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UVARCL to move SC against NCLAT order preventing Aircel from selling spectrum

June 12, 2021 - 8:24am
UV Asset Reconstruction Company Ltd (UVARCL) will shortly move the Supreme Court against a National Company Law Appellate Tribunal (NCLAT) order that forbids Aircel from selling its spectrum until the bankrupt telecom firm cleared its dues to the government, a person aware of the matter said.UVARCL, which has the clearance of the National Company Law Tribunal (NCLT) to acquire Aircel, will approach the SC in the next couple of days to prevent any delay in the asset monetisation of the telecom operator, the person said. “The dedicated bankruptcy court (NCLT) has already given its nod and UVARCL has to protect its assets now.”Aircel’s committee of creditors, headed by State Bank of India, had earlier moved the top court, fearing that the appellate tribunal’s order would lead to further delays in completing the UVARCL deal, leading to liquidation of Aircel.Deloitte, which managed Aircel through the debt resolution process, is also planning to move the SC on the same grounds. Deloitte is also the resolution professional for Reliance Communications, whose spectrum and fibre assets were cleared by lenders to be picked up by UVARCL, though the proposal is yet to be approved by the NCLT.
Categories: Business News

Banks firm up plans to sell Vijay Mallya’s assets

June 12, 2021 - 8:24am
Days after the Prevention of Money Laundering Act (PMLA) court allowed restoration of assets worth Rs 5,646.54 crore of beleaguered liquor baron Vijay Mallya with the consortium of banks led by the State Bank of India (SBI), the Indian banks have already started firming up plans for the sale of his assets, sources privy to the development told ET.These sources added that the bank executives recently met officials from the Enforcement Directorate (ED) to discuss the details.“In February last year through an application before the PMLA court, ED consented to the restoration of assets with the banks for the recovery of dues with certain riders, now that the PMLA court has allowed the banks' plea, meetings were held between the two to chalk the plan,” said an official in the know. “From now on, the ED will have no role to play as far as the auction of restored assets is concerned. The banks, however, have to execute a bond before the special court before auctioning the assets,” the official added.“If things go as per plan, the banks will be able to recover nearly 91% of the principal amount. While the movable and immovable assets are worth Rs 5,646.54 crore, the quantifiable loss suffered by the bank is Rs 6,203 crore.”Sources added that the lender consortium is in the process of appointing SBI Capital Markets to sell shares in United Breweries. Banks have plans to sell these shares between Q1 and Q2 and the sale could happen via large block deals. “Mallya’s 16.15% stake in the UB group is valued at Rs 5,500 crore,” said a senior official in the know. The ED has transferred 4.13 crore equity shares (16.15%) of United Breweries to the demat account of the recovery officer of the Debts Recovery Tribunal (DRT).“We have plans to sell company shares as soon as possible, this could also fetch us good returns as the markets are looking up,” said a bank official in the know. “Lenders will also soon move to physically possess the immovable properties, and will be guided by the SARFAESI law,” said another official.“However Mallya still has the option of appealing against the order before the High Court. If that remedy is availed, then it might delay the bank’s plans,” the official further added.
Categories: Business News

Bitcoin law is only latest head-turner by El Salvador's millennial president

June 12, 2021 - 8:24am
SAN SALVADOR: The young president of small Central American nation El Salvador leapt to worldwide fame this week after his country became the first in the world to adopt bitcoin as legal tender, but Nayib Bukele is no stranger to controversy.Cryptocurrency fans across the globe celebrated when his bill was swiftly approved by lawmakers on Wednesday, and when the 39-year-old leader followed up with a plan to mine energy from volcanoes to power the massive data centers needed to mint the digital currency.The move did not escape scrutiny. The International Monetary Fund quickly flagged economic and legal risks to the unprecedented use of bitcoin in the small economy.From firing officials via Twitter to entering Congress with heavily armed soldiers, Bukele has tended to ruffle establishment feathers since he became president in 2019.He swept congressional and local elections in February and enjoys an approval rating of over 90% despite the economy shrinking by 8% last year. His alliance won a historic supermajority, crushing the two parties that had dominated Salvadoran politics for 30 years.Just weeks before adopting bitcoin brought him a new international spotlight, Bukele fell out with the Biden administration after the new Congress summarily removed the attorney general and top judges from office.He says all his actions are constitutional and backed by popular mandate.The top prosecutor had been investigating government officials. Bukele also closed an anticorruption office he himself had opened.Bukele, who calls himself the "coolest president in the world," recently launched an international surf competition in the country wearing a backwards baseball cap and flanked by a military officer.His achievements include reducing murder rates in a country that has long grappled with deadly gang violence.Despite his youth, Bukele is no political neophyte.When he worked in his father's advertising agency early in his career, his client was the Farabundo Marti National Liberation Front (FMLN), the leftist party then in power.He joined the party and in 2012 became mayor of Nuevo Cuscatlan, a coffee-growing town near San Salvador. Far from the media spotlight and with few resources, he publicized his work on social media. His reputation for good management helped him garner the support to win office as mayor of the capital in 2015.In San Salvador, he gained prominence for his social and cultural focus and for donating his salary to scholarships. But two years after taking office, the FMLN expelled him, saying he had sowed division, violated party statutes and attacked a trustee with an apple during a council session.He has denied the accusations.DECISIVEBukele joined forces with the right-wing Gran Alianza por la Unidad Nacional (GANA) in his campaign for the presidency, which was driven by social media. He has founded a party called New Ideas.The youngest president in the Americas took office promising to end corruption. He was himself investigated by the Attorney General's office for money laundering, fraud and tax evasion during his terms as mayor. He has denied the allegations.The rise of his siblings and cousins to public posts or behind-the-scenes advisory roles has also led to complaints of nepotism, which he has denied.The international community did not pay much attention until the president arrived in Congress early last year to request approval of a $109 million loan to fight crime - accompanied by soldiers in full battle uniform."If I were a dictator or someone who does not respect democracy, I would have taken control of the entire government tonight," Bukele told Spanish newspaper El Pais.During the coronavirus pandemic, Bukele enacted a series of health and economic measures to alleviate the crisis, but ignored Supreme Court rulings against his lockdown measures and has faced rights complaints."He uses the press and social media to threaten, intimidate and persecute people who could be adversaries," said Jose Miguel Vivanco, Americas director for Human Rights Watch.Still, Salvadorans fed up with decades of corruption and ineffectiveness have admired Bukele's confident, decisive style including a penchant for using Twitter to give orders to ministers."Nayib does an excellent job, we have never had someone who cared about people's well-being," said taxi driver Eduardo Samayoa, 36.
Categories: Business News

