CIFCL, FY20 disbursements decreased by 4% yearly, majorly due to COVID impact. The Assets Under Management increased by 16% for FY20 ( AUM constituting of 73% – Vehicle Finance,21% – Home equity and 6% – home loan and others). Due to Covid-19 impact, moratorium is extended to 76% of customers and expected to remain till August 2020. Additional provisions made for Rs.5.04 billion due to COVID and Macro Provision in FY20, GNPA and NNPA stood at 3.85% and 2.2% respectively. The heavy commercial equipment segment is expected to impact the loan book. In FY20, CIFCL infused capital of Rs 9 billion (QIP) and Rs.3 billion (Preferential allotment). Capital adequacy ratio stood at 20.7% with Tier 1 – 15.3% and Tier -2 at 5.4%.
Founded in July 1992 and promoted by Mr V P Nandakumar, Manappuram Finance(MAFIL) is the flagship company of the Manappuram group. It is a non-deposit-taking NBFC that provides finance against personal gold ornaments. As of 31st March 2020, the company had 4622 branches across India. The company went public in August 1995, with shares listed on the stock exchanges of Chennai, Kochi, and Mumbai (Bombay Stock Exchange and National Stock Exchange). Over the past three years, the Manappuram group has diversified into other businesses such as microfinance, vehicle finance, loans against property, and affordable housing finance. It also has presence in insurance broking business. As of June 30, 2020, its AUM stood at Rs 253 billion with customer base of 42.6 million.
Muthoot Finance– is the largest gold loan NBFC in India in terms of loan portfolio. Muthoot Finance provides personal loans and business loans secured by gold jewellery, or gold loans, primarily to individuals who possess gold jewelry but are not able to access formal credit within a reasonable time, or to whom credit may not be available at all, to meet unanticipated or other short-term liquidity requirements. Muthoot Finance gross loan AUM stood at around Rs 425.62 billion as of June 2020.
Vedanta Limited – Vedanta Limited (VL) is a diversified company into natural resources like zinc, oil and gas, copper, aluminum, iron ore, and power. Vedanta Resource Limited(VRL) holds 50.1% equity stakes in VL. Its operations include copper, iron ore, aluminum assets at Jharsuguda, and Lanjigarh in Odisha and power divisions. The company runs its aluminum operations through its subsidiary, Balco. Also, a part of the power business is conducted through a wholly-owned subsidiary, TSPL. The oil and gas business has been merged with Vedanta, and the group operates the zinc business through HZL and Zinc International in South Africa and Namibia. VL credit rating is CRISIL long term rating of AA (Negative), short term rating A1+ while India Rating long term AA-(negative), and short-term rating of A1+.
Tata Cleantech Capital Limited (TCCL) was formed in 2011 as a joint venture between Tata Capital Limited (TCL) and International Finance Corporation (IFC). Tata Capital owns 80.5% share while 19.5% is owned by IFC. TCCL is a Systemically Important Non-Deposit Accepting Non-Banking Financial Company (SI-ND-NBFC) registered with the Reserve Bank of India and classified as an Infrastructure Finance Company (“NBFC-IFC”). TCCL offers finance and advisory services for projects in renewable energy, energy efficiency, waste management, water management and other infrastructure projects.
Advantages for investors: • Product Structure– ETF matures like a bond as it has a fixed maturity date and predetermined return if held till maturity. • Trades like ETF– As it will be listed on the exchange, liquidity will be enhanced by market makers. Investors can make entry and exit funds at the time of preference. • Diversified Fund- Raised money will be invested in AAA-rated GOI owned companies bonds which minimize the default risk.
AAA-rated India Grid Trust is a power sector InVIT.IndiGrid has Rs 122 billion AUM and the portfolio comprises of about 20 transmission lines and four substations, encompassing 5,800 circuit kilometers and 7,735 MVA capacity of transmission across 13-states. Project contracts are based on availability-based revenue which is independent of the quantum of power flow, even if the power demand in the interim comes down, the company does not have any immediate impact on revenue. As per CERC and a circular issued by the Ministry of Power, there is no moratorium on transmission charges.
