Securitisation market makes a comeback

With interest rates softening and credit demand easing, banks have revived their interest in asset securitisation. According to sources, public sector banks (PSBs) are receiving offers from private banks keen to sell a part of their portfolio through the securitisation route.

Recently, Icra had rated about Rs 1,800-crore securitised paper of ICICI Bank, which had personal loans as its underlying asset. This is the largest pool of personal loan securitised by a bank in the Indian market.

“Most banks have booked loans at very good rates. Going forward, if rates soften or even if they remain stable, securitisation market will gain momentum,” said Prasad Koparkar, head of structured finance at Crisil. “Besides, yields on a ‘AAA’ securitised paper are 50-75 basis points higher compared with other ’AAA’ paper,” he added.

Read more in The Economic Times

ICRA IPO opens for subscription

ICRA, a leading provider of investment information and credit rating services in India, is open for subscription with a public issue of 2,581,100 equity shares of Rs 10 each, for cash, at a price to be decided through a 100% book building process through an offer for sale by IFCI (18.6 lakh shares), administrator of the Specified Undertaking of the Unit Trust of India (7 lakh shares) and State Bank of India (20,500 shares).
The price band for the issue has been fixed between Rs 275 to Rs 330 per equity share. The issue closes for subscription on March 23, 2007. The issue size at the higher price band is at Rs 85.17 crore.
It is also an associate of Moody’s Investors Services. Moody has 29% stake in ICRA. Remaining stake is held by leading financial institutions and banks like SBI, LIC, IFCI etc.

Read more at MoneyControl

Stocks you can pick up this week

M&M
CMP: Rs 731
TARGET PRICE: Rs 1,030

HSBC Securities has retained its ‘overweight’ rating on M&M with a 12-month price target of Rs 1,030. “M&M has overcome input cost pressures through a combination of factors: production in tax-free zones in H2FY06; benefits from consolidation in the tractor industry; greater contribution from diesel generator sales; the transfer of the light commercial vehicle business to a separate JV called Mahindra International; an increase in returns to scale and economies of scale after diversification into the auto parts business; and bargaining harder for raw material procurement,” the HSBC note to clients said.

Read more at Economic Times