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<keyword id="19895063" type="General" weightage="20" keywordseo="india" source="keywords">India</keyword>'s <keyword id="23127366" type="General" weightage="20" keywordseo="consumption-loan" source="Orion">consumption loan</keyword> portfolio grew by 15.2% year-on-year (YoY) to Rs 90.3 lakh crore as of March 2024, according to the latest <keyword id="6354680" type="General" weightage="20" keywordseo="credit" source="Orion">credit</keyword> bureau report. The fourth edition of the CRIF High Mark report noted a slowdown from the 17.4% growth recorded in March 2023, largely due to a deceleration in the home <keyword id="6362287" type="General" weightage="100" keywordseo="loans" source="Orion">loans</keyword> segment, which accounts for 40.1% of the overall consumption loan portfolio by value. The home loans portfolio saw growth slowing down to 7.9 % YoY in FY24, from the 23 % expansion seen in FY23. This was mainly due to muted growth in "originations", which increased by 9.2 % in FY'24 compared to 18.2 % in the previous fiscal year. Origination refers to the process by which a lender creates or initiates a new loan or credit, including evaluating, processing, and approving a borrower's application. The report finds a shift toward higher <keyword id="6871589" type="General" weightage="20" keywordseo="ticket-size" source="Orion">ticket size</keyword>s, with a growing preference for loans above Rs 35 lakh, although the average ticket size (ATS) rose by 32% from Rs 20.1 lakh in FY20 to Rs 26.5 lakh in FY24. In contrast, the personal loans segment maintained strong momentum, growing by 26% YoY in FY24, despite recent regulatory reforms. Larger ticket loans of Rs 10 lakh and above increased their share in originations by value, while loans under Rs 1 lakh continued to dominate in volume. Banks led in value-based originations, whereas non-banking financial companies (NBFCs) remained dominant in volume. Two-wheeler loans experienced a 34% YoY growth in FY24, up from 30% in FY23, fueled by a shift to higher ticket-size loans. However, the overall volume of originations grew at a slower pace of 13% in FY24 compared to 32% in FY23. <keyword id="35527" type="General" weightage="20" keywordseo="auto-loans" source="Orion">Auto loans</keyword>, on the other hand, grew by 20% YoY in FY24, compared to 22% in FY23. Consumer durable loans posted a robust growth of 34% YoY in FY24, up from 26% expansion in the previous fiscal. This growth was driven by a shift to larger ticket sizes, although origination volumes grew by only 8.5% in FY24, compared to 38.2% in FY23. The MSME lending segment displayed mixed results, with individual MSME loans growing faster than entity MSMEs. The individual MSME portfolio increased by 29% YoY in FY24, accelerating from 15% in FY23, while entity MSME loans grew by just 6.6 % YoY, a sharp slowdown from 17.2 % in the previous year. Microfinance lending also saw strong growth, with the portfolio rising by 27% YoY in FY24, compared to 21% in FY23. "The resilience of the Indian credit market is evident in the strong performance across various lending categories and the stability in delinquencies. Home loans remain dominant, but the growth in personal loans, two-wheeler loans, and the rebound of NBFCs highlight significant shifts in the lending landscape," CRIF High Mark MD Sanjeet Dawar said.

Consumption loan portfolio expands 15% to Rs 90 lakh crore in FY24, notes CRIF report

