hopes to recover Rs 240 cr to repay small depositors

How Gujarat’s co-op bank hopes to recover Rs 240 cr to repay small depositors

Gujarat-based Madhavpura Mercantile Co-operative Bank (MMCB) has announced its final settlement scheme 2016 in a bid recover dues from defaulters

Gujarat-based Madhavpura Mercantile Co-operative Bank (MMCB) has announced its final settlement scheme 2016 in a bid recover dues from defaulters. The bank hopes to recover about Rs 240 crore from nearly 600 borrowers through this scheme.

It may be recalled that thousands of small depositors got duped in the Rs 1,200-crore MMCB scam that was unearthed in 2001. A bank official, requesting anonymity, said MMCB, currently under liquidation, owes nearly Rs 100 crore to about 13,000 small depositors, and Rs 650 crore to 268 other co-operative banks.

With this scheme, MMCB is offering its borrowers the final opportunity to settle their dues. In a press note, the bank said the scheme will cover all accounts except those of Ketan Parekh, Mukesh Babu and Sirish Maniar of Maniar Group.

Chief executive officer GK Fakir said the bank had filed several civil as well as criminal complaints against “defaulter borrowers”. He hoped the final settlement would see most borrowers clearing their dues.

At a time when the Reserve Bank of India did not allow banks to lend more than Rs 15 crore to stock brokers, MMCB had fraudulently issued pay orders worth Rs 12 crore to Mumbai-based stock broker Parekh, and huge sums to Babu and Maniar.

In 2012, the RBI had cancelled the bank’s licence after its total recovery pending stood at over R1,100 crore and non-performing assets had touched 99.9% of total deposits.

Sun Capital

Roposo bags $5 million from Bertelsmann India Investments

NEW DELHI: Relevant E-solutions, which owns and operates fashion discovery app Roposo, has bagged $5 million (about Rs 33 crore) from from Bertelsmann India Investments (BII), the strategic investment arm of German media conglomerate Bertelsmann SE.

The latest round is part of the Gurgaon-based startup's $15 million (about Rs 100 crore) Series B round, which was first reported in August last year, and confirmed by the company, and has been led by its existing backer, Tiger Global Management, which has pumped in $10 million this time around.

While the terms of the investment were not disclosed, Roposo, which also counts early-stage venture capital firm India Quotient as an investor, has raised about $21 million (about Rs 140 crore) in external funding till date.

"While Tiger Global had committed to invest the entire $15 million, we wanted to bring in a new investor that would share the same philosophy as us, and support our growth, and had set aside about $5 million accordingly. We are fortunate to have Bertelsmann on board as a partner," said Avinash Saxena, co-founder of Roposo.

Seeded by Flipkart Co-founder and Chief Executive Binny Bansal, the less-than two year-old startup was founded by IIT Delhi alumnus, Saxena, Mayank Bhangadia and Kaushal Shubhank in 2014. Last year, Tiger Global had led a $5 million Series A round in the company.

The founders also confirmed that Bansal has exited his position in the company last year, as had another early investor in the venture, 5ideas Startup Superfuel.

"We see tremendous promise in Roposo as a social network and as a business model. With an extremely strong founding team, it has managed to capture immense mindshare in India within a fairly short span since inception. With leaders such as multi-channel network StyleHaul in the US and social network Mogujie in China in the Bertelsmann family, we are excited to now work with Roposo to make it the leading fashion destination in India," said Pankaj Makkar, managing director, BII.

The startup will use the proceeds from the round towards strengthening its technology, expanding its team, bolstering the product and enhancing the Roposo community.

"The company is growing at a tremendous pace. We are building a world-class product team, and expect to make some really interesting hiring-related announcements over the course of the year," Saxena said.

Roposo, which claims to have 2.5 million installations of its app till date, is targeting having 7-8 million active users on its platform by the end of the current fiscal.

While fashion and lifestyle are the dominant categories, the startup, which competes with the likes of Wooplr, WithMe and Styledotme, is evaluating entering newer ones, such as food, travel and home furnishings, amongst others.

"Altogether, we're doing about 250,000 posts a month. There is a tremendous amount of engagement taking place, and our central philosophy has always been about connecting users," said Saxena.

