The company's net profit is expected to go up 17.6% at Rs 785crore on YoY basis.
Sunday, July 10, 2011
BHEL Jun qtr PAT seen up 17.6% at Rs 785cr
Gold price may hit Rs 25,000 by Diwali
Gold prices are likely to hit Rs 25,000 per 10 grams by this Diwali due to rise in demand for the yellow metal as a better investment alternative, analysts said.
The European Union's economic crisis and sluggish market recovery in US is leading to increased investments in silver also, which could see the prices of the metal touching Rs 65,000 per kg by Diwali season in October, they said.
Gold prices are currently ruling around Rs 22,450 per 10 gram, while silver is selling at around Rs 54,700 per kg.
"The recovery in US markets is not on expected grounds as the country's unemployment rate was higher in June compared to May this year adding to the uncertainty over the pace of the economic recovery," Emkay Global Financial Services, a commodity brokerage firm said.
According to Emkay Commodities Head Atul Shah, the European Union debt crisis involving Portugal, Ireland and Spain has also shaken investors confidence who are increasingly using gold and silver to hedge against losses.
The Libyan crisis that is far from over is also putting pressure on crude prices leading to volatility in the oil markets, Shah pointed out.
"With uncertainty in world economy and no clear solution in the coming months, the gold prices could climb to Rs 25,000 per 10 grams and silver can touch Rs 65,000 per kg by Diwali," Shah said.
According to WellIndia, another commodity brokerage firm, it is expected that gold and silver may trade upside in the next few weeks because of uncertainty in global economy and safe heaven demand by investors.
According to World Gold Council data, investment demand in Gold from US continues growing. China and India accounted for 51% of the world gold consumer demand and this year it can increase up to 58%, WellIndia said.
"Demand for silver is increasing day by day in China and India. Industrial and jewellery demand is not only increasing but also investors are using gold and silver hedge against inflation," it added.
Higher crude realisation to scale up oil cos Q1 earnings
Despite teething problems like slower gas production at Reliance Industries (RIL) and royalty and cess disputes between ONGC and Cairn India , the oil and gas is not on slippery ground.
Numbers for the April-June quarter for the sector are likely to be good q-o-q, essentially led by higher crude realisation and higher refining and petchem margins.
Crude oil continued its upward journey during the quarter by averaging at around USD 117/bbl Continued unrest in Libya coupled with expectations of tightening of the global oil markets has led to highest crude oil prices since 2008. Petroleum product crack spreads further improved during the quarter, aiding refining margins. Gasoline-crude spreads witnessed an expansion during the quarter from USD 12.7/bbl to USD 15/bbl., q-o-q.
Following are what investors can expect from the first quarter results of RIL, ONGC and Oil India
On the back of strong macro environment, RIL is likely to report a better set of numbers during the quarter. Its net sales will grow 35.5% y-o-y at Rs 78,899.2 crore. Its EBITDA margin will decline by 315 basis points to 13%. Its net profit will grow 17% to Rs 5,895 crore. Analysts have an 'accumulate' rating on RIL stock with a target of Rs 1,036 despite its KG-D6 block’s output slipping due to technical problems to about 52 mcmd from 60 mcmd in y-o-y.
ONGC will also see a muted growth in its sales on the back of the provisional estimate of 33% subsidy share for upstream companies. Its sales will yet grow 10% at Rs 15,017.9 crore. Its net profit will also grow 10%. Marketmen have a ‘buy’ rating on the stock with a target price of Rs 345.
Oil India is likely to report good set of numbers on account of expansion in net realisation during the quarter with higher volumes from its Namaligarh refinery. It will see a huge jump in its sales and profits as the refinery was shut during the corresponding quarter of previous year. Industry experts expect Indian Oil’s net realisation during the quarter to stand at USD 59.5/bbls, up from USD 50/bbls y-o-y.
Following are views of some brokerages on oil and gas earnings expectations in April-June quarter.
IIFL: "Refining margins have been higher on a sequential basis on account of improvement in gasoline spreads, which will result in better performance of RIL’s refining segment. Crude oil production from MA-1 field and gas production from KG-D6 field are likely to be tad lower on a sequential basis. Sharp y-o-y jump in production from Rajasthan field would lead to robust results for Cairn India and will translate into higher total production for ONGC. APM gas price hike will further improve ONGC’s performance.