Imagine a bustling jewellery market teeming with diamonds and gold. Amidst this glittering chaos, a small stall is trying to sell handcrafted gemstones. Even as newer and shinier outlets keep cropping up, all vying for attention, this gemstone store offers some of the oldest yet valuable jewels at a discount. Though they lack immediate sparkle, these rare gems reveal their value to the discerning buyer. This is how South Korea appears for many experts in global capital markets: a trove of undervalued gems, overshadowed by brighter, more aggressively marketed investment options. This undervaluation, known as the "<keyword id="24399183" type="General" weightage="20" keywordseo="korean-discount" source="keywords">Korean Discount</keyword>," reflects how South Korean companies are priced much lower than their global peers despite robust fundamentals — strong financial performance and consistent profitability. Contributing factors are many, ranging from opaque governance structures to geopolitical risks. But the fact stays, if you are a seasoned conglomerate listed in South Korea, you are likely undervalued. <keyword id="19906087" type="General" weightage="20" keywordseo="hyundai" source="keywords">Hyundai</keyword> Motor India Ltd. (HMIL), a subsidiary of the Korean giant Hyundai Motor Company (HMC), recently sought to escape this valuation trap by listing in India, a market where investor optimism commands premium pricing. But its valuation raised many eyebrows! Now that a month and a half has gone by since its listing, time is apt to examine if this gamble paid off. Will <keyword id="93460" type="General" weightage="100" keywordseo="hyundai-india" source="Orion">Hyundai India</keyword> justify its high valuation? Or does the listing highlight broader questions about the overheated valuation dynamics of Indian markets? A record-breaking <keyword id="19898327" type="General" weightage="20" keywordseo="ipo" source="keywords">IPO</keyword> but questions remain Hyundai Motor India’s mega Initial Public Offering (IPO), launched in October 2024, broke records by raising ₹27,870 crore, making it India’s largest-ever IPO. The offer was oversubscribed by 2.37 times, highlighting robust demand. But many investors remained sceptical: was this IPO an honest attempt to expand Hyundai’s footprint in India or was it trying to offer a way to cashout for existing investors and promoters? Or perhaps, is it an attempt by the Korean chaebol — a large family-owned business conglomerate — to break free from the aforementioned “Korean Discount”? When shares listed on October 22, these concerns seemingly weighed on the minds of most investors and the stock promptly dipped 5% below the issue price on the day. A tepid grey market performance had already foreshadowed this muted debut in the Indian markets. Now, after almost 35 trading sessions on Indian market, the stock remains almost exactly at price it listed on October 22 at Rs 1820—no gain, no loss. <h3>The gamble of hyper-valuation</h3>Much of this hesitation stemmed from Hyundai’s valuation. On listing, Hyundai was valued at $18 billion, positioning it as one of India’s most valuable automotive companies. However, such high valuations often temper investor enthusiasm, resulting in more cautious short-term outcomes. For most investors, the Price-to-Earnings (P/E) ratio is the most preferred parameter to gauge if a company is overvalued or undervalued. With a P/E ratio of 26.3, HMIL was priced significantly above the Indian automotive industry average of 24.4. Globally, automotive companies operate with much lower P/E ratios, reflecting mature market conditions and slower growth trajectories. HMIL’s South Korean parent Hyundai Motor Company (HMC) trades at a meagre 3.07, believe it or not! For Indian investors, the high premium hinted at overvaluation despite Hyundai’s strong domestic position. Such stark difference in valuation obviously sparked debates — is the Indian market assigning a premium to Hyundai Motor India’s growth potential, or is it simply reflecting the general exuberance around the prospects of the Indian economy? Another concern is the allocation of IPO proceeds. Hyundai’s IPO was structured as an offer for sale (OFS), meaning all funds raised would flow to the parent company rather than Hyundai India’s operations. Although Hyundai has committed to investing in R&amp;D for EVs and hybrids, critics argue that the lack of immediate reinvestment in India’s operations reflects a missed opportunity for domestic growth. Despite the early disappointment, Hyundai was confident that the valuation was fair. It did have some factors going for it, in addition to the fact that other auto giants like Mahindra &amp; Mahindra and <keyword id="19909974" type="General" weightage="20" keywordseo="maruti-suzuki" source="keywords">Maruti Suzuki</keyword> command even higher P/E ratios. And looking at the company fundamentals, it does seem like Hyundai is playing a long-term game. <h3>Hyundai in India: A proven track record</h3>Despite the initial stumble, Hyundai India’s long-term story is compelling. Since entering the Indian market in 1996, the automaker has sold over 8 million vehicles and firmly occupies the second spot in the domestic passenger vehicle market, trailing only Maruti Suzuki. Hyundai’s blockbuster SUV offerings, like the Creta and Venue, have been critical in building this dominance. Despite some challenge from Maruti Suzuki Brezza and Tata Punch, Creta has retained the tag of ‘most-selling SUV in India’ successfully so far this year. <div type="image" title="Hyundai" agency="Business Insider India" msid="116156234" hostid="261" caption="&amp;lt;p&amp;gt;Selling over 17,000 units per month on average this year, Creta has edged past major competitors to be the most-selling SUV in India in 2024. As Indian consumers preference continues to shift gradually towards premium products over budget segments, Hyundai stands to benefit (Wikimedia Commons / Canva)&amp;lt;/p&amp;gt;"></div> Selling over 17,000 units per month on average, Creta has edged past major competitors to be the most-selling SUV in India in 2024. As Indian consumers preference continues to shift gradually towards premium products over budget segments, Hyundai stands to benefit (Wikimedia Commons / Canva) Hyundai India’s market share of 14% in October 2024 underscores its clout. The company’s ability to tap into India’s premiumisation trend, where consumers increasingly prefer high-end vehicles, positions it well for growth. With plans to expand in electric vehicles (EVs) and hybrid technology, Hyundai is poised to capitalise on both domestic demand and export opportunities. The company’s ability to capitalize on its strong brand, extensive dealer network, and leadership in segments like SUVs and exports will determine its future performance. Hyundai’s strategic focus on expanding electric vehicle production also aligns with global trends towards sustainability, potentially positioning it as a leader in the segment. By listing in India, Hyundai aims not only to expand its operations but also to make India a global manufacturing and export hub for its products, especially SUVs and EVs. Therefore, despite early setbacks, Hyundai’s gamble seems to have paid off. The stock has rebounded, gaining 5% in the past month. More good news came in this week, as positive projections from Morgan Stanley and JPMorgan forecast an impressive 17-28% upside for the stock over the next year, reflecting growing investor optimism. <h3>A strategic pivot from the Korean Discount?</h3>The Korean Discount has long plagued South Korea’s chaebols, including Hyundai. Experts attribute this to several factors: <ul> <li>Chaebol Governance: South Korea’s conglomerates, known as chaebols, are often criticised for opaque governance structures and excessive family control.</li> <li>Geopolitical Risks: Tensions with North Korea contribute to investor caution, adding a layer of perceived risk.</li> <li>Limited Domestic Liquidity: South Korea’s relatively small investor base can constrain market activity and valuation potential.</li> </ul> By listing in India, Hyundai sought to unlock better valuations for its subsidiary, leveraging the optimism of Indian markets. India’s stock market has a trailing P/E ratio of 24.4, far above South Korea’s Kospi average of 16-17. The Indian market’s appetite for high-growth stories provides a fertile ground for companies like Hyundai to escape the valuation constraints of their home market. A successful IPO could encourage other such conglomerates to follow suit, setting a precedent. While Hyundai India has a robust track record, its future success hinges on navigating key challenges: <ul> <li>Supply Chain Vulnerabilities: Hyundai relies heavily on its Chennai plant, making it vulnerable to disruptions.</li> <li>Intensifying Competition: Domestic rivals like <keyword id="19906967" type="General" weightage="20" keywordseo="tata-motors" source="keywords">Tata Motors</keyword> and MG Motors are making aggressive inroads into the EV market.</li> <li>Policy Risks: The automotive sector’s reliance on government incentives for EVs and hybrids adds a layer of unpredictability.</li> </ul> High valuations come with risks. Hyundai will need to prove that it can sustain its growth trajectory in India, fend off competition from established players like Maruti Suzuki and Tata Motors, and navigate challenges such as supply chain disruptions and regulatory hurdles. If Hyundai successfully capitalises on its strong brand and market leadership, it could not only redefine its value but also serve as a case study for other Korean companies seeking better recognition and valuations in global markets. <h3>Is Hyundai saga a reflection of overheated Indian markets?</h3>The bigger question here is, does Hyundai’s IPO highlights a broader narrative about Indian markets’ premium valuations? With a trailing P/E ratio of 24.4, Nifty 50 index is among the highest in emerging markets. India’s stock markets consistently command a premium due to robust retail participation, strong economic growth prospects, and a burgeoning middle class. While this premium reflects optimism about India’s long-term growth story, it also signals potential risks of overvaluation, particularly in sectors like technology, automotive, and consumer goods. With a record ₹94,017 crore outflow by Foreign Portfolio Investors (FPIs) in October 2024, concerns about overheated valuations are mounting. Sustaining such unprecedented valuations required companies to consistently perform above global averages, and retaining robust earnings growth quarter after quarter remains a challenge in today’s uncertain world. For Hyundai, the high valuation is both an opportunity and a risk. While it underscores investor confidence, it narrows the margin of safety, making the stock vulnerable to corrections during economic downturns. Take for example, the high-profile IPO of Life Insurance Corporation of India (LIC) that raised over ₹21,000 crore. Its listing was met with disappointment as the stock began trading at a 9% discount to its issue price, and subsequent performance has remained subdued. LIC’s post-IPO journey also highlights how inflated valuations can lead to long-term underperformance, as the stock gave only 12% return over the past 30 months when even the Nifty 50 index went up by over 44%. This happens when when the company's growth narrative fails to align with its pricing. Despite being a household name with a dominant market share, LIC's stock has struggled to meet expectations, partly due to concerns about its operating efficiency and the limited use of IPO proceeds for growth initiatives. Make no mistake, Hyundai Motor India’s IPO is a landmark event! It showcases the potential for Korean companies to leverage emerging markets like India for better valuations. It also shows that strong fundamentals can help justify a company such premium valuations even amidst bearish economic prospects. However, it also serves as a cautionary tale about the risks of overvaluation. For Hyundai, the next steps involve proving its long-term growth story, navigating competitive challenges, and maintaining investor confidence. For Indian markets, Hyundai’s IPO underscores the need to balance optimism with realistic expectations as they continue to evolve as global investment hotspots. To sustain the country’s economic narrative as a land of unmatched opportunities, corporate India must work on improving long-term fundamentals and mitigating long-term risks. As global investors watch closely, Hyundai India’s success or failure could shape how international companies view India as a listing destination in the years to come.