Embassy Office Parks is India’s first listed REIT. Embassy REIT comprises 26.2 million square feet (msf) of completed and operational commercial properties across India. Company targetting seven Grade A office parks and four city-center office buildings in India’s performing office markets of Bengaluru, Mumbai, Pune and the National Capital Region (NCR). The portfolio has over 160 blue-chip corporate occupiers and comprises 78 buildings with strategic amenities, including two completed hotels, two under-construction hotels, and a 100MW(AC) solar park that supplies renewable energy to park.
Uttar Pradesh Power Corporation Ltd (UPPCL) was founded in November 1999 by the Government of Uttar Pradesh in pursuance of the reform-restructuring of the erstwhile Uttar Pradesh State Electricity Board (UPSEB) under the UP Electricity Reforms Act, 1999. UPPCL Bonds Series III & IV 2016-17 has been assigned a rating of AA(CE)(Credit enhancement) while UPPCL Bonds Series I & II 2017-18 has been assigned a rating of AA-(CE) by Brickwork Rating.
Axis Bank Limited (ABL) was incorporated in December 1993. It was known as UTI Bank till 2007. Its major promoters are Life Insurance Corporation of India (LIC), Specified Undertaking of the Unit Trust of India (SUUTI), General Insurance Corporation of India, The New India Assurance Company Limited, National Insurance Company Limited, The Oriental Insurance Company Limited, and United India Insurance Company Limited.
Established in 1986, Power Finance Corporation is a financial institution in India focused on the power sector. Registered with the RBI as a NBFC and classified as an Infrastructure Finance Company by the RBI and plays a strategic role in government’s initiatives for the overall development of the power sector in India.
IREDA is the GoI’s only nodal agency to incentivise the renewable energy sector and attract investments by way of subsidies and lower cost borrowings. It is the sole programme administrator of the MNRE’s schemes, such as incentive schemes for wind and solar power projects, the roof-top solar power programme, a capital subsidy scheme for solar water heating systems and the National Clean Energy Fund.
IIFCL is a wholly owned Government of India company started in 2006 to provide long-term financial assistance to infrastructure projects through the Scheme for Financing Infrastructure Projects through a Special Purpose Vehicle called India Infrastructure Finance Company Ltd (IIFCL), broadly referred to as SIFTI. IIFCL has been registered as a NBFC-ND-IFC with RBI These broadly eligible sector for financing include transportation, energy, water, sanitation, communication, social and commercial infrastructure.
Housing and Urban Development Corporation Ltd. (HUDCO), incorporated in 1970, is a listed Miniratna public sector enterprise under the Ministry of Housing and Urban Affairs, Government of India (GoI). It is a public financial institution registered as a housing finance company (HFC) with NHB, and primarily finances social housing and UI projects. The GoI held a share of 89.81% in HUDCO, as of December 31, 2019, while the balance was held by the public.
HPCL was incorporated in 1974 after the takeover and merger of erstwhile Esso Standard and Lube India Limited by the Esso (Acquisition of Undertakings in India) Act 1974. Caltex Oil Refining (India) Ltd. (CORIL) was taken over by the Government of India in 1976 and merged with HPCL in 1978 by the CORIL-HPCL Amalgamation Order, 1978. Kosan Gas Company was merged with HPCL in 1979.
In Feb 2020, Indiabulls Housing Finance Ltd has been downgraded to AA from AA+ by both ICRA and CRISIL. The downgrade has been caused by continued challenges faced by IBHFL in mobilizing long-term resources and the weakening of its market position as a leading financier to the housing sector.
Sundaram Finance Ltd (SFL) is an RBI registered, deposit taking, NBFC, and is classified as an asset financing company. with a focus on commercial vehicle and car financing. The company also has diversified into Mutual Funds, Housing Finance, General Insurance, IT, Business Process Outsourcing, and Retail Distribution of financial services and products through subsidiaries, JVs, and associates.
PNB Housing Finance Limited is promoted by Punjab National Bank and is a registered Housing Finance Company with National Housing Bank (NHB). The Company got listed on the Indian stock exchanges on 7th November 2016. The Company’s asset base comprises retail loans and corporate loans. The retail business focusses on organized mass housing segment financing for acquisition or construction of houses.
