Companies & Sectors
HDFC to divest 10 percent stake in insurance arm
Mumbai : Housing Development Finance Corp (HDFC) on Wednesday said it intends to sell up to 10 percent stake in its life insurance arm by way of an initial public offer when market conditions are favourable.
 
The development financial institution held a 61.3 percent stake in the non-listed HDFC Standard Life Insurance Company as on March 31, and said in a regulatory filing with the bourses that it intended to retain it as a subsidiary after the public offer.
 
For the financial year ended March 31, HDFC Life had a gross premium income of Rs.16,313 crore and a total income of Rs.17,954 crore. The profit-after-tax was Rs.818 crore, while the net worth was reported at Rs.3,150 crore.
 
The announcement on divestment was made just before the opening bell at Indian bourses on Wednesday. The shares of the company rose Rs.20.75 or 1.84 percent at Rs.1,148.05, within minutes after trading started on the BSE.
 
HDFC Life is a joint venture between the Indian financial institution and Standard Life, a global long-term investment savings player with headquarters at Edinburgh in Britain, that had a revenue of nearly $13 billion in 2015.
 
Earlier this year, HDFC had concluded the sale of another 9 percent stake in HDFC Life to Standard Life for around Rs.1,700 crore, to take the British company's holding to 35 percent from the earlier 26 percent.
 
This had valued HDFC Life at around Rs.18,500 crore. The group now hopes for a valuation of around Rs.22,500 crore during the public offer.
 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.

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Rising household indebtedness a concern: report
With WPI inflation consistently undershooting projections, the real value of nominal debt or credit card outstanding has become higher than expected. This may contribute to the building up of financial risks and make it difficult for households to manage their balance sheets says a report from SBI 
 
The current increment in bank lending has mostly been to the personal loan segment. Moreover, within the personal loans, it is the credit card loan segment that is rising rapidly, indicating a rise in consumer indebtedness. However, household debt as measured by credit outstanding per credit card in India has been rising even in real terms (after being adjusted for wholesale price index (WPI) inflation, says a report from State Bank of India (SBI) Ecowrap. 
 
It said, "Personal loans share is currently rising in the total loan portfolio which leads one to wonder if this increase suggests a movement towards a similar glaring situation as had happened prior to 2008 global crisis when share of personal loans increased in total ASCB loans or does it portend a potentially brighter economic outlook ahead."
 
The divergence between the deposit and credit growth has increased recently. While all scheduled commercial banks (ASCB) deposit growth has hit 53-year low of 9.9% in FY16 as on 18 March 2016, the credit off take has shown some improvement (at 11.3% as on 18 March 16). Household debt as measured by credit outstanding per credit card in India has been rising both in nominal and real terms after being adjusted for WPI inflation. In nominal terms, the outstanding per credit card stood at Rs8,668 as of February 2016, a rise of 15.5% year-on-year, the Ecowrap report says.
 
Further, SBI says, when the historical series is looked at, one finds the share of personal loans to total loans by ASCB increased prior to the global financial crisis of 2008. It increased to 23% by 2006 from 12% in 2001 and it declined subsequently.
 
 
According to the report, personal loans share is once again rising in the total loan portfolio leading one to wonder if this increase suggests a movement towards a similar glaring situation or it portends a brighter economic outlook ahead. However, personal loans share at present does not seem worrisome with the level even below March 2009. 
 
"Though the rise in personal loans might suggest an improving economic momentum going forward, however increase in personal loans alone is not enough. This is corroborated by an in-house study about the relation between credit allocated to industry and personal loans over the past ten years which indicates that industry credit granger causes personal credit and not the other way round," it added. 
 
During March 2016, WPI inflation remained in the negative zone for the 17th month in a row at - 0.85% compared with -0.91% in February 2016 and -2.33% in March 2015. However the larger question is whether this continuous disinflation for the past 17-months reflects worsening consumer demand, the report says.
 
 
According to SBI, despite the negative inflation for the past 17 months, the real outstanding has increased. This indicates that with WPI inflation consistently undershooting projections, the real value of nominal debt or credit card outstanding has become higher than expected. The result does not change much even if we take consumer price inflation into account. This may, in turn, contribute to the building up of financial risks and make it difficult for households to manage their balance sheets, it added.