Infosys results keenly eyed amid wage hikes, global worries
The first quarter earnings season will gain momentum with technology bellwether Infosys announcing its first quarter (April-June) numbers on Tuesday. The results, which come amidst economic uncertainties in Europe and margin pressures back home, will set the tone for the overall IT sector performance this quarter.
Infosys had disappointed the street in the fourth quarter with earnings and rupee guidance for the current fiscal well below what analysts had expected. Also, the unexpected resignation of TV Mohandas Pai, HR head and a long-serving member of the company, sparked speculation of a rift in the senior leadership team.
The stock has been under pressure since then, shedding 8%, compared with a 6% decline in the CNX IT Index. The market therefore will be keenly glued to the developments over at the Bangalore-based company, especially after better than expected results by overseas rivals Accenture and Oracle.
During the quarter ICICI’s KV Kamath was named the Chairman at Infosys. He will replace founder and current chairman NR Narayana Murthy who will retire on August 20.
Most Indian software services providers, including Infosys, are expected to report better earnings for the first quarter as demand is likely to be strong despite macro-economic worries. Revenue growth is likely to be "healthy" 20% year-on-year in April-June.
Infosys' margins will be under pressure due to the wage hike it implemented in the quarter. The company raised wages by 10-12% for offshore employees (people working in Infy locations in India) and 2-3% for onsite employees (people working at client locations). Pricing is also likely to be flattish (up about 1%) in the quarter.
"Infosys had guided to a 400 bps sequential decline in margins in Q1 FY12 due to 260 bps quarter-on-quarter decline due to wage hikes, a 70 bps q-o-q decline due to rupee appreciation and a 70 bps q-o-q decline due to higher visa costs. Management has commented that it has been unable to significantly improve utilisation due to the unevenness of demand and the mismatch of skill-sets between demand and supply," according to Manish Nigam and Sagar Rastogi of Credit Suisse.
The rupee, however, has depreciated 0.5% sequentially in April-June, and this Edelweiss Securities says will limit the margin decline to 200-250 bps. Infosys is also expected to raise its full year guidance.
"We expect Infosys to guide for a 5-5.5% sequential revenue growth for Q2 FY12. We expect the EPS guidance for FY12 to be revised upward to around Rs130-131 from Rs126.05-128.21 earlier," says brokerage Sharekhan.
The growth this fiscal, however, is still expected to lag some of its peers. Credit Suisse expects Infosys' EPS (earnings per share) and revenue growth to be around 15% and 24% respectively, while smaller HCL Technologies , for instance, is expected to report 27% topline growth and 45% EPS growth for the full year.
"Change in FY12 guidance and assumptions, growth momentum in non-BFSI (banking and financial services), Europe and discretionary spend, pricing comments, supply-side pressures and impact on attrition/margins hereon," will be the key factors to watch out for according to ICICI Securities.
Tuesday, July 5, 2011
Rushil Decor to list shares on July 7
Rushil Decor , a manufacturer of decorative laminated sheets, has fixed July 7 as a listing date for its equity shares. It has fixed issue price at higher end of price band of Rs 63-72 a share for its initial public offering of 54 lakh equity shares (excluding promoters contribution of 2,43,750 shares).
Company raised Rs 40.64 crore (including promoters' contribution of Rs 1.75 crore) through the issue, which will be used for setting up of medium density fibre board plant and for working capital requirement.
The issue, which opened for subscription during June 20-23, was subscribed 2.62 times.
Retail and non-institutional investors helped the issue, with their subscription of 6.5 times and 1.35 times over reserved portion, respectively.
Company raised Rs 40.64 crore (including promoters' contribution of Rs 1.75 crore) through the issue, which will be used for setting up of medium density fibre board plant and for working capital requirement.
The issue, which opened for subscription during June 20-23, was subscribed 2.62 times.
Retail and non-institutional investors helped the issue, with their subscription of 6.5 times and 1.35 times over reserved portion, respectively.
Birla Pacific Medspa to list on Thursday
Yash Birla Group Company Birla Pacific Medspa will be listing its equity shares on Thursday, July 7. It has fixed the issue price of the company at Rs 10 per share, the lower end of the price band.