Dodla Dairy IPO: Grey market doesn’t like it much, still giving it a premium

June 12, 2021 - 8:24am
NEW DELHI: After a brief pause, the domestic primary market is gearing up for ample action from Monday, with as many as four IPOs opening for subscription.The grey market, or the unofficial market for trading in unlisted shares, is pricing each of these IPOs based on what value they may leave on the table for investors.Hyderabad-based Dodla Dairy is aiming to raise Rs 520 crore from its IPO. The issue comprises fresh share issue worth Rs 50 crore, and an offer for sale of up to 1,09,85,444 shares. The company has fixed the price band at Rs 421-428.The stock is trading at a Rs 75-80 premium in the grey market, which signals an 18-20 per cent upside on the IPO price. The issue will be open for subscription from June 16 to 18.Dealers from the unofficial market have mixed views on the stock, as they are skeptical about the company's growth and product mix strategy and find the IPO price aggressive. However, they expect decent listing gains.Abhay Doshi, Founder of UnlistedArena.com, said the business is moving on a flat trajectory and there are no plans of expansion either. “That said, the IPO may give mild listing gains to investors, as it is not priced on the higher side," he said.Dodla sells products in the domestic market under the brand name 'Dodla' and 'KC+'. It sells products overseas under the brands, Dodla Dairy, Dairy Top and “Dodla+”. It processes and sells retail milk and produces dairy-based value-added products such as curd, ultra-high temperature processed milk, ghee, butter, flavoured milk and ice cream among othersSale of milk and dairy accounted for 72.81 per cent of the company’s total revenues for FY20. Value-added products accounted for 27.18 per cent of total revenues for the year and 24.68 per cent in the first nine months of FY21. Milk products brought in the remaining 75.32 per cent.Due to Covid-led disruptions, the company saw 20 per cent drop in volumes and 12 per cent fall in sales in the four quarters to December 2020.Umesh Paliwal, co-founder of UnlistedZone, said the company lacks an attractive business model. “Dodla would have to focus on value-added products as the margins milk and dairy are limited. The industry is dominated by unorganised players, adding more challenges to the business.”A total of 35 per cent of the IPO is reserved for retail investors, 50 per cent for qualified institutional buyers (QIBs), and the remaining 15 per cent for non-institutional investors. Investors can bid for a lot of 35 shares and in multiples thereafter.Dodla Dairy is the third-largest dairy firm in India in terms of milk procurement per day and second-largest private dairy player in terms of market presence. The company primarily caters to five states, namely Andhra Pradesh, Telangana, Karnataka, Tamil Nadu and Maharashtra. It also has some presence in Uganda and Kenya.
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Modi meets Shah, Nadda amid Cabinet rumours

June 11, 2021 - 8:23pm
Prime Minister Narendra Modi on Friday held deliberations with Home Minister Amit Shah and BJP president J P Nadda amid speculation about a reshuffle in the Union cabinet, an exercise Modi has not undertaken since forming the government for a second time in May 2019. There is also a growing buzz about the Cabinet expansion in Uttar Pradesh after Chief Minister Yogi Adityanath met the BJP top brass during his two-day visit to the national capital. Sources, however, added that Modi has been meeting Union ministers in different batches of late, and Nadda has also been present there. The deliberations among the top BJP leaders at the prime minister's residence came a day after Shah also met party allies from Uttar Pradesh, including Apna Dal's Anupriya Patel who was a minister in the first Modi government but was not inducted in the next. There has been no official word from the party on these deliberations. The BJP has of late engaged in the review of its organisation and government works in different states. Nadda had also held a meeting with the party general secretaries where, besides the relief work carried out by the saffron organisation during the COVID-19 pandemic, its performance in the recent assembly polls were reviewed. With the party now gearing up for the next round of assembly polls in five states early next year, including in all important Uttar Pradesh, it is expected to take various measures to bolster its social equation.
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HC dismisses writ petition of Amazon, Flipkart

June 11, 2021 - 8:23pm
The Karnataka High Court on Friday dismissed the plea by e-commerce giants Amazon and Flipkart on the investigation ordered by the Competition Commission of India (CCI) against them for alleged violations of provisions of competition laws. Justice P S Dinesh Kumar passed the order dismissing the petitions filed by the two companies. "It would be unwise to prejudge the issues raised by the petitioners in these writ petitions at this stage and scuttle the investigation," the judge said in the order. On January 13, 2020, fair trade regulator CCI ordered a probe against Flipkart and Amazon for alleged malpractices, including deep discounting and tie-ups with preferred sellers on their platforms, following which both the companies had moved the High Court seeking quashing of the probe order. The Karnataka High Court on February 14, 2020 granted an interim stay on the investigation ordered by the CCI. Following this, the CCI had approached the Supreme Court, which on October 26, 2020, asked it to approach the High Court. The CCI's January, 2020, probe order followed a complaint filed by Delhi Vyapar Mahasangh, whose members comprise many traders dealing in smart phones and related accessories.
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'Mukul Roy's return will make no difference'

