1. IIP Rises 2.7% in January, Shrugging Off Demonetisation Impact
India’s factory output, as measured by the index of industrial production (IIP), rose 2.7% in January, apparently shrugging off the impact of demonetisation.
Factory output had contracted by 0.1% in December after growing 5.7% in November, the fastest pace in 13 months, driven mainly by a positive base effect.
Data released by the Central Statistics Office (CSO) showed that in January, mining, manufacturing and electricity output increased. While mining output grew 5.3%, manufacturing rose 2.3% and electricity generation gained 3.9%.
Capital goods production – a key indicator of investment demand in the economy – also rebounded, growing by 10.7% in the month although economists were sceptical whether this trend would be sustained. In the 10 months ended January, capital goods production contracted by more than 21%.
In an indication that consumer demand is yet to pick up, consumer goods production contracted by 1%, mainly on account of a sharp fall in consumer non-durable goods production.
(Source: Livemint)
2. Tribunal Confirms Rs 10,247 Cr Tax Demand on Cairn UK
The Income Tax Appellate Tribunal, in an order passed on 9 March, has ruled that Cairn UK Holdings will have to pay Rs 10,247 crore in short term capital gains tax on an internal share sale dating back more than ten years.
The tribunal, however, rejected the tax department’s demand for back-dated interest on this liability of Rs 18,800 crore, saying the interest only came into effect because of a retrospective amendment made to the Finance Act, 2012. The company could not have foreseen such an amendment at the time, the tribunal held.
The tax dispute between the Indian government and Cairn Plc has also been the subject of international arbitration from 2014. But the tribunal has said the tax liability case could be heard locally, without prejudice to the arbitration.
(Source: Hindu Business Line)
3. SEBI To Investigate Alleged Manipulative Trading In Gitanjali Gems Shares
SEBI will conduct a detailed probe into the role of the Choksi group and other promoter entities of Gitanjali Gems Ltd in the matter of alleged irregularities in the trading of the company’s shares.
Stating that no formal investigation has been conducted by the regulator into the matter, which pertains to alleged manipulations dating back to 2011-12 period, SEBI Whole Time Member S Raman said a probe is needed to find out the role played by Choksi group and promoter entities. To conclude the matter expeditiously, Raman said the Securities and Exchange Board of India (SEBI) should look to complete the investigation within six months.
In his 29-page order, he said that no formal investigation was conducted by the regulator to verify the claims and counter claims made by the promoters of Gitanjali Gems vis –a–vis Manoj Vankar regarding their roles within the company. Vankar was a former official of Gitanjali Gems.
(Source: BloombergQuint)
4. CAG Raps Air India for Understating Losses
Air India lost money on the sale of five planes, understated its losses, was short-changed in a plane deal and could not meet most performance targets set for winning about Rs 42,000 crore in a government equity infusion, government auditor Comptroller and Auditor General of India (CAG) said in a stinging report on Friday.
The 197-page report on the Turnaround Plan and Financial Restructuring of Air India Ltd was tabled in Parliament on Friday. Another report in 2011 on the merger of Air India and Indian Airlines had come down hard on the aviation ministry, then under Praful Patel, for failing to protect Air India’s interests.
Air India “significantly” understated its losses during the period under audit. The understatement of losses was to the tune of Rs 1,455.8 crore in 2012-13, Rs 2,966.66 crore in 2013-14 and Rs 1,992.77 crore in 2014-15.
CAG has asked the government to review the equity support promised to Air India over the next decade.
(Source: Livemint)
5. PE Fund ‘Brands and Beyond’ Seeks to Invest $70 mn in Luxury Brands
Delhi-based private equity (PE) fund Brands and Beyond is looking to invest $70 million in home-grown luxury and lifestyle brands over the next three years. Backed by large families from Europe, Singapore and India, the fund has chosen India as its base after five years of market research, and plans to take 12-14 Indian luxury brands to the global stage.
