Shares of non-banking finance companies (NBFCs), including IFCI and IDFC, mulling to enter the banking space, on Thursday touched their respective year-highs in the early session on the Bombay Stock Exchange.
The Reserve Bank of India will meet the industry chambers, including Indian Banks' Association (IBA) and Confederation of Indian Industry (CII), in Mumbai on Thursday to discuss modalities for granting new banking licences to business houses and non-banking finance companies.
In August, the apex bank had announced a discussion paper on new banking licences and regulations for the same to foster greater competition.
NBFCs are financial institutions that provide banking services without meeting the legal definition of a bank.
In the hope of getting a banking license, shares of IFCI zoomed up to 5.58 per cent to a 52-week peak of Rs 71.80.
Similarly, IDFC rose as much as 3.92 per cent to its year-high of Rs 213.25.
"The rise in the stocks clearly indicates the market is very excited about this move, as there are huge amount of opportunities for NBFCs if they succeed in getting banking licences," Unicon Financial Services CEO Gajendra Nagpal said.
Besides IDFC and IFCI, shares of various entities like Reliance Capital, IndiaBulls, Religare, IL&FS and Aditya Birla Financial Services also saw smart gains in the start of the session, on speculations of the entities seeking banking licences.
Anil Ambani-led Reliance Capital's shares started the day on a strong note and gained over two per cent to touch a month-high level of Rs 874.80.
A gain of 4.78 per cent was seen in the shares of Religare, while Aditya Birla Nuvo advanced 1.86 per cent.
IL&FS also increased by nearly one per cent in the morning session.
Disclaimer: Business Today provides stock market news for informational purposes only and should not be construed as investment advice. Readers are encouraged to consult with a qualified financial advisor before making any investment decisions.
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