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RBI may tweak liquidity ops on MPC heat

December 21, 2020 - 8:26am
Mumbai: The Reserve Bank of India (RBI) may be pushed to begin tapering excess liquidity in the second quarter of 2021 as price pressures begin to spread beyond food items and concerns mount about possible instability in the financial markets, with overnight borrowing costs plunging below Mint Road’s desired levels.Policy interest rate and the accommodative stance could remain unchanged for much of 2021, but the RBI may begin tweaking its liquidity operations gradually to pull market rates higher, to at least 4%, its benchmark repo rate, the rate at which it lends to banks. Members of the Monetary Policy Committee (MPC) have warned that too much money in the market is visible in the ballooning of asset prices, and that negative real interest rates for too long could adversely alter savers’ behaviour.They “are debating the optimal timing of normalisation,’’ Sonal Varma, economist at Nomura Securities, said after the latest MPC minutes were published Friday. “Sticky core inflation suggests the effective policy rate should be aligned more closely to the repo rate, instead of being below the reverse repo rate, by reducing surplus liquidity. We expect the process of liquidity withdrawal to begin around the end of the first quarter of 2021, or the second quarter.’’Minutes of the last MPC’s December meeting showed that all the six members were unanimous in keeping the policy stance, but half of them warned that low short-term market rates could come back to haunt the central bank. They also suggested the central bank look at regulatory actions to suck out the markets-distorting excess liquidity.“Regulatory exposure norms can help prevent excess low rates driven short-term borrowing that creates risks,” said Ashima Goyal, one of the three independent members. “It is possible to sterilise excess durable liquidity from expansion in foreign exchange reserves, even while durable liquidity remains sufficiently in surplus to be able to absorb exogenous shocks.”Record Low RatesInterest rates in the overnight market rates fell to a low of 3.10% last week, making the RBI’s reverse repo rate, the rate RBI pays banks for keeping excess funds, of 3.35%, ineffective. Furthermore, the MPC has kept repo rates at 4%. In the overnight market where mutual funds also participate, the rate fell to 2.57% earlier this month.“The central bank needs to relook at its intervention strategy of mopping up dollars given that current forex reserves are sufficient to cover any probable rating downgrade,” said Ashhish Vaidya, MD & country treasurer at DBS Bank. Much of the collapse in money market rates is attributed to the flooding of cash due to RBI’s purchase of US dollars which aggregated about a hundred billion since the breakout of the pandemic taking the reserves to a record $578.5 billion.“The excess liquidity is from foreign exchange flows, both through FDI and FII,” RBI governor Shaktikanta Das said. “We are fully aware of the downside risks.”Reversing the CRR Cut It may begin with the Cash Reserve Ratio. RBI could allow the one percentage point reduction effected until March as an emergency measure to lapse, leading to ₹1.5 lakh crore reduction in surplus. If the foreign exchange inflows remain strong, the central bank could come up with the Market Stabililsation Scheme where it sells bonds to suck out cash. It could also invoke the Standing Deposit Facility. But there is a need to accommodate non-banks like mutual funds if it has to address the liquidity problems. 79829125“Giving greater access to reverse repo aids market development as well as short-term sterilisation,” Goyal said in her comments. “Liquidity management tools can be used at any time.”Excess liquidity could add to inflation which is already at a six-year high and above the targeted 4%.“The demand that is stimulated by a reduction in short rates is not accompanied by an offsetting supply boost, and therefore carries greater inflationary risks,’’ said Jayanth Varma, an independent member of the MPC. November inflation has eased to 6.9%, from 7.6% in October. But prices of steel, copper and aluminium are climbing to multi-year highs. Crude Oil is at a nine-month high after seven straight weeks of gains. “RBI needs to relax norms for lending that will encourage banks to expand credit,’’ said A Balasubramanian, CEO at Aditya Birla Mutual Fund. “Once lending resumes, cash in the banking system should come down, rationalising market rates in sync with the policy rate.’’
Categories: Business News

Bitcoin fever grips India amid global rally

December 21, 2020 - 8:26am
Mumbai: The cryptocurrency frenzy worldwide has rubbed off on Indian investors too. With prices of bitcoin — the most popular cryptocurrency — soaring to a record high of $23,000 and bringing its returns so far in 2020 to over 200%, local retail and rich investors are flocking to this unregulated new-age asset despite expert warnings about abrupt price reversals.Over a million new investors have flocked to the bitcoin market in the six months taking the total investor base for this new-age asset in India to 5-6 million, according to various industry estimates. Trading volumes too have grown multi-fold with the average daily turnover now around $80 million. The global rally in bitcoin along with the Supreme Court judgment earlier this year quashing an earlier Reserve Bank of India ban on cryptocurrencies has contributed to this euphoria locally.“We are seeing a flow of both retail and high networth individuals buying the cryptocurrencies,” said Nischal Shetty, CEO, WazirX, a bitcoin exchange. “While the volumes have gone up as much as 8-10 times in India during the last one year, we have seen at least a million new investors putting money into bitcoin.”79831650Inflationary Hedge for InstitutionsWhile most local investors are in it because of the potential of some quick gains, globally bitcoins are being lapped up even by institutions because they are seen as an inflationary hedge. Cryptocurrencies are now being included in the traditional asset allocation baskets which so far have been stocks, fixed income securities, real estate and gold. Television shows have been name dropping cryptocurrencies. In the popular American series Billions, billionaire hedge fund manager Bobby Axelrod compensated one of his traders with crypto and is also seen debating with nemesis US attorney Chuck Rhoades on the merits of bitcoins.Limited in supply like gold, bitcoins are seen as a protection against the weakening dollar with the US Fed and the government flooding the economy with liquidity as part of their massive stimulus packages to boost recovery. But, unlike gold, which is mostly preferred by boomers, cryptocurrencies are favoured by millennials. A lot of gold bulls are now shifting to bitcoins.“Gold bugs have to face up to the real risk that risk averse capital, which would have otherwise gone to gold to hedge the obvious ongoing fiat paper currency debasement in the G7 world, will now go to bitcoin. In fact that process has already begun,” said Christopher Wood, global head of equity strategy at Jefferies in his newsletter Greed & Fear. “It is also the case that the supply of bitcoin is shrinking, under the quantitative tightening dynamic, which is certainly not the case with gold.”Convenient & Cheap to BuyIn India, almost 30-40% of the bitcoin investor base comprises small-time investors, according to industry estimates. These investors are attracted to cryptos because they are convenient and cheap to punt on compared with regulated securities such as stocks and derivatives. The minimum ticket size for buying bitcoin is as low as Rs 100 without various regulatory requirements.“Unlike traditional equity or derivative markets which are led by institutional investors, the bitcoin market in India is dominated by a large number of small-ticket investors,” said Shetty.The asset class, however, continues to be in the regulatory twilight zone. The Supreme Court judgment in March 2020 has made it clear that bitcoin isn’t illegal but there are no regulations that make the asset legal, keeping it out of institutions’ bounds.Bitcoin witnessed a major boom in 2017 when its value against the dollar went up 20 times between January and December of the calendar year. Its price rose from $970 apiece to $20,000. So, if someone invested Rs 1 crore in January 2017, the same investment would be worth Rs 20 crore by the end of the year. However, the bumper run came crashing in 2018 when the value of this crypto asset fell to $3,700 from $20,000, resulting in many small investors burning their fingers.Risks Remain“Bitcoin popularity is on rise as volumes are picking up and startups engaged in bitcoin related businesses are getting funding from international investors,” said Tanvi Ratna, founder, Policy 4.0 — a boutique consultancy that advises on cryptocurrencies and blockchain solutions. “Globally we have seen some instances where certain large investors had used the ‘pump and dump’ strategy to take the prices up, so one should be mindful of the risks involved.”So, if an investor is buying a bitcoin on a cryptocurrency exchange, there is no guarantee that the seller actually possesses the bitcoins he claims to have. Again, there is no clearing and settlement system and hence the exchange wouldn’t guarantee the settlement of your trade.
Categories: Business News