Tackling the 'Korean Discount': A deep dive into curious case of Hyundai Motor India's market listing

<ul class="summary-list"><li>Chipmaker GlobalFoundries began offering student loan debt relief to eligible employees this summer.</li><li>The benefit is aimed at helping the company attract and retain workers.</li></ul>When Morgan earned her bachelor's degree in 2018, she graduated with over $20,000 in <a target="_blank" href="https://www.businessinsider.com/student-loan-forgiveness-blocked-biden-debt-cancellation-education-department-relief-2024-10">student loan debt</a> that she hoped to pay off by 2032.While she's kept up with her payments — which amount to a few hundred dollars each month — they've made it harder for her and her significant other to <a target="_blank" href="https://www.businessinsider.com/personal-finance/mortgages/tips-for-saving-for-a-down-payment">save for a home</a> and their future family, the 28-year-old told Business Insider. And she's not alone: More than <a target="_blank" class="" href="https://www.bankrate.com/loans/student-loans/student-loan-debt-statistics/?tpt=a">40 million Americans</a> collectively held over $1 trillion in federal student debt last year.However, Morgan's <a target="_blank" class="" href="https://www.businessinsider.com/personal-finance/student-loans/how-to-pay-off-student-loan-debt-fast">student loan</a> repayment journey has become a little easier over the past year.In May, her employer <a target="_blank" href="https://markets.businessinsider.com/stocks/gfs-stock">GlobalFoundries</a> launched a new student loan repayment program that provides qualifying US-based employees up to $28,500 in student debt relief. Morgan is a training coordinator at the New York-based manufacturer of <a target="_blank" href="https://www.businessinsider.com/semiconductor-chips-jobs-hiring-arizona-tech-phoenix-tsmc-intel-china-2024-1">semiconductor chips</a>, where she develops and implements technical training for the companies' technicians and engineers.Since the launch, a company spokesperson told BI that 237 employees have enrolled and that it's disbursed more than $100,000 in repayment funds. The relief program is helping repay student loans for degrees ranging from associate's to doctorates at more than 80 US colleges and universities.Morgan now expects to fully pay off her remaining $16,000 student debt balance by 2028 — four years earlier than planned."Paying off my student loans at a much faster rate will allow me to save that additional income to invest in our future, our home, and the growth of our family," said Morgan, who asked to be identified by her first name for privacy reasons. "This program is helping me to achieve financial freedom."<div type="image" title="Morgan" height="968" width="1290" msid="114374429" hostid="261" sizebytes="155266"></div>GlobalFoundries is betting that student debt relief will help it attract prospective employees and retain current workers. The company spokesperson told BI that the initial results have been promising."We are pleased to see enrollment numbers continue to increase, coupled with positive employee feedback," the spokesperson said. "This demonstrates the program is making a meaningful impact on the financial well-being of our employees."The company's debt relief program is part of a broader effort by semiconductor companies to grow their workforces as the US pushes for more domestic production of chips that power everything from <a target="_blank" class="" href="https://www.businessinsider.com/apple-iphone-chip-shortage-supply-constraints-2021-7">iPhones</a> to <a target="_blank" class="" href="https://www.businessinsider.com/chip-shortage-auto-industry-car-buying-dealerships-consumers-inventory-2022-12">cars</a> to <a target="_blank" class="" href="https://www.businessinsider.com/nvidia-ai-chip-semiconductors-tsmc-intel-jobs-arizona-2024-2">AI tools</a> like ChatGPT.In 2022, President Joe Biden signed the<a target="_blank" href="https://www.businessinsider.com/chips-act-bill-to-boost-us-chipmaking-competition-with-china-2022-7"> CHIPS and Science Act</a> into law, which included $52.7 billion in tax breaks and subsidies intended to bolster the US semiconductor industry. However, some industry leaders have raised concerns that there won't be enough <a target="_blank" href="https://www.businessinsider.com/semiconductor-certification-program-chipmaker-manufacturing-jobs-new-career-intel-tsmc-2023-8">skilled workers</a> to fill the jobs that will eventually be created.According to a<a target="_blank" href="https://www.semiconductors.org/america-faces-significant-shortage-of-tech-workers-in-semiconductor-industry-and-throughout-u-s-economy/"> report</a> published last year by the trade and lobbying group Semiconductor Industry Association and Oxford Economics, the US semiconductor industry faces a worker shortage of 67,000 people by 2030, including technicians, computer scientists, and engineers."It's not just about attracting talent; it's about retaining talent and ensuring our team feels supported and ready to lead in such a crucial industry," Pradheepa Raman, chief people officer at GlobalFoundries, told BI.To be sure, it's unclear if programs like GlobalFoundries will successfully address the company's workforce needs in the coming years. However, other companies in the semiconductor industry, like <a target="_blank" href="https://affiliate.insider.com?h=73de951b92747ea5bef57a78e50672904ae9aa73440c55d26deb3a0e4fdc24dc&amp;postID=67000ba80c43543ec7a9c940&amp;postSlug=student-loan-debt-relief-globalfoundries-semiconductor-chip-workforce-shortage-2024-10&amp;site=bi&amp;u=https%3A%2F%2Fwww.nvidia.com%2Fen-us%2Fbenefits%2Fmoney%2F529-college-savings-plans%2F">Nvidia</a>, have implemented student loan reimbursement programs. <h2 id="80d0f88b-f671-41e5-a9f5-6e2de733e674">Hiring challenges have forced the company to get creative</h2>In February, <a target="_blank" class="" href="https://markets.businessinsider.com/news/stocks/globalfoundries-and-biden-harris-administration-announce-chips-and-science-act-funding-for-essential-chip-manufacturing-1033079603">$1.5 billion</a> of the CHIPS Act funding was allocated to GlobalFoundries to expand production at the company's Malta, New York chip factory and build a new factory. Additionally, the Biden administration promised another $1.6 billion in federal loans. This is expected to triple GlobalFoundries' production capacity in New York over 10 years and create roughly <a target="_blank" class="" href="https://www.commerce.gov/news/press-releases/2024/02/biden-harris-administration-announces-preliminary-terms-globalfoundries">1,500</a> manufacturing jobs.However, filling roles like these can be challenging. Raman said GlobalFoundries has faced the same hiring challenges that are impacting the broader US semiconductor industry, which sometimes leads to longer recruitment periods for certain roles.These hiring challenges are among the reasons the company has established partnerships with <a target="_blank" href="https://markets.businessinsider.com/news/stocks/globalfoundries-partners-with-micron-and-u-s-national-science-foundation-to-drive-semiconductor-workforce-development-at-minority-serving-institutions-1033407247">universities</a>, community colleges, and STEM programs, in addition to starting an internal apprenticeship <a target="_blank" href="https://gf.com/careers/gf-maintenance-technician-apprenticeship-malta/">program</a> in 2021 — the <a target="_blank" class="" href="https://www.commerce.gov/news/press-releases/2024/02/biden-harris-administration-announces-preliminary-terms-globalfoundries">first</a> of its kind in the semiconductor industry."The demand for skilled workers in technology is outpacing supply, which is why we've been so proactive in our approach to workforce development," Raman said.The company's student debt relief program is just another way it's trying to attract workers.To be sure, debt relief isn't provided all at once. Through a partnership with the education platform EdAssist by Bright Horizons, GlobalFoundries sends a monthly payment directly to an employee's loan provider for up to 10 years.Both current workers and new hires are eligible to apply for the relief program, which the company expects to be an ongoing benefit offered to employees. To continue receiving the relief, an employee must make their minimum student debt payment, have a loan in good standing, and remain employed by GlobalFoundries."GlobalFoundries' contribution applies uniformly to all employees and increases over time with an initial investment of more than $100 a month during the first four years and up to $28,500 over the lifetime of the program," the company spokesperson said.In addition to debt relief, GlobalFoundries also offers a childcare subsidy and paid parental leave — 20 weeks for the birth parent and 12 weeks for the non-birth parent.These perks are helping employees like Stephanie, a marketing specialist based in Austin.After Stephanie earned an MBA in 2015, she said she had about $50,000 in student loan debt — her current balance is about $39,000. She said she signed up for GlobalFoundries' relief program on "day one" and received her first payment less than a month later, the 33-year-old told BI. She asked to be identified by her first name for privacy reasons.<div type="image" title="Stephanie" height="1737" width="2316" msid="114374433" hostid="261" sizebytes="455640"></div>The relief has been a "game changer," Stephanie said. If she stays at her job, she estimates GlobalFoundries will contribute thousands. She said she was only eligible for five years of relief because, under her repayment plan, her loans are supposed to be paid off within that timeframe.Before Stephanie enrolled in the program, she said she was on track to pay off her student debt by 2028. She now expects to pay it off at least one year ahead of schedule."It's made a real difference in reducing my principal and has given me more flexibility for my future instead of feeling constantly tied down by student loans."Do you work in the semiconductor chip industry and have a story to tell? Reach out to this reporter at <a target="_blank" href="mailto:jzinkula@businessinsider.com">jzinkula@businessinsider.com</a>.

