Business News

SBI, ICICI remain systemically important banks: RBI

Business News - January 20, 2021 - 7:58pm
HDFC Bank, ICICI Bank and the State Bank of India (SBI) continue to be the bellwethers of the country's banking system, with Mint Road Tuesday reiterating that all three lenders remain in the category designated as Domestic Systemically Important Banks.The additional Common Equity Tier 1 (CET1), a crucial requirement for these lenders, has already been phased-in from April 1, 2016 and became fully effective from April 1, 2019, according to the Reserve Bank of India.“The additional CET1 requirement will be in addition to the capital conservation buffer,” the central bank said late Tuesday. While the gauge is 0.60 percent of risk weighted assets for the State Bank of India, it is pegged at 0.20 percent for the two large private lenders.“SBI, ICICI Bank, and HDFC Bank continue to be identified as Domestic Systemically Important Banks (D-SIBs), under the same bucketing structure as last year,” RBI said.
Categories: Business News

Know Your Heroes: A few good men, story of a lifetime

Business News - January 20, 2021 - 7:58pm
Brisbane: An amalgamation of fascinating life stories that scripted one of the most memorable moments in the history of Indian cricket. The men who humbled Australia in their own backyard, defying odds and naysayers, are not the ones staring from the billboards in manic metro cities but shy, quiet and unassuming characters from the suburbs and the hinterlands. These are strong character artists of an author-backed film rather than mega stars with bulging biceps of 200-crore potboilers. Rishabh Pant Rourkee has always been known for its finest engineering college, now an IIT but this is also the hometown of Rishabh Pant, son of school owner parents. There was a time that on occasions a young Pant, accompanied by his mother would reach Delhi in wee hours of morning on weekends to attend training at the famed Sonnet Club and before the crack of dawn rest at the Gurdwara before heading to the ground. He played an IPL game days after his father Rajendra's sudden demise. Mohammed Siraj Son of an auto-rickshaw driver from Hyderabad's Lancer. He lost his father during the tour but decided to stay for the team and miss the last rites. He got a maiden five for in his debut series and was all choked up while dedicating the feat to the memory of his father. The youngster handled racist abuse from Australian fans with the same resolve. Navdeep Saini Son of a bus driver from Karnal, he used to play tennis ball matches for Rs 1000. Delhi first-class player Sumit Narwal brought him for the Ranji Trophy nets where then captain Gautam Gambhir picked him for tournament-proper. It was met with stiff resistance from none other than Bishan Singh Bedi who protested that a player outside Delhi domicile was being picked. This led to Gambhir putting his foot down and he never misses an opportunity to remind the detractors what Saini seemed capable of even at that time. Shubman Gill The heir apparent of Virat Kohli was born in a Punjab village called Fazilka to an affluent farmer family. His grandfather had prepared a pitch in the farming field for his dearest grandson before his father decided to shift to Mohali so that his son's cricketing ambitions got wings. He was a member of the India U-19 World Cup team. Recently, on his instagram account, he had voiced his support for ongoing farmers' protest. Cheteshwar Pujara The man from Rajkot is not very expressive but has dealt with adversity because of a strong mental make-up largely due to his coach and father Arvind Pujara. He lost his mother while playing junior cricket but never wavered from his goal despite the tragedy. Those hits on the body and knuckles in Brisbane on Tuesday will be the medals he would like to wear all his life. Shardul Thakur He comes from Palghar and as a 13-year-old had hit six sixes for his school Vivekananda International Borivali in a Harris Shield Match. Who is the most celebrated alumni of Vivekananda International? India's white ball legend Rohit Sharma. Both Shardul and Rohit have had the same childhood coach -- Dinesh Lad, whose son Siddharth also plays for Mumbai. Washington Sundar The name Washington was his father's tribute to his own mentor PD Washington, who had funded his studies and kits when he was young and faced financial hardships. A month after PD Washington's death, his own son was born and he named him Washington Sundar. He was a opening batsman back in 2016 during U-19 days. But his talent as an off-break bowler came to fore when Rahul Dravid and Paras Mhambrey told him to focus on his bowling in order to make the next grade. But batting remains his first love and India now has a ready replacement of Ravichandran Ashwin as and when required. Thangarasu Natarajan From the remote village of Chinnappampatti in Tamil Nadu, the son of a daily wage labourer at one point in time couldn't buy bowling spikes. And then IPL riches came along but he never forgot his roots. He has built a cricket academy in his native place and helps talented but needy cricketers. His child was born during the IPL but he will now get to see him for the first time in next few days and live to tell a tale. Ajinkya Rahane (Captain) The everyday man on that Mumbai local train travelling from Mulund to Azad and Cross Maidan. Rahane is someone who had a black belt in karate as a teenager, and honed his skills under former India batsman Praveen Amre. Did you know that Rahane's first ever first-class match was in Pakistan and not India? It was in Karachi where Quaid-e-Azam champions Karachi Urbans met Ranji Trophy champions Mumbai.
Categories: Business News

Comeback kids: What to expect from Reliance, TaMo

Business News - January 20, 2021 - 7:58pm
The Tata Motors stock was undervalued and has been out of favour for long. A bounceback of this proportion happens whenever a stock is under owned and undervalued, says Nitin Raheja, Co-Founder, AQF Advisors. Reliance seems to be making quite a comeback. In the last couple of sessions, it has been gathering momentum when we thought it was losing a bit of lustre.Some amount of profit booking had come in. It also got into a consolidated base for some time. But you can see what is happening from a long-term perspective, the evolution of Reliance and the direction in which it is going and also the way foreign investors are perceiving it. For most people and most portfolios, it was a standout as a long-term buy. Between that, some amount of consolidation would probably take place from time to time and so it is not really surprising. What about Tata Motors? This is another one that has been on a roll, partly also due to the JLR turnaround. Tata Motors was for a long time in a category where it had faced the double whammy of China slowdown, Covid happening in the UK and the impact of that on JLR. Also, commercial vehicles have been struggling for the last few years. Now, all three parts of the story are starting to look more and more positive. China has come back strongly and despite fears, continues to be among the fastest-growing economies. The whole Brexit event is now behind us and on the commercial vehicle side, initial signs of recovery can be seen. Most brokerage houses have got positive on Tata Motors. The whole medium and heavy commercial vehicle segment is seeing a virtuous cyclical upturn over the next few years. On the PV side, their cars have done reasonably well. All in all, Tata Motors seems to have hit a good patch as far as its business fundamentals are concerned. The stock was undervalued and has been out of favour for long. A bounceback of this proportion happens whenever a stock is under owned and undervalued. What is your sense on how the disinvestment and the OFS spree within the PSUs is panning out? Do they merit investment?Selectively. A lot of these PSUs have a lot of inherent strength in the businesses that they are in. Some of them also have years of delivery track record. What has, however, affected these PSUs in the past has been the interference from government and how capital allocation has been done at different points of time and the speed of decision making, the aggression and so on. There have been fundamental factors which have weighed over these PSUs and acted as an overhang on valuations when its peers in the private sector have got far superior valuation. They are attractive as far as the valuation is concerned and the government is capitalising on the markets and the present conditions to try and raise as much capital as they can because the big ticket items are taking time as we have seen in the case of BPCL. So the government is doing the smaller tickets to try to raise as much as they can. I would look at them on a selective basis. Also, I would classify these PSUs into two categories -- new age PSUs like the PFCs of the world or the IGLs and the older PSUs. The new age PSUs have done well, they are run professionally and they attract good talent. Some of them have good business models like IRCTC which got listed and have given humongous returns for shareholders. Selectively, one should look at some of these PSUs from an investment perspective. Also, the government seems to be putting more onus on accountability and that is a big positive. I would look at some of the non-banking PSUs on a selective basis. Some of these midcap NBFCs had a pretty good run in today’s session?They also had corrected quite a bit. Bajaj Finance had a close to 10% correction. With the market coming back, they are also bouncing back. My own view on this whole pack has been to stick to the larger names and the NBFCs which have a very strong domain leadership. If there is a company that has CV leadership and is substantially large or some gold finance company, or if you want a broad spectrum NBFC, then stick to big ones like Bajaj Finance. This is a period of further consolidation in the NBFC space and a market share grab is going to happen for the larger names because they are the ones which can raise capital at very cheap prices today. The market is flush with liquidity and interest rates are at all-time lows, but there is a large cross section which is not able to access these prices for that level of liquidity. The big and strong companies are going to get bigger. How have you assessed the earnings season so far? Where are you expecting the positive surprises will come from? The earnings season has got up to a very good start. Tech companies who normally start the earnings season are going through one of their best patches in recent times and more so the commentaries that they have put out, have been very strong. One of the largest private sector banks, HDFC Bank, came out with results and they have shown a remarkable amount of resilience at such tough times. I would think that this earnings season will be good given the strong momentum that we have seen so far. The PMI numbers being so strong, demand at the retail level has been very strong especially because of the festival season. We will see good numbers across the board. Yes, there will be some margin pressures because of higher raw material prices and that could probably impact the auto companies during the quarter, but to a large extent, that will be taken care of by the cost cutting measures that companies had put in place in the last six months. Across-the-board -- be it technology or the private banking pack, the numbers will be good. Within autos, the tractor pack will give some very good numbers this quarter. Retail will also come back quite strongly. The commodity pack and the metals will do well. The good results are already showing up in stock prices and the only disappointment that you will have to watch out for is that they could get sold out quite aggressively.
Categories: Business News

