Fino Paytech to launch payment bank, targets high domestic remittance areas

Fino Paytech to launch payment bank in Maharashtra, Madhya Pradesh, Uttar Pradesh and Bihar with 400 branches in the initial phase

New Delhi: In an attempt to expand their consumer base and carve out their own individual identity , Fino Paytech—one of the entities to receive in-principle approval from the Reserve Bank of India (RBI)—will focus on areas having maximum domestic remittances to extend its banking services.

Fino, which is expected to launch its payment bank operations soon, will provide services like basic banking products such as withdrawal and deposits as well as third-party products like insurance and remittances while continuing to serve their primary responsibility of a technology-solution provider and banking correspondent (BC) to other banks.

With a target of opening 400 bank branches across 30 cities on its opening day, Fino will also provide the basic services of account opening and cash withdrawal in additional 15,000 access points outside these branches.

to read more, please click on the link below:

http://www.livemint.com/Industry/3Pa8co04rbkkNOZAka66rK/Fino-Paytech-to-launch-payment-bank-targets-high-domestic-r.html

Hero Corporate Services chairman Sunil Munjal and Adventz Group chairman Saroj Poddar are reportedly looking to buy a stake in digital wallet and e-commerce firm Paytm.

Munjal and Poddar are together negotiating to buy Paytm shares from early investor and former IDFC Securities analyst Nikhil Vora, The Economic Times reported citing two people aware of the development. Vora holds a 0.35% stake, or 1.6 lakh shares, in Paytm.

The duo will buy Rs 50 crore worth of stake at Rs 8,000 per share, the report said.

However, the Press Trust of India reported, citing an Adventz group executive, that merchant bankers had approached the group to buy a stake in Paytm but it declined the offer due to valuation concerns.

Vora may be selling just under half of his stake in this transaction. The deal, if it goes through, will value Paytm around $5.7 billion (Rs 38,800 crore), according to Techcircle estimates.

Email queries to Munjal and Paytm founder Vijay Shekhar Sharma did not elicit any response till the time of filing this article.

Hero Corporate Services is the insurance redistribution and IT services arm of the Hero Group. Adventz Group comprises companies that make chemicals and fertilisers, build rail wagons, provide engineering services, manufacture furniture and offer financial services.

The reported development comes barely a month after Paytm founder Sharma sold a 1% stake in the digital wallet’s parent firm One97 Communications Ltd to raise nearly $48.1 million (Rs 325 crore) to fund the proposed payments bank.

The company is awaiting final approval from the Reserve Bank of India for the launch of its payments bank, to be run by Paytm Payments Bank Ltd.

In its last funding round in August, Paytm had raised $60 million (Rs 403 crore) from Taiwanese chipmaker MediaTek Inc.’s Mountain Capital fund. Paytm, backed by Chinese e-commerce titan Alibaba Group, had issued shares at Rs 6,650 each at the time, valuing it at $4.8 billion (Rs 32,250 crore) post money.

One97 posted a loss of Rs 1,548 crore for the financial year ended March 2016 on revenue of Rs 830 crore, and there is no likelihood of the tide turning this year as it continues to spend to grow its wallet business. Paytm spent nearly Rs 2,046 crore in acquiring customers in 2015, and had set aside an additional Rs 500 crore for its marketing spends for 2016 alone.

Leading securities depository CDSL, promoted by BSE, on Tuesday filed the draft papers for an initial public offer through which it plans to sell more than 3.5 crore shares.

Four shareholders – BSE, SBI, Bank of Baroda and the Calcutta Stock Exchange – will sell stakes in Central Depository Services (India) Ltd. through the IPO.

A little over 3.5 crore shares would be offloaded through the offer for sale route and out of the total, 7 lakh shares would be reserved for the employees, as per the draft red herring prospectus.

Net offer would constitute 32.98 percent of CDSL’s post offer paid up equity share capital.

BSE, which holds 50.05 percent stake in the entity, is itself preparing to come out with an initial share sale.

Other major shareholders in the company are State Bank of India, HDFC Bank, Standard Chartered Bank, Canara Bank, Bank of India, Bank of Baroda, Life Insurance Corp, Union Bank of India and Bank of Maharashtra.

http://www.bloombergquint.com/markets/2016/12/27/bse-promoted-cdsl-files-preliminary-papers-for-ipo

Bourse intends to offer 111.42 million shares representing 22.5% of post-offer paid up equity

KOCHI: The Catholic Syrian Bank (CSB) on Wednesday confirmed that Canadian billionaire Prem Watsa’s Fairfax India Holdings would acquire 51 per cent stake in the bank. Meeting media in Kochi after the board meeting of the bank at its headquarters in Thrissur, CSB Chairman S Santhanakrishnan said Fairfax India would invest Rs 1,000 crore in the bank and the deal was likely to be closed by March 2017. He said the CSB was not worried about Fairfax acquiring the stake because it will have voting rights only for 15 per cent.

