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Market regulator Sebi allows MFs to buy, sell credit default swaps

Market regulator Sebi allows MFs to buy, sell credit default swaps

by | Sep 20, 2024 | Share Market


2 min read Last Updated : Sep 20 2024 | 10:52 PM IST


The Securities and Exchange Board of India (Sebi) on Friday allowed mutual funds to participate as buyers and sellers in the credit default swap (CDS) segment and allowed greater flexibility to boost liquidity in the corporate bond market.


The mutual funds (MFs) were previously only allowed as buyers in the CDS segment — with negligible participation owing to restrictions.


The MFs could take such transactions only in the portfolios of fixed maturity plans (FMP) schemes having a tenor of more than one year.


CDS facilitates risk mitigation and investments in lower-rated corporate bonds.

 


It facilitates the swapping of the risk of default through a derivative contract and is akin to insurance. CDS allows an investor to offset their credit risk with another investor, who is willing to reimburse or pay a notional amount in case the borrower or the issuer of the bond defaults.


“Such flexibility to participate in CDS shall serve as an additional investment product for mutual funds and also aid in increasing liquidity in the corporate bond market,” said Sebi.


The market regulator has opened the segment to mutual funds with certain checks and risk management.


Sebi specified that MF schemes may sell CDS only as part of investment in synthetic debt securities, which means sell CDS on a reference obligation covered with cash, g-sec or T-bills. Overnight and liquid schemes will not be allowed to sell CDS contracts.


The schemes can buy CDS only for hedging their credit risk on debt securities.


MF schemes may sell CDS only as part of investment in synthetic debt securities. Overnight and liquid schemes shall not sell CDS contracts.


“The exposure through CDS (Notional amount of both CDS bought and sold) shall not exceed 10 per cent of AUM of scheme and shall be within the overall limit of derivatives exposure as prescribed in Scheme Information Documents,” Sebi noted.

The Association of Mutual Funds in India has been directed to issue guidelines for the valuation and accounting of CDS by MF schemes. 

Decoding the move


Mutual funds were only allowed as buyers, were subject to many other restrictions


Flexibility provided now to buy and sell CDS, with measures to keep risk in check


Exposure through CDS (notional amount of both CDS bought and sold) to not exceed 10% of AUM of scheme  


Amfi to formulate guidelines for valuation and accounting

First Published: Sep 20 2024 | 7:33 PM IST



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Rorix Holdings signs MoU with Adani Ports

Rorix Holdings signs MoU with Adani Ports

by | Sep 20, 2024 | Share Market


Last Updated : Sep 20 2024 | 7:50 PM IST

For exploring opportunities to transform commodities trade landscape

Rorix Holdings (Rorix), the Abu Dhabi-based global trade facilitation and finance company, announces the signing of a Memorandum of Understanding (MOU) during the UAE-India Business Forum with Adani Ports and Special Economic Zone (Adani Ports). This strategic partnership aims to leverage the strengths of both organizations to integrate advanced technologies into their logistics and trading platforms and create synergies that will transform the commodities market ecosystem.

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First Published: Sep 20 2024 | 7:19 PM IST



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Rorix Holdings signs MoU with Adani Ports

Tata Steel commissions India's largest blast furnace at Kalinganagar

by | Sep 20, 2024 | Share Market


Last Updated : Sep 20 2024 | 7:31 PM IST

Tata Steel today successfully commissioned India’s largest blast furnace at Kalinganagar, Odisha. With a total investment of Rs 27,000 crore, the Phase II expansion at Kalinganagar will take the total capacity at the site from 3 million tonnes per annum (MTPA) to 8 MTPA. The new facility was inaugurated by T. V. Narendran, CEO and Managing Director, Tata Steel, in the presence of senior leaders of the Company.

The new blast furnace will significantly boost the plant’s overall production capabilities, allowing Tata Steel to meet the growing demands of various industries, including automotive, infrastructure, power, shipbuilding, and defence. It will also provide advantages in specific areas like oil & gas, lifting & excavation, and construction.

 

With the Phase II expansion, Odisha has emerged as the largest investment destination in India for Tata Steel, with a total cumulated investment of over Rs 100,000 crore in the last 10 years.

The new blast furnace, with a volume of 5,870 m3 , is equipped with state-of-the-art features for long campaign life and an eco-friendly design to optimise the steelmaking process. This blast furnace will utilise four top combustion stoves, a first in India, along with two preheating stoves for optimum specific fuel consumption in hot metal production. In a first for Tata Steel, a dry gas cleaning plant has been installed to maximise energy recovery from by-product gas. The world’s largest Top Gas Recovery Turbine (TRT) of 35 MW power generation capacity will help with the recovery of an additional 10% of energy. An evaporative cooling system is being employed for the first time in an Indian blast furnace, optimising space footprint while lowering specific water and power consumption by approximately 20% compared to conventional designs. The blast furnace will also have a zero-process water discharge plan with rainwater harvesting.

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First Published: Sep 20 2024 | 7:13 PM IST



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Rorix Holdings signs MoU with Adani Ports

Northern Arc Capital IPO ends with nearly 111x subscription

by | Sep 20, 2024 | Share Market


Last Updated : Sep 20 2024 | 6:04 PM IST

The offer received bids for 238.22 crore shares as against 2.14 crore shares on offer.