Delhi High Court to give verdict on Future Retail-Amazon case on December 21

December 21, 2020 - 2:25am
The Delhi High Court will give its verdict today on Future Retail’s petition to restrain Amazon from writing letters to regulators against the retailer’s asset sale deal with Reliance Industries.The court will give its verdict at 10:30 am, Bloomberg reported.Kishore Biyani-led Future Retail Ltd in November, had accused the e-commerce giant of adopting a media strategy of "having every development reported and converted into a line of communication with stock exchanges" regarding the Amazon-Future Coupons' arbitration proceedings in Singapore.In a regulatory filing disclosing the development, FRL said,"...this disclosure is being made out of abundant caution to avoid any speculation given Amazon's media strategy of having every development reported and converted into a line of communication with stock exchanges."Amazon had dragged the Future Group to arbitration after the Biyani-led conglomerate had agreed to sell its retail businesses to Reliance Industries for $3.4 billion - a deal, Amazon alleges, breaches 2019 agreements by Future. Amazon says the 2019 deal, in which it invested nearly $200 million in a Future unit, had clauses saying the group could not sell its retail assets to anyone on a "restricted persons" list, which included Reliance.Reliance has said it plans to "enforce its rights and complete the (Future) transaction ... without any delay."Last month, the Delhi High Court had reserved order on an application by Kishore Biyani led Future Retail Ltd (FRL) seeking to injunct Amazon from interfering in the Reliance-Future deal on the basis of an interim order passed by the Singapore International Arbitration Centre (SIAC).The court had directed the parties to file written submissions by December 21.Amazon had also complained to stock exchanges, accusing Future of misleading public by making incorrect market disclosures, allegations the Future group denies.The SIAC on October 25 had passed an interim order in favour of Amazon barring FRL from taking any step to dispose of or encumber its assets or issuing any securities to secure any funding from a restricted party.The faceoff comes as Jeff Bezos-led Amazon has already been battling tighter foreign investment rules and antitrust cases in India, which is one of its key growth markets where it has committed investments of $6.5 billion.Last year in August, Amazon had bought 49 per cent in one of Kishore Biyani-led Future Group's unlisted firms -- Future Coupons Ltd (FCL) -- with the right to buy into the listed flagship FRL after a few years, if the government were to undo its bar on foreign ownership of multi-brand retailers.However, as FRL ran into a severe cash crunch soon after the nationwide lockdown imposed to curb the coronavirus outbreak it cut a deal with Reliance to sell its assets for Rs 24,713 crore.With agency inputs
Categories: Business News

Bharat Forge drags Bombardier to Singapore High Court over alleged glitches in business jet

December 21, 2020 - 2:25am
Mumbai: Indian auto component maker Bharat Forge has taken Canadian aircraft and train maker Bombardier’s Singapore unit to court over what it alleged serious technical glitches in a retrofitted component in its business jet, several people aware of the matter said. “In the wake of several unsuccessful efforts by Bharat Forge with inviting Bombardier to resolve matters and numerous failed attempts to resolve the system installation, Bharat Forge was compelled to take Bombardier Aviation Services Singapore (BASS) to court in Singapore and press on for damages relating to safety violations, antitrust, breach of contractual terms of warranties and workmanship,” one of the people said.“Bombardier does not comment on the actions of opposing parties in a lawsuit but notes that it denies the allegations and is vigorously defending itself,” a spokesperson for the Canadian company said in an emailed response to ET’s queries.A counsel at Singaporean law firm Shook Lin & Bok, which represents Bharat Forge, confirmed the case has been filed in the Singapore High Court. “The statements of claim and defence have been filed and now the case is in the discovery phase,” said the counsel, not wanting to be named.The discovery phase is the pre-trial process through which a party is entitled to obtain and gather information and documents that are relevant to the case but are in the possession of the opposing party.Bharat Forge’s jet, a long-range Bombardier Global Express XRS, was given for a major maintenance shop visit to Bombardier Aviation Services and was sent over to the facility of BASS, located at Selatar Airport.The aircraft was also to be installed with cabin management and in-flight management systems, a retrofit and upgrade to the existing system.Upon completion of the major maintenance work, the aircraft was released to service with a certification that all systems and components installed on the aircraft were in working condition and this approval was done under the licence and approval from the authorities in Singapore.Upon arrival, “there were repeated system failures, part failures and erratic and unpredictable system functioning”, said the person cited earlier, adding it did not have “adequate operational testing and stabilisation review prior to installation”.“There were two main services on the private jet. One was an 8C check and the other was the overhaul of the in-flight entertainment (IFE) system. The maintenance check itself was defective and there were various glitches with the IFE,” said the counsel.“There were attempts by Bombardier Singapore to set it right but none of those bore fruit. In fact, the plane was in a worse state than before. Hence the case has been filed,” he added.An independent forensic audit was also done on the issue, one of the people ET spoke with said.The Bombardier spokesperson said the company had not received the report. Bharat Forge’s counsel said it was too early to say whether the report would be part of the case proceedings. Bombardier is also facing an alleged bribery probe by the UK’s Serious Fraud Office over airplane sales to Garuda Indonesia, according to media reports. Other reports said an Irish parts manufacturer, Killick Aerospace, had sued the plane maker over alleged violation of distribution agreements. Bombardier has confirmed the UK SFO probe and said it would “vigorously defend” against the Irish parts maker’s claims, as per the reports.
Categories: Business News

