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Tuesday, November 5, 2019

economic news of india - world economic news - economics news for students - indian economy news

economic news of india - world economic news - economics news for students - indian economy news


Google, Facebook's tax bill could shoot up if India has its way

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NEW DELHI: India has sought changes in the Organisation for Economic Cooperation and Development (OECD) proposal on digital taxation, saying it would deny the country its proper share of taxes from multinationals such as Google, Facebook, Uber and Netflix, which generate substantial revenues locally.The government has proposed a more balanced principle for the taxation of such companies based on place of revenue generation."We want a fair share in revenues that accrue to the company from the country," said a government official aware of the development. India has submitted its concerns to the body. The OECD had on October 9 released a draft on taxing digital companies for public comment. Discussions on the proposal are to be held on November 21-22. All countries have to agree for the rules to be enforced.India imposed a 6% equalisation levy on online advertising in 2016. Under this, the levy is withheld by the recipient of services from the payment it's making for services. 71931562 The proposed OECD formulation will mean India getting little revenue despite the large digital and business presence of companies, the official said. This is because only "residual profit" will be apportioned among the countries where a company has its markets. The government is of the view that multinational companies derive large revenues from countries such as India via their digital presence, without having a physical one, and has questioned the distinction between "routine profit"— which accrue due to physical presence — and "residual" profit."We cannot back this formulation," the official said. For example, a cab aggregator operating via a mobile app has its core technology base in one country and software base in another but makes money in countries such as India.Size of BusinessThe latter will only get a small part of the profit under the OECD proposal, the government argues. There is also the matter of how the size of business will be determined — using employees, assets or sales.The Indian method focuses on revenue, wherein income is apportioned to each jurisdiction in line with operations there, which the official said would be fair to everyone and simpler to operate.On the other hand, in the case of outbound business from India — IT and software companies that export their services and products to developed markets, for instance — it is possible that residual profits will be attributed to markets there, thereby reducing taxable profits in the home country. There are also questions about the kind of businesses that will be covered, the official said.Companies basing themselves in low-tax jurisdictions for tax avoidance is referred to as base erosion and profit shifting (BEPS). The term Google tax refers to measures aimed at combating this and ensuring that companies pay what they owe in line with revenue generated locally."Requirements of both developed and developing nations should be kept in mind, while arriving at a unified approach to ensure that divergent interests are adequately aligned and protected," said Vikas Vasal, national leader tax, Grant Thornton in India."Consensus will be driven by how these formulae reallocate the non-routine profit to the market countries," said Rohinton Sidhwa, partner, Deloitte India.

The fight for Mumbai airport gets intense

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MUMBAI: Adani Properties wants the deadline for closing its proposed acquisition of Bidvest's stake in GVK-controlled Mumbai International Airport Ltd. to be extended by three months to February 2020.The company is willing to deposit the entire amount in a no-lien bank account if the transaction deadline is postponed to February 7 from November 7, Darius Khambata, senior counsel for Adani Properties, said in the Bombay High Court on Tuesday.Bidvest agreed in April to sell stake to Adani Properties by September 30 for Rs 1,235 crore. Adani Properties approached the court to restrain Bidvest from selling its stake to any other party. GVK had exercised its right of first refusal to buy Bidvest's holding.After hearing arguments from all the parties, Justice AK Menon reserved the matter for order on November 6. "We are seeking an injunction against Bidvest to sell their shares to anyone," argued Khambata. "GVK has failed to purchase shares from Bidvest and the other stakeholder AAI (Airports Authority of India) has made it clear that they are not interested to acquire those shares and hence there is nothing that can stop Bidvest to sell those shares to us."The Gautam Adani-controlled company is also seeking court intervention to appoint Bidvest as the 'constructive trustee' to make sure that GVK and the AAI abide by the right of first refusal to sell their stakes to them.Countering this, Ravi Kadam, senior counsel for GVK, argued that the company has deposited the money in an escrow account on October 30."This is just an attempt by the petitioner (Adani Properties) to cut short my right of first refusal. The agreement between Adani and Bidvest clearly says that their right will kick in only if I fail to perform," Kadam said.Senior counsel Janak Dwarkadas, who appeared for Bidvest, observed that the company is in a situation where there are two suitors with no money.After GVK delayed its payment, Bidvest approached the Delhi High Court and was allowed to move an arbitration tribunal, which gave GVK until Octoberend to make the payment."Currently, the arbitration tribunal has restrained us from selling shares until November 24," added Dwarkadas.The GVK Group raised over Rs 7,600 crore to reduce debt and acquire a 23.5% stake in MIAL, according to a company stock exchange filing on October 27.Currently, South African investors Bidvest and ACSA hold 23.5% in MIAL, GVK owns 50.5% and AAI owns the remainder.

