NPAsource.com has done the study based on 6,359 units valued at Rs9,897 crore for the first 10 months of FY12
Tamil Nadu, Uttar Pradesh, Gujarat and Andhra Pradesh accounted for the highest value of non-performing asset (NPA) properties in 2011-12 according to a study by NPAsource.com, a portal started by Atishya Technologies Pvt Ltd.
Out of a total of 6,359 units valued at Rs9,897 crore across India in 10 months of FY12, Tamil Nadu has the largest amount of NPA properties valued at Rs1,261 crore spread across 663 units. Uttar Pradesh came second with 533 units with a value of Rs1,025 crore, followed by Gujarat with 349 properties worth Rs1,023 crore and Andhra Pradesh (AP) with 1,226 units valued at Rs1,004 crore.
NPAsource.com study also revealed that out of the different types of properties given as collateral against loans, commercial and industrial properties worth Rs5,633 crore spread across 2,925 units accounted for more than 50% of the total NPA properties. Land worth Rs2,793 crore spread across 1,146 land and 2,165 residential units valued at Rs838 crore were the other major categories in NPA properties.
Elaborating on the study done by NPAsource.com, Devendra Jain, CMD of Atishya Group, said, “While Mumbai is known to be the biggest centre for disbursement of loans to corporates, our study has found that Tamil Nadu and Uttar Pradesh have the largest amount of NPA properties by value in the first 10 months of 2011-12. Maharashtra comes at number five in terms of NPA properties by value. Our portal’s aim to bridge the gap between the buyers and the sellers of NPAs. It is designed to facilitate the best deals for disposal of NPAs by updating all the details of available assets in the Indian market.”
Mr Jain further added that Atishya Technologies is investing a total of Rs10 crore in its new portal, NPAsource.com, which manages and resolves NPAs in India (later globally) so as to benefit lenders, borrowers as well as investors.
Total NPAs in India as of March 31, 2011 were more than Rs90,000 crore as per the statistics released by the Reserve Bank of India (RBI) which does not include co-operative banks, SFCs, FIs & NBFCs, whereas globally this figure would run into trillions of dollars. World over, the scenario for NPAs is bleak as it faces multiple pitfalls: database are scattered and inadequate, they are not updated periodically, there is inadequate realisation from intrinsic worth of NPAs, lack of visibility and transparency for all stakeholders as well as no access facility of data on NPA for use by prospective investors or buyers.
The distribution of NPAs in the system follows the 80:20 rule whereby 20% by number of borrowers constitute for 80% of value of impaired assets and vice versa. The large impaired assets comprise industrial assets having good restructuring potential. “Our experience shows in value terms that more than 60% of the impaired assets are capable to be restructured or sold as going concerns. The small assets, however, have to be put through a recovery process, where the collateral based funding practice followed by the banking system offers a fair recovery potential” Mr Jain, added.
“Through our offshore office, at Dubai, which will be operational by March 2012, we plan to tie-up with foreign investors globally who would be interested in acquiring impaired assets in India for themselves or for their clients world-wide. In India, we are getting application for registrations from various interested parties like chartered accountants, consultants, advocates and property dealers apart from companies of all sizes,” said Mr Jain.
Ring Plus Aqua deal was funded through internal accruals and facilitated by Equirus Capital
Ring Plus Aqua, the auto components business arm of Raymond Ltd has announced the acquisition of Trinity India Ltd, a Pune-based forged component manufacturer. This marks Ring Plus Aqua’s entry into the forging industry, adding to its current portfolio of auto components which includes flywheel ring gears, flexplate assemblies, integral shaft bearings and sheet metal pulleys.
Ring Plus Aqua acquired majority stake in Trinity India with the signing of the share transfer agreement with the promoters of Trinity in Pune today. The deal was funded through internal accruals and facilitated by Equirus Capital.
Harshal Jayavant, president–engineering business, Raymond said, “With this acquisition, we are looking at an added revenue of Rs80 crore during the current financial year.”
The Indian Forging Industry is estimated at about $2.9 billion, while the global industry is valued at over $115 billion. Mr Jayavant added, “Our expansion into forgings also provides us an opportunity to look at the fast developing non-auto sectors like power, aviation, defence and nuclear equipment.”
