RBI operationalises facility to provide short-term liquidity to banks

The Marginal Standing Facility, which is aimed at containing volatility in the interbank market, will allow banks to borrow from the RBI at 100 basis points above the repo rate

In line with the annual credit policy announcement last week, the Reserve Bank of India (RBI) on today published guidelines for the Marginal Standing Facility (MSF) to help banks tide over short-term liquidity problems.

As per the guidelines, a bank can borrow up to 1% of their total deposits from the RBI under the MSF facility at a rate that is 100 basis points higher than the short-term lending (repo) rate. The facility is effective from today, the RBI stated.

The repo rate, which was increased last week by 50 basis points, stands at 7.25%. As such, the rate charged under the MSF would be 8.25%, PTI reports.

The facility is expected to contain volatility in the overnight inter-bank market. The call money rate was at about 6.75% during the afternoon trading session today.

“Under the facility, eligible entities can avail overnight up to 1% of their respective net demand and time liabilities (NDTL) outstanding at the end of the second preceding fortnight,” the RBI said. Requests will be accepted received for a minimum amount of Rs1 crore and in multiples of Rs1 crore thereafter.

In the event that the banks’ SLR (statutory liquidity ratio) holdings fall below the statutory requirement on account of the use of this facility, banks will not have the obligation to seek a specific waiver for any default in SLR compliance, subject to a ceiling of 1% of their NDTL.

SLR is the percentage of total deposits kept in government securities and other specified instruments. The current SLR requirement is 24%.

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Aanjaneya Lifecare IPO opens today

Aanjaneya Lifecare aims to raise around Rs120 crore through the issue of 50 lakh equity shares

The initial public offering (IPO) of Aanjaneya Lifecare, a unit of Finaventure Capital, has opened for subscription today.

The company aims to raise around Rs120 crore through the issue of 50 lakh equity shares at higher end of price band of Rs228-Rs240 a share. Bids can be made for 25 equity shares and in multiples of 25 shares thereafter. The issue will close on 12th May.

Aanjaneya is vertically integrated pharmaceutical company with manufacturing and marketing capabilities in APIs (active pharmaceutical ingredients) with focus on anti-malarial, and finished dosage forms (FDFs) catering to various therapeutic segments.

Anand Rathi Advisors Ltd and IDBI Capital Market Services Ltd are the book running lead managers to the issue.

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Galaxy Surfactants IPO opens on 13th May

Galaxy Surfactants IPO closes on 19th May

Galaxy Surfactants is entering the capital markets with an initial public offering (IPO) of 59.30 lakh equity shares of Rs10 each. The price band for the issue has been fixed at Rs325 at lower level and Rs340 at upper level.

Galaxy Surfactants manufactures and markets surfactants and specialty chemicals for the personal and home care industry in India. The company produces a range of cosmetic ingredients including active ingredients, UV protection and functional products. The company’s products are used by many large FMCG companies in skin care, hair care, oral care, body wash, sun care, household cleaners and fabric care products.

The issue opens on 13th May and closes on 19th May. The equity shares of the issue are proposed to be listed on the Bombay Stock Exchange (BSE) and National Stock Exchange (NSE).

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