Covishield: Maldives, Bhutan will be first recipients

Business News - January 20, 2021 - 7:58pm
New Delhi: A consignment containing 100,000 doses of COVISHIELD vaccines and another consignment containing 150,000 doses of COVISHEILD vaccines will reach Maldives and Bhutan respectively on Wednesday.With this, Maldives and Bhutan will become the first recipient of India’s gift of the COVISHIELD vaccines, manufactured by the Serum Institute of India (SII).India’s vaccine diplomacy is yet another testament to its Neighbourhood First policy, in which Maldives occupies a special and central place, sources said. This is reciprocated in full measure by the ‘India First’ policy of the Government of Maldives. The Prime Minister during his visit to Maldives in June 2019 rightly said ‘Neighbourhood First is our priority; and in the Neighbourhood Maldives is priority’.The delivery of these vaccines in Maldives today fulfils the commitment made by Foreign Secretary during his visit to the Maldives in November 2020 when he announced that as a close partner and friend, India would accord priority to Maldives for providing vaccines, whenever these vaccines are ready.Since Maldives has a population of about 500,000, the donation will cover vaccination requirement of a significant percentage of the population. In addition, Maldives proposes to purchase 300,000 doses of vaccines from SII at commercial rates.Right from the start of the COVID pandemic, India has worked very closely with the Maldives in dealing with the pandemic. Among all neighbours, Maldives was the first and one of the largest beneficiaries of India’s Covid related assistance. This includes assistance in evacuation of Maldives nationals from Wuhan, supply of essential medicines and food items and deployment of a 14 member Rapid Response Team consisting of doctors and paramedics in March 2020 to guide and train the Maldivian authorities and personnel in tackling Corona threat.- When international borders were closed due to the pandemic in April 2020, Operation Sanjeevani was launched to meet the medicine requirements of Maldives. Under this operation, a special Indian Air Force plane airlifted 6.2 tonnes of essential medical supplies from India to Maldives. Also, as part of Mission SAGAR, Male was the first port of call for Indian Navy Ship Kesari which delivered about 600 tons of food items to Maldives in May 2020 thus ensuring food security.Maldives Foreign Minister has publicly announced that India has been the *first and the best responder* for the Maldives during this crisis. It is noteworthy that Indian assistance comes without any pre-conditions or expectations.Besides providing assistance to the Maldives in terms of medicines, food items, medical expertise, vaccines etc, India has provided the following assistance to the Maldives for its post Covid economic recovery:In order to support the tourism industry of Maldives, which is the main revenue earner for its government, it was decided to create an air travel bubble with the Maldives in August 2020. Maldives was the first country in South Asia with which an air travel bubble was established.The air bubble has been very successful and at present there are 40 flights to Maldives from 6 different cities of India. Creation of the air bubble has helped revive Maldives tourism industry thereby boosting its economy.Following creation of the air bubble with Maldives, with more than 60,000 tourist arrivals, India now occupies the number one spot as a tourist source in the Maldives. This position was occupied by China before the Covid pandemic.With tourism and fish exports coming to a grinding halt due to the Covid pandemic, the Maldivian economy was under immense strain. India’s steadfast support to Maldives was conveyed by PM Modi to the President of Maldives during their telecon in April 2020.In September 2020, India extended an urgent financial assistance of US$ 250 million to Maldives through investment by SBI in Maldives bonds. This was the first assistance package of such a magnitude that was announced by India to any country to deal with COVID-19 pandemic.Being an import dependent economy, Maldives bore the worst brunt of supply-chain disruptions during the Covid-19 pandemic. It was, therefore, decided to launch a direct cargo ferry service between India and Maldives to ensure a reliable and predictable supply chain for Maldives and boost bilateral trade. An announcement to commence the service was made by the Minister in August 2020 and the maiden journey of the cargo ferry service was flagged off by Minister of Shipping of India and Minister of Transport and Civil Aviation of Maldives in September 2020.The cargo ferry service has ensured food security to Maldives.On 16 April 2020, a telephone call between the PM and the Bhutanese PM on COVID-19 situation during which PM assured his Bhutanese counterpart of all possible support by India in to deal with the COVID-19 situation and beyond.In line with India-Bhutan unique and special relations, India ensured continuous supply of trade and essential items to Bhutan, despite COVID-19 related lock-downs. India so far has provided essential medicines and medical supplies- including Paracetamol, Hydroxychloroquine, PPEs, N95 masks, x-ray machine and test kits worth over INR 2.8 Core to the Royal Government of Bhutan. India has entered into an “Air Travel Arrangement” or “Transport Bubble” agreement with Bhutan.India has facilitated repatriation of over 2000 Bhutanese nationals stranded in various parts of India. Also facilitated repatriation of 14 Bhutanese nationals stranded in third countries through Vande Bharat flights to India and their onward journey to Bhutan.As part of India’s ‘science diplomacy’ initiative for strengthening clinical trial capacity for Phase-III clinical trials of Indian COVID-19 vaccine candidates in neighbouring countries, e-training courses are being organized by India’s Department of Biotechnology for the medical health professionals from the neighbouring countries. So far three such e-courses have been completed.On the request of Bhutan, India has also expedited the release of Rs 501 Cr for their reprioritized projects to meet the emerging challenges caused by COVID-19, in addition to other fund releases for the ongoing projects.India has taken several steps at the request of Bhutan to facilitate trade and transit during COVID times which includes opening of new trade route via Torsha Tea Garden (India) and Ahllay (Bhutan). New trade points at Nagarkata, Agartala, and Pandu & Jogighopa riverine ports will be operational shortly.
Categories: Business News

Top funds make a beeline at GIFT City

Business News - January 20, 2021 - 7:58pm
MUMBAI: At least half a dozen entities, including Kotak Mahindra Capital, ASK Investment Managers, Avendus Group and Multiples Alternate Asset Management, are planning to set up Alternative Investment Funds (AIF) in the Gujarat GIFT City.The funds are expected to anchor in the international special economic zone that offers relaxations to investors, unlike the local arena. They will gradually raise money for AIFs from global institutions only to deploy mostly into local industrial sectors.Kotak said it is planning to set up a fund at GIFT City for the attractive tax benefits.“We are considering setting up an AIF in the GIFT City given the attractive regulatory provision for our international limited partners, or LPs,” said Srini Sriniwasan, Managing Director, Kotak Investment Advisors. “However, at this point it is too early to talk about specifics with regard to any fund raise.”Mails/texts sent to other funds and investment firms didn’t elicit a reply until the publication of this report.Technology, life sciences, healthcare, pharma, fintech and consumption businesses remain some of the popular investment themes for deployment.Earlier last year, the government extended tax benefits for investors operating out of GIFT City for another ten years. The facility also provides exemption from dividend distribution tax (DDT), capital gains, and interest payment on loans taken from non-residents. “We are witnessing a substantial increase in interest in setting up of AIFs in IFSC,” said Siddarth Shah, senior funds partner at Khaitan & Co. “With the government relaxing norms for IFSC based AIFs, it has triggered a significant interest among domestic players in tapping this opportunity.”Looking at overall growth in the fund raising activities and pedigree of players exploring GIFT based AIFs, “it would not be surprising at all to see aggregate commitments for GIFT based AIFs breaching a billion dollars over the coming months,” he said.In 2015, market regulator SEBI had provided the basic framework for AIFs in the International Financial Services Centre at GIFT City.In 2012, SEBI introduced AIF framework with an intention to regulate unregistered pooling vehicles.“With the Indian economy poised to grow rapidly, and with investments in local projects set to multiply, there is heightened interest for setting up such funds in India’s IFSC at GIFT City,” said said Tapan Ray, Managing Director & Group CEO at GIFT City. “AIFs are popular and often preferred routes to channel investments across the globe.”At present, more than 600 AIFs are estimated to be registered with the capital market. Some of the key benefits include corporate tax holiday, single-regulator approval process, leveraging, and other tax-related exemptions. Many of these advantages don’t apply to AIFs set up locally.There is a 100% corporate tax exemption for 10 consecutive years out of the block of 15 years, for manager/ sponsor in IFSC. The government has also reduced the Minimum Alternate Tax (MAT) / Alternate Minimum Tax rate to 9%. No Goods and Services Tax (GST) applies for IFSC at GIFT City.Private equity and venture capital investments in India have witnessed a 6.6 per cent increase in 2020 to a record $39.2 billion from $36.3 billion in 2019, according to data compiled by Venture Intelligence.
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Nationwide survey to identify wilful EPFO defaulters

