Consumer Issues
CIBIL-TransUnion launch newer version of credit score

The CIBIL TransUnion Score 2.0, which tracks six month's credit history, will grade customers on a risk index ranging from 1 to 5, with 1 denoting the highest risk and 5 the lowest risk of default

Mumbai: Credit information services provider CIBIL and TransUnion on Thursday formally launched a newer version of their score which incorporates customers having a credit history of less than six months, reports PTI.
The CIBIL TransUnion Score 2.0 will grade customers on a risk index ranging from 1 to 5, with 1 denoting the highest risk and 5 the lowest risk of default.
The new version will use different parameters like past delinquency, movement of average balances in accounts, credit seeking enquiries made, credit utilisation in the past, type of credit availed and the age for arriving at a number on the risk index of 1 to 5.
CIBIL's managing director Arun Thukral said the new version has been launched keeping in mind the changes observed in borrowing behaviour of consumers and evolving market landscape.
Earlier, customers having a credit history of less than six months were not able to get a credit score which will not be the case now, he said.
The newer version is initially made available only for CIBIL's 862 member banks and financial institutions, after which it will be available for the customers as well, he said, without giving an exact timeline for the completion of the process.
However, the fee structures for customers for availing their individual scores will not change, Thukral said.


Great deal for GSPC under Gujarat government pressure?

GSPC may eventually end up with more than a 90% stake and possible delisting of Gujarat Gas. That too when there were several domestic and international buyers for the stake put on the block by the BG Group

The BG Group (formerly British Gas) has reached an agreement with GSPC to sell its majority stake in Gujarat Gas (BG owns a 65.12% stake) for Rs24.6 billion. The implied final deal price of Rs295/share (close to Nomura’s target price of Rs300) means a 12% discount to the current market price and a sharp 30% discount to the price when BG announced its intention to exit. BG had first announced its intention to exit Gujarat Gas in November 2011. The question being asked in corporate circles is that did the state government have a role in ensuring that GSPC got the deal and that too at a price that the state government wants?


It is reported that a clutch of government-owned firms, private companies and foreign entities were eyeing the 65% stake. PSUs BPCL, GAIL, ONGC, GSPC, private entities Adani Group, Torrent Power, and foreign firms European Gas Company GDF Suez, Germany-based E.ON looking at acquiring the BG Group’s promoter’s stake of Gujarat Gas Company. However, pressure from the state government is believed to be the main reason for other contenders dropping from the race.


With the purchase of a 65.12% stake from BG Group, new owner GSPC would have to come up with a mandatory 26% open offer for minority share holders. Nomura says that most of the minority shareholders may opt to tender their shares. Current regulatory uncertainties, exit of BG Group (with high standards of corporate governance) as a promoter, and limited growth opportunities in current operating areas of Gujarat Gas are the reasons, according to Nomura, for minority shareholders to opt to tender their shares.


The open offer may lead to GSPC eventually acquiring more than a 90% stake and possible delisting of Gujarat Gas. In Nomura’s view, it would also make strategic sense for the GSPC Group to merge Gujarat Gas with its existing city gas distribution entity GSPC Gas, which also operates in Gujarat.


Nomura Equity Research expects the Gujarat Gas stock to correct to deal valuation levels. Mandatory open offer of 26% would also happen close to the deal price. Low deal valuation reflects increased regulatory uncertainty and declined investors’ interest.


The increased regulatory uncertainties, post PNGRB’s (Petroleum and Natural Gas Regulatory Board) severe tariff order for Indraprastha Gas, and the fact that most other bidders lost interest (of six to seven bidders only GSPC remained in the fray) are the key reasons for lower deal valuation, in Nomura’s view. Nomura adds that having made its intention to exit Gujarat Gas public, the BG Group did not want to prolong the process and agreed on a somewhat depressed deal valuation.


