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December 29: BSE-Promoted CDSL Files Preliminary Papers For IPO

Leading securities depository CDSL, promoted by BSE, on Tuesday filed the draft papers for an initial public offer through which it plans to sell more than 3.5 crore shares.

Four shareholders – BSE, SBI, Bank of Baroda and the Calcutta Stock Exchange – will sell stakes in Central Depository Services (India) Ltd. through the IPO.

A little over 3.5 crore shares would be offloaded through the offer for sale route and out of the total, 7 lakh shares would be reserved for the employees, as per the draft red herring prospectus.

Net offer would constitute 32.98 percent of CDSL’s post offer paid up equity share capital.

BSE, which holds 50.05 percent stake in the entity, is itself preparing to come out with an initial share sale.

Other major shareholders in the company are State Bank of India, HDFC Bank, Standard Chartered Bank, Canara Bank, Bank of India, Bank of Baroda, Life Insurance Corp, Union Bank of India and Bank of Maharashtra.

http://www.bloombergquint.com/markets/2016/12/27/bse-promoted-cdsl-files-preliminary-papers-for-ipo

December 29′ 2016: NSE files draft prospectus for IPO

Bourse intends to offer 111.42 million shares representing 22.5% of post-offer paid up equity

The National Stock Exchange of India (NSE), the country’s largest bourse in terms of market share, has filed a draft prospectus for its proposed initial public offer (IPO).

According to the draft prospectus, the exchange intends to offer 111.42 million shares representing 22.5 per cent of the post-offer paid up equity capital of the company. Media reports suggest that the issue size could be as large as ₹10,000 crore.

This assumes significance as many large shareholders of NSE, including the State Bank of India and other public sector banks, were seeking the public listing of the exchange for quite some time now.

 In the past, shareholders have even written to the board and senior management of the exchange to expedite the listing process so that there would be greater transparency in pricing of shares and exits could be facilitated on the stock exchange platform.

Interestingly, the development comes close on the heels of the exit of its high-profile chief executive officer (CEO) Chitra Ramakrishna, who was also a part of the founding team of the exchange.

According to the draft document, some of the bigger shareholders including Tiger Global, Aranda Investments, Citigroup Strategic Holdings, IDBI Bank, SBI, SAIF Investments, GS Strategic Investments and Norwest Venture Partners would offer their shares for sale as part of the public issue.

http://www.thehindu.com/business/Economy/NSE-files-draft-prospectus-for-IPO/article16955149.ece

December 13′ 2016: Fairfax India to acquire 51 per cent stake in Kerala’s Catholic Syrian Bank

KOCHI: The Catholic Syrian Bank (CSB) on Wednesday confirmed that Canadian billionaire Prem Watsa’s Fairfax India Holdings would acquire 51 per cent stake in the bank. Meeting media in Kochi after the board meeting of the bank at its headquarters in Thrissur, CSB Chairman S Santhanakrishnan said Fairfax India would invest Rs 1,000 crore in the bank and the deal was likely to be closed by March 2017. He said the CSB was not worried about Fairfax acquiring the stake because it will have voting rights only for 15 per cent.

 

“We hope to get in-principle approval from the Reserve Bank of India by December. 90 days is a good time to finish the process. Fairfax had applied to RBI showing willingness to invest up to Rs 1,000 crore in an Indian bank in June. RBI in-turn forwarded the proposal to CSB which conveyed its readiness. It is good to raise money from a single investor instead of looking around for capital,” he said. The Rs 1,000 crore will allow the bank to increase its business by 10 times.

 

“After getting the approval we will appoint an independent evaluator to value the bank. As per my back of envelope calculation, the bank is valued around Rs 1500-2000 crore,” he said.

 

On IPO, he said, it will be more to meet the Regulator’s norm and that could be done somewhere in the end of 2017 or in early 2018. Addressing the concerns raised by LuLu Group MD Yusuff Ali M A, the largest shareholder in the bank, he said neither the headquarters of the bank would be shifted nor its name would be changed. “We will honour our commitments to Yusuff Ali, Thrissur Bishop and the Board of Directors,” he said.  T S Anantharaman will take over as the chairman of the bank from December 1 from Santhanakrishnan. He will continue as director after retirement.

 

http://www.newindianexpress.com/states/kerala/2016/dec/01/fairfax-india-to-acquire-51-per-cent-stake-in-keralas-catholic-syrian-bank-1544381.html

December 8th’ 2016: Paytm launches new payment method for users without Internet

Paytm has announced a toll-free number 1800-1800-1234 to enable consumers and merchants without an internet connection to pay and receive money

To read more, please click on the link below:

http://indianexpress.com/article/technology/tech-news-technology/paytm-launches-new-payment-method-for-users-without-internet-4415066/

 

December 8th’ 2016: ‘Demonetisation drive is a good development for payments banks’

‘Demonetisation drive is a good development for payments banks’

Already seen a spike in digital transactions with wallet players gaining ground in the last few weeks, says Fino Paytech MD

How will the recent demonetisation announcement impact your payments bank plans?