The company raised Rs 65 crore through an IPO of 651.75 lakh equity shares. The issue, which opened for subscription during June 20-23, was subscribed 1.18 times.
Birla Pacific Medspa proposes to utilise Rs 49 crore for establishing 55 'Evolve' outlets, around Rs 6 crore for brand building and the balance for meeting working capital, Issue and other preliminary
The company raised Rs 65 crore through an IPO of 651.75 lakh equity shares. The issue, which opened for subscription during June 20-23, was subscribed 1.18 times.
Birla Pacific Medspa proposes to utilise Rs 49 crore for establishing 55 'Evolve' outlets, around Rs 6 crore for brand building and the balance for meeting working capital, Issue and other preliminary
Mukesh Ambani planning to sell RGTIL biz
Billionaire industrialist MukeshAmbani is looking to sell Reliance Gas Transportation Infrastructure business, which is into building pipelines to carry natural gas, said a media report.
The Wall Street Journal has reported that Mukesh Ambani, chairman of Reliance Industries, has contacted bankers to help him sell the business. "The process is at an early stage and a sale may not take place," the daily said.
Quoting two people familiar with the matter, the report noted that the privately-owned gas pipeline business, known as RGTIL for short, could be worth about USD 1 billion.
RGTIL has a gas pipeline from the landfall hub of Kakinada across the country to Gujarat on the east coast, with various connections along the way.
"RGTIL started developing the pipeline in 2005 and sold bonds in early 2009 to help finance the project, according to the offer document for the bonds," the report said.
The Wall Street Journal has reported that Mukesh Ambani, chairman of Reliance Industries, has contacted bankers to help him sell the business. "The process is at an early stage and a sale may not take place," the daily said.
Quoting two people familiar with the matter, the report noted that the privately-owned gas pipeline business, known as RGTIL for short, could be worth about USD 1 billion.
RGTIL has a gas pipeline from the landfall hub of Kakinada across the country to Gujarat on the east coast, with various connections along the way.
"RGTIL started developing the pipeline in 2005 and sold bonds in early 2009 to help finance the project, according to the offer document for the bonds," the report said.
BT to stay invested in Tech Mahindra
UK-based telecommunications player BT today said it will continue to hold stake in Indian IT firm Tech Mahindra for the time being.
"BT has a 24.4% shareholding in Tech Mahindra. Tech Mahindra remains a key supplier to BT and, while further sales may be considered in the future, BT expects to continue to have a shareholding in Tech Mahindra for some time," a BT spokesperson said.
There were speculations that BT may exit in view of likely merger of Mahindra Satyam and Tech Mahindra.
In November last year, BT had sold 5.5% stake in Tech Mahindra to the IT company’s parent firm Mahindra & Mahindra . Tech Mahindra was developed from a joint venture between the two companies in 1986.
M&M held 48.17% stake in Tech Mahindra, while BT held 23.46% and Mahindra BT Investment Company Mauritius Ltd held 0.05% stake as of March 31, 2011, according to data available on the Bombay Stock Exchange website.
BT, which has a significant presence in India, is also ramping up in the country. It has also set up a New Delhi Technology showcase centre, which was inaugurated today.
"India is a critical component to BT's success and vision and is a key location to a large number of global companies. Many of our customers are expanding into India and we are investing to extend our communications infrastructure and services to support their growth," BT Global Services Asia Pacific President Kevin Taylor said.
The new facility is part of BT's ongoing investment plan in Asia Pacific, he added.
BT has also announced creation more than 60 new critical roles in India as part of the previously announced Asia Pacific expansion plan. "The new jobs will be in sales enablement, delivery and implementation of services for customers. We expect to see a similar number next year as well," Taylor said.
The opening of BT's New Delhi showcase follows the launch of BT Showcases in Hong Kong in September 2010, Beijing in November 2010, Sydney in January 2011 and Singapore in March, 2011.
BT offers global services including voice, CRM and MPLS (multi-protocol label switching) to support corporate customers across sectors like finance, IT/ITeS, government and manufacturing.
It has a regional security operations centre (SOC) in Noida and a regional centre of Excellence in Pune, apart from offices in various cities in the country.
