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Government to borrow additional Rs 36,000 cr in FY19

The Ministry said the government, in consultation with the Reserve Bank of India (RBI), will continue to have the flexibility to bring about modifications in the calendar in terms of notified amount, issuance period, maturities and others.

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Yogendra Yadav

New Delhi, Feb 5 (IANS) In order to meet additional expenses, the government has decided to raise additional Rs 36,000 crore through dated securities taking the total borrowing through the instrument to Rs 96,000 crore in the remaining period of the current fiscal.

Releasing a calendar for auction of government bonds on Tuesday, the government said it will raise the amount in two tranches of Rs 18,000 crore each next month during March 11-15 and March 18-22.

“To enable institutional and retail investors plan their investments efficiently and provide transparency and stability to the government securities market, an indicative calendar for issuance of government dated securities for the remaining period of the fiscal year 2018-19 (February 04, 2019 to March 31, 2019) has been prepared in consultation with the Reserve Bank of India (RBI),” Finance Ministry said in a statement.

As per the earlier calendar, the process of auctioning of bonds was to complete on March 8, including the five tranches of Rs 12,000 crore each in the interim period. With Rs 36,000 crore additional borrowings, the government will now raise a total of Rs 96,000 crore in the remaining period of the fiscal.

All these auctions will have the facility of non-competitive bidding scheme under which 5 per cent of the notified amount will be reserved for the specified retail investors.

The Ministry said the government, in consultation with the Reserve Bank of India (RBI), will continue to have the flexibility to bring about modifications in the calendar in terms of notified amount, issuance period, maturities and others.

The government may also issue different types of instruments, including instruments having non-standard maturity and floating rate bonds (FRBs), depending upon the requirement of the government, evolving market conditions and other relevant factors, after giving due notice to the market.

The government reserves the right to exercise the green-shoe option to retain additional subscription up to Rs 1,000 crore each against any one or more of the security.

The government will also borrow Rs 80,000 crore through auction of 8 tranches of treasury bills (T-bills) worth Rs 10,000 crore each between February 6 and March 27.

Each tranche would include Rs 4,000 crore of T-bills of 91 days, Rs 3,000 crore of 182 days and Rs 3,000 crore of 364 days.

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Markets open on positive note

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Sensex Nifty Equity

Mumbai, Feb 20: The 30-scrip Sensitive Index (Sensex) on Wednesday opened on a positive note during the morning session of the trade.

The BSE Sensex opened at 35,564.93 before touching a high of 35,581.14 and a low of 35,520.21.

It was trading at 35,528.69 up by 176.08 points or 0.50 per cent from its Tuesday’s close at 35,352.61.

On the other hand, the broader 50-scrip Nifty at the National Stock Exchange (NSE) opened at 10,655.45 after closing at 10,604.35.

The Nifty is trading at 10,656.25 in the morning.

IANS

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PF funds’ investment in IL&FS bonds have no government guarantee: Finance Ministry

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IL&FS Financial Service

New Delhi, Feb 19 (IANS) The provident and pension fund trusts that invested in the IL&FS bonds now fear loss of money as the debt-ridden company’s bonds are unsecured debt, and the Finance Ministry says superannuated bonds do not carry any government guarantee and all such instruments have to face all market-related risks.

“Since these are investments in bonds, the government does not ensure any guarantee on them as such and if these are invested in stock markets, they carry the market risks as applicable. It is between the bond issuer and bond holders…,” the Finance Ministry said in response to IANS queries.

Thousands of crores of money of more than 15 lakh employees of both public and private sector companies have exposure to IL&FS bonds.

However, queries sent to the EPFO Commissioner and Labour Minister Santosh Gangwar remained unanswered.

Over 50 funds that manage retirement benefits of over 15 lakh employees have exposure to IL&FS. PF trusts of state electricity boards, public sector undertakings (PSUs) and banks are among them. The provident and pension fund trusts have filed intervening applications in the National Company Law Appellate Tribunal (NCLAT) stating that they stand to lose all the money since the bonds are under unsecured debt.

Usually, retirement funds have a low-risk appetite and invest in “AAA” rated bonds (which IL&FS bonds used to be once upon a time) and get assured returns with low interest rates.

The worries of pension and provident fund trusts come from the classification of IL&FS profiling its companies as to which can meet the dues obligations. Many important trust managing funds of PSUs like MMTC, IOC, Hudco, SBI and IDBI are among those filing petitions. From private sector, HUL and Asian Paints are among the petitioners.

IL&FS is currently under resolution process at the National Company Law Tribunal (NCLT). The process will decide under Section 53 of the IBC the order of priority for distribution of proceeds of the process.

The beleaguered company has informed the NCLT that of the 302 entities in the group, 169 are Indian companies, out of which only 22 are emerging as those which can meet all obligations (green), while 10 firms can pay to only secured creditors (Amber). There are 38 companies of IL&FS (red) which cannot meet any obligations of payment, and 120 entities are still being assessed.

These PF and provident funds trusts are worried that if payment is limited to secured creditors, then only financial creditors like banks will receive the dues while unsecured bond-holders will be get any payments.

IL&FS bonds attracted investments by PF trusts as it had the shareholding of SBI and LIC giving its bonds the comfort factor.

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Sachin Bansal invests Rs 650 crore in Ola

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Bengaluru, Feb 19 (IANS) Internet entrepreneur and Flipkart co-founder Sachin Bansal has invested Rs 650 crore, or about $92 million, in ride-hailing platform Ola in his personal capacity as investor, the company said in a statement on Tuesday.

This investment is part of Ola’s larger Series J funding round. It is also the largest investment by an individual in Ola to date, it said.

“Ola is one of India’s most promising consumer businesses that is creating deep impact and lasting value for the ecosystem. On one hand, they have emerged as a global force in the mobility space and on the other, they continue to build deeper for various needs of a billion Indians through their platform, becoming a trusted household name today,” Bansal said.

He further said he has known Ola founder Bhavish Aggarwal as entrepreneur and friend over the years and that he has great respect for what he and the team at Ola have built in 8 years.

“We are extremely thrilled to have Sachin onboard Ola as an investor. Sachin is an icon of entrepreneurship and his experience of building one of India’s most respected businesses ground up, is unparalleled,” Ola CEO Bhavish Aggarwal said.

Ola integrates city transportation for customers and drivers onto a mobile technology platform ensuring convenient, transparent, safe and quick service fulfilment, the statement added.

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