Forex reserves hit record high at $359.917 bn

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India’s foreign exchange reserves continue to rise to hit a record level of $359.917 billion as on April 8, data from the Reserve Bank of India (RBI) show.

India’s foreign exchange reserves continue to rise to hit a record level of $359.917 billion as on April 8, data from the Reserve Bank of India (RBI) show.

The central bank data show that in the week-ended April 8, India’s forex reserves rose by $157.40 million from the previous week.

As on April 8, foreign currency assets (FCA), which forms a key component of the reserves rose by $159.3 million from the previous week to $335.845 billion. FCA are maintained in major currencies like US dollar, euro, pound sterling, yen, etc. However, the foreign exchange reserves are denominated and expressed in US dollar only.

The movements in the FCA occur mainly on account of purchase and sale of foreign exchange by the RBI in the foreign exchange market in India, income arising out of the deployment of the foreign exchange reserves, external aid receipts of the central government and revaluation of the assets.

Gold reserves, however, remained unchanged at $20.115 billion. Special drawing rights (SDR) from the International Monetary Fund fell by $0.90 million from the previous week to $1.501 billion.

SDR is an international reserve asset created by IMF and allocated to its members in proportion of the members’ quota at IMF. The country’s reserve position in the IMF, however, fell by $1 million to $2.455 billion.

Source: http://www.financialexpress.com/article/industry/banking-finance/forex-reserves-hit-record-high-at-359-917-bn/237598/

Lending for small companies is a $300 million business

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While bigger SME lending players like Lending Kart and Capital Float aim to close their next funding rounds, a slew of smaller players have emerged in the last year viewing the space as a segment where at least 10 strong players can coexist.

Amongst the new players, Puneet Dalmia-backed CoinTribe, which was launched in February, uses a proprietary algorithm to link up multiple data sources ranging from the credit bureau to social media determining the credit worthiness of an SME within minutes. The startup has tied up with private sector banks that use their platforms to process SME loans.

“Our ticket size for loans range between Rs 30,000 to Rs 20 lakh. We offer an interest rate of 13-18% and receive upto 30 applications on a daily basis,” said Amit Sachdev, cofounder at CoinTribe. The fintech player has an acceptance rate ranging between 25 and 30% for all of its applicants.

Tracxn Labs-backed LoanZen has not tied up with any banking partners yet and focuses on disbursing its loans from the capital raised in its first round. The startup, which claims that it receives up to 20 applications daily, offers loans up to Rs 10 lakh at an interest rate, ranging between 18 to 24%.

“We aim to complete the credit risk evaluation in a matter of minutes and disburse loans within 3 days. Since sectors like kirana stores and budget hotels cannot avail of loans from traditional banks, there is a lot of room for several players to emerge in this space,” said Madhu Sudhan, cofounder of LoanZen. The startup uses an artificial intelligence-based system to carry out the credit risk evaluation and looks at parameters like bank, taxation and accounting data. LoanZen claims to have disseminated loans up to Rs 50 lakh in the month of March.

According to Gaurav Hinduja, the co-founder of Capital Float, SME lending is a very deep vertical in India, despite banks and NBFC’s lending approximately $150 billion to this sector.

The unmet need is still over $300 billion and at least 20% of this can be tapped by new age tech lenders.

“It’s definitely not a winner take all market and we will see several startups attacking different niches in the market. We are likely to see at least 10x growth in fintech alternate lenders. There will also be a growing number of interesting partnerships between institutions and new fin tech lenders,” added Hinduja. Abhishek Goyal, the founder of Tracxn, believes that despite several players entering the SME lending sector, few will survive the current funding climate.

Source: http://economictimes.indiatimes.com/articleshow/51818398.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst

Sebi may soon revisit start-up listing norms

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The Securities and Exchange Board of India (Sebi) may soon review its framework for listing of start-ups, including e-commerce firms, while incorporating suggestions from various stakeholders to make this platform much more vibrant.

The Institutional Trading Platform (ITP) is yet to see any start-up listing ever since an easier set of compliance and disclosure requirements was notified in August 2015.

These norms have been put in place to encourage Indian start-ups and entrepreneurs to remain within the country rather than go abroad for funds.

Under the rules, start-ups can list on the separate ITP of stock exchanges such as BSE and NSE.

The platform is open to only institutional investors and high networth individuals (HNIs), while retail investors have been excluded in order to safeguard small investors against a higher level of risks associated with this platform.

Many start-ups believe that the current listing norms are unattractive for them to list in India. Moreover, not a single company got listed on the relaxed ITP platform.

Now, Sebi is likely to review the ITP norms soon. It will also incorporate suggestions from various stakeholders to make this platform much more vibrant, sources said.

Sebi’s Primary Market Advisory Committee (PMAC) has also suggested that norms should be reviewed as the matter progresses.

Under the notified rule, minimum trading lot and the minimum application size have been kept at Rs 10 lakh so that only sophisticated and large investors come in.

For their listing, Sebi also relaxed the mandatory lock-in period for promoters and other pre-listing investors to six months, as against three years for other companies.

Besides, the disclosure requirements for these companies have been relaxed.

The companies can, however, graduate to the main platform later and the small investors can also invest at that time.

Earlier this month, Infibeam Incorporation made a stock market debut becoming the first e-commerce player in the country to get listed. The firm got listed on the main-board instead of institutional trading platform.

Source: http://www.business-standard.com/article/markets/sebi-may-soon-revisit-start-up-listing-norms-116041500531_1.html

Fund raising via rights issue hits 5-yr high of Rs 9,239-cr

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Indian firms raised a staggering Rs 9,239 crore through rights issue in the past fiscal, making it the highest fund mobilisation in five years.