Business News - January 20, 2021 - 7:58pm
New Delhi: The government is set to begin a nationwide exercise to identify companies that did not deposit social security dues under the Employees’ Provident Fund Organisation (EPFO) and Employees’ State Insurance Corporation (ESIC) as part of a crackdown against wilful defaulters.Compliance cannot be totally based on self-declaration, said a senior government official. “We will undertake a survey to identify units and establishments which have failed to pay their provident fund, pensions and other dues towards their employees,” the official told ET on condition of anonymity. There is a growing view within the government that some monitoring is needed in the absence of physical inspections to check wilful defaults. There has been an increase in complaints about companies deducting employee contributions towards these schemes but not depositing. Physical inspections were stopped a few years ago to enhance ease of doing business in the country. The government had also temporarily suspended e-inspections during the pandemic but it is now keen for an on-ground assessment, especially in the wake of the Covid-19 pandemic. The survey will cover entities that did not deposit social security dues of employees during the pandemic and before that. The initial round of exercise could involve corroborating the information available on the Shram Suvidha portal with relevant information available across other government related portals. This would be followed by physical inspections in cases where defaults have been significantly higher while e-inspection notices will be sent to others. Establishments with 20 or more workers are covered under the EPFO. As per the scheme, both employees and employers contribute 12% each of the workers’ monthly wage, capped at Rs 15,000, every month towards PF, pension and employees’ deposit linked insurance (EDLI) under the EPFO. While employees' 12% contribution goes entirely to the provident fund kitty, 8.33% of the employers’ share goes to pension accounts, 3.67% goes to PF account and the rest goes to the EDLI and administrative charges. Currently, there are more than 600,000 establishments covered under the EPFO. Establishments with 10 or more workers are mandatorily covered under the ESIC, with workers’ wages capped at Rs 21,000 a month. Under the scheme, which provides medical and other benefits to the beneficiaries, employees contribute 0.75% of the wages while the employers contribute 3.25% of the wages, with a total contribution of 4% against each employee. More than 1.2 million establishments are covered under the ESIC. EPFO data shows 5,554 establishments remitted their dues amounting to Rs 214.38 crore in respect of more than 1.09 million employees while 1,594 establishments declared dues of Rs 105.54 crore and reasons for non-payment thereof in respect of about 797,000 employees or universal account numbers (UANs) after the EPFO restarted sending e-inspection notices to defaulters on the Shram Suvidha Portal. “The main reasons for non-payment intimated by the employers in the e-inspection forms included funds frozen, funds not received from the principal employer, legal dispute regarding coverage, natural calamities, wages not disbursed and technical issues,” the EPFO told ET. The EPFO had suspended e-inspections from March-June 2020 to ease the burden of employers during the lockdown on account of Covid-19. 80357457
Categories: Business News

Biden's immigration bill to benefit Indians

Business News - January 20, 2021 - 7:58pm
Washington: Joe Biden, hours after being sworn in as the 46th President, will send a comprehensive immigration bill to Congress which among other things proposes to eliminate the per country cap for employment-based green cards, a move that would benefit hundreds and thousands of Indian IT professionals in the US, whose current wait period for legal permanent residency runs into several decades.Called the US Citizenship Act of 2021, the legislation modernises the immigration system, according to an incoming White House official. It prioritises keeping families together, grows the country's economy, responsibly manages the border with smart investments, addresses the root causes of migration from Central America, and also ensures that the US remains a refuge for those fleeing persecution, said the official, who spoke on condition of anonymity. Describing this as a common-sense approach to solving immigration challenges, focusing on what works, the US Citizenship Act 2021 creates a roadmap to citizenship for a population that lives and works in the United States. January 1, 2021 is the cut-off date for those undocumented workers. Two-thirds of undocumented immigrants have been in the US for 10 years or longer. It provides an immediate pathway to green cards for individuals who meet certain criteria as they were dreamers or have been recipients of the Temporary Protected Status (TPS), or are farm workers and meet certain criteria. They can apply for citizenship three years later. For those who don't meet those qualifications, there will be another path to citizenship, where they would be in an interim status for five years. Afterwards they would be eligible to apply for citizenship within three years after becoming green card holders. According to the incoming White House official, the bill reforms the family-based immigration system by recapturing unused visas to clear the backlog, eliminating the lengthy waits, and it increases their per country visa caps. It also eliminates the bars and other provisions that have kept families apart. "The bill also clears employment-based immigration backlogs by reducing those backlogs altogether, eliminating the per country. It makes it easier for graduates of US universities with advanced degrees, in the Science, Technology, Engineering and Mathematics (STEM) fields to stay in the US. It also improves access to green cards for workers from the low wage sectors," said the official. "It eliminates again, many of the unnecessary hurdles for employment based green cards. The bill also includes the No Ban Act that prohibits discrimination based on religion and limits presidential authority to issue future bans," the official added. Indian IT professionals, most of whom are highly skilled and come to the US mainly on the H-1B work visas, are the worst sufferers of the current immigration system which imposes a seven per cent per country quota on allotment of the coveted Green Card or permanent legal residency. Post the November election outcome, a document of the Biden transition had said he will reform the visa system that has kept so many Indian families in waiting for too long. "He (Biden) will support first reforming the temporary visa system for high-skill, specialty jobs to protect wages and workers, then expanding the number of visas offered and eliminating the limits on employment-based green cards by country, which have kept so many Indian families in waiting for too long," the document stated. Biden's bill also increases the diversity visa programme from 55,000 visas to 80,000 per year. This bill is Biden's vision to fix the immigration system once and for all. But it's only the Congress that can provide immigrants with a path to citizenship. Biden "looks forward to working with the Congress to fix our broken immigration system and protect vulnerable populations, including dreamers, those with TPS farm workers and essential workers," said the official.
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Small, Mid-size offices resilience to be tested in 2021 as Rs 6,800 cr lease renewals due

Business News - January 20, 2021 - 7:58pm
Small and mid-sized office spaces across India will likely face a major test of occupancy and yields this year as lease agreements pertaining to annual rentals worth Rs 6,800 crore are due for renewal in 2021.The sensitivity of rental yields to these upcoming renewals will set the tone for businesses amid potential demand shrinkage in the aftermath of the pandemic and adoption of the work-from-home model by many businesses.Of the total expected renewals, 65% are for offices measuring less than 10,000 sq ft. More than 1 lakh sq ft contributes 25% of these rentals, showed data from real estate data platform Propstack.Mumbai leads the number of leases that are expected to expire this year, while Bangalore tops the area of these office leases due for renewal. In Delhi-NCR, a total of 958 leases will expire this year and that forms nearly 20% of the total agreements that are due for renewals.“Considering that many corporates have adjusted to work from home, we believe that 2021 will be a year of reckoning for corporate real estate in India. Mumbai has the highest rent per sq ft while area absorption is the highest in Bangalore,” said Raja Seetharaman, director at Propstack. “With India recording one of the highest work-from-home productivities, both cities will be tested.”According to him, corporate real estate will continue to evolve and every company will find a balance by deploying a hybrid model combining regular office and work-from-home options.The expected pattern of lease renewals and expiries in smaller size offices this year is likely to result in occupiers and tenants considering more flexible and co-working spaces.“Chances are high that the smaller and mid-sized businesses would opt for professionally managed and easy budget co-working and flexible offices in the backdrop of Covid-19 pandemic-led cost optimisation exercises among these companies,” said Naveen Nandwani, MD, Commercial Advisory & Transactions, Savills India. “The demand for flexible workspace options is already gaining traction and we are seeing acceptance of the concept among large enterprises.”Nandwani is also heading Workthere, the firm’s recently started coworking listing platform in India.Offices up to 50,000 sq ft account for 75% of the renewals. Leases with more than 1 lakh sq ft office space account for 3% in total number but 25% of rentals, the data showed.As organisations reassess their overall office space requirements and look for workplace flexibility in the wake of the pandemic, activity in the co-working offices segment is likely to gather further momentum.According to a recent study, leasing by co-working operators is expected to increase 42% on-year in 2021 to 4.9 million sq ft with shared offices likely to gain greater significance in the post-Covid world.
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Auto dealers' body urges FM to introduce vehicle depreciation benefits for individuals in Budget