FM hints at ushering in reforms which couldn't take off earlier

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Finance minister Nirmala Sitharaman on Tuesday said the government will soon use its strong electoral mandate to usher in the next wave of reforms, and not to miss the bus this time.Without naming the reform measures unsuccessfully attempted by the Modi government in its first term, and in an apparent hint at land acquisition reform attempts by NDA1, she said government's efforts last time were thwarted by the poor numbers in the Upper House.It can be noted that many analysts have been calling for urgent reforms in the factor markets, especially regarding land and labour, to get the economy out of the trough, citing the strong political mandate the government enjoys."...I am sure we will now show the commitment for reforms happens fast. That is where the mandate given to Modi 2.0 will help," Sitharaman said, speaking at The Indian Express' 'Adda'."We will push forward with those reforms which have missed the bus last time, but won't miss the bus now," the minister asserted.Her comments come on the heels of the BJP failing to improve its tally in the just concluded Maharashtra and Haryana elections despite the party playing the nationalism card to the full. Many pollsters have opined that hard economic realities such as the deepening agrarian crisis and rising joblessness have trumped the nationalism card of the ruling BJP in both the states.When asked whether economics has trumped politics in the recent elections, she it is not possible for any political party, particularly those in power, to delink any subject."It is not possible for any government, be it at the Centre or in the states, to say give me your vote on nationalism and I do not want to talk about economic issues. Is the voter going to be indulgent enough to say 'alright, the prime minister doesn't want to talk about economy so we won't talk about the economy'," she said.Hitting out at those who blocked government from carrying out reforms in its first term, she admitted that the numbers were limited (in the Upper House) and the country paid the price for that.She said the manufacturing sector competitiveness is still pulled down by "extraneous" factors such as high cost for land, electricity and also changes in land use, which are beyond the ambit of individual companies, but which the government now wants to ease them all."Everything has a long way to go in terms of becoming actually easy to do business," she said.With dozens of companies leaving China and opening shops in other emerging countries like Vietnam and Bangladesh following the US-China trade wars, Sitharaman said the government has created a list of potential players who will be tapped and added that some conversations are already on in this regard.She also pointed out Vietnam's weaknesses, including a saturation in its labour market and also low domestic demand due to its low population base & pointed to the huge domestic market that our 1.34 billion population offers.About companies to committing new investments and using the space created by the corporate tax cut for deleveraging, she said it is fine for a corporate to use the space for the purposes it wishes and exuded confidence that over the long-term, they will invest."I would not say deleveraging is wrong, if you want to come out of some stress," she said.

