Realty, banking, infra shares rally on easier financing norms
Jul 16 2014 , Mumbai
The RBI yesterday eased financing norms for infrastructure development and affordable housing, exempting long term bonds from mandatory regulatory norms like CRR and SLR if the money raised is used for funding of such projects, which boosted the shares from interes-rate related segments.
Shares of Unitech surged 6.82 per cent, DLF soared 5.82 per cent and Oberoi Realty rallied 5.37 per cent on the BSE.
Among others, Indiabulls Real Estate gained 3.65 per cent, HDIL rose by 3.17 per cent and Sobha Developers was up 1.75 per cent.
The BSE's realty index ended 4.28 per cent up.
Shares of IDFC climbed 8.70 per cent. ICICI Bank was up 4.70 per cent, Axis Bank (3.57 per cent), SBI (2.26 per cent) and HDFC Bank (1.07 per cent).
From infra related stocks, BHEL rose 2.54 per cent and L&T was up 1.53 per cent.
"RBI's recent move to announce incentives to raise long term bonds for infrastructure financing was also cheered. IDFC rose to 52-week high level post this announcement," Rakesh Goyal, Senior Vice President, Bonanza Portfolio Ltd.
"Banks can issue long-term bonds with a minimum maturity of seven years to raise resources for lending to (i) long term projects in infrastructure sub-sectors, and (ii) affordable housing," the Reserve Bank had said.
The RBI said that apart from what is technically defined as infrastructure, affordable housing is another segment of the economy which requires long term funding.
The central bank said it intends to "ease the way for banks to raise long term resources to finance their long term loans to infrastructure as well as affordable housing".