Business News

Subscribe to Business News feed Business News
The Economic Times: Breaking news, views, reviews, cricket from across India
Updated: 1 hour 12 min ago

Indian court dismisses pleas by Amazon, Flipkart to quash CCI's antitrust probe

June 11, 2021 - 5:22pm
An Indian court on Friday dismissed pleas by Amazon.com Inc and Walmart's Flipkart to quash an antitrust investigation, a lawyer told Reuters, more than a year after the probe was put on hold after legal challenges by the companies. The Competition Commission of India (CCI) announced a probe in January 2020 into Amazon and Flipkart following a complaint from a trader group which alleged they were promoting some "preferred sellers" and in turn hurting business for other, smaller sellers. The companies denied any wrongdoing and obtained a stay from a court last year. The High Court in the southern state of Karnataka on Friday dismissed the petitions by Amazon and Flipkart to quash the probe, Abir Roy, a lawyer for the opposing Indian trader group told Reuters, effectively paving the way for restart of the investigation.
Categories: Business News

IndiGo plans seven-hour overseas flights, depending on Covid recovery

June 11, 2021 - 5:22pm
Want to holiday in Beijing, Moscow, Cairo, Nairobi, Jakarta, Manila… or perhaps eastern Europe grabs your fancy? IndiGo plans to launch overseas flights of up to seven hours duration from Delhi, Mumbai, Chennai, Bengaluru and Kolkata, some of them with its longer-range Airbus A321s. All this depends on countries lifting Covid-related restrictions and regular international flights resuming.“As soon as this Covid comes down, you will see us going in every direction. We were ready for it before Covid,” IndiGo CEO Ronojoy Dutta told ET. “And we have so many markets within six, seven hours… Places like Beijing, Moscow, Cairo, Nairobi, Jakarta, Manila, and all the CIS countries in between them. I am giving the outer periphery, and this is a very attractive geography.”The airline can launch international flights from hubs such as Delhi, Bombay, Chennai, Bangalore and Kolkata.“We are very excited about it, and we are going to grow in a very, very aggressive manner,” Dutta said.India cancelled international flights in March last year, resuming limited services through Vande Bharat and bubble corridors. Regular overseas flights were to resume in the summer but the second wave of the pandemic put paid to those plans. Given that the Delta variant is seen as a more infectious variant of the virus and fears of a possible third wave, restarting overseas flights appears some distance away.Resumption will depend on the behaviour of the virus and vaccination progress in India and other countries.The country’s largest carrier in terms of market share and number of seats, IndiGo plans to expand overseas with its Airbus A320s and A321s.“IndiGo was 25% international and 75% domestic before Covid impacted travel and our plans had been that we will get to about close to 55-60% domestic and 35-40% international in five years,” Dutta said. “Now, how quickly we can get there again we will have to wait and see. But I would like to be at least 40% international in five years (from the day international flights resume).”The IndiGo plan will bolster the Indian government’s move to limit foreign flying rights. This had prevented foreign carriers from adding more flights, while giving room to Indian airlines to increase their overseas services.IndiGo doesn’t have any plans to induct dual-aisle, wide-bodied planes such as the Airbus A350 or Boeing 787 Dreamliner or launch flights to further destinations in Europe and the Americas for now.“Airbus 321 XLRs start coming in year 2024 and beyond. And they are a very good airplane to go to places like Milan or Munich but not to London,” Dutta said.He said international expansion would take place in phases and the airline would gradually expand to destinations further out, avoiding the error of over-extending itself as others did. IndiGo’s strategy is to fly to high-traffic destinations and develop a market by creating demand through low-fare offerings, among other incentives.
Categories: Business News

FDA told that no new EUA will be approved: BB

June 11, 2021 - 2:22pm
Hyderabad-based Bharat Biotech today said that the USFDA had earlier communicated that no new Emergency Use Authorisation (EUA) will be approved for covid vaccines, a day after its US partner Ocugen hit a major bump after FDA rejected EUA for Covaxin.The Pennsylvania-based eye disease company had to change its application from an Emergency Use Authorization to a full Biologics License Applications (BLA) approval. Bharat Biotech said biological license application process is the standard process for vaccines. "No vaccine manufactured or developed in India has ever received Emergency Use Authorisation or full licensure form the USFDA,” it said in a statement. So far, Covaxin has received EUA’s from 14 countries with more than 50 countries in process. The company said that an additional clinical trial will be required to support the marketing application submission for Covaxin. “With good herd immunity and significant percentage of the population vaccinated, the pandemic is reducing in the United States,” it added.
Categories: Business News

Delhi: Max speed limit revised for motor vehicles

June 11, 2021 - 2:22pm
Delhi Traffic Police has issued a fresh notification superseding all previous orders regarding declarations of speed limits on the roads of NCT of Delhi.The order shall be published for the information of the general public in the official gazette and by affixing a copy on the notice boards of the office of all District Deputy Commissioner of Police and all Police Stations in Delhi/New Delhi, the notification read.The concerned civic road maintaining agencies shall erect the corresponding informatory sign boards indicating the speed limits at all prominent locations on the road/road stretches in their areas of jurisdiction for guidance and convenience of the road user/general public. This order has come into force with immediate effect from June 8.Unregulated plying of motor vehicles on a high speed on the roads of NCT of Delhi is endangering the life of motorists as well as other road users/commuters and it is necessary to regulate the speed of motor vehicles on the roads of NCT of Delhi for safety of motorists as well as other road users.The notification has been issued by Satyawan Gautam, Deputy Commissioner of Police/Traffic (Modernization), Delhi in exercise of the powers, conferred u/s 28(1) (b) of Delhi Police Act, 1978 read with Rule 9 (1) of the Delhi Control of Vehicular and Other Traffic on Roads and Streets Regulations, 1980 which revises the maximum speed limit (where road condition permits) for various type of motor vehicles on Delhi roads.For cars, jeeps, taxis, cabs, the maximum speed limit is revised to 70 km per hour on NH-48 (Earlier NH-8) from Parade Road/Gurgaon Road Crossing to Delhi Gurgaon Border, DND Flyover - Mayur Vihar Link Road and NH-44 (Earlier NH-1) from Singhu Border to Sanjay Gandhi Transport Nagar, Noida Toll Road (The straight stretch from Delhi side upto Toll Gates and from the Toll Gate upto the points where curves lasts), Saleemgarh Bypass Road (Ring Road Bypass).Similarly, it was also revised on NH-9 (Earlier NH-24) from Millennium Park to Gazipur Border, NH-9 (Earlier NH-10) from Ghevra Xing to Tikri Border, Northern Access Road from Red Light NSG to T-Point of Northern Access & Central Spine, Central Spine Road from Mahipalpur Chowk to Terminal III, IGI Airport.A maximum speed of 60 km per hour is prescribed on stretches including NH-44 (Earlier NH-1) from Sanjay Gandhi Transport Nagar to Mukarba Chowk, Barapulla Nallah Road from Sarai Kale Khan upto Aurobindo Marg Xing, Ring Road from Chandgi Ram Akhara to Azadpur Flyover via ISBT, Rajghat, ITO, Sarai Kale Khan, Ashram Chowk, AIIMS, DhaulaKuan / Naraina, Punjabi Bagh, Outer Ring Road from Modi Mill Flyover upto Olaf Palme MargNH-8 Xing via Munirka.The speed limit is also revised on Outer Ring Road from District Centre Janakpuri via Peeragarhi, Mukarba Xing via Burari Xing upto Chandgi Ram Akhara, Pushta Road (Marginal Bandh Road) from Noida Border (Chilla Regulator) to New Geeta Colony Grade Separator via Akshardham Flyover, Radisson Road from T-Point Radisson Hotel to Terminal-III, IGI Airport ,Terminal-II, IGI Airport Road from T-point of Terminal-II Road and Central Spine to Terminal-II, IGI Airport.A maximum speed for cars of 50 kmph on NH-44 (Earlier NH-1) from Mukarba Chowk to Azadpur Chowk, Ring Road from Azadpur to Chandgi Ram Akhara via Model Town, Kingsway Camp, Mall Road, NH-9 (Earlier NH-10) from Punjabi Bagh to Ghevra Xing, All arterial roads in areas between Ring Road and Outer Ring Road, beyond Outer Ring Road, inside Ring Road and entire Trans Yamuna area (except roads which are specifically mentioned in the table).The lowest limit of 30 kmph is directed for All minor roads inside all Residential Areas / Commercial Markets and service roads / service lanes.
Categories: Business News