“Indian luxury market is still small. There is a lot of potential in Indian brands. International markets are big and structured, and growth is much easier. We want to take Indian brands international,” said François Arpels, founder and managing director of Brands and Beyond.
The PE fund is looking to invest in luxury brands across categories such as beauty, ready-to-wear, accessories and jewellery, which Arpels described as “non-ethnic” but in keeping with Indian design and aesthetics. “We are looking at such 100% ‘made in India’ brands,” he said, without disclosing the details of the brands the fund is looking at.
(Source: Livemint)
6. Volkswagen-Tata to Launch Products in India in 2019, Eyeing International Market Too
Homegrown auto major Tata Motors will form a long-term partnership with Volkswagen Group and Skoda to explore strategic alliance opportunity for joint development of products, technologies and component sourcing.
Tata Motors and Skoda Auto, representing the Volkswagen Group, will detail out the guiding principles and terms of cooperation in the next few months, Tata Motors said on Friday.
“Post successful completion of definitive agreements, the two companies will start joint development work and joint value chain activities. Based on this joint work, Tata Motors plans to launch products in the Indian market, starting calendar year 2019,” it said in a statement.
The agreement for the alliance was signed by Guenter Butschek, managing director of Tata Motors, Matthias Mueller, CEO ofVolkswagen AG, and Bernhard Maier, CEO of Skoda Auto on the sidelines of the Geneva Auto Show on Wednesday.
(Source: Economic Times)
7. D-Mart IPO Subscribed 104.5 Times on Final Day
The initial public offer of D-Mart parent Avenue Supermarts to raise Rs 1,870 crore has been subscribed a staggering 104.48 times at the end of the three-day bidding on Friday.
The D-Mart IPO, the biggest since PNB Housing Finance’s Rs 3,000 crore offer in October last year, received bids for 463.61 crore shares against the total issue size of 4.43 crore shares, as per data available with the NSE till 18:30 hrs.
The portion set aside for qualified institutional buyers (QIBs) was oversubscribed 144.6 times and that of non-institutional investors 277.74 times, sources said. Retail investors category was also oversubscribed 7.36 times. Avenue Supermarts on Tuesday raised nearly Rs 561 crore by allotting shares to anchor investors.
The price band for the IPO has been set at Rs 295-299.
(Source: Livemint)
8. ESAF Small Finance Bank Targets Rs 20,000 Crore Business by 2020
ESAF small finance bank, the first private bank in Kerala after India’s independence, which is all set to launch operations on 17 March, has targeted Rs 20,000 crore business by 2020.
It has also aimed at expanding its total number of branches to 500 and increasing its customer base to one crore. ESAF Microfinance, which is among the ten financial services firms selected by RBI for setting up small finance banks, currently has a network of 285 branches spread over 11 states. Of this 104 branches are in Kerala.
"All our current branches will be converted to customer service centres and 85 retail branches will be opened in the first year. We have got approval to open 39 while another 17 are pending approval with RBI. We will expand footprints to north-eastern states starting with Assam and to the metros,’’ K Paul Thomas, the founder and executive director of ESAF Microfinance said. Of the new branches, 25% will have to be opened in unbanked regions. ESAF has identified ten such places in Kerala.
(Source: Economic Times)
9. Government Appoints BP Kanungo As Deputy Governor Of RBI
The government on Friday appointed BP Kanungo as a deputy governor of the Reserve Bank of India (RBI), to replace R Gandhi whose three-year term ends this month.
Kanungo will take charge for a period of three years or until further orders, starting 3 April 2017, according to a statement on the Department of Personnel and Training website.
Gandhi was in charge of currency management, foreign investment, payment & settlement, and foreign exchange department. He briefly handled the monetary policy department when Urjit Patel was elevated as RBI governor. Deputy Governor Viral Acharya took over the monetary policy department after his appointment late last year.
Kanungo was named as executive director of the RBI in March 2016. He looks after the foreign exchange and bank accounts and internal debt management departments.
(Source: BloombergQuint)
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