Morning Buzz: AU Small Finance Bank eyes Fincare SFB for acquisition, India Inc faces higher borrowing costs, and more

AU Small Finance Bank is in initial talks to acquire Fincare SFB. Image: Indranil Aditya/NurPhoto via Getty Images

AU SFB eyes Fincare SFB for acquisition

AU Small Finance Bank is in initial talks to acquire Fincare SFB. The talks are at a nascent stage and if they go through, it would be the first deal in the small finance bank (SFB) space. AU is the largest SFB and Fincare refiled its IPO prospectus with Sebi in May. The deal would expand AU’s footprint in Andhra Pradesh, Telangana, Karnataka and Kerala and mark its entry into the micro finance space.
(BusinessLine)

India Inc faces higher borrowing costs

India Inc is seeing a rise in borrowing costs as the gap between the government 10-year G-sec yield and corporate bonds widen. The spread has widened by 2 and 4 basis points for 3- and 10-year borrowings. Corporate bonds usually command higher yields than government securities and this could be on account of higher liquidity in the banking system.
(Business Standard)

Tax scare for diesel vehicles

Minister for Road Transport and Highways Nitin Gadkari said he plans to present a letter to the finance ministry asking for a 10 percent tax on diesel vehicles as manufacturers are not doing enough to phase them out. Later he clarified that there was no such active proposal under consideration by the government. Before the clarification, shares of Tata Motors, Ashok Leyland and Mahindra and Mahindra fell between 3 and 4.2 percent. All these manufacturers have a majority of diesel vehicles in their portfolio.
(Mint, Financial Express)

Mid and small cap indices fall most in 2023

A sharp sell-off in mid and small cap indices saw them fall by 3.07 percent and 4.1 percent respectively. This was the most since December 23, 2022, and came a day after the Nifty hit 20,000. The crash also came after Kotak Institutional Equities published a report saying it was withdrawing its ratings on mid and small caps as it saw no fundamental reasons for the sharp run up.  
(Economic Times, Business Standard, Mint, BusinessLine)