Risk Aversion: The new guiding principle in banking

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Less than a year into his first term as Prime Minister, Narendra Modi came to Mumbai to address India's financiers to mark the 80th anniversary of the establishment of the central bank. The central theme of Modi's emotional speech was financial inclusion. "I come as a representative of the poor, underprivileged, marginalised and tribals; I am one among them; I seek on their behalf, and trust you will not disappoint me."Four summers have passed since, and India has made some progress on bringing banking to those hitherto excluded from formal financing. Jan Dhan accounts and the Mudra scheme have sought to enhance financial inclusion at the individual level, gains that can't be denied by the staunchest critics. But a credit crisis and question marks over debt-service cover have restricted fund access to a majority of Indian businesses below the top tier, despite abundant liquidity with high-street lenders. And that has raised the weighted average cost of capital for innumerable businesses now battling with the cost of working capital debt running into high teens.The problem appears to affect small and medium businesses across industries. A mid-sized SME in the business of chemical exports approached one of India's largest lenders for a working capital loan. But little did the SME borrower know that this will increase the interest outgo to 15.5% from 14.2%, with a warning that the facilities could be withdrawn within three months. While the SME was lucky to even secure a loan, albeit at much higher rates, several of its other counterparts had their requests turned down as the state-owned bank has decided to withdraw the banking facilities for lower-rated businesses due to higher perceived risks.REJECTION RISKRisk aversion is the new guiding principle in Indian banking today, reflecting the decline in credit growth numbers. Loan growth remained tepid in the fortnight ended October 11, signaling that the loan melas that kicked off this month are yet to translate into significant disbursals."A lot of contraction in credit is related to the fact that mutual funds have withdrawn, non-banking lenders have withdrawn ... there is a huge contraction ... because some have burnt their fingers. You are seeing withdrawal of credit from the system. The problem is that most corporates are also not borrowing as much as they did in the past," said Amitabh Chaudhry, CEO of Axis Bank.Credit increased 8.8% compared with 14.4% in the same period a year ago. The latest monetary policy report by the Reserve Bank of India (RBI) also revealed that overall financial flows to the commercial sector have declined sharply, by around 88%, in the first six months of FY20.According to the latest RBI data, the flow of funds from banks and non-banks to the commercial sector has been Rs 90,995 crore in 2019-20 so far (April to mid-September) against Rs 7,36,087 crore in the same period last year."On the funding side, lenders have been selective. Even though many non-banking financial institutions have reduced their shorter-tenure borrowings and increased onbalance sheet liquidity, interest from institutional investors in the debt capital market has remained tepid. A significant reversal in this trend is unlikely in the near term even as bank funding has not yet fully bridged the gap," said Krishnan Sitaraman, senior director, CRISIL Ratings.At Axis Bank, 84% of its corporate exposure by value is rated A or better. At the end of the September quarter, exposure to AAA-rated corporates comprised 14% of its corporate book, while AA was 40%, A was 30% and BBB was 13%. Over 95% of fresh originations in the first half of fiscal 2020 were to corporates rated A- and above.At ICICI Bank, over 66% of its overall loan book comprised assets rated A- and above. While nearly 30% of the loans were in the BBB+, BBB and BBB- category. Only 1.6% of the overall loans were to firms below investment grade. About 90% of the disbursements in the first half of FY20 in the domestic and international corporate portfolio of the bank were to corporates rated A- and above."Bank credit growth continues to languish, with similar trends observed in the NBFC space. There has been a fall in consumption demand, especially in home loans, auto and service segments; and decline in industry credit, primarily on account of risk aversion on the part of banks to lend to MSMEs," said Suresh Ganapathy of Macquarie. 