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March 14th 2017: Fairfax will need to sell 25% in ICICI Lombard for second licence

Fairfax will need to sell 25% in ICICI Lombard for second licence:

Prem Watsa-owned Fairfax may have to reduce its stake in ICICI Lombard to get a second licence in the general insurance segment, the Insurance Regulatory and Development Authority (Irda) said.

When asked whether Fairfax will have to sell stake in ICICI Lombard to float another insurance company, TS Vijayan said chairman Irda said, “As per law they can promote only one insurance company. As a investor they can continue with less than 10% stake.”

Fairfax has applied a second licence to form a fresh joint venture in general insurance with Kamesh Goyal, a former executive at German financial services major, Allianz. As per the application, different entities of Fairfax will own close to 45% in the joint venture. Goyal will have a 15% stake and Oben Ventures will hold the rest.

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March 14th 2017: Tata Sons raises Rs 4,115 crore via NCDs since Cyrus Mistry’s removal

Tata Sons raises Rs 4,115 crore via NCDs since Cyrus Mistry’s removal:

Tata Sons, the holding company of the $103-billion conglomerate, raised Rs 4,115 crore by selling bonds to marquee local investors since removing Cyrus Mistry as chairman in October, regulatory filings with the ministry of corporate affairs show.

Tata Sons plans to use the funds raised for general corporate purposes, including refinancing of debt and investment in securities or providing loans to group companies, it said in a board resolution passed on September 15. The board approved raising not more than Rs 6,750 crore at “prevalent market rates in appropriate forms” in Indian or foreign currency in one or more tranches.

The funds were raised from December 14 to March 6. Tata Sons declined to comment. “We do not share information on such matters,” a Tata Sons spokesperson said in an emailed reply to ET. “From time to time, Tata Sons raises funds as part of its on-going activities.”
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March 6th 2017: Reliance General signs bancassurance deal with Catholic Syrian Bank

Reliance General signs bancassurance deal with Catholic Syrian Bank :

Non-life insurer Reliance General Insurance — part of Reliance Capital Ltd — on Wednesday said it has signed a bancassurance deal with private-owned Kerala-headquartered Catholic Syrian Bank.

In a statement, Reliance General Insurance said it would target the 1.5 million-strong customer base of Catholic Syrian Bank spread across its 430 branches in Kerala, Tamil Nadu and Maharashtra.

“We are delighted to partner with Catholic Syrian Bank. This tie-up will enable RGI (Reliance General Insurance) to leverage Catholic Syrian Bank’s unparalleled retail and SME (small, medium enterprises) customer base, robust distribution network, strong technology platform, strong brand name and offer them innovative and comprehensive range of insurance products from RGI,” Rakesh Jain, CEO, Reliance General Insurance, was quoted as saying in the statement.

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March 3rd 2017: Carlyle, Warburg, Advent vie for ICICI Lombard stake

Carlyle, Warburg, Advent vie for ICICI Lombard stake:

Global private equity (PE) firms including The Carlyle Group, Warburg Pincus Llc and Advent International have evinced interest in acquiring the 35% stake in ICICI Lombard General Insurance Ltd held by Canadian financial institution Fairfax Financial Holdings Ltd, said two people aware of the development. The proposed deal will value the joint venture at $3 billion (around Rs20,000 crore), the two added, asking not to be identified.

ICICI Bank Ltd holds the remaining 65% stake in the joint venture.

ICICI Lombard, India’s largest private-sector general insurer, was set up in 2001 as a 74:26 joint venture between India’s largest private-sector lender ICICI Bank and Prem Watsa-owned Fairfax. Fairfax increased its stake in 2015 after ICICI Bank agreed to sell an additional 9% stake in its general insurance company for about Rs1,550 crore, valuing it at Rs17,225 crore.

ICICI Lombard has an overall market share of 8.82%. Reuters reported on 20 January that Blackstone Group and KKR and Co. were in talks with Fairfax for the stake sale. Mint learns that both have backed out on account of the high valuation of ICICI Lombard.

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February 27th 2017: Bharti Airtel to acquire Telenor India

Bharti Airtel to acquire Telenor India

Bharti Airtel on Thursday said it will buy Telenor India in a further indication of the consolidation underway in telecom as a result of Reliance Jio shaking up the sector with its pricing and deep pockets.

The deal will give Airtel more spectrum and marketshare to take on Mukesh Ambani’s Reliance Jio, a serious challenger to its number one position.

Although both Bharti Airtel and Telenor India did not disclose the deal size, analysts’ reports and internal company sources said it could be in the range of ₹1,500-1,800 crore.

“The Airtel-Telenor merger is a strong consolidation move by Airtel to counter not only the unlimited offers given by Reliance Jio but also to silence the hype around the Vodafone-Idea merger to become the largest telecom company,” said Kapil Nayyar of International Business Advisors.

Telenor India’s operations and services will continue as normal until the completion of the transaction, expected by the first quarter of the next financial year (between April and June).

“The decision to exit India has been taken after thorough consideration. It is our view that significant investments are needed to secure Telenor India’s future business, as on a standalone basis it will not give an acceptable level of return,” said Sigve Brekke, Chief Executive Officer of the Telenor Group.

