1. Economic Recovery on Firm Footing: RBI Governor Urjit Patel
India is witnessing a revival in investment activity after several quarters of downturn, putting the nation’s economic recovery on a surer footing, Reserve Bank of India (RBI) governor Urjit Patel said at the International Monetary and Financial Committee meeting in Washington DC.
“There are now clearer signs that the revival in investment activity will be sustained. Global demand has been improving, which should encourage exports and boost fresh investments. On the whole, real GDP growth is expected to expand at 7.4% in 2018-19, with risks evenly balanced,” Patel said, speaking on behalf of finance minister Arun Jaitley, who missed the spring meeting of the International Monetary Fund due to health reasons.
(Source: Livemint)
2. Petrol Price Hit Highest Level Under BJP-Led Government, Diesel At Record High
Petrol price on Sunday hit Rs 74.40 a litre – the highest level under the BJP-led government, while diesel rates touched a record high of Rs 65.65, renewing calls for a cut in excise duty to ease burden on consumers.
State-owned oil firms, which have been since June last year revising auto fuel prices daily, on Sunday raised petrol and diesel rates by 19 paisa per litre each in Delhi, according to a price notification.
The hike, necessitated due to firming international oil prices, comes on the back of a 13 paisa increase in rates of petrol effected on Saturday and a 15 paisa hike in diesel, it said.
(Source: PTI)
3. Social Security Plan Gets PMO Nod, Rollout Likely in 3 Phases
The Prime Minister’s Office (PMO) has given its approval to the labour ministry proposal on universal social security cover for 500 million workers, including those in the farm sector, seeking to start the process of putting in place a more secure welfare net a year before the general election.
The finance and labour ministries will work out the details of the scheme that will require nearly Rs 2 lakh crore when fully rolled out for the lower 40 percent of the country’s total workforce.
The remaining 60 percent of the workforce is expected to make contributions out of their own pocket, either fully or partially.
(Source: The Economic Times)
4. Rail Ministry Entity to Raise Rs 40 Billion for Station Redevelopment
The first phase of the rail ministry’s Rs1-trillion station redevelopment plan is set to take off soon. Indian Railway Stations Development Corporation (IRSDC) is likely to raise about Rs 40 billion from the markets for upgrading at least 50 stations.
The nodal agency in this regard, it will become the second entity under the ministry, after Indian Railway Finance Corporation (IRFC) to raise money from the markets. The ministry decided to redevelop stations by itself through IRSDC, under an engineering, procurement and construction (EPC) model, after getting only a tepid response from private entities when bids were invited for 21 stations.
(Source: Business Standard)
5. SEBI May Seek Forensic Probe Of ICICI Bank Books, Disclosures
Markets watchdog SEBI is mulling a forensic examination of financial statements and disclosures made by ICICI Bank in the last few years amid a controversy over alleged conflict of interest involving the lender's Chief Executive Officer Chanda Kochhar and her husband.
The Securities and Exchange Board of India will also consult the Reserve Bank of India on the matter to avoid any intra-regulatory jurisdiction issues, top officials told PTI.
The forensic examination will focus on various disclosures made by the top private sector bank over the last few years, according to clarifications submitted by ICICI Bank to the stock exchanges in reply to queries made in the backdrop of a controversy regarding certain loans extended as part of a consortium to the Videocon Group.
(Source: PTI)
6. Flipkart Needs Walmart Deal To Take On Amazon, Aswath Damodaran Says
India’s largest e-commerce player Flipkart needs Walmart to contend with Amazon’s “incredible patience and lots of capital”, said Aswath Damodaran, professor of finance at NYU Stern School of Business.
An acquisition by Walmart will give the Indian unicorn a “second life”, he told BloombergQuint in an interview. “Head to head, Flipkart has no chance to get Amazon. Over time, Amazon would have outlasted them.”
Walmart is in discussions to spend about $7 billion to become the largest investor in Flipkart which has been burning cash at a rapid rate as it seeks to keep up with the Jeff Bezos-led e-commerce giant which made an entry into India in 2012. Besides, Amazon is considering putting in a rival bid, Livemint reported.
(Source: BloombergQuint)
7. 12 IPOs Lined up for the Next 2 Months to Raise Rs 17,000 Crore
The initial public offering (IPO) market is gearing up for a burst of activity, with at least 12 companies planning to raise more than Rs17,000 crore over the next two months, after a quiet start to the June quarter.
Experts attributed the introduction of the new Indian accounting standards (IndAS) as one of the reasons why IPO-bound companies have not approached the market so far this quarter.
“Companies now have to move to the IndAS from the Indian GAAP (generally accepted accounting principles). So, for the fresh numbers that companies will put in the documents, they have to be audited under the IndAS and also the past stated numbers have to be stated according to the IndAS,” said Girish Nadkarni, managing director at Motilal Oswal Investment Advisors Pvt. Ltd. “That is taking some time which is why you are seeing less activity post-March.”
(Source: Livemint)
8. Metal Headache: Commodity Rally Will Put Pressure on Operating Margins
The recent rally in metal prices would prove expensive for India Inc, which is still recovering from the demand shock and economic disruption caused by demonetisation and the roll-out of the goods and services tax.
Analysts expect cuts in corporate margins in the forthcoming quarters, given the negative correlation between metal prices and operating margins of domestic manufacturers.
Historically, domestic manufacturing companies (excluding energy, metals, and mining players) have reported higher core operating margins when commodity prices, including metals, have been low and vice versa.
(Source: Business Standard)
9. Lean, Mean Air India Says no to Post-Retirement Extensions
While the Centre’s efforts to privatise Air India (AI) are facing some headwinds, the process is already ushering in some good practices in the company.
One such measure is the effort to get ‘leaner’. As many as 300 AI employees on contract after superannuation across all levels were let go recently. This is likely to become a formal policy.
AI’s employee cost is unsurprisingly high compared to its peers and takes up nearly 12 percent of its revenue.
(Source: The Hindu BusinessLine)
(At The Quint, we are answerable only to our audience. Play an active role in shaping our journalism by becoming a member. Because the truth is worth it.)