Repost's revenue model is centred around its affiliate channels, through its partnership with over 400 websites, including most major ecommerce ventures. It also has advertising and video channels.

"We are experimenting with various channels... The monetisation strategy will shape up by the end of 2016," Saxena said.

Sun Capital

TranServ Gets $15 Million In Series C From Micromax, IDFC To Enhance Current Offerings, Build New Micro Credit Product

More finance for finance tech startups today. TranServ, the digital payments startup, possessing its own digital wallet as well, has raised close to $15 Million in a Series C round, led Micromax Informatics and IDFC Asset Management Co., along with the participation of Nirvana and Faering Capital India Evolving Fund.

While Micromax Informatics and IDFC Asset Management Co. are the new investors, Nirvana Ventures and Faering Capital India Evolving Fund are existing ones. IDFC has invested in the company through its VC fund called IDFC SPICE.

The newly raised capital will help the company to launch new products including micro credit, which the company is currently working on. It is also planning to hire more people and enhance its technology around payments.

The company is currently in talks with banks and non-banking financial institutions to kickstart its micro-credit business. It is also exploring growth opportunities through both organic and inorganic routes.

The company’s founder, Anish Williams says that the company may not need to raise another round of funding considering its current growth rate. He also says that they aim to make company fully profitable within next one or one and a half year.
We are looking to add new products such as micro credit and micro investments, besides other offerings. A lot of focus will be given to push Udio to make transactions seamless.
said Anish Williams, co-founder & CEO, TranServ
He further revealed that the promoters, including Amar Habibullah, Aditya Gupta, Sandeep Ghule and himself, are the largest shareholders, although they hold less than 51% equity in the company.
Earlier this year, the company had launched Udio – a digital wallet with a social angle. The wallet is more of a social experience that seeks to address some of the issues that cause the gap between real and virtual modes of payment.

Udio Wallet is designed to bring a social and community-driven aspect of payments to the fore while also ensuring an anytime, anywhere accessibility to digital P2P transactions via its very own, secure payment systems. Last year, it partnered with India’s largest smartphone company – Micromax to equip all future Micromax devices with its service.

The Mumbai-based startup was founded by Anish Williams, Aditya Gupta and Sandeep Ghule around five years ago. Transerv is an electronic payments and prepaid payments solutions software platform that seeks to serve a variety of organisations and people through ease and safety in payment processing.

Till now, the company was executing projects in government grant disbursements besides insurance and dairy payments. Its flagship brand is Shmart!Pay and it works with lenders like Bank of India, Kotak Mahindra Bank, Axis Bank along with RuPay and Visa to execute such projects.

In this segment, one of the direct competitor for TranServ is ItzCash while in the digital wallet space, it is competing against PayTM, FreeCharge, Oxigen, MobiKwik, etc.

Supreme Court asks finmin to reveal mechanism to recover NPAs of PSBs

The Supreme Court on Tuesday asked the finance ministry to inform it about the mechanism in place and steps being taken to recover huge non-performing assets (NPAs) of the nationalised banks.

he Supreme Court on Tuesday asked the finance ministry to inform it about the mechanism in place and steps being taken to recover huge non-performing assets (NPAs) of the nationalised banks. The apex court also asked the government to form an expert panel to look into the issue.
A bench headed by Chief Justice T S Thakur, while seeking response from the RBI and the Indian Banks Association on various issues framed in this regard, said the current system is not working to safeguard the interests of the banks. It said “if your (government) system was perfect, you could not have such huge NPAs”.

“Something is missing (in the current system). Something is not working. Don’t take this as adverse remark. But steps are needed to prevent such huge write-offs. We are looking at suggestions to reform the system and prevent the huge write-offs… Please tell us what is the current institutional mechanism to check it…And what reforms you are intending to bring in,” the bench asked Solicitor General Ranjit Kumar, who informed the court that some “amendments are in the offing. And the Bankruptcy Code is likely to come into effect soon”.
Kumar also told the apex court that the government is already working to contain the bad loan situation and has various mechanisms like the proceedings before the Debt Recovery Tribunals/the Sarfaesi Act to recover the bad debts.

