Alternative Investment
Companies raise Rs2.4 lakh crore debt through private placement during January-August

During January-August this year, more than 1,500 companies garnered a total of Rs2.39 lakh crore through private placement compared to Rs1.5 lakh crore same period last year


Mumbai: Over 1,500 Indian companies raised a whopping Rs2.39 lakh crore through private placement of debt securities or bonds in the first eight months of the year, reports PTI.

 

This represents a jump of 59% from Rs1.50 lakh crore raised in the year-ago period, data from SEBI shows.

 

In debt private placements, companies issue debt securities or bonds to institutional investors to raise capital.

 

During January-August period this year, Indian companies garnered a total of Rs2.39 lakh crore through this route compared to Rs1.5 lakh crore in the same period in 2011, according to data available with the market regulator.

 

In 2011, funds mopped by Indian companies through private placement of debt route was to the tune of Rs2.43 lakh crore.

 

The funds raised during the period under review was mobilised by a total of 1,513 institutions and corporates compared to 1,033 in the year-ago period.

 

SEBI, however, did not disclose the segment-wise fund raising details. As per a report by Prime Database, financial institutions and banks accounted for a major part of capital.

 

As per the report, Indian financial institutions or banks raised a total of Rs32,980 crore in the first quarter of current fiscal (2012-13).

 

The report said that in April-June quarter, PFC raised Rs8,398 crore through private placements, HDFC (Rs4,790 crore), Hindalco (Rs4,500 crore) and NABARD (Rs4,379 crore).

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SEBI slaps Rs60 lakh fine on two entities for fraudulent trading

SEBI said Krupa Sanjay Soni and Sanjay Soni sold shares in Shree Global Tradefin acting as a part of a group and thus profited significantly from the offloading

New Delhi: Market regulator Securities and Exchange Board of India (SEBI) has imposed a penalty of Rs60 lakh on two individuals -- Krupa Sanjay Soni and Sanjay Soni -- for alleged fraudulent trading in the shares of Shree Global Tradefin Ltd (SGTL), reports PTI.

 

Probe carried out by SEBI revealed that SGTL share price recorded a jump of 31.8% in 163 trading days. The investigation covered the period from 23 March 2009 to 20 November 2009.

 

"The noticees (Krupa Sanjay Soni and Sanjay Soni) have net sold 32,810 shares of SGTL acting as a part of a group and thus profited significantly during the investigation period from the offloading of the shares," a SEBI order dated 14th September said.

 

The noticees (Krupa Sanjay Soni and Sanjay Soni) along with the other entities of Krupa Soni Group had dealt in the scrip of SGTL in a fraudulent and manipulative manner during the period under investigation that created false and misleading appearance of trading, artificial volume and price manipulation in the scrip, it said.

 

"... impose a penalty of Rs30 lakh each on the Noticees, amounting to a total of Rs60 lakh under Section 15HA of the SEBI Act...the penalty is commensurate with the default committed by the Noticees," the order added.

 

Considering the practices indulged in by them and the group entities, the order said the gains per se were made by the two noticees.

 

They traded in the scrip in a manner meant to create artificial volumes and liquidity which is an important criterion, apart from price, capable of misleading the investors while making an investment decision, SEBI added.

 

"... anyone could have been carried away by the unusual fluctuations in the volumes and been induced into investing in the said scrip. Besides, this kind of activity seriously affects the normal price discovery mechanism of the securities market," the order said.

 

Further, the regulator said information on record does not indicate that the violations of Krupa Sanjay Soni and Sanjay Soni are repetitive in nature.

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RBI issues guidelines on banks' illiquid assets

RBI guidelines require banks to make specified valuation adjustments for various risks or costs in their portfolios including derivatives, which are subject to 'mark to market' requirement and also for illiquidity of these positions

 
Mumbai: The Reserve Bank of India (RBI) has issued draft guidelines on prudent valuation of banks' long-term assets which are illiquid in nature, reports PTI.
 
"The prudent valuation adjustment for illiquid positions has assumed greater importance in the wake of the recent financial crisis," RBI said in the draft supplementary guidance.
 
"This guidance seeks to provide indicative guidelines to banks to define illiquid positions and subsequent valuation adjustments through Tier I capital," it said.
 
The guidance also contains certain additional valuation adjustment to be made to the derivatives portfolio, it said.
 
These guidelines require banks to make specified valuation adjustments for various risks or costs in their portfolios including derivatives, which are subject to 'mark to market' requirement and also for illiquidity of these positions.
 
The guidelines on which comments are invited till 19th October, permit banks to follow any recognised model or method for computing the amount of valuation adjustment.
 
RBI said that illiquid positions are generally disposed of at much lower price than the value reflected by banks in the books of accounts as per applicable accounting standards.
 
These concerns have become more pronounced after the financial crisis.
 
The recent market events such as large capital inflows or outflows, global financial crisis, large increases in government borrowings, frauds involving many active market participants in particular market segments leading to erosion of confidence in the financial markets, etc. could render the prices quoted a few days back or even the same day unreliable for fair valuation, it said.
 
Banks need to take into account such events while valuing their positions, it said.
 
Liquidation of large concentrated positions may result in adverse movement in the price the moment the off-loading starts, particularly when the market is not deep, it said.
 
Banks need to make a downward adjustment to the fair value of such positions reflected in the books of the banks, to reflect this uncertainty, it added.
 

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COMMENTS

Ramesh Poapt

5 years ago

RBI and PSU banks facing many odds.FinMin tryies to showcase goodie picture but the fact is quite reverse.Concealed deterioration has gone far away.make or break gamble is on...

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