Business News - January 20, 2021 - 7:58pm
NEW DELHI: Ahead of the upcoming Union Budget, the Federation of Automobile Dealers Associations (FADA) on Wednesday urged Finance Minister Nirmala Sitharaman to introduce benefits of claiming depreciation on vehicles for income tax-paying individuals and extend the depreciation period for corporates.In its budget recommendations, FADA also said auto dealers should be kept out of annual TCS (tax collected at source) of 0.1 per cent saying it is a huge financial burden on the automobile retail industry."The upcoming 2021 Union Budget should be focused on measures to revive the Indian economy from the pandemic slowdown and boost consumption led demand."The Indian automobile industry is a barometer of the Indian economy and its revival will in turn pull up the economy," FADA President Vinkesh Gulati said in a statement.He further said, "The auto retail industry is one of the key pillars of India's growth trajectory, contributing around 4.5 million jobs. We look forward to a demand-led growth-oriented budget."Gulati recalled that "Sitharaman has already expressed her intention to revive growth and boost investor confidence".In its budget recommendations, FADA urged the finance minister to introduce benefits of claiming depreciation on vehicles for individuals paying income tax, and extend the depreciation period for corporates."This will boost vehicle demand during these extraordinary times and also increase the number of individuals filing I-T (income tax) returns and promote growth in GST collection for the government," the apex national body of automobile retailers said.It added that the increase in depreciation rate for all types of vehicles which was valid till March 31, 2020, should also be extended for 2020-21 and it will fuel demand further."The Finance Bill 2020 introduced TCS of 0.1 per cent to be charged annually w.e.f October 1, 2020."This is a huge financial burden on the automobile retail industry, tying up working capital until dealers receive refunds. It will affect demand since vehicle acquisition costs will go up and hence auto dealers should be kept out," FADA said.FADA also called for reduction of corporate tax for proprietary and partnership firms saying it will boost morale and sentiment of traders, who together employ 5 million people, 2.5 million of whom are on direct employment."The government reduced corporate tax to 25 per cent for private limited companies with a turnover of up to Rs 400 crore last year. This benefit should also be extended to all proprietary and partnership firms since most traders in the auto dealership community are in this category," it said.Reiterating the demand of the auto industry for vehicle scrappage policy, FADA said the government must design a robust inspection and certification (I&C) policy or end of life vehicles (ELV) policy for vehicles in the country."However, as both the above policies would take time to be effectively implemented, there is a need for an immediate scheme based on incentive for encouraging voluntary scrapping of old vehicles and replacing them with newer ones. The new vehicles are cleaner and meet stringent emission requirements," it added.FADA said the scrappage policy implementation should be focused on incentives rather than strict mandates."It is more feasible to encourage people than to force them to replace their old vehicles with new ones. We have already witnessed a similar success in the voluntary surrender of gas subsidies by consumers," it said.All vehicles registered in India until March 31, 2000 should qualify under the modern fleet vehicle replacement scheme, it added.Similar schemes have been successfully implemented in the US, Canada, the UK and Italy by providing fiscal incentives and concessions for replacement through a single-window fleet modernisation programme, it added.
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Double in 3 months! Is it time to sell Tata Motors stock now?

Business News - January 20, 2021 - 7:58pm
ET Intelligence Group: Tata Motors’ stock price has doubled in the past three months. Though rumours of a possible tie-up with Tesla garnered attention, a major chunk of the gain was on account of improving domestic business and cheaper valuation.The company surprised analysts by gaining market share as passenger car volume revived over the past six months. It clocked a market share of 8.5% in December 2020 compared with 5.1% in February following 40-131% year-on-year improvement in sales volume over a span of six months.The turnaround in the passenger vehicle (PV) business was due to a quick improvement in production levels in the post-lockdown period, attractive pricing and differentiated positioning of car models. The company introduced new models to fill up the gap in its product portfolio.The tentative production schedule of Tata Motors and interaction with suppliers suggest that the momentum will continue in the next fiscal year. A Tata Motors supplier said that the volume projection of the top selling models including Nexon and Altroz has been consistently improving on a month-on-month basis.Analysts expect the company to report a volume of 2.8 lakh and 3.3 lakh units for FY22 and FY23 in the PV segment. The company is in a position to surpass these estimates if it is able to maintain the tentative production schedule.The turnaround has promoted analysts to consider the car business while valuing the company’s operations in contrast with the earlier trend of ascribing either zero or negative valuation to the segment. The enterprise value of the PV business is now considered to be 0.4-0.6 times its estimated sales for FY23. When compared with the valuation multiple of 2-2.2 for Maurti Suzuki India, the country’s largest PV maker, there appears to be a scope for further improvement in Tata Motors’ PV valuation if the company sustains the growth momentum in the coming quarters.In addition, analysts have also increased the valuation of the company’s truck business in line with that of the pure-play company Ashok Leyland given the expectation of a strong volume growth for the truck segment in the next fiscal year. Typically, the upcycle in the truck segment remains for four years. This augurs well for revenue and margin of Tata Motors, which commands nearly 50% market share in the domestic truck segment.The superior valuation multiple to the PV and truck business has increased the fair value of the stock by Rs 50-55 per share to Rs 130-140 per share. The company’s UK subsidiary Jaguar Land Rover, which accounts for nearly 80% of the consolidated revenue, contributes nearly Rs 200-250 per share. It means the fair value of the stock is around Rs 330-390. At Wednesday’s closing price of Rs 274.9 on the BSE, it traded below the fair value. The stock is available at 1.4 times one-year forward book value, which is at 35% discount to the long-term average.
Categories: Business News

Bajaj Finance Q3 results: Net profit falls 29% to Rs 1,146 cr; provisions, bad loans rise

Business News - January 20, 2021 - 7:58pm
NEW DELHI: Bajaj Finance on Wednesday posted a 29 per cent year-on-year (YoY) drop in net profit at Rs 1,145.98 crore for the quarter ended December 30.Net Interest Income (NII) for the quarter was Rs 4,296 crore as against Rs 4,535 crore in the year ago quarter, registering a drop of 5.27 per cent. The company said this was predominantly due to higher reversal of interest income at Rs 450 crore versus Rs 83 crore in Q3FY20 and higher cost of liquidity surplus at Rs 213 crore versus Rs 83 crore.The consolidated results of Bajaj Finance include the results of its wholly owned subsidiaries Bajaj Housing Finance Limited (BHFL) and Bajaj Financial Securities Limited (BFinsec).The company provided Rs 1,352 crore for loan losses and provisions, which was significantly higher than Rs 831 crore it provided in the same quarter last year. During the quarter, the company has done a one time write-off of principal outstanding amount of Rs 1,970 crore and interest outstanding of Rs 365 crore on account of Covid-19 related stress.The company holds a management overlay provision of Rs 800 crore as of 31 December 2020 for Covid-19 related stress.Gross NPA and net NPA stood at 0.55 per cent and 0.19 per cent respectively, as against 1.61 per cent and 0.70 per cent last year. The financial companies have been barred from declaring bad loans by the Supreme Court. Notwithstanding the order, the GNPA and net NPA ratio would have been 2.86 per cent and 1.22 per cent, respectively, Bajaj Finance said.The provisioning coverage ratio of the company stood at 65 per cent. Provisioning coverage on stage 1 and 2 assets was 190 bps as of 31 December 2020.The NBFC giant said new loans booked during Q3 were 6.04 million as against 7.67 million in the same quarter last year. Customer franchise stood at 46.31 million as against 40.38 million. The company acquired 2.19 million new customers in the quarter compared to 2.46 million in last year.Assets under management (AUM) stood at Rs 1,43,550 crore as against Rs 1,45,092 crore. Liquidity surplus stood at Rs 14,347 crore as against Rs 11,384 crore.
Categories: Business News