Mumbai gets respite from heavy rains

June 11, 2021 - 2:22pm
Trains and buses are running according to their schedules as Mumbai got a much needed respite from heavy showers on Friday.Train services were disrupted on Wednesday after waterlogging was reported as heavy rains lashed Mumbai. South west monsoon arrived in the metropolis on Wednesday.IMD had issued an orange alert on Wednesday. In the last 24-hours, the eastern suburbs of Mumbai received 51.76 mm rainfall, followed by 43.42 mm in the island city and 34.33 mm in its western suburbs, an official of the Brihanmumbai Municipal Corporation (BMC) said.Another official said that after two days of continuous rain, showers have stopped in the city and suburbs since around 9 am and the citizens also got to see sunlight.The civic administration was on its toes as a high tide of 4.34 metres was expected at around 12.54 pm on Friday. But as the rain has stopped, they have heaved a sigh of relief.(With inputs from PTI)
Categories: Business News

Can Buffett's fav sector deliver biggest compounder?

June 11, 2021 - 2:22pm
NEW DELHI: Does HDFC Life Insurance stand today where HDFC Bank was 20 years ago?That's the question running in the minds of several long-term investors in India, who are hunting for stocks that can compound steadily over the next few years. After all, even legendary investor Warren Buffett loves insurance stocks. Over a quarter of Berkshire Hathaway's holding is in the insurance business.“Insurance is a great play on the emergence of the middle class in India. When people graduate into middle class, what they generally do is buy insurance. It is a great structural story to just own whether the market is going up or not. Although it benefits from a rising market, because insurance companies typically own large equity portfolios,” says Mark Matthews, Head of Asia Research, Julius Baer.As the insurance industry is relatively nascent in India compared with its developed market peers, the runway for growth is much longer. Just the way Covid accelerated the adoption of digital technology by a few years, the pandemic might also give a fillip to the insurance industry in India.“Insurance companies will get bumper underwriting opportunities like what happened till March. People are scared; they will definitely like more insurance. Insurance rates have also gone up. It is going to be an opportune sector,” says Raamdeo Agrawal, a value investor and Co-founder and Chairman of Motilal Oswal Financial Services.Along with HDFC Bank, HDFC Life Insurance featured in a list of 25 stocks for the next 25 years that Agrawal put out last year.Dalal Street's blue-collared fund manager Saurabh Mukherjea is also betting big on HDFC Life, which had a market share of 21.5 per cent in the private life insurance market in FY20.Citing three trends that are working in favour of the stock, Mukherjea says HDFC Life is at a very powerful intersection of the migration of market share from public sector to private sector and the shift of market share to strong and well-run financial services companies. The company will also benefit from financialisation of savings. “It does have strong competitive advantages around data analytics and their underwriting capabilities are the best in the country,” Mukherjea said.Foreign brokerage Nomura, which has a target price of Rs 725 on the stock, said in a note this month that it continues to believe HDFC Life remains a good compounding story.Near-term challengesWhile on the one hand, the awareness about insurance might have gone up during the first and second wave of Covid, most insurers reported higher claims in FY21. In the second wave, deaths have already exceeded last year’s numbers. New business premium (NBP) growth also declined 5.5 per cent year on year at the industry level.Jefferies said its talks with top insurers indicate claims come with a lag and the industry is expecting a 2-3 times rise claims from Covid 2.0 compared with the first wave.ICICI Securities said the increase in mortality and morbidity rates induced by the pandemic is an area of concern for the industry in the short term. Yet, the brokerage has a ‘buy’ rating on ICICI Prudential, HDFC Life and SBI Life. Nirmal Bang also has a ‘buy’ rating on all the three listed insurers.Volatility factorSaurabh Mukherjea-run PMS firm Marcellus Investment Managers believes life insurance as a business is likely to have a relatively low correlation with lenders and can, therefore, act as a natural hedge and reduce portfolio volatility.“While life insurers do not have a long history of being listed in India, the past year has shown that even though insurance and lending are parts of the larger financial services universe, the balance sheet structures and business models of insurers and lenders are quite different and uncorrelated with each other,” the PMS said in a recent note to investors.
Categories: Business News

‘Quantum LTEVF sees 7.11% rise in NAV in one month’

June 11, 2021 - 2:22pm
S&P BSE Sensex increased by 6.67% on a total return basis in the month of May 2021. After the resurging covid-19 wave in April, markets have reacted positively to the fall in the new daily cases and overall positivity rate of infections this month. On a trailing twelve-month (TTM) basis, the index has returned 62.09%. A favorable base of May 2020 is getting reflected in the TTM return. S&P BSE Sensex has outperformed the developed market indices such as S&P 500 & Dow Jones Industrial Average which appreciated by 0.69% & 2.21% respectively, during the month. This has helped the S&P BSE Sensex to reduce the underperformance as compared to the S&P 500 & Dow Jones Industrial Average on a YTD basis.The broader market has done better than Sensex in the month of May 2021. The S&P BSE Midcap Index appreciated by 7.16% and the S&P BSE Small-cap Index rose by 8.93%. Power & Capital goods were the winning sectors for the month. As the Covid-19 wave receded during the month domestic focussed sectors saw renewed interest. Quantum Long Term Equity Value Fund saw a 7.11% appreciation in its NAV in May 2021. This compares to a 6.94% appreciation in its benchmark S&P BSE 200. Outperformance for the month was driven by holdings in Financials & Consumer discretionary. Cash in the scheme stood at approximately 7.7% at the end of May. Our approach remains to position the portfolio towards economic recovery without undermining the risk associated with pandemic-related economic upheavals.Market Performance at a GlanceIndexYTD Returns (%)S&P BSE SENSEX9.18S&P BSE 200 14.36S&P BSE MID CAP21.80S&P BSE SMALL CAP30.71S&P 500 12.16* On Total Return BasisSource-BloombergMay has seen restrictions on mobility continue across most states. There has been some relief on the Covid-19 front as the daily new cases, active cases and daily fatalities all are trending down but the restriction on mobility has not eased. The state governments are exhibiting extreme caution to not repeat the mistakes of unlocking too quickly. Unlocking of restricted economic activity & general mobility should begin in June if the covid-19 cases continue to trend downwards. Maharashtra has already moved in that direction.Equity markets moving from resilience to complacency: Equity markets have welcomed the reduction of Covid-19 caseload and moved up sharply this month. They are already factoring in improvement in economic data and pent-up demand to some extent as the unlocking happens. Economic shocks like demonetization, an ill-planned GST implementation, IL&FS bankruptcy-induced credit tightness and lockdowns have tested the best of the corporate balance sheets & business models in the last few years. While larger companies are better placed to handle such jolts, it’s the smaller companies that face existential risks in such an environment. The small & midcaps indices are up by 118% and 86% in the last one year (vs. Sensex return of 62%) and reflect some sense of complacency in terms of risks. We would advise investors to exercise caution in this space. Overall, Indian equities remain an attractive asset class and are expected to do well over the long term. A staggered investment approach via SIPs remains the simplest way to tide over market cycles. The last 12-14 months have also been a wake-up call for a balanced asset allocation plan and investors are suggested to ensure they spread their savings across Equities, Debt and Gold based on their long term goals and risk & return preferences.
Categories: Business News

