Fresh RBI guidelines on new banking licences by July

The central bank will come out with a discussion paper on new norms for granting banking licences to private sector companies and non-banking financial companies by July

The Reserve Bank of India on Tuesday said that it will come out with a discussion paper on new norms for granting banking licences to private sector companies and non-banking financial companies (NBFCs) by July end, reports PTI.

The discussion on new banking licences will be posted on the website of the central bank for public comments, RBI governor D Subbarao said while unveiling the monetary policy for 2010-11.

"Thereafter, detailed discussions will be held with all stakeholders on the discussion paper and guidelines will be finalised based on the feedback," he said.

All applications received in this regard would be referred to an external expert group for examination and recommendations to the RBI for granting licenses, he added.

Separately, in Parliament today, minister of state for finance Namo Narain Meena said although expressions of interest (EoIs) of some private entities have been received by the RBI, they are to be processed once the guidelines for issuing fresh banking licences to private players are finalised.

The move follows the announcement made by finance minister Pranab Mukherjee in the Budget speech 2010-11 to grant more banking licences.   

"The Indian banking system has emerged unscathed from the crisis. We need to ensure that the banking system grows in size and sophistication to meet the needs of a modern economy. Besides, there is a need to extend the geographic coverage of banks and improve access to banking services,” Mr Mukherjee had said.

The RBI was considering giving some additional banking licences to private sector players. NBFCs could also be considered, if they meet RBI's eligibility criteria, the minister had said.


RBI rate hike: Realtors see no adverse impact on demand

The RBI's decision to tighten monetary policy may not have a negative impact on housing demand, as real-estate developers do not expect any increase in home loan rates   

Real-estate developers on Tuesday said that the Reserve Bank of India (RBI)'s decision to tighten monetary policy would not have a negative impact on housing demand, as they do not foresee any increase in home loan rates.   

“It’s a very balanced and calibrated announcement meant to control inflation. The signals from the public sector units (PSUs) as well as private banks are favourable and they expect no increase in home loan rates. This will be to the ultimate interest of homebuyers,” DLF Group executive director Rajeev Talwar told PTI. Mr Talwar said that housing demand would remain firm.

Parsvnath Developers’ chairman, Pradeep Jain, said, “I do not foresee interest rates going upwards. Therefore, there is no concern for the real estate sector.”

In a move to curb inflation, the apex bank today increased the repo and reverse repo rates by 25 bps each and the CRR also by 25 bps.

Property consultants also feel that the hike in policy rates would not have any significant impact on the housing sector, which has witnessed a revival in demand over the last one year.

“It was on expected lines. This would have a sentimental and emotional setback on residential demand, not on office or retail,” Jones Lang LaSalle Meghraj country head Anuj Puri said.

However, he cautioned that a continuous increase in the repo rates would curtail the optimistic sentiment in the real-estate sector.

Knight Frank India's national director for residential agency, Anand Narayanan said, “Real estate is having a strong sentiment now. This will not have any significant impact on the buyers.”


Talwalkars’ profits are too meagre; its IPO too expensive

The fitness chain makes 10% net margin—but the business is too small, suffers from poor cash flows and the stock is priced exorbitantly

The Mumbai-based fitness chain Talwalkars Better Value Fitness Ltd (TBVF), which operates ‘Talwalkars’ gyms and health clubs, hits the market on 21 April 2010 with its initial public offering (IPO). TBVF operates 58 health clubs in 28 cities having a membership of 55,000. The company owns 44 clubs and six others are operated under a joint venture with Pantaloon and other franchises.

“We will double our headcount by 3,000 employees to manage the 38 new clubs. This will take our employee strength to 6,000,” Prashant Talwalkar, CEO, TBVF, told PTI.

The company’s operating revenue has grown from Rs10.20 crore in FY06 to Rs59.20 crore in FY09. Correspondingly, it recorded a net profit of Rs5.69 crore, Rs4.52 crore and Rs1.09 crore against a total income of Rs59.42 crore, Rs38.50 crore and Rs22.29 crore in FY09, FY08 and FY07 respectively.

TBVF’s cash and cash equivalents have been meagre for fiscal 2009 despite positive cash flows from both operating and financing activities. This was due to significant investments in fixed assets. Its earnings per share (EPS) were Rs3.61, Rs2.88 and Rs0.72 in the financial years 2009, 2008 and 2007 respectively. There is no comparable stock in the market. At a floor price of Rs123, the company’s diluted PE is an exorbitant 42.71.