68% of professionals see learning as the key to landing better opportunities: Survey

Business News - January 20, 2021 - 7:58pm
Bengaluru: Four in 10 mid-career professionals felt stagnant in their careers last year, and professionals in consulting, finance, and healthcare/pharma were more likely than others to feel stuck, finds a new survey.The annual survey report by Simplilearn - an online bootcamp for digital economy skills training - titled ‘IT Skills Training Trends: 2020 and 2021’, was conducted to understand how 2020 affected work environments and what aspirants are doing to prepare for the various eventualities that they foresee in 2021. The survey also finds that 14% respondents lost their jobs last year.However, professionals are taking a proactive approach to career success in 2021.Three in 10 respondents saw the pandemic as an opportunity to learn new skills; this number rose to 49.5% of employees in small and medium enterprises. Furthermore, 67.5% of professionals see learning as the key to landing better opportunities and plan to start learning programmes in 2021. Also, 66% of professionals are either enrolled in training programmes or plan to start in 2021.The survey also finds that technology professionals will be in demand in 2021, as much because of the pandemic as in spite of it. 54.3% of professionals expect upskilling to provide better opportunities in 2021 or lead to pay raises and promotions in their current jobs, and 20% expect upskilling to future-proof their careers. 25.8% expect upskilling to unlock a new career path that lets them follow their passion. “The work-from-home scenario which is a by-product of the effects of the pandemic and the new normal, has driven a clear trend to online learning. With individuals getting a little extra time for self-development, we saw a 60% jump in enrollments in the early days of lockdown itself. In fact, usage on the platform has doubled compared to pre-pandemic times,” Krishna Kumar, founder and CEO, Simplilearn, said.Another factor which contributed to this was career uncertainty and job losses which made it clear to many professionals that digital skills is key to career stability and growth, Kumar added.More than 5,000 Simplilearn learners, comprising both individual and corporate learners, participated in the survey. 19.4% of survey respondents were freshers, 51.3% mid-level, and 29.2% senior-level professionals. A majority of the respondents were from the IT sector, followed by manufacturing, consulting and finance.Over the last six months, Simplilearn has on-boarded over 50,000 corporate learners across 12 countries, led by India, the USA, Thailand, and Oman.
Categories: Business News

Trump's legacy: A more divided America

Business News - January 19, 2021 - 4:57pm
WASHINGTON: When President Donald Trump delivered his inaugural speech on Jan. 20, 2017, he promised an end to "American carnage," a bleak and dysfunctional nation he had promised that he alone could fix. Closing out his presidency exactly four years later, Trump leaves behind an even more polarized America, where thousands are dying daily from the COVID-19 pandemic, the economy is badly damaged and political violence has surged. Trump didn't create the bitter differences that have come to define American life. Still, he seized upon many of them as tools to build his power base, promising to uplift rural America and the broader working class he said had been neglected by the Washington establishment. When thousands of his angry followers - the vast majority of them white - marched on Capitol Hill on Jan. 6, they rallied behind Trump's false claims of a stolen election. The rioting that ensued left a police officer and four other people dead, dozens wounded and a nation shaken. A major part of his legacy when he departs the White House on Wednesday is likely to be Americans more politically and culturally estranged from each other than they were when he took office. At the heart of that divide, Trump's opponents say, is race. Early in his presidency, he initially resisted denouncing white nationalists after a deadly 2017 rally in Charlottesville, Virginia, fueling perceptions that he sympathized with their cause. His harsh rhetoric often worsened racial crises that flared over police killings of Black people on his watch. "Sadly, he is the natural outcome of the history of divide and conquer," in American race relations, said Reverend William Barber, a prominent civil rights activist and co-chair of the Poor People's Campaign, an anti-poverty, anti-racism movement that Martin Luther King helped organize in the 1960s. "The thing is, he just pushed it all the way." Trump has repeatedly denied any racist animus. His staunch supporters argue that he served as a corrective to prior administrations of both parties that let down the poor, the working class and rural regions that have struggled in recent decades. That base of support remains large - another likely legacy of the Trump era. Alex Bruesewitz, an organizer for Stop the Steal, a pro-Trump group protesting the election results, said the president retains his appeal to working-class voters. "They felt like they were the forgotten men and women. And the president said, 'You are forgotten no longer'," Bruesewitz said. Trump's refusal to concede defeat to Democratic President-elect Joe Biden, and his encouragement of his supporters to descend on the Capitol, mean his term is ending amid a swirl of untruths that millions of Republicans have taken to heart, creating a serious challenge for the new administration to win their trust. The disorderly transfer of presidential power comes against the backdrop of the increased spread of a pandemic that Trump has downplayed, and mounting financial hardships from the deep recession spurred by it. Keeping the country on edge, and prompting security lockdowns in Washington and state capitals, is concern that the pro-Trump mob's siege of the Capitol on Jan. 6 could embolden far-right extremists to further violence. "There has never been a presidency in modern times when America's dysfunction has been so fully on display," said Aaron David Miller, a former State Department adviser to Republican and Democratic administrations who is now at the Carnegie Endowment for International Peace in Washington. White House spokesman Judd Deere rejected the notion that Trump's legacy lay in tatters. In a written statement to Reuters, Deere cited a list of what he considered Trump's economic accomplishments, such as getting the country on the path to recovery and deregulatory moves, which have included loosened restrictions on auto emissions and oil drilling. He also argued that the president secured the border with Mexico, rebuilt U.S. military strength, brought some troops home and helped orchestrate development of a coronavirus vaccine in a matter of months. "He leaves office having made America safer, stronger, more secure," Deere said. He declined, in the statement, to address racism accusations against the president. 'AMERICA FIRST' Trump did, in fact, deliver on a number of priorities for his Republican Party. In partnership with Senate Majority Leader Mitch McConnell, he overhauled the U.S. judiciary, giving it a more conservative bent with the appointment of three Supreme Court justices and the fast-tracking of more than 200 federal judges. Trump pushed through massive tax cuts for corporations. The economy expanded faster than it had under predecessor Barack Obama, and unemployment reached record lows. But the solid economy, which he hoped would be his biggest re-election selling point, was swept away in a wave of coronavirus-driven shutdowns that plunged the country into the worst downturn in nearly a century as joblessness soared. The national debt, which had ballooned during his term, grew even more in his final year. Trump catered to his base by cracking down on illegal immigration, but critics condemned his approach as too harsh. Biden plans to reverse much of it, including a travel ban on a handful of Muslim-majority nations. Erecting a barrier along the U.S.-Mexico border was a signature pledge of his 2016 campaign. Less than half of the 1,000 miles he promised was built, much of it where existing barriers stood - and Mexico never paid for it as Trump had vowed. Abroad, Trump often invoked his "America First" agenda. He dismantled or disrupted multilateral pacts, withdrawing from the Paris climate accord, which committed nearly every nation to cut greenhouse gas emissions; and the Iran nuclear deal, which eased sanctions in exchange for curbs on its nuclear program. His administration eroded bedrock alliances like the North Atlantic Treaty Organization, antagonized traditional partners and indulged autocrats such as Russian President Vladimir Putin and North Korean leader Kim Jong Un. But Trump has been credited by Republicans as well as many Democrats for a tougher stance on China. He slapped tariffs on billions of dollars of Chinese imports, sanctioned top officials over a crackdown in Hong Kong and imposed penalties on Chinese telecommunications companies. His administration faced some criticism, however, for provoking a trade war with Beijing and reverting to Cold War-style rhetoric. Trump has also won praise for brokering historic accords to normalize relations between Israel and four once-hostile Arab neighbors. And he reduced U.S. forces in conflict zones such as Afghanistan, Iraq and Syria, though he failed to completely extract America from "endless wars" as he promised in his 2016 campaign. "Trump did accomplish some useful things," Richard Haass, a former senior State Department official who is president of the Council on Foreign Relations, wrote on the think tank's website. He deserves credit, Haass said, "for moving the U.S. policy vis-a-vis an increasingly repressive, powerful, and assertive China in a more sober, critical direction." But what the president got right, Haass added, was "dwarfed by what Trump got wrong," citing foremost "the damage he has done to American democracy." FRINGE SUPPORTERS Trump's political strength stemmed, in part, from his ability to pose as a populist champion to tap into white rural and working-class resentment that has been building for years, as the United States became a more multiracial society and their communities felt the brunt of globalization, analysts say. Some far-right fringe groups have also flocked to Trump's banner. Rioters who gathered at the Capitol included some of the more extreme elements of his base, including members of QAnon, who espouse a debunked conspiracy theory that claims Trump is fighting a Democratic cabal of Satan-worshipping pedophiles and cannibals. "Trump built a coalition out of white supremacists, conspiracy theorists and bigots," said Douglas Brinkley, presidential historian at Rice University in Houston. Trump has denied any affinity for such groups or welcoming them into his fold. "I'm the least racist person you'll find anywhere in the world," he insisted in 2019. Accusations against Trump of xenophobia extended to his immigration policies. One White House official told Reuters on condition of anonymity that it was a "fiasco" when the administration in 2018 separated several thousand children - including infants - from their undocumented parents at the Mexican border. Images of crying youngsters crowded into chain-link pens were beamed worldwide. While some Trump supporters have turned away from him since the assault on the Capitol, most appear to be sticking with him. Seventy percent of Republicans remain loyal to Trump, according to Reuters/Ipsos polling done in the immediate aftermath of the siege. Many activists say they're willing to abandon the party for any perceived slight against their leader. "I see Trump as a fighter for the people that actually work and put the backbone into this country," said Will Williams, a Trump supporter from Oklahoma. "His legacy will be remembered by me as a great man that took on the corruption in this country." Trump's invocation of "American carnage" at his own inauguration, painting what many Democrats considered an overblown dystopian vision, was an appeal to that base and also to the urban poor. He said their dreams had been stifled by economic distress, crime, drugs and loss of jobs to other countries. Opponents say Trump, a wealthy former real estate developer, did little to help them. He sought repeatedly to kill the Affordable Care Act, also known as Obamacare, which helped millions of Americans get health insurance. His tariffs war with China hurt American farmers and didn't trigger the U.S. manufacturing revival he had promised. And his tax cuts mainly benefited the rich. REPUBLICAN SOUL-SEARCHING? As Trump heads out the door as the first president in U.S. history to be impeached twice, most recently on a charge of inciting the Capitol riot, the Republican Party's future is deeply uncertain. Trump remade it in his image, replacing traditional conservative principles of fiscal austerity and commitment to international alliances with large deficits, his "America First" approach and a habit of frequently issuing policy shifts and trial balloons by Twitter. He demanded unwavering loyalty and turned on anyone who opposed him. Now that Republicans find themselves relegated to the opposition in the Senate, the question is whether Trump's spell over the party - and "Trumpism" as a viable movement - will endure when he no longer wields the levers of government power. Trump's base remains a potent electoral force. It handed him more votes - some 74 million - than any Republican in history. Fear of antagonizing them was evident when nearly half of Republican House members, fresh off the mob attack that had sent them scuttling for cover in the Capitol basement, endorsed a failed effort to block certification of Biden's victory. But some cracks have formed in Republican ranks in response to the Capitol mayhem, and the party may be in for a period of soul-searching. Trump's own political future could be in jeopardy as well. If convicted by the Senate in an impeachment trial that would occur after he leaves the White House, Trump could be banned from holding office again. Bob Corker, a former Republican senator from Tennessee, said Trump had been a "consequential president" in terms of enacting many policies Republicans wanted. "But in the process of being purposely divisive and perpetuating untruths" about the election, "he undermined our democracy," Corker told Reuters. Corker said the Republican Party needs "to go in a direction not led by him. We've got to redefine who we are."
Categories: Business News

