Bajaj Housing Finance Targets Rs 7,000 Crore IPO to Meet RBI Listing Norms and more.

Bajaj Housing Finance Targets Rs 7,000 Crore IPO to Meet RBI Listing Norms

Bajaj Housing Finance has filed papers with SEBI for a Rs 7,000 crore IPO, aligning with RBI mandates for upper-layer NBFCs. The IPO includes a fresh issue of Rs 4,000 crore and an offer for sale of Rs 3,000 crore by Bajaj Finance. Proceeds will bolster the company’s capital base. The lender posted a net profit of Rs 1,731 crore for FY24, up 38% from FY23.

Understanding Upper Layer NBFCs

Upper layer non-banking financial companies (NBFCs) are identified by the RBI based on factors like size, market activity, and interconnectedness. These companies must adhere to stricter regulatory requirements, including mandatory stock exchange listings by a specified deadline to enhance transparency and oversight. Bajaj Housing Finance’s IPO is a step towards complying with these norms, ensuring robust governance and capital adequacy.

Source: Business Today

FPIs Withdraw ₹10,355 Crore from Indian Markets in June, Shift Focus to China

Foreign portfolio investors (FPIs) have withdrawn ₹10,355 crore from Indian markets as of June 7, driven by high valuations and market volatility. The total outflow includes ₹14,794 crore from equities. FPIs are redirecting funds to Chinese stocks, especially those listed on the Hong Kong Exchange, due to attractive valuations. The Hang Seng index’s recent performance has significantly influenced this trend.

Foreign Portfolio Investors (FPIs)

Foreign Portfolio Investors (FPIs) are international investors who invest in a country’s financial markets. They buy stocks, bonds, and other financial assets but do not gain significant control over the businesses they invest in. FPIs are sensitive to market conditions and economic indicators, shifting their investments based on factors like valuations, political stability, and global economic trends. This mobility can impact the host country’s financial market stability and liquidity.

Source: Live Mint

Sebi Mandates Direct Payout of Securities to Clients by October 14

Sebi has mandated direct payout of securities to clients’ demat accounts from October 14, bypassing brokers to prevent misuse and improve efficiency. This move will ensure faster and safer transactions. The Broker’s Industry Standards Forum will set implementation standards by August 5. This replaces the current system where brokers pool securities before crediting clients’ accounts. Despite technical and operational challenges, this shift aims to protect client assets and streamline processes.

Direct Payout of Securities

Direct payout of securities involves transferring securities directly to a client’s demat account without intermediaries like brokers. This system aims to enhance security, reduce misuse, and ensure faster transaction completion. It contrasts with the traditional method where brokers pool securities before crediting client accounts, which poses risks of misuse. Direct payouts offer a more transparent and efficient way to manage and transfer securities, benefiting investors with quicker access and increased protection.

Source: Financial Express

Paytm’s UPI Market Share Falls to 8% in May Amid RBI Crackdown

Paytm’s UPI market share dropped to 8.1% in May, down from 13% in January, marking a fourth consecutive month of decline. This follows the RBI’s January directive to wind down Paytm Payments Bank Ltd. (PPBL) operations. Since then, Paytm shares have fallen 55%. Competitors PhonePe and Google Pay maintain 49% and 37% market shares, respectively. Paytm’s CEO, Vijay Shekhar Sharma, is forming new partnerships to stabilize operations.

Unified Payments Interface (UPI)

Unified Payments Interface (UPI) is an instant real-time payment system developed by the National Payments Corporation of India (NPCI). It facilitates inter-bank transactions by linking accounts to mobile apps, allowing users to transfer money quickly and securely. UPI is widely used in India for various transactions due to its ease of use, speed, and low cost. Major apps using UPI include Paytm, PhonePe, and Google Pay.

Source: Mint

Indian Olympians’ Sponsorship Soars 2000% Over Decade to Rs 50 Crore for Paris

The Indian Olympic Association (IOA) has secured Rs 50 crore in sponsorships for the Paris Olympics, double the amount for Tokyo 2020, and a 2000% increase from pre-Rio 2016. Major sponsors include Reliance Foundation, JSW, and Yes Bank. This surge reflects growing corporate support for Indian athletes like Saikhom Mirabai Chanu and Manika Batra. Total association value, including brand activations, could reach Rs 200 crore to Rs 250 crore.

Sponsorship Revenue

Sponsorship revenue refers to the money paid by companies and brands to support events, teams, or individuals, usually in exchange for advertising rights and brand exposure. In the context of the Indian Olympic team, this revenue helps fund training, travel, and other expenses, enhancing the athletes’ performance and promoting the sponsors’ brands through various media channels.

Source: Financial Express

Elon Musk’s Starlink Gets Green Light in Sri Lanka

Sri Lanka has approved Elon Musk’s Starlink to launch its satellite internet service, aiming to enhance connectivity, especially in remote areas. President Ranil Wickremesinghe announced on X that the Telecommunication Regulatory Commission of Sri Lanka (TRCSL) has given the go-ahead, pending a two-week public consultation. This move promises faster, more reliable internet, benefiting education, innovation, and emergency communication. Recent launches in Indonesia and Fiji highlight Starlink’s global expansion.

Satellite Internet

Satellite internet is a type of internet connection that uses satellites orbiting Earth to provide broadband access. It is particularly useful in remote or rural areas where traditional cable or fiber-optic networks are unavailable. Starlink, a project by SpaceX, aims to offer high-speed internet globally through a constellation of low Earth orbit (LEO) satellites, ensuring faster and more reliable connectivity compared to traditional satellite services.