Sensex at record high: 4 catalysts driving the rally

June 11, 2021 - 2:22pm
As benchmark indices Sensex and Nifty scaled new lifetime highs on Friday, Chakri Lokapriya, CIO & MD, TCG AMC, explains what's driving this leg of the bull market. Edited excerpts from an interview:The market is continuing to move from strength to strength. What is the latest trigger?There are four triggers the way I look at it. The first one is the easing of borrowing cost for service sector like travel, restaurants, etc and also for various other such businesses and MSMEs. As lockdowns ease, they (businesses) will begin to come back and they will need a lower borrowing cost. The second factor is the pace of vaccine drive and the pricing of vaccines for the private sector. The economic recovery is going to be dependent on the pace of vaccination drive. The third and fourth factors are expectations related to fiscal measures for both rural and urban India. Execution has been a problem because of lockdowns. Rural incentives are also important. I think these are the four catalysts which will define the next leg of rally.What is the long-term story looking like for TCS?TCS is one of the most well-run companies. It has shown margin improvement on the face of adverse conditions due to the lockdown. The demand has been robust. One of the biggest factors driving margin improvement will be international travel. The onsite-offsite mix is going to make a big difference, unlike the previous years. The second factor is the accelerated adoption of digital technologies, including cloud computing. The pace was not there before the pandemic and now it is not going away. These two things will take the company higher. Its revenue will grow at 8-10%, which is a very big number for a company of that size. Their cash flows helps not only TCS but also other group companies.How you are looking at the entire cluster of power stocks? Of late, this basket has been very active.Many power stocks are trading below their book value. Take NTPC as an example. It is trading below its book value because the country has been under lockdowns and so the demand for power has been low. Now as the economy unlocks and demand picks up, its bottom line and book value will also improve. So the stock will look even cheaper. It is fairly certain that at some point, depending on the pace of the vaccine drive, the Indian economy will open up. So NTPC looks good. If you look at Tata Power, it is a similar story. It is slightly more expensive at 1.5 times its book value. There is also a talk about some new policies which may help power stocks. But just the unlock theme is sufficient to correct some undervaluation.Which stocks look attractive to you in the midcap basket?It would be the consumer names and unlock trades - Crompton Greaves or Bata. These are the companies which have underperformed over the last one year. As India unlocks and these companies gain back their traction, I think a decent upside of about 20-25% is possible in these stocks over the next 6 to 12 months.
Categories: Business News

G7 move closer to tax plan for US tech giants

June 11, 2021 - 2:22pm
G7 countries that make up lucrative markets for US tech giants have moved closer to a plan to squeeze more tax money from the coffers of Amazon, Apple, Facebook and Google. The group, including Britain, Canada, France, Germany, Italy, Japan and the United States, has visions of a global tax rate of at least 15 percent on the multinational behemoths. The move comes as US President Joe Biden is pressing to raise the corporate tax rate, taking particular aim at companies reaping fortunes. "Pressure has been building over the years," said Georgetown University law professor Lilian Faulhaber. "I think some of it, honestly, is just political." The pandemic's hit to economies has made it harder to balance government budgets, the professor noted. At the same time, voters see stories of internet firms raking in profits while avoiding taxes and, perhaps, taking advantage of market dominance. "More and more voters have gotten upset about this," Faulhaber said. Silicon Valley giants are increasingly under fire in Europe and the United States due to concerns about wielding monopoly-like power. "Maybe the resentment bleeds from one side into the other in terms of tax avoidance and the influence these companies have over the way we live," said Alan Auerbach, a taxation specialist in the University of California, Berkeley, economics department.Outdated tax code Nations out to optimize tax revenue from tech firms face powerful companies adept at using data, analytics and ingenuity to build markets and profits. In the United States, internet companies take advantage of opportunities for tax credits from investments or recruiting. Elsewhere, companies use legal strategies to shift profits to countries with low tax rates and move losses to places where taxes are steep. "It's wrong to call them ethically or morally defective because they take advantage of the incentives that we provide them," Auerbach said. "The international tax system is designed for an earlier era; when companies had a clear residence and their production occurred in one place," added Auerbach, co-author of recently released Taxing Profit in a Global Economy. Using a 19th century tax code in a 21st century economy is a recipe for losing revenue, he reasoned. Part of the G7 reform plan involves taxing multinational corporations where they make their money rather than where they have offices or factories. "There are all these people who are both receiving services and providing eyeballs," Faulhaber said, referring to online audiences cashed in on by internet firms relying on digital advertising. "Previously, their role has not been recognized in international tax law." In Europe, such a tax code change would be felt in Ireland, which has attracted companies such as Apple with a favorable tax environment.Mere 'pinch' It remained unclear whether the G7 would achieve its goal. Questions to be answered included whether countries could woo companies with deductions or breaks, and what portions of profits should be taxed. What would become of digital taxes already introduced in countries such as Britain, France, Italy and Spain? Nuances of a global tax would have to be negotiated by those involved, with everyone figuring out how to apply the rules fairly. Authorities will also need to craft a code that targets large tech firms while avoiding penalizing small or unrelated firms. "In the end, it's a pinch; it's not going to be a back breaker," said Wedbush Securities analyst Dan Ives. "Because ultimately global tax structures of big tech are some of the most complex in the world." Seattle-based Amazon, for example, has been keen to distinguish itself from Silicon Valley firms by playing up its e-commerce core, complete with warehouses and a relatively lean profit margin of six percent. The profile changes significantly once Amazon Web Services, its lucrative cloud computing division, is factored into the equation. Saying Amazon is not a tech company is "like saying (Lionel) Messi doesn't play football," Ives quipped, referring to the Argentinian soccer star.
Categories: Business News

India reports 91,702 Covid cases, 3,403 deaths

June 11, 2021 - 2:22pm
India today reported 91,702 fresh cases of Covid-19 in the last 24 hours, with daily positivity rate dropping to 4.49 per cent. This is the fourth consecutive day when the case count in the country remained below the one-lakh mark.According to the updated Union Health Ministry data, the total tally of cases now stands at 2,92,74,823, in which 11,21,671 are active cases comprising 3.83 per cent of the total infections. The recovery rate has improved to 94.93 per cent. A net decline of 46,281 cases has been recorded in the COVID-19 caseload in a span of 24 hours.Total 3,403 death cases have been reported in the last 24 hours taking the Covid-19 toll in the country to 3,63,079.According to the data, 20,44,131 Covid tests were conducted yesterday taking the total cumulative tests conducted so far in the country to 37,42,42,384.The daily positivity rate is now at 4.49 per cent, which is now below 10 per cent for the past 18 days, the ministry said, adding the weekly positivity rate has also declined to 5.14 per cent.Recoveries continue to outnumber daily new cases for 29th consecutive day. The number of people who have recuperated from the disease surged to 2,77,90,073, while the case fatality rate has increased to 1.24 per cent, the data stated.On the vaccination front, 24,60,85,649 COVID-19 vaccine doses have been administered so far across the country.The country'stally had crossed the 20-lakh mark on August 7, 40 lakh on September 5 and 50 lakh on September 16 last year. It surpassed the one-crore mark on December 19. India crossed the grim milestone of 2 crore on May 4.The 3,403 new fatalities include 1,915 from Maharashtra, 358 from Tamil Nadu, 194 each from Karnataka and Kerala.A total of 3,63,079 deaths have been reported so far in the country including 1,03,748 from Maharashtra, 32,485 from Karnataka, 28,528 from Tamil Nadu, 24,748 from Delhi, 21,597 from Uttar Pradesh, 16,642 from West Bengal, 15,367 from Punjab and 13,285 from Chhattisgarh.The ministry highlighted that over 70 per cent of the deaths occurred due to comorbidities.(Inputs from PTI)
Categories: Business News