Telenor will receive zero cash and hand over the business on a debt-free basis to Airtel (refinancing the outstanding local debt first). Airtel would also take on the residual future liabilities, including around Norwegian Krone (NOK) 2 billion of spectrum and NOK 5 billion in lease obligations.

As part of the agreement, Airtel will acquire Telenor India’s running operations in seven circles — Andhra Pradesh, Bihar, Maharashtra, Gujarat, Uttar Pradesh East and West, and Assam.

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February 27th 2017: Hero FinCorp discloses Rs 1000 Cr fundraising plan

Hero FinCorp discloses Rs 1000 Cr fundraising plan


Hero FinCorp, the retail lending arm of Hero MotoCorp, has unveiled its plans to raise Rs 1,000 crore in a fresh round of funding from private equity (PE) investors.

Singapore investment firm, Temasek Holdings Pvt. Ltd., and India-focused PE fund, ChrysCapital LLC are in the final stages of talks with Hero FinCorp.

Hero FinCorp’s promoters may sell about 20-25% stake for $100-120 million. The funded amount will be used for expansion of business and diversification to non-organic areas. As part of the deal, Hero FinCorp could dilute partial stake for raising this money.

Currently, Hero MotoCorp has 40% stake in Hero FinCorp.

The non-banking finance company (NBFC) has a presence at over 1,000 retail financing touch-points across Hero MotoCorp’s network and has partnered with more than 200 satisfied corporate clients.

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February 16th’ 2017: Fino Paytech to launch payment bank, targets high domestic remittance areas

Fino Paytech to launch payment bank, targets high domestic remittance areas

Fino Paytech to launch payment bank in Maharashtra, Madhya Pradesh, Uttar Pradesh and Bihar with 400 branches in the initial phase

New Delhi: In an attempt to expand their consumer base and carve out their own individual identity , Fino Paytech—one of the entities to receive in-principle approval from the Reserve Bank of India (RBI)—will focus on areas having maximum domestic remittances to extend its banking services.

Fino, which is expected to launch its payment bank operations soon, will provide services like basic banking products such as withdrawal and deposits as well as third-party products like insurance and remittances while continuing to serve their primary responsibility of a technology-solution provider and banking correspondent (BC) to other banks.

With a target of opening 400 bank branches across 30 cities on its opening day, Fino will also provide the basic services of account opening and cash withdrawal in additional 15,000 access points outside these branches.

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January 4th 2017: Hero Group’s Sunil Munjal eyes stake in Paytm at $5.7 bn valuation

Hero Corporate Services chairman Sunil Munjal and Adventz Group chairman Saroj Poddar are reportedly looking to buy a stake in digital wallet and e-commerce firm Paytm.

Munjal and Poddar are together negotiating to buy Paytm shares from early investor and former IDFC Securities analyst Nikhil Vora, The Economic Times reported citing two people aware of the development. Vora holds a 0.35% stake, or 1.6 lakh shares, in Paytm.

The duo will buy Rs 50 crore worth of stake at Rs 8,000 per share, the report said.

However, the Press Trust of India reported, citing an Adventz group executive, that merchant bankers had approached the group to buy a stake in Paytm but it declined the offer due to valuation concerns.

Vora may be selling just under half of his stake in this transaction. The deal, if it goes through, will value Paytm around $5.7 billion (Rs 38,800 crore), according to Techcircle estimates.

Email queries to Munjal and Paytm founder Vijay Shekhar Sharma did not elicit any response till the time of filing this article.

Hero Corporate Services is the insurance redistribution and IT services arm of the Hero Group. Adventz Group comprises companies that make chemicals and fertilisers, build rail wagons, provide engineering services, manufacture furniture and offer financial services.

The reported development comes barely a month after Paytm founder Sharma sold a 1% stake in the digital wallet’s parent firm One97 Communications Ltd to raise nearly $48.1 million (Rs 325 crore) to fund the proposed payments bank.

The company is awaiting final approval from the Reserve Bank of India for the launch of its payments bank, to be run by Paytm Payments Bank Ltd.

In its last funding round in August, Paytm had raised $60 million (Rs 403 crore) from Taiwanese chipmaker MediaTek Inc.’s Mountain Capital fund. Paytm, backed by Chinese e-commerce titan Alibaba Group, had issued shares at Rs 6,650 each at the time, valuing it at $4.8 billion (Rs 32,250 crore) post money.

One97 posted a loss of Rs 1,548 crore for the financial year ended March 2016 on revenue of Rs 830 crore, and there is no likelihood of the tide turning this year as it continues to spend to grow its wallet business. Paytm spent nearly Rs 2,046 crore in acquiring customers in 2015, and had set aside an additional Rs 500 crore for its marketing spends for 2016 alone.

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.


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.


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.



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

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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.

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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 !!

Sept 20′ 2016: Fino PayTech has set a target of attaining an AUM of Rs 1000 crore

Fino PayTech has set a target of attaining an AUM of Rs 1000 crore

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