EPFO net new enrolments rises to 56% in Oct

December 20, 2020 - 11:24pm
NEW DELHI: Net new enrolments with retirement fund body EPFO rose by 56 per cent to 11.55 lakh in October compared to 7.39 lakh in the same month last year, according to its latest payroll data, providing a perspective on formal sector employment amid the coronavirus pandemic.The net payroll additions, however, have registered a slight dip in October compared to 14.19 lakh in September this year, according to a statement by the Labour Ministry.Provisional payroll data released by the EPFO last month had shown that net new enrolments stood at 14.9 lakh in September this year.Latest data released on Sunday showed that net new enrolments in April were in the negative zone at (-) 1,79,685 against the figure of (-) 1,49,248 released in November.This means that the number of members who exited the EPFO subscription was more than those who joined or rejoined the scheme.Earlier in July, provisional data had shown net new enrolments for the month of April stood at 1 lakh, which was revised down to 20,164 in August and further lowered to (-) 61,807 in September and (-) 1,04,608 in October.The number of net new enrolments in May was also revised further downwards to (-)1,43,540 from (-) 97,988 estimated last month and (-) 35,336 estimated in the data released in September.During 2019-20, the number of net new subscribers rose to 78.58 lakh as compared to 61.12 lakh in the preceding fiscal.The EPFO has been releasing the payroll data of new subscribers since April 2018, covering the period starting from September 2017.The data also showed that during September 2017-October 2020, the number of net new subscribers was over 1.94 crore.According to a labour ministry statement on the data, in October 2020, around 7.15 lakh new members have joined the EPFO and approximately 2.40 lakh members exited during October 2020.Roughly 6.80 lakh members exited and then rejoined EPFO, indicating switching of jobs by subscribers within the establishments covered by EPFO and subscribers choosing to retain membership by transferring funds rather than opting for final settlement.Exited members rejoining also indicate that workers are returning to their jobs with decline in active COVID-19 cases in India, it added.Despite the COVID-19 pandemic, it stated that the EPFO has added around 39.33 lakh subscribers during the current financial year (from April to October 2020).The data comprises members who have joined during the month and whose contribution has been received by the EPFO for the wage month.As has been historically the case, the maximum number of net subscriber additions for October 2020 has been from the 18-25 age-bracket, possibly due to the nature of the demographic profile in India.The 18-25 age-group members can be considered as fresh hands in the labour market and have contributed around 50 per cent of the net subscriber additions for October 2020.State-wise comparison of payroll figures shows that Maharashtra, Karnataka, Tamil Nadu, Gujarat and Haryana continue to remain at the forefront of the employment recovery cycle adding approximately 53 per cent of total net payroll addition (total of 39.33 lakh) in the first seven months period of current fiscal from April to October, 2020, across all the age groups.Category-wise analysis of industry indicates that the ‘expert services' category has continued its recovery, adding 60 per cent of the net payroll during the current financial year.However, it stated that performance in other industry classification such as building & construction, trading-commercial establishments, engineers & engineering contractors and electrical, mechanical & general engineering products indicate that recovery has started picking up in other sectors as well.Gender-wise analysis shows that around 2.08 lakh net female subscribers were added during October 2020. Women contributed around 21 per cent of the new subscribers for October 2020.The estimates are net of the new members enrolled, members exited and rejoined during the month, as per records of the EPFO. The estimates may include temporary employees whose contributions may not be continuous for the entire year, it has said.The EPFO manages social security funds of workers in the organised/ semi-organised sector in India.The payroll data is provisional since updating of employee records is a continuous process and accordingly gets updated in subsequent months, it added.
Categories: Business News

Bank of America leases 4 lakh sq ft office space in GIFT City for 15 years

December 20, 2020 - 11:24pm
Mumbai: Bank of America has leased nearly 4 lakh sq ft of office space from the Savvy Group in Gujarat International Finance Tec-City (Gift-City), in one of the largest commercial real estate transactions during the pandemic period, said two people with direct knowledge of the development.The American multinational investment bank and financial services company had booked 1 lakh sq ft earlier, but then decided to extend it by an additional 3 lakh sq ft now. The space is spread over 14 floors of a 24-storey building that counts International Financial Services Centres Authority and Sequel Logistics as other key tenants.BA Continuum India, Bank of America’s India subsidiary, has leased the space for 15 years, with the agreement involving rental reset clause after every three years.“The transaction has been approved by the SEZ authority and was inked last week. The bank had earlier finalised around 1 lakh sq ft space in this building and has now concluded with a total nearly 4 lakh sq ft. This is the fastest and biggest expansion decision by the bank during the pandemic,” said one of the people mentioned above.The bank’s Global Business Services Center had leased some space in the building prior to the outbreak of pandemic.The total office space is expected to accommodate more than 3,000 employees serving its global subsidiaries.Most of these employees will be hired afresh.Nearly 1,200 of BA Continuum India’s employees were earlier expected to be operating from this building.ET’s email query to Bank of America remained unanswered until the time of going to press on Sunday.Savvy Group's Chairman & Managing Director Jaxay Shah declined to comment for the story.Started in 2004, BA Continuum India currently operates out of four Indian cities — Mumbai, Hyderabad, Chennai and Gurgaon — with over 20,000 employees.Located between Ahmedabad and Gandhinagar, Gift City is the first operational International Financial Services Centre (IFSC) in India.IFSCs are intended to provide companies with easier access to global financial markets, and to complement and promote development of financial markets in the country.According to reports, 18 IT and IT enabled services companies have applied for setting up units at the Gift City's multi-services SEZ.The entities setting up operations in the Gift City are eligible for a tax holiday for 10 consecutive years, besides no goods & services tax, stamp duty & registration charges. Additional benefits from the Gujarat government including a capital investment subsidy up to 25% and rental subsidy of Rs 3-8 per sq ft a month are also available.
Categories: Business News

Europe starts banning flights from Britain

December 20, 2020 - 8:23pm
LONDON: European countries started banning flights coming from the UK on Sunday as government in London warned that a potent new strain of the virus was "out of control". Following the example of the Netherlands, where a ban on all UK passenger flights came into effect on Sunday, a German government source said Berlin, too, was considering a similar move as "a serious option" for flights from both Britain and South Africa. The Dutch ban came into effect from 6:00 am (0500 GMT) and will last until January 1. And neighbouring Belgium also said it was suspending flight and train arrivals from Britain from midnight. The moves come as around a third of England's population entered a Christmas lockdown and UK Health Secretary Matt Hancock warned that the new strain of virus was "out of control". Prime Minister Boris Johnson had said the day before that millions of Britons would have to cancel their Christmas plans and stay home because the new strain was spreading far more quickly. Speaking on Sky News, Hancock said the situation was "deadly serious." "It's going to be very difficult to keep it under control until we have the vaccine rolled out," he said. It seems that scientists first discovered the new variant in a patient in September. Susan Hopkins of Public Health England told Sky News that the agency notified the government on Friday when modelling revealed the full seriousness of the new strain. She confirmed a figure given by Johnson that the new virus strain could be 70 percent more transmissible. Last week, Europe has become the first region in the world to pass 500,000 deaths from Covid-19 since the pandemic broke out a year ago, killing more than 1.6 million worldwide and pitching the global economy into turmoil. Countries are shutting down their economies again in a bid to rein in the virus. The Netherlands is under a five-week lockdown until mid-January with schools and all non-essential shops closed to slow a surge in the virus. Italy also announced a new regime of restrictions until January 6 that included limits on people leaving their homes more than once a day, closing non-essential shops, bars and restaurants and curbs on regional travel.More than 50,000 deaths in Russia In Russia, health authorities said that the number of people who have died from the coronavirus has surpassed the 50,000 mark and now stands at 50,858. But some experts believe that the real number could be much higher, with one former demographer at Russia's state statistics agency, Alexei Raksha, putting it as high as 250,000. Raksha, who left Rosstat in July, told AFP that the Russian health ministry and the consumer health agency "downplay and falsify" the statistics. A year after the pandemic first emerged in the Chinese city of Wuhan, the rapid rollout of vaccinations is now seen as the only effective way to end the crisis and the economically devastating lockdowns used to halt its spread. Europe is expected to start a massive vaccination campaign after Christmas following the United States and Britain, which have begun giving jabs with an approved Pfizer-BioNTech shot, one of several leading candidates. Russia and China have also started giving out jabs with their own domestically produced vaccines. The United States on Friday authorised Moderna's Covid-19 vaccine for emergency use, paving the way for millions of doses of a second jab to be shipped across the hardest-hit country in the world. It is the first nation to authorise the two-dose regimen from Moderna, now the second vaccine to be deployed in a Western country after the one developed by Pfizer and BioNTech. The head of Asia's largest drugmaker Takeda said that pharmaceutical firms must be "very transparent" about the risks and benefits of vaccines. "We have to manage the situation well, be very transparent and extremely educative in the way we introduce products," Takeda chief executive Christophe Weber told AFP in an interview. Takeda, one of the world's biggest pharmaceutical companies, is not developing its own vaccine but has contracts with several firms to distribute their jabs in Japan and is also testing a virus treatment. "Medicines or vaccines are never perfect... there are always some side effects," Weber said. US virus stimulus dealThe Wall Street Journal reported that US lawmakers had agreed on pandemic spending powers for the Federal Reserve late Saturday, clearing the way for a vote on a roughly $900-billion Covid-19 relief package for millions of Americans. The deal would maintain the central bank's ability to set up emergency lending programmes without congressional approval, the Journal said, but the Fed would require approval to restart existing CARES Act programmes once they expire at the end of this year. In the sports world, Cricket Australia said Sunday they were pressing ahead with plans to the hold the third Test against India in Sydney despite a growing coronavirus outbreak in the city. The Test is due be held from January 7 and CA interim chief Nick Hockley said they were watching the situation closely, with contingency plans in place.
Categories: Business News