One chip company's newest tactic to attract workers: Help pay off their student loans

New Delhi: Shares of <keyword id="20599931" type="General" weightage="100" keywordseo="NTPC-Green-Energy" source="keywords">NTPC Green Energy</keyword> Ltd, the <keyword id="19895602" type="General" weightage="20" keywordseo="renewable-energy" source="keywords">renewable energy</keyword> arm of <keyword id="19903558" type="General" weightage="20" keywordseo="NTPC" source="keywords" meta.keywordsubtype="org" meta.entityname="NTPC" meta.hostid="261" meta.entityid="NTPC">NTPC</keyword>, listed with a premium of over 3 per cent against the issue price of Rs 108 on Wednesday. The stock made its debut at Rs 111.60, up 3.33 per cent from the issue price on the BSE. Later, it climbed 12.40 per cent to Rs 121.40. At the NSE, it listed at Rs 111.50, up 3.24 per cent. The company's market valuation stood at Rs 1,02,211.38 crore during the morning trade. Shares of NTPC climbed nearly 2 per cent to Rs 368.80 on the BSE. The <keyword id="19913114" type="General" weightage="20" keywordseo="initial-public-offering" source="keywords">initial public offering</keyword> of NTPC Green Energy Ltd got subscribed 2.40 times on the closing day of the share sale on Friday. The Rs 10,000-crore share sale had a price band of Rs 102-108 per share. Proceeds from the <keyword id="19898327" type="General" weightage="20" keywordseo="IPO" source="keywords">IPO</keyword>, about Rs 7,500 crore at the upper band, will be used to repay or prepay part or all of its subsidiary NTPC Renewable Energy Ltd's (NREL) outstanding loans, and a portion will be utilised for general corporate purposes. NTPC Green Energy is a 'Maharatna' central public sector enterprise with a renewable energy portfolio, including solar and wind power assets.

NTPC Green Energy shares debut with over 3% premium

IPOs of <keyword id="22105289" type="General" weightage="20" keywordseo="Aasan-Loans" source="keywords">Aasan Loans</keyword> (<keyword id="22105288" type="General" weightage="20" keywordseo="Akme-Fintrade" source="keywords">Akme Fintrade</keyword> India) and <keyword id="22105291" type="General" weightage="20" keywordseo="DEE-Piping-Systems" source="keywords" meta.keywordsubtype="org" meta.entityname="DEE Piping Systems" meta.hostid="261" meta.entityid="DEE Piping Systems">DEE Piping Systems</keyword> (DEE Development Engineers Limited) are set to hit the D-street for subscription today, and will close on Friday, 21st June. With a price band of Rs 114-Rs 120, Aasan Loans, which offers loans to rural and semi-urban populations, aims to raise 132 crores via a fresh issue of 1.1 crore shares. With its niche in vehicle and business financing, experts are advising staying away from the <keyword id="19898327" type="General" weightage="20" keywordseo="IPO" source="keywords">IPO</keyword>, given how competitive the Indian NBFC space is. The company also harbours significant NPAs, and has had some compliance issues in the past as well. The other mainboard IPO, <keyword id="22105286" type="General" weightage="100" keywordseo="DEE-Piping" source="keywords">DEE Piping</keyword> Systems, intends to raise Rs 418 crore via combination of fresh issue and offer for sale (OFS). While Rs 325 crores will be raised via fresh issue, Rs 93.01 crores will be raised via OFS. With its price band set between Rs 193-Rs 203, DEE specialises in providing piping solutions to oil, gas, chemicals and power industries. <cmsannotation type="cmsannotation" annotationid="SME IPO dashboard" comment="subhead" text="SME IPO dashboard">SME IPO dashboard</cmsannotation> While these are mainboard IPOs, 3 small and medium enterprises (SME), namely <keyword id="22105292" type="General" weightage="20" keywordseo="Falcon-Technoprojects-India" source="Orion">Falcon Technoprojects India</keyword>, <keyword id="22071172" type="General" weightage="20" keywordseo="Durlax-Top-Surface" source="Orion">Durlax Top Surface</keyword> and <keyword id="22105290" type="General" weightage="20" keywordseo="Gem-Enviro" source="keywords">GEM Enviro</keyword> are also opening for subscription today. The company, which aims to raise Rs 13.69 crore, offers mechanical and plumbing services, which includes installing air conditioners, water supply and lighting systems. Its share price has been set at Rs 92. The other company on the SME dashboard is Durlax Top Surface, which has 2 brands, namely LUXOR and ASPIRON. The company manufactures solid surface materials, which include UV acrylic solid sheets. The company wants to raise Rs 40.80 crore, out of which Rs 28.56 crore will be raised via fresh issue, and the remaining will be accumulated via offer for sale. The stock’s price band is set between Rs 65-68. Gem Enviro, which specialises in plastic waste management and recycling, aims to raise Rs 44.93 crore via this IPO. Stock analyst Dilip Dawda recommends investing in this IPO for medium to long-term gains, given that the company has paid dividend over the past 2 years <cmsannotation type="cmsannotation" annotationid="IPOs closing today" comment="subhead" text="IPOs closing today">IPOs closing today</cmsannotation> IPOs of <keyword id="22105287" type="General" weightage="20" keywordseo="GPES-Solar" source="keywords" meta.keywordsubtype="org" meta.entityname="GPES Solar" meta.hostid="261" meta.entityid="GPES Solar">GPES Solar</keyword>, which opened on 14th June, and United Cotfab, which opened on 13th June, are closing today. GPES Solar, which is in the business of solar inverters and panels, aims to raise Rs 31 crore. Its IPO was oversubscribed around 408.3 times. Retail investors oversubscribed to the share by around 519.57 times. However, Dawda recommends subscription to this IPO only if you are a market veteran and have surplus, long-term funds to park. The IPO of United Cotfab, which manufactures open-end cotton yarn, is also closing today. It was oversubscribed by 48.27 times in the retail investor category. While the company intends to raise Rs 36.29 crore entirely via fresh issue, experts have raised concerns about the company’s profitability and sustainability.

