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The de-listed company held its EGM to decide the buyback price, as per the Karnataka High Court order
Karnataka-based Bhoruka group company Bhuruka Gases Ltd (BGL) has said that it has received shareholders’ approval to buy back its shares at Rs41 per share. However, the final share purchase price will be decided by the Karnataka High Court.
“We cannot confirm the final share price. It will be decided by the Karnataka High Court. We are filing an application in the court and the process could take about one month,” said R Srinivasan, legal manager and compliance officer, BGL.
Bhuruka Gases, which delisted in November 2008 from the Bombay Stock Exchange, said that it has received shareholders’ approval for its proposal to buy back 100% shares in the company in its extraordinary general meeting (EGM) held on 24th December.
While BGL delisted to cut costs, minority shareholders were crying foul, looking at what they call the good future business prospects of the company.
Earlier, Shreyansh Sanghani, a minority shareholder in BGL, told Moneylife, “I am of the opinion that the promoters are using their majority shareholding to take away the ‘benefits of proposed prosperity’ of the company from the minority shareholders.”
According to media reports, BGL is planning to invest in overseas trading operations in coal and bio-diesel by next year, through Bhoruka Overseas Pte Ltd, its investment unit based in Singapore.
The company has not paid any dividend since 1995, citing losses due to increased competition and the rise in power costs. According to the director’s report, BGL did not make any dividend payout for the year ended 31 March 2009 due to its “long-term growth and huge funds requirement”.
In 1995, BGL was examined by the committee of the Board for Industrial and Financial Reconstruction (BIFR) due to continuing losses in power generation and increased competition.
The BIFR committee suggested that BGL reduce its share capital by reducing its face value per share from Rs10 to Rs2.50. The Government of India has also given the company concessions in power and tax instalments. The company also received an interest subsidy of 25%-30% from IDBI Ltd and ICICI Bank Ltd on outstanding amounts due since 1995.
A housing finance company feels that documents like salary slips are not the only way to judge the credit-worthiness of a potential borrower
If you want a loan to buy an affordable home, but do not have enough documents (like salary slips), do not worry. Micro Housing Finance Corp Ltd (MHFC) is ready to provide a loan of up to Rs6 lakh for people who do not posses these documents.
“We do not believe that documents are the only way to test the trust of a client. I do not think that a salary slip will actually determine whether he or she will be able to repay the loan or not,” said Rajnish Dhall, founder, MHFC.
“A salary slip will only show how much a person earns, but there are other ways to check the earning and repayment capacity of a borrower. You can conduct independent verification and surveys to know that. For example, if I am lending to a vegetable vendor, then I observe his business. I see him every day on the street from 9 in the morning to 8 at night. You can easily make an estimate of his earning,” added Mr Dhall.
According to the latest National Sample Survey Organisation (NSSO) report, there are over 80 million poor people living in India. The slum population is also increasing and as per the Town and Country Planning Organisation’s (TCPO) estimates in 2001, over 61.8 million people in India were living in slums.
There is a huge demand for affordable housing supported by easy finance for this segment. Many banks reject loan applications of a prospective client if his company does not have a provident fund facility as the applicant might be working in a small & medium enterprise.
Besides the urban poor, a person earning Rs 8,000-Rs15,000 per month can approach this
micro-finance company for a home loan.
MHFC is targeting people like vegetable vendors, maids, taxi-drivers, etc. In fact, its first customer is a food vendor, the second is a housemaid, and the third a beautician.
“We conduct personal interviews of the customers and carry out surveys to know about the earnings of people from a particular segment. We can easily make out what a taxi-driver or maid earns. If we are lending money to a maid, we call the employer to enquire more on her earnings. We conduct ample number of enquires before lending,” added Mr Dhall.
The company has an equity capital of Rs33 crore. It has already disbursed around Rs2.50 crore to about 100 borrowers. “We have plans to sanction loans worth Rs60 crore by next year,” claimed Mr Dhall.
“We only mortgage the house being financed. To sanction a loan, we do not require a guarantor or any other security,” said Nachiket Shelgikar, co-founder, MHFC.
MHFC charges a prime lending rate (PLR) of 12% to clients and provides a loan of about 80% of the property value. As a security, the company mortgages the property being financed. While other banks require a minimum of two or three types of assurances, this company does not. MHFC claims that it has not yet faced any problems with loan repayments.
“We take two weeks to sanction loans from the date of application. We also charge 1% processing fee before disbursal, and the client has to pay a Rs300 application fee, based on which we process the application and provide a sanction,” said Mr Dhall.
The micro-finance company does not advertise. It ties up with developers who build affordable housing projects costing between Rs3 lakh to Rs6 lakh per home in urban areas. When the builder advertises his project, he also adds that he has tied up with MHFC.
At present, the company has tied up with seven affordable projects like Shubh Griha (Boisar, Maharashtra); Global City (Virar, Maharashtra); Swarajya (Ambivali, Maharashtra) and Om Shantinagar 2 (Ahmedabad, Gujarat).
“We are planning to tie up with 20 more projects which are in the pipeline. We intend to commence operations shortly in Bengaluru, Surat and Kolkata. We are also in discussions with various State governments for housing initiatives for the economically weaker section or lower income group,” said Madhusudhan Menon, founder, MHFC.
Contact Details of MHFC:
Micro Housing Finance Corporation Limited (“MHFC”)
#3, Victoria Building,
SA Brelvi Rd,
Off Horniman Circle,
Fort, Mumbai - 400 001
E-mail: [email protected]
Contact No : ( +91 22 2266 0130 / +91 22 2266 0427 )