Realty developers witness a surge in demand for luxury and super luxury homes

December 20, 2020 - 8:23pm
New Delhi: Demand for luxury and super luxury homes has risen as many high networth individuals (HNIs) and ultra HNIs are either upgrading or buying bigger houses taking advantage of the lower prices due to the pandemic, realty developers and brokerage firms said.Developers like DLF, Supertech, Central Park and M3M, which offer luxury properties, said they have closed multiple transactions ranging between Rs 2 crore and Rs 30 crore post the lockdown. India Sotheby’s International Realty, which lists super luxury property on its platform, said it has closed multiple high-value transactions ranging from Rs 65 crore to Rs 100 crore plus during the last 3-4 months. “These transactions have taken place in both second/holiday home destinations as well as metropolitan cities like Mumbai, Delhi NCR and Kolkata,” said Ashwin Chadha, president, India Sotheby’s International Realty. “We expect a 40% surge in our revenues this fiscal, driven by the overall buoyancy returning to the luxury segment of the market.”DLF Ltd said pent-up demand due to the pandemic has led to increased enquiries and sales right after the lockdown.“The high-end luxury housing segment has seen a surge in demand as Indian real estate developers today are delivering projects of international standards and are attracting buyers not just from within India but worldwide,” said Karan Kumar, chief marketing officer at DLF Ltd.Besides HNIs, who have been more resilient to the financial impact of the pandemic, NRIs have also spotted the remunerative path to invest in the Indian real estate market. The increase in the purchasing power of the NRIs coupled with a spike in the exchange rate of the US dollar will continue to encourage the sale of luxury realty, developers said.India Sotheby’s International Realty said the most significant trend seen among UHNIs and HNIs is a spike in demand for larger homes in the city’s most coveted addresses like Lutyens Delhi, Judges Court Road in Kolkata, Malabar Hills, Juhu and Bandra in Mumbai. “The long hours at home during the lockdown have helped develop people`s outlook towards their lifestyle and homes, inducing the interest of buyers towards the luxury quotient,” said Pankaj Bansal, director at M3M. “The luxury housing market is witnessing a revival as the end-users at the top of the pyramid have only been affected marginally, and their lifestyle benchmarks will continue to evolve in the year 2021.”Most industry reports also point to a continuing demand for luxury realty in 2021. Realty developer Supertech, which is executing NCR’s tallest residential tower Supernova, said it has closed multiple transactions post lockdown.“The price ranges between Rs 7 crore and Rs 30 crore with size of 5,000 sq ft to 25,000 sq ft. A lot of celebrities and businessmen have shown interest in buying property,” said RK Arora, chairman of Supertech group.Buyers of luxury and super luxury homes are now also looking at properties that offer a wide range of facilities. “The discerning customers are evaluating properties with unmatched hospitality, 5 star club with exclusive lifestyle amenities such as all-weather swimming pool, full service concierge, multi-layer security, superior air quality and an elite neighbourhood,” said Amarjit Bakshi, CMD at Central Park.
Categories: Business News

Ajanta Shoes aims at Rs 500 crore topline in FY21, plans to expand network

December 20, 2020 - 8:23pm
KOLKATA: Ajanta Shoes is planning to expand its footprint across the country and targeting a 25 per cent jump in turnover in the current fiscal, despite disruptions in the market due to the COVID-19 pandemic, a company official said on Sunday.The 64-year-old firm had clocked a revenue of Rs 400 crore in the last fiscal and is expecting to touch Rs 500 crore turnover this year with the "right products and marketing strategy" when many footwear companies are struggling to meet at least the 2019-20 sales.The city-based company has introduced a new sports shoe brand 'Impakto', targeting the youths and the growing segment of fitness-conscious customers."COVID-19 has no impact on us as we have got adequate orders. Online sales are strong. Our wholesale segment also did well during the coronavirus crisis," Ajanta Shoes managing director Sagnik Banik said.He said the company has planned to expand its operations."We have plans to take the number of stores to 250 over the next two years from 105 at present. We are looking to promote the brand across the country," he said.He remained optimistic about the new sports shoe brand.Ajanta Shoes has 800 dealers and sub-dealers and 20,000 retailers across the country.
Categories: Business News

Long & Short of Markets: IPO mart on a high, stock ideas for 2021 & other top reads

December 20, 2020 - 8:23pm
It’s been almost 100 years since economist John Maynard Keynes used the term ‘animal spirit’ to describe a spontaneous urge to action rather than inaction. Irrational market behaviour hasn't matured much since then. The mad rush in the IPO mart is a grim reminder of how action is still dictated by spontaneous optimism rather than mathematical expectations. Read this and more in this weekend’s edition of Long & Short of Markets.FOMO: The villain within If something hasn’t changed much since the cradle of civilization, it’s human instincts under pressure and uncertainty. Fear Of Missing Out (FOMO) is one such social anxiety clearly visible in a raging stock market. Here's more on how chartbuster IPO listings are fueling FOMO. >>>Side-effects of a hefty dividendYou thought a Rs 974 dividend per share is a blessing? It has its own downside too! Read here for more on how booking profits and paying capital gains tax is better than paying tax on Majesco’s dividend. >>>Riding this classic bull cycleRecord inflows into emerging markets and a weakening greenback are signs of a classic bull run, says this market veteran. Bucking up to ride this rally, the bullish expert says the end is not yet near. Here's some more outlook on how to make the best out of this market. >>>Finding value in laggardsMutual funds have dumped 40 out of 50 Nifty stocks on the back of a strong round of redemption. The rest 20 per cent has seen some buying by these institutional investors. Take a look here at the Nifty stocks which were bought and sold by these fund houses last month. >>>Potential 2021 betsAfter a stellar run in the last 9 months, analysts are betting on a slowdown in bluechips. Brokerages are looking forward to picking up laggards in midcap and smallcap spaces, besides thematic trends. Check out the list here. >>>
Categories: Business News

