UBS of Switzerland may be close to a total takeover of Credit Suisse to rescue the latter from the brink of a major crisis. While the Swiss government is keen that UBS rescues its competitor, UBS wants a $6 billion guarantee from the Swiss government as a back-up for the takeover. However, the news has helped to reduce the worries of a systemic spill-off effect in the global financial markets. While Blackrock has denied interest in Credit Suisse, reports suggest they are still in the fray. Credit Suisse is a strong wealth franchise.
SEBI plans to change rules to address concerns around ESOP ownership. Currently, founders and family members of digital and new-age start-ups own shares under ESOPs. SEBI does not want founders to have stock options, if they have rights akin to that of promoters. Under Indian laws, promoters are barred from owning ESOPs, but tech promoters have been skirting the rule by holding than the basic promoter stake requirement. In the case of Paytm, the promoter had reduced his stake artificially through dummy shifts.
The Nifty Realty index gained 3% on Friday, making realty stocks the sold silver lining in a clouded market. Realty companies reacted positively to the stellar demand for DLF’s latest launch as well as the news that the Fed may turn less hawkish till the banking crisis is resolved. Stocks like DLF, Prestige, Lodha and Sobha rallied between around 4-5% on Friday. The Nifty Realty index gain of 3% was much better than the 0.52% return on the Nifty. DLF announced that it had sold 1,137 luxury apartments priced at Rs7 crore and above.
India’s largest fintech platform, PhonePe, has raised $200 million from its parent (Wal-Mart), at $12 billion valuation pre-money. This is solid valuations at a time when most start-ups are struggling to raise money due to questionable profit and revenue models. PhonePe will use these funds to scale up its insurance, wealth, lending, stockbroking, and ONDC-based shopping businesses. It will also go aggressive on UPI Lite payments in India. PhonePe has 450 million registered users and has digitized 35 million offline merchants.
The NCLT approved the proposed merger scheme of HDFC Ltd and HDFC Bank Ltd. The $40 billion merger deal has been in the works for more than a year now. The merger is now expected to be completed by the end of July this year, since other approvals from RBI and SEBI have already come in. HDFC will be subsumed into HDFC Bank with HDFC Bank becoming a 100% publicly owned company while HDFC will hold 41% in the bank. HDFC Bank will leverage the long tenor funds and mortgages of the HDFC parent.
Disbursal volumes of digital lenders spiked by 147% yoy to 18.3 million in Q3FY23 while the rupee value of the disbursal increased by 118% to Rs18,540 crore. This is despite the stringent digital lending rules framed by the RBI as average loan ticket sizes also went up by 37.8% yoy. While the average process fee ranges from 1.6% to 6.2%, the average interest rate ranged from 15.2% to 37.1%. According to market watchers, the demand for credit has surged and a lion’s share of this has been cornered by the Fintechs.
Foreign portfolio investors were sellers in the recent week on the back of the evolving global banking crisis as FPIs preferred safe haven assets. This has largely offset the massive inflows that India saw from GQG Partners into Adani group. However, even after the recent sell-off by FPIs, the net inflows by FPIs into Indian equities in March 2023 stands at Rs11,495 crore. The banking crisis globally is far from over and in response the Sensex fell 1,145 points (-1.93%), and Nifty dipped 313 points (-1.8%) in the previous week.
Cochin Shipyard has bagged and order for design and construction of the world’s first Zero Emission Feeder Container Vessels with an option for 2 more vessels. These vessels will be powered by Hydrogen Fuel Cells with Green Hydrogen. The order comes from Norway based Samskip Group; a global logistics solution provider. The total project cost will be Rs550 crore with the first vessel delivered in 28 months and the second in 34 months. It will serve European markets, where sustainable transport is the in thing.
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