Bank licences: Sebi scans listed applicants, firms

As the Reserve Bank of India (RBI) gears up to issue new bank licences, capital markets regulator Sebi has also a job at hand that is of scrutinising all applicants coming under its jurisdiction directly or through group entities. Sebi's scrutiny follows detailed queries shot off by RBI to various regulators in India and abroad as part of its due-diligence of entities seeking to enter banking arena. According to a senior official, Sebi is looking into the capital market track-record of all the group entities of 26 banking aspirants, some of whom are either listed entities or have presence in Sebi-regulated businesses like mutual funds, brokerage and investment banks. The area of prime focus for the Securities and Exchange Board of India (Sebi) is action taken by or underway for violations to various market regulations, he added. The scrutiny is expected to be over this month itself. RBI is granting new bank licences for the first time in about a decade and preliminary screening process is underway for 26 entities that have submitted their applications. As part of this process, RBI has also asked the applicants to provide further details about their promoters, equity structure, financial inclusion programme, proposed banking model, among others, sources said. In addition to Sebi, RBI is also seeking details from other regulators such as insurance watchdog IRDA and pension regulator PFRDA, about the businesses of the applicant entities under their respective jurisdictions. With regard to some applicants, RBI has sought to know details about source of funds and compliance to the structural norms proposed for new banking players. Besides, RBI is seeking additional details from the concerned foreign regulators about those applicants whose group entities have operations, significant business dealings with foreign companies or overseas listings. Sources said this due diligence process involves information exchange with domestic and foreign regulatory authorities for all group entities of the applicants.

NHPC's Rs 1,000 cr tax free bonds issue likely on Oct 15

Siliguri: State-run power producer NHPC is likely to hit the market with its maiden tax-free bonds issue worth Rs 1,000 crore on October 15.

For the issue, the company filed the Draft Red Herring Prospectus (DRHP) with capital market regulator Sebi on Monday.

"We are expecting to come out with Rs 1,000 crore tax-free bonds issue on October 15," NHPC Director (Finance) A B L Srivastava said.

The company would come out with the issue in a single tranche, he told reporters late on Monday.

For this fiscal, NHPC's construction budget is Rs 3,450 crore. Out of that amount, around Rs 1,831 crore is planned to be garnered by way of debt.

The country's largest hydro power is awaiting approvals for about ten projects having total capacity of 8,801 MW.

When asked about government selling stake in the company, Srivastava said it would be decided by the Department of Disinvestment.

The disinvestment is likely through the Offer for Sale (OFS) route, he added.

Mutual funds witness Rs 50,000 cr outflows in July

New Delhi: Investors pulled out a net amount of more than Rs 50,000 crore from various mutual fund schemes in July -- the highest outflow in five months.

The huge pull-out of funds during July followed a net withdrawal of Rs 48,403 crore in the preceding month, taking the total outflows for two consecutive months to close to Rs one lakh crore.

As per the latest data available with market regulator Securities and Exchange Board of India (Sebi), the net outflow of Rs 50,067 crore during July was the highest withdrawal by investors in mutual fund (MF) schemes in a single month since March, when investors had redeemed Rs 1.08 lakh crore.

This has left the MFs' net mobilisation of funds from investors so far in the current fiscal (April-July) at about Rs 45,539 crore.

Mutual fund is an investment vehicle that is made up of a pool of funds collected from many investors for the purpose of investing in securities such as stocks, bonds, money market instruments and similar assets.

At gross level, mutual funds mobilised Rs 7.8 lakh crore in July, but also witnessed redemption worth Rs 8.27 lakh crore -- resulting into a net outflow of Rs 50,067 crore.

This has brought down the total assets under management of mutual funds to Rs 7.6 lakh crore as on July 31, from Rs 8.11 lakh crore in the previous month.

The BSE's benchmark Sensex plunged by 232 points, or 1.2 percent, during the period under review.

"During the financial year 2013-14 so far (April-July), mutual funds net mobilised Rs 45,539 crore as compared to Rs 1,33,976 crore mobilised in corresponding period of 2012-13," Sebi noted.

In the entire fiscal 2012-13, mutual funds had garnered Rs 76,539 crore from investors while a net amount of over Rs 22,000 crore moved out of the mutual funds' kitty during the preceding year.

PTI