TBVF operates in a highly competitive market and faces stiff competition from other players operating both in the organised and un-organised sectors. Some foreign players have also entered the Indian physical fitness market.

TBVF is marred by conflict of interests. According to the RHP, there are 11 gyms which operate under the trademark name ‘Talwalkars’ which are owned and operated by TBVF’s group companies. Of these, seven gyms are held by three of TBVF’s promoter-directors Madhukar Vishnu Talwalkar, Girish Madhukar Talwalkar and Prashant Sudhakar Talwalkar through their proprietary undertakings and partnership firms while the other four gyms are held by Life Fitness India Private Limited, in which Madhukar Vishnu Talwalkar jointly with his wife holds 50% of its outstanding equity share capital. TBVF has entered into trademark license agreements with these 11 gyms.

Talwalkars Fitness Solutions Private Limited (TFSPL), another company controlled by Rahul Talwalkar, Rohit Talwalkar and Amber Talwalkar, operates 13 gyms in Mumbai, Baroda, Ahmedabad, Raigad, Thane and Nasik. There is no separation or non-competing agreement between these two independent companies (The Talwalkars Group and TFSPL). This Group owns and operates gyms under the same name and can claim the history of the brand Talwalkars and can be a potential conflict of interest.

Moreover, TBVF’s business is not scalable as it cannot bring in economies of scale by adding more gyms. The company owns 58 health clubs across India and has generated a mere Rs5.69 crore net profit in FY09.

India Infoline Ltd is the lead running manager to the issue. The issue opens on 21 April 2010 and closes on 23 April 2010. The company plans to raise Rs74 crore to Rs77 crore at a price band of Rs123-Rs128 by issuing fresh equity of 60.50 lakh shares of Rs10 each.

Ratings agency CARE has assigned ‘IPO Grade 3’ to the issue. According to the red herring prospectus, the proceeds (Rs70.81 crore) will be utilised for setting up of additional health clubs and repayment of unsecured loans to the tune of Rs20 crore. It plans to add 27 health clubs by the end of fiscal 2011 with an estimated cost of Rs50.22 crore. 




7 years ago


Rg 1203/09
Talwalkars fit and active
Pantaloon fitness pvt ltd,
6th floor, big bazaar, old madras road Bangalore

The manager
Talwalkars fit and active head office
Pantaloon fitness pvt ltd,

Respected management
The purpose of writing this letter is to send my sincere appreciation for Mr. manoj (floor manager) I had an unfortunate experience that kidding manners from him which was a headache of the day but however without hesitation Mr. manoj took direct owner ship of the issue and assisted me to ensure the problem was resolved ,it has been my experience that whenever employees provide quality customer service of the highest caliber, they tend to be employees that are quickly promoted to leadership positions and or competing organizations seek to hire ,so do take care of this employees as Mr. manoj is a true asset to your organizations .and At all times I have found Mr. manoj floor manager to be dependable, reliable, hard-working, conscientious, honest, peace-loving, courteous, love and business have opposite arithmetic they are opposite in nature. So they cannot meet. Business is giving less and taking more, but manoj deals different way which both business and love need an exchange, a communication, a happening. When the sense of belongingness grows in us. Love finds its true expression. Not just as a formality. But he deals both are same way! Manoj takes good care of those whom is client.
From The clients respect that you gain through virtue is very different from the respect you gain through the position. The respect you get through a position is short-lived and temporary. But the respect that you gain just because of your smile, your attitude, your virtues are there with you all the time. As far as my feel Mr. Manoj goes this way
I commend both Mr. manoj and your organization for the value of service provided and I feel grateful to be one of your customer based on the service I have received from manoj .am an professional software in engineer in working multinational company so I will not have hesitated to recommend your organization to all of my business associates and friends

Yours sincerely

iam living in the present moment because the present moment is inevitable


7 years ago

Really bad analysis. Moneylife should reconsider this report. Talwalkars went from Rs.128 to Rs.170 on the first day. Today it went to Rs.192. Gaining almost Rs.64 in 2 days is amazing. I wonder why I trusted Moneylife and did not buy Talwalkar shares.


7 years ago


k a prasanna

7 years ago

Analysis is correct. Pl. also log on to for analysis on all ipos

vijay kumar gupta

7 years ago

brief but to the point analysis. that is what moneylife is all about.

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