June 11, 2021 - 8:23pm
Senior BJP leader Mukul Roy's return to the TMC evoked mixed reactions in the saffron camp on Friday, with its state unit president Dilip Ghosh asserting that the move will have no impact on his organisation, and former MP Anupam Hazra claiming that "lobby politics at play is adversely affecting the party". BJP state general secretary Joyprakash Majumder, on his part, extended his best wishes to Roy, and said that he should immediately quit all saffron party posts. "Mukul babu is a veteran leader, he is a known face in Bengal politics. We wish him the best in his new innings, but shouldn't he forthwith quit from the primary membership and all other posts of the BJP? Shouldn't he not resign as the MLA as he had won a seat on Lotus (BJP) symbol," Majumder said. Roy along with son Subrangshu was on Friday cordially welcomed back to the TMC by party supremo and Chief Minister Mamata Banerjee and other senior leaders. He had quit the TMC in 2015, after being removed from the post of the party's national general secretary, and sucsequently joined the BJP two years later. Ghosh, while talking to reporters, said to he was not sure if the BJP would lose anything from Roy's decision, given that he was "unsure whether we gained anything" from his entry three-and-half years back. "Right now, we are bothered about more serious issues as the cycle of violence goes on unabated in the state. We are bothered about the safety of our workers, who are being targeted by TMC activists," he added. Hazra, earlier in the day, said lobby politics with the saffron camp has led to such a situation, hours before Roy made his re-entry in the Mamata Banerjee camp. Taking to Twitter, he contended that it was high time that the state unit of the BJP put an end to the practice and utilise leaders according to their merit. The former MP, who had switched over from the TMC to the BJP in 2018, however, asserted that he will continue to be a part of the saffron camp under all circumstances. "Too much importance has been accorded to one or two leaders while ignoring and humiliating the rest. That has led to the present sad situation. There is also no trace of the royal passengers who had taken a chartered flight," the academic-turned-politician, who had unsuccessfully contested the Lok Sabha polls in 2019, said. Hazra was possibly referring to TMC turncoats Baishali Dalmiya, Rajib Banerjee and Prabir Ghosal, who had taken a chartered flight to Union Home Minister Amit Shahs residence in Delhi earlier this year. He further said, "Please don't give me the tag of a disgruntled leader for this post. I am with the BJP and will remain in the BJP. But the dirty lobby politics should come to an end. This is all I want." A section of state BJP leaders are of the view that Roy and other senior leaders, including Sabyasachi Dutta, were not accorded due importance by the saffron party top brass during the assembly elections, and only a handful of leaders, such as Suvendu Adhikari and actor-turned-politician Mithun Chakraborty were given all responsibilities. Hinting he was not made a part of important meetings, Hazra said, "Hoping to get an invite to state unit meetings of the BJP as per protocol."
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UP: Outsider entry creates ripples in BJP

June 11, 2021 - 8:23pm
The induction of Congress turncoat Jitin Prasada into BJP has come just ahead of the scheduled elections for four seats in the UP legislative council on July 5, in what has created fresh ripples in the state unit of the saffron party.The four seats which will fall vacant in the upper house are all represented by SP legislators -- Sri Ram Singh Yadav, Lilawati Kushwaha, Ram Vraksh Yadav and Jitendra Yadav. Given the strength of BJP in the UP assembly, it would be able to win all four seats.As a matter of fact, the BJP leadership seeks to project Prasada as the party's Brahmin face to consolidate the upper caste community -- which accounts for 12% of the voting population -- in the UP assembly elections due next year. A section of the community has been raising the issue of dominance of Thakurs in the present Yogi Adityanath-led government.83397701Even as Prasada's chances of getting a role in BJP's central organisational setup remains uncertain, the party sources do not rule out the possibility of him being propped up at the state level and being routed to the legislative council. Party sources said that this could potentially dent the prospects of a senior UP BJP organisational leader who has been nursing the ambition of getting a seat in the upper house.83415490It was only in January when ex-IAS officer Arvind Kumar Sharma, who is considered close to PM Narendra Modi, joined the BJP and was immediately given a ticket to the legislative council which he won easily. Sharma happens to be a Bhumihar from east UP.83372794While top BJP leaders refused to comment, sources said that the state unit was squarely averse to the very idea of party para-dropping an outsider as a key contender for a seat in council. "This will further set the narrative of insider versus outsider within the BJP," said a senior party leader.Notably, Prasada, who was a Union minister in the previous Congress-led UPA government, had been facing a severe political crisis since 2014 when the BJP started its juggernaut under the leadership of PM Narendra Modi. Prasada not only lost his traditional Dhaurahra in 2014 and 2019 Lok Sabha elections to Rekha Verma but managed to secure a little over 16% and 15% vote share.He also faced a defeat at the hands of BJP's Roshan Lal Verma from Tilhar assembly seat in 2017 UP assembly elections despite Congress cobbling up a pre-poll tie up with the Akhilesh Yadav-led Samajwadi Party. Verma had won the Tihar seat in 2012 on a BSP ticket.
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'ICMR to start national sero surveys'

June 11, 2021 - 8:23pm
The ICMR will start national-level sero surveys to assess the spread of COVID-19 and all states/UTs should also be encouraged to conduct them so that information from all geographies can be collected, the Union health ministry said on Friday. The ministry also said that the Covid situation in the country appears to be stabilising, but urged people to continue following the appropriate behaviour and social distancing norms. "The Indian Council of Medical Research (ICMR) will conduct national sero surveys to assess the Covid spread and states/UTs should also conduct them to get all geographies' information," it said. The ministry said almost 78 per cent decline in daily new COVID-19 cases has been noted in India since the highest reported peak in daily cases on May 7. It also said that there has been 74 per cent decrease in weekly COVID-19 positivity rate since the highest such rate was reported between April 30-May 6 at 21.6 per cent. The Centre underlined that breaking the chain of transmission ensures lesser strain on the health infrastructure and better quality of care. On the US's Food and Drug Administration (FDA) denying Emergency Use Authorisation (EUA) to Bharat Biotech's COVID-19 vaccine Covaxin, the health ministry said, "We respect each country's regulatory system, but it will have no impact on India's vaccine programme."
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Auto companies go heavy on tech investments even as they work overtime to cut costs

