Stocks of banking aspirants jumped up to 5 per cent on Tuesday after the Bimal Jalan panel summited its report on 25 applicants for bank licences to the Reserve Bank of India.
L&T Finance Holdings climbed 3.86 per cent to settle at Rs 78. The stock was up as much as 5 per cent in the intra-day trade, as some analysts see it as a strong contender for banking licence. LIC Housing Finance, an arm of LIC, advanced 3.23 per cent to Rs 209.30.
“There are expectations that the panel has recommended a minimum of five to six applicants for licences,” Rikesh Parikh AVP at Motilal Oswal Securities said.
Edelweiss Securities, Bajaj Finance and Muthoot Finance gained 2.70 per cent, 2.15 per cent and 1.19 per cent, respectively. IDFC was up 1.59 per cent to Rs 95.65.
“Among all the applications, we believe L&T Finance has good chances of getting a bank licence from RBI, as we believe it fulfils all the criteria and have financial strength and professional management to carry on banking activities,” said Vaibhav Aggarwal AVP at Angel broking.
Parikh said, “We see IDFC as a major contender. Other strong contenders include L&T Finance, LIC Housing and Bajaj Finance.”
He said that the successful NBFCs who will get banking licences would witness a re-rating on their valuations. Investors have to evaluate the pain these firms will experience in the short run to fulfil priority sector lending and other norms within a required time period and the gains they will see while transforming in the long run.
A total of 27 applications for bank licenses were collected till July 1, 2013, out of which Tata Sons and Value Industries withdrew their applications later.
The committee headed by Jalan, a former RBI governor began evaluating applications in November 2013. Now, with the recommendations lying with the apex bank, it is expected that the licences could be awarded by March-end.
Reliance Capital and Religare Securities ended flat.
IIFL and AB Nuvo declined 2.42 per cent and 0.38 per cent, respectively.
L&T Finance Holdings climbed 3.86 per cent to settle at Rs 78. The stock was up as much as 5 per cent in the intra-day trade, as some analysts see it as a strong contender for banking licence. LIC Housing Finance, an arm of LIC, advanced 3.23 per cent to Rs 209.30.
“There are expectations that the panel has recommended a minimum of five to six applicants for licences,” Rikesh Parikh AVP at Motilal Oswal Securities said.
Edelweiss Securities, Bajaj Finance and Muthoot Finance gained 2.70 per cent, 2.15 per cent and 1.19 per cent, respectively. IDFC was up 1.59 per cent to Rs 95.65.
“Among all the applications, we believe L&T Finance has good chances of getting a bank licence from RBI, as we believe it fulfils all the criteria and have financial strength and professional management to carry on banking activities,” said Vaibhav Aggarwal AVP at Angel broking.
Parikh said, “We see IDFC as a major contender. Other strong contenders include L&T Finance, LIC Housing and Bajaj Finance.”
He said that the successful NBFCs who will get banking licences would witness a re-rating on their valuations. Investors have to evaluate the pain these firms will experience in the short run to fulfil priority sector lending and other norms within a required time period and the gains they will see while transforming in the long run.
A total of 27 applications for bank licenses were collected till July 1, 2013, out of which Tata Sons and Value Industries withdrew their applications later.
The committee headed by Jalan, a former RBI governor began evaluating applications in November 2013. Now, with the recommendations lying with the apex bank, it is expected that the licences could be awarded by March-end.
Reliance Capital and Religare Securities ended flat.
IIFL and AB Nuvo declined 2.42 per cent and 0.38 per cent, respectively.
