Spice Money: Industry Monitoring 31 January 2019
- Priyanka Kanodia
- Jan 31, 2019
- 8 min read
Spice Money
Industry News
Why Acquiring Gruh Finance Made Sense for Bandhan Bank
Publication- The Wire
Edition- Online
Date- 31 January, 2019
The attention span of the purveyors and consumers of business news is extremely short. Bandhan Bank acquiring Gruh Finance, therefore, is a deal done and left behind. When the news broke, most analysts felt the country’s youngest universal bank had overpaid to acquire the affordable housing finance subsidiary of HDFC. This is indeed the case if we go by the valuation numbers available and the share swap ratio. But that does not give the whole picture and here is an alternative scenario and a contrary view.
Bandhan Bank is in a bit of a fix as it has been put under restrictions because of its inability to stick to the Reserve Bank of India schedule to reduce its promoters’ stake to 40%. The Gruh acquisition will go part of the way in reducing that stake, from 82% to 61%. Therefore it can be taken as a transaction done under some pressure and so may not be on the best possible commercial terms. But what is important is that there are several other factors going in favour of the deal in commercial terms too and the big difference in perception can have resulted from analysts having the short-term perspective of equity investors whereas Bandhan is simply taking a longer-term view.
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Top mutual funds still have Rs 8,650 crore exposure to DHFL & four group entities
Publication- The Economic Times
Edition- Online
Date- 31 January, 2019
As skeletons tumble out one after another from the closets of highly leveraged companies, domestic mutual funds with exposure to such entities are finding themselves in a Catch 22 situation. After Zee seemingly managed to stave off a crisis for the time being, Dewan Housing Finance NSE 0.84 % (DHFL NSE -12.76 % ) is once again on investors’ radar after the mortgage lender’s December quarter numbers showed acute pain from the September liquidity crisis in the NBFC space, leading to a 37per cent drop in quarterly profit. DHFL first came on the radar after domestic mutual funds sold off their bonds and commercial papers in distress following a debt default by IL&FS group.
The company has since been busy raising money to pay off maturing debt. Disbursements dropped 95 per cent sequentially in December quarter even as the company bundled and sold off some high-yielding loans. The company’s December quarter shareholding data showed ace investor Rakesh Jhunjhunwala sold some 23 lakh shares during the quarter to bring down his stake by 0.73 per cent to 2.46 per cent. Yet, several fund houses had exposure worth about Rs 8,650 crore to DHFL and its group entities like Aadhar Housing Finance, Essential Hospitality, Avanse Financial Services and Wadhawan Global Capital at the end of December.
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Visa profit beats estimates on higher transaction volume
Publication- Business Standard
Edition- Online
Date- 31 January, 2019
Visa Inc beat Wall Street estimates for quarterly profit on Wednesday, as the payments network processed more transactions on the back of higher consumer spending during the holiday season. Visa's total payments volumes and the number of processed transactions rose 11 percent each, sending its shares up about 3 percent after the bell. The United States recorded its strongest holiday season in six years backed on the strength in the economy. According to a Dec. 26 report by Mastercard, holiday spending rose 5.1 percent to more than $850 billion. This boosted payments volume, which represents the dollar amount of purchases made with cards carrying Visa's branding. The company charges a fee every time a merchant swipes a card that uses its network. Payments volume at Visa is improving as it is heavily marketing and trying to bolster revenue at its Visa Direct platform, which enables real-time funds delivery directly to financial accounts using card credentials.
However, operating expenses rose 16.5 percent to $1.79 billion in the quarter as Visa, like its rival Mastercard spent more to partner with consumer brands, payment processors, hotels and airport lounges to offer subscribers better perks. Due to this, expenses rose, but also boosted payment volumes. "Visa's new partnerships and renewals are helping the company to attract more customers, boosting payment volumes," Buckingham Research Group analyst Chris Brendler said. Net income at the world's largest payment processor rose to $2.98 billion, or $1.30 per Class A share, in the first quarter ended Dec. 31, from $2.52 billion, or $1.07 cents per Class A share, a year earlier. Excluding one-time items, Visa earned $1.30 per share, beating the analyst average estimate of $1.25, according to IBES data from Refinitiv.
PayPal shares fall as sales outlook misses Wall St expectations
Publication- Business Standard
Edition- Online
Date- 31 January, 2019
PayPal Holdings Inc shares fell almost 4 percent in after-hours trading on Wednesday after the online payments company forecast revenue for the current quarter short of Wall Street's expectations. For the first quarter, PayPal said it expects revenue between $4.08 billion and $4.13 billion, falling short of analysts' average $4.16 billion estimate. The company reaffirmed its full year outlook. For the fourth quarter that ended in December, revenue rose to $4.23 billion from $3.74 billion, just missing analysts' average estimate of $4.24 billion, according to IBES data from Refinitiv. Excluding one-time items, PayPal earned 69 cents per share, beating the average analyst estimate of 67 cents.
Net income fell to $584 million, or 49 cents per share, in the fourth quarter, from $620 million, or 50 cents per share, a year earlier. Shares of the San Jose, California based company were down 3.7 percent at $89.00 after the bell on Wednesday. PayPal separated from e-commerce platform eBay in 2015 and has since focused on broadening the types of services it offers to consumers and merchants, making a slew of acquisitions and partnerships. The revenue miss in the fourth quarter was due largely to slower growth than expected for payments processed for eBay and unfavourable foreign exchange rates, PayPal executives said on a call with analysts.