The government’s demonetisation drive is a good development for payments banks as it pushes digitisation. We have already seen the spike in digital transactions with wallet players gaining ground in the last few weeks. Lack of currency led to many people moving to digital transactions. It remains to be seen how many will continue in this digital journey once currency becomes available post-December 30.

The next five to six months would be interesting as there is a need to accelerate our digital footprint as we can see new entities embracing digital payments, such as salaries for workers by SMEs and MSMEs (micro, small and medium enterprises). Even if there is a moderate impact of digitisation in rural areas, it will be a game changer.

How soon do you think you will be able to launch the payments bank and with how many branches initially?

There is a need to improve infrastructure in terms of awareness and training among customers as well as the bank staff, availability of right devices to facilitate digital banking/payment transactions and willingness of people to move into the digital ecosystem.

If all this is in place, then execution will be fast and easy. Regarding our launch plans, we are still awaiting a few approvals, after which we will apply for final licence, which could be around December 2016. After receiving the licence, we will launch in two to three months. Geography-wise our focus will be both urban and rural areas across Maharashtra, UP, Bihar and MP.

How many branches or kiosks are you planning to have in the first year of operations?

We will have 400 payments bank branches spread across urban and rural areas, along with 30,000 to 40,000 transaction points that facilitate banking access. We will have a mix of physical and digital strategy in servicing our customers.

How is Fino planning to generate revenues from this channel given the fact that payments banks are not allowed to lend? What are some of the possible revenue channels?

Payments banks will largely have three avenues to operate and generate revenues: remittances/merchant paybacks; customer deposits (government securities give 7 per cent return and with bank rates to customers at 4 per cent, payments bank can make at least 3 per cent); and through cross-selling third-party products, such as insurance, bill payments, recharges and offering lending services on behalf of banks.

There are reports that your deposit rates will be as high as 14 per cent. Is this sustainable? How are you planning to take deposits at such high interest rates at a time when big banks are currently not able to offer more than 7-7.50 per cent?

That kind of interest is not possible for any payments bank. We plan to stick to the prevailing bank deposit rate of the day.

How many current accounts and savings accounts are you targeting in the first year of operation? What is the target for the next four years? What is the profile of customers you are targeting?

Ten million in the first year and 40-50 million in the next four years. We are looking at all those customers who can be digitally serviced. Interestingly, through the demonetisation move we expect over 500 million people to join the digital bandwagon, of which, a significant portion will be serviced by payments banks.

To read more, please click on the link below:

http://www.thehindubusinessline.com/info-tech/demonetisation-drive-is-a-good-development-for-payments-banks/article9413981.ece

December’ 5th 2016: Demonetization – A growth Driver or a blunder

Demonetzation: Will it decide India’s fate?

Dear Readers,

This is our first independent post. Almost a month has passed and still the whole concept of demonetization is not clear. Supporters of the same are pushing hard to make it a success and opponents are cursing government for this action.

A few scholars had presented their independent views that we support and could be understood in normal parlance:

1. The move is definitely good but is it for curbing the black money in circulation or the cash money that holds back the economy in general? Don’t forget the crisis of 2007-08 when the entire world was bleeding through recession and we somehow managed to sustain.

2. The implementation that we have seen so far by the GOI is very poor. There is lack of infrastructure, sufficient new currency, unclear guidelines for banking and most importantly poor administration and accountability.

3. As stated by Dr. Singh, this move, if not properly managed, will lead to deteriorate the image of the central bank, globally.

4. A few school of thoughts also believed that black money was never present in the form of currency but was parked in other precious assets such as gold, diamonds and land (also). To some extent we also believe in the same. As per an international study, Indians have bought enormous quantities of gold in the past two decades, of which major portion was bullion and not jewelry.

5. There is another point which needs attention. As per the RBI, there was Rs. 14.18 lakh crore in circulation in the form of Rs. 500 and Rs. 1000 notes when its demonetization was announced on November 8th. By 5th of December, it was expected that Rs. 11 lakh crore has already been deposited in the system. With little less than a month left for closure, this raises question whether the whole exercise was needed at all in the first place. PLEASE NOTE: there are two situations here:

a. If there will be more deposits then expected, does it indicate that there was no black money at all ?

b. If there will be more deposits then expected by the central bank (say the total money deposited in the form of banned notes reaches to Rs. 15 lakh crores), who will bear the liability (of Rs. 1 lakh crores apprx).

Its too early to say for its success but we all wish that our country to become a super power on the world map. And all we expect that this shouldn’t turn out to be a mere political gimmick.

Cheers !!

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