The CJI also told the bank to propose a committee which can look into all these issues. “We are not financial experts and cannot look into the safeguard issues, but the government should be in a position to evolve safeguards to prevent NPAs. If you propose a committee which can go into all these issues, we will be okay with it,” he observed.
Counsel Prashant Bhushan, appearing for NGO Centre for Public Interest Litigation (CPIL), told the judges that there is severe discrepancy with respect to the information on loan write-offs provided by individual banks and the RBI.
Bhushan cited the RBI data that showed Punjab National Bank writing off over `8,500 crore in the last two years, while PNB has denied writing off any loan during this period. Similarly, while the Bank of India claimed that the bank wrote off more than `17,700 crore loans in the last two years, the RBI figure stood at `2,567 crore.

The counsel also filed a two-page note and formulated around 11 issues to be looked into by the court. The issues included — whether the RBI can refuse to disclose information about defaulted loans, suits filed for recovery of loans, restructured loans, debts written off, willful defaulters, one-time-settlement, sales of assets of companies to Asset Reconstruction Companies etc, what mechanisms are required to ensure that banks obtain adequate security for the loans that they give to the companies/corporates and whether the personal guarantees of the promoters should be required to be taken in loans given to the corporates.
The SC had earlier critisised the banks for failing to go after big defaulters and instead driving farmers to sell their small tracts of land and committing suicide for failure to return small outstanding loans.

Sun Capital

Patanjali Revenue May Touch Rs 10,000 Cr

NEW DELHI: Patanjali Ayurved, promoted by yoga instructor and promoter Ramdev aims to record a turnover of Rs 10,000 crore during the financial year 2016-17, and  will invest over Rs 1,150 crore  to set up six processing units and one R&D centre.

The domestic FMCG firm also challenged the multinational firms like Unilever, Nestle, P&G and Hindustan Unilever the established players in fast moving consumer goods (FMCG) segment in India. The company is confident that its network
of over 4,000 distributors, 10,000 stores and 100 Patanjali mega marts pan India, will help achieve its target.

The company’s ambitious plan includes distributing its products globally in the international market. “Patanjali is an International brand,” Ramdev who promoted Patanjali told reporters on Tuesday.  Patanjali will also enter new categories like dairy, animal feed and khadi garments for yoga. “We will enter dairy segment this year with the launch of milk, cheese, butter milk and paneer.”

When asked about the source of funds, he said: “Banks are more than willing to give loans to us. We have no shortage of funds to expand. We are a debt-free company.”

Sun Capital

Tuesday, 26 April 2016

HDFC Bank is the Glenn McGrath of Indian banking

HDFC Bank’s balance sheet has crossed Rs7 trillion, narrowing the gap with ICICI Bank

Just like former Australian bowler Glenn McGrath used to land ball after ball in the same spot outside the off stump, HDFC Bank Ltd has unerringly posted another quarter of 20% net profit growth. If there was any mild excitement around its March quarter earnings, it was the utilization of around Rs.300 crore of floating provisions towards two accounts.
Half of this provision was on account of a central bank directive to all lenders to set aside 7.5% of their exposure to the Punjab state government, which is battling a foodgrain scam. It has to make a similar provision in the first quarter of this financial year. That said, at the end of the day, as the lender’s management clarified in a conference call, this loan has been made directly to the state government and would be classified as sovereign debt.
There was no untoward effect on HDFC Bank’s credit costs either. Annualized credit costs came in at 47 basis points in the March quarter, a decline from both a year ago and the previous quarter’s number. One basis point is one-hundredth of a percentage point. The bank maintained its asset quality performance with gross non-performing loans remaining under 1% of its advances.
Other performance yardsticks hit the mark as well. Return on assets was 1.9% and cost-to-income ratio under 45%. The bank’s net interest margin was 4.3%; the management said the move to the new marginal cost of funds-based lending rate was unlikely to affect margins much. It reiterated its usual guidance of 4-4.4% margin for the current quarter as well.
With this set of numbers repeated quarterly, the trigger for stock performance is balance sheet growth. HDFC Bank’s balance sheet has crossed Rs.7 trillion, narrowing the gap with ICICI Bank. In the March quarter, loans grew 27%, about two-and-a-half times industry growth and especially creditable for a loan book of this size. Retail loans—driven by personal loans and home loans—grew by 30%. Deposits also grew faster than the industry at 21%.
While HDFC Bank shares trade at 3.3 times their expected book value for this financial year—among the most expensive in the world—it is its ability to disregard the operating environment that allows the stock to outperform the benchmark Bankex.
Sun Capital