Execute last year’s budget proposals: Exporters

Business News - January 19, 2021 - 4:57pm
The pandemic had a debilitating impact on the country’s exports for most part of last year. Except for the positive momentum in September when exports moved up 5.99%, the performance in other months reflected the trail of devastation caused by the virus outbreak.December showed an increase, albeit marginally, at 0.14%. Sectors such as petroleum products, leather and leather manufactures, marine products and coffee were among some of the product categories that registered a negative growth during this period. On the upside, labour-intensive sectors such as carpets, ceramic products and glassware and handloom products among others showed positive trends.Exporters hope that the coming time would mean recovering what they have lost in 2020. Ajay Sahai, DG & CEO, Federation of Indian Export Organisations (FIEO), says that he is hopeful of a V-shaped recovery in world trade. “The Christmas and New Year sales have been pretty encouraging. This implies the inventory will be liquidated and demand for new orders will come,” he adds, bullish on the road ahead.Sahai added that addressing the supply side challenges and concerted efforts by the government at this point can go a long way in offering the much needed push to exports.Schemes for a leg upIn February last year, Finance Minister Nirmala Sitharaman had announced the NIRVIK scheme, which would provide high insurance cover for exporters and reduce premiums for small exporters. “To achieve higher export credit disbursement, a new scheme NIRVIK is being launched which provides for high insurance cover, reduction in premium for small exporters and simplified procedures for claim, settlement,” Sitharaman had stated while presenting the Budget last year.However, operational rollout of the scheme still hasn’t happened so far. Exporters feel that institutionalising the scheme could prove timely and facilitate lending more seamlessly. “It will offer a good cushion to banks to lend to exporters. Under this, the interest premium to exporters is expected to come down, which will be of immense benefit. Also, the enhanced insurance cover will play a big role as liquidity has been at an all-time low and defaults are bound to happen. It will be a win-win situation if the scheme comes through,” Sahai added. 80340317The other anticipated measure has been operationalisation of the new Remission of Duties or Taxes on Export Products (RoDTEP) scheme which was effective from January 1, 2021. The scheme which replaces the Merchandise Export from India Scheme (MEIS), will reimburse the taxes, duties or levies at the central, state and local level which are currently not being refunded under any other mechanism. “This scheme is going to give a boost to the domestic industry and Indian exports providing a level playing field for Indian producers in the International market so that domestic taxes/duties are not exported,” the PIB release had stated in March last year.The refunds under RoDTEP have been expected to be a step towards ‘zero-rating’ of exports, along with refunds like Drawback and IGST, which will enhance cost competitiveness in international markets. However, the uncertainty on rates of reimbursement so far has meant that exporters are still not clear on how to cost their products. Exporters have been rooting for notification of rates as the need of the hour as this would enable complete rebating of Indian exports by refunding the taxes, including embedded taxes.Pressing issues and concernsAnd then there have been other issues playing havoc as far as exports are concerned. Container shortage owing to the export-import mismatch has been creating much trouble, with air and sea freight seeing a considerable spike.Exporters feel that the myriad uncertainties in logistics is making competitiveness a big question mark. “The logistic issues have been very specific from a Covid perspective. We are getting into our peak season - by all accounts, it is going to be a 100% increase even in key shipments now. That is really unbelievable and we have seen nothing like that,” highlights Pankaj Khandelwal, Chairman and Managing Director of INI Farms, a horticulture company with 85% exports in its portfolio mix. The company’s agri exports, especially perishable items, is high from Jan - early May with 70-80% exports done during this period.Khandelwal elaborates further stating that while the government has been offering some support within the domestic movement, the scenario hasn’t been the same for exports. “On the exports side, there is absolutely nothing. Till now, things were being managed in some way because of off peak season. However, air freight has continued to be a 3x of normal and that has had a huge impact on perishables. Sea freight has been 15-20% higher. But now in peak season, all indications are that even sea freight will be 100% higher than last year and that is something that the government urgently needs to address,” he asserts. 80340342Echoing similar views, Mahavir Pratap Sharma, Immediate Past Chairman, Carpet Export Promotion Council (CEPC) says key issues relating to container shortage need immediate attention as it is reducing competitiveness, especially in the low end segment. “We should insist on shipping lines to have enough containers in India. The Government has to put a cap on freight charges for sea freight at least as that mode is for cargo alone. Airlines should be asked to run more cargo planes before passenger planes go back to normal,” he rationalises.Will exports pick up in 2021?While there are many factors acting as constraints in the present time, will 2021 also bring some hope and happiness for exporters? Exporters feel it can be a mixed bag, especially with lockdowns resurfacing across the globe to tackle the spate of fresh coronavirus infections taking over. “Lockdowns are on in European countries, so much can’t be said right now. It will depend on how vaccines succeed not just in India, but also in the global markets. We can presume the second half of the year to do better,” says Puran Dawar, Northern Region chairman, Council for Leather Exports (CLE).Moreover, getting a fix on supply chain issues will be a key determinant of export recovery in this year. “There is a good possibility for exports to deliver a 5-7% growth over last year depending on how the supply chain issues are addressed. If these are not resolved in the first six months, we may see contraction by 8-10%. But if that is taken care of, it should be business as usual in the last six months of the year,” adds Khandelwal optimistically.While uncertainty may well be the dominant factor hovering over the country’s exports at present, there is also hope that the coming time may just see a turnaround. As Sahai of FIEO puts it, “We may have bottomed out, but the way forward from that is only growth.”(Illustrations by Sadhana Saxena)
Categories: Business News

