Reliance Infra announces Rs1,000 crore share buyback offer

Reliance Infrastructure has announced a Rs1,000 crore share buy-back offer to buy 8.34% shares from public shareholders

Asserting that its shares are undervalued at current levels, Anil Ambani-led Reliance Infrastructure has announced a Rs1,000 crore share buy-back offer to buy 8.34% shares from public shareholders.

Under the offer, the company will repurchase up to 1.38 crore shares from non-promoter shareholders for a maximum price of Rs725 a piece. At the Bombay Stock Exchange (BSE), the scrip was trading at Rs664, up 2.05% from the previous close.

Commenting on the offer, a Reliance Infra spokesperson said that the buy-back for up to Rs1,000 crore through open market purchases would begin on 5th April. In a mandatory public announcement to launch the buy-back offer, the company said that the offer was approved by its board on 14th February.
"The proposed buy-back is being implemented in keeping with the company's desire to enhance overall shareholder value. It is expected to contribute to the overall enhancement of shareholder value without comprising the pursuit of high growth opportunities of the company," Reliance Infra said.

"The share buy-back is expected to reduce short-term volatility in the company's share price, deter speculative activity in the company's share price, send a strong signal to the capital markets on the perceived under-valuation of the company's share price and reiterate the confidence of management in the future growth prospects of the company," it added.

According to market experts, the proposed buy-back may have a positive impact on the company's stock price. It will also reduce the number of outstanding shares, increasing earnings per share and improve return on net worth.

As per the offer, the company would repurchase a minimum of 34.48 lakh shares and maximum of 1.38 crore shares from shareholders for a maximum price of Rs725 a piece. The company has done three buy-backs for an aggregate amount of Rs923 crore.

On Monday, Reliance Infra ended 1.76% up at Rs662.10 on the BSE, while the benchmark Sensex gained 0.68% to 18,943.14.

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UBI, Indiabulls get SEBI nod to enter mutual fund space

Union Bank of India has got the approval from the SEBI to enter the mutual fund arena. Indiabulls Mutual Fund has also got the final approval from SEBI to launch its mutual fund business

After waiting for over a year, Union Bank of India has got the approval from the market watchdog Securities and Exchange Board of India (SEBI) to enter the mutual fund arena.

Meanwhile, Indiabulls Financial Services, too, said it got the regulatory nod for launching its mutual fund company.

"We have received the licence from SEBI on 24th March. We hope to launch the business within the next two months," Union Bank chairman and managing director MV Nair said.

On the kind/number of products that the company would come out with, Mr Nair said, "We will be launching two products for sure. The details are yet to be worked."

Indiabulls Mutual Fund, sponsored by Indiabulls Financial Services, has got the final approval from SEBI to launch its mutual fund business. It plans to hit the market with its maiden offering in both equity and fixed income segment in a couple of months," it said in a release.

Way back in November 2008, Union Bank had tied up with the Belgian financial powerhouse KBC Asset Management to enter the MF business. At a time the domestic MF market was down in the dumps following the global financial meltdown that began in September 2008 with the fall of Lehman Brothers and many other Wall Street titans.

After getting shareholders' approval, the bank moved the SEBI for approval in early 2009. Announcing the tie-up, the public lender had then indicated that it was looking forward to launch the business by January 2011.

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EPFO to use Brickwork credit ratings for fund investment

Employees’ Provident Fund Organisation has decided to use ratings of securities and bonds by credit rating firm Brickwork Rating India for investing its funds

Retirement fund body Employees' Provident Fund Organisation (EPFO) has decided to use ratings of securities and bonds by credit rating firm Brickwork Rating India for investing its funds.

"The ratings carried out by Brickwork for various securities and bonds issued by borrowers shall be treated and qualify for investment made by EPFO at par with the other Securities and Exchange Board of India (SEBI) approved rating agencies," an EPFO official order said.

At present, EPFO investments are made on the basis of ratings provided by credit rating agencies recognised by market regulator SEBI, which include ICRA, CARE, Fitch and CRISIL.

The EPFO has a huge corpus of over Rs3 trillion with a subscriber base of 4.71 crore.

The EPFO's existing fund managers, including ICICI Pru, HSBC AMC, Reliance Capital and SBI, use the ratings of SEBI-recognised credit rating agencies for investing the retirement money in various securities or bonds.

Brickwork provides ratings, grading and research services. Rating services include issue ratings, fixed deposit ratings, corporate governance ratings and issuer ratings.

The company also provides initial public offer grading, research and analytical services to various stakeholders like exchanges, regulators and government entities.

Brickwork Ratings' corporate office is in Bengaluru, with regional offices at New Delhi, Mumbai, Chennai, Hyderabad and Pune.

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