"BT has a 24.4% shareholding in Tech Mahindra. Tech Mahindra remains a key supplier to BT and, while further sales may be considered in the future, BT expects to continue to have a shareholding in Tech Mahindra for some time," a BT spokesperson said.
There were speculations that BT may exit in view of likely merger of Mahindra Satyam and Tech Mahindra.
In November last year, BT had sold 5.5% stake in Tech Mahindra to the IT company’s parent firm Mahindra & Mahindra . Tech Mahindra was developed from a joint venture between the two companies in 1986.
M&M held 48.17% stake in Tech Mahindra, while BT held 23.46% and Mahindra BT Investment Company Mauritius Ltd held 0.05% stake as of March 31, 2011, according to data available on the Bombay Stock Exchange website.
BT, which has a significant presence in India, is also ramping up in the country. It has also set up a New Delhi Technology showcase centre, which was inaugurated today.
"India is a critical component to BT's success and vision and is a key location to a large number of global companies. Many of our customers are expanding into India and we are investing to extend our communications infrastructure and services to support their growth," BT Global Services Asia Pacific President Kevin Taylor said.
The new facility is part of BT's ongoing investment plan in Asia Pacific, he added.
BT has also announced creation more than 60 new critical roles in India as part of the previously announced Asia Pacific expansion plan. "The new jobs will be in sales enablement, delivery and implementation of services for customers. We expect to see a similar number next year as well," Taylor said.
The opening of BT's New Delhi showcase follows the launch of BT Showcases in Hong Kong in September 2010, Beijing in November 2010, Sydney in January 2011 and Singapore in March, 2011.
BT offers global services including voice, CRM and MPLS (multi-protocol label switching) to support corporate customers across sectors like finance, IT/ITeS, government and manufacturing.
It has a regional security operations centre (SOC) in Noida and a regional centre of Excellence in Pune, apart from offices in various cities in the country.
Check out: 8 stocks on brokerages' radar
UBS has maintained a "NEUTRAL" stance on Patni Computer , however, it has cut the target to Rs 380 from Rs 475. They believe that the benefits from the iGate and Patni integration are unlikely to have meaningful impact over the next few quarters. They expect the lower free float and the lack of clarity on delisting to continue to weigh heavily on the stock, limiting upside.
CLSA has maintained an "OUTPERFORM" rating on United Spirits with a target of Rs 1,125. With the consensus lowering FY13 estimates by 22% in the last 12-months it believes a large part of expectations adjustment is already over. CLSA expects over 30% earnings growth in Q1FY12 that would be the near-term trigger for the stock.
JPMorgan has maintained an "OVERWEIGHT" rating on MOIL with a target of Rs 450. This is despite its expectations that the company will report a soft first quarter given the price cut implemented over the last few months and tepid demand trends
Meanwhile, Goldman Sachs has a "SELL" rating on Nestle with a target of Rs 3,396. It feels that their store audits confirm high competition for shelf space with three majors like HUL, ITC and Nestle competing in the packaged foods categories, which remain a risk to margins. They believe current valuations price in volume growth and increasing margins, which we see as unlikely given high competition and input costs.
Citi has a "BUY" recommendation on DB Corp with a target price of Rs 305. The rising consumption in non-metro cities and the big mismatch in the share of ad revenues for regional papers would make the stock an interesting play
Credit Suisse is "NEUTRAL" on HDFC based on valuations with a target price of Rs 725. Improvement in market share, drop in costs and margin recovery are some of the key positives.
Nomura has reiterated a "BUY" on Crompton Greaves on account of positive surprises in their annual report. The target price is at Rs 325. Mitigation of concerns from overseas subsidiaries, margin recovery, pick-up in execution and order flow in domestic power systems are some of the key catalysts. They consider the stock to be the most attractive pick in the space.
Credit Suisse has retained "UNDERPERFORM" rating on Tata Steel and all Indian steel stocks under coverage due to sectoral concerns.
CLSA has maintained an "OUTPERFORM" rating on United Spirits with a target of Rs 1,125. With the consensus lowering FY13 estimates by 22% in the last 12-months it believes a large part of expectations adjustment is already over. CLSA expects over 30% earnings growth in Q1FY12 that would be the near-term trigger for the stock.