The initial public offer (IPO) of Northern Arc Capital received bids for 2,38,22,43,807 shares as against 2,14,78,290 shares on offer. The issue was subscribed 110.91 times.

The Qualified Institutional Buyers (QIBs) category was subscribed 240.79 times. The Non Institutional Investors (NIIs) category was subscribed 142.41 times. The Retail Individual Investors (RIIs) category was subscribed 31.08 times.

The issue opened for bidding on 16 September 2024 and it closed on 19 September 2024. The price band of the IPO was fixed between Rs 249 to 263 per share.

 

The initial public offer (IPO) consisted of fresh issue to raise Rs 500 crore through issuance of 1.90 crore equity shares at the lower band of Rs 249 per share (face value Rs 10 per share) and 2.01 crore equity shares at the upper band of Rs 263 per share.

The issue included an offer for sale (OFS) of 1.05 equity shares for raising 262.55-277.00 crore from the investors Leap Frog Financial Inclusion India (II) 38,44,449 equity shares, Accion Africa-Asia Investment Company 12,63,965 equity share, Eight Roads Investment Mauritius II 17,46,950 equity shares, Dvara Trust 13,44,828 equity shares, 360 One Special Opportunities Fund 14,08,918 equity shares and Sumitomo Mitsui Banking Corporation 9,23,210 equity shares.

The net proceeds from the fresh issue will be used for augmenting the capital base to meet future capital requirements. The issue will bring the benefits of listing the equity shares on the stock exchanges, including enhancing brand image among existing and potential customers and creation of a public market for the equity shares in India.

Ahead of the IPO, Northern Arc Capital on 13 September 2024, raised Rs 228.86 crore from anchor investors. The board allotted 87.02 lakh shares at Rs 263 each to 15 anchor investors.

Northern Arc Capital is a diversified financial services platform catering to the diverse retail credit requirements of the under-served households and businesses in India. Over the last 15 years, the company has facilitated financing of over Rs 1.73 lakh crore touching 10.18 crore lives across India. The business model is diversified across offerings, sectors, products, geographies and borrower categories.

The firm reported a consolidated net profit of Rs 308.33crore and income from operations of Rs 1,712.11 crore for the twelve months ended on 31 March 2024.

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First Published: Sep 20 2024 | 5:53 PM IST



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HDFC unit HDB Financial Services approves raising Rs 2,500 cr via IPO

HDFC unit HDB Financial Services approves raising Rs 2,500 cr via IPO

by | Sep 20, 2024 | Share Market


HDB financial services, HDFC Group | Credit: X

1 min read Last Updated : Sep 20 2024 | 5:27 PM IST


India’s HDB Financial Services, a unit of HDFC Bank, has approved raising Rs 2,500 cr ($299 million) through a fresh issue of shares in its initial public offering, the lender said on Friday.

 


Existing shareholders will also sell some stake in the IPO via an offer for sale, the details of which were not revealed in an exchange filing.

 


HDB Financial’s listing follows the country’s central bank norms introduced in 2022, which required large non-banking financial companies (NBFC) to be listed on stock exchanges by September 2025.

 


Earlier in 2024, HDFC Bank had said it planned to start the process of HDB Financial’s listing later in the year.

 

 


Incorporated in 2007, HDB Financial provides secured and unsecured loans and has more than 1,680 branches across India.

 


(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

First Published: Sep 20 2024 | 5:27 PM IST



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Rorix Holdings signs MoU with Adani Ports

Adani Ports spurts on inking MoUs with Rorix Holdings

by | Sep 20, 2024 | Share Market


Last Updated : Sep 20 2024 | 4:16 PM IST

Adani Ports and Special Economic Zone advanced 2.49% to Rs 1,443 after the firm informed that it signed a memorandum of understanding (MOU) with Rorix holdings to revolutionize the commodities market ecosystem.

This strategic partnership aims to leverage the strengths of both organizations to integrate advanced technologies into their logistics and trading platforms and create synergies that will transform the commodities market ecosystem.

Rorix Holdings, a subsidiary of International Holding Company / Sirius International Holding, is dedicated to revolutionizing trade finance, consulting, commodities exchange, and trade insurance sectors.

Dr. Thani bin Ahmed Al Zeyoudi, executive chairman of Rorix Holdings, stated, Our partnership with Adani Ports will create an innovative and efficient commodities market ecosystem. By combining our expertise in regulated financial platforms and market infrastructure with Adani Ports’ strength in logistics and port management, we aim to revolutionize the way commodities are traded, stored, and managed.

 

Karan Adani, managing director of APSEZ said, This partnership represents a unique opportunity to transform the commodities trade landscape. By leveraging next-generation technologies and combining our expertise, we aim to redefine how commodities markets operate. The collaboration between Rorix and Adani Ports is a significant step towards our ambition to become one of the largest integrated transport and logistics infrastructure companies globally, providing comprehensive end-to-end services.

Adani Ports & Special Economic Zone is in the business of development, operations and maintenance of port infrastructure (port services and related infrastructure development) and has linked multi product Special Economic Zone (SEZ) and related infrastructure contiguous to port at Mundra.

The companys consolidated net profit surged 47.2% to Rs 3,112.83 crore on 11.34% rise in revenue from operations to Rs 6,956.32 crore in Q1 FY25 over Q1 FY24.

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First Published: Sep 20 2024 | 4:02 PM IST



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