Larsen & Toubro will be watched. With respect to the disclosure made on November 24, 2014 to the exchange titled "L&T Technology Services closes acquisition of Dell's Engineering Services Business", the company clarified that L&T Technologies Services intends to acquire Dell's Engineering Services business located at US and India, subject to regulatory approvals. The acquisition price is $12.5 million, subject to customary net asset adjustments at the time of closing. There are no further disclosures, the company added.
With respect to the media report titled, "Srikakulam plant gets Form 483 for lapses: DRL", Dr Reddy's Laboratories after trading hours yesterday, 27 November 2014, clarified that it had received some inspectional observations from the US Food and Drug Administration (USFDA) after their visit to the active pharmaceutical ingredient (API) manufacturing facility of the company in Srikakulam district of Andhra Pradesh. DRL said that the company is committed to respond to the agency within stipulated timelines with remedial plans and start implementing the necessary measures immediately. At this stage, it has no implication on any activity at the plant, DRL said. Hence, these are not expected to be material to the company's operations or consolidated results, DRL said.
With respect to the disclosure made on 25 November 2014 to the exchange titled "Adani Power to acquire Avantha Power's Korba West Power Project in Chattisgarh Installed capacity to rise to 11,040 MW", Adani Power clarified after trading hours yesterday, 27 November 2014, that it has signed a binding term sheet for the acquisition of 100% shares of Korba West Power Company from Avantha Power & Infrastructure at an enterprise value of about Rs 4200 crore subject to due diligence.
The Reserve Bank of India (RBI) yesterday, 27 November 2014, set Rs 100 crore as minimum paid-up equity capital requirement for setting up payments banks and small finance banks. Those eligible for setting up a payments bank include existing non-bank pre-paid payment instrument (PPI) issuers and other entities such as individuals/professionals, non-banking finance companies (NBFCs), corporate Business Correspondents (BCs), mobile telephone companies, super-market chains, companies and real sector cooperatives that are owned and controlled by residents. Public sector entities can also apply to set up payments banks, the RBI said while issuing guidelines on payments banks. A promoter/promoter group can have a joint venture with an existing scheduled commercial bank to set up a payments bank. A scheduled commercial bank can take equity stake in a payments bank only to the extent permitted under Section 19 (2) of the Banking Regulation Act, 1949. Promoter/promoter groups should be 'fit and proper' with a sound track record of professional experience or running their businesses for at least a period of five years in order to be eligible to promote payments banks, according to the RBI guidelines on payments banks.
A payment bank can accept demand deposits. However, it will initially be restricted to holding a maximum balance of Rs 1 lakh per individual customer as demand deposits. A payments bank can issue ATM/debit cards, but cannot issue credit cards. A payments bank will provide payments and remittance services through various channels. A payments bank can act as BC of another bank, subject to the Reserve Bank guidelines on BCs. The payments bank cannot undertake lending activities. Apart from amounts maintained as Cash Reserve Ratio (CRR) with the Reserve Bank of India on its outside demand and time liabilities, a payments bank will be required to invest minimum 75% of its "demand deposit balances" in Statutory Liquidity Ratio (SLR) eligible government securities/treasury bills with maturity up to one year and hold maximum 25% in current and time/fixed deposits with other scheduled commercial banks for operational purposes and liquidity management.
The payments bank should have a leverage ratio of not less than 3%, i.e., its outside liabilities should not exceed 33.33 times its net worth (paid-up capital and reserves). The promoter's minimum initial contribution to the paid-up equity capital of a payments bank shall at least be 40% for the first five years from the commencement of its business, the RBI said. The operations of a payments bank should be fully networked and technology driven from the beginning, conforming to generally accepted standards and norms, the RBI said.
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Those eligible for setting up a small finance bank include resident individuals/professionals with 10 years of experience in banking and finance and companies and societies owned and controlled by residents. Existing NBFCs, Micro Finance Institutions (MFIs) and Local Area Banks (LABs) that are owned and controlled by residents can also opt for conversion into small finance banks. Promoter/promoter groups should be 'fit and proper' with a sound track record of professional experience or of running their businesses for at least a period of five years in order to be eligible to promote small finance banks, according to RBI's guidelines on small finance banks.
The small finance bank shall primarily undertake basic banking activities of acceptance of deposits and lending to unserved and underserved sections including small business units, small and marginal farmers, micro and small industries and unorganised sector entities, the RBI said. There will not be any restriction in the area of operations of small finance banks, the central bank said. If the small finance bank aspires to transit into a universal bank, such transition will not be automatic, but would be subject to fulfilling minimum paid-up capital/net worth requirement as applicable to universal banks, its satisfactory track record of performance as a small finance bank and the outcome of the RBI's due diligence exercise. The promoter's minimum initial contribution to the paid-up equity capital of a small finance bank shall at least be 40% and gradually brought down to 26% within 12 years from the date of commencement of business of the bank, the RBI said.
The small finance bank will be subject to all prudential norms and regulations of RBI as applicable to existing commercial banks including requirement of maintenance of Cash Reserve Ratio (CRR) and Statutory Liquidity Ratio (SLR). No forbearance would be provided for complying with the statutory provisions, the RBI said. A small finance bank will be required to extend 75% of its Adjusted Net Bank Credit (ANBC) to the sectors eligible for classification as priority sector lending (PSL) by the RBI. At least 50% of the loan portfolio a small finance bank should constitute loans and advances of upto Rs 25 lakh.
Ashok Leyland issued a clarification with respect to the disclosure made on 24 November 2014 to the Exchange titled "M/s. Hinduja Tech Limited - HTL (formerly Defiance Technologies Limited) a Wholly Owned Unlisted Subsidiary (WOS -100%) of Ashok Leyland Limited (AL), has now become a Subsidiary Company. To unlock value, HTL has roped in a strategic investor to subscribe to the equity share capital of the Company. Consequent to the allotment of equity shares to the strategic investor, the holding of AL now stands at 68%."
Ashok Leyland clarified that the error in the percentage of holding [post dilution of equity in Hinduja Technologies Limited (HTL)] as 62%, instead of 68% was purely a typographical error and not otherwise. Hence, the company had filed the revised disclosure on time well before the market opened for the next day (25 November 2014).
Regarding non-disclosure of details about consideration received, the company stated that it has not received any consideration. The equity stake of Ashok Leyland has been brought down from 100% to 62%, consequent to allotment of further shares (preferential issue) in Hinduja Tech. The proceeds of the fresh issue were received by HTL (which is an unlisted subsidiary of AL), the company added.
Just Dial will be in focus as the ceiling on investment in the company's shares by foreign institutional investors (FIIs)/registered foreign portfolio investors (RFPIs) has been raised to 75% of its equity capital from 49% earlier. The Reserve Bank of India (RBI) issued a notification in this regard yesterday, 27 November 2014. Just Dial has already passed resolutions at its board of directors' level and a special resolution by the shareholders agreeing for enhancing the limit for the purchase of its equity shares and convertible debentures by FIIs, the RBI said. Total holding of FIIs in Just Dial stood at 26.64% as on 30 September 2014.
Cox & Kings said that a committee of board has decided to allot 3.27 crore equity shares of face value Rs 5 each at Rs 305 per share (including a premium of Rs 300 per share), aggregating to Rs 1000 crore.
Suven Life Sciences said its qualified institutional placement (QIP) opened on Thursday, 27 November 2014. The floor price for the QIP issue is Rs 201.38 per share. The company may offer a discount of not more than 5% on the floor price.
Poddar Developers after market hours yesterday, 27 November 2014 said that its board of directors will meet on 5 December 2014, to consider various fund raising options.
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