Latest news with #SiddhiNayak
Mint
14 hours ago
- Business
- Mint
Indias HDB Financial IPO pricing not influenced by 70% premium in grey market, bankers say
By Siddhi Nayak, Vivek Kumar M and Bharath Rajeswaran MUMBAI, June 20 (Reuters) - The initial public offering of India's HDB Financial has been priced based on the fundamentals of the business, unaffected by the roughly 70% premium the stock is trading at in the informal 'grey market' for unlisted securities, bankers said on Friday. Shares in the lender will be sold in a price band of 700 rupees to 740 rupees per share ($8.06-$8.52), valuing HDB Financial at $7.1 billion at the upper end of the band. The shares were traded around 1,200 rupees to 1,250 rupees in the 'grey market'. "This price has been determined basis extensive roadshows," said Jibi Jacob, head of equity capital markets at Jefferies India, one of the bankers to the issue. "We have no influence on what is happening on the unlisted side," Jacob said at a press conference in Mumbai. HDB Financial's IPO, the largest for an Indian non-banking financial company, opens for subscription on June 25, with large institutions bidding a day earlier. The firm, which lends across segments such as personal and business loans, operates 1,747 branches nationwide. India's largest private lender, HDFC Bank, holds a 94% stake in the firm. The IPO pricing has been determined on the fundamentals of the franchise and how key peers are trading, said Sonia DasGupta, head of the investment banking division at JM Financial, another banker to the issue. At 740 rupees per share, the price-to-book ratio, a key measure of valuation, works out to 3.72 for HDB, in line with peers such as Bajaj Finance and Shriram Finance . India's red-hot IPO streak has cooled in 2025, following a blockbuster year in 2024 that saw record capital raised through new listings. So far this year, nearly 100 firms have hit the market, raising about $4 billion, a decline from the 137 IPOs and $4.3 billion fundraise in the year-ago period, according to data compiled by LSEG. Analysts attribute tepid retail investor demand to aggressive IPO pricing, as the Nifty 50 trades nearly 6% below its record high from last September. The bull run in Indian markets post the COVID-19 crisis led to valuations of unlisted firms inflating beyond fundamentals, said Arun Kejriwal, founder of Kejriwal Research and Investment Services. "HDB's approach is a timely reminder that IPO pricing should be grounded in reality, not speculative hype," Kejriwal said. ($1 = 86.6040 Indian rupees) (Reporting by Siddhi Nayak and Vivek Kumar M in Mumbai and Bharath Rajeswaran in Bengaluru, additional reporting by Nishit Navin; Editing by Mrigank Dhaniwala)
Yahoo
5 days ago
- Business
- Yahoo
India cenbank seeks market views on aligning call money rate with repo, sources say
By Siddhi Nayak and Dharamraj Dhutia MUMBAI (Reuters) -The Reserve Bank of India has sought feedback from large market participants on aligning the overnight interbank call money rate more closely with the policy repo rate, five treasury officials aware of the discussions told Reuters on Monday. The move follows a Reuters report last week that said the RBI wants the overnight call rate to broadly align with the policy repo rate and is considering steps to ensure that happens. The policy rate currently stands at 5.50%, while the overnight call rate averages 5.30% and the TREPS rate hovers near 5.20%. The overnight call rate and TREPS rate have averaged below the policy rate since April. A persistent gap between the RBI's operative rate and the policy rate typically signals that banks are accessing cheaper funding than what the central bank is comfortable with. The RBI spoke with large treasury officials on Friday to review liquidity conditions and understand why the overnight call rate — the operative policy target — has been persistently trailing the repo rate, two of the sources said. None of the sources wanted to be named because they are not authorised to speak to the media. The RBI did not immediately reply to a Reuters email seeking comment. The central bank is also keen to understand why treasury bill yields have spiked in the last week, the two sources added. The yield on 364-day notes was sharply higher than estimates last Wednesday. "The motive seemed to be to sensitise the market that a variable rate reverse repo auction would be in the offing," a senior official at a state-run bank said. The source had added that the RBI could start conducting variable rate reverse repo auctions to suck out surplus liquidity as and when required. The weighted average overnight call rate has remained well below the RBI's key repo rate and closer to the policy corridor's floor, the Standing Deposit Facility rate, for the past few weeks. On June 6, the RBI slashed its key policy rate by 50 basis points, but changed its stance to neutral, indicating limited room for further cuts. The RBI also announced a reduction in banks' cash reserve ratio by 100 basis points September onwards. The central bank also stopped conducting daily fund infusion through variable rate repo since June 11, which market took as an indication that the RBI may move towards VRRR soon. Market participants have requested that the RBI avoid shocks in liquidity management which would help avoid volatility in short-term rates, another treasury official said. "Given that the focus of monetary policy is on enhancing transmission, the expectation channel is equally important. Hence, it would be better to move overnight rates towards repo rate after some time, allowing transmission to gain pace," said Gaura Sen Gupta, chief economist with IDFC First Bank.
