Nik's Diary
The Indian market opened in the green
today mirroring positive opening trades in the SGX Nifty and most of the Asian
markets. After showing a strong upward move in early trading on Tuesday, US
stocks continued to perform well throughout the session. The strength on Wall
Street reflected a positive reaction to news from overseas as well as an upbeat
report on US service sector activity. The European markets ended Tuesday's
session in positive territory. The markets were able to build on the positive
performance of the Asian markets, after China maintained its economic growth
target at 7.5% for 2013, while lowering its inflation target to 3.5% from
previous year's 4%. The European markets also received a boost from the
better-than-expected retail sales report from the Eurozone and the
smaller-than-expected decrease in the service sector. Meanwhile, Indian shares
joined a global rally in equities on growing hopes that the Reserve Bank of
India will cut interest rates later this month and that other major central
banks across the globe would decide to keep monetary policy loose at meetings
this week.
ICICI Bank receives capital
repatriation of $100mn from UK subsidiary
ICICI Bank, this country’s largest private sector lender, on
Tuesday said its wholly-owned banking subsidiary in Britain had repatriated
$100 million (Rs 549 crore) of capital. “This comprises redemption of $50
mn of preference share capital and return of $50 mn on equity capital, after
receiving requisite approvals...Post the repatriation, the capital base of
ICICI Bank UK is $495 mn and its capital adequacy ratio (CAR) continues to be
strong,” the bank said. ICICI Bank UK had a CAR of 31.5 per cent at
end-December. In September 2012, Business Standard had exclusively reported on
ICICI initiating talks with the regulators to repatriate a part of its capital
from the UK subsidiary. Slowing business growth and a stringent regulatory
environment had led to the decision to bring back the capital from UK. ICICI
Bank UK’s total assets were $3.98 billion at the end of December 2012, compared
with $3.81 billion a quarter before. The profit after tax for ICICI Bank UK was
$5.4 million during the third quarter, compared with $7.7 million in the
corresponding period of the previous year. According to senior executives,
ICICI Bank UK has been looking at selective lending opportunities to highly
rated entities, including trade and transaction banking products and smaller
term loans to multinational corporations and subsidiaries of Indian companies
in the UK and Europe. “ICICI already has a strong CAR and (this) return of
capital would further improve the same, enhancing (our) ability to optimise
capital deployment and return on equity,” the bank said. The CAR was 19.53 per
cent at the end of the previous quarter, while the tier-I ratio was 13.25 per
cent. The bank also plans to bring back a part of the capital from its
subsidiary in Canada. “On Canada, we continue to discuss the capital
rationalisation and over a period of the next 12 to 18 months, we are hopeful
of getting some capital back, depending on regulatory approvals,” a senior
executive of the bank had told analysts in January 2013. ICICI Bank
Canada’s CAR was 34.5 per cent at the end of December 2012. Sector
analysts and bankers said ICICI had put large capital in its UK and Canadian
subsidiaries some years earlier, hoping the growth rate would be high in those
businesses. With this rate having decelerated, there is excess capital in the
subsidiaries. ICICI also has a third subsidiary abroad, in Russia. In all
other international markets, the bank operates through branches. Source: BusinessStandard
KFA lenders complicate Diageo deal;
may sell pledged USL shares
"CCI (Competition Commission of India) approval has been
received. All regulatory approvals have been received. So that's why it (the
deal) is on track," Mallya told reporters here after meeting Finance
Minister P Chidambaram here. The CCI in an order dated February 26 had
approved Diageo's proposed majority stake purchase in Mallya-led United Spirits,
saying the deal would not have adverse impact on competition. After
seeking clarifications and changes four times the fair trade regulator, CCI had
ruled that the deal would give a boost to entry of premium brands in alcoholic
beverage market. Diageo Plc had earlier said it would launch its over Rs
5,441-crore open offer to acquire 26 per cent stake United Spirits between
January 7, 2013 and January 18, 2013 but the delay in getting CCI nod had made
it approach market regulator SEBI requesting it to allow to make the offer only
after getting all the requisite regulatory approvals. While granting its
approval to the request, the Securities and Exchange Board of India (SEBI) on
its part has said that Diageo will have to pay an interest of 10 per cent per
annum for the period of delay to the public shareholders tendering their shares
in the open offer. In a letter dated January 31, 2013 SEBI had said the
letters of offer needed to be dispatched to public shareholders within seven
days and the share tendering period was supposed to begin within next five
days, that is no later than February 18. Subsequently, the payment to all
shareholders was required to be completed by March 18. However, JM
Financial, which has been appointed as manager to offer by Diageo, requested
SEBI that the tendering period should be allowed to commence within 12 days of
receipt of all applicable statutory approvals. SEBI has accepted the
request with a condition of additional interest payment for the delay and
Diageo would announce the revised schedule in due course. In November last
year, in one of the biggest stake sales by an Indian firm to a foreign company,
UK-based Diageo agreed to buy 53.4 per cent stake in United Spirits for Rs
11,166.5 crore in a multi-structured deal. Source: DeccanHerald
Comments
Post a Comment