3 sectors that may throw up multibaggers

Business News - January 19, 2021 - 4:57pm
Look for semi midcap and smallcap gems in textile, second-tier steel and manufacturing sectors, says Sanjay Dutt, Founder & Director, Quantum SecuritiesWhere are you treasure hunting in the semi midcap or the smallcap pond?It is a good time to look at the textile sector. There are a lot of companies in the textile sector, maybe even lower than that Rs 2,500-crore market cap because that is one sector which the government would focus on, plus it is coming out of a long cycle of mess and a lot of problems. I am looking at opportunities there. I have always maintained that in the Rs 2,500- 10,000-crore range, there are a large number of second-tier steel companies which over the next year or two would give good returns. I am a believer that metals have more steam to go with a pullback. Similarly, there are a good number of second-tier manufacturing companies belonging to good, well established families. You will be able to find many of them in cement, in ancillaries and a lot of other places. So there is a huge basket available in that space. There will be 50 to 100 companies worth evaluating and considering which will give good entry opportunities if the market cracks. I think these are the pockets of the smaller companies which are still off the radar and people are not focussing on them. This is the place where investors need to be in but obviously this is a difficult space because you need to do a lot of homework and understand things, read the annual reports and research reports, it is not easy to get the next 2x or 3x stock within this universe. What will you completely stay out of?There would not be anything that is a clear avoid. All portfolios normally have underweight and overweight positions but at this point of time, contrary to consensus on the Street, I would be a little wary of the IT companies which have started to trade at closer to 30 multiples. Similarly, a lot of branded consumer plays are there also. I would be underweight for the time being on companies which are trading in the multiple of 50, 70 or more. Those are the two places I would have very little exposure to in my portfolio. I saw you retweeting a view on Reliance the other day saying that it has a return on equity of barely 9% which does not even cover the cost of equity and the ROE despite significant profit growth projections is still expected to be 10-11% over the next two years. How does it all tie in with investment into Reliance?At this point of time, particularly in the 1900-2200 range where Reliance is trading, it has got most of the positives priced in, particularly because some of the platform businesses where there have been a lot of excitement. Those businesses are going to take a substantially long period of time to actually see cash coming in. In order to see positive returns and capital coming in, they would borrow a good amount of capital and the petrochemicals business is exactly where the ROE and all those things have been coming out. But even the petrochemicals business does not seem robust enough right now to actually carry the stock getting further from the current levels. It is in the upper end of the range but longer term, once the whole unlocking story is out, we will have demerger of various verticals into separate listed companies -- be it retail or the Jio IPO that have been talked about. Once that happens, we may have some upside coming in but as a stance, plus minus 10% or 15% is all that Reliance has to offer over the next 12 months. Out of insurance, hospitals, drug companies, diagnostics -- where is the opportunity for not just in the short term but for next two to five years?In the broad healthcare space, priority would be diagnostics because it has phenomenal potential if you tag this with insurance and other issues particularly in Covid. People are going to get more timely health checkups and in any case, healthcare in India is evolving in such a manner that the entire methodology has changed. As soon as you land up with a physician or a specialist, the first thing he asks you to do is some tests. I think diagnostics is a very big market in India and it will continue to grow and the existing players will really become big and some more new players will come in. It is not as capital intensive as hospitals. It is more of a logistics-oriented business and there is a phenomenal amount of mechanisation, automation, technology that has gone into this business. So, that is where I would like to be. But overall healthcare as a theme is very positive. After that insurance is a big bet. So diagnostics along with insurance is the biggest opportunity in the healthcare space. Hospitals yes, but hospitals are very capital intensive businesses and it requires a huge amount of investments which takes a long time to give returns. So to cut a long story short if you want to take exposure to the healthcare segment, I would be into diagnostics and insurance and of course individual pharma companies which are way ahead. How should one bet on internet or e-commerce IPOs?It is near impossible to get the right valuation metrics for these companies because most of these companies tend to burn a huge amount of cash in the initial phases which they are in right now. Companies like Zomato are burning a lot of cash but the bet you always make is on the company that is going to emerge as the winner. After a few years of cash burn, the leader finally starts breaking in profits. So the IPOs get lapped up and no one looks at cash flows or anything. There is enough liquidity in the system but sustainability is a whole question. It is like what we saw in Burger King. The kind of volatility we have seen there in just a short span of a few weeks. Exactly the same thing would be repeated ee in some of the internet companies. But they are very exciting businesses and you need to evaluate them carefully and have some of them in your portfolio for a longer term five-ten years. I am very optimistic on something like Zomato. What is a realistic return expectation or a year-end target that an investor can keep in mind?You have to be smart enough to just sit aside and get in when there is a deep cut in the market. You obviously cannot get in at the bottom and by deep cut I mean if the market falls about 5-8% and even if you have got in when it fell about 4 or 6%, there is a good chance of making a 15% return from that level. But timing has become very tricky now because indices have rallied a lot. So, if you were to take a call and a return based on purely indices it is very difficult to do as market timing becomes very critical. I would on the other hand advocate timing in the market and not market timing, that is get your right stocks, stay put in them for the next 2-4 years and then you would make returns. But trying to game your entry point and when you can sell is very difficult. Most of the aggressive volatile moves in the market are a function of things other than domestic happenings like the dollar index, EM flows and a lot of other combinations. It is near impossible for even someone like us who have been in the markets for decades to really game an entry level when it comes to indices. So to cut the long story short let us just stick to good quality stocks which you understand, hold them in your portfolio, ride them out over the next three, five years and you will make good money. But if you want to get too cute to game an entry or exit based on an index, then you are basically a trader.
Categories: Business News

Bird flu: Red Fort shut for public till Jan 26

Business News - January 19, 2021 - 4:57pm
New Delhi: A sample of a dead crow from Red Fort has tested positive for bird flu and orders have been issued to restrict the entry of public into the monument, officials said on Tuesday. Around 15 crows were found dead in the premises of Red Fort a few days ago. A sample from a dead bird was sent to a Jalandhar-based laboratory for testing, Rakesh Singh, the director of the Delhi government's animal husbandry department said. Entry of public into monument has been restricted till January 26 as a precautionary measure, he said. On Saturday, samples from a dead owl in the Delhi zoo had tested positive for avian influenza. Last week, the Delhi government had banned the sale of processed and packaged chicken brought from outside the city and ordered the closure of the Ghazipur poultry market in east Delhi for 10 days after samples taken from crows and ducks at parks and lakes in the national capital tested positive for avian influenza. Municipal corporations of the city had also imposed a temporary ban on sale and storage of poultry or processed chicken meat in view of the bird flu situation here. However, the ban was lifted on Thursday after all the 100 samples taken from Ghazipur, Asia's largest poultry market, tested negative.
Categories: Business News

BJP more dangerous than Maoists: Mamata

Business News - January 19, 2021 - 4:57pm
Terming the BJP as more dangerous than the Maoists, West Bengal Chief Minister Mamata Banerjee on Tuesday accused the saffron party of making false promises to the people before elections. The TMC supremo, whose party is witnessing an exodus ahead of the assembly elections due in April-May, asserted that politics is a solemn ideology and philosophy and one cannot daily change ideologies like clothes. "The BJP is more dangerous than the Maoists," Banerjee said while addressing a rally in Purulia district, which was once a hotbed of Left-wing extremism. "Those who want to join the BJP can leave but we will never bow our heads to the saffron party," she said. Several TMC leaders have left the ruling party in the state to join the BJP. She claimed that the BJP leaders misled the Adivasi people of the Jangalmahal area, within which Purulia is situated, with false promises and did not visit them after winning the Lok Sabha elections. BJP candidates won all the seats in the Jangalmahal area including Purulia in the 2019 Lok Sabha elections.
Categories: Business News

