Bonds shrug off early losses
Mumbai: In the forex market, the rupee fell to a five-week low on Tuesday, following a slide in the local stock market indices coupled with resurgence of the dollar against other global currencies, ending at 43.8100/8200 per dollar, a tad lower than Monday's close of 43.7850/7900.

G-Secs: The G-Sec market witnessed some sell-off in morning deals following Monday's announcement of 'higher than expected' government borrowings in the first half of the coming fiscal. The government's borrowing programme, which starts in April, was announced after the market closed on Monday.

Call rates: The inter bank rates straddled around 4% amidst ample liquidity, said dealers.
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IDFC's maiden float dependent on market conditions
Mumbai: The Infrastructure Development Finance Company (IDFC) will take into account stock market conditions before finally deciding on its initial public offering (IPO).

With a capital adequacy ratio (CAR) of 36 per cent, IDFC has adequate capital to take care of its fund requirement for three years. IDFC also proposes to shortly launch a second infrastructure development fund with a corpus of about Rs1,300 crore. This follows IDFC having committed the bulk of its existing Rs850-crore India Development Fund.

Officials said that the institution's balance sheet would grow from the present Rs8,000 crore to Rs25,000 crore over five years at an average annual growth of 30 per cent.

IDFC has also planned an external commercial borrowing offering of $ 150-200 million and is in talks with various multi-lateral agencies and domestic institutions capable of providing foreign exchange loans.

Today, the government holds 35 per cent stake in IDFC directly and an additional 5 per cent through IDBI. The institution had earlier planned to raise Rs1,000 crore through an IPO. According to the original shareholder agreement, IDFC's IPO was to be completed a couple of years back. Following a two-year grace period, the period was extended till 2005.

All existing shareholders have agreed to remain invested in the financial institution after the IPO. Foreign investors including American International Group, IFC Washington, Asian Development Bank (ADB), Government of Singapore, CDC, Deutsche Asia Pacific, among a host of others hold 40 per cent stake in IDFC. Domestic institutions hold the balance 25 per cent.
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Crisil study: Decline in debt default continues
Mumbai: According to a study by the rating agency Crisil, the rate of defaults in debt instruments rated by it is on the decline since 2000, with the annual default rates for the five years till 2004, being at an average of 2.27 per cent, as compared with 2.95 per cent over the thirteen year period beginning 1992.

The first default study covers Crisil's rating database spanning thirteen years and covers two full economic cycles. The default rate is the proportion of the total defaults to the total outstanding ratings in a year.

Of the total 120 defaults in Crisil's rated instruments since 1992, as many as 80 defaults occurred during 1997-1999, which witnessed an economic downturn and regulatory changes, particularly in the non-banking financial services sector.

According to Crisil, the default rate study is significant as the Basel-II norms will measure a rating system for rating accuracy. The number of defaults is higher in the case of Crisil as its definition of a default is more rigorous compared to other Indian rating agencies.

Crisil deems as default if a corporate misses the due date for payment of interest or principal, whereas other rating agencies like ICRA follow the estimated loss method, taking into account the amount recoverable.

The default rates for Crisil are comparable to those of Standard & Poor's globally, agency officials said. There has not been a single default in instruments rated triple A by Crisil.
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ICICI Bank and IndusInd launch remittance schemes
Mumbai: Gearing up to tap the $20-billion Indian remittance market, ICICI Bank and IndusInd Bank have separately rolled out new products in order to enable expatriate Indians to send money to their home country. While ICICI Bank has inked an agreement with the Wells Fargo Bank, IndusInd Bank has joined hands with Bank of New York towards this end.

ICICI Bank officials also said that the Wells Fargo Bank was also open to extend this strategic alliance to other products like insurance, mortgages and property services. ICICI Bank also plans to open a branch in Hong kong. It has received Reserve Bank of India's approval and is awaiting the approval of Hong Kong monetary authority, bank officials said.

The global remittance market is estimated at $110 billion, with approximately $20 billion a year, coming into India. Non-resident Indians (NRIs) living in the US, numbering over 1.5 million, remit over $7 billion to India annually.

IndusInd Bank, in the meanwhile has launched its Indus Fast Remit, a product developed to receive remittances in dollars and India Speed-Remit for bank's NRIs client base in United Arab Emirates.

The bank intends to rope in a global private banking entity in order to form a capital market subsidiary to provide wealth and portfolio management services for non-resident Indians.
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