LIC Housing Finance was established by LIC and other financial institutions in 1989. It is India’s second-largest housing finance company, with 9 regional offices, 24 back offices, and 282 marketing units in India, and 2 overseas representative offices with 2392 employees as of FY20. LIC Housing Finance Rating – CRISIL long term rating of AAA(Stable), CRISIL/ICRA/ short-term rating of A1+
Punjab and Sind Bank (P&S Bank) is a PSU bank that was founded in 1908. As of 30th June 2020, the Government of India has a holding of 80.28% in this bank’s share capital. The bank has a well-established network of 1,526 branches and 1,047 ATMs. Proposed talk to sale stake by GoI- Union Government of India has started talks to sell its stake from Punjab and Sind Bank to generate revenue so as to compensate revenue shortfall caused by the corona pandemic. This might put its BASEL III-tier I bonds under risk.
Larsen & Toubro Ltd (L&T) is a major technology, engineering, construction, manufacturing, and financial services conglomerate, with global operations. The presence of L&T is in key sectors like- Hydrocarbon, Infrastructure, Power, Process Industries, and Defence – for customers in over 30 countries around the world. As of Q1Fy21, India contributed most to the top-line followed by US, Europe & Middle East. Orderbook as of Q1Fy21 stood at Rs. 3051 billion mainly pending orders that belonged to the Infrastructure and Hydrocarbon sectors. On the international order book front, the Middle East pending orders contribute 14% of the total order book.
Tata Steel Ltd. (TSL), founded in 1907, is the flagship company of the Tata Group. The company operates in 26 countries and has a commercial presence in more than 50 countries. The product mix of the company includes flat steel products such as HR Coils, CR Coils, Galvanized Steel, Long Products such as Wire Rods, Rebars, Ferro Alloys, Tubes, Bearings, Wires, etc.
HDFC Life Insurance (HLI) is a joint venture between HDFC Ltd and Standard Life Aberdeen, a global investment company. HDFC Pension Management Co and HDFC International Life & Re are wholly-owned subsidiaries. HDFC Life is a life insurance solutions provider in India, operating in protection, pension, savings, health solutions, investment, and annuity.
ICICI Bank was incorporated by erstwhile ICICI Ltd in 1994. In 2002, ICICI Ltd was merged with ICICI Bank. In August 2010, ICICI Bank acquired Bank of Rajasthan (BoR) which increased its presence in northern and western India. As on June 30, 2020, the bank had a network of 5324 branches and 15,661 ATMs which signifies its strong geographical presence.
SBI Financial Performance during Q1FY21 • Net interest income (NII) increased by 16.14% year-on-year to in Q1FY21 • The net interest margin stood at 3.24% in Q1FY21 compared to 2.94% in the quarter ended March 31, 2020 (Q4-2020) and 3.01% in Q1-2020 • Provisions declined by 19% year-on-year to Rs 94.20 billion, Total COVID provision of Rs 30 billion as on Q1FY21. • The profit after tax grew by 81% year-on-year as exceptional gain of Rs 15.39 billion by selling stake in SBI Life Insurance Company. • From about 23% of total loans being under moratorium at FY20, came down to 9.5% in Q1FY21. • Net NPA ratio at 1.86% is down 121 bps y-o-y and Gross NPA ratio at 5.44% is down 209 bps y-o-y. SBI expects Rs 100-110 billio from accounts under resolution in next 2 quarters. • Capital Adequacy Ratio (CAR) has improved by 51 bps y-o-y to 13.40% as on Q1FY21.
Mahindra and Mahindra Limited, India’s largest tractor and utility vehicle manufacturer, holds a 51.19% stake in MMFSL and provides operational and financial support to this company. This enables MMFSL to mobilize funds at a good rate and to manage economic downturns. Comfortable capital position: MMFSL is well-capitalized with a capital adequacy of 19.6% as of 30 June 2020, which is above the RBI’s minimum stipulated requirement of 15% with Tier I ratio of 15.3%. Moreover, M&M Ltd infuses both equity and debt in MMFSL. The debt to equity stood at 5.41 times as on 30 June 2020 as compared to 5.23 times as of 31 March 2020 and 5 times as of 30th June 2019.
