? STATE BANK OF INDIA. SBI Debt-Equity ratio : 12. 43 (march’12) A high debt/equity ratio generally means that a company has been aggressive in financing its growth with debt. This can result in volatile earnings as a result of the additional interest expense. If a lot of debt is used to finance increased operations (high debt to equity), the company could potentially generate more earnings than it would have without this outside financing. If this were to increase earnings by a greater amount than the debt cost (interest), then the shareholders benefit as more earnings are being spread among the same amount of shareholders.
However, the cost of this debt financing may outweigh the return that the company generates on the debt through investment and business activities and become too much for the company to handle. This can lead to bankruptcy, which would leave shareholders with nothing. The debt/equity ratio also depends on the industry in which the company operates. For example, capital-intensive industries such as auto manufacturing tend to have a debt/equity ratio above 2, while personal computer companies have a debt/equity of under 0. 5. ICICI BANK LTD. ?
ICICI Debt Equity ratio: 4. 23 (march’12) Which is the better bank? As we said earlier, SBI’s government backing makes it the more ‘safer’ entity. ICICI by itself does not have the reputation of good quality assets. But it is certainly striving to achieve the same. Both in terms of margins and returns, SBI has had an edge and will continue to have it in the medium term. Having said that investors must carefully weigh the future prospects of both the entities vis-a-vis their respective valuations before taking their pick. DEBT INSTRUMENTS IN INDIA.
Debt Instruments are obligations of issuer of such instrument as regards certain future cash flow representing Interest & Principal, which the issuer would pay to the legal owner of the Instrument. They can also be said to be tradable form of loans. Debt Instruments are of various types like Bonds, Debentures, Commercial Papers, Certificates of Deposit, Government Securities (G secs) etc. The Government Securities (G-Secs) market is the oldest and the largest component of the Indian debt market in terms of market capitalization, trading volumes and outstanding securities.
The G-Secs market plays a vital role in the Indian economy as it provides the benchmark for determining the level of interest rates in the country through the yields on the government securities which are treated as the risk-free rate of return in any economy. The reserve Bank of India has permitted Primary Dealers, Banks and Financial Institutions in India to do transactions in debt instruments among themselves or with non-bank clients. Debt instruments provide fixed return declared as coupon rate.
Retail investors would have a natural preference for fixed income returns and especially so in the current situation of increasing volatility in the financial markets. Now, retail investors are also showing keen interest in Debt Instruments particularly in the Central Government Securities (G-secs). For an individual investor G-secs are one of the best investment options as there is zero default risk and lower volatility in case of G-secs. SBI DFHI is a major player in G-Secs market and widely deals in other debt instruments also. STATE BANK OF INDIA: ) GOVERNMENT SECURITIES: (dates government securities-long term, treasury bills are short term) SBI DFHI Ltd. is a leading Primary Dealer in Government Securities. SBI DFHI Ltd gives investors an opportunity to buy G-Sec / SDLs / T-Bills at primary market auctions of RBI through its SBI DFHI Invest scheme (details available on website ). Investors may also invest in high yielding Government Securities through “SBI DFHI Trade” where “buy and sell price” and a buy and sell facility for select liquid scrips in the secondary markets is offered. ) TREASURY BILLS: SBI DFHI Ltd, is an active player in the both the primary and the secondary market for Treasury Bills with an impressive total outr. ight turnover of Rs. 7,892 crores. 3) Money market instruments : Commercial paper, Certificate of Deposit: 4) non-slr bonds like public sector undertaking (PSU bonds) or corporate bonds 5) Debentures ICICI: 1) Bonds (regular income, tax saving, deep discount bonds etc. ) 2) Unsecured Debentures 3) Commerical Papers 4) certificate of deposit LISTINGS: STATE BANK OF INDIA: NSE . CODE: SBIN BSE CODE : 500112 LSE CODE: SBID ICICI: NSE: ICICIBANK,
BSE: 532174, NYSE: IBN STATE BANK OF INDIA: The declaration and payment of dividends is recommended by the Bank’s Central Board of Directors and approved by its shareholders. The Bank’s decision to declare a dividend depends on a number of factors including but not limited to its profits, capital requirements and overall financial condition. The Central Board may also pay interim dividends from time to time. All dividend payments are made in cash to the shareholders of the Bank. The Bank’s dividend policy is to declare dividends only at the conclusion of the fiscal year. ? ICICI ?
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