Now, invest in mutual funds with ICICI Securities using UPI payments; key things to know
Publication- The Financial Express
Edition- Online
Date- 31 January, 2019
ICICI Securities on Wednesday launched a new facility for mutual fund investors. Now, they can use Unified Payments Interface (UPI) based payment mode to purchase funds on its online trading platform, the company said in a statement. The customers can avail multiple payment modes through UPI along with already existing mediums, the company also said. “We are confident that the customers will find this new feature very useful as UPI has emerged as a leading payment option for millions of Indians for their everyday transaction and now they can invest in MFs also through this,” Hariharan M, Senior VP Products Advisory Group, ICICI Securities said. The facility would be extended to other non-equity products online as well, he added.
With this service, the customers can now register up to 3 Virtual Payment Address (VPA) – an ID, which a user creates by linking their accounts to their bank or BHIM mobile app – from different bank accounts and can also invest lump sum amounts or set up systematic plans including Systematic Investment Plan (SIP) and Target Investment Plan (TIP). Meanwhile, Paytm Money had recently come out with a similar facility for investors using which they could buy mutual funds by just using Unified Payments Interface (UPI) based payment mode on the on Paytm Money app.
Lending has been our star performer: MobiKwik founder
Publication- The Times of India
Edition- Online
Date- 31 January, 2019
MobiKwik co-founder Bipin Preet Singh talks to TOI about the startup’s journey from being one of the India’s first mobile wallets to a financial super app. Excerpts: Q 1) How do you plan to become a musthave fintech app? A) MobiKwik is now a Digital Bank for the millions of underbanked Indians. From accessing one’s bank account (via UPI),making payments, availing instant loans, to wealth management, buying/selling of digital gold and digital insurance— one can do it all on MobiKwik App. The App is targeted towards the 400 million customers who have bank accounts and smartphones but want a 21st century digital experience, not a web 1.0 or branch- led experience. Q 2) How difficult or easy was it to make the transformation from a digital-only payments company to a more well-rounded player in the financial services segment? A) MobiKwik was formed on the premise of bringing about impactful change in the lives of Indians. We have continued to innovate, to be able to drive in our country.
The transformation to a full-stack fintech company came about, keeping in mind the opportunity in the country. It has been an exciting journey over the last year or so. We have transformed ourselves from being a leading player in the consumer payments industry to one of India’s largest full-stack financial services company. Led by innovation, our brand new avatar, MobiKwik 3.0 has shaped up very well. As of the end of the last financial year, we have a registered user base of more than 107 Mn users and a network of over 3 Mn merchants. We are aiming at 400% growth this fiscal. We are adding over 3 Mn new users every month, one of the highest in the industry. We will have close to 200 million users by the end of 2019.
Blockchain, the new technology of trust
Publication- Telangana today
Edition- Online
Date- 31 January, 2019
Whether it is for having a secured database of land records or to have leakage proof implementation of government schemes, one technology that can be used is blockchain. The technology can be leveraged by almost all the government departments to maintain transparency, security and privacy of data. Telangana, the youngest State, has been a pioneer in this regard as has set up a Blockchain District, signed partnerships to secure certificates issued by IIIT Basar and to track the credit history of self-help groups.
Though mostly used in bitcoin dealings, the blockchain technology can be used in any and every field where data is involved. Many private financial technology companies are embracing the technology and experts point out that the time is right for governments to adopt this technology in a big way. By using blockchain, government schemes can be made leakage-proof and transparent. “Blockchain can automate a lot of things and if the governments are keen about correct implementation of schemes then blockchain is the solution. Here the technology is not with just one person or company, but it is with the government and they don’t have to depend on a company to put any data and operate the technology,” said Ram Gollamudi, CEO, Zagg Protocol.
https://telanganatoday.com/blockchain-can-disrupt-government-sector
Six ways you can use credit card for optimum credit score
Publication- Money Control
Edition- Online
Date- 31 January, 2019
Credit cards are one of the fastest ways to make purchases without worrying about a cash crunch. As per the TransUnion CIBIL Industry Insights Report for Q3 2018, the number of consumers with access to a bank card reached an all-time high of 36.9 million in Q3 2018 and has grown by 31.7 percent year-on-year (YoY). In line with this growing demand, lenders are keen to offer credit cards to consumers.
A credit card isn't just plastic in your pocket -- it ensures you have access to credit at your fingertips, especially in case of an emergency. Careful usage and prompt payments will positively impact your CIBIL Score over time. Lenders reward credit-conscious consumers by increasing the credit limit, thus enabling you to make your financial goals come true at the swipe of a card. However, any late or missed payments on your credit card bill can incur late payment fees and impact your CIBIL Score, in turn affecting your access to future credit when you need it. Here are six tips to ensure that you get the most out of your credit card while safeguarding your CIBIL Score:
https://www.moneycontrol.com/news/business/personal-finance/six-ways-you-can-use-credit-card-for-optimum-credit-score-3458501.html
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