China Rapid Finance Bolsters Governance by Adding Joe Zhang to Board

Acclaimed author and finance expert to serve as an independent non-executive director

SHANGHAI- China Rapid Finance Limited (“CRF” or the “Company”), a leading online consumer lending marketplace, bolstered its commitment to corporate governance, regulatory compliance and transparency with the addition of acclaimed author and financial expert Huaqiao (Joe) Zhang to its board.
“I have strong belief that with its innovative technology and multi data, multi channel strategy, as well as its rigorous risk management practices, China Rapid Finance has unparalleled advantage to thrive in this huge, untapped market.”
Mr. Zhang, 52, who is currently the chairman of Hong Kong-listed China Smartpay, has been appointed as an independent non-executive director on CRF’s board. Previously, he had served as an advisor to the Company since August 2013.
“The addition of Joe Zhang to our board will aid the Company in our aim to grow as a leading consumer lending marketplace that’s focused on strict risk management, transparency, and business innovation,” said Dr. Zane Wang, CEO of the Company.
“I have strong belief that with its innovative technology and multi data, multi channel strategy, as well as its rigorous risk management practices, China Rapid Finance has unparalleled advantage to thrive in this huge, untapped market." Mr. Zhang said. "I'm glad I can join China Rapid Finance to contribute my experience to its promising development in the future."
CRF aims at bringing affordable consumer credit to EMMAs, which are defined as Emerging Middle-class, Mobile Active consumers in China. There are 500 million such people, with quality employment, yet no credit record in the People’s Bank of China, which means they cannot get access to traditional credit service from banks.
Mr. Zhang brings to CRF’s board a wealth of industry knowledge and experience after having spent more than two decades in investment banking and finance. Prior to working at China Smartpay, Mr. Zhang served as the Chairman of Wansui Microcredit Company in Guangzhou from 2011-12. His work was recognized by The Microcredit Association of China, which named Mr. Zhang "Microcredit Person of the Year" in January 2012.
From 2006 to 2008, Mr. Zhang was the chief operating officer of Shenzhen Investment Limited. Earlier, he worked for various investment banks for 15 years, including 11 years with UBS as a banker and head of China Research. While at UBS in 2001, he became well known for publishing research that highlighted the weak governance and financial reporting issues of some companies listed on the Stock Exchange of Hong Kong. From 1986 to 1989, Mr. Zhang worked as a manager at the People's Bank of China.
Mr. Zhang is also the author of the bestseller Inside China's Shadow Banking: The Next Subprime Crisis, which was published in 2013. He has authored numerous articles that have appeared over the past two decades in publications including The New York Times, The Wall Street Journal, Financial Times, Bloomberg and South China Morning Post.
Mr. Zhang received a bachelor’s degree in Economics from Hubei Institute of Economics and Finance, a master’s degree in Economics from the PBOC Finance Institute and a master’s degree in Economics from the Australian National University.
About China Rapid Finance
China Rapid Finance Limited began its operations in 2001, and is the largest online consumer lending marketplace serving China’s emerging middle class in terms of total number of loans. The Company is a recognized innovator with a proprietary Big Data analytics technology platform. The Company has a proven track record in credit risk management and transparency, and has facilitated more than 5 million loans to-date.

HDFC to raise Rs 500 crore by issuing bonds to finance housing biz

The bonds with a tenor of five years, have April 26, 2021, as the redemption date

To cater to housing finance needs, India's largest mortgage lender HDFC on Monday said it will raise Rs 500 crore by issuing bonds on a private placement basis.

Issue size of Rs 500 crore secured redeemable non-convertible debentures, to be held on private placement basis, will carry a coupon rate of 8.35% per annum.