PayPal faces Rs 96 lakh penalty in India

December 20, 2020 - 5:22pm
NEW DELHI: American online payment gateway giant PayPal has been imposed a Rs 96 lakh penalty by the FIU for alleged contravention of the anti-money laundering law and accused of "concealing" suspect financial transactions and abetting "disintegration" of India's financial system. PayPal, which began India operations in November 2017, said it was fully committed to follow due processes and is "carefully reviewing the matter". The company has also been charged with "defeating and frustrating" the tenets of public interest and the provisions of the Prevention of Money Laundering Act (PMLA), which aims to keep the country's financial system safe from economic crimes, terrorist financing and black money transactions. Calling the contraventions as "deliberate and wilful", the Financial Intelligence Unit (FIU) in a scathing 27-page order issued on December 17 held the company guilty on three broad counts, the fundamental being its failure to register itself as a "reporting entity" with the federal agency as mandated under the PMLA. "...I, in exercise of powers conferred upon me under section 13(2)(d) of the PMLA, 2002 impose a total fine of Rs 96 lakh only on PayPal Payments Private Limited which will be commensurate with the violations committed by it," the order issued by FIU Director Pankaj Kumar Mishra said. It said that "there is ample evidence of the willful violation of the law and, therefore, PayPal cannot be let off with a penalty that should normally be imposed for minor violations". The order directs the company to pay the fine within 45 days and also register itself as a reporting entity with the FIU, appoint a principal officer and director for communication within a fortnight of the receipt of the order. An appeal against the order can also be made before the Appellate Tribunal of the PMLA within 1.5 months. A PayPal spokesperson told that it "is fully committed to regulatory compliance." "We take our obligations seriously across 200 markets where our payments platform is present. We are carefully reviewing the matter and we cannot comment further at this point," he said. This is for the first time that the FIU, an agency under the Union finance ministry, has undertaken punitive action against an online payment system operating in the country like it has done against public, private and cooperative banks in the past for not following anti-money laundering procedures in keeping their financial channels clean. As per the order accessed by , the legal tussle between the FIU and PayPal began in March, 2018 when the latter asked the company to register as a reporting entity for keeping "record" of all transactions, reporting suspicious transactions and cross-border wire transfers to the FIU and for identifying beneficiaries of these funds. The FIU analyses and shares these reports with various intelligence and investigative agencies for further action. As per the order issued under section 13 of the PMLA, PayPal refused the FIU's directive and hence a show cause notice was issued to it in September last year. PayPal defended its action and cited Reserve Bank of India guidelines to state that it only operates as an Online Payment Gateway Service Provider (OPGSP) or a payment intermediary in India and is "not covered within the definition of a payment system operator or financial institution and in turn, not covered under the definition of a reporting entity under the PMLA". "Therefore, at this time, payment intermediaries, such as PayPal, are not required to register as such with the FIU-India," it said in its reply to the agency. PayPal also stated that it has "submitted" to the RBI its decision to cease domestic payment aggregator business in India before June next year. The FIU, however, rejected its claims and said PayPal was very much involved in handling of funds in India, is a "finanical institution" and hence qualifies to be a reporting entity under the PMLA. "The business model offered by PayPal clearly indicated that it not only acts as an intermediary but actively undertakes money transfer operations... "PayPal undertakes to settle an online transaction by moving money from the customer's account (issuing bank) to the merchant account, which ultimately transmits funds to the merchant's bank account (acquiring bank) when the transaction is finalised," the order said. It added, "By virtue of enabling payment system for its users by way of credit card, debit card, money transfer operations, PayPal is functioning as a payment system operator and is therefore deemed to be a reporting entity..." The order said while the company "defies" the process in India, its parent company in the US - PayPal Inc. - reports suspicious transactions to the American FIU and also to similar agencies in Australia and the UK. Sharing of suspicious transaction reports by PayPal was "crucial" in enabling FIU to share such information with Indian law enforcement agencies and by refusing to register it was "not only concealing suspect financial transactions but is also abetting in the disintegration of India's financial system" and posing "enhanced risk to the financial system of India", the order said. It noted that if PayPal's contention was accepted, the objective of the anti-money laundering law would be rendered "redundant" and other such entities "will find some reason to technically escape being categorised as one (reporting entity) and frustrate the very purpose and object of the PMLA".
Categories: Business News

Digital training of blue-collar employees on the rise, says experts

December 20, 2020 - 5:22pm
Mumbai: Even when faced with challenges of connectivity and bandwidth, companies across sectors embraced digital training or learning and development (L&D) for blue collar staff, which witnessed from nearly nothing to double fold growth, as the pandemic fast tracked adoption of technology by two decades, says experts.“Specific to blue collared staff, the thinking was always that they will not be able to learn effectively using technology. COVID-19 has shattered all such assumptions. Many organizations are using digital learning tools to continuously engage with their blue collared employees as they are doing with their white collared employees,” TeamLease Services Senior Vice-President Neeti Sharma told PTI.However, she said there are few challenges like connectivity and bandwidth that continue to exist as the single largest challenge while the blue-collar staff were in their hometowns, she stated.The other key challenge now that the blue-collar staff is coming back to workplaces is to provide them relevant infrastructure and time for learning, she said adding that for employers, creating a balance between productivity at the workplace as well continuous learning is important but not often easy.Many companies in the Industrial Engineering, logistics and essential retail sectors have adopted technology led L&D for their blue-collar staff, she said.She said that many also focussed on upskilling their existing workforce, initially for health and safety measures that need to be followed at workplaces due to the pandemic.“Adoption of technology for skilling in the manufacturing industry has moved up by almost 50-60 per cent over the last two months. We believe that VILT (Virtual Instructor Led Training) is here to stay and will become an integral form of learning in the future,” she opined.Further, CIER HR Services Aditya Mishra said that usage of technology for training blue collars is a boon to overcome the geographical barriers, establish standardisation and consistency in delivery and thereby improve quality, reduce cost and generate more value for the business.“Our estimate is that we will see the contribution of digital learning in the overall L&D efforts of organisations will increase from the current levels of 0-20 per cent to 30-60 per cent among blue-collar segment over the next 3-5 years,” he stated.The most common challenges employers face during digital training of the blue-collar staff are fewer tools, distracted learners, gaining learners' confidence, staying up-to-date with modern technology and subject matter experts with no prior instructional design knowledge, he pointed out.He said, balancing tight e-learning budgets, designing e-learning courses for different generations and finding the perfect e-learning authoring tool or learning platform were also challenges face by the organisations giving training to blue collar employees.“Sectors who have started adoption of technology in L&D in training blue-collar staff are manufacturing, healthcare, retail and e-commerce, finance and construction,” he said.He said, since companies have now begun to adapt to the new normal, outsourcing or hiring experts for the digital training of employees is expected to increase.Global job site Indeed India Managing Director Sashi Kumar said traditionally, organisations have focused more strongly on training their white-collar employees.However, this situation has been rapidly changing in recent years, and companies are giving the L&D needs of their blue-collar workforce the attention they deserve and are actively investing in resources that will upskill their blue-collar workers in a wide range of areas, he opined.Companies need to bear in mind that several blue-collar workers might not be well-versed or even introduced to these new-age technologies, he said.Also, as companies move to virtual platforms to train their workforce, access to devices and connectivity might pose a major challenge in training them, he said.Going forward, organisations will need to be more invested and inclusive in their efforts to train blue collared workforces for the jobs of the future, he added.
Categories: Business News

