Shriram Transport planning NCD
These are good times for small-ticket finance and leasing companies, thanks to difference between banks’ borrowing rates and high lending rates of these firms. These firms have taken advantage of the sufficient liquidity in the banking system by borrowing at low rates and lending it to its clients at a much higher rate, say analysts.
And even if cost of borrowing from banks come down, these players usually do not pass over the benefits to loan consumers. Most leasing companies keep the rate differential steady in the range of 7 and 15%.
Seeing good lending business prospects ahead, Shriram Transport is believed to be coming out with an NCD issue over the next few weeks. While it is not known how much the company intends to raise through this issuance, distributors expect the yield on the NCD issue would be in the range of 9- 10% per annum. Shares of Shriram Transport Finance Company ended 5% higher at Rs 499 on the BSE.
Local FIs, brokers stop bulk purchases
Domestic institutions and top brokerages that run proprietary books are likely to reduce their participation in the market to account their books for the fiscal ending March 31.
Market sources say, top brokers, who have sizeable proprietary books, have already stopped making bulk purchases in the market. Brokers say that most of the proprietory books and institutional funds are said to be in no mood to invest in the markets also that valuations are turning costlier by the day.
Proprietary books constitute approximately 30% of the total derivative volume, according to industry estimates.
Punters make a dash for Pricol for auto part play
Das board instruments major, Premier Instruments and Controls (Pricol) is said to be back on the radar of some savvy traders, on the auto component play. The share which has been trading between Rs 23-Rs 25 band in the recent past is said to be witnessing informed buying at lower levels.
Analysts maintain the company is a turnaround story and is gaining traction in a segment which has little competition. Word on the street is that the company is looking for fund infusion to retire some of its debt on books.
Whether the company would look to do this through the existing joint venture route or is in talks with new players could not be confirmed. Pricol shares fell 3% to close at Rs 23.90 on Tuesday.
(Contributed by Shailesh Menon, Apurv Gupta & Deeptha Rajkumar)
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Src: ET and DP blog
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