L&T Finance, Anil Ambani's Reliance Capital, Religare Enterprises, Aditya Birla Financial Services and Mahindra Financial Services are likely to see higher interest this week, as the RBI opened the doors for NBFCs, broking, real estate firms to set up banks. These companies are keen to set up banks. The RBI allows applications up to July 1 and successful applicants will have to set up a bank within a year. According to the RBI guidelines, new banks must make a stock market listing within three years and licences will be issued on a "very selective basis". The RBI has imposed stiff conditions for eligibility to enter the business. Among other things, new banks have to put up Rs 500 crore as capital on Day 1 and 25 per cent of their branches will have to be in “unbanked” rural areas.
Open offer to buoy Orient Green Power
The stock of Orient Green Power will see buying activity this week, as Shriram Group has announced an open offer to buy 26 per cent stake in Orient Green Power Company at a price of Rs 15 a share. The stock jumped over 13 per cent on Friday following the announcement to Rs 13.08 on the BSE. Shriram Industrial Holdings Private Ltd along with Orient Green Power Pte Ltd and Shriram Venture, will acquire 14.77 crore equity shares of Orient Green Power from public shareholders. The open offer was mandatory following Shriram Industrial Holdings, a holding company for Shriram Group's non-financial services business, plans to infuse Rs 150 crore in Orient Green Power through an preferential allotment of 10 crore shares. It will also acquire indirect stakes by buying out other subsidiaries which hold stakes in Orient Green Power from Shriram EPC for Rs 148.20 crore. Major public shareholders in Orient Green Power include Life Insurance Corporation of India (4.24% stake), private equity firms Olympus India Holdings (2.86%) and Bessemer India Capital Partners Fund (1.16% stake).
Welspun Syntex
Another stock that will be in the limelight because of open offer would be Welspun Syntex. Krishiraj Trading along with Welspun Mercantile is making an open offer to acquire up to 1.02 crore equity shares, representing 26 per cent of the post conversion equity share capital of Welspun Syntex. The offer is being made at a price of Rs 13 per fully paid-up equity share of Welspun Syntex, payable in cash. The Welspun Syntex on Friday closed at Rs 12.80. The open offer was as per SEBI mandate after the company promoters converted 1.6 crore optionally convertible cumulative preference shares of the face value of Rs 10 each on preferential basis at Rs 10.25 a share.