Bank of Baroda completes integration of erstwhile Dena, Vijaya banks with itself

December 20, 2020 - 5:22pm
Mumbai: State-run Bank of Baroda on Sunday said it has completed integration of 3,898 branches of erstwhile Vijaya Bank and Dena Bank with itself. In a first three-way amalgamation, Vijaya Bank and Dena Bank were merged with Bank of Baroda from April 1, 2019. The bank has completed the integration of 1,770 erstwhile Dena Bank branches in December 2020, and had earlier completed the integration of 2,128 erstwhile Vijaya Bank branches in September 2020, the lender said in a release. "We have successfully completed integration of erstwhile banks with Bank of Baroda amidst the challenges faced under the COVID environment. We are happy to once again welcome all our esteemed customers and request them to avail full suite of Bank of Baroda's products and digital solutions," the bank's managing director and CEO Sanjiv Chadha said in the release. Over 5 crore customer accounts were migrated. In addition to branches, all ATMs, POS machines and credit cards have been migrated successfully. The bank said all customers now have access to a total of 8,248 domestic branches and 10,318 ATMs across India, which will provide them complete access to its entire suite of products and services. All customers will now have access to the bank's digital channels. Debit cards already issued to customers by erstwhile banks will continue to function until the stipulated expiry of the card, the bank said.
Categories: Business News

Oil's vaccine trade faces hurdles ahead: Julian Lee

December 20, 2020 - 5:22pm
It’s easy to get caught up in oil’s recovery. After an exceptionally fraught year, hopes are high that putting 2020 soundly behind us can only mean better days. But there’s still a long way to go to get back to anything like normal.That hard reality didn’t stop crude prices from rising by $14 a barrel, or 37%, since the beginning of November. That’s when trial data showed vaccines were proving extremely effective against SARS-Cov-2, followed by the rapid roll-out of the first doses in the U.K. and U.S. There’s a sense of optimism that hasn’t been felt since the world woke up early in the year to a new disease that had emerged in China.The relief being felt in the oil market is understandable. As the virus spread, it had a devastating impact on lives and livelihoods. The only tool most governments had to slow contagion was to shut down their economies, causing an unprecedented slump in oil demand.The world’s major oil forecasters — the International Energy Agency, the U.S. Energy Information Administration and the Organization of Petroleum Exporting Countries — slowly began to factor the virus into their outlooks, initially seeing its impact limited to China. But by April it was apparent that the disease was spreading rapidly elsewhere. Forecasts for 2020 oil demand were slashed and they haven’t recovered much in subsequent months as the chart below shows.Oil consumption this year is now expected by all three to be about 10 million barrels a day below the volumes they were forecasting at the end of last year — enough to fuel all of Africa and Latin America.79824782Producers were slow to respond. Seemingly irreconcilable differences between OPEC and its allies sparked a production free-for-all after Russia refused in March to agree to deeper output cuts to help prop up oil prices. They regrouped the following month and eventually agreed to a record 9.7 million barrel a day reduction from the start of May.Further supply cuts came from producers outside the OPEC+ group, as budgets were slashed and some operations didn’t make economic sense anymore. U.S. crude production, which had already peaked in November of last year, fell by 2.7 million barrels a day, or 21%, between March and May. Around one-third of that has been restored in subsequent months.The sluggish response sent oil stockpiles soaring. Storage tanks filled, ships were pressed into service to hold excess volumes and spare capacity at Cushing, Oklahoma — the delivery point for the West Texas Intermediate crude contract — dwindled, briefly sending prices tumbling into negative territory for the first time ever.By the end of October, oil stockpiles in the developed nations of the OECD were still above the peak reached during the 2016 surge that preceded the formation of OPEC+, even though they had been falling for the previous three months.79824788Production discipline among the OPEC+ producers, who’ve been kept in line by Saudi Arabia, has helped create the supply deficit needed to draw down stockpiles. Although the cartel’s de facto leader hasn’t called out Russia, the group’s second-largest overproducer in volume terms, it has been prepared to ruffle feathers closer to home, singling out both Iraq and the United Arab Emirates for failing to abide by their production targets. As a result, the group’s overall compliance with its output targets has been better than anyone expected.But there’s still a long way to go. The latest forecasts from the three agencies show global oil demand lagging the corresponding 2019 levels throughout next year, and that’s even with all the positive vaccine news. And the outlook’s getting worse, not better. OPEC’s own analysts have cut their forecast for 2021 oil demand with each new report since July, when they first began publishing quarterly numbers for next year.79824792The demand recovery is patchy — both geographically and sectorally — and it’s likely to stay that way. It’s also going to be very susceptible to the ups and downs of the battle to defeat the pandemic. Tighter restrictions are once again in place in much of Europe and in some significant markets in Asia. New cases are rising again in South Korea, although the country is not yet at the point of tightening social distancing rules, while a fresh wave of infections is causing challenges for Japan’s fragile recovery. Different recovery speeds for different products are creating their own challenges for the refining sector. While diesel demand is picking up, as online shopping boosts the need for delivery trucks, jet fuel consumption is still being hammered, with commercial flights stuck at about 60% of comparable levels last year. Those disparities are unlikely to change any time soon, with many people likely to remain wary of flying for months to come.The approval of effective vaccines mark the beginning of a post-pandemic world. But we’d be foolish to think that just because we can see a finish line, it means we’ve actually reached it. There’s still a long way to go and the next few months will be tricky, both for people’s health and wellbeing and for economies around the world and my patch of the woods, the oil sector.
Categories: Business News

Nirav Modi's brother charged with fraud in NY

December 20, 2020 - 2:22pm
NEW YORK: Nehal Modi, the younger brother of fugitive diamantaire Nirav Modi, has been indicted here for fraudulently obtaining diamonds worth over USD 2.6 million from one of the world's biggest diamond companies in Manhattan. Nehal, 41, is charged in a New York Supreme Court indictment with Grand Larceny in the First Degree, Manhattan District Attorney Cy Vance, Jr. said. "While diamonds maybe forever, this flawed scheme was not, and now Modi will face the clarity of a New York Supreme Court indictment. My Office will not allow individuals who have the privilege of soliciting business in Manhattan's iconic diamond industry to defraud our businesses or consumers," Vance said in a statement on Friday. According to the indictment, court filings, and statements made on the record in court, between March 2015 and August 2015, Nehal, a former member of Noble Titan Holdings, made false representations to obtain over USD 2.6 million worth of diamonds from LLD Diamonds USA on favourable credit terms and consignment, and then liquidated the diamonds for his own ends. The statement said that Nehal, "who comes from a well-known family in the diamond industry", was initially introduced to the president of LLD Diamonds through industry associates. In March 2015, he approached LLD, claimed that he was pursuing a relationship with Costco Wholesale Corporation and asked the New York-based diamond company to provide several diamonds, worth nearly USD 800,000, to present to Costco for a potential sale. After LLD provided the diamonds, Nehal falsely informed the company that Costco had agreed to purchase them. Subsequently, LLD allowed him to purchase the diamonds on credit, with full payment required within 90 days. He then pawned the diamonds at Modell Collateral Loans to secure a short-term loan, the Manhattan District Attorney's office said. Between April and May 2015, Nehal returned to LLD three additional times and took more than USD 1 million worth of diamonds for purported sales to Costco. He made a series of payments to LLD, but used the majority of the proceeds for personal use and other business expenses. To cover his fraud, Nehal falsely claimed that he was encountering payment issues due to a "Costco fulfillment error" and made repeated promises to satisfy the balance, the statement noted. In August 2015, Nehal returned to LLD again and falsely claimed that Costco wanted to purchase additional diamonds. This time, LLD permitted him to take the additional diamonds on consignment, with terms explicitly stating that he did not have the authority to sell the diamonds without authorisation by LLD. LLD also required a partial payment upfront in the event of a sale, as Nehal's outstanding balance was nearly USD 1 million at that time. Nehal had already contacted Modell to arrange an additional loan. After picking up the diamonds from LLD, he pawned the majority of the diamonds at Modell to secure two separate loans and sold the remainder of the diamonds to various retailers at a steep discount from the listed consignment price. LLD ultimately uncovered the fraud and demanded that he immediately pay his outstanding balance or return the diamonds. However, he had already sold or pawned all of the diamonds and spent most of those proceeds. LLD subsequently reported the fraud to the Manhattan DA's Office. Nehal's brother Nirav, 49, is wanted in India on charges of fraud and money laundering in the estimated USD 2-billion Punjab National Bank (PNB) scam case. He remains at Wandsworth Prison in south-west London where he has been lodged since his arrest in March last year. The Interpol has issued a Red Corner Notice (RCN) against Nehal on charges of alleged money laundering that is being probed by the Enforcement Directorate. Nehal was born in Antwerp, Belgium in 1979, and he knows languages such as English, Gujarati and Hindi, according to the RCN issued by Interpol. The New York Post quoted Nehal's defense lawyer Roger Bernstein as saying: "This is a commercial dispute" and that "Nehal is not guilty." A video on The Post website shows Nehal walking with Bernstein, who said "we are not discussing anything about the case" when asked about the Interpol notice.
Categories: Business News