June 11, 2021 - 8:23pm
Automakers are stepping up investments in technology and future projects, even as they cut costs to weather the Covid-19 pandemic. Tata Technologies, KPIT, Capgemini and Tata Elxsi have been bagging new projects even amid the virus outbreak, as automakers take a long-term view in a competitive environment.Research and development (R&D) spending by automotive companies is expected to increase by 6.5% on average this year, with a focus on software and electric vehicles (EVs), business intelligence firm IHS Markit said in a report recently. A tenth of the respondents in its survey was from India. “As we have addressed during our quarterly results, technology spending is positive,” KPIT said in an email to ET.KPIT, Capgemini and Tata Technologies said the bulk of future investments in R&D globally will be related to EVs, autonomous vehicles and connected car technologies. In India, however, EVs attract the bulk of the investments, which have been growing despite cost cuts by automakers in other business areas.Mahindra and Mahindra (M&M) has outlined capital expenditure of Rs 3,000 crore for EVs in the next three years, while Tata Motors’ overall investment for this year will be Rs 3,000 crore, again focused on EVs. The investments are on track despite both companies delivering significant cost savings in FY21, with similar plans for the ongoing fiscal year.EV projects involve investment around battery technology and management systems, motors, thermal management systems, and power electronics. “I can’t think of projects which don’t have some form of electrification,” Warren Harris, the chief executive of Tata Technologies, told ET. Citing the example of a leading Indian automaker, Harris said the cost savings came in the form of reduced production costs, streamlined raw materials and headcount.In the long term, cost reductions are being achieved by shedding legacy IT infrastructure in favour of Cloud and digital systems. “A lot of the savings has been driven to invest in digital and we have been a beneficiary there,” Harris said. Investment in connected vehicles is also slowly taking off in India but spending on autonomous technology remains negligible except for some pilot projects, said Shamik Mishra, vice president, Capgemini Engineering – India.Tata Elxsi said in its annual report that automakers and component manufacturers were also growing their R&D expenditures on initiatives to develop driver assistance and industry 4.0 capabilities.
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India's fuel demand slips to nine-month low in May

June 11, 2021 - 8:23pm
India's fuel demand in May slumped to its lowest in nine months as restrictions to curb the second wave of COVID infections stalled mobility and muted economic activity. Fuel demand fell 1.5 per cent to 15.1 million tonnes despite the low base of May 2020 and was down 11.3 per cent when compared to the previous month, according to data from the Petroleum Planning and Analysis Cell (PPAC) of the oil ministry. India was under one of the world's strictest lockdowns in May last year, which brought all mobility and economic activity to a grinding halt. This year, though the infection rate is much severe, restrictions are localised. Personal mobility is not as hampered as last year and more factories have remained open while cargo movement between states too hasn't been as badly affected. Petrol consumption at 1.99 million tonnes in May was up 12 per cent over the previous year, it was down 16 per cent over April and 27 per cent over the pre-COVID era. Diesel sales were up marginally to 5.53 million tonnes year-on-year but were down 17 per cent over April and 29 per cent over the pre-COVID period. With travel restrictions curtailing airline operations, ATF sales fell by 36 per cent to 2,63,000 tonnes month-on-month but were more than double of 1,10,000 tonnes consumption in May 2020. Pre-COVID ATF demand was 6,80,000 tonnes. Sales of domestic cooking gas LPG, the only fuel to have shown growth in consumption during the height of the first nationwide lockdown, was almost flat at 2.16 million tonnes when compared to the previous month, but was 5.5 per cent lower than the last year. It was, however, 5.5 per cent higher than pre-COVID May 2019. This is because the government gave free cylinders as part of the COVID-19 relief package. Consumption of bitumen, which is used in road construction and is an indicator of economic activity, was down 19 per cent month-on-month and near 10 per cent year-on-year. India's new coronavirus cases have fallen from over 4 lakh to 91,702 and deaths from the infection dropped to 3,403 from over 4,000 a few weeks back, according to the health ministry data. "We were near pre-COVID level in March 2021, but new restrictions due to the second COVID-19 wave have temporarily reduced the demand for both personal mobility and industrial goods movement," an industry official said. "Local fuel consumption will start to look up this month when the second pandemic wave is expected to weaken." Declining fuel sales reduced crude intake by refiners, reducing the operating run rate by 85-86 per cent. OPEC in its monthly oil market report saw India's oil demand climbing by 10.82 per cent to 5 million barrels per day in 2021. "Daily new COVID-19 cases increased in May, forcing states to implement lockdowns and other restrictions that led to a steep decline in mobility," it said. "As COVID-19 cases come under control and restrictions are eased towards 3Q21, oil demand, led by transportation fuel, is projected to show solid gains throughout the remainder of the year." For the time being, India's COVID-19 curve may begin to plateau as the state-led lockdown strategy helped in reducing the daily cases, as well as keeping the effective reproduction rate below 1. But, uncertainty will remain high mainly related to a possible new wave of COVID-19 or the emergence of new variants, in addition to the pace of vaccinations in the country. Moreover, high retail prices and the excise tax policy add uncertainty going forward, it said, adding oil demand growth is anticipated to pick up pace in 2H21, driven by the low baseline and an uptick in petrol and diesel demand in transportation, construction and agriculture. "India's crude imports recovered from a five-month low in April to average 4.5 million barrels per day," it said. "The vicious surge in COVID-19 cases which reached record levels in May will likely weigh on demand for crude imports for May and June, with local refiners expecting the situation to improve in July. Constrained domestic consumption could free up product for exports over the period."
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Tata Group guns for Rs 20 lakh crore m-cap, midcap IT runs riot

