1. RBI Proposes Stricter Rules for Big Borrowers
The Reserve Bank of India (RBI) has proposed to limit the amount of short-term cash a company can borrow from banks against stocks or receivables, in an attempt to bring credit discipline among large borrowers.
According to the draft guidelines released on Monday, 11 June, RBI said that borrowers with working capital facility of over Rs 150 crore need to withdraw a minimum of 40 percent of the limit as loan component and the remaining as cash credit.
“In respect of borrowers having aggregate fund based working capital limit of Rs 150 crore and above from the banking system, a minimum level of ‘loan component’ of 40 percent shall be effective from 1 October 2018,” the guidelines said. “The 40 percent loan component will be revised to 60 percent, with effect from 1 April 2019.”
(Source: Livemint)
2. For Loss-Making Companies, 2017-18 Was the Worst Year in a Decade
Even as 1,794 companies reported a combined net profit of Rs 4.42 trillion in financial year 2017-18, India Inc’s performance was pulled down by loss-making companies. In FY18, 344 companies reported a combined loss of Rs 1.8 trillion – more than double the number in FY17, and the highest in at least a decade.
Loss-making companies have now cumulatively lost Rs 4.85 trillion in the past five years, and 76 percent of that has come in the past three years. And, contrary to general perception, not all of these losses are due to the bad loans.
(Source: Business Standard)
3. Infrastructure Needs up to USD 1 Trillion Investment in 2-3 Years: NIIF
The National Investment and Infrastructure Fund (NIIF) on Monday, 11 June, said the country needs an investment of up to USD 1 trillion in the infrastructure sector in the next two to three years. “In the next two to three years, we need total investment of USD 800 billion to USD 1 trillion in infrastructure,” its chief executive Sujoy Bose said at at a finance ministry-organised seminar here. He said resources are required both in tangible infrastructure assets as well as de-leveraging by companies saddled with high debt.
(Source: PTI)
4. Nifty Earnings See 17 Percent Cut in FY19 Amid Rising Oil Prices
The recent spike in oil prices, depreciation in the rupee, and hardening of bond yields have begun to take a toll on India Inc. Analysts say these can raise expenses for India Inc and lower margins. Since the start of the fiscal year, brokerages have lowered their one-year forward earnings per share (EPS) estimates of Nifty companies by 17 percent.
The earnings of 28 of the Nifty 50 companies have been downgraded. Such a sharp cut indicates broad-based weaknesses in the economy and a possible slowdown in fresh investment in infrastructure.
(Source: Business Standard)
5. Infosys Gets Nod to Delist from Euronext Paris and London Exchanges
IT major Infosys on Monday, 11 June, said its proposal for voluntary delisting of its American Depositary Shares (ADSs) from Euronext's Paris and London exchanges has been approved by the Board of Directors of the two bourses.
In March this year, Infosys had announced its intention to delist the ADSs on account of the "low average daily trading volume of Infosys ADS on these exchanges, which is not commensurate with the related administrative requirements".
"...the voluntary delisting of its ADS' from the Euronext Paris and Euronext London exchanges has been approved by the Board of Directors of Euronext Paris SA and by Euronext London Ltd," Infosys said in a BSE filing on 11 June.
(Source: Business Standard)
6. RBI to Raise $30-35 Billion via NRI Bonds to Support Rupee: Report
The Reserve Bank of India (RBI) is expected to raise $30-35 billion through NRI bonds to support the rupee and offset the slowdown in foreign portfolio investment (FPI) flows amid rising oil prices, says a report.
The FPI inflows to India will be impacted by Chinese firms listing in global benchmark indices like MSCI, it said.
According to a Bank of America Merrill Lynch (BofAML) report, the listing in benchmark indices will shift up to $100 billion to China market by 2019.
“Our China strategists estimate that possible entry into benchmark indices could push up to $100 billion into the China markets by end-2019,” BofAML said in a research note.
It further said that FPI equity flows to India may slow amid political uncertainty in the run up to the general elections, given rich valuations.
(Source: Livemint)
7. Indian IT Companies to Grab Larger Share of Digital Services Pie Globally: ICRA
Large Indian IT companies are expected to clinch a "higher share of the digital services space" in the coming three years, rating agency ICRANSE 1.40 percent said on Monday, 11 June
It further said that Indian IT services companies are expected to register compounded annual growth rate (CAGR) in "mid-to-high single digits" between FY 2018-2021.
"The growth of Indian IT Services companies is impacted by lower demand led by uncertain macro-economic environment, lower deal sizes in digital technologies, cloud adoption and high competitive intensity from local as well as international players," ICRA Vice President Gaurav Jain said.
(Source: Economic Times)
8. IBC Changes Will Cut Timelines, Improve Realisations: Report
The recent amendments in the bankruptcy resolution framework will help reduce timelines, enhance transparency and improve realisations, a report said on Monday, 11 June.
"The amendments will help safeguard the interest of lenders by maintaining the residual value of assets and also spur the pace of resolutions under the Insolvency and Bankruptcy Code (IBC)," domestic rating agency CrisilNSE -4.41 percent’s senior director Krishnan Sitaraman said in the report
The fine-tuning of the contentious Section 29(A) of the IBC will open opportunities for resolution applicants to bid once their eligibility is proven, and exempts financial entities from being disqualified from bidding, he said.
Source: Economic Times)
9. Rs 13,000 Crore Punjab National Bank Fraud: ‘UK Confirms Nirav Modi’s Presence in Britain’
The United Kingdom has confirmed that Indian diamantaire Nirav Modi, who is at the centre of a money laundering case linked to the over Rs 13,000 crore Punjab National Bank (PNB) fraud, is currently in that country, top officials said on Monday, 11 June.
UK Minister Baroness Williams has also assured Union Minister of State for Home Kiren Rijiju, at a meeting here, Britain’s full cooperation in the Government of India’s efforts to expedite Nirav Modi, liquor baron Vijay Mallya and other’s extradition. “UK authorities have confirmed Nirav Modi’s presence in Britain,” an official privy to the meeting said.
Modi, who is absconding and has not joined the ED probe in the case till now, and others are being probed under various criminal laws after the fraud came to light this year following a complaint by PNB that they allegedly cheated the nationalised bank to the tune of over Rs 13,000 crore, with the purported involvement of a few employees of the bank.
(Source: Financial Express)
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