"The object of the issue is to augment the long-term resources of the corporation. The proceeds of the present issue would be utilised for financing/refinancing the housing finance business requirements of the corporation," HDFC said in a regulatory filing.

The bonds with a tenor of five years, have April 26, 2021, as the redemption date.

HDFC said the issue can be subscribed by only the persons who are specifically addressed through a communication by the company.

Scrips of the company traded 1.77% down at Rs 1,111.40 apiece on BSE.

Friday, 22 April 2016

IndusInd Bank all set to foray into affordable housing loans

IndusInd Bank is all set to foray into the affordable housing finance business and will be launching its first product in this segment by the end of the current quarter, Sumant Kathpalia, head – consumer banking, said after the bank’s March quarter results were announced.

IndusInd Bank is all set to foray into the affordable housing finance business and will be launching its first product in this segment by the end of the current quarter, Sumant Kathpalia, head – consumer banking, said after the bank’s March quarter results were announced.
“We have identified affordable housing as the correct avenue to venture into home loans. Typically, home loans are a product which does not really bear any fruit for the company unless the book is around R10,000 crore or more. But with affordable housing, we could achieve that with a R 2,000-crore book,” Kathpalia said.
In order to provide a fillip to the affordable housing market and to make it easier for individuals to finance their plans of buying a house, the Reserve Bank of India announced in October last year that lenders could lend up to 90% of the price of a house that costs R30 lakh or less. For houses costing between R30 lakh and R75 lakh, the loan-to-value (LTV) ratio was fixed at 80%, while for houses costing above R75 lakh the LTV was fixed at 75%.
At present, IndusInd Bank does not give home loans on its own. In fact, the bank has partnered with Housing Development and Finance Corporation and originates loans for the mortgage lending major. Kathpalia said that foraying into the affordable housing market will also help the bank meet its priority sector lending targets.
“We have a whole team working on it at the moment. We have everything ready to go and we will put our first step in that direction by the end of this quarter,” he said, adding that the new avenue will help the bank cross-sell more of its products.
“The cross-sell into our own clients’ infrastructure will give us the money. The contract-for-difference business for example, is a real cross-seller,” he added.

Ujjivan expects to start small finance banking operations in 2017

Ujjivan Financial Services will launch its initial public offer on 28 April to raise about Rs358.16 crore

Microfinance lender Ujjivan Financial Services Ltd will launch its initial public offer (IPO) on 28 April and expects to start its small finance bank (SFB) in the first quarter of calendar year 2017, the top management of the company said on Thursday.
“The Reserve Bank of India (RBI) has given a timeline till April 2017 for launching the operations. We are confident that we will be able to do a soft launch of the small finance bank business by in the first quarter of next calendar year,” chief financial officer Sudha Suresh told reporters at a press meet in Mumbai.
The company’s significant scale, a geographically well-diversified business, senior management team with banking experience and robust risk management practices will help it in successfully building its small finance banking business, added Suresh.
Through its IPO, Ujjivan plans to raise Rs.358.16 crore. The company has fixed a price band of Rs.207-210 per share. The offer closes on 2 May.
The offer will also see several private equity investors in the company pare their stakes to ensure the company’s compliance with RBI’s norms of foreign ownership for SFBs, which require foreign ownership to be capped at 49%.
Investors selling their shares through the IPO include World Bank arm IFC, impact investment funds Elevar and India Financial Inclusion Fund, Dutch development finance institution FMO, Sarva Capital, Women’s World Banking Capital Partners, Wolfensohn Capital Partners and Mauritius Unitus Corp.
In February, Ujjivan raised fresh capital to the tune of Rs.292 crore in a so-called pre-IPO round. The pre-IPO round and IPO will help the company bring down its foreign shareholding to within 49%, the company said.
“After the pre-IPO round our foreign shareholding stands at around 77% and post the IPO the foreign shareholding will reduce to around 44-45%,” said Sudha Suresh. As of 31 March 2015, foreign investors owned 88.69% stake in Ujjivan.
Ujjivan is the second of 10 SFB licensees to start selling shares to the public. Earlier this month, the public offer of Chennai-based microfinance lender Equitas Holdings Ltd that sought to raise Rs.2,176 crore was subscribed almost 17 times.
On Thursday, Equitas’ shares listed on the stock exchanges with a 33.6% premium over its IPO price of Rs.110 per share.
SFBs will offer basic banking services, accept deposits and lend to unserved sections, including small business units, small and marginal farmers, micro and small industries, and entities in the unorganized sector.
For the nine months ended December 2015, Ujjivan reported a profit of Rs.122.3 crore on revenue of Rs.729.6 crore.
As of 31 December, the company served over 2.77 million active customers through 470 branches across 209 districts. Ujjivan’s assets under management stood at Rs.4,589 crore. The company is present in 24 states.
Sun Capital

