nipoplansn hdfclifefilesdraft paperwithsebiforipo · hdfc holds 61.5 per cent in the life insurance...

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NEW DELHI | 19 AUGUST 2017 FINANCE 3 . < ABHIJIT LELE Mumbai, 18 August H DFC Standard Life Insurance Company (HDFC Life) has filed a draft red herring prospectus with the Securities Excha- nge Board of India (Sebi) for an Initial Public Offer of 299.8 million shares. Housing Development Finance Corporation (HDFC) plans to offload up to 191.2 million shares (9.57 per cent stake) and Standard Life, its joint venture insurance company, will sell up to 108.6 million shares (5.43 per cent stake) through the public offer, according to the prospectus. HDFC holds 61.5 per cent in the life insurance company. Standard Life, the UK-based foreign partner, holds 35 per cent. Merchant bankers for HDFC Life IPO’s include Morgan Stanley, HDFC Bank, Credit Suisse and Nomura. According to the draft prospec- tus, the embedded value of HDFC Life was ~12,470 crore at the end of March 2017, up from ~10,232 crore at the end of March 2016. As on June 30, its embedded value was pegged at ~13,220 crore. It had a net worth of ~4,150 crore and a solvency ratio of 197.5 per cent on June 30, 2017, above the minimum 150 per cent solvency ratio required under the Insurance Regulatory and Development Authority of India (Irdai) rules. After Irdai rejected the initial structure of merger between HDFC Life and Max Life, the board of HDFC Life decided to go ahead with their listing plans as no other alternative structure was in place. Moreover, Standard Life had expressed appre- hension of a new structure’s viability and stated its intent to go for a listing at the earliest opportunity. For the financial year ended March 31, 2017, HDFC Life posted a gross pre- mium income of ~19,445 crore and the profit after tax stood at ~892 crore and its net worth stood at ~3,839 crore. HDFC Life files draft paper with Sebi for IPO ABHIJIT LELE Mumbai, 18 August Andhra Pradesh Grameena Vikas Bank (APGVB), a regional rural bank sponsored by State Bank of India, is looking to raise ~600-800 crore by issuing fresh equity shares through an Initial Public Offer (IPO). V Narasa Reddy, chairman, APGVB, said the bank was comfort- able on the capital front, with a capital adequacy ratio (CAR) of 14 per cent but it would need extra capital to support growth plans over the next five years. The lender would like to expand the branch network and asset book as well as make invest- ments to upgrade technology. Besides retained earnings, it would need injec- tion of funds (equity) to finance expansion and strengthen capital base. These plans are subject to regu- latory clearances, Reddy said. The bank’s CAR strengthened to reach 14.05 per cent at the end of March 2017, from 13.48 per cent a year ago, well above the level of minimum nine per cent stipulated by the K C Chakrabarty committee. SBI has indicated it plans to list two regional rural banks (RRBs) sponsored by it in the next one year. Besides APGVB, SBI plans to list Rajkot-based Saurashtra Gramin Bank. The RRB Act was amended in 2015, allowing these banks to raise capital from sources other than the Centre, the state government and sponsor banks. In such a case, the combined shareholding of the central govern- ment and sponsor bank cannot be less than 51 per cent. National Bank for Agric- ulture and Rural Developm- ent, which supervises RRBs, is yet to issue guidelines for raising capital from the market. Reddy said the bank’s deposits grew 25.65 per cent (from ~2,616.46 crore) to reach ~12,818.58 crore. The share of low-cost deposits — current and savings accounts — increased from 36.60 per cent in March 2016 to 41.04 per cent in March 2017. The cost of deposits declined from 7.62 per cent (March 2016) to 6.89 per cent in March 2017. Advances rose by 16.66 per cent (~1,766.76 crore) to reach ~12,368.53 crore in March 2017. Out of it, credit to agriculture and allied activities, including agriculture-portion of self- help group lending, stood at ~8,403.85 crore. AP Grameena Vikas Bank to raise up to ~800 crore ANUP ROY Mumbai, 18 August ICICI Bank the country’s largest private sector lender and, one of its public sector peer Union Bank of India reduced their savings bank rates by 50 basis points on Friday, expanding the num- ber of banks that have cut their savings rates in recent times. State Bank of India (SBI) started the trend on July 31 with a cut of 50 basis points on savings deposits. Bank of Baroda, Punjab National Bank, HDFC Bank, Axis Bank, YES Bank and now Union Bank and ICICI Bank have also cut to match competition. But, the baskets are different for dif- ferent banks. For example, SBI reduced