The huge fund-raising was primarily driven by Tata Motors’ rights issue.

Most of the funds were mopped-up for expansion, repayment of debt and working capital requirements.

In the rights issue mode, shares are issued to existing investors at a pre-determined price, normally at a discount, in proportion to their holdings.

Companies garnered Rs 9,239 crore in the past fiscal, which was 37 per cent higher than Rs 6,750 crore raised in the preceding financial year, according to an analysis.

This was the highest fund-raising since 2010-11 , when firms had raked in Rs 9,594 crore.

In terms of number, the past fiscal witnessed 12 companies using the rights route as compared to 17 firms in 2014-15.

The largest rights issue during the period was from Tata Motors which alone raked in Rs 7,498 crore.

It was followed by IL&FS Transportation (Rs 740 crore), Sun Pharma Advanced (Rs 250 crore) and Fortune Financial Services (Rs 204 crore).

Source: http://www.business-standard.com/article/pti-stories/fund-raising-via-rights-issue-hits-5-yr-high-of-rs-9-239-cr-116040800804_1.html

Korn Ferry to help Indian start-ups

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Stephen Kaye, CEO of Korn Ferry Hay Group

US-based global management consultancy giant Korn Ferry Hay Group has embarked on an ambitious plan to support for free 100 start-ups from India that have potential to grow big, its CEO Stephen D Kaye said on Friday.

Talking about the group’s ambitious NextBig100 programme, Kaye said it is supporting the next big-100 start-ups in India and would help them as they go through various growth stages.

“We are working alongside those companies to help them move forward and to support the development of business in India.”

Source: http://www.thehindubusinessline.com/companies/korn-ferry-to-help-indian-startups/article8451964.ece

Companies raise Rs 48,952 crore via various instruments in FY16

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Despite stock market volatility and a negative return of 9.4 per cent from the Sensex, 2015-16 saw good participation in new equity issuances and companies raised a total of Rs 48,952 crore through various instruments, says a report.

“In financial year 2015-16, a total of Rs 48,952 crore was raised through various equity market instruments including initial public offers, qualified institutional placements, follow-on public offers and offers-for-sale,” a report by Centrum Wealth Research said today.

This was, however, lower than Rs 58,801 crore raised in fiscal 2015.

IPOs garnered Rs 14,772 crore in fiscal 2016, a massive leap from Rs 2,769 crore raised in the previous fiscal.

Money raised through QIPs stood at Rs 14,438 crore, lower than Rs 29,102 crore in the last fiscal, but rights issues raised Rs 8,785 crore, a 30 per cent jump from Rs 6,750 crore in FY15.

Despite the turmoil, the BSE IPO index performed relatively better than the benchmark Sensex. In 2015-16 fiscal, the Sensex shed more than 9 per cent, while the BSE IPO index was down only 1.8 per cent.

“While the year was good in terms of quantum of money raised and out performance of the IPO index, it turned out to be a mixed bag in terms of individual stock performances,” the report titled ‘Performance of New Equity Issues in FY16’ said.

Shree Pushkar Chemicals was the biggest gainer with an over 100 per cent return from its offer price, followed by VRL Logistics which gained 81 per cent.

Dr Path Labs, Syngene and Manpasand Beverages were all up 45-65 per cent each. Amongst the key drags were MEP Infra, UFO Moviez, Quick Heal and Coffee Day, that were down 30-40 per cent each.

“Even though new equity issuances witnessed robust participation in FY16, the Indian IPO market had to go through a slump at the start of 2016. This was in line with global IPO activity, which saw a sharp drop in Q1, 2016 led by worldwide economic slowdown,” the report added.

On the future outlook, the report co-authored by Sweta Chawla and Siddhartha Khemka said, “Central banks across the world are likely to maintain an accommodative monetary policy through the year and that should help check global market volatility. Earnings are expected to show an improvement in the second half of the year.

“A lot will depend on monsoon though. An overall positive market sentiment will keep the interest alive in primary market issuances and we could see lot more money raising.”

Source: http://economictimes.indiatimes.com/articleshow/51648033.cms

Private sector lender Federal Bank to support startups

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Jumping on to the startup bandwagon, Kerala based private sector lender Federal BankBSE -1.38 % is opening incubation centres in Bangalore and Ernakulam exclusively for startups. These would be specialised lounges within Federal Bank branches meant for funding advisory, regulatory support and if required even for direct investment.

“We have a dedicated startup fund worth Rs 25 crore which we would like to use to fund or lend to promising startups. These lounges, named Launchpad, with fast internet connections, support staff from the financial world and advisory mechanisms would be the perfect breeding ground for future entrepreneurs,” said Shyam Srinivasan, managing director, Federal bank.

The lounge would be manned by bank officers who would be capable of dealing with the financial requirements of the startups as well as local specialists who would be able to advise on regulatory issues that entrepreneurs need to handle.

“We are talking to 3 or 4 startups daily. The challenge for a bank is to move away from a conservative credit mind set to a more entrepreneurial mind set and to accept the fact that out of 40 or 50 investments only one might take off. So even we are in the process of understanding how to engage with startups better,” he said.

The bank follows the footsteps of HDFC Bank and Bank of Baroda to integrate their platform with mobile payments application Chillr. The addition that Federal Bank brings to the Chillr app is that they would allow even non Federal Bank users to instantly open a Federal Bank account through a selfie and Aadhar identification number and allow them to receive payments through Chillr.

“This is just another offer in the suite of offerings for the customer. We are in the major discovery process slowly there would be convergence in this field,” said Srinivasan.