Market picks up possible bank licence winners
Shares of NBFCs like Religare, L&T Finance, SREI & Bajaj Finserve gained between 3% and 9% while Indiabulls, India Infoline and Shriram City Union Finance declined between 2% and 4%.
By ET Bureau | Updated:
MUMBAI: Shares of non-banking finance companies ( NBFCs) had a mixed day after RBI released the final norms for new bank licences last Friday. The expectation is that only some of the NBFCs may be in a position to qualify for a banking licence.
Shares of NBFCs like Religare Enterprises, L&T Fiannce, SREI Infrastructure and Bajaj Finserve gained between 3% and 9% while Indiabulls Financials, India Infoline and Shriram City Union Finance declined between 2% and 4%.
However, a few analysts expect the Reserve Bank to issue licences selectively at first.
Leading foreign brokerage, Bank of America Merrill Lynch, said, "RBI may initially give out 4-5 new bank licences even as restrictions on real estate or brokerage business have been removed in the final guidelines."
The biggest gainer among NBFCs was Religare Enterprises, whose stock gained 8.7% to end at 293.85. L&T Finance Holdings, promoted by engineering giant, Larsen & Turbo, rose 4.96% to end at 85.70. Bajaj Finserv, a part of two wheeler manufacturer, Bajaj Group gained 3.36% to settle at 851.
Domestic brokerage Emkay in a note to clients said NBFCs such as IDFC, M&M Financial Services, Bajaj Finance and Shriram Transport Finance had a high probability of getting a banking licence.
"We believe that with RBI retaining its right to refuse a banking license on any grounds and seeking impeccable integrity of the promoters, the new banking license theme story should be played on creme-la-de-creme promoters which may include some of the renowned large industrial houses," said Emkay Global.
RBI has asked interested firms to file their applications by July 1 while announcing banking guidelines for new bank licences on February 22.
The biggest loser among NBFCs was Indiabulls Financials Services, whose stock was down 3.8%, followed by India Infoline - which lost 2.87%. Shriram Transport Finance Company, closed 0.56% in the red at 710. IDFC, ended up 0.58% at 156, and Edelweiss Financial gained 0.47% to end at 32.40.
Shares of NBFCs like Religare Enterprises, L&T Fiannce, SREI Infrastructure and Bajaj Finserve gained between 3% and 9% while Indiabulls Financials, India Infoline and Shriram City Union Finance declined between 2% and 4%.
However, a few analysts expect the Reserve Bank to issue licences selectively at first.
Leading foreign brokerage, Bank of America Merrill Lynch, said, "RBI may initially give out 4-5 new bank licences even as restrictions on real estate or brokerage business have been removed in the final guidelines."
The biggest gainer among NBFCs was Religare Enterprises, whose stock gained 8.7% to end at 293.85. L&T Finance Holdings, promoted by engineering giant, Larsen & Turbo, rose 4.96% to end at 85.70. Bajaj Finserv, a part of two wheeler manufacturer, Bajaj Group gained 3.36% to settle at 851.
Domestic brokerage Emkay in a note to clients said NBFCs such as IDFC, M&M Financial Services, Bajaj Finance and Shriram Transport Finance had a high probability of getting a banking licence.
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"We believe that with RBI retaining its right to refuse a banking license on any grounds and seeking impeccable integrity of the promoters, the new banking license theme story should be played on creme-la-de-creme promoters which may include some of the renowned large industrial houses," said Emkay Global.
RBI has asked interested firms to file their applications by July 1 while announcing banking guidelines for new bank licences on February 22.
The biggest loser among NBFCs was Indiabulls Financials Services, whose stock was down 3.8%, followed by India Infoline - which lost 2.87%. Shriram Transport Finance Company, closed 0.56% in the red at 710. IDFC, ended up 0.58% at 156, and Edelweiss Financial gained 0.47% to end at 32.40.
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