Druva gets strategic investment from NTT Finance, expands in Japan

Druva is trying to tap into the growing Asia Pacific market for security

Druva Inc., a start-up that helps enterprises protect and manage their data across devices, said it received a strategic investment from NTT Finance, the financial arm of Japanese telecommunications company Nippon Telegraph and Telephone Corporation, to strengthen its presence in Japan.
Druva is trying to tap into the growing Asia Pacific market for security software. Last year, it entered Japan by localising its products in partnership with NTT Neomeit and NetOne Systems.
“We see our Japanese market expansion as a way to sustain the continued doubling of our global business each year with the Japanese growth significantly in excess of this,” Jaspreet Singh, chief executive officer of Druva, said in an email.
“We believe Druva will simplify and strengthen Japanese companies’ information security and compliance efforts, and that’s why we are investing in the company,” said Masayuki Utada, senior executive manager, International Business Unit, NTT Finance, in a statement.
Enterprises deal with vast amounts of data spread across multiple devices. For companies, it is crucial that all this data is continuously backed up, and is compliant with data governance policies. Druva has two products that deal with this—inSync, which helps companies protect data in end-user devices such as laptops or mobile phones, and Phoenix, which helps companies remotely backup and archive their server data.
However, when Jaspreet Singh, Milind Borate and Ramani Kothandaraman started Druva in 2008, they set out to build a very different product - one that dealt with disaster recovery software. On realising that it was very difficult for Indian companies to sell such a product, they shifted to data protection.
Druva serves over 4,000 enterprise customers with 65% of them in the Americas, 25% in Europe and the Middle East and 10% in the Asia Pacific region.
The Sunnyvale, California-based company has all its engineering team in its Pune office in India, with the sales, marketing, product and finance teams in the US.
Druva was identified as one of the top 30 product companies in the country according to the iSPIxB2B index by software products think-tank iSpirt, which tracks the software products industry.
It has so far raised $67 million from investors including Sequoia Capital, Tenaya Capital and Nexus Venture Partners, and counts iSpirt co-founder Sharad Sharma as an angel investor.
Druva competes with large enterprises such as EMC Corp., Symantec Corp., and Hewlett Packard Enterprise.

Thursday, 21 April 2016

Future Generali joins hand with 10 banks for micro insurance push

Future Generali India Insurance Company joins hands with 10 cooperative banks in Maharashtra to grow rural business
The tie-ups will help the insurer expand its market in the state as the company looks to grow bancassurance business by 50% this fiscal. 

"We have always been focusing on tying up with cooperative and rural banks to provide micro insurance and rural insurance to the wider section of the society," said Anurag Sinha, head of bancassurance. 

The insurer, a joint venture between retail giant Future Group and Italy's Generali, has tied up with banks such as Warana Sahakari Bank, Sangali District Central Cooperative Bank, Kolhapur District Central Cooperative Bank operating in the Kolhapur and Sangli districts. 

"These tie-ups are vital to provide financial access to rural households, thus ensuring better standards of living. We expect rural and micro insurance to grow by 30% by end of 2016-17," said KG Krishnamoorthy Rao, managing director and chief executive of Future Generali India Insurance Company. 

The company is also doing business with banks like Ashta Peoples Cooperative Bank, Kumbhi Kasari Cooperative Bank and Yashwant Sahakari Cooperative Bank in the region.