JPMorgan has maintained an "OVERWEIGHT" rating on MOIL with a target of Rs 450. This is despite its expectations that the company will report a soft first quarter given the price cut implemented over the last few months and tepid demand trends
Meanwhile, Goldman Sachs has a "SELL" rating on Nestle with a target of Rs 3,396. It feels that their store audits confirm high competition for shelf space with three majors like HUL, ITC and Nestle competing in the packaged foods categories, which remain a risk to margins. They believe current valuations price in volume growth and increasing margins, which we see as unlikely given high competition and input costs.
Citi has a "BUY" recommendation on DB Corp with a target price of Rs 305. The rising consumption in non-metro cities and the big mismatch in the share of ad revenues for regional papers would make the stock an interesting play
Credit Suisse is "NEUTRAL" on HDFC based on valuations with a target price of Rs 725. Improvement in market share, drop in costs and margin recovery are some of the key positives.
Nomura has reiterated a "BUY" on Crompton Greaves on account of positive surprises in their annual report. The target price is at Rs 325. Mitigation of concerns from overseas subsidiaries, margin recovery, pick-up in execution and order flow in domestic power systems are some of the key catalysts. They consider the stock to be the most attractive pick in the space.
Credit Suisse has retained "UNDERPERFORM" rating on Tata Steel and all Indian steel stocks under coverage due to sectoral concerns.
Exhausted bulls: Will Nifty manage to cross over 5750?
It was an uneventful session on back of lacklustre volumes. The market moved in a consolidation phase due to lack of any positive cues. Investors seem to be waiting patiently on the sidelines for the forthcoming events line up in this month.
Earnings season to be kicked started by IT bellweather Infosys on July 12 will probably set the ball rolling. Other major events in July are release of industrial output data, inflation and monetary policy review.
The Nifty trended closer to the 5600 support but closed at 5632 down 18 points. The Sensex shut shop at 18744 down 70 points.
Jai Bala, Chief Market Technician, Cashthechaos.com feels that bears have dropped the baton and market has actually stopped at the key resistance under 5,720-5,750 region. “Although the larger trend still looks lower, the pace of the rise from June 20 low is putting doubts on the bearish case but it is still a neutral market,” he explained.
You shouldn't miss this: Forefront Cap positive on auto sector, bets on Bajaj Auto
Krishna Kumar Karwa, Managing Director of Emkay Global Financial Services doesn't expect any positive surprises this earnings season. "Any further upmove in the market will be on the back of positive policy action from the government which will be the key driver.”
Gaurav Doshi of Morgan Stanley Private Wealth Management believes that the correction is warranted after the amazing upmove seen recently. "Going forward, the Nifty is likely to remain range-bound between 5500 and 5800 levels," he said.
Stock specifically, Technical Analyst, SP Tulsian is negative on RIL . According to him, there won’t be any newed interest on the stock from a delivery or from an investment point of view.
“I wouldn’t be surprised even if the share corrects to about Rs 800 to Rs 810 in this series where one can contemplate as a trading buy in the stock or maybe even by the long term investors as a fundamental buy at those levels,” Tulsian elaborates.
Rajesh Jain, Independent Market Strategist suggests getting into infrastructure stocks for a long term horizon of about 18 months.
Some of the top bets of Mehraboon Irani, Principal and Head- Pvt Client Group Business, Nirmal Bang Securities are Hexaware , Rolta and NIIT Technologies . Irani explains that if IT companies post mute earnings, then midcap IT stocks may fall and that would emerge as entry points.
Earnings season to be kicked started by IT bellweather Infosys on July 12 will probably set the ball rolling. Other major events in July are release of industrial output data, inflation and monetary policy review.
The Nifty trended closer to the 5600 support but closed at 5632 down 18 points. The Sensex shut shop at 18744 down 70 points.
Jai Bala, Chief Market Technician, Cashthechaos.com feels that bears have dropped the baton and market has actually stopped at the key resistance under 5,720-5,750 region. “Although the larger trend still looks lower, the pace of the rise from June 20 low is putting doubts on the bearish case but it is still a neutral market,” he explained.