June 11, 2021 - 8:23pm
MUMBAI: One of the defining characteristics of the Covid-19 bull market has been its propensity for nostalgia. The heroes of the yesteryears are back in vogue as if this were some Marvel comic movie where you can’t kill them so you keep resuscitating them in the storyline.Look at value investing, for example, the bruised and bullied child of Warren Buffett was shoved away like a mediocre backbencher a few years ago but is today back in the limelight. A similar picture could be painted for one of India’s oldest conglomerates, the Tata Group.The return of the old economy stocks has turned around the fortune of this Old India giant as it now guns for a cumulative market capitalisation of Rs. 20 lakh crore, a first for an Indian corporate house. The Nifty Tata Group index rose another 1.5 per cent on Friday with the market capitalisation of the listed stocks rising to around Rs 19.3 lakh crore.At the pace it is going, the conglomerate spearheaded by N Chandrasekaran, currently, could find itself on the footsteps of the elusive $300-billion club, and not even the Ambanis and Adanis of India can catch it.The Show StealersFor weeks, the IT space was being chided for being a Covid winner. A sector whose good days were well behind it yet, all it took for investors to come running back to the sector is a re-iterations of comments made by TCS’ chief, Rajesh Gopinathan, back in January. With the TCS chief reiterating that the multi-year tech cycle in IT is, in fact, still intact, investors rushed to buy IT stocks.However, this time it is the midcap IT stocks that stole the show as analysts highlighted their superior earnings performance in the March quarter. While the Nifty IT index rose 1.5 per cent, the mid-sized stocks part of the gauge jumped 2-4 per cent. Dalal Street knows now that it must back the mid-sized guys, if it wants the returns it is so addicted to these days.Steel stocks make a moveThe way this month has been going for the steel sector, Friday’s move almost feels like a mirage. After dominating the market in the March-May period, the sector fell awfully silent in June. However, commentary from some of the companies, most pertinently by JSW Steel, has reminded investors of the sector’s potential. Shares of Tata Steel, JSW Steel, Jindal Steel and SAIL ended 4-5 per cent providing a timely reminder to the rest that they are still the sector to beat when it comes to returns.That said, we are in no mood for a make-believe rivalry between sectors as the weekend is here and so are the Euros.
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Who invested in ICICI Bank infra bonds?

June 11, 2021 - 8:23pm
MUMBAI: ICICI Bank, India’s largest private sector lender by asset size, Friday raised Rs 3,001 crore via infrastructure bonds for the first time in four years reflecting the emerging optimism in building ports and roads in an economy that is expected to rebound steeply as vaccinations and slowing infections raise hopes.The bonds offered 6.45 percent with seven-year maturity. ICRA rated those papers with AAA (Stable) grade.At least two pension funds LIC New Pension Scheme (NPS) and UTI NPS, fund houses like Aditya Birla MF, Tata MF and insurer Bajaj Alliance likely subscribed to those papers through the bidding process. The bank obtained and retained about one and a half dozen bids.The proceeds will be used to lend to the infrastructure sector along with low-cost affordable housing. ICICI Bank had last raised infrastructure bonds for Rs 4,000 crore in 2016-17.Some banks are said to have lapped up those top-rated debt securities through a bidding process only to sell down their holdings to different mutual funds including SBI, HDFC and Tata Life Insurance.Individual investors could not be contacted immediately for comments. ICICI Bank did not reply to ET’s request for comment till press time."Infrastructure bonds hit the market after a long gap, suggesting that the borrower has pockets of deployments," said Ajay Manglunia, managing director - debt capital market, JM Financial. "Demand for infrastructure credit is gradually coming up with the unfolding of the unlocking programme."The core size of the issue was pegged at Rs 1,000 crore with an option to retain subscription up to Rs 4,000 crore. Pension funds are likely to have owned larger sums than mutual funds running up to Rs 600 crore for a single bid."The bank’s current capital is sufficient to support its growth requirements over the medium term and absorb the expected asset quality shocks," ICRA said in a note.ICICI Bank reported a 104 percent jump in its standalone net profit for the financial year ended March 31, 2021, at Rs 16,192.68 crore.In the January-March quarter, the lender reported another phenomenal rise of 260.47% year-on-year in net profits.“We remain positive on ICICIBANK, considering a strong balance sheet, strong growthin advances, high CASA (Current Account-Savings Account) ratio and improving asset quality,” AnandRathi brokerage said in a report.Total loans increased by 14% year-on-year to Rs 7,33,729 crore as on March 31, 2021 from Rs 6,45,290 crore a year ago.
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Delta variant 60% more transmissible: UK

June 11, 2021 - 5:22pm
The British government said Friday that the new Delta coronavirus variant is 60 percent more transmissible in households than the variant that forced the country to lock down in January. The Delta variant, which first emerged in India, has caused a rise in cases in the UK, prompting questions about whether social distancing restrictions will be lifted as planned from June 21. New research from Public Health England "suggests that the Delta variant is associated with an approximately 60 percent increased risk of household transmission" compared to the Alpha variant identified in Kent, southeast England. The Kent variant caused a surge of Covid cases in January leading to a three-month lockdown as hospitals were stretched to near-capacity. The government ramped up its public vaccination drive in response, and has now given two doses of vaccine to nearly 29 million adults and one dose to nearly 41 million. Daily cases rose to 7,393 on Thursday, a level not seen since February. More than 90 percent of new cases were of the Delta variant, ministers said. However the number of patients in hospital remains low, at just over 1,000 on Thursday, and Health Secretary Matt Hancock has said most inpatients have not had any vaccine. The government said this suggested the vaccination programme is mitigating the impact of the Delta variant, urging the public to get both jabs. Jenny Harries, chief executive of the UK Health Security Agency, said that "two doses provide significantly more protection" against the Delta variant than one. The UK has reported 127,867 deaths from the virus, the worst toll in Europe. Under the government roadmap, England plans to drop rules on numbers at social gatherings and allow large weddings and reopening of nightclubs from June 21. But officials have stressed that they are open to changing this date if the virus situation changes, with a decision due next week, as many businesses push for full reopening.83135154833297828340334283163776
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The human mind: Weight and value

