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Showing posts from November 25, 2017

RBI order may bump up ARCs valuations

RBI order may bump up ARCs valuations The Reserve Bank of India’s (RBI’s) dispensation to allow asset reconstruction companies (ARCs) to hold more than 26 per cent stake in distressed assets might bump up the valuations of the ARCs for foreign investors The rule puts ARCs in a commanding position in deciding how an asset resolution should happen, something they could not do so far because of their limited shareholding. Technically, the latest rules give ARCs freedom to become owners of the stressed firm and drive the resolution process “We will now have better level of control and more say in how the company concerned should be operated,” said Vinayak Bahuguna, managing director and chief executive officer of Asset Reconstruction Co of India (ARCIL). “Moreover, it gives ARCs the ability to maximise returns by increasing shareholding and selling the stake off in case a company turns around.” The central bank, in a notification on its website on Thursday, did not specify an upper limit that…

Govt fixes sovereign gold bond rate at Rs 2,961/g

Govt fixes sovereign gold bond rate at Rs 2,961/g The price of new series of sovereign gold bonds (SGBs) opening on Monday has been fixed at Rs 2,961 per gram, the Reserve Bank of India said on Friday.The government, in consultation with the Reserve Bank of India, has decided to offeradiscount of Rs 50 per gram to investors applying online and making payments digitally.“For the subscription period from November 27, 2017, to November 29, 2017,the nominal value of the bond based on the simple average closing price for gold of 999 purity of the last three business days of the week preceding the subscription period (November 22 to 24) works out to Rs 2,961,” the RBI said in a statement. The Business Standard, New Delhi, 25th November 2017

Aadhaar can reduce bank fraud

Aadhaar can reduce bank fraud There has been Rs 3 billion loss in the past year due to fraud in the banking sector and the linking of bank accounts with Aadhaar can drastically reduce such frauds, said A.B. Pandey, chief executive officer of Unique Identification Authority of India ( UIDAI) on Friday, while speaking at the fifth Global Conference on Cyber Space (GCCS) in the national capital. The Business Standard, New Delhi, 25th November 2017

Promoters loss is PEs gain

Promoters  loss is PEs  gain Private equity (PE) players are getting ready to bid for stressed assets, which they expect to bag at attractive valuations after an ordinance amended the Insolvency and Bankruptcy Code (IBC). The ordinance has practically barred most promoters of the defaulting companies from bidding for their assets in the bankruptcy auction.

PE players have raised distressed assets funds totalling over Rs 4 billion in the past two years, sensing an opportunity in the increasing number of bad assets in the banking system.

These include a Rs 1.04 billion fund raised by Brook field and SBI in July 2016 anda Rs 1 billion fund raised by Piramal Group and Bain Capital in August 2016.

The change in the IBC comes at a time when 11 of the 12 cases mandated by the Reserve Bank of India (RBI) for early bankruptcy proceedings are in an advanced stage of auctioning assets.

"One can expect that prices that would be realised through these auctions may be on the lower side now," s…