71932220 MSMEs IN THE WHIRLPOOLThe Modi government, in its second innings, has been pushing credit to small businesses, but most banks have seen a spike in bad loans in that segment. CIBIL data showed that in just three months, the total onbalance sheet commercial lending exposure to this segment declined to Rs 63.8 lakh crore in June from Rs 65.5 lakh crore in March.According to Capital Line data, 1,127 companies out of over 4,500 listed companies have ratings that range between BB, C and D."The decision-making has been passed on to the lowest level in the chain to avoid taking responsibility in the event of future defaults; people at lower levels of management are also not taking calls due to these concerns," said Sridhar Ramachandran, chief investment officer (CIO) at IndiaNivesh Renaissance Fund that buys distressed assets.Poor monetary policy transmission has also affected businesses. RBI data showed that the response of banks to the cumulative reduction in the policy repo rate by 110 bps during the easing cycle of monetary policy starting from February 2019 has been muted so far. While the weighted average lending rate (WALR) on fresh rupee loans decreased by only 29 bps (February-August 2019), WALR on outstanding rupee loans, in contrast, increased by 7 bps over the same period. The inadequate transmission essentially reflects slow adjustment in bank term deposit rates.TRUST DOESN'T COME EASYSo, where does this risk aversion stem from? It has been almost a year since IL&FS collapsed, leaving behind a wave of destruction in the non-banking sector, which is now struggling with asset quality issues. The biggest names like mortgage lender DHFL, ADAG Group and Zee Enterprises have added to banks' woes that are struggling to ensure proper asset quality.CRISIL data showed that the nonbanking crisis has worsened the problem. The wholesale loan book of non-banks —comprising nonbanking financial companies (NBFCs) and housing finance companies (HFCs) — de-grew further by 3-5% in the first half of fiscal 2020, following a de-growth of 2% in the second half of fiscal 2019. This comes on the back of a 32% compound annual growth rate (CAGR) between fiscals 2016 and 2018; and a 11% growth in the first half of fiscal 2019. With disbursements sluggish in the first half of this fiscal, prospects for the current year are subdued."Bad news keeps coming from this sector. Look at DHFL, it has only got worse. At IL&FS, only Rs 20,000 crore of the problem has been solved. In the meantime, some more companies have defaulted. First, it started with liquidity. Now, we see asset quality issues. The moment I suspect that, I want to run away from you. Because I start believing your equity is wiped out. They are all leveraged ... you only have to get 8-10% of your loans wrong for the crisis," said Axis Bank's Amitabh Chaudhry.And the worries are not unfounded. According to an analysis by Fitch Ratings, Indian banks would face a capital shortfall of about $50 billion in the event of a systemic crisis in non-banking financial companies. As per a stress test that assumed 30% of banks' NBFC exposure could go bad, such an occurrence would reverse the recent progress that banks have made in reducing their NPL ratios. In fresh estimates, Fitch said that the banking system's gross NPL ratio would rise to 11.6% by FYE21 from 9.3% at FYE19 compared with its baseline expectation of a decline to 8.2%."There have been pockets of business in India which are needed to clean the shirt. We need more clean white shirts and I think there is sensitivity in the system to ensure that while we clean the white shirt, we take efforts not to tear the white shirt. So, I would like to believe that we are moving forward, in a manner, towards the cleaner white shirt; hopefully, not at the white shirt," Uday Kotak, MD, Kotak Mahindra Bank, said in an earnings call with investors last week.SAFETY CATCHThe banking system is sloshing about with liquidity that is in excess of Rs 2.3 lakh crore, clearly indicating two things: One, there is a demand side problem and banks want to toe the line to avoid past mistakes. With slow credit offtake, banks have once again begun parking money in safehaven investments. RBI data showed that banks held excess SLR of 6.9% of net demand and time liabilities on August 30 this year compared with 6.3% at the end of March.Banks are also busy chasing assets that are rated BBB- and above. But in this race, what they forget is that 50-60% of SME assets are below BB - that is non-investment grade."I think we must be far more focused on so-called AAA-rated corporate… we do our own credit analysis before blindly accepting a rating agency that says it is AAA," says Kotak. "We do believe one of the biggest problems in India has been concentration risk. And therefore, however good a AAA corporate may look today, we have much tighter norms on concentration risk compared to probably many other players. And it is something which has stood up in good stead over a long period of time. Because this is an environment, you just have to look at the last 12 months, how many AAAs have become D."FEAR OF THREE CSHistorically, banks have accused the three Cs — CBI, CVC and CAG — for digging out cases of lending malpractices with the power of hindsight. While the conviction rate has been poor in most cases, a lot of these cases also raise eyebrows over poor lending decision by banks."Banks should answer how they funded Rs 50,000 crore to Bhushan Steel for a company having a net worth of hardly Rs 5,000 crore. How can banks blame the investigative agencies?" asked Sridhar. "This is a foolish argument, look at the balance sheet of the company and you would know that bankers fell for some foolish dreams sold by the promoter."

