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SEBI softens stance on valuation of AT1 bonds: A win-win for all

The regulator has done a fine balancing job as the revised valuation norms will protect investors while minimising the adverse impact on mutual funds and banks

March 24, 2021 / 09:36 AM IST
SEBI softens stance on valuation of AT1 bonds: A win-win for all

Bank of Maharashtra | The bank had successfully raised capital of Rs 100 crore through private placement of Tier II bonds. The maturity of these bonds will be March 23, 2031. The banks said the bonds will be listed on the wholesale debt market segment of the BSE. The news came in after market hours on March 23. The stock closed 10 percent higher at Rs 20.90 on March 23. It hit a 52-week high of Rs 27.73 on February 19, 2021, and a low of Rs 8.15 on March 26, 2020. The market-cap of the company stands at Rs 13,710.73 crore. In terms of technicals, the current rating by Moneycontrol on the stock is Neutral.

PRO Only Highlights
Quarterly performance largely backed by improved realisations
Medium-term triggers China plus and protectionist measures for tyre industry
Valuations not inexpensive; but improved medium-term outlook

The Securities and Exchange Board of India (SEBI) has finally acceded to the request of the finance ministry and relaxed the valuation norms for additional tier 1 (AT1) bonds. Earlier this month, the regulator had proposed that AT1 bonds, which are perpetual in nature, should be considered to be of a tenor of 100 years from the date of issuance for the purpose of valuation by mutual funds (MFs). The regulation was to come into effect from April 1. The regulator’s sudden...

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