IPO Overview : DEE Piping, Akme Fintrade, GPES Solar

<ul class="summary-list"><li>It's all but guaranteed that the Federal Reserve will cut interest rates this week.</li><li>It comes after years of aggressive inflation-fighting from the central bank.</li></ul>The time has finally come: Americans are about to find out <a target="_blank" href="https://www.businessinsider.com/interest-rate-cuts-wall-street-how-much-jackson-hole-fed-2024-8">how big of an interest-rate cut</a> they'll be getting this week.On Wednesday, the Federal Open Market Committee will announce its next move on <a target="_blank" href="https://www.businessinsider.com/jobs-unemployment-interest-rates-economy-recession-soft-landing-2024-8">interest rates</a>, and it's all but certain the nation's central bank will cut for the first time in four years. The big question is how much.According to <a target="_blank" href="https://www.cmegroup.com/markets/interest-rates/cme-fedwatch-tool.html">CME FedWatch</a>, which estimates interest rate changes based on market predictions, the size of the rate cut is a coin toss. As of Friday afternoon, there's a 51% chance the Federal Reserve will cut rates by 25 basis points and a 49% chance it'll be an extra-large 50-basis-point cut. The probabilities suggest a near-zero chance that the Fed will hold rates steady."The time has come for policy to adjust," Fed Chair Jerome Powell said during his address at a gathering of central bankers in <a target="_blank" href="https://www.businessinsider.com/interest-rate-cuts-are-coming-federal-reserve-jackson-hole-powell-2024-8">Jackson Hole, Wyoming,</a> last month. "The direction of travel is clear, and the timing and pace of rate cuts will depend on incoming data, the evolving outlook, and the balance of risks."The <a target="_blank" href="https://www.businessinsider.com/inflation-august-consumer-price-index-federal-reserve-rate-cuts-2024-9">consumer price index</a> inflation data that came out last Wednesday was the last large piece of data before the Fed meeting. With August's core CPI coming in unexpectedly hotter than expected, it was looking likely a 50-basis-point cut wouldn't happen. That's because a larger rate cut makes borrowing cheaper, which tends to drive up spending and fuel price increases.The <a target="_blank" class="" href="https://www.businessinsider.com/unemployment-rate-job-growth-interest-rate-cuts-federal-reserve-recession-2024-9">job market</a> also supports a rate cut this month — the unemployment rate ticked down in August but stayed above its recent lows, and hiring gains have cooled. Lower rates ease pressure on companies' bottom lines, freeing up budgets for hiring.Many economists hope that the long-sought soft landing of getting inflation under control while avoiding a devastating recession could be near. "This rate cut is great news for middle-class families, not only does it underscore the Fed is convinced that inflation is coming under control, it signals the economy has recovered to a faster, sustainable growth trajectory and is ready for further investments in job creation," Michael Madowitz, the former director of macroeconomic policy at the Washington Center for Equitable Growth, said.<h2 id="d213ed81-690b-4194-9569-8ae1349857cf">It'll take time for the cuts to set in</h2>Alena McTier, a Gen Zer, had been looking to replace the car she purchased in 2017 this summer, but she was up against sticker shock. She can't wait for the <a target="_blank" href="https://www.businessinsider.com/personal-finance/banking/when-is-the-next-fed-meeting">Fed to announce rate cuts</a>. She told Business Insider she's been <a target="_blank" href="https://www.businessinsider.com/car-prices-falling-forecast-outlook-new-used-electric-vehicle-market-2024-6">holding on to her car</a> "until a solid decision is made" from the Federal Reserve on interest rates."When they are cut, I am going to actively explore the different rates that are available," McTier, who is looking to buy a used vehicle, told Business Insider in August.It could take a while for McTier to see those lower rates. While some parts of the economy will be immediately impacted, there will still be a lag for relief in some sectors."Given the fact that monetary policy does take time to work its way through the system, it'll be the same to some degree with the rate reductions," Mark Hamrick, senior economic analyst for Bankrate, told Business Insider. He added that prime lending rates will likely be adjusted soon after the decision: "Banks adjust their prime lending rates, the rates reserved for their best customers, and those tend to then be reflected in credit card rates immediately," Hamrick said.Credit card interest rates have been at historic highs — a February <a target="_blank" class="" href="https://www.consumerfinance.gov/about-us/blog/credit-card-interest-rate-margins-at-all-time-high/">report</a> from the Consumer Financial Protection Bureau found that the average annual percentage rate on credit cards has almost doubled over the past decade to 22.8% in 2023. However, the lag means that those hoping to pay off credit cards won't be materially impacted by this month's rate cut — it'll take time for the relief to set in.Rate cuts will also eventually make it cheaper for <a target="_blank" class="" href="https://www.businessinsider.com/recession-outlook-small-business-owner-economy-interest-rate-cuts-2024-9">small businesses</a> to take out loans. When it comes to <a target="_blank" href="https://www.businessinsider.com/how-fed-rate-cut-could-impact-mortgage-rates-homebuyers-2024-9">buying a new house</a> or car, the rate cuts could make things slightly cheaper, but they likely won't have a significant impact on costs in the short term. That's because rate cuts' effects on the housing market are complicated. A rate cut could <a target="_blank" class="" href="https://www.businessinsider.com/buying-home-not-easier-interest-rate-cuts-prices-rent-crisis-2024-8">cause a rush of buyers to enter the market</a> in the short term, driving up prices and competition.Still, some Americans are shaping their finances in anticipation of a rate cut. <a target="_blank" href="https://www.nerdwallet.com/h/data/studies-and-data-analysis#rate-cut-actions">NerdWallet</a> found in a July survey that a majority of Americans reported planning to take financial action once interest rates drop, like buying a home or taking out a loan. Almost a quarter of US adults in the survey said they plan to buy a car, while 15% said this about a home."Regardless of what the Fed decides, if you have credit card debt, your credit card debt is going to remain expensive even if interest rates begin to go down a little bit," Sara Rathner, credit cards expert at NerdWallet, said.How are you shaping your finances in anticipation of an interest-rate cut? Are you planning to make any big purchases or investments? Share your story with these reporters at <a target="_blank" href="mailto:asheffey@businessinsider.com">asheffey@businessinsider.com</a> and <a target="_blank" href="mailto:mhoff@businessinsider.com">mhoff@businessinsider.com</a>.