With worst COVID-19 woes behind, FMCG sector optimistic about 2021

December 20, 2020 - 2:22pm
Crisis brings opportunities. This could not have been truer for the FMCG industry in 2020 even as the world grappled with the impact of the COVID-19 pandemic. The sector is learning, innovating and rising from disruptions to put the worst behind and looking forward to the new year with optimism and new-found confidence. With food, personal care items, especially hand sanitisers and disinfectants -- the hero products of the pandemic -- managing to push the industry to post positive growth amid the crisis, in 2021, the FMCG industry is looking forward to carry on with the momentum and sustained revival across categories in rural and urban markets of India. With lessons learnt on how to navigate through the hurdles and uncertainties thrown up by the once-in-a-lifetime occurence, the sector is more confident going into 2021, having fast tracked adoption of digital medium for distribution and realigned product portfolio, such as ayurvedic preventive healthcare items tailored for the new normal. "2020 has been a year of disruption and learning at the highest level for one and all. As a business and (as a) team, we have come closer, are more aligned, and continue to innovate to meet our consumers' needs while ensuring the well-being of our people and their families," PepsiCo India President Ahmed ElSheikh told . As potential COVID-19 vaccine candidates are expected to hit the market soon, he said, "we are cautiously optimistic that 2021 will witness sustained revival and eventually growth. Our focus areas remain on prioritising profitable channels, diligently managing SKUs (Stock-Keeping Units), further investing in digitisation and driving execution to meet the ever-evolving consumer demand". In 2021, companies would continue to align their product portfolio in line with the 'new normal' and work on increasing penetration. Sounding bullish, Parle Products Senior Category Head Mayank Shah said, "the worst is behind for the FMCG sector. We are expecting next year to be a great one for the entire FMCG industry". Besides learning lessons in terms of navigating challenging and uncertain times, he said the pandemic also made the FMCG sector carve opportunities out of the crisis. Expressing similar views, a HUL spokesperson said, "looking forward, we are cautiously optimistic that the worst is behind us, we are confident of the medium to long-term growth prospects of the FMCG sector". HUL will focus on competitive volume-led growth, absolute profit and cash delivery, said the spokesperson, adding that the company remains committed to "further strengthen its portfolio of brands through bigger and better innovations and unblinking defence of a strong market leadership position". As the coronavirus pandemic brought to the fore the need for preventive healthcare, FMCG companies also focussed on meeting heightened demand for ayurvedic products. "Ayurveda-based preventive healthcare and hygiene -- both personal and household -- are gaining prominence in the consumer mind space. People are now more inclined to prophylactic health remedies, especially immunity-boosting products. This trend would sustain, going forward," Dabur India CEO Mohit Malhotra said. Echoing similar sentiments, Patanjali Ayurved MD Acharya Balkrishna said, "this pandemic has helped to create faith in Ayurveda and Yoga among the section which does not believe in it. This is an opportunity for us as people are now having faith in Ayurveda and traditional system." One of the biggest outcomes of the COVID-19 pandemic is the acceleration in the adoption of digital medium by FMCG companies, not just for distribution but also for marketing and advertising, Mayank Shah said. Earlier, the estimation was that the contribution of digital channel in the total FMCG market would be around 10 per cent in the next ten years but it could now be achieved in the next three to four years, he added. Deloitte India Partner and Consumer Leader Porus Doctor said, "one significant feature of this lockdown and post lockdown scenario was a tectonic shift towards online and e-commerce, a trend that is here to stay". According to EY Partner and National Leader (Consumer Products and Retail) Pinakiranjan Mishra, companies would accelerate their adoption of digital medium to improve internal efficiency and connect with their business partners and consumers. Even as the FMCG sector heaves a sigh of relief for being able to overcome the challenges of the disruptions of the pandemic, it will be grateful to the Indian rural market for driving growth in the difficult times. "In these unprecedented times of the coronavirus pandemic, rural India has offered that much-needed beacon of hope. And Bharat will continue to be the big growth engine in the coming year too," Mohit Malhotra said. The mass reverse migration of labour from big cities to villages following the nationwide lockdown coupled with good monsoon and a plethora of fiscal stimuli offered by the government resulted in a marked uptick, he added. Another development that is working in favour of the FMCG sector going forward is the recovery of the urban market. Marico CFO Pawan Agrawal said demand is continuing to recover with improved urban consumer sentiment and rural continues to fare well. In 2020, personal care and hygiene products gained market share and the FMCG companies plan to continue to invest in the segment by introducing more nature-based products in their personal care and food segment. "We will continue to align our product portfolio in line with the 'new normal'. Going forward, the packaged food market in India which is about USD 35 billion is expected to be about USD 70 billion by 2025. "This is possible with increasing penetration, increasing proclivity of consumers towards more credible, more transparent, trustworthy, and scientifically better modulated brands," a Nestle India spokesperson said. According to Edelweiss Financial Services Executive Vice President Abneesh Roy, companies would look up for more automation in factories or in distribution. "This kind of challenge has really taught them to be future-ready for such challenges," Roy added.
Categories: Business News

