QBiz: FM Chairs Meet on CapEx; Retailers Against Predatory Pricing
Find the top business stories of the day on QBiz.
1. FM Sitharaman Asks Departments to Prepare CapEx Plans for Next 4 Quarters
The Finance Ministry has asked all central government departments to come up with a road map for their capital expenditure requirements for the next four quarters, Finance Minister Nirmala Sitharaman said on Friday after meeting secretaries and financial advisors of various ministries to review their capex plans.
Sitharaman will meet heads of non-banking state-owned companies to review their capital spending plans as well, on Saturday.
“I have asked them to give us well in advance their plans for capital spending for the next four quarters, so that there is a clear commitment on where the capex will be targeted, and what they need. Within the next week they should be coming back to the expenditure secretary with their plans,” Sitharaman said.
2. HDIL Not Servicing its Loans for 3 Years, Says Suspended PMC Chief
Housing Development & Infrastructure Limited (HDIL) has not been servicing its loans worth Rs 2,500 crore from Punjab and Maharashtra Cooperative Bank (PMC) for the past two-three years, Joy Thomas, the suspended managing director of the crisis-hit bank said on Friday.
Speaking to reporters, Thomas said that PMC has had a banking relationship with the group since 1989-1990, but the loan amount grew over the last six-seven years, and it was not reported to the central bank. Thomas denied that there was external pressure on him or the bank to grant these loans.
“I am not going to tell you how it (HDIL’s exposure) got hidden; it is that they have not seen," said Thomas.
When asked about the reason for underreporting of these loans, Thomas said PMC Bank wanted to grow fast and reporting the exposure could have led to a run on the bank. “We thought that if there was a run on the bank then the depositors, employees will face a lot of problem," he added.
3. Hyundai Explores Ways to Pass on Benefits of Tax Cut to Customers
Although customers are expected to flock to the showrooms during the festive month of October, the company has decided to increase discounts on four models—the Santro, Creta, Elite i20 and Grand i10—that kicked in on 21 September.
The country’s largest vehicle manufacturer, Maruti Suzuki India Ltd on Wednesday reduced the price of select entry level offerings and diesel variants of different products by Rs 5,000.
4. India May Cut Duties on 80% of Chinese Imports Under RCEP
India may cut or eliminate tariffs on 80 percent of products imported from China under a 16-country free trade agreement, the last round of negotiations for which is underway in Vietnam.
The concessions will, however, be less than what it has offered to other countries that are part of the Regional Comprehensive Economic Partnership (RCEP) as India tries to avoid cheap Chinese goods flooding the country once the agreement is signed. The RCEP is a proposed FTA between the 10 member states of the Association of Southeast Asian Nations (Asean) and its six FTA partners – China, India, Japan, South Korea, Australia and New Zealand. RCEP negotiations began in November 2012.
5. Phone Retailers Call Govt to Block Predatory Pricing
Brick-and-mortar retailers have urged the government to curb the practice of etailers forging exclusive tie-ups with smartphone makers and offering lower prices, saying, ahead of the critical festive season, the buildup of inventory owing to “predatory online pricing” would sound the death knell for offline sellers and lead to huge job losses.
The All India Mobile Retailers Association (AIMRA), which represents thousands of brickand-mortar stores across the country, has shot off letters to the commerce ministry, the Competition Commission of India and the Department for Promotion of Industry & Internal Trade (DPIIT).
6. For the First Time, Apple and OnePlus Lock Horns in Indian Market
For the first time, two of the biggest brands in the premium segment are in a direct face-off in the Indian market. OnePlus is currently the top player in the market and is fighting to keep its hold over the above Rs 30,000 price segment.
Apple, on the other hand, is leaving no stone unturned to regain top slot it conceded to the Chinese player last year. Both had been aggressively betting for a tighter grip on the fast-growing premium market India that is growing at a healthy double-digit rate. But this time, the fight has got more intense with both the brands focusing heavily on extending their businesses in India.
Both players have adjusted their launch dates to align with the upcoming Great India Festival by Amazon and Big Billion Day by Flipkart.
7. Centre Seeks to Ease Rules for Renewal of Licences, Permits
In a move which could significantly improve the ease of doing business, the Centre proposes to make five years the minimum period for which licences and permits are renewed by various ministries.
“The Cabinet note on national policy for ease of doing business, approved by the Commerce and Industry Minister, which aims to do away with the need to renew most licences and permits, also suggests that any renewal should be granted only after obtaining the approval of the Cabinet Secretary,” a government official told The Hindu BusinessLine.
All ministries will be asked to list out the licences/registration granted by them to businesses, and eliminate the requirement of renewal for most, the official added.
(Source: The Hindu BusinessLine)
8. DHFL Offers to Repay Investors in Full, But Seeks Nod for ICA
Dewan Housing Finance Corporation (DHFL) has offered to repay investors in full without any haircut over a period of time but has sought their consent to a bank-led process called the Inter-Creditor Agreement (ICA).
The company met representatives of non-bank institutional lenders and investors – including mutual funds, insurers, Employees’ Provident Fund Organisation (EPFO), provident funds and offshore lenders – and tried to persuade them to accept the plan proposed by the banks. The mutual funds and other investors are wary of the plan and want a full and final payment immediately. The ICA, which has already been signed by lenders, involves a package aimed at reviving the indebted company.
9. IDBI Bank to Exit ARCIL, Board Okays Stake Sale
IDBI Bank on Friday informed the stock exchanges that its board has granted in-principle approval to divest the bank’s entire 19.18 percent stake in Asset Reconstruction Company (India) Ltd (ARCIL). The sale would comprise 62.32 million shares of the lender.
Avenue India Resurgence Pte Ltd, the Indian unit of the US-based investment firm Avenue Capital Group, in March became ARCIL’s largest shareholder, acquiring 27 percent stake in the company from six of its shareholders. These included IDFC Bank, South Africa’s FirstRand Bank Ltd, Quiveo Enterprises Ltd, Lathe Investment Pte Ltd (a subsidiary of Government of Singapore Investment Corporation Ventures), Karur Vysya Bank Ltd and Barclays Bank Plc.
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