Source: Business Today

Oil Reports Third Straight Weekly Loss on OPEC+ Verdict, Delayed US Fed Cuts; Brent Dips 2.5% to $79

Brent crude fell 2.5% to $79.62 a barrel, marking its third consecutive weekly loss amid demand concerns and delayed US Fed rate cuts. West Texas Intermediate (WTI) dropped 1.9% to $75.53. OPEC+ reassurances and US jobs data, which suggest higher rates for longer, contributed to the decline. Analysts forecast continued volatility with support at $74.70 and resistance at $75.90.

Crude Oil Prices

Crude oil prices refer to the cost per barrel of oil, which fluctuates based on supply and demand dynamics, geopolitical events, and economic indicators. These prices impact global economies, influencing inflation, production costs, and energy markets. Key benchmarks like Brent and West Texas Intermediate (WTI) represent the major trading classifications of crude oil, with prices often used to gauge the health of the global economy and energy sector trends.

Source: Mint

Better ForeCaste: Gap in Consumption Shrinks; Spending by SC, ST, OBCs Rose 1% Faster Each Year

Consumption spending in marginalized groups, such as Scheduled Castes (SC), Scheduled Tribes (ST), and Other Backward Classes (OBC), grew 9.2% annually from 2011-12 to 2022-23, outpacing the 8.1% growth of other groups. Rural per capita consumption for SCs nearly tripled, reaching Rs 3,474. However, despite gains, marginalized groups still consume 20-25% less than others. Maharashtra, Chhattisgarh, and Kerala show the highest rural inequality.

Consumption Inequity

Consumption inequity refers to the unequal distribution of spending or consumption among different groups within a society. It highlights disparities in the ability to purchase goods and services, often reflecting broader economic inequalities. In India, efforts to reduce consumption inequity aim to address gaps between marginalized groups (like SC, ST, and OBC) and others, promoting more inclusive economic growth and social equity.

Source: Economic Times

Credit Score Drop Could Cost You Rs 19 Lakh Extra on Rs 50 Lakh Home Loan: 4 Tips to Avoid It

A poor credit score can result in significantly higher loan costs. Many social media users report sudden credit score drops due to erroneous transactions, lender misreporting, late payments, and over-utilisation of credit. Maintaining a good credit score is crucial, as a low score can increase your home loan interest rate from 8.35% to 10.75%, costing an extra Rs 19 lakh on a Rs 50 lakh loan.

Understanding Credit Scores

Credit Score: A numerical representation of an individual’s creditworthiness, ranging from 300 to 900. A score above 750 is considered good, while a score below 600 is poor. It influences loan approval, interest rates, and credit limits. Factors affecting it include payment history, credit utilisation, and length of credit history. Maintaining a good score involves timely payments, low credit utilisation, and regular credit report checks.

Source: Economic Times

Byju’s Valuation Crashes from $22 Billion to Zero: What Happened?

Byju’s, once India’s most valuable startup valued at $22 billion, is now worth nothing according to HSBC. The dramatic decline follows a year of financial turmoil, with the edtech giant facing severe setbacks. This marks one of the most notable collapses in startup history. The news highlights the volatility in the tech sector and the potential risks even successful startups face.

Understanding Startup Valuations

Startup Valuations: A startup’s valuation is an estimate of its worth, influenced by factors such as revenue, market potential, and investor interest. High valuations attract more investment but also come with expectations of rapid growth. A significant drop, like Byju’s, often results from financial mismanagement, unmet expectations, or market changes. Regular audits and transparent reporting are crucial for maintaining investor confidence and avoiding such drastic devaluations.

Source: Yahoo

Rural Consumption Up 40% Over a Decade, Urban Areas See 33% Rise

Rural India’s per capita consumption expenditure surged over 40% from ₹1,430 in 2011-12 to ₹2,008 in 2022-23, as per a government survey. Urban areas saw a 33% rise, with expenditure increasing from ₹2,360 to ₹3,510. Food accounted for 46% of rural and 39% of urban household spending. The Gini coefficient indicates a drop in income inequality, highlighting improved living standards and reduced economic disparity.

Understanding the Gini Coefficient

Gini Coefficient: A measure of income inequality within a population, ranging from 0 to 1. A lower Gini coefficient indicates more equal income distribution. It is used to assess the effectiveness of economic policies in reducing inequality. In this context, a drop in the Gini coefficient for both rural (from 0.283 to 0.266) and urban areas (from 0.363 to 0.314) suggests improved income equality in India over the past decade.

Source: Mint

RBI Revises Bulk Deposit Limit to Rs 3 Crore

The Reserve Bank of India (RBI) has raised the bulk deposit limit from Rs 2 crore to Rs 3 crore for Scheduled Commercial Banks and Small Finance Banks. This move, part of efforts to align banking regulations with market conditions, allows banks to offer differential interest rates on bulk deposits. The change aims to streamline deposit categorization and enhance banks’ flexibility in managing their asset-liability portfolios.

Understanding Bulk Deposits

Bulk Deposits: Large sum deposits made with banks, generally attracting higher interest rates due to their substantial size. The RBI has now increased the threshold for bulk deposits from Rs 2 crore to Rs 3 crore. This adjustment helps banks better manage their resources and offer tailored interest rates based on deposit size. Bulk deposits are significant for banks’ liquidity and funding strategies.

Source: Business Today