June 11, 2021 - 5:22pm
One of the most peculiar things about the Harappan civilization is its obsession with weights and measures. They had binary measuring systems and decimal measuring systems. They also had pans for measurement. The people of Indus were particular about measurement. The weights and volumes were standardized and uniform and did not deviate much, spanning a period of 500 years. This indicates a strong trading culture and an obsession with fairness and balancing things to avoid conflict. But weight and value are not the same thing. The difference becomes an important role in later literature. You can weigh food but it is hunger that determines value. The more we want something, the more valuable it gets. The less we want something, the less valuable it gets. In the Buddhist, Jain and Hindu stories, King Shibi saves a dove from an eagle. The eagle then demands that the king provide him with food because the dove was its natural food. The king offers his flesh equal in weight to that of the dove. To his surprise, he finds no matter how much flesh he cuts from his body and places on the pan, the dove's weight turns out to be more. He is forced to cut out most of his flesh. Even when he is reduced to his bare bones, he still is not able to balance the pans.The story ends with everybody celebrating the great sacrifice of the king. But what is often overlooked is the attention drawn to the weight of the eagle's hunger that is greater than the weight of the flesh offered. The eagle does not value the flesh being given, as it is not enough for all his meals. Did the king not promise to satisfy all his hunger, not just the hunger of a single meal?In the Bhagwat Purana we are told the story of how sage Narada asks Krishna's wives to give him Krishna. The queens refuse. Then Narada asks for something equal in value to Krishna. Krishna is then put on one pan of the balance and on the other pan the queens put their valuables. Satyabhama puts all her gold but that gold does not balance Krishna's weight. Rukmini puts a sprig of tulsi leaves, stating that the sprig was an indicator of her love for him. The tulsi sprig is heavier than Krishna. The weight of gold does not match the value established by the symbolic sprig of love. This reveals that the craving for love is far greater than the object of love. Rukmini's love is greater than Krishna himself. No amount of wealth can match the object of love; in other words, you can never buy love, though many try. For love satisfies our relentless desire to be seen, appreciated and indulged.There is never going to be an objective value that satisfies our hunger for food, or our yearning for love. In materialistic philosophies such as communism and capitalism, the naked man who owns no property is a poor man. But in Buddhism, Jainism and Hinduism, the naked ‘digambar’ is greater than everyone else, as he does not value property and seeks to own nothing.This idea is lost in the modern world, where value is placed on things, not on contentment. Doctrine of contentment is viewed cynically. We are told in ‘woke’ circles that feudal societies want the rich to be ambitious and the poor to be content, that value is twisted such that the poor are satisfied with less and the rich continue to indulge their greed, calling it ‘the big vision’. We cannot make the world a better place by indulging desire and providing value alone. Instead, we have to simultaneously work towards controlling, or outgrowing, hunger. The human mind has the power to create value - turn gold or jade or paper into currency. The human mind also has the power to overcome the yearning for value. As long as we indulge our insatiable desire to extract value from the market, we will remain hungry and dissatisfied. Our mind that can turn a rock into a god can also turn away from the need to turn rock into a god. The Upanishadic phrase 'Aham-Brahmasmi' refers to the human ability to grant value, and strip value. What matters when we are young should not matter when we are old. Report cards and measuring scales that matter a lot when we are students, should not matter when we are retiring. If we grow up generating wealth, we should grow old distributing wealth. If we are the hungry hawks in our youth, we have to be generous Shibi as we grow older, and wiser. Satyabham’s gold matters at one stage in life, but then eventually we reach a point where Rukmini’s tulsi makes all the difference.
Categories: Business News

Top Citi economist on India's coming litmus test

June 11, 2021 - 5:22pm
It has been seen globally that the moment vaccination gathers pace, consumer sentiment changes very substantially, Samiran Chakraborty, Chief Economist-India, Citi, tells ET Now's Nikunj Dalmia. Edited excerpts:What is your assessment of the second wave's impact on the economy?The way we are looking at things, it's the first quarter where the brunt of the second wave would be felt. The impact will be less than the first wave first quarter.The reason is that the economy has started understanding how to live with the virus. Not just India, but globally. We have observed that the extent to which the lockdown impacted economic activity is much lower.Also, we have to understand that this time the restrictions were done in a more nuanced fashion. Certain kinds of industrial and construction activities were allowed, so we can see it in our data that those sections of the economy have not been impacted as much.The open question is, how much or how fast do we get out of this mess? Is it going to be as fast as the first wave where pent-up demand really took us up very sharply? Or is it going to be slower?We have taken a call that maybe the pace of recovery is going to be a tad slower than what we had observed during the first wave. That is not because of the damage to the income or jobs of households. It is more because of the sentiment factor.RBI's survey is showing that consumer confidence today is even weaker than what it was during the first wave. That makes us a bit cautious. That's why we are saying that maybe the pace of recovery is going to be somewhat lower than what we had seen during the first wave.There is a naysayers' club that harps on high inflation and its impact on savings, low sentiment, supply disruptions and the hit on rural economy. What would you say to that?Theoretically, all of those arguments are kosher. The key question is to understand to what extent these factors will be countered by the sentiment factor.This is an extremely young and dynamic economy. A lot of people have to move out to earn a living. In that kind of an economy, the moment the widest curve comes down and the moment vaccination gathers pace, sentiment could turn quite quickly as well.So, maybe for next couple of months things will just first come back to — let us say — about 90-95% of where we were before the second wave. To go above 100% of that, we would require confidence to come back. I think the vaccination process will be very critical in bringing back that confidence.In our data, we are not finding that the labour market disruption — in jobs or income — has been as large as in the first wave. The litmus test of everything will be by the time we get into the festive season. If the economy has mended enough by then and the vaccination process has gathered pace, then we might see the demand situation somewhat normalise.We have seen it globally in all countries that the moment vaccination gathers pace, consumer sentiment changes very substantially.
Categories: Business News