COVID-19 battered auto sector drives into 2021 with cautious optimism

December 20, 2020 - 2:22pm
Having endured and managed to recover from the disruptions induced by a once-in-a-century event, the Indian auto sector is cautiously looking forward to 2021 with hopes of putting up a better show in the post-COVID-19 world, although a lot will hinge on how the economy grows. Already battered by an unprecedented slowdown before the coronavirus pandemic, the resilience of the Indian auto industry was tested severely when the nationwide lockdown was announced towards March-end. Passenger vehicle sales in India, the barometer of the automobile industry's performance, plunged 78.43 per cent in the April-June period this year hit by the pandemic, declining for the ninth straight quarter and making it the longest slowdown in 20 years. It is estimated that during the prolonged lockdown, the auto industry suffered losses of more than Rs 2,300 crore in turnover for every single day of closure. In order to overcome the unprecedented challenge, the auto industry players embraced digitisation to adapt to the new normal to serve customers while learning to be nimble footed to keep factories running under COVID-19 SOPs (Standard Operating Procedures) and concentrating on financial health by reducing costs and generating free cash flows. The pandemic-induced lockdown also had an impact on the country's transition to BS-VI emission norm from April 1. Reflecting on the impact of the global health crisis on the sector, the Society of Indian Automobile Manufacturers (SIAM) Director General Rajesh Menon told that the growing preference for personal mobility and the gradual opening of economic activities have lent some momentum and the industry is now seeing signs of recovery in some of the industry segments. "While the festive season brought back some fervour in specific segments, the overall economic scenario would determine the industry's performance going forward," he noted. With so many uncertainties in the market, Maruti Suzuki India Chairman R C Bhargava said it was difficult to predict the future. "But certainly next year would not be as bad as this year because in 2020 the first quarter was a complete write off, so that made the big difference. So I expect that next year will be better than this year but how much better, what is the likely target for sale, all of that we have not fixed yet," he said. Sounding optimistic, Tata Motors MD and CEO Guenter Butschek said that going forward the company expected both sales and production to improve in 2021 on the back of overall economic recovery. Echoing similar sentiments, Mahindra & Mahindra (M&M) Automotive Division CEO Veejay Nakra said a positive monsoon, strong rural demand and the availability of finance were all indicators of a good economic recovery and buoyant demand, going forward. "Having said that, overall there would be challenges given the uncertainty of the pandemic and the implication of that on the supply chain. These supply issues will continue for some time to come and will continue to create short term challenges," Nakra said. Some of the newer challenges being shortage of steel and micro-processors (semiconductors) impacting electronic components and systems, he noted. The country's second largest car maker Hyundai Motor India Ltd (HMIL) is also hopeful of some economic recovery taking place next year which in turn would aid the auto industry. "Looking ahead, the company is cautiously optimistic about the future and could clearly spot some green shoots of recovery in 2021," HMIL MD and CEO S S Kim said, adding that the pandemic has set newer challenges for the industry. "The biggest challenge is to sustain business operations and ensuring financial health of the organisation. Performance of the automotive industry is linked to each stakeholder in the value chain starting from vendors to our dealerships," Kim said. Honda Cars India Senior Vice President and Director Marketing & Sales Rajesh Goel said with the health crisis expected to continue for some time, rise in personal mobility is likely to help the auto industry sustain sales momentum in the coming months. "With the government announcing that the first batch of novel coronavirus vaccines will arrive soon in India, we expect improvement in consumer sentiment leading to positive sales trend and business normalcy," he added. Over a year into the pandemic, Toyota Kirloskar Motor Senior Vice President, Sales and Service Naveen Soni said there have been significant learnings and the entire auto sector has emerged stronger with greater focus on localisation and digitalisation. "We strongly believe that the current economic revival is likely to help sustain the sales momentum in 2021 and we are hopeful that 2021 will see a V-shaped recovery of the economy thereby helping the industry to bounce back," he added. While the mass segment passenger cars are witnessing recovery, Lamborghini India Head Sharad Agarwal said the super luxury segment in India continued to face challenging times and is expected to decline by approximately 30 per cent during the calendar year 2020. "However, as this segment is driven by emotions and with vaccine round the corner, we anticipate the segment to rebound in 2021 to the 2019 levels," he added. Terming 2020 as "a year of re-inventions", Audi India Head Balbir Singh Dhillon said, "our resilience was under test. In terms of business, the automotive industry and in particular the luxury car market witnessed a challenging period, we were no different". As for the two-wheeler segment, Honda Motorcycle and Scooter India (HMSI) Director (Sales and Marketing) Yadvinder Singh Guleria said the first three months of the pandemic were "like moving from pause to play mode, absorbing transition to the new BS-VI norm". "From gaining back stability in the system to infusing strength in two-wheeler demand, the second half of 2020 saw heightened activity like new product launches and changing sentiments in the industry," Guleria said. The next fiscal is expected to show positivity on-board due to low base of 2020, however, real positive growth and market expansion may take some time, he added. Representing the auto component industry, ACMA President Deepak Jain said that after two harsh years -- 2019-20 and 2020-21 - recovery is expected in the next financial year. "There is hope that going into 2021-22, there will be vaccination available which would also boost both the consumer side sentiments as well as supply side sentiments," he noted. Certain headwinds like raw material availability as well as the rise in commodity prices, however, continue to impact the sector, Jain said.
Categories: Business News

Govt may invite EoIs for SCI sale this week

December 20, 2020 - 2:22pm
New Delhi: The government is likely to invite bids for privatising Shipping Corporation of India this week and buyers will have time till mid February to submit EoIs, an official said.The government is planning to sell its entire 63.75 per cent stake in Shipping Corporation along with transfer of management control."The Preliminary Information Memorandum (PIM) will be issued this week and bidders will have time till mid February to submit EoI," the official told .The Department of Investment and Public Asset Management (DIPAM) is working towards concluding the sale in the current financial year as there is good investor interest and the transaction size is not big.Shares of Shipping Corp closed at Rs 86.55, up 3.22 per cent over the previous close on the BSE on Friday.At the current market price, the government's stake in Shipping Corp is valued at Rs 2,500 crore.The Cabinet Committee on Economic Affairs in November last year gave in-principle approval for the strategic divestment of Shipping Corp. However, the plans were delayed due to the pandemic. The 2020-21 Budget has set a record divestment target of Rs 2.1 lakh crore.The government has so far raised Rs 11,006 crore through minority stake sale in CPSEs this fiscal year. Strategic sale process of BPCL and Air India is ongoing and both the companies have received "multiple" expressions of Interest (EoI) from potential buyers.
Categories: Business News

Nepal Cabinet recommends dissolution of Parl

December 20, 2020 - 11:22am
KATHMANDU: Nepal's Cabinet recommended dissolving parliament in an emergency meeting on Sunday, the state broadcaster and other media reported.It was not immediately clear what triggered the decision.
Categories: Business News

60+ people account for 53% of Covid-19 deaths, says govt

December 20, 2020 - 11:22am
NEW DELHI: The Covid-19 case fatality rate is highest at 24.6% among those above 60 with pre-existing health conditions, even as people in this age group make up for only around 19% percent of infected patients.Overall — with and without co-morbidities — those above 60 account for 53% of deaths from Covid, official data shows. The case fatality rate, indicating the share of deaths among infected cases, is lowest at 8.8% among people less than 45 years of age but with co-morbidities, whereas those in the same age band but without any pre-existing disease or disorder is merely 0.2%.However, the incidence of the infection is higher among people under 45 years of age — who accounted for 60% of all Covid-19 infections in the country, but constituted only 12% of total deaths. Officials say the analysis of case fatality data forms the basis for the priority age group population outlined in the Covid-19 immunisation plan.“Our aim is to reduce the mortality in the first phase of immunisation and build herd immunity in the second phase by vaccinating a certain percentage of population. So, apart from the healthcare and frontline workers who are most vulnerable because of the nature of their jobs, when we look at age groups the above 50 population will cover almost 75% with co-morbidities where the case fatality rate is highest currently. Then, we address the infection among younger population but with pre-existing conditions because such people are at higher risk of mortality than those without comorbidities,” an official said.Overall, case fatality rate among people with co-morbidities is estimated at 17.9%, whereas that in those without any such conditions is only 1.2%. So far, 1,45,136 deaths due to Covid-19 have been registered in India.
Categories: Business News

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