Mastercard launches resource site to support SMEs

Business News - January 19, 2021 - 4:57pm
To help small and medium enterprises (SMEs) recover from the pandemic and prepare for the future, Mastercard has launched the Digital Acceleration for Small Businesses microsite across most of its Asia Pacific websites with information and resources on how to digitalize and run businesses more efficiently.As COVID-19 drives a shift to e-commerce and contactless payments, the center features guides on digital transformation, e-learning courses, information about Mastercard products and services for SMEs, cyber security insights and tools to reduce vulnerabilities and access to discounts on business software solutions, e-commerce platforms and digital marketing services.“SMEs have taken a particularly hard hit from the pandemic, so it’s vital for them to get the knowledge, skills and resources they need to offer an omnichannel shopping and payment experience that drives business and builds customer loyalty in the physical and digital worlds. With consumer buying habits and expectations evolving so quickly, this initiative is just one of the ways that Mastercard is fostering financial inclusion and helping small businesses to go digital across their operations to reduce costs, increase efficiency and improve cashflow management – all while staying safe and protected from cyber risks and fraud,” said Sandeep Malhotra, Executive Vice President, Products & Innovation, Asia Pacific, Mastercard, in a statement.The Digital Acceleration for Small Businesses center is available across Mastercard’s English-language websites for Singapore, Malaysia, the Philippines, Thailand, Hong Kong, India and Southeast Asia. It will be rolled out selectively on non-English sites in the future.To enhance the resources for SMEs, Mastercard has joined forces with website builder Wix and Zoho, a cloud solutions provider. These partners are sponsoring online guides and articles on various topics – from creating an online store and choosing a domain name to migrating to an online expense management and accounting platform.“As the world shifts beyond short-term survival, SMEs need to plan for long-term success in a new world of online shopping. At Wix, we’ve seen how the past year challenged businesses in so many ways but how it brought out their resilience, grit and adaptability. “We will draw on the collective learning of the Wix team who built our eCommerce platform and the merchants who run their businesses on it to help SMEs plan and strategize for 2021,” said Liat Karpel Gurwicz, Head of eCommerce Marketing at Wix, in a statement. In a statement, Vice President and GM, Asia Pacific, Zoho Corp, Gibu Mathew said, “Even as organizations are trying to reimagine their business models, dwelling in rich content helps unlock ideas. This initiative will enhance and deepen digital awareness and know-how, allowing business owners and top management to make informed decisions when selecting solutions that best support evolving business needs.”The resources site in Asia Pacific is part of Mastercard’s global efforts to help SMEs 'Get Paid, Get Capital and Get Digital' through new product development, partnerships and distribution channels. These include initiatives in North America, the Caribbean, Australia and New Zealand.
Categories: Business News

Delhi airport evaluating 'computer vision' tech

Business News - January 19, 2021 - 4:57pm
NEW DELHI: Delhi airport is evaluating "computer vision" technology to track passengers, reduce waiting time and ensure social distancing at its terminals, a top official of the facility's operator said on Tuesday.Computer vision technology uses images to analyse and understand passenger density at the airport. It has already been installed at the GMR group-led Hyderabad airport.Delhi airport, which is also led by a GMR group-headed consortium, installed the 'Xovis' passenger tracking system at Terminal 3 last month. It uses sensors to check passenger density.“We are also evaluating some other technologies. As you might be aware that the Terminal 1 is getting revamped, so while this (Xovis) system is a tried and tested one, there is also something called computer vision technology our Hyderabad airport has tried. We are also evaluating that for future uses,” Videh Kumar Jaipuriar, CEO of Delhi International Airport Limited, said at a press conference here.Since flight operations are currently less than pre-COVID levels, only Terminal 2 and Terminal 3 of the Delhi airport are handling aircraft movement.In the Xovis passenger tracking system (PTS), passengers are counted and tracked anonymously using ceiling-mounted sensors.The PTS receives data streams from the sensors and provides the airport operator with valuable key performance indicators (KPIs) such as waiting times, process times and passenger throughput.The KPIs are visualised on an intuitive dashboard, enabling airports to quickly identify crowded areas and bottlenecks.The operator has put PTS display screens at various points of Terminal 3 – check-in hall, arrival pier junction, etc.
Categories: Business News

Time to buy SBI instead of HDFC Bank? Here's why

Business News - January 19, 2021 - 4:57pm
If you are betting on the economy there is no reason why good quality PSU banks will not start doing well over the next two to three years! I am a tad worried about investing in the likes of Kotak and HDFC Bank though they are phenomenally good, well managed companies, says Sanjay Dutt, Founder & Director, Quantum Securities. The Delhi winter is at its peak. How are things with you?My only worry is the winter cold shouldn’t hit the markets because at the moment they are hot and in action. Otherwise, markets are bearing pretty positively for investors for a long time and the last two-three days’ correction and some deep cuts in select stocks will shake out the weak hands and give people a reality check. From Ruchir Sharma to CLSA, from Citi to BofA, the universal view is that markets are pricing in a strong economic recovery this year and next and stocks are trading at a valuation from where near term returns should not be expected?On a broader gauge, I would agree with that especially in some of the sectoral indices, but one can’t say that there are no opportunities in the market. There are a lot of opportunities in the market. Industry may not see another 10-20% rise over the next 12-18 months, but there are opportunities in select stocks and sectors, particularly economy-facing cyclical, manufacturing and select PSU plays where the government is expected to take some serious steps over the next two years and either privatise them or make them more efficient. We are already seeing first signs of that. So to cut a long story short, most of the observations are being made by research houses that markets are more or less pricing in everything but to say that there are no opportunities in the market is wrong. There are a lot of opportunities in the market to make money but it is getting difficult to find them and to really go into depth and understand as to what kind of growth they will give and how much of the growth is already in the price. What should an ordinary investor do? We definitely are in a bull run. In a bull run, it is important to participate but if you are participating via the mutual fund route, the returns have not been very gratifying?I do not think we can really pass a verdict on mutual fund returns over the last year or two. Most of the mutual fund money can only be evaluated for a little longer time frame. Yes the past five-six years has not been good but for various reasons and I am reasonably confident that lay investors or investors who do not understand the integrities of individual stock and sector analysis should continue to do their SIPs. Yes they can take selective calls on some of the funds they bet on, funds that are exposed to the economy. They could probably increase allocation there and avoid funds that are exposed to the much higher and overvalued kind of growth story. That is very easy to evaluate by looking at the funds portfolio. So my recommendation would be selective on mutual funds, but do not evaluate them over the last year or two which have been pretty rough for the fund managers. It is not easy to make money but I am reasonably confident that 5-10 funds would perform very well in the next five odd years. The countdown to Budget has started, There has been an upbeat sentiment on consumption and demand coming back and things really getting back on track. What would be your strategy going forward? Would you still focus on cyclicals or go for consumer stocks?I would focus on cyclicals. I have been positioned on cyclicals and domestic facing stocks for the last six-eight months. Consumption is also domestic facing. Infra, steel and cement segments are the places where aggressive public expenditure can be seen. Also, the capex cycle will see revival in the next 12 months because the single most important factor that is going to benefit the economy are lower interest rates. We are already seeing the impact and we are hearing positive news from some of the housing finance companies. We heard a lot of positive talk from the managers at HDFC that demand is starting to pick up at the lower end of the market. As interest rates fall, the cost for all companies which are into manufacturing and who need working capital, are going to come down, margins are going to improve and at the consumer level, the average EMI is going to come down substantially. Lower interest rates are here to stay. We can worry about inflation and 25-50 bps up and down in interest rates over the next two to three years but I do not think anything more than that. I do not see inflation being a big headache over the next 24 months for the RBI Governor. There seems to be a suggestion that perhaps you should get used to this new normal from the financial basket; maybe we would not see outperformance in that same time period. What is your take?Financials is a very tricky space as one does not have the conviction to take a call on buying an HDFC at the valuations it is trading right now. I would be quite sceptical but markets are markets, prices are prices, people are buying into them and I really would want to be underweight on private sector financials which are so overvalued. I am positioned more towards the State Bank of India, If you are betting on the economy there is no reason why good quality PSU banks will not start doing well over the next two to three years! I am a tad worried about investing in the likes of Kotak and HDFC Bank though they are phenomenally good, well managed companies and have been delivering quarter on quarter. Whenever you bet against them you go wrong, but I would still avoid being invested in them because they are not my cup of tea as such.
Categories: Business News

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