You shouldn't miss this: Forefront Cap positive on auto sector, bets on Bajaj Auto
Krishna Kumar Karwa, Managing Director of Emkay Global Financial Services doesn't expect any positive surprises this earnings season. "Any further upmove in the market will be on the back of positive policy action from the government which will be the key driver.”
Gaurav Doshi of Morgan Stanley Private Wealth Management believes that the correction is warranted after the amazing upmove seen recently. "Going forward, the Nifty is likely to remain range-bound between 5500 and 5800 levels," he said.
Stock specifically, Technical Analyst, SP Tulsian is negative on RIL . According to him, there won’t be any newed interest on the stock from a delivery or from an investment point of view.
“I wouldn’t be surprised even if the share corrects to about Rs 800 to Rs 810 in this series where one can contemplate as a trading buy in the stock or maybe even by the long term investors as a fundamental buy at those levels,” Tulsian elaborates.
Rajesh Jain, Independent Market Strategist suggests getting into infrastructure stocks for a long term horizon of about 18 months.
Some of the top bets of Mehraboon Irani, Principal and Head- Pvt Client Group Business, Nirmal Bang Securities are Hexaware , Rolta and NIIT Technologies . Irani explains that if IT companies post mute earnings, then midcap IT stocks may fall and that would emerge as entry points.
Nifty in tight range; SBI, SAIL, Reliance Cap top gainers
The benchmark Nifty was trading in a narrow range of 5615-5645 since the beginning of trade today. Market could be eyeing for events, which are lined up this month like earnings, GDP, inflation and RBI policy.
The 30-share BSE Sensex was trading at 18,763, down 51 points and the 50-share NSE Nifty fell 15 points to 5,635. Global markets were quiet in trade as US markets were shut yesterday.
Heavyweights Reliance Industries and BHEL were down over 2% & 3.5%, respectively. ITC, HUL, Bharti Airtel, TCS, Hindalco, DLF, NTPC, ICICI Bank and Reliance Communications too were putting pressure on the market.
However, SBI was the leading counter on Nifty, with rising 1.5%. Infosys, Wipro, HDFC Bank and L&T too were on buyers' radar. SAIL and Grasim were the top gainers, with gaining over 2%.
ICICI Bank, SBI, BF Utilities, Jubilant Foodworks, VIP Industries, Reliance Industries, BHEL and Tata Motors were most active shares on exchanges.
Midcaps like Cholamandalam rallied 12%. BF Utilities, Blue Dart, Wockhardt and Greaves Cotton gained 4-6.5%. However, UCO Bank, Shree Global, TTK Prestige, Shree Renuka and Prestige Estate lost 2.5-5%.
Smallcaps like Accentia Tech, Mahindra Forgings, Mastek, Electrotherm and Symphony jumped 8-13% whereas Warren Tea, Chromatic India, Cosmo Films, KPR Mill and Binny fell 5-13%.
The 30-share BSE Sensex was trading at 18,763, down 51 points and the 50-share NSE Nifty fell 15 points to 5,635. Global markets were quiet in trade as US markets were shut yesterday.
Heavyweights Reliance Industries and BHEL were down over 2% & 3.5%, respectively. ITC, HUL, Bharti Airtel, TCS, Hindalco, DLF, NTPC, ICICI Bank and Reliance Communications too were putting pressure on the market.
However, SBI was the leading counter on Nifty, with rising 1.5%. Infosys, Wipro, HDFC Bank and L&T too were on buyers' radar. SAIL and Grasim were the top gainers, with gaining over 2%.
ICICI Bank, SBI, BF Utilities, Jubilant Foodworks, VIP Industries, Reliance Industries, BHEL and Tata Motors were most active shares on exchanges.
Midcaps like Cholamandalam rallied 12%. BF Utilities, Blue Dart, Wockhardt and Greaves Cotton gained 4-6.5%. However, UCO Bank, Shree Global, TTK Prestige, Shree Renuka and Prestige Estate lost 2.5-5%.
Smallcaps like Accentia Tech, Mahindra Forgings, Mastek, Electrotherm and Symphony jumped 8-13% whereas Warren Tea, Chromatic India, Cosmo Films, KPR Mill and Binny fell 5-13%.