“We hope to get in-principle approval from the Reserve Bank of India by December. 90 days is a good time to finish the process. Fairfax had applied to RBI showing willingness to invest up to Rs 1,000 crore in an Indian bank in June. RBI in-turn forwarded the proposal to CSB which conveyed its readiness. It is good to raise money from a single investor instead of looking around for capital,” he said. The Rs 1,000 crore will allow the bank to increase its business by 10 times.

“After getting the approval we will appoint an independent evaluator to value the bank. As per my back of envelope calculation, the bank is valued around Rs 1500-2000 crore,” he said.

On IPO, he said, it will be more to meet the Regulator’s norm and that could be done somewhere in the end of 2017 or in early 2018. Addressing the concerns raised by LuLu Group MD Yusuff Ali M A, the largest shareholder in the bank, he said neither the headquarters of the bank would be shifted nor its name would be changed. “We will honour our commitments to Yusuff Ali, Thrissur Bishop and the Board of Directors,” he said.  T S Anantharaman will take over as the chairman of the bank from December 1 from Santhanakrishnan. He will continue as director after retirement.

http://www.newindianexpress.com/states/kerala/2016/dec/01/fairfax-india-to-acquire-51-per-cent-stake-in-keralas-catholic-syrian-bank-1544381.html

Paytm has announced a toll-free number 1800-1800-1234 to enable consumers and merchants without an internet connection to pay and receive money

To read more, please click on the link below:

http://indianexpress.com/article/technology/tech-news-technology/paytm-launches-new-payment-method-for-users-without-internet-4415066/

‘Demonetisation drive is a good development for payments banks’

How will the recent demonetisation announcement impact your payments bank plans?

The government’s demonetisation drive is a good development for payments banks as it pushes digitisation. We have already seen the spike in digital transactions with wallet players gaining ground in the last few weeks. Lack of currency led to many people moving to digital transactions. It remains to be seen how many will continue in this digital journey once currency becomes available post-December 30.

The next five to six months would be interesting as there is a need to accelerate our digital footprint as we can see new entities embracing digital payments, such as salaries for workers by SMEs and MSMEs (micro, small and medium enterprises). Even if there is a moderate impact of digitisation in rural areas, it will be a game changer.

How soon do you think you will be able to launch the payments bank and with how many branches initially?

There is a need to improve infrastructure in terms of awareness and training among customers as well as the bank staff, availability of right devices to facilitate digital banking/payment transactions and willingness of people to move into the digital ecosystem.

If all this is in place, then execution will be fast and easy. Regarding our launch plans, we are still awaiting a few approvals, after which we will apply for final licence, which could be around December 2016. After receiving the licence, we will launch in two to three months. Geography-wise our focus will be both urban and rural areas across Maharashtra, UP, Bihar and MP.

How many branches or kiosks are you planning to have in the first year of operations?

We will have 400 payments bank branches spread across urban and rural areas, along with 30,000 to 40,000 transaction points that facilitate banking access. We will have a mix of physical and digital strategy in servicing our customers.

How is Fino planning to generate revenues from this channel given the fact that payments banks are not allowed to lend? What are some of the possible revenue channels?

Payments banks will largely have three avenues to operate and generate revenues: remittances/merchant paybacks; customer deposits (government securities give 7 per cent return and with bank rates to customers at 4 per cent, payments bank can make at least 3 per cent); and through cross-selling third-party products, such as insurance, bill payments, recharges and offering lending services on behalf of banks.

There are reports that your deposit rates will be as high as 14 per cent. Is this sustainable? How are you planning to take deposits at such high interest rates at a time when big banks are currently not able to offer more than 7-7.50 per cent?

That kind of interest is not possible for any payments bank. We plan to stick to the prevailing bank deposit rate of the day.

How many current accounts and savings accounts are you targeting in the first year of operation? What is the target for the next four years? What is the profile of customers you are targeting?

Ten million in the first year and 40-50 million in the next four years. We are looking at all those customers who can be digitally serviced. Interestingly, through the demonetisation move we expect over 500 million people to join the digital bandwagon, of which, a significant portion will be serviced by payments banks.

To read more, please click on the link below:

http://www.thehindubusinessline.com/info-tech/demonetisation-drive-is-a-good-development-for-payments-banks/article9413981.ece

Demonetzation: Will it decide India’s fate?