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COMMENTS

Mahesh S Bhatt

8 months ago

Death by Debt is unwritten untold Goevrnments Policy across the Globe.

Create bubbles of property/stocks/ commodities rip up free natural resources and sell at astronomical values to gullible stupid educated grads who take loans from education/house/health/festival.

These indebted youth let them die or struggle to repay while Political + Business enjoy the richness.

Mahesh Bhatt

B. Yerram Raju

8 months ago

All personal loans are bartering the future for the present and this has been accelerated with Credit Cards linkage to several Tourist Travels and Airlines. People without battering the eyelid today travel long distances and overseas by buying the airtickets and hospitality to repay in instalments. On top of this even the SBI Card offers Reward Points that are tagged only to purchases of items worth the cash value of reward points on the net.
Consumerism is living beyond one's own means and living on debt. The type of growth we are having today built on such consumerism is highly risky. It is time that the powers that be start thinking on austerity.
The FM thinks of this when his Fiscal Deficit is close on its heels. He asks his bureaucrats not to travel abroad or travel with permission or travel on economy class in airlines etc.,etc. Austerity has to start at several levels and several instrumentalities. This is imperative for sustainable growth.

Ramesh Poapt

8 months ago

big co;npa bubble, auto loan bubble, housing loan bubble, edu loan bubble, credit card/personal loan bubble...........burst previous 2008....next 201?...

MG Warrier

8 months ago

Those who have a regular income are also prone to borrow regularly. Personal loans and credit cards trap this category of borrowers in a 'vicious cycle'. I was a 'victim' of this behavioural pattern till retirement in 2003. Though interest rates were reasonably low as I was borrowing from staff cooperative credit society. I give below an excerpt from my forthcoming article in The Global ANALYST to illustrate the trap:
"What is negative interest rate for the consumer?
For starters, let me explain this concept with an example. Fish-vender Arundhati from a small town in Kerala has been selling fish by carrying headloads of fish from house to house for the last 25 years. Today, she buys fish costing about Rs3,500 from the wholesale market, transports it in an auto-rikshaw to her town and makes about Rs5,000 by evening by sale by carrying from door to door. Whole her life, she has been dependent on ‘Blade Bhasi’ a local money lender. Every Monday morning she borrows Rs5,000 and repays Rs5,500(including Rs500 towards interest) on Saturday evening. In this process, if the original Rs5000 belonged to Arundhati, the additional Rs500 paid is the negative interest she is paying to Blade Bhasi for safe custody of Rs 5,000 from Saturday to Monday. If the corpus of rs5,000 belonged to Blade Bhasi, the interest paid by Arundhati on the borrowed money @Rs500 per week on rs5,000 is at around 500 per cent per annum."
Your views are welcome.
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YouTube launches 360-degree live streaming
New York : Video sharing platform YouTube has introduced a 360-degree live streaming and spatial audio to its platform for both the viewers and event organisers.
 
"Now anyone, with just their phone, can have that front-row experience without having to be there," technology website The Verge quoted Neal Mohan, chief product officer, YouTube, as saying.
 
Just as watching a concert in 360 degrees can give you an unmatched immersive experience, spatial audio allows you to listen along as you do in real life, where depth, distance and intensity all play a role. 
 
Mohan's announcement arrives just after Facebook unveiled its plans for expanding live-streaming and its own design for a 360-degree camera, the report said.
 
"As a user, you don't need to do anything," Mohan said, adding, "There is no fancy technology to purchase or integrate."
 
Just open the YouTube app on your smartphone and you are ready to go. 
 
According to Mohan, along with 360-degree live streaming, they are also launching spatial audio for on-demand YouTube videos. 
 
"We are working with companies like VideoStitch and Two Big Ears to make their software compatible with 360-degree live streams or spatial audio on YouTube and more will be available soon," Mohan noted.
 
He said that the company would also make 360-degree live streaming and spatial audio technologies available at all YouTube Space locations around the globe.
 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.

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COMMENTS

Nanda Patel

8 months ago

https://http://www.youtube.com/watch?v=zDAYZU4A3w0

not a live steam but just a 360 video.

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