IRDA appoints M Rama Prasad as Health Insurance Forum Chairman

IRDA has said that the Forum was necessary for effective dialogue between service providers (hospitals), the insurance companies, TPAs, and the consumers in general.

Insurance regulator IRDA announced the appointment of M Rama Prasad as chairman of newly-formed Health Insurance Forum that would eventually become a self-regulatory organisation to help promote health insurance. The Health Insurance Forum, as it is called, would help in evolving policies and processes for the health insurance sector. M Rama Prasad is a member (Non-life) of the Insurance Regulatory and Development Authority (IRDA), according to a notification issued.

The forum will have 32 members, including CEOs of health insurance companies, life insurers, third party administrators (TPAs), officials from labour and health ministries and representatives of health service providers. The forum, IRDA has said, would act as a consultative agency between insurance companies and other stakeholders. It would also assist IRDA in collecting data for efficient conduct of health insurance business in the country. It added that if the members failed to attend two consecutive meetings, they would be substituted.

IRDA has said that the Forum was necessary for effective dialogue between service providers (hospitals), the insurance companies, TPAs, and the consumers in general.

This Forum would help form a consultative role in order to enable the evolution of a regulatory structure to take care of the growing needs of the sector. The Forum would meet at least twice a year and the members of would be in office for a period of two years.

Last year from 1 October 2011, IRDA had allowed portability of health insurance schemes, thereby allowing customers to change insurers without losing policy benefits.

Besides three standalone health insurers, Star Health & Allied Insurance, Apollo Munich and Max Bupa, a number of other players including National Insurance Company, United India and Oriental Insurance and ICICI Lombard are also active in this field.

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Tata Motors sales increases 19% to 92,119

Tata Motors’ sales from exports at 5,415 vehicles in February 2012 are higher by 20% compared to 4,504 vehicles in February last year.

Tata Motors’ total sales (including exports) of Tata commercial and passenger vehicles in February 2012 were 92,119 vehicles, higher by 19% over February 2011. The company’s domestic sales of Tata commercial and passenger vehicles for February 2012 were 86,704 units, higher by 19% over 73,039 units, sold in February last year. Cumulative sales (including exports) for the company for the fiscal are 806,354 units, a growth of 12% over 719,976 units, sold last year.

The company’s sales of commercial vehicles in February 2012 in the domestic market were 51,872 units, a 26% growth, compared to 41,130 vehicles, sold in February last year. LCV sales were 32,540 units, a growth of 38%, compared to 23,498 vehicles sold in February, last year. M&HCV sales stood at 19,332 units, a growth of 10%, compared to 17,632 vehicles sold in February, last year.

Cumulative sales of commercial vehicles in the domestic market for the fiscal are 471,917 units, a growth of 19% over last year. Cumulative LCV sales are 286,880 units, a growth of 26% over last year, while M&HCV sales stood at 185,037 units, a growth of 10% over last year.

The passenger vehicles business reported a total sale and distribution offtake of 36,536 units (34,832 Tata + 1,704 Fiat) in the domestic market in February 2012, higher by 8%, compared to 33,751 units (31,909 Tata + 1,842 Fiat) in February last year. Sales of Tata passenger vehicles for February 2012 are at 34,832 units, a growth of 9% over 31,909 units, sold in February last year. Sales of the Tata Nano were 9,217 units, higher by 12%, compared to 8,262 units, sold in February, last year. The Indica range sales were 10,424 units, higher by 4%, over 10,044 units, sold in February, last year. The Indigo range recorded sales of 8,595 units, lower by 4%, over 8,966 units, sold in February, last year. The Sumo/ Safari/ Aria/ Venture range accounted for sales of 6,596 units, a growth of 42%, over 4,637 units, sold in February, last year.  

In the late afternoon, Tata Motors was trading at around Rs268 per share on the Bombay Stock Exchange, 1.03% down from the previous close.

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Muthoot Finance’s Rs500-crore bond issue opens tomorrow

The issue, priced at Rs1,000 per bond with a minimum of Rs5,000 worth of bonds, opens on 2 March 2012 and closes on 17 March 2012.

Gold loan company Muthoot Finance’s Rs500-crore bond issue, the third this fiscal, will hit the market on Friday, 2 March 2012. The funds raised through this issue will be utilised for various financing activities, including lending and investments, to repay existing liabilities or loans and towards business operations, including for capital expenditure and working capital requirements.

“We have got Sebi permission for an Rs250 crore NCD (non-convertible debenture) issue which has a green-shoe option,” Muthoot Finance managing director George Alexander Muthoot said.

The issue offers four different tenors – two years with a yield on 13%, three years at 13.25%, five years for HNIs and QIBs, with a coupon of 13.25% and five and a half year tenor attracting 13.43%. In the past two issues, the gold loan firm had offered 13% for two years and 13.25% for three to five year bonds.

On higher pricing, chief financial officer Oommen K Mammen said going by the indications from RBI, the interest rate has reached its peak and “we want maximum participation from the retail investors and hence the higher coupon”.
The issue, priced at Rs1,000 per bond with a minimum of Rs5,000 worth of bonds, opens on 2 March 2012 and closes on 17 March 2012.

Muthoot said the funds will be used for operational expenses, apart from part-paying debt. This is the third NCD issue from the company this fiscal. Earlier, it had raised Rs693 crore August 2011 and Rs459 crore in December 2011.

The company has so far raised Rs10,000 crore worth working capital from as many as 30 banks and mutual funds. Since the bank lending to gold financing firm has been tightened by the Reserve Bank recently, Muthoot said his cost of fund has gone up to some extent.

In the recent past, the cost of funds has gone by 2.5-3% to 12.5-13%, while the firm’s net interest margin remained at 10.81% at the end of Q3, he said.

On the rationale for the third NCD route, Muthoot said most of the banks have now reached their sectoral cap to the industry, forcing people like us to look for more diversified fund raising avenues. As of the quarter to December 2011, the highly leveraged company had an asset size of around Rs23,000 crore out of its share capital of just about Rs3,000 crore, with the debt being the rest, Muthoot said.

On expansion plan, he said the Muthoot Finance is likely to overshoot the branch plan by almost 100 to 800, taking the overall network to 3,480 by this fiscal-end.

During the December quarter, its retail loan assets rose by Rs1,944 crore to Rs22,885 crore, while income grew 91% to Rs1,231 crore, helping the company report a 61% spike in net profit at Rs251 crore as against Rs155 crore a year ago.

In the early afternoon, Muthoot Finance was trading at around Rs155 per share on the Bombay Stock Exchange, 0.61% down from the previous close.

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