BAJAJ BROKING
In yesterday's trading session, the shares of REC and PFC initially plunged up to 12% post-RBI's draft guidelines. The proposed 5% general provision exceeds the current 0.4% standard. However, stocks recovered later, following CLSA's optimistic outlook.
CLSA reassured that there will be minimal impact on REC and PFC's profitability despite RBI's draft guidelines. Both companies boast a healthy tier-1 ratio of 23%, ensuring resilience.
Additional Read: Share Market News
RBI's draft guideline proposes stricter provisioning requirements and limits lenders' exposure in consortiums until project operationalisation. Private banks may face reduced competition in renewable energy projects due to these regulations.
Additional Read: Commodities Market Today
IIFL Securities predicts a 200-300 basis points hit on tier-1 ratios for REC and PFC, potentially affecting valuation multiples. However, RoE is expected to remain unaffected.
CLSA emphasises that higher provisions will impact impairment reserves but not drag down profits for REC and PFC, given their robust capitalisation. The proposed changes align with RBI's aim to strengthen project financing regulations.
Additional Read: Gold Rate Today
RBI has solicited feedback on the proposal until June 2024. Despite initial market jitters, confidence in REC and PFC's resilience remains high, with both stocks showing significant gains over the past year.
Sources:
https://www.cnbctv18.com/market/rec-pfc-share-price-no-impact-profitability-clsa-capital-adequacy-rbi-draft-rules-19407026.html
https://www.moneycontrol.com/news/business/stocks/rec-pfc-to-see-minimal-impact-from-rbi-draft-norms-says-clsa-stocks-show-mild-recovery-12715466.html
Disclaimer: Investments in the securities market are subject to market risk, read all related documents carefully before investing.
This content is for educational purposes only. Securities quoted are exemplary and not recommendatory.
For All Disclaimers Click Here: https://bit.ly/3Tcsfuc
Share this article:
Share Market Today | Gift Nifty Signals 100-Point Gap Down, Nifty to Consolidate
06 Sep, 2024 | 4 Min. read
KEC International Secures ₹1,423 Cr Transmission Line Order in Saudi Arabia
06 Sep, 2024 | 1 Min. read
Ashoka Buildcon’s Viva Highways Monetises Pune Land for ₹453 Crore
06 Sep, 2024 | 2 Min. read
Peak Partners To Sell 11% Stake in Indigo Paints via Block Deal
06 Sep, 2024 | 2 Min. read
US Initial Jobless Claims Drop to 227,000 in August.
06 Sep, 2024 | 1 Min. read
Commodities Market Today | WTI Crude Steady at $69.18, Gold Rises 0.8% to $2,546
06 Sep, 2024 | 1 Min. read
Gold Rate Today | Gold Rises 0.8% to $2,546, Silver Gains 2% to $29.14
06 Sep, 2024 | 2 Min. read
Vodafone Idea Share Price Falls 11% After Goldman Sachs Report
06 Sep, 2024 | 1 Min. read
Suzlon Energy Share Price Rises After Corporate Office Sale
06 Sep, 2024 | 1 Min. read
Why is the Stock Market Down Today? Key Factors Explained
06 Sep, 2024 | 1 Min. read
Sona BLW Precision Forgings Plans ₹2,400 Crore QIP at ₹675-700 per Share
05 Sep, 2024 | 1 Min. read
Commodities Market Today | Crude Oil Drops, Brent Hits Low; Gold and Silver Rise
05 Sep, 2024 | 1 Min. read
Analysis to Become a Pro Investor
28 Dec, 2023 | 4 Min. read
Women In Real Estate Investing (Investree)
28 Dec, 2023 | 5 Min. read
How To Check Prudent Corporate Advisory IPO Allotment Status
27 Dec, 2023 | 3 Min. read
How To Boost Credit Score? – Steps to Improve Creditworthiness
27 Dec, 2023 | 4 Min. read
Advantages and Disadvantages of Opening Multiple Demat Accounts
26 Dec, 2023 | 4 Min. read
7th CPC LTC: Leave Travel Concession Rules for Central Government Employees
26 Dec, 2023 | 4 Min. read
7th Pay Commission: House Building Advance (HBA) Interest Rate FY 2023-24
26 Dec, 2023 | 5 Min. read
The Future of Trading: Exploring Bajaj Broking’s Demat Features
26 Dec, 2023 | 6 Min. read
7th Central Pay Commission Cpc Fitment Table
23 Dec, 2023 | 7 Min. read
Level up your stock market experience: Download the Bajaj Broking App for effortless investing and trading