Bank stocks will be in focus as the Reserve Bank of India yesterday, 17 December 2015, released the final guidelines on computing interest rates on advances based on the marginal cost of funds. The guidelines come into effect from 1 April 2016. Apart from helping improve the transmission of policy rates into the lending rates of banks, these measures are expected to improve transparency in the methodology followed by banks for determining interest rates on advances. The guidelines are also expected to ensure availability of bank credit at interest rates which are fair to the borrowers as well as the banks. Further, marginal cost pricing of loans will help the banks become more competitive and enhance their long run value and contribution to economic growth.
As per the guidelines, all rupee loans sanctioned and credit limits renewed from 1 April 2016 will be priced with reference to the Marginal Cost of Funds based Lending Rate (MCLR) which will be the internal benchmark for such purposes. The MCLR will be a tenor linked internal benchmark. Actual lending rates will be determined by adding the components of spread to the MCLR. Banks will review and publish their MCLR of different maturities every month on a pre-announced date. Banks may specify interest reset dates on their floating rate loans. They will have the option to offer loans with reset dates linked either to the date of sanction of the loan/credit limits or to the date of review of MCLR. The periodicity of reset shall be one year or lower. The MCLR prevailing on the day the loan is sanctioned will be applicable till the next reset date, irrespective of the changes in the benchmark during the interim period. Existing loans and credit limits linked to the Base Rate may continue till repayment or renewal, as the case may be. Existing borrowers will also have the option to move to the Marginal Cost of Funds based Lending Rate (MCLR) linked loan at mutually acceptable terms. Banks will continue to review and publish base rate as hitherto.
Power Grid Corporation of India will be in focus. The Reserve Bank of India yesterday, 17 December 2015, notified that the restrictions placed on the purchase of shares of the company by foreign institutional investors (FIIs)/registered foreign portfolios investors (RFPIs) are withdrawn with immediate effect as the foreign share holding by FIIs/RFPIs in the company has gone below the prescribed threshold caution limit stipulated under the extant FDI Policy. The shares of Power Grid Corporation of India can now be purchased through primary market and stock exchanges.
Tata Power Company announced after market hours yesterday, 17 December 2015 that it has issued a turkey contract to Gamesa India for commissioning a 100 megawatts (MW) wind power project at Nimbagallu in Andhra Pradesh. The project is to be commissioned by May 2017. The company has also signed Gamesa for long term operations & maintenance to ensure smooth functioning of the wind farm, Tata Power said
HDFC said after market hours yesterday, 17 December 2015, that it has agreed to sell 12.33 crore shares or 22.902% stake held in HDFC ERGO General Insurance Company, a subsidiary of the company to ERGO International AG, Dusseldorf at a price of Rs 90.973 per share totalling Rs 1122 crore. HDFC ERGO clocked net profit of Rs 104 crore on total income of Rs 1990.66 crore in the year ended 31 March 2015 (FY 2015).
Gujarat Gas (GGL) said after market hours yesterday, 17 December 2015, that it has executed a gas purchase contract for regasified liquified natural gas (LNG) with Gujarat State Petroleum Corporation. This shall effectively enable GGL to purchase 0.50 mmscmd additional regasified LNG on long term basis valid up to 1 July 2025.
Hindusthan National Glass & Industries said after market hours yesterday, 17 December 2015, that the company has received a notice from Autometers Energitec, intimating that they have filed a winding up petition before the High Court, Calcutta. Further, the company in consultation with its legal counsel, has already initiated appropriate legal recourse.
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Stone India said after market hours yesterday, 17 December 2015, that the company has signed an agreement with Shenyang Brilliant Elevator Group Co., China, on 15 December 2015 for forming a joint venture company to undertake the business of manufacture and sale of elevators in India with their technology.
Somany Ceramics announced the opening of the qualified institutional placement (QIP) of shares on 17 December 2015. The floor price for the QIP was fixed at Rs 357.24 per share. The announcement was made after market hours yesterday, 17 December 2015. It may be recalled that Somany Ceramics had in March 2015 and through a special resolution passed by the shareholders of the company on 2 May 2015, had approved for QIP of shares for an aggregate amount not exceeding Rs 150 crore.
Bhilwara Green Energy announced that rating agency ICRA in a letter dated 16 December 2015 has reaffirmed the credit rating [ICRA]BBB+ (pronounced ICRA triple B plus) for the company's Rs 177.44 crore secured redeemable non convertible debentures (NCDs). The announcement was made after market hours yesterday, 17 December 2015.
Jyoti announced that is has secured a prestigious order worth Rs 139 crore from DRN Infrastructure in Karnataka for design, manufacturing, supply, erection, testing and commissioning of five units of metallic volute pumps along with allied mechanical, electrical and instrumentation equipment, for TubchiBableshwar Lift Irrigation Scheme under Karnataka Neeravari Nigam. The announcement was made after market hours yesterday, 17 December 2015.
Sobha announced the launch of its first commercial project Sobha City Mall at Thrissur in Kerala. Situated at heart of Sobha City - the first and the largest integrated township in Kerala, Sobha City Mall will offer best-in-class retail and entertainment experience for the customers, Sobha said in a statement. The announcement was made after market hours yesterday, 17 December 2015.
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