300% increase in freight costs plague SMEs

June 11, 2021 - 5:22pm
The shipping and logistics crisis plaguing the industry since the onset of Covid freight costs have skyrocketed 300% , worsening the situation for Indian SMEs who are navigating their business amidst the global pandemic, says a new report.Drip Capital recently released a research paper around the 'Global Shipping Crisis' talking about the detrimental impact of the rising tide of freight costs on SMBs. Based on the shipping and logistics crisis plaguing the industry since the onset of Covid freight costs have skyrocketed 300% worsening the situation for Indian SMEs who are navigating their business amidst the global pandemic.This competitive environment severely affected the SME exporters who were burdened by these high costs. In a statement, Pushkar Mukewar, co-founder, CEO, Drip Capital said, "The lack of containers doesn't just increase logistics costs, but also affects the SMEs' capabilities to fulfill orders and delays payment cycles while stressing their margins. If the issue continues, consumer-led economies are likely to scout for alternative markets with shorter trade routes to cut losses. This could severely harm SMEs who are already battling with the pandemic-led economic crisis."The global shipping crisis, results from the uneven post-Covid economic recoveries of the world's largest importing and exporting countries. "The primary pillars of the crisis are significant fall in the availability of containers, reduced workforce, fewer shipping vessels operating, and erratic movements in demand for various commodities. Additionally, a lag in the supply of timber to manufacture containers, a rise in the number of containers being scrapped than produced further increased the cost of the containers which surged from $ 1600 last year to $ 2500 this year," he added in the statement. In 2019, China contributed to 16.1% of overall international exports. But when Covid struck China's exports plummeted by 17% in the first two months of 2020. This was due to strict lockdowns leading to a manufacturing standstill, labor shortage to transport the incoming containers, and diversion of multiple reefer containers from major Chinese ports. Consequently, shipping liners predicted a further plunge in ocean freight and began skipping docks or even the entire route to shield themselves from significant losses. "Delays in shipments mean the products would barely have a few months on the shelf of the buyers, who now run the risk of not selling the products. New orders will not be placed if the buyer suffers a loss. As a result, my strategy for the coming year until the container shortage issue persists is to only export on shorter and close-by trade routes. To avoid spoiling my trade relations, for the rest of 2021, I will not be servicing long-distance clients," said Jignesh Mehta, CEO, Rise, and Shine Overseas, in a statement. The pandemic led to an economic contraction across the world. In March 2020, with social distancing protocols and coronavirus clusters amongst dockworkers, there emerged a shortage of containers in Asia as empty metal boxes were stranded at North American and European ports. As China started to recover from the virus and its economic impact, it was flushed with orders from North American and European markets, and it recorded a 3.5% y-o-y growth in April 2020. Hence, China began ramping up its global empty container repositioning program. According to S&P data, in June, the total volume of empty twenty-foot equivalent unit (TEU) containers shipped from the US to China increased by 188% Y-o-Y and 245% Y-o-Y in June and July, respectively. On the other hand, more cargo came into consumer-led economies like the US, where the goods movement system had slowed down due to a lack of workforce and a series of lockdowns.In a statement, Sachin Malani from Shree Metal Products said, "The buyers are understanding the gravity of the issue and are willing to share the ocean freight costs with us. They are also willing to renegotiate the product rates. There is cooperation by everyone in the shipping industry in these pressing times. But, if the transport cost keeps increasing, there might come a time when our local distributors in the US start doing a cost-benefit analysis. They might evaluate whether they should keep importing from us or source locally from the US. Competing with US manufacturers could be a problem for Indian SMEs." Between August and October, when the lockdown was gradually relaxed, and demand started picking up in the west, the requirements for shipping containers returned. This surge in demand, coupled with the fact that empty containers were at the wrong place at the wrong time, saw Drewry's composite WCI jump by almost 27%, from $ 2059 at the start of August to $ 2615 at the end of October. The index continued to rally, and in June 2021, it touched almost $ 6430.
Categories: Business News

RBI extends risk-based internal audit system to HFCs

June 11, 2021 - 5:22pm
The Reserve Bank on Friday extended the risk-based internal audit (RBIA) system to select housing finance companies to enhance the quality and effectiveness of their internal audit system. In February this year, the RBI had issued a circular mandating the RBIA framework for select non-banking financial companies (NBFCs) and urban co-operative banks by March 31, 2022. On Friday, the RBI, through a circular, extended the provisions issued for NBFCs to housing finance companies (HFCs) also. The provisions will apply to all deposit-taking HFCs, irrespective of their size, as well as non-deposit-taking HFCs with asset size of Rs 5,000 crore and above, the central bank said. Such HFCs have been asked to put in place an RBIA framework by June 30, 2022. An effective RBIA is an audit methodology that links an organisation's overall risk management framework and provides an assurance to the Board of Directors and the senior management on the quality and effectiveness of the organisation's internal controls, risk management and governance-related systems and processes. As per the RBI's February circular, the internal audit function should broadly assess and contribute to the overall improvement of the organisation's governance, risk management, and control processes using a systematic and disciplined approach. The function is an integral part of sound corporate governance and is considered as the third line of defence, it had said. Historically, the internal audit system at NBFCs/UCBs has generally been concentrating on transaction testing, testing of accuracy and reliability of accounting records and financial reports, adherence to legal and regulatory requirements, which might not be sufficient in a changing scenario. A shift to a framework that focuses on the evaluation of the risk management systems and control procedures in various areas of operations, in addition to transaction testing, will help in anticipating areas of potential risks and mitigating such risks, the central bank had said. In February the Reserve Bank of India had said that all deposit-taking NBFCs; all non-deposit taking NBFCs with asset size of Rs 5,000 crore and above; and all UCBs having an asset size of Rs 500 crore and above under will have to implement the RBIA framework by March 31, 2022.
Categories: Business News