Mint
5 days ago
- Business
- Mint
India cenbank seeks market views on aligning call money rate with repo, sources say
By Siddhi Nayak and Dharamraj Dhutia MUMBAI, - The Reserve Bank of India has sought feedback from large market participants on aligning the overnight interbank call money rate more closely with the policy repo rate, five treasury officials aware of the discussions told Reuters on Monday. The move follows a Reuters report last week that said the RBI wants the overnight call rate to broadly align with the policy repo rate and is considering steps to ensure that happens. The policy rate currently stands at 5.50%, while the overnight call rate averages 5.30% and the TREPS rate hovers near 5.20%. The overnight call rate and TREPS rate have averaged below the policy rate since April. A persistent gap between the RBI's operative rate and the policy rate typically signals that banks are accessing cheaper funding than what the central bank is comfortable with. The RBI spoke with large treasury officials on Friday to review liquidity conditions and understand why the overnight call rate — the operative policy target — has been persistently trailing the repo rate, two of the sources said. None of the sources wanted to be named because they are not authorised to speak to the media. The RBI did not immediately reply to a Reuters email seeking comment. The central bank is also keen to understand why treasury bill yields have spiked in the last week, the two sources added. The yield on 364-day notes was sharply higher than estimates last Wednesday. "The motive seemed to be to sensitise the market that a variable rate reverse repo auction would be in the offing," a senior official at a state-run bank said. The source had added that the RBI could start conducting variable rate reverse repo auctions to suck out surplus liquidity as and when required. The weighted average overnight call rate has remained well below the RBI's key repo rate and closer to the policy corridor's floor, the Standing Deposit Facility rate, for the past few weeks. On June 6, the RBI slashed its key policy rate by 50 basis points, but changed its stance to neutral, indicating limited room for further cuts. The RBI also announced a reduction in banks' cash reserve ratio by 100 basis points September onwards. The central bank also stopped conducting daily fund infusion through variable rate repo since June 11, which market took as an indication that the RBI may move towards VRRR soon. Market participants have requested that the RBI avoid shocks in liquidity management which would help avoid volatility in short-term rates, another treasury official said. "Given that the focus of monetary policy is on enhancing transmission, the expectation channel is equally important. Hence, it would be better to move overnight rates towards repo rate after some time, allowing transmission to gain pace," said Gaura Sen Gupta, chief economist with IDFC First Bank. This article was generated from an automated news agency feed without modifications to text.
Yahoo
11-06-2025
- Business
- Yahoo
Exclusive-India's central bank to use cash reserve ratio as active liquidity tool, says source
By Siddhi Nayak and Swati Bhat MUMBAI (Reuters) -India's central bank plans to use the cash reserve ratio more frequently to manage liquidity and aid policy transmission, rather than deploying it only during extreme cash swings, a source told Reuters on Wednesday. The person aware of the Reserve Bank of India's thinking declined to be identified because they are not authorised to speak to the media. The RBI did not reply to an email seeking comment. The central bank last week announced a surprise 100-basis-points reduction in CRR, the portion of deposits banks must park with the RBI, in four equal tranches, taking take it down to 3%. The move will release 2.5 trillion rupees ($29.25 billion) into the banking system. RBI governor Sanjay Malhotra had then said that the regulator was "comfortable" with a 3% CRR, but did not give other details. With banks' total deposit base having grown in recent years, the need to maintain the CRR at a minimum of 4% to manage crisis situations is no longer seen as necessary, the source said. "CRR is a good tool to have from a liquidity management perspective and the scope goes beyond just an emergency tool, it will be used more often from now," the person said, adding that the ratio could also be raised to absorb a large liquidity influx caused by sustained foreign inflows and is more efficient than conducting multiple open market operations. Between December and May, the RBI injected nearly $100 billion into the banking system via OMOs and FX swaps, its largest such infusion over a similar period. A shift toward managing liquidity via CRR, previously unreported, could reduce the need for bond buys that often distort market yields. ANCHORING RATES A large cash surplus in the banking system had also pushed the weighted average overnight call rate — the operative policy rate — well below the RBI's key repo rate, currently at 5.5%. "The RBI wants the overnight call rate to be around the repo rate, steps will be taken to ensure that happens," the source said, adding that the RBI could start conducting variable rate reverse repo auctions to suck out surplus liquidity as and when required. The source also said the central bank was uncomfortable with the 10-year benchmark yield falling significantly below existing levels. The RBI is currently in the process of drafting a revised liquidity management framework, and existing operations will continue until the new framework is finalised, the source said. ($1 = 85.4790 Indian rupees) Error while retrieving data Sign in to access your portfolio Error while retrieving data Error while retrieving data Error while retrieving data Error while retrieving data
Yahoo
11-06-2025
- Business
- Yahoo
Exclusive-India's central bank to use cash reserve ratio more actively to manage liquidity, says source
By Siddhi Nayak and Swati Bhat MUMBAI (Reuters) -India's central bank plans to use cash reserve ratio "more often" as a tool to manage liquidity and speed up monetary policy transmission, moving away from the practice of deploying it only in times of extreme cash swings, a source told Reuters on Wednesday. The person aware of the Reserve Bank of India's thinking declined to be identified because they are not authorised to speak to the media. The RBI did not reply to an email seeking comment. In a surprise move on Friday, the Reserve Bank of India announced a 100-basis-points reduction in the CRR to 3%, to be implemented in four equal tranches between September and November, releasing 2.5 trillion rupees ($29.25 billion) into the banking system. ($1 = 85.4790 Indian rupees) Error while retrieving data Sign in to access your portfolio Error while retrieving data Error while retrieving data Error while retrieving data Error while retrieving data