its savings rate to 3.5 per cent for deposits up to ~1 crore. For ICICI Bank, the cut is effective for deposits up to ~50 lakh. Beyond ~50 lakh, savings bank remain at four per cent. In case of Union Bank, the cut in savings rate would be appli- cable for deposits up to ~25 lakh. For deposits above ~25 lakh, the rates continue to remain at four per cent. ICICI, Union Bank cut savings rate AVISHEK RAKSHIT & ISHITA AYAN DUTT Kolkata, 18 August The National Company Law Tribunal (NCLT) has rejected an appeal by Usha Martin’s ousted chairman, Prashant Jhawar (pictured), board member Basant K Jhawar, and other promoter shareholders to stay a board meeting sched- uled for Saturday. The meeting is about infusing fresh capital into the company. In a filing with the Bombay Stock Exchange, the company said the promoters, including Usha Martin Ventures Ltd and Peterhouse Investments India Ltd, had moved the Kolkata Bench of the NCLT on Thursday, seeking the appointment of a special officer or administrator to supersede the current board as well as prevent the company from infusing fresh equity. Debanjan Mandal, partner, Fox & Mandal, the solicitor firm representing Usha Martin, said the NCLT had, on Friday, declined to stay the board meeting. “After hearing the parties at length, the Bench did not pass any order of stay on the board meeting or any resolu- tion or agenda item proposed to be taken up at the board meeting scheduled on August 19,” he said. The bench has directed the applicant and the respondent to maintain the status quo on their shareholding pattern in the company. The resolution to be pro- posed at the board meeting on Saturday will be over infusing ~90 crore in the company by issuing convertible equity war- rants and will not alter the share- holding pattern of the parties concerned and is only a propos- al to allot shares to the promot- ers and promoter group entity. It implies that Prashant Jhawar, who continues to be on the board despite losing his chairmanship, and Rajeev Jhawar, the company’s manag- ing director, will infuse ~45 crore each into the company. In case the proposal for cap- ital infusion is passed, the share- holders of the company will have to approve the resolution at a general meeting. “The infusion of fresh capital is in accordance with a prior agreement reached between the lenders and the promoters. The infusion will help in repayment of loans, besides other things,” Rajeev Jhawar said. In the petition before the NCLT, the Basant-Prashant Jhawar faction had alleged mismanagement at the com- pany by Rajeev Jhawar and oppression of shareholders. Also, this faction of promoters in the company sought to restrain the current manage- ment from selling or disposing of immovable assets or prop- erty of the company. They also alleged that the board meeting convened on April 25 this year, when Prashant Jhawar was removed as chairman, and Basant Jhawar stripped of his powers on the board, was illegal. The same day, in the board meet- ing, GN Bajpai, former chair- man of the Securities and Exchange Board of India, was appointed chairman. NCLT rejects Usha Martin ex-chief’s plea N IPO PLANS N SBI indicated that it plans to list two RRBs sponsored by it in the next one year PRESS TRUST OF INDIA Mumbai, 18 August The Reserve Bank (RBI) will soon introduce new fluores- cent blue ~50 bank notes bearing the motif of ‘Hampi with Chariot’ that depicts India’s cultural heritage. RBI said it would shortly issue these ~50 denomination banknotes in the Mahatma Gandhi (new) series. “The new denomination has the motif of Hampi with Chariot on the reverse, depicting the country’s cul- tural heritage. The base colour of the note is fluores- cent blue,” RBI said in a release. Among others, the new notes will have designs and geometric patterns aligning with the overall colour schemes, both at the obverse and reverse, RBI said. On the obverse/front side, the note will have a portrait of Mahatma Gandhi at the cen- tre, denominational value in Devanagari script, micro let- ters RBI, India — both in English and Devanagari — as well as the numeral ‘50’. The Ashoka pillar emblem will be on the right side of the obverse and an electrotype watermark and the number panel with numerals in ascending order on the top left side and bot- tom right side. The new note having dimensions of 66 mm by 135 mm will bear the year of printing on the reverse side, a Swachh Bharat logo with slo- gan, language panel and the motif of ‘Hampi with Chariot’. “All the banknotes in the denomination of ~50 issued by the Reserve Bank in the earlier series will continue to be legal tender,” RBI added. RBI to issue fluorescent blue ~50 banknotes Embedded value pegged at ~13,220 crore in June