2nd highest rain for India in May in 121 yrs

June 11, 2021 - 2:22pm
India as a whole received the second highest monthly rainfall for the month of May in the last 121 years since 1901. There were no major heat wave conditions and the fourth lowest average monthly maximum temperature for the month of May during 1901 to 2021, which was also the lowest in the last 44 years after 1977. Monthly rainfall features: All India rainfall was second highest since 1901. Rainfall over the country as a whole for the month of May 2021 shows that it has recorded 107.9 mm which is 74 % more than its Long Period Average (LPA) of 62 mm. Rainfall over India during the month of May was second highest since 1901. The reasons for absence of any major spells of heat wave in the month over India included regular occurrence of wet spells at regular intervals and due to the rainfall caused under the influence of the two cyclones; Tauktae and Yaas during the second half of May. The Western Disturbance (WD) activity in the month of May 2021 was higher than normal as a total of eight WD moved across Western Himalayan Region against the normal of four to five WDs. In May 2021, all six active WDs caused fairly widespread rainfall/thunderstorms activity over Western Himalayan Region. In all three months of this summer of 2021, frequencies of WD activities over north India were higher than normal. In March, April and May 2021, it was 7,9 and 8 respectively against a normal of 4-6 WDs. Remnants of Extremely Severe Cyclonic Storm “Tauktae” (pronounced as Tau’Te) and its interaction with one of the Western Disturbance during 18-20 May 2021, has caused fairly widespread to widespread rainfall/thunderstorms over Uttarakhand and over the plains of northwest India along with isolated heavy 7 to very heavy rainfall over Haryana, Chandigarh & Delhi and Uttar Pradesh and isolated extremely heavy rainfall over Uttarakhand on one day each; National capital Delhi also has recorded unusual high rainfall of 11.9cm on 19th May 2021 from this interaction and it was ever highest for Delhi for the month of May. No Significant Heat wave spell observed during the month over any parts of India. "Like in March and April 2021, heat wave conditions in May 2021 were occasional and also for shorter periods over very small regions. No Significant Heat wave occurred during the month over the country except northwest Rajasthan where it was observed for 2 days on 29 and 30 May 2021. The national Capital Delhi, reported a max temperature of less than 40 celcius on most of the dates of May 2021," said IMD. The observed average maximum, average minimum and mean temperature for the country as a whole during May 2021 are 34.18ºC, 24.17ºC and 29.17ºC respectively, against the normal of 35.17ºC, 24.32ºC and 29.74ºC based on period 1981-2010. Thus, the average maximum, average minimum and mean temperature for the country as a whole were below/near normal by 0.99ºC, 0.15ºC and 0.57ºC respectively. The average maximum temperature over India during May 2021 is fourth lowest at 34.18 ºC since 1901 with the lowest ever temperature recorded in 1917 when it was 32.68 ºC. The average minimum temperature of May is also the lowest in the last 44 years after 1977 when it was 33.84 ºC. It shows the maximum temperatures were above normal in almost most parts of India except Kashmir, northeastern states and Saurashtra and Kutch areas and parts of Tamilnadu where it was 1-2 ºC below normal. The maximum temperatures were 2 to 5ºC above normal over central and northern plains of India and central parts of Peninsular India. IMD has projected that considering the month as whole, the rainfall activity in June is likely to be normal to above normal over central India and adjoining Peninsula and north India during June 2021.
Categories: Business News

India has only scratched the surface in online retail, no real competition there yet: K Ganesh, GrowthStory

June 11, 2021 - 2:22pm
K Ganesh, Founder, GrowthStory tells ET Now's Tamanna Inamdar about Tata Digital's recent deal spree and what these new deals portend for Indian etail. Edited excerpts:How do you look Tata Digital's shopping spree? What are the challenges here that the company faces?This is a milestone moment — a large, traditional conglomerate has taken the big, bold step of paying a premium to acquire new-age digital companies. It's not normally done in India, because people like to build it on their own. They do not like to acquire loss-making companies which is not EPS accretive. So, it's a very welcome, bold move.The world is clearly moving online. Covid has only accelerated it. Online commerce makes a lot more sense because it's several orders of magnitude cheaper to sell online in a vast country like India than to build tens of thousands of stores. You are already seeing the likes of Kishore Biyani and other struggling.India is still very early in the game. It makes sense for large industrial companies like Tata and Reliance to bet on this sector now that they already have done traditional retail and can leverage all the learning instincts and stores they have built over the years.Indian economy, needless to say, is one of the fastest growing in the world. Indian consumer market is one of the largest. US and China are also huge markets, but they are fully developed. So, it's great to see this happening in India.I like it also because when they bring IPOs in India, that enables the Indian retail investors to participate in the growth. Otherwise, all the value creation and capital appreciation go to foreign funds and foreign investors.Paytm, Zomato going public in India, with potentially Tata Digital also going public, is a hugely positive development. It answers questions like where are the exits in India, how will loss-making companies ever make money, how will they exit, etc. All of that has now been done.Now, Super app is a completely different story. China has really confused everyone. Which app, for instance, is big because messaging is at the core of it and messaging is the highest frequency activity consumers indulge in. Equivalent to WeChat in India is WhatsApp. Now how the Super app is going to help in India is a question that we need to answer.Tencent, for example, used tens and hundreds of millions of users who live on WeChat to build a Super app. They added gaming, they added commerce, they added payments, they added ticketing — almost everything. The users and usage were already there.To start building a super app, it really require a core functionality which is super high-frequency. Messaging is the best, payment is slightly less so, commerce is not frequent except in fresh fruits and vegetables. That is where I think this BigBasket and medicine acquisitions make sense.Merely adding a lot of categories into one app does not really solve the problem. The core problem of acquiring millions of users still remains. Besides, consumers can always order what they want on individual apps. That really is the question.So, how are you going to build a super app in India where a WeChat-like entity is not there? Facebook's investment in Reliance makes sense if we assume WhatsApp as the super app. But it's still very early stage; there's a lot to play out in this particular space.Amazon is trying to build more and more traction with users, Reliance is getting into the game. How can Tata Digital ensure that it is in the race with the other giants?Firstly, like I mentioned, we only have scratched the surface in the retail sector. There is a lot of headroom. I do not see real competition yet.If we go back a few years when Amazon entered India, people said Flipkart is finished, how will Flipkart even compete, and stuff like that. But both of them grew tremendously, and are still growing. That's because they are not growing at the cost of each other; they are growing at the cost of offline coming online. Covid has only accelerated it. So that is point number one.Two, there are two distinct ways to get products to consumers. The first is using national-level distribution channels like Amazon or Flipkart, where products can be shipped anywhere in the country from warehouses. The second one is hyper local distribution — DoorDash, BigBasket, Swiggy, where products are shipped from a nearby dark existing store.Most products can be delivered by either method. But fresh products — foods and vegetables, restaurant food, etc — can only be delivered by hyper local companies.Now these are two different things. The moment you go hyper local, it means you cannot do one national strategy. You have to take on city by city, neighbourhood by neighbourhood. You have to fight with your competitors in each city separately.So automatically, it is almost like, say, a school business. You can have one great school in Delhi and another great school in Chennai. No single school can cater to everybody, because it is a physical school, you have to do that stuff.Both of these require huge amount of capital. I think there is enough room for everybody to grow, for everybody to build their businesses. So I do not see a challenge of competition eating into it. Obviously, you have to stitch this together, you have to build the right culture, you have to be able to ensure that the customer keeps coming back, but that's about it.Just to take an international example — what is the biggest, hottest thing that is happening abroad? It's DoorDash, a $40 billion US company that started with food delivery and is now in groceries, is on-boarding locals stores in other categories (Macy’s for fashion is an example). And in future, they can well add something like BestBuy for electronics, Staples for office products, millions of local stores that have products that Amazon has and more.Now tell me — is not it more efficient to deliver electronics or fashion from an existing local store than to carry your own inventory, build large warehouses, invest in nationwide logistics networks? So, that entire gamut is now open for Tata or for Reliance.One good way for Tata could be to start with BigBasket and then add to it. So look at it like this: be a DoorDash and not an Amazon.Amazon, of course, is great. Amazon will grow. But see, Amazon is making money from AWS, it is not making money in retail, while DoorDash is a $40-billion company in retail.To sum it up, there is great opportunity in the hyper local model. At the national level, we have Flipkart and Amazon are there, and we may have a couple of more large players — Reliance and Tata can become big. But the rest the field is still fully and completely open. Competition is really not the issue; taking share from offline is the issue.
Categories: Business News

Auto sales crash in May 2021 amid COVID-induced lockdowns

June 11, 2021 - 2:22pm
Sales of automobiles in the local market last month sequentially declined in strong double-digits with state governments imposing sporadic lockdowns to check the spread of the second wave of the coronavirus pandemic. As many as 88,045 passenger vehicles were sold last month, compared to 33,546 units sold in the year-ago period, according to data released by industry body Society of Indian Automobile Manufacturers (SIAM). The numbers are, however, not comparable because as both production and retail sales in both months were impacted due to lockdowns imposed in the country to curb Covid-19 cases. The sales data does not include volumes of Tata Motors, which has stopped reporting to SIAM on a monthly basis. Sales of three-wheelers last month stood at 1,251 units compared to 2,437 units in May 2020. Wholesale volumes of two-wheelers last month were 352,717 units, as against 279,682 units sold in May 2020. Automakers in India report wholesale dispatches from factories and not retail sales from dealers to customers. “Most part of May was under lockdown in many states thus impacting overall sales and production. Many members had shut down their manufacturing plants to divert oxygen from industrial use for medical purposes”, said Rajesh Menon, director general, SIAM. He added that since both May 2020 and May 2021 were abnormal months because of the Covid-19 situation and lockdowns, comparison of these two months holds no meaning. However, a comparison of May 2021 sales with May 2019, which was a normal year, presents a realistic picture. “So, as compared to May 2019, sales in the month of May 2021, for Passenger vehicles stood at 88,045 units (- 61.2%), for Two-wheelers at 3,52,717 units (- 79.6%) and for Three-Wheelers at just 1,251 units (- 97.6%)”, Menon informed.
Categories: Business News

Can cryptos change the fortunes of struggling asset management industry?

