The market regulator said its restrictions would remain in force till Aashi Industries, Dharnendra Overseas, AEC Enterprises, Solid Carbide Tools and Dharnendra Industries resolve all pending investor grievances
The market regulator, Securities and Exchange Board of India (SEBI), has barred directors of four companies and Dharnendra Overseas Ltd from the markets for failing to address investor grievances. In an order dated 7th April, the market regulator said its restrictions would remain in force till the companies resolve all pending investor grievances.
SEBI has barred Aashi Industries' directors Dhaval A Jhaveri, Seema D Jhaveri and Dilipkumar Puri, AEC Enterprises' directors RD Apte, Sanjeev R Apte, Vikram V Desai, GP Sharma and Dinesh Sharma, Dharnendra Industries' directors Dharnendra B Gandhi, Navinchandra B Gandhi, Bhupendra B Gandhi and Bharat P Delvala, Solid Carbide Tools' directors Mukesh M Kothari, Narendra C Joshi and Dilip Suresh Shah. It also barred Dharnendra Overseas from buying, selling or otherwise dealing in the markets until all the pending investor grievances are resolved.
The market regulator said, as on 24 September 2008, it found 61 investor grievances pending by Solid Carbide Tools. All reminders and letters sent by SEBI to the company were returned undelivered. On 23 January 2009, the market regulator put up a public notice of its web site for Solid Carbide Tools, but it did not receive any response from the company.
SEBI later sent notices to Solid Carbide Tools' directors Mukesh M Kothari, Narendra C Joshi and Dilip Suresh Shah. Only Dilip Shah acknowledged the show-cause notice. However, he too failed to respond to the notice. When SEBI published a public notice in some local newspapers, Narendra Joshi sent a letter on 27 July 2010 in which he stated that he was never attached to the company in any manner and was not in a position to give any information regarding Solid Carbide Tools. However, SEBI said, Mr Joshi had signed as a director of the company in the annual report for 1999-2000 that was sent to the Registrar of Companies, Maharashtra, under its seal.
In the order, Dr KM Abraham, whole-time member, SEBI, said, "Sufficient opportunities have been provided to the company to redress the pending investor grievances listed by SEBI, since September 2008. However, it failed to respond. No action taken report was submitted by the company to SEBI, as advised. The protection of investors in the securities market is one of the paramount duties of SEBI and the present case involves a listed company that not only failed to redress investors' grievances, but also failed to respond to the letters/show-cause notice issued by SEBI. In such circumstances, permitting the company and its directors to access or deal in the securities market would be against the interests of the investors."
Similarly, SEBI found 122 investor complaints pending as on 2 September 2010 against Ahmedabad-based Dharnendra Overseas, 61 complaints pending as on 24 September 2008 against Madhya Pradesh-based AEC Enterprises, 416 investor grievances pending as on 25 September 2008 against Gujarat-based Aashi Industries and 101 complaints unresolved as on 24 September 2008 against Dharnendra Industries.
In the matter of AEC Enterprises, SEBI said, V Saminathan and Navneet Kampani, two of directors, have resigned from the company board in 1999 and the proceedings against them were disposed off without any directions.
Indices record sharpest decline in four days on dull earnings outlook
Contrary to our expectations, the Indian market opened with marginal gains as its Asian peers picked up momentum despite the news of another earthquake striking the north-eastern coast of Japan on Thursday. The Sensex added 12 points at the opening at 19,603 and the Nifty was a point up at 5,887. Realty, banking and fast-moving consumer goods counters witnessed good demand in early trade. The indices scaled the day's high within the first half hour. At the day's high the Sensex had added 106 points at 19,697 and the Nifty was up 41 points to 5,927.
Then the market saw a sudden bout of selling, which pushed the indices into the red soon after they touched the day's peak. Subsequently, trading was sluggish and the indices dropped to intra-day lows in the last hour. The Sensex fell to 19,388, a decline of 203 points and the Nifty retraced 64 points to 5,822. The market closed off those levels-the Sensex at 19,451, a decline of 140 points, and the Nifty at 5,842, down by 44 points. Today's decline was sharper than on Thursday. The advance-decline ratio on the National Stock Exchange was 587:1504.
The broader indices lagged behind the Sensex today, with the BSE Mid-cap index declining 1.25% and the BSE Small-cap index tanking 1.40%.
BSE Realty (down 2.52%), BSE Auto (down 1.87%), BSE Consumer Durables (down 1.48%), BSE PSU (down 1.37%) and BSE Oil & Gas (down 1.33%) were the top sectoral losers. BSE Fast Moving Consumer Goods (up 0.39%) and BSE Capital Goods (up 0.15%) were the only sectoral gainers.
In the Sensex space, Bharti Airtel (up 1.56%), ITC (up 0.88%) and Larsen & Toubro (up 0.51%) were the gainers worth mentioning. The laggards were led by Jaiprakash Associates (down 3.77%), DLF (down 3.73%), Hindalco Industries (down 2.99%), Tata Motors (down 2.84%) and Reliance Infrastructure (down 2.12%).
