IndiaCatalog.com
India News
Search Web Directory
News Home
Yes Bank, Indiabulls Housing are different peas stuck in same pod
Posted on 14th October 2019
A year ago, before the liquidity crunch manifested for non-banking financial companies (NBFCs), Yes Bank Ltd’s market capitalization was 1.5 times that of Indiabulls Housing Finance Ltd. Today, that difference has narrowed quite a bit as the adjoining chart shows.

Both the lenders have seen a massive erosion in their market value, but Yes Bank’s pain has been deeper.

Are investors looking at a bank and an NBFC through the same lens?

Is this similarity of treatment justified? After all, depositors and regulators treat non-banks differently from banks and rightly so.

The heart of the matter is that both lenders have seen their luck run out in terms of capital. Capital is key for future growth and investors bet on the future potential rather than current circumstances.

Clearly, when it comes to trust, markets spare none. “There are differences between banks and NBFCs when it comes to factors such as protection of deposits and access to liquidity windows. But when you are dealing with a deficit in terms of counterparty confidence, the difference in name tag doesn’t make much of a difference. It’s only when the tide goes out that we know who can still borrow a piece of clothing," said an analyst at a foreign brokerage firm, requesting anonymity.

The sharp drop in market capitalization of the two lenders suggests investors are assigning a low probability of either of them getting capital easily.

Being a bank meant that Yes Bank needn’t worry about a steady stream of funding. But the lender hasn’t been able to beef up its equity capital, essential for growth in the coming years. The bank’s new chief Ravneet Gill has given repeated assurances that money would come, but the wait for a sizeable infusion continues.

In the meanwhile, its erstwhile promoter Rana Kapoor has sold off most of his stake despite a massive erosion in value. This raised many eyebrows, especially since Kapoor had staunchly defended his Yes Bank stake in the past, comparing it to diamonds.

For Indiabulls Housing Finance, the merger with Lakshmi Vilas Bank Ltd was key to steadying its funding boat. Indeed, the company had set in motion structural changes, in a serious pursuit of the regulator’s approval for the merger. Analysts at Macquarie Capital Securities (India) Pvt. Ltd noted that it was telling the regulator refused despite all efforts from the lender. “What is the future of IHFL? We are very unsure now. Since most market participants are reluctant to give money, this rejection (of the merger by RBI) further jeopardises the funding situation," the brokerage firm said in a note.

In the last one year, Indiabulls Housing Finance had to sell down its loans to conserve capital. It had to defend itself from the onslaught of a liquidity crunch.

It’s interesting to note that until this negative development (the merger getting called off) for Indiabulls Housing, its market cap was higher than that of Yes Bank for most of the past three months.

Related Companies: Yes Bank   

Other Latest News
AIMPLB to decide on filing Ayodhya verdict review petition in SC today
Posted on 16th November 2019
The All India Muslim Personal Law Board (AIMPLB) is likely to take a call on whether to file a review petition in the Supreme Court's final verdict in the Ayodhya land dispute case.

A meeting of AIMPLB is expected to take place today in Lucknow to decide on call to be taken by the board in the Ram Janmabhoomi-Babri Masjid case verdict by the Supreme Court.


Maharashtra: BJP afraid MLAs may defect, says NCP’s Nawab Malik
Posted on 16th November 2019
The Maharashtra BJP is bedevilled by the trepidation that politicians who joined the party ahead of the October 21 Assembly polls will defect and, hence, its leaders are claiming they will form government in the state, the NCP said on Saturday. NCP chief spokesperson Nawab Malik made the remarks a day after Maharashtra BJP chief Chandrakant Patil said his party will soon form the government and claimed it can count on the support of 119 MLAs, including Independents, in the 288-member Assembly.

SAT pulls up Sebi for 'shabby' handling of complaints from investor
Posted on 16th November 2019
The Securities and Appellate Tribunal (SAT) has hauled up the Securities and Exchange Board of India (Sebi) for giving computer-generated response to investor complaints filed on its online platform Scores and for disposing of the matter without settling the case.

“We find the approach adopted by Sebi to be a strange one. Such computer-generated disposal of a serious complaint speaks volumes on the conduct in treating the minority shareholders in this shabby manner,” the tribunal said while delivering a judgment on a matter related to an investor complaint.


US to extend licence for its firms to continue business with Huawei: Report
Posted on 16th November 2019
The Trump administration is set to issue a two-week extension of a licence allowing U.S. companies to continue doing business with China's Huawei Technologies Co Ltd, two sources familiar with the deliberations said.

The extension of around two weeks is far shorter than the prior 90-day extension and a longer extension is in the works but has not yet been finalised due to regulatory hurdles, said one source who was briefed on the matter.


SC sets aside NCLAT order, paves way for Arcelor to acquire Essar Steel
Posted on 16th November 2019
The Supreme Court on Friday brought down the curtains on an epic battle for debt-laden Essar Steel, paving the entry of the world’s largest steel maker, ArcelorMittal, into the second-biggest steel market, India.

In a ruling that would have a far-reaching impact on cases under the Insolvency and Bankruptcy Code (IBC), the apex court has set aside the National Company Law Appellate Tribunal (NCLAT) order that put a different class of creditors — financial vis-a-vis operational creditors as also secured and unsecured financial creditors — on a par.


» Post a FREE Classified Advertisement
Inviting Real Estate Agents, Job Placements Agents, Educational Institutes, Software Service Providers, Real Estate Builders, Marriage Bureaus, Travel Agents, Restaurant Owners, Health & Fitness Centers and other Local Businesses to Post a FREE Classified Advertisement on Cootera.com Classifieds Website.
Jobs in India India Real Estate Automobiles Matrimonials Beauty & Fitness

Add a comment for Yes Bank, Indiabulls Housing are different peas stuck in same pod
Please only use this form to enter comments on the above company. All comments are reviewed before they are displayed on the web site. Not all comments may be displayed. Check back with us to see if your comments have been displayed.
If you want us to email the comments posted by users, please Subscribe by email
Name*
Comments*
Security Code*
 

Be the first person to write a business review for Yes Bank, Indiabulls Housing are different peas stuck in same pod

Most Read News

Supreme Court: CJI Ranjan Gogoi's last working day today, Bar Association to organise farewell ceremony

There will be Shiv Sena CM in Maharashtra, no matter what: Sanjay Raut

Govt must read ‘extremely important’ dissent order in Sabarimala verdict: Justice Nariman

Amazon challenges Pentagon's $10-billion cloud deal with Microsoft

Women's entry at Sabarimala: Supreme Court refers matter to larger bench

More India News

  India Web Directory
Business Profiles
Automotive Directory
IT/ITES/BPO Directory
Hotel Directory
Health Directory
Business Directory
Gems & Jewellery
Education Directory
Real Estate Directory
Agriculture Directory
Logistics Directory
Yellow Pages
NRI Guide
Photo Galleries
Global Web Directory
*** FREE India Classifieds
Order Premium Listings
Submit a Site
Business Reviews
Home
About us
Link to us
Advertise
Contact us
Google Search Keywords: India Catalog, IndiaCatalog, India Web Directory
    © 1999 - 2019 IndiaCatalog.com
    All Rights Reserved
Privacy Statement