Sun Capital

Mudra Bank invests Rs.50 crore in Janalakshmi Financial Services

Mudra Bank invested Rs50 cr in Janalakshmi Financial Services through a securitization deal facilitated by IFMR Capital

Mudra Bank, a refinance bank for microfinance and non-banking financial companies, has invested Rs.50 crore in Janalakshmi Financial Services Pvt. Ltd through a securitization deal facilitated by IFMR Capital. This is Mudra Bank’s first capital market transaction.
Mudra, or the Micro Units Development & Refinance Agency, is a government initiative to provide cheap loans to companies that finance micro and small companies. IFMR Capital, in a statement on Wednesday, said it had exclusively structured and arranged a securitization transaction where MUDRA would investRs.50 crore in the A (-) rated senior tranche of securitized loan portfolio of Janalakshmi.
Securitization allows companies to provide part of their loan books and its receivables as a guarantee to financial institutions. In this short-term transaction, the tenure is 1.5 years. IFMR Capital also participated as an investor through its investment in the subordinated j tranche, it said. The Economic Times reported that IFMR has put in Rs.1.63 crore.
“Structured financing has a greater impact in enabling financial institutions to access funds from capital market at a lesser cost, without a charge on their limited capital. We hope to participate in more such transactions,” said Jiji Mammen, chief executive, Mudra Bank.
IFMR has structured 18 securitization and assignment transactions so far for Janalakshmi to raise around Rs.2,000 crore. “With this transaction, Mudra plays a facilitating role in ensuring that NBFCs providing microfinance and small business finance are able to access domestic capital in an efficient manner,” said Kshama Fernandes, CEO of IFMR Capital.
Small finance bank licensee Janalakshmi Financial said on Monday it has raised $150 million (around Rs.1,000 crore) in a round of primary funding led by global private equity firm TPG.

JP Morgan to invest Rs200 crore for Bengaluru villa project

With this investment, project developer Assetz Property Group has raised about $250 million for its residential projects so far

JP Morgan Asset Management Co. Ltd is set to invest about Rs.200 crore in Singapore-headquartered Assetz Property Group to help the developer buy a 20-acre land parcel in north Bengaluru to build a villa project, said two people familiar with the development.
The deal will be signed this week, they said.
The proposed project, for which the land is being bought, is a villa and row-house development near Yelahanka and will be launched early next year.
“The capital will be given in the form of equity by JP Morgan. The project is yet to be named but it will be launched as soon as the approvals come in,” said one of the two people mentioned above, who did not wish to be named.
Assetz declined to comment and a JP Morgan spokesperson didn’t respond to an email.
With this transaction, Assetz, which has a number of premium residential and commercial office projects in southern India, has raised about $250 million for its residential projects so far.
In the past, it raised around $116 million from private equity (PE) and venture capital firm Equis Funds Group Pte Ltd for its mid-market housing vertical. It has also raised money from property consultancy Jones Lang LaSalle’s real estate investment arm Segregated Funds Group, Avenue Real Estate Fund and Amplus Capital Advisors Pvt. Ltd.
In March, the company announced the launch of its township brand Assetz Lifestyle, under which it will build a range of mid-market housing projects. Over the next 10 years, it plans to build around 10,000 homes along the growth corridors of Bengaluru and expects to generate about Rs.5,000 crore in revenue from this business.
Assetz also recently ventured into the warehousing and logistics sector and is developing an 88-acre logistics park in Bengaluru. It plans to raise about Rs.400 crore for this business. 
PE funding in the real estate sector has remained robust despite the slowdown that has continued for more than two years. Real estate-focused funds invested about $410 million in residential, office and retail projects between January and March this year, compared with about $680 million in the corresponding period last year, according to VCCEdge, which tracks investments, and Mint research.
Equity financing by PE funds is a rarity these days, as most investors are busy offering debt to developers to help them refinance old loans and construct projects.
“Some investors are willing to give equity capital but to only a select few developers with good pedigree, high corporate governance standards and good project portfolio. Equity for land acquisition makes sense because it’s early stage investing, which involves risk and also promises a better upside,” said Chintan Patel, partner, transactions and restructuring, real estate and hospitality, KPMG India.
Patel added that equity financing would make a cautious return once there was enough downside protection for investors.

