News digest: IL&FS mess, G-sec buybacks, IPO market, Asia Cup, and more

RBI freed up about Rs 2 trillion worth of liquidity for the banking system by tweaking how the solvency ratio is calculated, effective October 1

Crisis-hit IL&FS looks to exit long-term project financing business

Shareholders of Infrastructure Leasing & Financial Services (IL&FS) are discussing a restructuring proposal under which the company will focus mainly on the management and execution of infrastructure projects, including engineering, procurement and construction (EPC) contracts, and exit the financing of long-term projects.

Some assets of the infrastructure development and finance major, which is facing a severe liquidity crunch, will also be put up for sale to pare its debt. 

A top source aware of the developments in IL&FS said the company had strong project management and execution skills for infrastructure projects, similar to those of global firms like Bechtel. Read more 
 

RBI may further pare down buybacks of G-secs, slash borrowing in H2FY19

The government is likely to reduce its gross borrowing by around Rs 200 billion in the second half of the fiscal year, Business Standard has learnt. The reduction is likely to come in form of lesser buybacks, with no expected change in issuances of government 

Officials from the Finance Ministry and Reserve Bank of India will meet in New Delhi on Friday to decide the borrowing calendar for October-March. The meeting will include Economic Affairs Secretary Subhash Garg, a RBI deputy governor, and officials from the ministry’s budget division and the central bank.

“There are discussions on further reducing the scheduled buyback of bonds by around Rs 200 billion,” said an official. The person added that issuances of long-term G-secs will not be affected. Read more 

RBI frees up about Rs 2 trillion worth of liquidity for the banking system

The Reserve Bank of India (RBI) on Thursday freed up about Rs 2 trillion worth of liquidity for the banking system by tweaking how the solvency ratio is calculated, effective October 1. The move comes against the backdrop of tightening liquidity in the banking system and rates shooting up in the money market.

However, the freed-up money will unlikely prompt banks to buy non-banking financial companies (NBFC) papers. Sources told Business Standard that banks told the central bank that they were not interested in buying NBFC debt papers for fear of rising mark-to-market losses.

“The RBI is doing the right thing. It has already done two open market operations (secondary market bond purchase), and now it has freed up the fund. What banks will do with the money is something up to themselves,” said Jayesh Mehta, head of treasury at Bank of America Merrill Lynch. Read more 
 

Aavas Financiers to Garden Reach, volatility spike takes a toll on IPOs

The volatility in the secondary market has spilled over to the primary market, with initial public offerings (IPOs) failing to garner desired subscription. On Thursday, the Rs 17.3-billion offering by Rajasthan-based housing finance company Aavas Financiers failed to garner 100 per cent subscription. A day earlier, state-owned Garden Reach Shipbuilders had to cut its issue price and extend the closing day as it managed to reach only two-third subscription mark.

Experts say risk aversion among investors following a sharp drop in stock prices is taking a toll on new issuances. Several IPOs waiting in the wings to come to the market will have to be deferred till the market stabilises and investor sentiment improves, they added.

Benchmark indices have corrected six per cent the past one month, while the broader market and financial stocks have seen a sharper cut. Read more 
 

Without flyers, India's regional airlines are still waiting for their UDAN

Kaustav Dhar was on a high in the winter of 2017: With the civil aviation minister flagging off his new airline, he was making a comeback to the aviation circuit as the chief executive of Zoom Air.

Dhar had been at the helm of an airline thrice before — one was shut down, another sold, and the third failed to take off. But it was different this time: The Narendra Modi government at the Centre was rolling out its ambitious Regional Connectivity Scheme — UDAN, or Ude Desh Ka Aam Nagrik, which literally means flight for the country’s common man — and Dhar saw an opportunity in it.

“The need of the hour in this country is to connect Tier-II and -III cities. That is part of the larger dream of the entire political think-tank also,” Dhar had said as he posed in front of the 50-seater CRJ-200 jet in red and gold livery at Delhi airport. Read more 
 

Asia Cup 2018: India's games got 6 times more viewers than other matches

The ongoing Asia Cup tournament has seen massive ups and downs in terms of viewership. While India matches were expected to have the highest viewership, the five non-India matches have managed to garner an average viewership of just 3.2 million impressions. The three India matches, on the other hand, averaged 19.5 million impressions. The India-Pakistan (September 19) match was the top performer, with 29.4 million impressions.

The first eight matches in the tourney have attracted an average viewership of 9.3 million impressions. The Asia Cup seems to be following the Indian Premier League in terms of the male-female viewership split. Like the annual T-20 league, the Asia Cup, too, has seen 41 per cent viewership come from female viewers, while males contributed 59 per cent. Read more