Electronics companies run into entry-level pileup

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Kolkata: Stagnant or lower festive season sales of entry-level television and appliances like semi-automatic washing machines and single door refrigerators have seen a huge pile-up of stock of these products prompting consumer electronics companies to cut production by up to 30% in November and December, three senior industry executives said. Low to middle-income consumers stayed away from purchases or shifted to hugely discounted online-focused brands.While premium products like large screen televisions, frostfree refrigerators and fully automatic washing machines did sell in cities and large towns driven by plethora of consumer finance options and price cuts — sales of entry-level products which constitute the belly of the market — were a washout, several manufacturers said.Two industry executives said Samsung is evaluating curtailing of television imports (it does not have local production) in the next two months, especially of entry level screen sizes smaller than 43 inches. Sony and LG are also considering similar options for TV production. Some brands have also told contract manufacturers about reducing production for appliances and TV."Television sets, semi-automatic washing machines and single door refrigerator sales were badly impacted this Diwali with inventory piling up, especially in up-country markets. Companies are reducing their production since November-December are lean months," said industry body Consumer Electronics and Appliances Manufacturers Association president Kamal Nandi.In a rare move, Samsung and LG have extended consumer promotion schemes for televisions beyond Diwali till November. Overall television sales remained flat through the year and failed to revive during festive season, as consumers postponed purchases by consuming streaming content on smartphones owing to poor economic sentiment.71929636 Growth in 55-inches and above premium models failed to revive the overall TV market due to 30% contribution by unit sales. In the sub-50 inches range, online-focussed brands like Xiaomi, BPL, Thomson, Kodak and Vu dofaiminated sales this Diwali.Nandi, who is also business head at Godrej Appliances, estimates sales of semi-automatic washing machine and single door refrigerators declined 7-10% this festive season compared to last. Samsung India denied plans of import cut and extension of consumer promotion scheme. In a press release on Tuesday, Samsung said it grew sales of its premium TV line up this festive season — sales of QLED television went up three times over last year and doubled for 4K TVs, while it has launched offer for Gurpurab and wedding season.Sony declined to comment for this story. LG India did not comment on television production cut but vice president (home appliances) Vijay Babu said there were no plans to cut production for appliances, with appliance sales growing 35% this festive season across both entry and high-capacity models. CM Singh, CEO at electronics retail chain CMS Electronics Junction, said manufacturers have indicated cut down on production and imports. "The impact in entry level products was everywhere, but in smaller towns, festive business was down 30-40% over last year. Ecommerce further dented sales," he said. Retailers said Diwali discount is continuing for entry level appliances and televisions in November as well. East and North's leading retail chain Great Eastern director Pulkit Baid said most brands have decided to continue festive schemes, freebies and extended warranty, especially for TVs, to liquidate stock amidst slow sales last month.Nandi said premium appliances grew, helping the industry clock 6-7% growth, but those are not barometers of the economy. "There is a liquidity issue in trade and this has impacted wholesale stock movement, which remained down 5-10% (on-year) from July onwards," he said.The festive season — from Onam in Kerala till Diwali covering Navratri, Durga Puja, Dussehra and Dhanteras — is the biggest shopping period in India, accounting for 30-40% of annual sales of consumer electronics, smartphones and home appliances.

DoT briefs government panel on telecom woes, AGR crisis

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NEW DELHI: A group of officials from the department of telecommunications (DoT) on Tuesday briefed a high-powered panel on the financial state of the industry and the challenges it is facing.Tuesday's meeting — the second of its kind – was an "information-gathering exercise by the committee of secretaries (CoS)" to take stock of financial stress in the debt-laden telecom sector, a source said.The panel was formed to suggest steps to provide relief in a time-bound manner to the carriers which are facing a Rs 1.3-lakh-crore-plus payout in additional statutory dues after the Supreme Court order on adjusted gross revenue (AGR)."A representation was made to inform the CoS about the situation of the sector. They're aware of the duress and the debt. We have also given the information on AGR and the fallout that it will have on the sector," a government official said.Loss-making Vodafone Idea and Bharti Airtel have been hit hardest by the Supreme Court order backing the government stance to include non-core items while calculating AGR, basis which the telcos pay licence fees and spectrum usage charge (SUC) to the government. The two telcos are cumulatively staring at over ?80,000-crore additional dues to be cleared in less than three months.Both have sought urgent relief from the government, saying that they will face an "unprecedented crisis" if forced to pay the full amounts. Rival Reliance Jio has opposed any relief in the AGR issue."The CoS is far from finalising anything at this point, more meetings will take place," the official said, highlighting that discussions were gathering pace since the onus of finding solutions for the sector is on the multi-ministerial panel.ET had reported on Monday that the panel is looking at a repayment period of 20 years for AGR dues, with possibly an initial moratorium to ease the burden on heavily indebted companies. While the total debt of the sector is about Rs 7 lakh crore, incumbent Airtel and Vodafone Idea together have a debt of more than Rs 2 lakh crore.The panel is headed by cabinet secretary Rajiv Gauba and has officials from key stakeholder ministries and departments. It may also consider a reduction in the total incidence of taxation to help the troubled sector, besides a reduction in levies. The service providers have long been asking for lower taxes on telecom services, which comes to nearly 33% of the overall revenue.