Dear Readers,

This is our first independent post. Almost a month has passed and still the whole concept of demonetization is not clear. Supporters of the same are pushing hard to make it a success and opponents are cursing government for this action.

A few scholars had presented their independent views that we support and could be understood in normal parlance:

1. The move is definitely good but is it for curbing the black money in circulation or the cash money that holds back the economy in general? Don’t forget the crisis of 2007-08 when the entire world was bleeding through recession and we somehow managed to sustain.

2. The implementation that we have seen so far by the GOI is very poor. There is lack of infrastructure, sufficient new currency, unclear guidelines for banking and most importantly poor administration and accountability.

3. As stated by Dr. Singh, this move, if not properly managed, will lead to deteriorate the image of the central bank, globally.

4. A few school of thoughts also believed that black money was never present in the form of currency but was parked in other precious assets such as gold, diamonds and land (also). To some extent we also believe in the same. As per an international study, Indians have bought enormous quantities of gold in the past two decades, of which major portion was bullion and not jewelry.

5. There is another point which needs attention. As per the RBI, there was Rs. 14.18 lakh crore in circulation in the form of Rs. 500 and Rs. 1000 notes when its demonetization was announced on November 8th. By 5th of December, it was expected that Rs. 11 lakh crore has already been deposited in the system. With little less than a month left for closure, this raises question whether the whole exercise was needed at all in the first place. PLEASE NOTE: there are two situations here:

a. If there will be more deposits then expected, does it indicate that there was no black money at all ?

b. If there will be more deposits then expected by the central bank (say the total money deposited in the form of banned notes reaches to Rs. 15 lakh crores), who will bear the liability (of Rs. 1 lakh crores apprx).

Its too early to say for its success but we all wish that our country to become a super power on the world map. And all we expect that this shouldn’t turn out to be a mere political gimmick.

Cheers !!

Fino PayTech has set a target of attaining an AUM of Rs 1000 crore

Read more at:
http://economictimes.indiatimes.com/articleshow/54425894.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst

Hero FinCorp raises Rs 1000 crore, aims at reaching asset size of Rs 35,000 cr by 2020

Hero FinCorp today said it has raised Rs 1,000 crore fromChrysCapital, Credit Suisse and the Hero Group to fuel future growth over the next 12-18 months. 

The company aims to reach asset size of Rs 35,000 crore by 2020 from Rs 8,000 crore now. 

ChrysCapital led the current round by investing Rs 570 crore. The Hero Group has made an additional investment of Rs 300 crore in the latest round. Credit Suisse has invested Rs 132 crore. 

Pawan Munjal, chairman, Hero Group, said, “The financial services market in India, particularly the NBFCs, has witnessed steep growth in recent years and it still remains largely under penetrated. With Hero FinCorp, we aim to capitalise on this opportunity by providing credit power to financially excluded customers across the hinterlands of the country.”

http://economictimes.indiatimes.com/industry/banking/finance/hero-fincorp-raises-rs-1000-crore-aims-at-reaching-asset-size-of-rs-35000-cr-by-2020/articleshow/54345871.cms

The move will strengthen Singtel’s foothold in India; Singtel to also acquire 21% stake in Thailand’s Intouch Holdings for about $1.14 billion

Singapore Telecommunications Ltd (Singtel) said on Thursday that it had signed an agreement with its majority owner Temasek Holdings (Pte) Ltd to purchase a 7.39% stake in Bharti Telecom Ltd, the holding company of India’s largest telco Bharti Airtel Ltd, for $659.51 million.

The deal will strengthen the foothold Singtel, South-East Asia’s largest telecom company, has in India, the world’s second largest mobile-phone market, where consumers are switching to smartphones from feature phones at a rapid pace.

Prior to the agreement with Temasek, Singtel already owned 39.78% of Bharti Telecom besides a direct stake of 15.01% in Airtel through its subsidiaries Pastel Ltd and Viridian Ltd.

With the latest deal, Singtel’s effective total holding in Airtel will increase to 36.27% from 32.94%, cementing its position as the largest shareholder in the Indian company.

The Mittal family owns just under a 30% effective stake in Airtel, largely by virtue of its 51% stake in Bharti Telecom.

