Sebi issues operational guidelines for security, covenant monitoring with DLT

Sebi issues operational guidelines for security, covenant monitoring with DLT

With effect from April 1, 2022, the recording of asset details (and their verification), allotment, listing and payment of interest or redemption shall be available in the DLT system.

Market watchdog, Sebi has issued operational guidelines for security and covenant monitoring using Distributed Ledger Technology (DLT). The regulator has given relaxation to issuers who are unable to record details in the system while existing outstanding non-convertible securities issuers need to feed details in their DLT before September end.

HDFC Bank shares fall for 9th straight session. Good time to buy? Watch..
HDFC Bank’s Q4 standalone net profit jumped 23% led by lower provisions

Shares of HDFC Bank continued to fall in Tuesday’s early deals by plunging more than 2% to ₹1,362 apiece on the BSE, marking its ninth straight session of loss. The bank’s stock is down about 9% as compared to a 3% fall in benchmark Sensex in the last five trading sessions.

HDFC Bank’s Q4 results came below estimates. The private lender reported a 23% jump in Q4 standalone net profit, led by lower provisions, even as other metrics like net interest income (NII) came in below expectations.

 Earlier this month, Mortgage financier Housing Development Finance Corporation announced that it will merge with its subsidiary HDFC Bank, creating a financial behemoth. The merger is subject to regulatory approvals.

“HDFC Bank and HDFC Ltd. have fallen more than 20% from their respective highs post-merger news. HDFC Bank’s results were below expectations due to pressure on NIMs. However, we believe that the strong liability fortress of the bank and asset quality record is a huge competitive advantage over its peer banks. We believe that the merger is positive for both entities in the long run. Thus, we suggest investors buy HDFC twins on dips to play on the private capex revival, economic growth,” said an analyst.The bank’s net interest income (NII), difference between interest earned and interest expended, grew 10% to ₹18,872 crore. Its provisions declined 29% from the year-ago quarter whereas net interest margin, a key measure of profitability, was down 20 bps YoY and 10 bps QoQ at 4%.

“HDFC Bank’s growth in Q4 was seen in the products of every segment. The merger with HDFC Ltd is also going to benefit the bank in the long term. However, due to overall correction in the broader indices, HDFC Bank is also witnessing some profit booking. Investors may enter the stock around 1,350 levels for the target of 1,650 levels in near term,” said Ravi Singh-Vice President and Head of Research-ShareIndia.

HDFC Bank reported a slight miss on PAT due to continued weak core profitability, which was dragged by weak margins/fees and additional contingent provisions, highlighted analysts. They have a long-term Buy rating on HDFC Bank shares, given the recent correction, with a target price of ₹1,950.

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