Chief economic advisor to the Union finance ministry, Kaushik Basu, has said that although inflation has not gone out of hand, it is still not in the comfort zone. While the Reserve Bank of India had been following a tight monetary policy to control inflation, the government is also doing its best, he said. Although India is on a high growth trajectory, inflation and corruption were the two big clouds looming over the country, Mr Basu said.
Markets in Asia, led by the Nikkei, settled mostly higher as the tremors that rocked northern Japan yesterday resulted in little damage and spared the nuclear power plants. Shipbuilders in Korea helped the Seoul Composite close higher, while the Chinese and Hong Kong market witnessed institutional buying.
The Shanghai Composite gained 0.74%, the Hang Seng rose 0.47%, the Jakarta Composite advanced 0.30%, the Nikkei 225 jumped 1.85%, the Straits Times gained 0.49% and the Seoul Composite was up 0.27%. On the other hand, the KLSE Composite lost 0.28% and the Taiwan Weighted lost 0.08%.
Back home, foreign institutional investors were net buyers of stocks worth Rs220.59 crore on Thursday, while domestic institutional investors were net sellers of stocks worth Rs212.16 crore.
KEC International (up 0.18%) today announced its foray into the water business with its first order worth Rs31 crore. The order is from the Water Resource Department of the Madhya Pradesh government. The project involves renovation, repairs and remodelling of canals under the Urmil Tank Project in Chattrapur district of Madhya Pradesh.
Tech Mahindra (down 1.22%) has secured a contract to manage the IT systems of Vodafone Hutchison Australia (VHA) for five years. The total value of the contract is estimated at about $250 million. As per the contract , the Indian IT services major will cover day-to-day IT operations and infrastructure such as servers and data centres (including break/fix support) across both of VHA's mobile brands-Vodafone and '3'-in addition to application maintenance and management.
Tata Steel's (down 1.23%) output and sales registered a smart increase in 2010-11 compared to the previous fiscal, following the successful implementation of its expansion plan. Production of hot metal increased by 3.8% to 7.5 million tonnes (MT) in 2010-11, from 7.231 MT in the previous year. Crude steel production touched 6.855 MT against 6.564 MT. In addition, saleable steel production rose by 3.9% to 6.691 MT in 2010-11.
Education loans through banks have grown by 20% in the past couple of years. That’s the fastest ever, and banks want to push that further to 30%-40% going ahead
The season of college admissions has begun and banks are gearing up to facilitate maximum education loans to students. Going by the comments of banking experts, the education loan portfolio has gained momentum and is set to grow multi-fold.
As per the latest report of the Reserve Bank of India (RBI), education loans have increased to Rs43,801 crore in the year to February 2011, from Rs36,522 crore in the previous corresponding period, which is a significant growth of 19.93%.
According to a senior official of the Punjab National Bank (PNB), "Our education loan disbursal has been showing significant growth. As of 31 December 2010, we disbursed around Rs2,750 crore towards education from our Rs21,700 crore retail loan portfolio. Going ahead we are optimistic about the growth of this sector." He added, "Last year we posted a growth of 46% in our education loan portfolio; the current growth is 24%. Though, our volumes are increasing."
Efforts by banks to create awareness and promote education loans are evident. "The sector has grown at 30%-40%. Large numbers of students going for higher education are approaching banks for loans to fund their studies," said K Unnikrishnan, deputy chief executive, Indian Banks' Association.
However, post the global recession of 2008, the education loan portfolio which has the lowest default rate has witnessed increasing cases of defaults. But banks are not too worried as the non-performing loans have come back to earlier levels.
Vivek Mhatre, general manager, retail, at Union Bank of India, told Moneylife, "Our NPAs on the education loan portfolio are minimal. Since 2008-09, our portfolio has doubled to Rs1,600 crore and we want to increase it by 30-40%. When a student opts for higher education from a premier institute like Indian Business School or IIM, the default risk is almost zero as these institutes have good placement facilities. Now the season of education loans has begun and we are already receiving a steady stream of proposals." Mr Mhatre explained that "as per RBI guidelines there is no collateral required for loans up to Rs4 lakh, so this category has some default rate, but we have a monitoring mechanism in place and there is nothing to worry about."
The government's interest subvention scheme for students from families that have an income of less than Rs4.5 lakh, will also help the default rate to come down. "The interest subvention scheme will significantly bring down the credit default risk involved in education loans," Mr Unnikrishnan said.
Explaining the low NPAs on PNB's education loans portfolio, a bank official said, "Our loan portfolio has picked up in the last 3-4 years and the repayment of those loans is yet to begin, so currently there is no worry of any NPA. Also, there is not much debt on our books pertaining to this portfolio."
State Bank of India (SBI) is the leading player in the education loans segment with 25% of the market share. As per its March 2010 annual report, education loans grew by 34.61% in the year to March 2010.
Mr Unnikrishnan explains, "Banks today, have realised the potential of education loans and lot of effort has been put by them. The loan processing has become faster and going further the growth rate is expected to be consistent. SBI has 25% market share in this portfolio and others like Indian Bank also have a significant amount of education loan portfolio."
Currently, as per RBI guidelines, banks can provide a maximum loan of Rs10 lakh for studies in India and Rs20 lakh for studies abroad.