June 11, 2021 - 2:22pm
The outlook for the global asset management industry, plagued in recent years by unmerciful downward pressure on fees, is starting to look brighter. With meme stocks, decentralized finance and non-fungible tokens capturing the headlines, money managers need to keep up with the zeitgeist. A new report suggests that the cryptocurrency markets offer a great opportunity for fund managers and wealth management firms to tap a new client base and seize a source of fresh revenue. Color me skeptical.The Bank for International Settlements just put crypto assets in the highest risk category, suggesting banks will need to hold a dollar in capital for each dollar’s worth of Bitcoin on their books. Risks abound, including regulatory uncertainty, crypto’s role in money laundering, the seeming vulnerability of wallets to getting stolen and backlash against the environmental costs of mining digital currencies. Not to mention the volatility that’s seen Bitcoin trade in a 130 per cent range this year, leaving it currently about 40 per cent off its April high.Nevertheless, the potential growth for an asset class that’s exploded in recent years means the fund management community needs to be poised to meet client demand, according to a study just published by investment bank Morgan Stanley and consultancy firm Oliver Wyman.If Bitcoin really is digital gold, then the bullion market provides a guide to its potential. Gold market capitalization has traditionally been between 5 per cent and 15 per cent of global gross domestic product, with about 50 per cent of demand coming from its use as a store of value rather than a commodity. On that basis, the report argues that Bitcoin’s market cap could reach $6 trillion by 2025.The real El Dorado could materialize if the Securities and Exchange Commission finally approves an exchange-traded fund that can buy Bitcoin in the U.S. The report’s most bullish scenario sees Bitcoin growing to $9 trillion in market cap, spawning $450 billion of higher-fee ETFs with potential annual revenues of $4.5 billion. No asset manager in the hugely competitive passive space will want to miss out on such a potential goldmine. There are other opportunities for the investment industry to expand revenues in the coming five years, the report’s authors say. In private wealth, total assets could almost double by 2025 to $13 trillion. The chunky fees still available from assets including private equity, venture capital and real estate make that a $21 billion-a-year revenue rainmaker.Another hot spot is in the environmental, social and governance space. A shift to “more mature” ESG strategies, including impact investing, will grow the market to $6.5 trillion from about $2 trillion. And in wealth management, the report says advances in technology will make it cheaper for firms to produce customized portfolios for a wider range of wealthy customers, even those with less than $10 million.But it’s in the crypto arena where investment firms face the hardest choice. “There are likely significant benefits from being an early mover,” the report says. There are also significant risks, both reputational and financial. That will probably inhibit the widespread introduction of portfolio tools based on virtual currencies, especially while regulators remain wary of being seen to legitimize the asset class.All of which makes the SEC’s delayed decision on approving a Bitcoin ETF a key moment. If it says yes, then there’ll be a devil-take-the-hindmost rush to create a universe of investment products tied to digital currencies. Until and unless it does, crypto is likely to remain just that bit too racy for most of the mainstream financial community.
Categories: Business News

Shyam Metalics IPO opens on Monday: Should you subscribe to the issue?

June 11, 2021 - 2:22pm
NEW DELHI: Shyam Metalics, the firm that produces intermediate and long steel products, will hit the market with a Rs 909 crore initial public offering (IPO) on Monday. Analysts said the issue is reasonably valued and has enough on the table for investors.The IPO will be sold in the Rs 303-Rs 306 price band and would comprise fresh issuance of shares, aggregating up to Rs 657 crore, and an offer for sale of shares worth up to Rs 252 crore by existing shareholders.Analysts said the company has consistently outperformed its peers in terms of profitability. They said the majority of the power that Shyam Metalics consumes is met through captive sources, which results in low power costs and, thereby, improved operating performance vis-à-vis its peers. The company also enjoys low freight costs due to captive railway siding.Astha Jain of Hem Securities said the company is bringing in the issue at a PE multiple of 13 times on a post-issue annualised FY21 EPS basis."We like the company’s financial performance with healthy balance sheet status. Efficiency improvements, better productivity and cost rationalisation have enabled the company to deliver consistent and strong financial and operational performance,” Jain said and recommended a “subscribe” rating to the issue on both short- and long-term basis.Reliance Securities said the issue is valued at 2.4 times of 9MFY21 basis and 12.8 times of FY21 annualised earnings, which look reasonable."Considering improved visibility of demand recovery in domestic as well as international markets, led by a strong focus on infrastructure development and steady pricing scenario, Shyam Metalics’ financial performance is expected to improve significantly in the coming quarters," the brokerage said.It said the domestic steel industry is witnessing a structural change with increased commitment towards reduction in carbon emission by large producing countries like China, which bodes well for the domestic steelmakers."A strong balance sheet along with best-in-class leveraging positioning offers an edge to SMEL. Additionally, the OCF (operating cash flow) yield at 8.4 per cent as on 9MFY21 looks to be impressive and expected to improve further with higher cash flow generation in the ensuing quarters," Reliance Securities said and recommended a ‘subscribe’ rating on the issue.The company is one of the leading integrated steel and ferroalloys producers in the eastern region of India in terms of long steel products. It has three manufacturing units with an operating capacity of 5.70 million tonnes per annum, with 227 mw of captive power capacity.Shyam Metalics' integrated units are located at Sambalpur, Odisha and Jamuria, West Bengal respectively. Another unit is located at Mangalpur, West Bengal. The integrated nature (backward and forward integration) of manufacturing plants has resulted in the control over all aspects of their operations with the exception of sourcing of primary raw materials, Kotak Securities said in a note."The backward integration activities, include, setting up of iron pellet plants and installation of rotary kilns to produce sponge iron. SMEL utilises the sponge iron produced to further manufacture billets. The forward integration activities include, diversification of their product mix by utilising the billets to produce value-added products, such as, TMT bars, structural products, and wire rods, which enable them to de-risk revenue streams and expand product offerings," Kotak said.The company has a relatively better financial strength compared with peers operating in the long and intermediary steel sector, Axis Securities said, adding that the company has reported healthy operational as well as financial growth despite downturns in the industry, especially during FY09 and FY15.Revenues of Shyam Metalics rose 6.5 per cent compounded annually to Rs 4,362.89 crore in FY20 over Rs 3,842.57 crore in FY18 (It had fallen in FY20). Revenues for the first nine months of FY21 rose 19.80 per cent to Rs 3,933.08 crore. The company's manufacturing plants are currently operating subject to certain social distancing and additional safety measures.Ebitda for FY20 came in at Rs 634 crore and for first nine months of FY21 at Rs 717.32 crore.Profit almost halved to Rs 340 crore in FY20 from Rs 637 crore in FY19, though it has improved strongly to Rs 456 crore in the first nine months of FY21 from Rs 260 crore in comparable period last year.The company is least leveraged group among its peers, Axis Securities said.The company proposes to use the net proceeds from the fresh issue towards repayment or prepayment of up to Rs 470 crore of its debt and that of its subsidiary, Shyam SEL and Power, and for other general corporate purposes.Angel Broking said valuations are optically high at 9.2 times trailing 12-month EV/Ebitda, but volume and realisation growth and improving Ebitda per tonne (that suggests a higher contribution from value-added products), are suggesting reasonable FY23 EV/Ebitda. This brokerage has a 'subscribe' rating on the issue.
Categories: Business News

