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

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.

Click here for enlarge

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.

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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.

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.

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