Trinity India has four manufacturing locations with an installed forging capacity of 12500 tons. It employs about 400 people.
Raymond’s shares closed at Rs371.05 per share on the Bombay Stock Exchange, 1.5% up from the previous close.
Expert forecasts about market directions are usually wrong. But Bob Janjuah, a strategist with Nomura, takes the cake. He says he would have been right with his extreme bearish views but the central banks came and rigged the market
Experts often make market predictions that are wrong. Worse, some of them continue to hold on to their jobs despite grossly inaccurate predictions and stay stuck to their wrong beliefs at a considerable cost to their clients. Bob Janjuah, a strategist with the Nomura group, is a noted market bear. He has been predicting a market crash since early 2011 and that the S&P 500 of the US would soon hit 1,000. Well, after a year the market index is up 35%. The frustrated bear still seems to have a “high conviction” that the markets will end badly, no matter what: “...the longer we have to wait for the ‘final’ resolution to the global financial crisis, the bigger and more devastating the final leg lower will be.” But he has essentially given up trying to predict a market that he says is rigged by central banks.
Janjuah has been raising concerns of a bubble in the making, this time created by irresponsible policymakers trying to bail out Greece, by throwing good debt after bad. According to him “our policymakers seem so one-dimensional, so short-termist, and so utterly bereft of courage or ideas... that (they) again misprice the cost of capital... through increased leverage/debt... which in turn will lead to yet another round of asset bubbles.” The markets have been moving up precisely because of this, so called, artificial monetary push.
Bubbles, of course, always burst but this would be the mother of bubbles, according to Janjuah with consequences possibly greater than the 2008 sub-prime crisis. He notes that “in this current cycle, where central banks’ balance sheets are at the core, the bubble is everywhere... when it bursts that it will make 2008 feel, relatively speaking, like a bull market”.
He feels that the Greek bailout has been a farce and tragedy of sorts and that the charade has been going on for far too long, which has been serving the elites at the expense of the average Greek. “Policy seems to be focused on protecting and preserving vested interests, with little consideration given to the dreadful conditions the people of Greece,” he adds.
Janjuah feels that central bankers might have stepped too far and might have run out of options required to prop up the markets. Even as the market has climbed higher, Janjuah sees more and more of problems: “The really dangerous thing about this next bubble is that ...central banks are... accumulating ever more toxic assets, is at the centre of the current cycle... This of course means that if/when the current cycle implodes central banks which have seen explosive balance sheet growth will add to the problems, rather than being able to act as credible lenders of last resort. A resulting consequence is that we will, at that point, usher in a new era of central banking and policy settings, where the key will be to regain a semblance of credibility and independence. This will be good news. But we will likely have to go through the bust first.” Thus he notes that the central bankers may not be able to save the system due to their bloated balance sheets, which are filled with (worthless) illiquid bonds that were created during the sub-prime crisis. Rather than let markets fail and cleanse themselves, they have been propping up the markets over and over, to no end.
When will these dire predictions—that seem to be at odds with the world’s most successful investor, Warren Buffett—play out?
Having found his calls going wrong he now says that “I am not well equipped to navigate bubbles where tactical views and secular views are all thrown into the melting pot together, where there is no visibility.” He says he has absolutely no idea what is happening in the market because the central bankers have distorted the markets beyond recognition. But the end must come according to this perma-bear. According to him “such rallies can last days, weeks, months, perhaps we could even extend into 2013... The S&P could end up in the high 1500s again if this current binge lasts into 2013.” But it is a bubble, according to him, and it will burst. He may well be right eventually but as a strategist who is supposed to advise his clients about what is likely to happen he seems to be too dogmatic, stuck to his position.
There are two problems with such dogmatism. First, it is the job of an expert to provide assessments of market movements and includes anticipating and analysing what the world’s central banks do. Second, Janjuah has been making market calls, too, not just ranting about policies. In November he wrote: “I will simply wait for the inevitable knee-jerk rally to fade before reloading my short risk positions.” And now, he says the world has gone crazy. To say that he would have been right but for a “rigged market” is a case of sour grapes or how not to forecast.