How to get same day NAV for MF investments

June 11, 2021 - 11:21am
Effective February 1, 2021, mutual fund investors only get the same day's net asset value (NAV) if their application for purchase of units as well as the payment reaches the mutual fund house's bank account before 3 PM on a business day for all equity and debt schemes. If the payment reaches the mutual fund's account after 3 PM, then the individual (investor) will get units valued at the next day's NAV.At times it can be very important for investors to get the units allotted on the same day as the payment is made i.e., get the same day's NAV. For example, those investing in ELSS schemes on the last day of the tax-saving season, i.e., on March 31. Also, those investors investing in a mutual fund scheme with plans of getting indexation benefit for long term capital gains tax or those investors wanting to invest in a debt MF the day before the NAV goes up due to expectation of a cut in policy interest rates by the Reserve Bank of India (RBI).There are various ways such as cheque, Net-banking, IMPS, RTGS, UPI etc. by which an individual can invest in a mutual fund. Though each option comes with its own set of pros and cons, however, it appears that IMPS, UPI and RTGS are better options for transferring money to the mutual fund's bank account. This is because they are faster in crediting money to the mutual fund's bank account as compared to other methods. Although you can get the same day's NAV by investing before 3 PM, you might not always be able to do this despite making the payment before 3 PM. This is because there can be instances where money has been debited from your bank account but the inefficiency of your bank's server, server glitches or glitches in online banking etc. can delay the credit of funds in the mutual fund's bank account.Remember on April 1, 2021, many customers faced glitches in transfer of money via NEFT, RTGS, IMPS and UPI etc. As per National Payments Corporation of India (NPCI), the financial year closing had led to some UPI and IMPS transactions failure at few banks. Due to this failure, money was not credited into the beneficiary's bank account immediately which is not normally supposed to happen on these money transferring platforms.Here are the pros and cons of five commonly used payment methods.Investment via chequeIf payment for units of a mutual fund is made via a cheque, then it usually takes two to three days for the bank to clear the cheque and transfer the money to the mutual fund's bank account. Once the money reaches the fund house's bank account, only then is the investment done and units are allotted to an investor based on the NAV prevailing on the day money has reached mutual fund's bank account. So, if you are investing in a mutual fund via cheque be prepared to get the allotment date and the corresponding NAV of a few days after deposit of application and cheque with fund house/registrar.Investment via RTGS/NEFTIn case of RTGS/NEFT, the money is transferred usually within 30 minutes to one hour to the mutual fund's bank account. However, in case an individual has not earlier added the mutual fund's bank account as a beneficiary in their Net banking account, then the time taken to transfer the money will be more. When a beneficiary's details are added for the first time, banks usually take 30 mins to 1 hour before allowing the transfer of funds for the first time. Further, some banks put in restrictions on the maximum amount that can be transferred for the first time to the newly added beneficiary account.Milind Nesarikar, Chief Risk, Service Delivery and Operations Excellence Officer, Nippon India Mutual Fund says, "Investors investing in Nippon India mutual funds including ELSS schemes should transfer funds via NEFT before 1 PM or via RTGS before 2:30 PM to get the same day NAV."Though there is no limit on the minimum or maximum amount that can be transferred via NEFT, banks may put a limit on the maximum amount that can be transferred per transaction or per day. For instance, as per State Bank of India website, RTGS can be done for a minimum of Rs 2 lakh and a maximum of Rs 10 lakh. Similarly, NEFT can be done for a maximum of Rs 10 lakh. In case of RTGS transfer, the minimum transfer amount starts from Rs 2 lakh onwards. So do check these details with the bank before you choose your payment method.Investment via UPI/IMPSInvestment in mutual fund schemes can also be done via UPI and IMPS. However, do keep in mind that the maximum that can be transferred via IMPS is Rs 2 lakh per transaction. On the other hand, UPI permits a maximum transaction of Rs 1 lakh per account per day.Nesarikar says, "In case of UPI/IMPS, the money transfers can be done till 2.45 PM for Nippon India mutual fund schemes. This is because they provide instantaneous transfer of money from the investor's bank account to the scheme's mutual fund bank account." Debit cards/Credit cardsNesarikar says, "Investments via credit cards are not allowed in the mutual funds. Investments via debit cards were earlier allowed, however, they offer T+1 settlement. This would mean that NAV of the next day will be allotted to the invested. Further, mutual funds have discontinued the option of investing via debit cards as it is the mutual fund house's responsibility to ensure that no third-party investments have been made using debit cards. It is difficult to cross-check in case of debit cards whether the investor is actually the debit card holder."Net banking--Tie-ups with banksYou might think that this method would always mean an instantaneous transfer of funds, but this is not always the case. Even this depends on the bank's efficiency and whether the MF has a tie-up with the bank or not.People can use net banking to transfer the payment money to the relevant fund house's bank account. To offer an instantaneous transfer of money to the mutual fund's bank account, some AMCs have tied up with various banks. While making an investment in the mutual fund scheme, an investor can choose from the bank options mentioned on the mutual fund website and then make the payment via Net-banking if they have a bank account with any of these banks. For instance, Nippon Mutual fund has tie-ups with 8 banks such as HDFC Bank, ICICI Bank, Axis Bank etc. What happens if you have a bank account with a bank that does not have a tie-up with the mutual fund house? Ashwin Karmarkar, Partner, Vintage Finvest, a mutual fund distributor says, "In case of transaction with a non-tie up bank, the transfer of funds from the individual's account to the mutual fund's bank account will depend on the efficiency of the individual's bank in handling online transfers. Often, public sector banks clear such money transfers with a one-day delay. Thus, even if money is debited from the customer's account immediately, the money will reach the mutual fund's bank account either after 3 PM or the next day. It will lead to the individual getting next day's NAV."What the new NAV rule statesNAV is the net asset value or market value of the securities held by the scheme and it varies on a day-to-day basis. Before February 1, 2021, individuals making purchase transactions up to Rs 2 lakh were given same day NAV irrespective of whether money had been actually transferred to the mutual fund's bank account or not.The new rule effective from February 1, 2021, is applicable on all purchase transactions including initial investments and additional investments made via lump sum or systematic investment plans (SIP). Further, investments made by switching from one mutual fund scheme to another (including switch transactions via systematic transfer plan) will be allotted NAV based on the time that the invested funds become available in the target scheme.Manish Mehta, National Head - Sales, Digital Business & Marketing, Kotak Mahindra Asset Management Company says, "In case of overnight/liquid schemes, a client gets previous day NAV if the application form and realized proceeds reflect in the AMC bank account by 1.30 PM. In all other schemes, the cut off time is 3 PM. Irrespective of the payment mode being used, clear funds have to be in the AMC bank account before the said cut off time to get the same-day NAV."Liquid mutual fund schemes are usually used by companies to earn one-day returns. Karmarkar explains how this works. Suppose the funds are transferred on Wednesday and reach the mutual fund's bank account before 1:30 PM. In such a scenario, the mutual fund will allot the units based on the previous day's NAV, i.e., Tuesday. Now, let us say on the same day when the money is transferred (i.e., Wednesday), a redemption request has been issued by the investor. In such a case, the units will be redeemed based on Wednesday's NAV, thus, offering the investor one-day return presuming that Wednesday's NAV is higher than Tuesday's.
Categories: Business News