Too much volatility in returns? Review MF portfolio every 6 mths

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It may not pay to buy and hold an equity mutual fund forever. The stark contrast in returns between the top performers and the laggards among equity schemes has made it critical for investors to review their holdings more frequently, said investment advisors.For example, in the last one year, the best performing fund in large caps – Axis Bluechip delivered 24.71 per cent returns, while Franklin India Bluechip returned 6.22 per cent, a gap of almost 17 per cent. In the Multi-cap fund category, IIFL Focused Fund has delivered 27.65 per cent in a year, while ICICI Focused returned 0.5 per cent.Higher volatility in the markets has led to a set of blue chips performing better than the rest. Those funds which have managed to hold these blue chips have managed to do well. Others like Axis Bluechip have done well because of high cash holdings. Some of the underperforming schemes have exposure to stocks with poor corporate governance that have been battered in recent months.Investors may not be able to identify the best performer every year but consistent underperformance is a red flag. Investment advisors have different periods to evaluate the health of portfolios. For many of them, a bad show for three years is a good enough reason to exit from the scheme."Periodical review of portfolio once in six months or in a year is a must," said Amol Joshi, founder, Plan Rupee, a Mumbai-based financial planner. "If the underperformance vis-a-vis peers in the same category is large and continues for more than three years, investors should understand the reasons and should not hesitate to exit the fund," he said.The mid- and small-cap fund categories too have seen divergent trends. Over a three-year period, Axis Midcap Fund gave a return of 15.43 per cent while SBI Midcap Fund gave a return of 1.43 per cent. Over a five-year period, HDFC Small Cap delivered 18.93 per cent returns while Quant Small Cap returned 0.76 per cent.71931946 "If a fund underperforms its category average for three years, it definitely is on my watch list. It shows the fund manager calls are not in line with market and for an aggressive investor and calls for corrective action, which includes a switch to a better performing fund," says Shankar S, founder of Chennai-based Credo Capital.Financial planners said poor performance has been because of higher exposure to sectors or stocks that did not perform.In the recent past, funds that were overweight on telecom sector and bought stocks like Bharti Airtel and Idea underperformed.Similarly, those with a higher exposure to pharma stocks underperformed as stock prices corrected due to increasing USFDA scrutiny. With NPAs mounting, fund managers who went overweight on PSU banks or PSU as a theme underperformed. On the other hand, funds that were overweight on HDFC Bank, Kotak Bank, Bajaj Finance, Reliance Industries generated higher alpha. Axis Mutual Fund became one of the best performing fund houses in the last one year with many of its schemes being top performers as it bet on quality and held 10-20 per cent cash in many schemes.Longer periods of poor performances could result in investors missing out on targets set for such investments.

Sebi tightens rules on P-notes, to need separate registrations

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India's capitalmarkets regulator on Tuesday tightened rules on participatory notes (p-notes), or offshore derivative instruments issued by brokers to foreign investors not registered locally, while easing some operational norms for select overseas funds.ET was the first to report last month on the likelihood of the Securities and Exchange Board of India (Sebi) tightening the rules governing pnote investments.Sebi said late Tuesday that foreign portfolio investors (FPI) would have to make separate registrations for issuing p-notes for underlying derivatives. However, this requirement is waived for p-notes against underlying cash equities."Based on the new guidelines, some of the existing FPIs will have to get separate registrations if they want to issue p-notes based on derivatives," said a tax consultant, who did not want to be named. "However, Sebi has not prescribed any relaxation for such separate registrations. This could escalate the compliance burden on some of the big FPIs. Since the KYC information is already available with custodians and Sebi, funds should not be made to wait 45 days for a registration."ET had reported last month that stricter rules would impact at least two of the top five p-note issuers in the Indian markets, which reportedly have a combined market share of around 30 per cent. The total value of p-notes issued stood at Rs 79,800 crore in August, Sebi data showed.The regulator also said that an ODI-issuing (offshore derivative instrument) overseas investor, which hedges its ODI only by investing in securities held by it in India, cannot undertake proprietary derivative positions through the same FPI registration. Such an FPI must segregate its ODI and proprietary derivative investments through separate FPI registrations."An ODI-issuing FPI cannot commingle its non-derivative proprietary investments and ODI hedge investments with its proprietary derivative investment or vice versa in the same FPI registration," Sebi said in the new operating guidelines posted on its website.P-notes are derivative instruments issued by registered foreign portfolio investors to overseas investors to enable them to trade in Indian stocks without having to register with Sebi."No fresh derivative position, not in compliance with the above requirements, shall be allowed henceforth. FPIs have 90 days' time from the date of publication of the Operating Guidelines to comply with the above requirements," the Sebi order said. "Offmarket transfer of assets/positions will be allowed for FPIs intending to transfer assets/ position from one FPI account to another FPI account to comply with the above requirements."To be sure, the regulator has also relaxed some KYC norms for FPIs. It has exempted category I FPIs from submitting the information of their beneficial owners to custodians. Market participants said that the regulator has also given more clarity on the KYC documents that need to be collected for each category of offshore funds. The regulator has also put in place a data-privacy mechanism for sharing of KYC documents across market institutions, such as brokers and depositories. Going forward, all such data sharing will be consent based.Further, global custodians have been allowed to rely on the documentation collected by their own bank in a different country. Hence, in some cases, leading global custodians will be able to onboard FPIs into Indian markets without any fresh KYC."We believe that clarifications such as reliance on information available from reliable public sources would make life much simpler for several investors," said Sriram Krishnan, managing director, Deutsche Securities Services."Around 80 per cent of all FPIs, if not more, are likely to be in Category I, where for identification and verification of beneficial owners, the document number is not required to be provided."Some long-standing concerns remained even after the regulator issued the new guidelines."Several procedural clarifications have also been provided in the new guidelines, making the new FPI norms more robust and transparent," said Tejesh Chitlangi, partner, IC Universal Legal. "However, some of the major industry concerns pertaining to continuing restrictions on majority NRI holdings in FPIs and less favourable treatment of non-FATF member jurisdictions, such as Mauritius, from the perspective of higher KYC and ODI restrictions continue."

