QBiz: SEBI to Reduce Mutual Fund Schemes & More

Business news from across the country in QBiz.

5 min read

The head office of the Securities and Exchange Board of India (SEBI) in Mumbai. 

1. Sebi to Reduce Mutual Fund Schemes by Half

The Securities and Exchange Board of India’s (Sebi’s) mutual fund advisory panel has recommended strict definitions on how mutual funds are categorised, a move that might halve the number of schemes offered by asset managers currently.

The capital markets regulator aims to ensure that an asset management company has only one product offering in each category, said two people with direct knowledge.

The move will help investors cut through the clutter of 2,000 investment schemes and aid decision making, said these people. At the end of August, 42 fund houses in Indian managed Rs20.6 trillion. 

Source: Livemint

2. E-Vehicle Drive: Centre May Take Elon Musk's Australian Policy for a Spin

India is working on an Elon Musk-inspired policy to challenge global and Indian firms to set up manufacturing facilities for electric vehicles, batteries and charging infrastructure in an ambitious time frame with the help of assured policy and regulatory support along with help in getting land and other infrastructure.

The move follows Australia’s decision to award Tesla a giant contract against stiff competition after Musk promised to build a grid-scale battery in 100 days and deliver it free if he overshoots the deadline. The lithium-ion battery, which can light up 30,000 homes if there is an outage, will prop up Australia’s plan to help relatively erratic wind and solar plants replace thermal power stations in the country.

Source: Economic Times

3. Blackstone Group to Buy IARC, Enter India's Distressed Assets Space

Blackstone Group Lp, the world’s largest alternative asset manager, is set to acquire a controlling stake in Mumbai-based distressed asset buyer International Asset Reconstruction Co Pvt Ltd (IARC), according to two people aware of the development.

According to the agreement, Blackstone will initially invest about $150 million for a large minority stake, which can be subsequently raised to a majority one in a couple of years, said one of the two people, requesting anonymity.

Blackstone is the latest among global private equity funds to tap the opportunity in the distressed asset space. Bad and stressed loans at Indian banks have surged to at least Rs 10 trillion as on 31 March as the Reserve Bank of India (RBI) hastened a clean-up of balance sheets of lenders, forcing them to sell off bad loans to free up capital for lending.

Source: Livemint

4. IndiGo Eyes Wet-Lease to Cash in on Winter Traffic

A slowdown in the delivery of new aircraft has forced India’s biggest airline, IndiGo, to consider the wet-lease option to raise its passenger capacity for the upcoming winter schedule.

The airline is in talks with Lithuanian airline SmallPlanet and troubled European airlines Air Berlin and Alitalia to wet lease at least seven A320 planes, sources close to the development said. While IndiGo has been dry leasing older planes since 2015, this will be the first time the airline will resort to wet lease.

Wet lease, an arrangement under which the lessor airline provides aircraft along with crew, maintenance, etc to the lessee, is costlier than dry lease and may lead to a spike in operational cost for IndiGo. But if the airline does not deploy enough capacity, it fears losing market share, besides lucrative slots at airports.

Source: Business Standard

5. GST Cess Hike on Luxury Cars, SUVs to Take Effect From Today

The increased Goods and Services (GST) cess on mid- sized, luxury and SUV cars will come into effect on Monday.

The GST Council on 9 September decided to hike cess on mid-sized cars by 2 percent, taking the effective GST rate to 45 percent

Also, cess on large cars has been hiked by 5 percent, taking the total GST incidence to 48 percent while that of SUVs by 7 percent to 50 per cent.

"Notification regarding increase in the effective rates of the Compensation Cess on specified motor vehicles will be issued on 11 September 2017, effective from 00 hours the same day," the Central Board of Excise and Customs (CBEC) tweeted.

Source: Business Standard

6. Bakshi-McDonald's Row: Board May Meet This Week to Take Call on 169 Stores

The role of the administrator of Connaught Plaza Restaurants Ltd (CPRL) is set to gain precedence in the battle between estranged partners Vikram Bakshi and McDonald's India Ltd (MIPL).

While the two fight it out and the matter IS slated for next hearing on 21 September, Justice GS Singhvi, who is the administrator on the board of CPRL, will now decide on whether the 169 stores in the north and east of India can remain open till the time the matter is settled in courts. For this, a board meet is likely to be called this week, persons in the know said.

Justice Singhvi had deferred the matter on September 6, when the last board meet was held, asking both parties to wait for the outcome of the court hearing on September 7. Bakshi had said on September 7 that outlets would remain open, while MIPL had said that it would take steps to enforce the termination it had issued last month.

Source: Business Standard

7. No Machines Being Used In RBI Offices For Counting Scrapped Notes

The Reserve Bank of India (RBI) has said counting machines are “not being used” for tallying the total number of demonetised notes of Rs 500 and Rs 1,000 in any of its offices, according to an RTI reply.

The central bank also refused to give the total number of personnel deployed for counting of the scrapped notes, saying compiling the information would "disproportionately divert" its resources.

In its annual report for 2016-17 released on August 30, the RBI had said Rs 15.28 lakh crore, or 99 percent of the demonetised 500 and 1,000 rupee notes, have returned to the banking system.

Source: Bloomberg Quint

8. Narendra Modi, Shinzo Abe to Fire up 'Bullet Train' Project

Gujarat, Prime Minister Narendra Modi’s home state, is decking up to host Japanese PM Shinzo Abe. Ahmedabad’s potholed roads are getting a quick makeover while the state’s bureaucrats are having new visiting cards printed in Japanese.

The grand plans are being seen reciprocation of the hospitality the Japanese PM extended to his Indian counterpart in November 2016. Abe, who lands here on Wednesday, will be treated to authentic Japanese and Gujarati food, though a tête-à-tête a la the Indian PM and Chinese President Xi Jinping, might not take place, according to government sources.

Source: Business Standard

9. Asia Stocks Rise, Dollar Bounces as Irma Weakens: Markets Wrap

Asian stocks rose with US equity-index futures and the dollar rebounded from its lowest in more than two years as hurricane Irma’s force waned and as the United Nations prepared to vote on tougher North Korean sanctions.

Equities advanced in Tokyo, Seoul and Sydney as Treasuries fell. The dollar rose against major peers as Irma, while devastating, didn’t reach the feared Category 5 storm that some had expected and looks to have spared Miami. Markets in China will come into focus after inflation accelerated in August, exceeding estimates, and the yuan will be watched as China’s central bank is said to have removed a reserve requirement on the trading of foreign-exchange forwards.

Source: Bloomberg Quint

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