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Page 1: NIPOPLANSN HDFCLifefilesdraft paperwithSebiforIPO · HDFC holds 61.5 per cent in the life insurance company. Standard Life, the UK-based foreign partner, holds35percent. Merchant

NEW DELHI | 19 AUGUST 2017 FINANCE 3. <

ABHIJIT LELEMumbai, 18 August

HDFC Standard Life InsuranceCompany (HDFC Life) hasfiled a draft red herring

prospectuswith theSecuritiesExcha-ngeBoard of India (Sebi) for an InitialPublicOfferof 299.8millionshares.

Housing Development FinanceCorporation (HDFC) plans to offloadup to 191.2 million shares (9.57 percent stake)andStandardLife, its jointventure insurancecompany,will sellup to 108.6 million shares (5.43 percent stake) through the public offer,according to the prospectus.

HDFC holds 61.5 per cent in thelife insurance company. StandardLife, the UK-based foreign partner,holds 35 per cent.

Merchant bankers for HDFC LifeIPO’s include Morgan Stanley, HDFCBank,Credit SuisseandNomura.

According to the draft prospec-tus, the embedded value of HDFCLife was ~12,470 crore at the end of

March 2017, up from ~10,232 crore atthe end of March 2016. As on June30, its embeddedvaluewaspeggedat~13,220 crore.

It had a net worth of ~4,150 croreand a solvency ratio of 197.5 per centonJune30,2017,above theminimum150 per cent solvency ratio requiredunder the InsuranceRegulatory andDevelopment Authority of India(Irdai) rules.

After Irdai rejected the initialstructure of merger between HDFC

LifeandMaxLife, theboardofHDFCLife decided to go ahead with theirlisting plans as no other alternativestructure was in place. Moreover,Standard Life had expressed appre-hensionof anewstructure’s viabilityandstated its intent togo for a listingat the earliest opportunity.

ForthefinancialyearendedMarch31, 2017,HDFCLifepostedagrosspre-miumincomeof~19,445croreandtheprofit after tax stoodat ~892 crore anditsnetworth stoodat ~3,839crore.

HDFC Life files draftpaper with Sebi for IPO ABHIJIT LELE

Mumbai,18August

Andhra Pradesh Grameena VikasBank (APGVB), a regional rural banksponsored by State Bank of India, islooking to raise ~600-800 crore byissuing fresh equity shares throughan InitialPublicOffer (IPO).

V Narasa Reddy, chairman,APGVB, said the bank was comfort-able on the capital front,with a capital adequacyratio(CAR)of14percentbutit would need extra capitalto support growth plansover thenext fiveyears.

The lenderwould liketoexpandthebranchnetworkandassetbookaswellasmakeinvest-mentstoupgradetechnology.Besidesretainedearnings,itwouldneedinjec-tion of funds (equity) to financeexpansion and strengthen capitalbase.Theseplansare subject to regu-latoryclearances,Reddysaid.

The bank’s CAR strengthened toreach 14.05 per cent at the end ofMarch2017, from13.48percentayearago,wellabovethelevelofminimumnine per cent stipulated by the K CChakrabartycommittee.

SBI has indicated it plans to listtwo regional rural banks (RRBs)

sponsoredby it in thenext oneyear.Besides APGVB, SBI plans to listRajkot-based Saurashtra GraminBank.

TheRRBActwasamendedin2015,allowing these banks to raise capitalfrom sources other than the Centre,the state government and sponsorbanks. In such a case, the combinedshareholding of the central govern-mentandsponsorbankcannotbeless

than51per cent.NationalBankforAgric-

ultureandRuralDevelopm-ent,whichsupervisesRRBs,is yet to issue guidelines forraising capital from themarket. Reddy said thebank’s deposits grew 25.65

percent(from~2,616.46crore)toreach~12,818.58crore.Theshareoflow-costdeposits — current and savingsaccounts—increasedfrom36.60percentinMarch2016to41.04percentinMarch 2017. The cost of depositsdeclined from 7.62 per cent (March2016) to 6.89 per cent in March 2017.

Advances rose by 16.66 per cent(~1,766.76 crore) to reach ~12,368.53crore inMarch 2017. Out of it, creditto agriculture and allied activities,includingagriculture-portionofself-help group lending, stood at~8,403.85 crore.

APGrameenaVikasBankto raiseup to~800crore ANUP ROY

Mumbai,18August

ICICI Bank the country’slargest private sector lenderand, one of its public sectorpeer Union Bank of Indiareduced their savingsbank rates by 50 basispoints on Friday,expanding the num-berofbanks thathavecut their savings ratesin recent times.

State Bank of India (SBI)started the trend on July 31with a cut of 50 basis pointson savings deposits. Bank ofBaroda,PunjabNationalBank,HDFC Bank, Axis Bank, YES

Bank and now Union BankandICICIBankhavealsocuttomatch competition. But, thebaskets are different for dif-ferent banks.