Welcome to interest-rate cut week: Here's how the Fed's next move will impact everything from home prices to new cars loans

Mumbai, Three out of five consumers surveyed in India believe it is normal for people to exaggerate income on <keyword id="20243269" type="General" weightage="20" keywordseo="loan-applications" source="keywords">loan applications</keyword>, according to a report on people's attitudes toward first-party <keyword id="20490528" type="General" weightage="20" keywordseo="financial-fraud" source="keywords">financial fraud</keyword>. The survey by global analytics software company FICO stated that more than a quarter (27 per cent) of Indians believe it is normal for people to deliberately misrepresent their income on mortgage applications. "Three in five consumers (63 per cent) think it is OK or normal for people to exaggerate their income on loan applications, significantly more than the global average of 39 per cent," the survey said. More than half (54 per cent) believe it is normal to falsify insurance claims, the global survey which examined 1,000 people in India said. Many Indians consider it fine to exaggerate income on personal loan applications, further complicating financial integrity. Just one third (33 per cent) of consumers believe it is never acceptable to exaggerate income on a personal loan application, while another third (35 per cent) finds it acceptable under specific conditions. "With over 60 per cent of Indian consumers viewing income falsification as acceptable or justified, banks face a very real problem of 'liar loans' that could skew risk assessment and increase bad loan rates," said Aashish Sharma, APAC segment leader for risk lifecycle and decision management at FICO. As many 1,000 Indian adults were surveyed, along with approximately 12,000 other consumers in Canada, U.S., Brazil, Colombia, Mexico, The Philippines, Indonesia, Malaysia, Singapore, Thailand, U.K. and Spain. Globally, attitudes are notably different, with the survey revealing the majority of consumers (56 per cent) firmly reject the idea of exaggerating income on loan applications, viewing it as never acceptable. Just, one in four (24 per cent) consider it permissible in certain circumstances, and only one in seven (15 per cent) view it as a normal practice, the report said. "Many consumers may not see this as harmful behaviour, but it's important to understand that when applying for financial products, applicants typically certify that the information they provide is accurate," Sharma said. SEE ALSO:<a href="https://www.businessinsider.in/stock-market/news/arkade-developers-ipo-allotment-how-to-check-allotment-ipo-gmp-listing-date-and-more/articleshow/113493854.cms" target="_blank"></a> <a href="https://www.businessinsider.in/stock-market/news/arkade-developers-ipo-allotment-how-to-check-allotment-ipo-gmp-listing-date-and-more/articleshow/113493854.cms" target="_blank">Arkade Developers IPO allotment – Check allotment status, GMP, listing date and more</a><a href="https://www.businessinsider.in/stock-market/news/western-carriers-ipo-allotment-how-to-check-allotment-ipo-gmp-listing-date-and-more/articleshow/113511375.cms" target="_blank"></a> <a href="https://www.businessinsider.in/stock-market/news/western-carriers-ipo-allotment-how-to-check-allotment-ipo-gmp-listing-date-and-more/articleshow/113511375.cms" target="_blank">Western Carriers IPO allotment – How to check allotment, IPO GMP, listing date and more</a><a href="https://www.businessinsider.in/tech/mobile/news/iphone-16-series-allows-users-to-wirelessly-restore-the-firmware-using-an-iphone-or-ipad/articleshow/113455048.cms" target="_blank"></a> <a href="https://www.businessinsider.in/tech/mobile/news/iphone-16-series-allows-users-to-wirelessly-restore-the-firmware-using-an-iphone-or-ipad/articleshow/113455048.cms" target="_blank">iPhone 16 series allows users to wirelessly restore the firmware using an iPhone or iPad</a>

Three out of 5 consumers think it's normal to exaggerate income on loan applications: Survey

<ul class="summary-list"><li>Trump announced a new tax proposal to appeal to car buyers and the auto industry.</li><li>It took him a while to get to that. Along the way, he denigrated Detroit, where he was speaking.</li></ul>On Thursday, former President Donald Trump traveled to Michigan to announce a new tax cut proposal designed to appeal to both car buyers and the auto industry.Trump told the Detroit Economic Club that under the new proposal, interest on car loans would be fully tax-deductible, as is the case with <a target="_blank" class="" href="https://www.businessinsider.com/personal-finance/mortgages/mortgage-interest-deduction">home mortgage loans</a>.The proposal, which would require Congress's approval and is part of a broader <a target="_blank" href="https://www.businessinsider.com/trump-tax-plan-tarriffs-benefits-top-earners-study-2024-10">array of tax cuts</a> that the former president would seek next year, aims to make it easier to buy a car and stimulate the auto manufacturing industry."It's like the paper clip," Trump mused, claiming he'd spoken to a person who worked in the auto industry who was dumbstruck by the proposal. "Somebody comes up with the paper clip, and everybody asks 'Why the hell didn't I think of that, right?'"By that point, Trump was roughly two hours into his address.Prior to that, the former president offered various musings on topics ranging from the ongoing presidential election, to his occasional <a target="_blank" href="https://www.businessinsider.com/trump-suffers-teleprompter-trauma-at-a-rally-in-ohio-2024-3">trouble with faulty teleprompter</a> systems, to the state of the economy."The word 'grocery,' yeah, it's a sort of simple word, but it sort of means like everything you eat," Trump said at one point. "The stomach is speaking, it always does." At one point, Trump casually noted that he had another grandchild on the way: His youngest daughter, Tiffany, is pregnant."She's gonna have a baby. So that's nice," Trump said.Trump also said that "companies outside of our world, big companies, powerful companies" had been allowed to "come in and raid and rape our country.""Oooh, he used the word 'rape'," Trump said mockingly. "That's right I used the word 'rape.' They raped our country." And when discussing the impact of a potential victory by Vice President Kamala Harris, Trump denigrated the city of Detroit, where he was speaking."The whole country's going to be like — you want to know the truth? It'll be like Detroit," Trump said. "Our whole country will end up being like Detroit if she's your president."

