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In an interesting turn of events, the government has decided to ask the Life Insurance Corporation (LIC) to consider picking up 10 per cent stake in the troubled Kingfisher Airlines. If a company like LIC, the largest domestic institutional investor, puts money in Kingfisher Airlines, it will give confidence to the lenders as well. Its lenders, who hold around 23 per cent of the debt-laden airline, have asked the promoters to bring in equity before they lend more. LIC, on the other hand, has enough headroom in its equity investment target for the current financial year. Given the attractive valuation, it may get a good bargain. Going by the present market valuation, it could be quite a buy for LIC, as the airline’s share price has tanked 62 per cent in the current financial year to Rs 24.95 a share on Friday from Rs 66.05 on April 1. Going by the present market value, LIC would be required to invest Rs 124 crore for 10 per cent stake.
The company held meetings with banks and sought a working capital loan of Rs 400 crore to meet day-to-day expenses, over and above letters of credit and guarantees worth Rs 445 crore, bankers familiar with the development said. The banks led by State Bank of India, which have lent close to Rs 7,000 crore to the company, asked the promoters to bring in equity worth Rs 400 crore before any further loans. At present, LIC can invest up to 10 per cent of capital employed by the investee company, or 10 per cent of the fund size in a corporate entity, whichever is lower. The capital employed includes share capital, free reserves and debentures or bonds.During 2010-11, LIC invested Rs 1.96 lakh crore, of which Rs 43,000 crore was invested in equities. In the current financial year, the insurer has plans to invest a similar amount in equities. However, given the volatile nature of the equity market, during the first six months of the current financial year, LIC has invested only around Rs 15,000 crore in equities. The total equity investment in the same period last year stood at Rs 54,000-55,000 crore.
| Company Name | CMP |
|---|---|
| ICICI Prudential | 545.00 |
| Go Digit General Ins | 298.45 |
| Star Health and Allied | 519.70 |
| Life Insurance Corp | 1012.70 |
| HDFC Life Insurance | 550.10 |
| View more.. | |
MoneyWorks4Me rating and ranking of funds for SIP is available to subscribers only. Moneyworks4Me is not a rating and ranking agency, however it is required that users have a way of selecting funds and building a Portfolio. The method used by it are described below to enable users to understand the logic behind the rating and ranking Subscriber will find more details on this in the various content made available from time to time. In case you need more please write to besafe@moneyworks4Me.com
MoneyWorks4Me rates and ranks mutual funds based on the following data-driven system:
Funds ranking in screeners: Performance Consistency and Quality are two parameters used for ranking funds for SIP. The ranking as follows GG, GO, GR, OG, OO, OR, RG, RO and RR.
With the same color-coded funds, the one with the higher Average 3-year rolling returns (over 5 to 10 years), the number that appears in the Performance tag, ranks higher.
Here is the summary:
The third tag Upside Potential is not relevant for SIP. It is relevant for lumpsum investments in Mutual Funds.
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