Reality check awaits Kerry's bid to cut ships’ CO2

June 11, 2021 - 11:21am
John Kerry wants to accelerate the decarbonization of the global shipping industry which spews more carbon dioxide into the atmosphere each year than France and the U.K. combined.The U.S. climate envoy said back in April that he wants international shipping’s emissions to drop to zero by 2050, a much sharper cut than the industry’s current target. The U.S. will work with other countries at the International Maritime Organization, which regulates global shipping, to “adopt ambitious measures that’ll place the entire sector on a pathway to achieve this goal,” he said.From Thursday, those aims will face their first major test as countries gather virtually for the latest round of IMO talks on cutting CO2 emissions. Major proposals, including a carbon tax, are on the table. And while little of significance is likely to be decided at this meeting, the new U.S. position is expected by industry insiders to give fresh impetus to the discussions.“Game changer is a strong word, but it’s probably true in this context,” Soren Skou, chief executive officer of A.P. Moeller-Maersk A/S, the world’s largest container line, said of the new U.S. stance. It suggests there’s a “better chance” of getting to zero emissions by 2050, he said.Shipping’s current 2050 target is only a 50% reduction in annual greenhouse gas emissions versus 2008, whereas limiting global warming to 1.5 degrees Celsius requires net-zero CO2 by around the same time. So far, there’s no concrete plan to achieve even this lower level of ambition, although the industry overwhelmingly supports putting a price on carbon to force behavioral change and enable clean alternatives to compete with today’s fossil-based marine fuels.To that end, Maersk has called for a CO2 tax on marine fuels of at least $150 per ton, which would almost double the cost of very low-sulfur fuel oil, a popular ship propellant, using today’s prices. Commodities trading giant Trafigura has pitched even higher at $250-$300 per ton. 83423354On the agenda for the upcoming talks, officially called MEPC 76, is a very small CO2-based charge -- backed by the shipping industry and multiple countries -- to raise $5 billion for research into clean alternatives. There’s also a call for a $100-a-ton carbon dioxide tax by 2025, ratcheting up every five years, from the Marshall Islands and Solomon Islands. Neither are likely to be approved this time round, but the discussions are still worth watching.“Look at it as a test point to see what kind of measures stand a chance, in current circumstances, to be taken forward,” said Faig Abbasov, program director for shipping at Transport and Environment, a non-governmental organization. “Every single word that will come out of the mouths of the country representatives will be valuable.”Shipping is responsible for almost 3% of the planet’s man-made CO2 emissions and currently aims to stop pumping greenhouse gases into the atmosphere by the end of this century. That doesn’t sit well with the rising climate urgency in the international community. More than 110 countries are now targeting carbon neutrality in under three decades, according to the UN.U.S. ActionPreviously approved rules on carbon intensity reduction relating to how ships are designed and operated, known as short-term measures, are also set to be formally adopted at the talks. Wrangling over key detail has recently taken place, with the U.S. among those pushing for a stronger reduction, Abbasov said.“The United States supports adopting regulations at the IMO to place the international shipping sector on a pathway to achieve zero greenhouse gas emissions, both in the context of the short-term measures to be adopted at MEPC-76 and the mid-term measures to be adopted in the coming years,” a State Department spokesman said.But however bullish the U.S. is on short-term measures, the success of its agenda ultimately rests on weaning the global shipping industry -- which delivers about 80% of world trade -- off oil-based fuels. For that to succeed, governments around the world may have to get behind a global carbon tax. That could be a tricky conundrum for a U.S. administration that has yet to fully embrace that idea domestically.Although the U.S. only has one vote at the IMO, its new stance “ratchets up pressure,” on the organization, said Edmund Hughes, a former official at the UN regulator who was responsible for greenhouse gas emissions.“It gives a very clear signal to business about investment, and that’s critical,” he said.(With assistance from Jennifer A. Dlouhy and Will Wade)
Categories: Business News

If owner dies, asset goes to Jt holder or nominee?

June 11, 2021 - 11:21am
In case of death of one of the holders of an asset such as shares, bank fixed deposits, bank accounts and mutual fund units, would the asset be transferred to the joint holder or the nominee? In case of single holding of shares, fixed deposits (FDs), bank accounts and mutual funds (MFs) it is clear that if there is a nomination registered, then the money will be given to the nominee(s) after the death of the asset holder. If no nomination is mentioned, then the money will be given to the legal heir(s) of the asset holder.What happens in the case of a joint/Either or Survivor holding of an asset? After the death of one of the asset holders, to whom the money will be transferred -- will it be the nominee or the surviving joint/other holder(s)?Here's a look at how transfer of money works in such a scenario for various assets. However, according to experts, irrespective of whether the money is transferred to the nominee or to the surviving joint holder, the rightful owner of the asset in the event of the demise of one of the holder will be the legal heir(s) of the deceased person only, unless specifically mentioned in a will.SHARESAs per the rules of the investment, shares can either be held singly or jointly. There is no option of holding shares in 'Either or Survivor' mode in case of joint holding of the same. Also, as per current laws, in case of joint holding, only one nominee is allowed.(a) Single holdingHere, shares will be transferred to the nominee in the event of death of the shareholder if nomination was made earlier. If no nomination was made, then the shares will be transferred to the legal heir(s).(b) Joint holding of sharesDivi Dutta, Partner, Shardul Amarchand Mangaldas & Co. says, "If the shares are held jointly and a nomination is also made in respect of those shares, then in the event of death of one of the holders, the shares will be transferred in the name of the surviving holder."Regarding the nominee of the asset, Dutta says, "The nominee will be entitled to receive the shares when all the joint holders of a share die. In case no nomination is made then the shares will be transferred to the legal heir(s)."FIXED DEPOSITS Fixed deposit or FDs can be held singly or jointly. In case of joint holding, the mode of operation can be 'jointly' or 'either or survivor' or 'former or survivor' and 'anyone or survivor' in case of two or more than two holders. To whom the money will be transferred in the event of death of one of the fixed deposit holder depends on the mode of the operation.(a) Single holdingWhen the fixed deposit holder dies, the money will be transferred to the nominee if the nomination is registered or to the legal heir(s) if no nomination is registered. However, the final owner of the asset is/are the legal heir(s) as per the will (if any) or relevant succession act. This is explained later in this article.(b) Joint holding operable on joint basisThere is a slight difference in opinion as to what would happen if one of the joint holder's dies in a case where there is a nominee also. However, it appears that the money would be transferred to nominee provided the surviving joint holder agrees.Dutta says, "As per the comprehensive deposit policy of banks, if a fixed deposit is held jointly and one of the holders dies, then the fixed deposit balance will go to the nominee. The bank may however require other procedures to be fulfilled such as submission of requisite documents, consent of the surviving holder etc. This would depend upon every bank's internal policy requirements. If no nomination is registered, then the balance will be paid jointly to the survivor and the legal heirs of the deceased.""In case of bank fixed deposit held on joint basis money will be paid as per the instructions made at the time of opening of account. Usually the instructions are: (a) single (b) either or survivor (c) jointly (d) former or survivor," says Ashok Shah, Senior Partner, NA Shah Associates LLP. He adds, "As per section 45ZA of the Banking Regulation Act, payment is to be made to the nominee only if both joint holders die. In the event, account is held under "joint", and one holder dies, bank may refuse to pay to the survivor on the ground that it is repayable only jointly. In such an event, it may be necessary to procure probate of will or succession certificate, since banks are taking up a position that in absence of either or survivor clause, they will not pay to the joint holder. Payment can be made to nominee only on death of all joint holders. This creates a situation where inspite of there being nomination, banks would be requiring probate/succession certificate. Hence, banks may be persuaded to pay to the nominee with the joint holder consenting it. Usually one nominee is permitted in case of joint holding."(c) Joint holding on Either or Survivor basis"If the fixed deposits are held jointly under 'Either or Survivor' mode, then the money will be transferred to the surviving holder, in the event of death of one of the fixed deposit holders. The nominee will get the money only when all the fixed deposit holders die. If no nomination is registered, then legal heir(s) will be entitled to claim it," says Dutta.BANK ACCOUNTSSimilar to fixed deposits, a bank account can be held singly or jointly. Joint holding can be operable 'jointly' or on 'Either or Survivor' basis. Dutta says, "The rules regarding who will get the money in the event of death of bank account holder are same as those that apply in case of a fixed deposit holder."MUTUAL FUNDSAn investor can invest in mutual funds singly, jointly or jointly with Either or Survivor mode of operation. In the event of death of a unit holder, who will receive the money also depends on the mode of operation of the mutual fund investment.(a) Single holderIf the nomination is registered in the mutual fund scheme, then the units will be transferred in the name of nominee. Dutta says, "If no nominee is registered, then the units will be transferred in the name of the legal heir."(b) Joint holding/Either or Survivor holdingsDutta says, "Irrespective of whether the mutual fund investments are held jointly or in either or survivor mode, in the event of death of a unit holder, the investment is transferred to the surviving unit holder. The nominee, if registered with the mutual fund house, will be entitled for transfer if both or all unit holders pass away. If no nominee is registered then the legal heirs of the unit holders will be entitled for the claim."PROPERTY/REAL ESTATEIn case of property and real estate, there is no concept of nominee. "The properties can be held either in single holding or joint holding. If one of the joint holders of the property dies, then unless specifically mentioned otherwise in the property deed, the legal heir(s) of that holder will be legally entitled for his share in the property," says Dutta. However, in case a property is held in a cooperative society, a nomination can be made with respect to that property. Shah says, "The property in a cooperative society can be held either in single or joint holding. The mode of operation cannot be either or survivor in case of real estate. However, if a property is held in cooperative society, then one can make a nomination. Upon the death of first holder of the shares of co-operative society, the shares can be transferred to the nominee, irrespective of whether the shares are held in single or joint holding. The nominee will hold the shares on behalf of the estate and the property will go to persons who are entitled under the Will or intestate succession as per personal laws applicable."Now the question arises what happens in case the second holder of a property held in cooperative society dies. Shah says, "If second holder (meaning associate member) dies, his name gets deleted. Bye laws of the society will have to be seen whether associate member has been given right of nomination along with first member. If associate member does not have right to make nomination, then heirs of associate member may have to get probate of the Will or succession certificate to get their name inserted in the share certificate."Points to rememberIt is important to have nominations in place for one's assets. However, do keep in mind that the nominee is not the rightful owner of the asset in the event of demise of the asset holder. It will be the legal heir who will ultimately be the owner of the assets of the deceased individual. The legal heir is either determined through testamentary succession, i.e., by way of a will, or by way of operation of the relevant/ applicable succession laws. Dutta says, "Courts in India have consistently upheld the view that nomination does not override the law in relation to testamentary or intestate succession. The provisions regarding nomination are made with a view to ensure that the estate/assets of the deceased are protected until the legal representatives of the deceased take appropriate steps."Shah says, "In case of assets where the mode of holding is in 'either or survivor', 'former or survivor' or 'anyone or survivor', the rightful owner of the asset in the event of the demise of one of the holders will be the legal heir of that deceased person only, unless specifically mentioned in the will. The surviving holder works as the custodian of the assets of the deceased holder."Also read: All you need to know about estate planning, inheritance, will and more
Categories: Business News