In rambling, hours-long speech, Trump introduces new car loan tax proposal

New Delhi: <keyword id="22803368" type="General" weightage="100" keywordseo="Smartworks-Coworking-Spaces" source="keywords">Smartworks Coworking Spaces</keyword> Ltd has filed preliminary papers with capital markets regulator <keyword id="19901201" type="General" weightage="20" keywordseo="Sebi" source="keywords" meta.keywordsubtype="org" meta.entityname="Sebi" meta.hostid="345" meta.entityid="Sebi">Sebi</keyword> to raise funds through an <keyword id="19913114" type="General" weightage="20" keywordseo="initial-public-offering" source="keywords">initial public offering</keyword> (IPO). The proposed initial share sale is a combination of a <keyword id="20953853" type="General" weightage="20" keywordseo="fresh-issue" source="keywords">fresh issue</keyword> of equity shares worth Rs 550 crore and an Offer For Sale (OFS) of 67.59 lakh shares by promoters, according to the <keyword id="20076796" type="General" weightage="20" keywordseo="Draft-Red-Herring-Prospectus" source="keywords">Draft Red Herring Prospectus</keyword> (DRHP). The city-based company may consider raising Rs 110 crore through a <keyword id="22244028" type="General" weightage="20" keywordseo="pre-IPO-placement" source="keywords">pre-IPO placement</keyword>. If such placement is undertaken, the amount raised will be deducted from the total fresh issue size. Proceeds from the fresh issue to the tune of Rs 282.30 crore will be used for capital expenditure related to the fit-outs in new centres and security deposits for these new centres, Rs 140 crore will be allocated for payment of loans and the remaining funds will be utilized for general corporate purposes. Smartworks Coworking Spaces Ltd is a leading platform for office experiences and managed campuses. It specialises in leasing large, bare-shell properties in prime locations and transforming them into fully serviced, tech-enabled campuses with modern amenities. These campuses include cafeterias, sports zones, gyms, crA"ches, medical centres, and more, offering a modern and attractive work environment. The company cater to businesses of all sizes, with a focus on mid-to-large companies that need over 300 seats. The company is concentrated in cities including Bengaluru, Mumbai Metropolitan Region, Hyderabad, Gurugram and Chennai. India's commercial office space was about 841.2 million square feet as of March 31, 2024, and is expected to grow at an annual rate of 6.71 per cent to 1,079.3 million square feet by the end of 2027, as per the draft papers. Flexible workspaces have become a key part of modern work culture, supporting different working styles and adding flexibility to the office market. JM Financial Ltd, BOB Capital Markets Ltd, IIFL Securities Ltd and Kotak Mahindra Capital Company Ltd are responsible for managing the company's IPO process.

Smartworks Coworking Spaces files IPO papers with Sebi; eyes Rs 550 crore via fresh issue

