Better Markets Digest #2
Some good news:
What’s up at PPBL?
If you follow the news even remotely, you might be aware that Paytm Payments Bank (PPBL) has been facing issues. Those issues grew worse this week, as the company’s CEO and MD , Surinder Chawla,?resigned from the board, a little over one year into his tenure.
The problems at PPBL began when RBI found irregularities with its following of KYC norms and overall cyber security. It was forced to stop onboarding new customers and eventually a stop on deposits and credits . Amidst the turmoil, Vijay Shekhar Sharma (Founder of PayTM, PPBL's parent entity) stepped down from its board.
Tougher to sell bad loans
Following the issues at PPBL, RBI is making KYC norms stricter for bad loan accounts purchased by asset reconstruction companies (ARCs).
Sidebar: ARCs buy bad loans from financial institutions at a discounted price and try to recover whatever value they can from the borrower.
Once an account turns bad, borrowers often become non-cooperative, making it difficult for ARCs to meet KYC requirements. Accordingly, executives of ARCs are requesting the RBI for more clarity, and even exemption for accounts lacking KYC compliance.
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Invesco has a new home
IndusInd International Holdings (IIHL), the parent entity of IndusInd Bank, will take a 60% stake in Invesco Asset Management India Ltd. (IAMI) - India’s 5th largest foreign asset manager and 17th largest domestic asset manager.
The acquisition will give IndusInd Bank a presence in the asset management business, something it lacked thus far.
Pulling out
Small and mid-cap stocks are the holy grail for most retail investors. It’s where they try their luck, hoping to make a fortune. And, because the regulator wants to protect them, they do various things. Like, recently, SEBI told mutual fund houses to conduct stress tests because of the developing froth in small and midcap shares.
And maybe the stress tests made few investors wary, because for the first time in 30 months, small-cap funds registered a net outflow of ?94 crore last month.
Performance (E)ssue
It’s not just VC funding that’s in short supply these days - Private Equity (PE) has been? tough to come by as well. One year back, quarterly PE investment into India stood at $3.15 billion. This has fallen by 43.6% in January-March 2024 to $1.77 billion, a six-year low.
Despite a slow start, internet and financial firms remained hot, however, grabbing nearly half (48%) of all PE investments in India this quarter.
Dean Placements & Corporate Relations (CoRe)
11 个月Thank you, Salman!