Five tips to help NRIs optimise taxes

June 11, 2021 - 11:21am
As a non-resident Indian, you may have the dubious honour of paying tax twice. If you live and earn abroad, your foreign income will be taxed in your host country. But if you still have investments, assets, or business transactions in India that earn you money, you will have to pay tax on the Indian income in India. It only makes sense that you want to make the most of any tax deductions and provisions available to you.There are many different ways for you as a non-resident Indian to save on taxes. Below we unpack five tips to help you optimise your taxes as a non-resident Indian while you are living and earning abroad. These tips include making the most of your pension fund and home loan deductions, as well as maximizing the provisions on the sale of foreign assets. Also Read: 4 tips every NRI needs to know about retirement planningAre NRIs Liable for Taxes on Income in India?Firstly, before we look at saving money on tax, you first need to understand whether you are even liable to pay tax in India as an NRI. Non-resident Indians (NRIs) have to pay tax on any income that is earned in India. Although you are not currently residing in India, you may have NRI investments, assets, or business transactions in India that earn you money. You have to pay tax on that income to the Indian tax authorities.As a non-resident Indian, you will have to pay tax on the following: All income earned or accrued in IndiaYour income that is directly or indirectly received in IndiaIncome that is received, accumulated or accrued in India when deemed as such by the Indian tax authoritiesAny income you earn while not in India that does not fall in the above categories is exempt from income tax in India. The income you earn and accrue abroad while living abroad as a non-resident is taxable by your host country.So yes, as a non-resident Indian you may be liable to pay tax in India. Let’s look at five ways to save on the tax you have to pay.1. Make the Most of Your DeductionsMany of the basic deductions that resident Indians are entitled to are not available to you as a non-resident Indian. You cannot earn tax deductions by investing in social schemes like Public Provident Funds or the National Savings Certificates for example. You also do not have access to tax deductions available for medical benefits or medical expenses.You do, however, have access to the National Pension System and the tax deductions related to it. Under Section 80CCD (1) of the Income Tax Act, you are eligible for a tax deduction on contributions you or your employer makes towards the National Pension System. The maximum tax deduction amount allowed is INR 1.5 lakh. There is an additional deduction of INR 50 000 allowed over and above the INR 1.5 lakh deduction limit to encourage further investment in the National Pension System. To qualify for this additional deduction, you must have exhausted the limit of INR 1.5 lakh by making other investments eligible for deduction. Additional contributions you make towards the National Pension System can be utilized to claim an additional deduction of INR 50,000.2. Apply for a PAN CardA Permanent Account Number (PAN) is a code that identifies you as a taxpayer in India. A Permanent Account Number is used to help prevent tax fraud. You need a Permanent Account Number to claim an income tax refund.Income made in India above a certain threshold is subjected to Tax Deducted at Source. If you fail to provide your Permanent Account Number when you invest in India, you will likely get charged a higher Tax Deducted at Source amount.So, by getting your PAN Card, you can ensure you pay less Tax Deducted at Source.3. Maintain Your NRI StatusWhile living abroad, the income you make abroad is not taxable in India. If, however, your non-resident status is in doubt, your income can be taxed by the Indian tax services. If you want to keep your tax affairs from getting messy, make sure you maintain your NRI status. You need to plan your visits to India in such a way that you don’t lose your non-resident status. Your tax liability is determined by your residential status and income. If your residential status changes, so will your tax liability in India.4. Take Advantage of ProvisionsAnother way to optimise your tax as a non-resident Indian is to take advantage of the tax provisions issued for long-term assets purchased in foreign currency. When selling or transferring foreign assets, you will make a profit or a loss. You cannot deduct for capital gains received against the sale or transfer of foreign assets. But you can get some exemptions under Section 115F of the Income Tax Act.If you make a profit on the sale of foreign assets, you can choose to reinvest this profit into shares of an Indian company, deposit it into an Indian bank, or contribute to the National Savings Certificate plan. There are tax provisions providing for tax exemptions if you choose to reinvest your profit in this way.5. Pay and Claim Home Loan InterestAs a non-resident Indian, you can claim tax deductions that relate to your Indian property. If you pay the interest on your home loan or the property tax on your property, you are eligible for a tax deduction. This makes owning property a good way for non-residents to invest in India.If you are selling your Indian property, you will pay capital gains tax on the sale’s profit. Try to limit the amount of capital gains you make in a year to stay in a lower tax bracket. ConclusionBeing a non-resident Indian can complicate your tax matters. If you live and earn money abroad, your foreign income will be taxed in your host country. But if you still have investments, assets, or business transactions in India that you earn money on, you will have to pay tax on the Indian income in India.Fortunately, there are ways you can save on taxes as an NRI. Keep the five tips we provided top of mind when planning your taxes so you can reduce the tax you have to pay.
Categories: Business News

Brisbane set to be named 2032 Olympics host

June 11, 2021 - 11:21am
Brisbane will be offered as the 2032 Olympics host for International Olympic Committee members to confirm in Tokyo next month. IOC president Thomas Bach said after an executive board meeting Brisbane can be awarded hosting rights at a July 21 meeting ahead of the Tokyo Olympics opening. Brisbane is set to be the first Olympics host selected unopposed under a new system to streamline and speed up bidding campaigns. The Australian city was put on the fast track to victory in February when the IOC named it as the preferred candidate. The Brisbane bid was led by IOC vice president John Coates.
Categories: Business News

Pages

  Udhyog Mitra, Bihar   Trade Mark Registration   Bihar : Facts & Views   Trade Fair  


  Invest Bihar