Wednesday, 20 April 2016

Mondelez,maker of Cadbury chocolates & Oreo, launches Bournvita biscuits

Expanding its biscuit footprint from cream to cookies, Mondelez India, the maker of Cadbury chocolates, on Tuesday launched its second brand in the category in the form of Cadbury Bournvita biscuits.

Expanding its biscuit footprint from cream to cookies, Mondelez India, the maker of Cadbury chocolates, on Tuesday launched its second brand in the category in the form of Cadbury Bournvita biscuits.
The Bournvita cookies will be the company’s second offering in the biscuits segment after Oreo, which was launched in India in 2011. Introduced as the morning biscuit, the Bournvita cookies are loaded with the signature taste of the malted beverage Bournvita and other essential vitamins and nutrients. “If you go to the average Indian household in the morning, there will be some sort of milk and biscuits for breakfast. When it was introduced, Bournvita’s task was to enhance the morning beverage experience.
Similarly, the task for Bournvita biscuits will be to enhance the morning biscuit experience,” said Chandramouli Venkatesan, managing director, Mondelez India Foods.
Following extensive consumer insights and research, the company – which operates in the chocolate, beverages, biscuits and gums & candy segments – aims to reach out to anyone who is a biscuit consumer in the Indian market.
Chella Pandyan, associate director, marketing, biscuits India and kids fuel AP, Mondelez India, says India is a large and exciting biscuit market for the company. “Mornings are the biggest biscuit occasion in India. That is where we are anchoring our product,” Pandyan added. The biscuits will be available in two packs – Rs10 and Rs25 – and are expected to hit all major urban and rural retailers in May. They will also be available exclusively through a pre-launch on online marketplace Snapdeal soon.

Corporate debt worth $178 bn at default risk: BNP Paribas

A whopping 16.1 per cent or $178 billion worth of corporate credit in India is at risk of default, making the domestic banking system the worst in Asia in terms of bad loans, says a report.

A whopping 16.1 per cent or $178 billion worth of corporate credit in India is at risk of default, making the domestic banking system the worst in Asia in terms of bad loans, says a report.
According to the report by French financial services major BNP Paribas, of the total bank credit of USD 1,109 billion in the country, corporate debt worth USD 178 billion, 16.1 per cent of the total bank credit, stands the risk of default.
India is followed by Indonesia and China with 7.2 per cent and 6.6 per cent of respective total bank credit at the risk of default.
While in Indonesia, USD 22 billion of its total bank credit of USD 305 billion is at potential risk of default, China stares at USD 1,050 billion of potential bad loans. The Chinese banking system is worth USD 15,884 billion.
The brokerage did not specify the time-frame of the report which is based on an analysis of 738 listed companies in Asia which have a combined gross debt of USD 1.7 trillion.
“Mounting corporate debt is one of the biggest problems for Asian economies,” the report said.
“Our country-wise analysis highlights the following percentages of bank loans at risk: 6.6 per cent in China, 16.1 per cent in India, 5.8 per cent in Korea, 2.4 per cent in Thailand and 7.2 per cent in Indonesia,” it said.
As per BNP Paribas, policymakers in every country are trying to tackle the debt problem in different ways. “China’s solution seems to be a debt-to-equity swap. This was tried in China in the late 1990s,” the report said.
“The present instance, however, could be different…the government may not assume a significant part of the debt, as it did in the last instance,” it added.
India’s approach is more direct as the “Reserve Bank’s asset quality review is forcing banks to acknowledge and write off stressed assets leading to severe short-term pain, particularly for PSU banks, but also potential long-term gain once bad loans are fully recognised,” the report noted.
Last December, RBI conducted an asset quality review under which it identified 150 top corporate accounts which are stressed.
Following this, the regulator asked banks to make provisions for all these 150 accounts by December and March quarters and get the entire books cleaned up by March next.
This had all the banks, including the private sector ones, reporting massive spikes in bad loans and adding a whopping Rs 1 trillion in fresh slippages between the September and December quarters.
Already, total NPAs and stressed assets have touched 13 per cent of the system and are set to rise again in the March quarter.

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