During FY20, HDFC net profit grew significantly by 84% y-o-y to Rs 177 billion from FY19. Net Interest Income also rose by 12.63% to Rs 129 billion during FY20. On asset quality, gross NPA stood at 1.99% as of March 31, 2020, as compared to 1.18% as of March 31, 2019. Net Interest Margin remained stable at 3.4% during FY20 as compared to 3.3% in previous fiscal. Housing and Development Finance Corporation– HDFC Ltd, a housing finance company, was formed in 1977 by International Finance Corporation(IFC), Washington, and the Aga Khan Trust. As on March 31, 2020, HDFC’s gross loans, stood at Rs. 5,167.73 bn. The company’s market capitalization is at Rs 2,828 billion as of 31st March 2020. Its total employee count was at 3095 as of 31st March 2020.
Tata Motors Ltd has Long term rating of AA- and Short term rating A1+ Incorporated in 1945, Tata Motors Limited is India’s largest automobile company and the market leader in the domestic CV industry and one of the top five manufacturers of PVs in India. In the domestic CV industry, TML has one of the most diversified product portfolios with a presence spanning across light, medium and heavy-duty segments of the CV industry.
Export–Import Bank of India (EXIM) was established in 1982 under Export-Import Bank of India Act 1981. It is wholly owned (100%) by Government of India. EXIM provides financial assistance to exporters and importers, and for functioning as the principal financial institution for coordinating the work of institutions engaged in financing the export and import of goods and services in order to promote the country’s international trade.
The Housing Development Finance Corporation Limited (HDFC) was amongst the first to receive an ‘in principle’ approval from the Reserve Bank of India (RBI) to set up a bank in the private sector, as part of RBI’s liberalization of the Indian Banking Industry in 1994. The bank was founded in August 1994 in the name of ‘HDFC Bank Limited’. HDFC Bank is promoted by HDFC Ltd. Currently, HDFC Bank Ltd. (HBL) is the largest private sector bank in India. As on March 31, 2020, the bank’s total asset stood at Rs.15305.11 billion. As of March 31, 2020, the Bank’s distribution network was at 5,416 banking outlets and 14,901 ATMs / Cash Deposit & Withdrawal Machines (CDMs) across 2,803 cities.
National Highway Authority of India (NHAI) was constituted under Section 3(1) of the National Highways Authority of India Act, 1988 and commenced operations in February 1995 to develop, maintain and manage national highways in the country. NHAI is vested with executive powers for developing national highways in India by the Ministry of Road Transport & Highways (MoRTH). NHAI is mandated to implement NHDP and Bharatmala, and is responsible for implementing other national highway projects, mainly those ensuring connectivity with major ports.
The Jawaharlal Nehru Port Trust (JNPT) was established in 1989 occupies a prominent place among the most modern ports in India and is ranked 28th among the top 100 container Ports in the world. The Jawaharlal Nehru Port Trust (JNPT) at Navi Mumbai (formerly known as the Nhava Sheva Port) is the largest container port in India and has been a key enabler for EXIM trade growth in India. JNPT handled over 5 Mn TEUs in FY 2018-19, which is share of ~52% of the total containerized cargo handled by all major ports in the country. Initially, JN Port was planned to be a ‘satellite port’ to the Mumbai Port with a purpose to decongest traffic.
National Bank for Agricultural and Rural Development (NABARD) was set up in 1982 through the NABARD Act, 1981, as an apex financial institution for the development and flow of credit to agriculture, small scale industries, cottage and village industries, rural sector, handicrafts and other rural crafts. NABARD also has a mandate to promote the integrated and sustainable development of rural areas. It also frames policies and guidelines for rural financial institutions and provides financial assistance to various issuing financial institutions and banks through refinancing. NABARD also monitors the flow of ground-level rural credit. NABARD is wholly owned by the GoI, with effect from March 31, 2018.
Indian Railway Finance Corporation (IRFC) was set up in 1986 as the dedicated financing arm of the Indian Railways for mobilizing funds from domestic as well as overseas Capital Markets. IRFC is under the administrative control of the Ministry of Railways. Company is registered as Systemically Important Non–Deposit taking Non-Banking Financial Company (NBFC – ND-SI) and Infrastructure Finance Company (NBFC- IFC) with Reserve Bank of India (RBI).
Fortish Healthcare is seeing a lot of bidding interest but even if the company passes on to strong hands, bondholders and lender of promoter holding companies are not going to see any benefits, The lenders against pledged shares of Fortis Healthcare have invoked the pledge and currently own a large stake in the company.