For example, SBI reducedits savings rate to 3.5 per cent

fordepositsupto~1crore.For ICICIBank, the cutis effective fordeposits up to~50 lakh. Beyond~50 lakh, savings bank

remain at four per cent.IncaseofUnionBank, thecutinsavings ratewouldbeappli-cable for deposits up to~25 lakh. For deposits above~25 lakh, the rates continue toremain at four per cent.

ICICI,UnionBankcutsavingsrate

AVISHEK RAKSHIT &ISHITA AYAN DUTTKolkata,18August

The National Company LawTribunal (NCLT) has rejectedan appeal by Usha Martin’sousted chairman, PrashantJhawar (pictured), boardmemberBasantKJhawar, andother promoter shareholdersto stayaboardmeeting sched-uled for Saturday.

The meeting is aboutinfusing fresh capital into thecompany.

In a filing with the BombayStock Exchange, the companysaid the promoters, including

Usha Martin Ventures Ltd andPeterhouse Investments IndiaLtd, had moved the KolkataBenchoftheNCLTonThursday,seeking the appointment of a

special officer or administratorto supersede the current boardaswell asprevent the companyfrominfusing freshequity.

DebanjanMandal, partner,Fox & Mandal, the solicitorfirmrepresentingUshaMartin,said the NCLT had, on Friday,declined to stay the boardmeeting.

“After hearing the partiesat length, the Bench did notpass any order of stay on theboard meeting or any resolu-tion or agenda item proposedto be taken up at the boardmeeting scheduledonAugust19,” he said.

Thebenchhasdirected the

applicant and the respondentto maintain the status quo ontheir shareholding pattern inthe company.

The resolution to be pro-posed at the boardmeeting onSaturday will be over infusing~90 crore in the company byissuing convertible equity war-rantsandwillnotaltertheshare-holding pattern of the partiesconcernedandisonlyapropos-al to allot shares to thepromot-ers and promoter group entity.

It implies that PrashantJhawar,whocontinuestobeonthe board despite losing hischairmanship, and RajeevJhawar, thecompany’smanag-

ingdirector,will infuse~45croreeach into thecompany.

Incase theproposal for cap-italinfusionispassed,theshare-holders of the company willhavetoapprovetheresolutionatageneralmeeting.

“Theinfusionoffreshcapitalis in accordance with a prioragreementreachedbetweenthelendersandthepromoters.Theinfusionwillhelpinrepaymentof loans, besides other things,”RajeevJhawar said.

In the petition before theNCLT, the Basant-PrashantJhawar faction had allegedmismanagement at the com-pany by Rajeev Jhawar and

oppression of shareholders.Also, this factionof promotersin the company sought torestrain the current manage-ment fromsellingordisposingof immovable assets or prop-erty of the company.

They also alleged that theboard meeting convened onApril 25 this year, whenPrashant Jhawarwas removedas chairman, and BasantJhawar stripped of his powerson the board, was illegal. Thesame day, in the board meet-ing, GN Bajpai, former chair-man of the Securities andExchange Board of India, wasappointed chairman.

NCLTrejectsUshaMartinex-chief ’splea

N IPO PLANS N

SBI indicatedthat it plans tolist two RRBssponsored byit in the nextone year

PRESS TRUST OF INDIAMumbai, 18 August

The Reserve Bank (RBI) willsoon introduce new fluores-cent blue ~50 bank notesbearing the motif of ‘Hampiwith Chariot’ that depictsIndia’s cultural heritage.

RBI said it would shortlyissue these ~50denominationbanknotes in the MahatmaGandhi (new) series.

“The new denominationhas the motif of Hampi withChariot on the reverse,depicting the country’s cul-tural heritage. The basecolour of the note is fluores-cent blue,” RBI said in arelease.

Among others, the newnotes will have designs andgeometric patterns aligningwith the overall colourschemes, both at the obverseand reverse, RBI said.

On theobverse/front side,thenotewill haveaportrait ofMahatma Gandhi at the cen-tre, denominational value inDevanagari script, micro let-ters RBI, India — both inEnglish andDevanagari—as

well as the numeral ‘50’.The Ashoka pillar

emblem will be on the rightside of the obverse and anelectrotype watermark andthe number panel withnumerals in ascending orderon the top left side and bot-tom right side.

The new note havingdimensions of 66 mm by 135mm will bear the year ofprintingon the reverse side, aSwachhBharat logowith slo-gan, language panel and themotif of ‘HampiwithChariot’.

“All the banknotes in thedenomination of ~50 issuedby the Reserve Bank in theearlier series will continue tobe legal tender,” RBI added.

RBI to issue fluorescentblue ~50 banknotes

Embeddedvaluepeggedat~13,220croreinJune