News Update dated March 29, 2017

Rupee storms to fresh 17-month high; jumps 37 paise

Scripting its second biggest single-day gain this year, the rupee today zoomed by 37 paise to close at a fresh 17-month high of 65.04 on the back of panic dollar selling by speculative traders and exporters. This is the highest closing for the domestic unit since October 28, 2015 when it had closed at 64.93. The home currency resumed on a firm footing at 65.27 from last Friday’s closing value of 65.41 at the Interbank Foreign Exchange (Forex) market.

Source: The Hindu Business Line


Three in final race for 35% stake in ICICI Lombard

Bulgebracket private equity funds Warburg Pincus, Carlyle and Temasek have been shortlisted for a 35% stake in ICICI Lombard General Insurance Co Ltd, the country’s largest private sector general insurer, in a deal that could fetch up to $1 billion, said people familiar with the development. The selection took place late last week after bids were received from four potential investors. Others in the race included Blackstone, KKR, Advent and General Atlantic. The three will now conduct a final round of due diligence before submitting binding offers by April end, the people mentioned above said.

Source: Economic Times


New board for indirect taxes to become operational from June 1

The Central Board of Indirect Taxes and Customs (CBIC), which will replace the current CBEC, will become operational from June 1 in preparation for the Goods and Services Tax (GST) regime, an official source said. The Central Board of Excise and Customs (CBEC) is presently the top policy-making forum for indirect taxes in the country. “The CBIC will become operational from June 1. There will be no need for different commissionerates for service tax, central excise and others. There will be only one body — Commissionerate for GST,” a CBEC source told IANS.

Source: Economic Times


GST draft bills tabled in House; peg peak rate at 40%

Finance Minister Arun Jaitley on Monday introduced in Lok Sabha four bills on Goods and Services Tax, providing for a maximum GST rate of 40 per cent, an anti-profiteering authority and arrests for evading taxes. With this, rollout of GST – the biggest tax reform since independence – has entered the last lap and its passage by Parliament will pave the way for integrating India as one market with one rate of tax replacing multiple state and central levies. Jaitley introduced a Central Goods and Service Tax or CGST bill which will amalgamate all the indirect central government levies like sales tax, service tax, excise duty, additional customs duty (Countervailing Duty), special additional duty of customs, surcharges and cesses.

Source: Millenium Post


Reliance Industries follows a mini-Jio strategy in fuel-retail business

It is not only telecom where Reliance Industries (RIL) is keeping competitors on tenterhooks. The conglomerate is attempting something similar in its fuel-retailing business, forcing competitors to offer a tough fight to sustain market share.  According to industry sources, RIL continues to offer a discount in the range of Rs 1 to Rs 1.4 to the market price. “There is no uniform discount. It is different at different pump locations, depending on the feasibility,” said one, who did not wish to be identified.

Source: Business Standard


Govt, RBI may introduce gradation system to deal with bad debts

The government and the Reserve Bank of India (RBI) could introduce a gradation system in loan restructuring to deal with bad debts.   All schemes introduced by the central bank would be used, depending upon the provisioning requirement, and public sector banks would get to act like aggressive private equity players to recover dues. The central idea would be to protect the interests of banks.   “Banks have in the past few months been talking to various private equity (PE) players and a few large corporates in India and abroad.

Source: Business Standard


Aadhaar can’t be made compulsory for welfare schemes’ benefits: Supreme Court

Having an Aadhaar card cannot be made mandatory by the government for giving out benefits from its welfare schemes, the Supreme Court said today, PTI reported. It did add though that the government can’t be stopped from making it compulsory to have one for things like opening bank accounts. The top court also said that while a seven-judge bench needs to be set up to hear the pleas challenging Aadhaar, but that is not possible at this time. Earlier this month, the government said nobody will be deprived of benefits because they don’t have an Aadhaar card.

Source: Times of India


L&T construction arm wins order worth Rs 705 cr

“The water and effluent treatment business of the construction arm of L&T has won an order worth Rs.705 crore,” the engineering major said in a BSE filing today. The project, awarded by Tanzaia’s Minstry of Water and Irrigation, will be executed by L&T through a joint venture with Shriram EPC. Shares of L&T were trading 0.28 per cent lower at Rs. 1,547 on the BSE.