Saturday, July 2, 2011
ICICI Bank raises rates; home, auto loans to cost more
As the banking industry completed a year after the introduction of the benchmark lending rate or base rate today, the second largest lender ICICI Bank set the ball rolling for another round of interest rate hikes by effecting a 0.25 per cent rise in its base rate to 9.5 per cent.
The largest private sector lender also upped its retail lending rates by a similar quantum. While its new benchmark lending rate (fixed rate) will be 18.25 percent, the floating rate will be 15.25 per cent, the city-based lender said in a release.
With effect from July 1, the new interest rates will be applicable on new loans and advances, including consumer loans and home loans, bank said, adding however, the fixed rate customers will not be impacted by these increases.
The new base rate will be effective Monday next, while the new retail lending rates will be effective today itself, the bank said.
Since the introduction of the base rate system on July 1, 2010, the rate below which a bank cannot lend to anyone, leading banks have increased their base rates on an average of 200 bps. While the largest lender SBI is yet to take a call on the new round of rate hike, it is expected to revise its rates.
SBI has increased its base rate by 1.5 per cent since last July 1, the second largest private sector lender HDFC Bank and the third largest Axis Bank have already done so by 2 per cent, while ICICI's has done so by 1.75 per cent. However, the effective increase of ICICI is also 2 per cent as it had launched base rate 0.25 per cent higher than others at 7.75 percent.
ICICI Bank is the third bank to increase base rate since June 16, after the state-run Canara Bank, which had raised its base rate to 10.25 per cent on Wednesday, and the medium-sized Dena Bank that upped its base rate to 10.20 per cent on Friday.
While the Bangalore-based Canara Bank hiked its base rate by 0.25 per cent each to 10.25 percent effective July 1, and the benchmark lending rate by a similar amount to 14.50 per cent attributing it to rise in the cost of funds, the Mumbai-based Dena Bank also followed suit with its base rate being hiked to 10.20 per cent and benchmark lending rate to 15.25 per cent.
Since the Reserve Bank had raised its key policy rates 0.25 per cent at its mid-quarter policy review on June 16--the tenth increase since March 2010 during which it has upped the short-term lending and borrowing rates by a whopping 2.5 per cent to 7.5 and 6.5 percent respectively, to batten down inflation--many banks have hinted at upping their base rates.
The largest private sector lender also upped its retail lending rates by a similar quantum. While its new benchmark lending rate (fixed rate) will be 18.25 percent, the floating rate will be 15.25 per cent, the city-based lender said in a release.
With effect from July 1, the new interest rates will be applicable on new loans and advances, including consumer loans and home loans, bank said, adding however, the fixed rate customers will not be impacted by these increases.
The new base rate will be effective Monday next, while the new retail lending rates will be effective today itself, the bank said.
Since the introduction of the base rate system on July 1, 2010, the rate below which a bank cannot lend to anyone, leading banks have increased their base rates on an average of 200 bps. While the largest lender SBI is yet to take a call on the new round of rate hike, it is expected to revise its rates.
SBI has increased its base rate by 1.5 per cent since last July 1, the second largest private sector lender HDFC Bank and the third largest Axis Bank have already done so by 2 per cent, while ICICI's has done so by 1.75 per cent. However, the effective increase of ICICI is also 2 per cent as it had launched base rate 0.25 per cent higher than others at 7.75 percent.
ICICI Bank is the third bank to increase base rate since June 16, after the state-run Canara Bank, which had raised its base rate to 10.25 per cent on Wednesday, and the medium-sized Dena Bank that upped its base rate to 10.20 per cent on Friday.
While the Bangalore-based Canara Bank hiked its base rate by 0.25 per cent each to 10.25 percent effective July 1, and the benchmark lending rate by a similar amount to 14.50 per cent attributing it to rise in the cost of funds, the Mumbai-based Dena Bank also followed suit with its base rate being hiked to 10.20 per cent and benchmark lending rate to 15.25 per cent.
Since the Reserve Bank had raised its key policy rates 0.25 per cent at its mid-quarter policy review on June 16--the tenth increase since March 2010 during which it has upped the short-term lending and borrowing rates by a whopping 2.5 per cent to 7.5 and 6.5 percent respectively, to batten down inflation--many banks have hinted at upping their base rates.
Subscribe to:
Posts (Atom)