Top banks, PNB, BOB, cut interest rates

Come January 1 2009 and two leading public sector lenders Punjab National Bank and Bank of Baroda will reduce their prime lending rate by 50 and 75 basis points.

The BPLR of PNB would stand reduced to 12 per cent, from the existing 12.50 per cent, effective from January 1.PNB also announced a reduction in its peak deposit rate by 100 basis points to 8.5 per cent for deposits of one year to less than three years beginning new year.Earlier this month, the bank had reduced its peak deposit rate to 9.50 per cent from 10.5 per cent.

In a separate regulatory filing to the BSE, Bank of Baroda said "The bank has decided to reduce its Benchmark Prime Lending Rate (BPLR) by 75 basis points from existing 13.25 per cent to 12.50 per cent with effect from January 1, 2009."

LIC raises stake in HDFC Bank to over 5 per cent

Country's largest insurer Life Insurance corporation of India has increased its stake in HDFC Bank to over five per cent following acquisition of shares from the open market.LIC purchased 1.6 lakh shares from the open market hiking its stake in
the company to 5.01 per cent.The equity holding of the insurer increased by 0.04 per cent from 4.97 per cent earlier.

As on June 2008, LIC holding in the bank stood at 2.15 per cent which went up to 4.7 per cent in September this year.Yesterday, LIC hiked its stake in Vijaya Bank to 9.53per cent by acquiring shares worth nearly Rs 30 crore from the open market.

Domestic institutional investor acquired over 94.29 lakh shares representing 2.18 per cent stake in the state-run lender.Before the acquisition, LIC held over 3.18 crore shares representing 7.38 per cent stake in the bank which subsequently increased to 9.53 per cent after the purchase.

Swiss Finance Corp raises its stake in Amtek Auto to 8%

Mauritius-based Swiss Finance Corporation (SFC) has bought an additional 4% stake in Amtek Auto through open market purchases.The foreign investor acquired a total of 57.2 lakh shares for about Rs 31 crore on December 12 ‘08. Post-acquisitions, SFC’s
stake in the company has gone up to 8.2% of the equity, according to disclosures filed with the Bombay Stock Exchange.

The Amtek Auto stock has risen sharply by 52% in the past one month. Warburg Pincus, Citigroup, Credit Suisee Singapore, CLSA Mauritius and Sansar Capital Mauritius are among other major foreign institutional investors holding a substantial stake in the company.

Amtek Auto is part of Amtek Group, one of major players in automotive components industry with production facilities located across North America, Europe and Asia.

Petrol begins to flow from RPL's refinery

Reliance Petroleum (RPL), a subsidiary of Reliance Industries, commissioned its 27-million tonne export refinery in Jamnagar on Thursday, putting to rest market speculation of a possible delay following a global demand slump for petroleum products.

The RPL refinery, which will be capable of processing 5,80,000 barrels of oil per day (bopd), has been developed in partnership with Chevron of US, which holds a 5% stake in the refinery. This is the second refinery from the Reliance stable in Jamnagar, which along with the existing 33-million metric tonne per annum (mmtpa) RIL refinery, is now the world’s largest refinery complex, with an aggregate refining capacity of 1.24 million bopd at a single location.

RIL and RPL, which would be exporting most of their products except LPG — which they sell to government-owned refineries — would be keenly watched by its rivals and analysts, as they seek to sell their products in the western markets.

Fortis Healthcare to raise Rs 1,000 crore through rights issue

Fortis Healthcare CEO & MD Shivinder Singh on Christmas day announced plans to raise Rs 1,000 crore through a rights issue.

The money would be used to fund the company’s greenfield projects and restructure the balance sheet, besides being utilised for other investment opportunities.The share ratio and issue price of the rights issue would be finalised by February-end.

The company is setting up a medicity in Gurgaon and three new hospitals in Mumbai, West Delhi and Gurgaon. Fortis’.Last year, Fortis Healthcare raised Rs 496 crore through its maiden public issue and the promoters currently own 74.4% in the company. At present, Fortis Healthcare has 23 hospitals and plans to increase it to 40 hospitals by 2011.


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Cholamandalam DBS to raise Rs 300 cr via preference shares

Cholamandalam DBS said its founders including EID Parry, Coromandel Fertiliser Ltd and DBS Bank would subscribe to 10 million convertible shares, to raise Rs 300 crore.

The preference shares will be issued at Rs 100 each at a premium of Rs 200 and shall be convertible into equity within 18 months, the financial services firm said in a statement to the stock exchange.

The firm had said on Oct 24 it will raise an additional Rs 50 lakh.

LIC's investment in MF's rises 3 folds

After banks, it’s the country’s largest insurer Life Insurance Corporation of India (LIC) that has come to the aid of cash-strapped mutual funds (MFs), which are reeling under redemption pressure on liquid and fixed maturity plans (FMPs).The public-sector insurer has pumped in over Rs 14,000 crore into liquid funds of various fund houses. This is more than three times its investment of around Rs 4,500 crore in such instruments last year.

It could not be ascertained as to how much the corporation has invested in its own mutual fund arm, LIC Mutual Fund.
According to Irda norms, LIC can invest 50 per cent in government securities, 15 per cent in the infrastructure sector, and the remaining 35 per cent in other channels, including equity, mutual funds, fixed deposits, non-convertible debentures, certificate of deposits, and commercial papers.

Liquid or money market funds earn returns in the range of 10-12 per cent. LIC parks money in short- term liquid funds and FMPs, where the average tenure varies from two weeks to a month.