Source: The Hindu Business Line


Government wants all PSU banks to be Aadhaar Pay-ready by April

Post demonetization, government has given the much-needed push for digital transactions to take-off in a big way. As the first step, the banking regulator Reserve Bank of India, through its division National Payment Corporation of India (NPCI), has built the railroads to set the digital payment system in motion. A.P. Hota spoke to Mint about the road map ahead in terms of awareness, customer protection and Unified Payments Interface (UPI), the most ambitious project of NPCI. Edited excerpts:

Source: Livemint


IRFC declares Rs 340 cr as dividend for 2016-17

Indian Railway Finance Corporation (IRFC) has declared highest ever interim dividend of Rs 340 cr for the 2016-17 fiscal. Railway Minister Suresh Prabhu accepted the dividend cheque from IRFC MD, SK Pattanayak, in the presence of senior ministry officials. With this, the cumulative dividend payout to Indian Railways has reached Rs 2750 cr, according to a release. IRFC, a railways PSU, plays a critical role in capital formation for the Indian Railways. Railways gets one-fourth of its Plan Fund needs from the PSU. The railways has a big investment plan of Rs 8.56 lakh crore between FY 2015-16 and FY 2019-20, out of which the target of funding through IRFC has been pegged at Rs 2.50 lakh crore.

Source: Money Control


Sintex in talks with TPG, Blackstone, Carlyle to sell stake in Sintex Plastics

Sintex Industries Ltd, the world’s largest maker of plastic water tanks, is in talks with private equity (PE) funds to sell a minority stake in its newly demerged entity—Sintex Plastics Technology Ltd, according to two people aware of the development. TPG Capital, Blackstone Group LP and Carlyle Group have shown interest in the company and separate discussions are on to sell a minority stake worth $200 million (Rs1,300 crore), said one of the two cited above, requesting anonymity.

Source: Livemint


Ikea working on lower pricing for India stores

Ikea, the world’s largest furniture retailer, is working to squeeze costs further to make its furniture and home décor products available to a larger Indian audience before opening its first store in the country early next year in Hyderabad, a top company official said. “In the cities where we will be present1 at Ikea,” said Patrik Antoni, deputy country manager at Ikea India Pvt. Ltd.

Source: Livemint


Kotak to consider raising funds via multiple routes

Private sector lender Kotak Mahindra Bank on Monday said it will consider raising equity capital through qualified institutional placement (QIP) of shares, rights issue or private placement at a board meeting on Thursday. In a communication to the stock exchanges, the bank said it would also consider the options of a follow-on public offering (FPO), global depository receipts (GDRs) and/or American depository receipts (ADRs) for raising funds. “…we hereby inform you that a meeting of the board of directors of the bank is scheduled to be held on Thursday, March 30, 2017 to consider raising of equity capital by the bank through rights issue, private placement, follow-on public offering (FPO), qualified institutional placement (QIP), global depository receipts (GDR), American depository receipts (ADR) or through any other permissible mode or a combination thereof, as may be considered appropriate, subject to shareholder approvals as applicable and regulatory/ statutory approvals and requirements,” the lender said in the filing.

Source: Financial Express


BSE, NSE to conduct mock trading sessions on April 1

Leading bourses BSE and NSE will conduct mock trading sessions on Saturday to test system and software related to trading and risk management. The two bourses separately said they will conduct mock trading sessions on Saturday, April 1, 2017. In three separate circulars, the BSE said the mock trading would be held for the equity, equity derivatives and currency derivative segments.

Source: India Today


PE, venture capital-backed companies faring better than firms going solo

Companies backed by VC funds and private equity are growing significantly faster than the ones that do not have such fundings and also the publicly listed firms including those part of Sensex and Nifty, says a study. Besides, such firms exhibit a more efficient working capital management as compared to listed peers. Further, revenue growth of PE-VC backed companies are more than twice that of other benchmarks. The study by Venture Intelligence was conducted under the guidance of Professor Thillai Rajan, Department of Management Studies, IIT Madras. In the six years between 2011 and 2016, PE-VC firms invested over USD 72 billion in Indian companies — over 6.5 times what corporate India raised via initial public offers (IPOs) during the same period, the study noted.

Source: Financial Express


Indian companies may have Rs 4 lakh crore extra working capital: E&Y

Top Indian companies might be having excess working capital of Rs 4 lakh crore, says a report. Giving the estimate on the excess working capital that might be available with the domestic companies, global consultancy E&Y today said firms need to execute focused programmes to release such funds towards growth activities. “A high-level comparative analysis indicates that Indian companies may have up to Rs 4 trillion (USD 60 billion) in excess working capital, over and above the level they require to operate their business model efficiently and meet all their operating requirements.

Source: Hindustan Times