Builders have too many new homes on their hands.Thanks to a construction boom years in the making, homebuilders are sitting on more newly completed homes than at any point since 2009, when the market was reeling from the global financial crisis. Despite the hefty ready-to-sell supply, a sizable chunk of those homes may never be sold to regular buyers. That strange reality says a lot about the hurdles for would-be homeowners right now.Both builders and buyers find themselves in a tricky position. Prices have <a target="_blank" href="https://www.businessinsider.com/personal-finance/mortgages/home-prices-drop">continued their climb</a> in most of the country. Mortgage rates dropped steadily over the summer, but that <a target="_blank" class="" href="https://www.businessinsider.com/personal-finance/mortgages/how-does-fed-impact-mortgage-rates">turned out to be a head fake</a> — in the span of a month, the typical rate for a 30-year loan increased by almost a full percentage point, and could rise further. Throwing down for a starter home is about 45% more expensive than renting, a far wider gap than the historical average of about 15%, according to monthly expense data tracked by John Burns Research and Consulting. Builders, meanwhile, are luring buyers with some perks but are barely budging on prices. That's partly because these companies have another place to turn: the rental market.Given the strong demand for rentals and a tough sales market, some builders are choosing to convert for-sale homes into rentals or offload inventory to investors who specialize in single-family-home rentals. Opportunistic investors — mostly small and midsize players, who own the vast majority of single-family rentals in the country — are happy to oblige.Four walls and a backyard are still the bedrock of the American dream. For those who can't afford to buy a house (or don't want to right now), the only option is to rent. That simple fact gives builders some breathing room, but it also means that a glut of new homes may not deliver the price cuts buyers have been anxiously awaiting.A <a target="_blank" href="https://www.businessinsider.com/housing-market-outlook-forecast-mortgage-rates-homebuilding-inventory-prices-2024-2023-12">golden run for homebuilders</a> is drawing to a close. When rising mortgage rates <a target="_blank" href="https://www.businessinsider.com/housing-market-mortgage-rates-outlook-home-prices-affordability-wealth-gap-2024-3">trapped many would-be sellers</a> in their homes two years ago, builders turned out to be the big winners — if you wanted to buy a home, your <a target="_blank" href="https://www.businessinsider.com/house-construction-building-boom-last-hope-new-homebuyers-housing-market-2023-7">best bet was probably new construction</a>. One economist told me last year that builders were "the only game in town" in some areas. Builders not only offered a welcome alternative to the <a target="_blank" href="https://www.businessinsider.com/housing-market-ice-age-higher-home-prices-fewer-sales-inventory-2023-5">frozen resale market</a> but could cut deals to make their homes even more appealing to the average buyer: <a target="_blank" class="" href="https://www.businessinsider.com/homebuilders-turn-to-mortgage-rate-buydowns-as-affordability-sours-2022-12">Mortgage-rate buydowns</a>, in which the builder pays the lender up front in exchange for lowering the buyer's loan rate, can save a new homeowner hundreds of dollars each month.Now, even with the freebies, builders are selling homes at a slower-than-expected pace as buyers grapple with worsening affordability, sharp swings in mortgage rates, and general uncertainty — people would rather sit on the fence than leap into a market with so many unknowns. With slower sales across the board, the number of homes on the market has climbed. There were 108,000 finished homes for sale at the end of September, some 48% more than at the same point a year ago. There were 258,000 homes under construction but not yet sold, another sizable figure — at the same point in 2019, there were about 194,000. Builders surveyed by John Burns Research and Consulting said they had an average of about 2.5 unsold homes in each of their communities in October, representing a 47% increase from a year ago. In October 2021, they reported only 0.4 unsold homes per community. Some of this increase is by design. Companies are building more homes "on spec," or before they have a buyer, to shorten timelines and compete directly with the resale market. But there's no question that builders have hit a snag.The answer might seem obvious: Cut prices! But builders will "try a lot of other things first," says Keith Hughes, an executive at the housing research firm Zonda. "And we're not seeing drastic price drops virtually anywhere." Buyers may not be flooding the market, but there are fewer homes out there, too. The number of available homes for sale at the end of October, according to <a target="_blank" href="http://Realtor.com">Realtor.com</a>, was about 21% lower than in the same month in 2019. Builders looking to move their product lean heavily on incentives — Lennar, one of the largest homebuilders in the country, said that the average sales incentives per home amounted to $48,100 from June through August, compared with $36,400 a year earlier. Builders are also completing smaller floor plans to match the needs of cost-conscious consumers.Builders have another fallback: the rental market. Over the past decade, homebuilders have forged relationships with companies that <a target="_blank" class="" href="https://www.businessinsider.com/single-family-rental-investor-conference-buying-more-homes-2021-12">purchase thousands of single-family homes</a> and manage them as rentals — if a builder were looking to move a portfolio of homes, they might find a willing buyer in a company like Pretium, which owns nearly 100,000 homes, or Invitation Homes, which manages a portfolio of more than 85,000 homes. Builders have also started <a target="_blank" class="" href="https://www.businessinsider.com/wall-street-single-family-rental-build-to-rent-houses-finance-2021-7">developing entire communities of single-family homes</a> to be rented out rather than sold, a strategy known as build-for-rent. The idea is to meet the demand of renters who want their piece of the American dream — a home with a yard in a safe neighborhood with good schools — but either can't make a purchase or don't want to. Builders can sell to a guaranteed buyer willing to purchase in bulk or hold on to the homes and enjoy the steady returns of rental income. Given these advantages, the build-to-rent pipeline has become robust. D.R. Horton, the nation's biggest homebuilder, recently said it had about $800 million worth of single-family-rental property on its balance sheet, consisting of 3,140 homes and about 1,900 lots on which it can build more. Invitation Homes, one of the largest owners of single-family rentals, recently said it expected to purchase nearly 2,500 homes in the next couple of years from builders in places like Tampa, Florida; the Carolinas; and Houston.Owners of single-family rentals have been around forever, but large, sophisticated SFR companies <a target="_blank" class="" href="https://www.businessinsider.com/single-family-rental-companies-institutional-backers-homes-wall-street-2020-12">arrived after the financial crisis in 2008</a>, when investors began raising billions of dollars to pick up homes on the cheap. Now these companies represent a "new category of buyers that would really help a builder during a downturn unload some inventory," John Burns, of John Burns Research and Consulting, said in a recent podcast with Don Mullen, the CEO of Pretium. "And you're playing that out right now, you're already doing that."But big companies actually <a target="_blank" class="" href="https://www.businessinsider.com/average-americans-beating-wall-street-new-homes-real-estate-homebuying-2023-11">own a small fraction of all single-family rental homes</a>, and they've been much more selective with their purchases as higher interest rates have made it tougher to get strong returns on their investments. The <a target="_blank" class="" href="https://www.businessinsider.com/mom-and-pop-landlords-homeownership-rent-wall-street-corporate-investors-2024-7">most active buyers right now are small and midsize investors</a> who own anywhere from a handful of homes to several hundred. With builders sitting on more homes, these investors are sniffing around for deals."I think investors are more or less saying to themselves, we're providing a solution here for builders, and that solution is inventory management and getting out of inventory that otherwise they're having trouble selling," says Adam Stern, the founder and CEO of Strata SFR, a real-estate brokerage focused on single-family rentals and build-to-rent homes. "We're that exit option."Data from <a target="_blank" href="https://www.forecasa.com/">Forecasa</a>, a real-estate analytics firm, indicates investors purchased 3% to 5% of homes sold by builders in the past three months. That may not sound like much, but a year ago that number was closer to 1%. Some builders have recently been shuttling about 10% of their inventory to investors. Even then, these numbers may be undercounts, since some amateur rental owners may not be buying through the kinds of legal entities that tip off analysts to investor purchases."It may seem like a small percentage, but if you think about just the sheer volume of properties that are being moved, it's a fairly large number, especially because it's growing," says Sean Morgan, the CEO of Forecasa.Investors have mostly focused on Sun Belt markets like Nashville and Dallas in the lower half of the US, where new construction is most plentiful. Builders may offer a slight discount, but they get something valuable in return: homes off their balance sheets. Builders often take on loans of 12 to 24 months to construct homes — before time is up, they have to either find a buyer or get a new loan. Local and regional builders are more likely to feel the squeeze than a national company like D.R. Horton, which can afford to keep homes on its books longer. When builders are staring down that ticking clock, "investors are natural buyers," says Alex Offutt, the CEO of Business Purpose Capital, a capital provider for long-term investor loans. Builders don't even have to sell, though. Another route is to get a new long-term loan based on the rental income the properties will generate, then find tenants for the homes and wait to sell when the market is more favorable. Both Offutt and Ray Sturm, a managing partner of Tower1, which offers financing for residential lenders, tell me they've been having more conversations with builders and their lenders who are seeking out this option."They know if they work on a rental campaign, they've got an exit," Sturm says. "It's early, but it's bigger than I thought."This isn't the ideal scenario for most builders, especially since many aren't well versed in the minutiae of managing rental properties. But it could become another valuable off-ramp if they have trouble unloading homes.Most homebuilders are a long way from hitting the panic button. There's still a <a target="_blank" class="" href="https://www.businessinsider.com/us-housing-affordability-home-shortage-market-construction-population-cities-zillow-2024-6">national housing shortage</a>, even if there's a short-term oversupply in some places, and builders are <a target="_blank" class="" href="https://www.businessinsider.com/housing-market-ice-age-homebuyers-mortgage-rates-spring-real-estate-2024-10">looking ahead to the spring buying season</a> as the true tell of where things are headed. Their embrace of the rental market says more about the obstacles for buyers than for builders. Prices and borrowing rates haven't provided relief for those looking to make a purchase. People who already own homes are reluctant to sell and move up, which means they're not freeing up the starter homes that first-time buyers crave. Would-be buyers have nowhere else to turn but the rental market — Redfin estimates that the number of renter households is growing three times as fast as homeowner households.The housing market "is in limbo," says Selma Hepp, the chief economist at the real-estate data firm CoreLogic. "It's sitting on the sidelines. It's waiting."<a target="_blank" rel="" href="https://www.businessinsider.com/author/james-rodriguez">James Rodriguez</a> is a senior reporter on Business Insider's Discourse team.

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