M&M finally puts design at heart of future plans

June 11, 2021 - 5:22pm
In a move to put design at the centre of its future offerings from two wheelers to trucks, Mahindra & Mahindra, the maker of XUV and Thar sports utility vehicles, on Friday announced creating a new global design organisation for the automotive and farm equipment sector.To steer the new set up, the Mahindra Group also announced the appointment of Pratap Bose as the Executive Vice President and Chief Design Officer to lead its newly formed Global Design organization.Bose will join on 24th of June and will directly report into Rajesh Jejurikar, ED, Auto and Farm Sectors of Mahindra & Mahindra. Kripa, the current chief of design, will explore opportunities outside of Mahindra Group, said an internal announcement. She will continue till November 2021 to ensure smooth transition and handover. Kripa was responsible for designing highly successful products like the XUV 500 and Thar.On the announcement, Jejurikar said the Group is at an inflection point in both Auto and Farm Sectors growth journey as it accelerates the transformative initiatives. The robust pipeline of 23 new products that will be launched in the next five years would bring the new design and advanced engineering capability across automotive, farm equipment and two wheelers to the fore.“Having Pratap on the team will strengthen our design capability, enhance our products and widen our customer base. We are very excited to welcome him on board and look forward to writing a new chapter in Mahindra’s rich product legacy,” said Jejurikar.Criticised for its polarising SUV design language, M&M is seeking to strengthen that part of its operation. The group has plans of launching over three dozen products across segments (Uvs, CVs and tractors) in the next 5 years and will be investing close to Rs 17,000 crore across business in three years.With this M&M is set to double its design investment and take the resource pool to 150 in the coming two to three years, say people in the know.The Global Design organization will comprise of the recently announced Mahindra Advanced Design Europe (M.A.D.E), which is being set up in Coventry in the West Midlands, U.K and the existing Mahindra India Design Studio (M.I.D.S). Bose will lead a team of 30 designers out of the UK in the first phase.Bose will be responsible for both M.A.D.E and M.I.D.S and will oversee design of all key business segments such as authentic SUVs including Born Electric Vehicle (BEV), LCV products (under <3.5 T), Last Mile Mobility (LMM), Large CVs, Peugeot Scooters (France) and Tractors & Farm Machines.An alumnus of Royal College of Art, London and National Institute of Design, India, Bose brings with him over 20 years of rich global automotive design experience.His last assignment was with M&M’s rival Tata Motors, in the UK where he spent 14 years. Prior to that he had worked in Piaggio, Italy and Daimler Chrysler, Japan.The Born EV products are likely to be designed out of the UK, whereas the rest of the portfolio’s responsibility will be shared between India and UK. All major tractor and truck design capabilities are expected to be managed out of India.The global design organization is a strategic initiative aimed at ensuring that products are future-ready and exceed expectations of customers across the world.The incumbent for the position of Head - Mahindra Advanced Design Europe (MADE) is being hired and will be announced in due course, said an internal missive to the employees. The role holder will be responsible for Creative Design of MADE and will be based in the UK.Ajay Saran Sharma, another ex-Tata Motors executive who recently joined M&M is being appointed as Vice President and Head - Global Design Management. He will lead Design Program Management (DPM) of MIDS as well as M.A.D.E. His responsibilities will also include overseeing Physical & Digital Modelling, Studio Engineering and Design Perceived Quality. Ajay will be based out of Mumbai, India, added the internal circular.To ensure world class creative output and program execution, dedicated verticals are being created in each studio location that will maximize and enhance creativity and ensure program delivery on schedule. The organization will sharpen Mahindra’s distinctive product designs and differentiated technology offerings across its portfolio, the company added in a statement.
Categories: Business News

Digital & cyclical two big themes: Hiren Ved

June 11, 2021 - 5:22pm
Our big picture theme is that digital and cyclical are likely to do well, says Hiren Ved, Director, CIO & CEO, Alchemy Capital Management, in this interview with ET Now. Edited Excerpts:All indicators are suggesting that the second wave will have an impact on both demand and output. How come the market is not recognising that?Covid has became an inflection point for many corporates to completely rejig their businesses, reduce their cost structures and improve productivity. There was no visibility (of earnings) when Covid hit us for the first time and so corporates had to respond to that very aggressively. They went into survival mode. The phenomenal capability of the top 200 companies to manage margins and business amidst this situation is being reflected in the market now. Markets are forward looking. Earnings have surprised on the upside, despite what we thought in the early phase of Covid. In the second phase of Covid, companies know how to manage the situation. The market is willing to overlook this (second wave). In fact, stocks of companies which are most impacted are actually doing better than companies which are relatively less impacted. So the market is telling us that it is not concerned about what is happening in the short to medium term.Is the market pricing in FY23 growth? The headroom to make money now could be limitedA new economic growth cycle is starting. There will be fits and starts in between. It does not mean the market will keep running away. It may happen that Nifty consolidates and stays within a range, but the rest of the market catches up. There are scores of sectors and companies which are breaking out of long years of consolidation and downturn. So let us not look at the market only from the prism of Nifty. That is a big mistake that many investors are doing today. They look at Nifty and say the market is nearing 16,000 and so let me book some profits. I think that is a big fallacy. You got to start looking beyond Nifty. This is very similar to what happened in 2008-09. The scars of a deep correction always remain for a longer period of time. You keep feeling that the market bounced back too fast and I will look like a fool if I enter the market at these levels. You are bullish on two themes - cyclicals and platform companies. Aren't they both on two ends of the spectrum and contradictory strategies?They are not contradictory but complementary. Our big picture theme is that digital and cyclical are likely to do well.Digital trends are taking hold. Digital transactions are increasing and every business is going digital. The onslaught of e-commerce is a secular trend and Covid has accelerated it dramatically. Therefore, it is a big trend that we cannot miss in our investment thesis. We are very bullish on IT services and the entire internet cohort platform companies where they are using technology and internet to accelerate growth. While we keep debating about GDP shrinking by 8-10 per cent, many of these companies are growing at 30-40-50 per cent. Online brokers have added 8 to 10 million new accounts. They have been growing at 50-60 per cent. Many internet companies and delivery companies are growing much faster than the GDP. All that is being enabled by technology.At the other hand of the spectrum are sectors like metals, power and infrastructure that went through a very severe leverage cycle. Even auto and auto ancillary companies were not doing well before Covid. The headwinds are now likely to become tailwinds. So whether it is capital goods, metals or autos, there is a huge opportunity to make money.Now the macro environment is becoming favourable. I think we will see the private investment cycle pick up. When I speak to CEOs of capital goods companies, they say that they have not seen this kind of an order book situation in the last 8-9 years. The momentum in these businesses is coming back. So when these stocks are going up, I think the market is giving you a message. It is up to us whether we want to pick up that message or not.
Categories: Business News

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