Major Asian stock markets have opened the day on a positive note. The stock markets in Japan and Singapore are trading higher by 1.1% and 1.2% respectively. Major indices in Europe and US ended their previous session on an encouraging note too. The benchmark indices in US and UK ended the day higher by 1.3% and 2.4% respectively. The rupee is trading at 68.56 per US$.
Indian stock markets have opened the day on a firm note. The BSE Sensex is trading higher by 222 points (up 1%) and NSE Nifty is trading higher by 72 points (up 1.1%). Both BSE Mid Cap and BSE Small Cap are trading higher by 1% and 0.7% respectively. Major sectoral indices have opened the day in green with stocks from capital goods and pharmaceutical sectors witnessing maximum buying interest.
As reported in a leading financial daily, Reserve Bank of India (RBI) announced certain changes to thestrategic debt restructuring scheme (SDR). According to the scheme banks were allowed to convert loans into majority equity shareholding (atleast 51%) in case of a default by the borrower.
Once loans were converted into equity, banks had to dilute the majority shareholding and find a new buyer within a period of 18 months. However, it was challenging for the banks to dilute such a big portion of shareholding within the specified time of 18 months.
Considering this, RBI revised the guidelines and stated that banks can upgrade an asset to the standard asset category if they divest at least 26% of the stake to the new promoter within the specified period of 18 months. The balance equity shareholding could be divested at a later stage. Reportedly, this is a significant departure from the norms released on June 2015, when the regulator had asked banks to divest their entire 51% holding within the same time-frame.
This may give some relief to banks as they will get additional time to find the right buyer.
In another news update, Mahindra and Mahindra has firmed up plans to invest Rs 10 billion in developing petrol engines over the next two to three years. Reportedly, there are four engines that will be available in petrol- 1.2 litre, 1.5 litre, 1.6 litre and 2.2 litre. The 1.5 litre and 1.6 litre will be developed in-house. Whereas, the 2.2 litre petrol engine will be developed in collaboration with its South Korean subsidary Ssang Yong Motor Company (SMC).
The 1.2 litre petrol engine is already strapped in its newly launched compact sports utility vehicle (SUV) ‘KUV 100’. The company has intensified the focus on development of petrol engines ever since Supreme Court suspended registration of vehicles strapped with diesel engines bigger than 2 litres in the National Capital Region (NCR).