Manthan Software to acquire US-based RichRelevance

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Bengaluru: Manthan Software plans to acquire RichRelevance, a personalisation software provider for the retail sector, for an undisclosed amount. The Bengaluru-headquartered company which specialises in software applications for the retail industry and counts United Supermarkets, Pizza Hut, Helzberg Diamonds, Love's, Alshaya, and Future Group as its clients.RichRelevance, the San Francisco-based retail focused technology firm, raised $150 million so far and Manthan is offering a premium on the firm's current valuation, sources said. According to sources, this would help Manthan get access to 200 customers and get a "strong exposure" in retail technology solutions market. The acquisition would also increase Manthan's headcount to 600 from 500 currently. Manthan is exploring many cross-selling opportunities through this acquisition. Manthan announced on Tuesday that the company, jointly with RichRelevance, "have initiated a go-to-market now, and have set the path towards consolidating their category-leading businesses in the coming year, in compliance with applicable regulations"."RichRelevance and Manthan together will deliver an end-to-end Algorithmic Customer Experience marketing solution that includes business to consumer Customer Data Platform, Retail Marketing and Merchandising solution, and Real-time Personalization with advanced data science," said Manthan in a press release. Manthan said the comprehensive joint solution would enable retailers and brands to algorithmically discover new segments and target their most profitable customers, automatically test for and seamlessly deliver the most relevant content and offers across all touchpoints using emerging technology."It creates a new paradigm in algorithmic consumer experience," said Atul Jalan, chief executive officer, Manthan, adding that "you now have a partnership that is deeply vested in your success and brings a joint solution and expertise to the market to help you grow digital revenues through personalization".

Computer science gets the highest job offer of Rs 1.45 crore per annum at Indraprastha Institute of IT

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New Delhi: A computer science woman engineer bagged the highest job offer of Rs 1.45 crore per annum this year at the Indraprastha Institute of Information Technology (IIIT). The current batch graduating in 2020 from this institute received a total of 562 offers including 310 full time offers and 252 internship offers in this placement season. The other high pay packages recorded this year at IIIT Delhi were about Rs 43 lakh and Rs 33 lakh. Currently the campus average compensation is Rs 16.33 lakh and median is Rs 14.85 lakh among both the under graduate and post graduates programmes. Some of the top companies which recruited from the campus include, Google, Microsoft, Amazon, Goldman Sachs, Adobe, Qualcomm, Nvidia, Wadhwani AI, WDC, Tower Research, HSBC MathWorks, Harmon Kardon, Reliance and Samsung R&D etc, according to a release shared by the institute. Some of the top recruiters offering internship included NetApp, Nvidia, Tower Research, Adobe, Amazon, Google, among others. The list of first time companies included NetApp, Nvidia, Facebook London, etc.