Additionally, Singtel will acquire a 21% stake in Thailand’s Intouch Holdings Public Co. Ltd for about $1.14 billion. Intouch is the biggest shareholder in Thailand’s largest mobile operator Advanced Info Services Public Co. Ltd (AIS)

for more info:

http://www.livemint.com/Companies/bL1jZZdOhjoSkDsxK45vDJ/Singtel-to-buy-739-stake-in-Bharti-Telecom-Thailans-Into.html

Hero FinCorp set to close PE fundraising worth $100 million

Hero FinCorp, which took birth as Hero Honda FinLease Ltd in December 1991, recorded a turnover of Rs771 crore in 2015-16 against Rs298.62 crore in 2014-15

Mumbai: Hero FinCorp Ltd, the financial services arm of India’s largest two-wheeler maker Hero MotoCorp Ltd, is close to raising around $100 million from private equity (PE) investors, two people aware of the development said.

Singapore investment firm Temasek Holdings Pte. Ltd and India-focused PE fund ChrysCapital LLC are in the final stages of talks with Hero, one of the two persons said. The deal could be closed within a couple of days, this person added, on condition of anonymity.

According to this person, both Temasek and ChrysCapital are equally keen on a stake and shares could be split between the two.

Hero FinCorp promoters, who had initially planned to sell 15% stake for $85 million may instead sell about 20-25% stake for $100-120 million, the second of the two persons cited above said.

Hero FinCorp planned to raise $100 million (Rs.650 crore) by selling a significant minority stake to PE funds to fuel its expansion into new areas, Mint reported in November last year. The company hired global investment bank Credit Suisse Group AG to find buyers and discussions had started, the Mint report added.

Spokespersons at Temasek and ChrysCapital declined to comment while an e-mail sent to Abhimanyu Munjal, chief executive officer at Hero Fincorp, and a spokesperson at Credit Suisse on Thursday went unanswered.

Hero FinCorp, which took birth as Hero Honda FinLease Ltd in December 1991, recorded a turnover of Rs.771 crore in 2015-16 against Rs.298.62 crore in 2014-15.

The non-banking finance company (NBFC) has a presence at over 1,000 retail financing touch-points across Hero MotoCorp’s network and has partnered with more than 200 satisfied corporate clients, according to the company website.

for more info, please click on the link below:

http://www.livemint.com/Companies/6mYZW1g0iEk4P7iPTR9UxL/Hero-FinCorp-set-to-close-PE-fundraising-worth-100-million.html

ICICI Prudential Life could become the first major insurance company to be listed through an initial public offer after parent ICICI BankBSE -0.58 % decided to sell a part of its stake to the public. 

India’s largest private sector life insurer filed an offer document with regulators for an issue that could raise around Rs 6,325 crore for the parent while valuing the company at close to Rs 50,000 crore. 

The share sale is an exclusive offer by ICICI Bank and does not comp .. 

http://www.livemint.com/Money/XfjmPqECkRunJI1NQ6pRQM/ICICI-Prudential-Life-files-for-Indias-first-insurance-IPO.html

SEBI to delist 4200 Companies from stock exchanges to give exit to investors.

In a mammoth clean-up exercise, markets regulator Sebi is planning to push for delisting of over 4,200 listed companies whose shares are not being traded, and promoters refusing to give exit opportunity to investors would face strict penal actions.

These include over 1,200 companies whose shares are listed on national bourses BSE and NSE but where trading has been suspended for various non-compliance issues for over seven years. Besides, there are over 3,000 companies listed on various regional stock exchanges that have become defunct, Sebi Chairman U K Sinha said on Wednesday.

He also warned of strong action against the auditors who close their eyes to the lapses in the financial accounts of listed firms.

“So far, we have had a hands-off approach on auditors, but we will take action if something serious comes to our notice.

Auditors cannot go scot-free if they have been certifying the books for years without pointing finger at the lapses,” Sinha said.

The exercise for over 4,200 listed firms would be completed this year. Such exercises would be taken up going forward to clean up the market from what the Sebi chief described as “a source of nuisance”.

In an interaction here, Sinha said delisting of these companies is one of the key focus areas for the regulator in the current fiscal.

“We are going to reduce the number of listed companies. We have already reduced the number of stock exchanges by successfully closing several defunct or non-functional regional exchanges. They were centres of risk and there were series of litigations but we have won all of them.

“Now our target is to reduce the number of listed companies where no or little trading is taking place,” he said, adding that it was not something to be happy about to have maximum number of listed companies if there was no trading activity happening.

“There are two sub-sets — first there are over 3,000 companies exclusively listed on regional exchanges and then the second is the list of companies where trading has been suspended for a long time. To start with, we have decided on a seven-year threshold and there are over 1,200 such listed companies together on BSE and NSE,” he said.

http://www.huffingtonpost.in/2016/05/25/sebi-delisting-shares_n_10128340.html