by admin | May 25, 2021 | Banking, Corporate, Corporate finance, Economy, Markets, News
By Anjana Das,
New Delhi : IDBI Bank has sounded out its new owner LIC seeking another tranche of up to Rs 12,000 crore to meet its huge provisioning requirements amid mounting losses.
The fresh support is required to cover for non-performing assets (NPAs) in the January-March quarter.
Life Insurance Corporation of India (LIC) completed acquisition of 51 per cent controlling stake in IDBI Bank on January 21. The bank received total capital of Rs 21,624 crore from the insurer in the four-month period prior to formalisation of acquisition.
Recently IDBI and LIC officials met Department of Financial Services senior officials and are said to have taken up the matter of fresh capital infusion. LIC has not commented so far.
In the backdrop of capital infusion from LIC, the bank has achieved regulatory capital requirement as on December 31, 2018, and its common equity tier-1 (CET-1) capital improved to 9.32 per cent as on December 31, 2018, against 6.62 per cent a year ago.
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IDBI Bank Q3 loss has widened threefold to Rs 4,185 crore. Total income decreased to Rs 6,190.94 crore for the quarter, compared with Rs 7,125.20 crore in the corresponding quarter a year ago.
The bank’s gross NPAs shot up to 29.67 per cent of gross advances during the quarter, against 24.72 per cent in the year-ago period. However, net NPAs declined to 14.01 per cent of the total advances, from 16.02 per cent in the December 2017 quarter.
As a result, the bank’s provision for bad loan increased to Rs 5,074.80 crore in Q3, compared with Rs 3,649.82 crore a year ago.
Provisions and contingencies for the September-December period spiked 30 per cent to Rs 4,179.12 crore against Rs 3,205.56 crore in December quarter last fiscal.
Gross bad loans as a percentage of total loans stood at 24.72 per cent at end-December compared with 24.98 per cent in the previous quarter and 15.16 per cent a year ago.
IDBI Bank, with its highest NPAs, had got the maximum Rs 10,610 crore from government last year to maintain regulatory capital in January last year.
(Anjana Das can be contacted at anjana.d@ians.in)
—IANS
by admin | May 25, 2021 | Corporate, Corporate finance, Corporate Governance
The bankruptcy of the infrastructure lending giant IL&FS is a result of poor corporate governance by the BJP Govt: Sanjay Nirupam
By Asmita Jadhav,
Mumbai: Mumbai Congress President Sanjay Nirupam today claimed that PM Modi and Finance Minister Arun Jaitley have been pressurizing the state-owned LIC and SBI to bail out the debt ridden Infrastructure Leasing & Financial Services (IL&FS) with the money which belongs to the common people of the country. He has also demanded a high level probe into this matter in order to investigate the role of multiple BJP Ministers who have been taking advantage of their positions and exploiting IL&FS for their vested interests.
Sanjay Nirupam said, “Being a 30-year old infrastructure lending giant, IL&FS has gone completely bankrupt today. How did the debt of this company jump by 44% and its profitability decline by 900% only in the past 3 years? The entire stock market has shaken in the past 2 weeks over this issue. Despite all, PM Modi and Finance Minister Arun Jaitley have been pressurizing LIC & SBI to pay more money and bail out IL&FS. Largest Public sector financial institution LIC owns maximum stakes i.e. 26.34% stakes in IL&FC. It also has almost 29 Crore policy holders and majority of them are common people. The Govt wants the LIC, along with the largest public sector bank SBI, to spend this money which belongs to the common people only to protect the foreign investors. If the Modi Govt doesn’t stop its trend of using the money belonging to the people only to protect its favourites, we will soon witness a situation like that of the Lehman Brother’s Collapse in the year 2008”.
Mr. Nirupam also raised questions as to why no one is questioning the fact that many board members of IL&FS have resigned from their posts. “The RBI had raised a red flag and pre-emoted this crisis a few years ago. Why did the Financial Ministry refrain from taking any precautionary measures? What is the Govt doing to ensure that none of the members who have resigned become another Nirav Modi or Mehul Choksi”, asked Nirupam.
The Mumbai Congress President demanded a high-level probe in this entire issue requesting an investigation to be conducted on the role played by multiple ministers of the BJP Govt in exploiting IL&FS before it went completely bankrupt.
Infrastructure Leasing & Financial Services (IL&FS) has about $500 Million in repayment. However, the firm has only $27 Million available. It has put its corporate headquarters worth Rs. 1300 Crore on sale, it has also identified almost 25 projects for sale. The firm also plans to sell their assets and bring down the debt by almost 30,000 Crore which comprises of only one-third of the total amount. However, this process will take almost a year while the firm has $500 Million in repayment which are due in the second half of this financial year. As of March 2018, LIC owns 25.34% stakes in IL&FS making them the company’s largest stakeholders. It is followed by Japan’s Orix Corporation which has 23.54% stakes in the company. Abu Dhabi Investment Authority, HDFC, Central Bank Of India & SBI hold 12.56% , 9.02%, 7.67% and 6.42% respectively.
by admin | May 25, 2021 | Business, Corporate, Corporate finance, Corporate Governance, Economy, Finance, Medium Enterprise, News, Politics
New Delhi : The Central government will guarantee the Rs 5,000 crore bond issue by the Indian Railway Finance Corporation (IRFC) to be subscribed by state-run Life Insurance Corporation (LIC) according to an official announcement on Monday.
A Finance Ministry release here said the move will further ease the flow of borrowed funds for the Railways Ministry to undertake projects.
“The Ministry of Finance has approved the Government guarantee of Rs 5,000 crore in the current financial year for the IRFC bonds to be subscribed by the Life Insurance Corporation (LIC),” it said.
The Railways Ministry had signed an MoU with LIC in March 2015 under which the latter is required to provide financial assistance of Rs 1.5 lakh crore for identified projects between 2015 to 2019.
The IRFC has accordingly been raising funds from LIC by issue of bonds having a tenor of 30 years and remitting the same to the ministry for undertaking projects.
However due to exposure limit constraints under the insurance regulator IRDA’s guidelines, LIC has not been able to subscribe to IRFC bonds beyond a certain limit, the statement said.
“In order to overcome the exposure limit constraint, the Ministry of Finance has approved the government guarantee so that LIC can subscribe to the government guaranteed bonds without any limit as per IRDA guidelines,” it said.
The guarantee fee for the amount has also been waived by the ministry, the statement added.
—IANS
by admin | May 25, 2021 | Business, Finance, Investing, Large Enterprise, Markets, News
Chennai : Housing mortgage lender LIC Housing Finance Ltd on Friday said it will be raising about Rs 55,000 crore through issuing non-convertible debenture this year for business purposes.
“We will be raising Rs 55,000 crore issuing non-convertible debentures this year. Till August we have raised Rs 17,000 crore,” Managing Director & CEO Vinay Sah told reporters here.
He was here to inaugurate the company’s 20th edition of ‘Ungal Illam’, an exclusive property fair.
According to Sah, the company is logging a growth of around 15 per cent this fiscal with the retail segment continuing to register growth.
Queried about the impact of Goods and Services Tax (GST) and the Real Estate (Regulation and Development) Act (RERA) on home purchase decisions and consequently on the company, Sah said some prospective buyers are adopting a ,wait and watch’ policy.
He said the demand from those who are buying for investment purposes has gone down while those who buy for self-occupation continue to make their purchases.
Sah said people are waiting to see the prices of housing units to drop following RERA but the prices are neither going up or down.
He said there is some slowdown in the registration of new projects.
—IANS
