1. Rs 5 Lakh Crore In New Currency In Circulation, Government Tells Supreme Court
The Reserve Bank of India has supplied Rs 5 lakh crore worth of new currency notes to the banking system, Attorney General Mukul Rohatgi told the Supreme Court on Thursday. In addition to this, Rs 2.5 lakh crore in old and valid currency remains in circulation, he added.
The comments came during the hearing of a case related to the government’s decision to withdraw the legal tender status of Rs 500 and Rs 1,000 notes. The decision left the country grappling with a cash crunch as not enough new notes had been printed to compensate for those withdrawn. Around 86 percent, or Rs 15.4 lakh crore, of currency was withdrawn from a total of Rs 17.97 lakh crore in circulation.
Data provided by the Attorney General suggests that the valid currency in circulation is now at about 42 percent of the currency that was in circulation before the demonetisation
(Source: BloombergQuint)
2. Nusli Wadia Files Rs 3,000 Cr Defamation Suit Against Ratan Tata And Tata Sons
Industrialist Nusli Wadia, an independent director for some Tata group companies, has filed a Rs 3,000 crore defamation suit against Ratan Tata, Tata Sons and its directors.
According to sources close to Wadia, the suit was filed at the Bombay High Court.
Wadia, who is an independent director in Tata group firms, including Tata Motors, Tata Steel and Tata Chemicals, is facing a vote by respective shareholders of the companies to a resolution moved by Tata Sons seeking his removal from the boards.
Tata Sons have called EGMs to remove ousted chairman Cyrus Mistry and Wadia from the boards of Indian Hotels, Tata Chemicals, Tata Motors and Tata Steel. Tatas have also accused Wadia of trying to take control of some of these companies.
(Source: BloombergQuint)
3. Paytm’s Valuations Rise 4.7% As Demonetisation Lends A Helping Hand
Digital wallet and e-commerce company, Paytm saw a 4.7 percent jump in its valuation in just three months. Founder Vijay Shekhar Sharma sold 1 percent stake in the parent company, One97 Communications Ltd, for about Rs 325 crore last week, which translates to an enterprise valuation of Rs 32,500 crore.
Documents confirmed the increase in valuation by reviewing the documents filed by One97 with the Registrar of Companies.
In August, Paytm raised nearly Rs 402 crore from Taiwan-based MediaTek’s investment arm Mountain Capital. It issued 6,06,668 shares at a price of Rs 6,626.36 per share, which valued the company at Rs 31,042 crore, as per the company filings with the RoC.
The demonetisation-induced spike in digital transactions could be one of the factors behind the increase in valuations, according to investors and analysts.
This is a secondary sale and has nothing to do with new investors coming in and these are all existing sharesHarshad Lahoti, the chief executive officer of ah! Ventures
(Source: BloombergQuint)
4. Digital Mode No Substitute for Cash Deals, Only a Parallel Mechanism: Jaitley
Asserting that digital transactions are only a “parallel mechanism” to cash transactions, Finance Minister Arun Jaitley on Thursday said that the former should not be seen as a “substitute for cash transactions”.
A cashless economy is actually a “less cash economy” as no economy can be fully cashless, Jaitley said in his opening remarks at the 5th meeting of consultative committee attached to Finance Ministry. The subject of the meeting was ‘Shift to Digital Transactions’.
Jaitley said that the government is trying to encourage digitisation because an excessively cash-dependent economy has its own social and economic costs and consequences. He said that less cash can be gradually substituted to the possible extent through digital payments/transactions.
Jaitley said the government has given lot of incentives to the people to shift to digital mode of payment and the response has been quite positive.
(Source: The Hindu Business Line)
5. Uber Doesn’t Want A Co-Passenger In India
The world’s largest taxi aggregator, Uber, sees a path to profitability in India, and unlike what it did in China, in India it has no plans to merge with any of its competitors, said co-founder and chief executive officer, Travis Kalanick.
Kalanick is in India and has been meeting a whole host of ministers, including Finance Minister Arun Jaitley and Law Minister Ravi Shankar Prasad over the last two days. On Thursday evening, he sat down for a free-wheeling chat with NITI Aayog CEO, Amitabh Kant.
After a rather expensive competition with Chinese cab aggregator, Didi Chuxing, Uber sold its China business to the local player in August this year. When Kant asked him why he lost out to Didi Chuxing, Kalanick quipped, “Because we were losing $200 million a month.”
(Source: BloombergQuint)
6. Bonds, Rupee Come Under Pressure on Fed Rate Hike
Bonds, stock and rupee came under pressure after the US Federal Reserve hiked its policy rate by 25 basis points (bps) and guided that there could be three more hikes next year, instead of the widely expected two, as the US economy shows early signs of a pick-up in growth.
The hawkish guidance by the US Fed raised concerns it could tie the hands of the Reserve Bank of India (RBI) from cutting rates aggressively here.
The central bank had paused on 7 December, anticipating an imminent hike by the Federal Open Market Committee (FOMC), and waiting to see how the hike would impact the financial markets. If the US goes ahead with three hikes as guided, the RBI may end up cutting rates by not more than 50 bps as otherwise the interest rate differential will become unattractive for foreign investors.
(Source: Business Standard)
7. Exports up 2.29% in November; Trade Deficit Hits 2-Yr High
Exports rose for the third straight month in November, recording a growth of 2.29 percent, though the trade deficit shot up to about two-year high of $13 billion mainly due to increase in gold imports.
Exports of engineering products rose by 14.10 percent, petroleum by 5.73 percent and chemicals by 8.3 percent, compared to the same month last year, according to official data released on Thursday .
Imports too increased by 10.44 percent to $33 billion.
(Source: Business Standard)
8. Note Ban Drags down Home Loan Market
Banks and housing finance companies are feeling the effect of the downward spiral in business sentiment triggered by the demonetisation of high-value currency notes.
Market expectations of a decline in real estate prices, as well as in interest rates, have prompted borrowers to defer purchases, resulting in tepid home loan demand.
Retail home loan enquiries have come down substantially... it is almost next to nothing. Even people who made token payments on purchases are holding back and not taking fresh loan disbursements. In some cases, we have seen cancellations of bookings too.Statement by a top housing finance company executive.
A senior public sector bank official said prospective home buyers had gone into a wait-and-watch mode to figure out how property prices will move.
(Source: The Hindu Business Line)
9. Currency Recall Dents Advance Tax Outgo
Demonetisation has crippled sales and earnings of fast-moving consumer goods, durables and automobile companies. Companies like Hindustan Unilever (HUL) and Asian Paints told tax officials that their sales took a beating due to the high-denomination note recall on 8 November.
Consumer major Hindustan Unilever on Thursday reported a decline of nearly 10 percent in its advance tax outgo for the third quarter to Rs 560 crore from Rs 620 crore in the same period a year ago. Asian Paints saw a mere 2.7 percent year-on-year increase in advance tax for Q3FY17.
(Source: Business Standard)
(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.)