Sensex, Nifty stretched but reversal not in sight: Thursday Closing Report

Watch 5725 on the Nifty for a trend reversal

Assertion of the government to pursue economic reforms to put the economy back on the growth track and support from the Asian markets led the market higher for the fourth day in succession. Today the Nifty closed at 5,788, its highest since 28 April 2011. The index gained 1% on the government’s reforms proposal, the highest in the past eight trading days (including today). The benchmark may continue the uptrend, however, look out for 5,725 after which the index may see some reversal. The National Stock Exchange (NSE) saw a higher volume of 100.38 crore shares and an advance decline ratio of 1093:710.
The Indian market witnessed a gap up opening tracking firm global cues and on expectations that the government would take up insurance and pension reforms today. The US markets closed in the green overnight, but the Dow some of its gains as technology major Hewlett Packard said that its earnings next year would see a sharp decline. Similarly, Asian markets were in the green on firm economic data from the US.
Back home, the Nifty opened at 5,752, 21 points higher, and the Sensex gained 70 points to resume trade at 18,940. The opening figures on both benchmarks were their intraday lows. All-round buying saw the market moving northwards in subsequent trade.
Meanwhile, the rupee continued to rule firm at 51.97 against the greenback in morning trade on persistent dollar selling by banks and exporters in view of sustained capital inflows from foreign funds into the equity market despite firm dollar overseas. The rupee had resumed higher at 52 per dollar and moved in a range of 51.86-52.10, before quoting at 51.97 at 1045 hrs local time.
The upmove helped the BSE Sensex cross the psychological level of 19,000 in early trade. The market extended its gains as trade progressed. The benchmarks hit their highs at around 1.00pm. At the highs the NSE Nifty breached the 5,800 mark and stood at 5,807 while the Sensex jumped to 19,107. 
However, profit booking at higher levels and a lower opening of the key European markets resulted in the local indices paring some of their gains in post noon trade. 
The indices were range-bound in late trade and settled higher let by realty, consumer durables and banking stocks, making it the fourth positive close in a row. The Nifty climbed 56 points (0.98%) to 5,788 and the Sensex surged 188 points (1%) to finish trade at 19,058.
The broader indices underperformed the Sensex today. While the Sensex closed 1% higher, the BSE Mid-cap index gained 0.41% and the BSE Small-cap index rose 0.35%.
The top sectoral gainers were BSE Realty (up 4.94%); BSE Consumer Durables (up 2.44%); BSE Bankex (up 1.92%); BSE Capital Goods (up 1.89%) and BSE Power (up 1.57%). The losers were BSE Healthcare (down 0.92%); BSE IT (down 0.28%) and BSE Auto (down 0.08%).
Twenty of the 30 stocks on the Sensex closed in the positive. The major gainers were BHEL (up 6.57%); ICICI Bank (up 2.93%); Dr Reddy’s Laboratories (up 2.165); State Bank of India (2.15%) and Maruti Suzuki (up 1.97%). The key losers were Cipla (down 3.86%); Mahindra & Mahindra (down 1.24%); Bajaj Auto (down 1.05%); Hero MotoCorp (1.02%) and Coal India (down 0.92%).
The top two A Group gainers on the BSE were—Indiabulls Real Estate (up 8.38%) and Adani Enterprises (up 7.55%).
The top two A Group losers on the BSE were—Gujarat Gas (down 8.52%) and Hexaware Technologies (down 4.05%).
The top two B Group gainers on the BSE were—Landmark Property Development Company (up 19.92%) and BSEL Infrastructure Realty (up 19.87%).
The top two B Group losers on the BSE were—Aarya Global Shares & Securities (down 16.62%) and Piccadily Sugar & Allied Industries (down 10.68%).
Out of the 50 stocks listed on the Nifty, 31 stocks settled in the positive. The main gainers were BHEL (up 7.16%); DLF (up 6.03%); Jaiprakash Associates (up 3.71%); BPCL (up 3.45%) and ICICI Bank (up 3.11%). The key laggards were Cipla (down 4.47%); Lupin (down 3.20%); Ranbaxy Laboratories (down 1.20%); Hero MotoCorp (down 1.17%) and M&M (down 1.14%).
Markets in Asia closed mostly higher on better-than-expected economic news from the US on Wednesday. The news eased worries about the slowing global economic growth. Hopes of the European Central Bank and the Bank of England, which are set to hold policy meetings today, keeping interest rates unchanged also supported the gains.
The Hang Seng rose 0.09%; the Jakarta Composite gained 0.47%; the KLSE Composite climbed 0.71%; the Nikkei 225 surged 0.89% and the Straits Times settled 0.31% higher. On the other hand, the Seoul Composite declined 0.17% and the Taiwan Weighted lost 0.03%. The Chinese market was closed today for a local holiday.
At the time of writing, the key European indices that opened in the red were mostly positive and similarly the US stock futures were trading higher.
Back home, foreign institutional investors were net buyers of shares totalling Rs602.39 crore on Wednesday whereas domestic financial institutions were net sellers of stocks amounting to Rs668.15 crore.
Pharma major Sun Pharmaceutical Industries today said its board of directors has approved the proposal to raise up to Rs8,000 crore through domestic or international offerings, Sun Pharmaceuticals said in a filing to the BSE. The proposal would be put for shareholders’ approval during the annual general meeting scheduled on 8th November. The stock fell 0.15% to close at Rs696.65 on the NSE.
Godrej Properties has launched its new residential villa project, Godrej Gold County, at Tumkur Road, near Bangalore. The project, which is the fourth project of the company in Bangalore, is spread over about 12 acres and is being developed at an investment of Rs100 crore. The stock gained 0.68% to close at Rs596 on the NSE.
Industrial Finance Corporation of India (IFCI) today said its board has decided to proceed with the conversion of Government of India bonds worth Rs 923 crore into equity. With the conversion, the direct shareholding of the government will increase to 55.57%. IFCI, a term lender, is promoted by financial institutions and banks including LIC. The stock tanked 4.70% to close at Rs29.40 on the NSE.



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