expr:content='data:blog.metaDescription' itemprop='description'/>

Translate

Showing posts with label Economic Times. Show all posts
Showing posts with label Economic Times. Show all posts

Monday, January 13, 2020

Jaiprakash Power Ventures to exit insolvency process - economic news of india - world economic news - economics news for students - indian economy news

Jaiprakash Power Ventures to exit insolvency process
NEW DELHI: Jaiprakash Power Ventures’ lenders, led by ICICI Bank, have restructured its debt by converting much of it into equity or convertible instruments, and approached the National Company Law Tribunal (NCLT) to withdraw their application for starting of bankruptcy proceedings.The outstanding debt of the Jaiprakash Associates group company has reduced to less than Rs 6,000 crore, from more than Rs 11,000 crore, following the restructuring. The terms involve an interest write back of about Rs 2,000 crore that will help the company report a net profit this fiscal, people in the know said.ICICI Bank, which had filed for initiating proceedings under the Insolvency and Bankruptcy Code against the company in 2018, last Friday moved an application before the Ahmedabad bench of NCLT for its withdrawal. Since the earlier petition is yet to be admitted, the bank will be allowed to withdraw it, said a person cited above.A Jaiprakash Power Ventures spokesperson confirmed that the lenders had approved the debt restructuring, but refused to divulge details. An ICICI Bank representative didn’t respond to queries until press time Monday.“The consortium of lenders has agreed to a restructuring whereby they reduced outstanding loan of Rs 11,282 crore to Rs 5,800 crore; the balance was converted into equity or compulsorily convertible preference shares,” said a senior banker involved in the process.73237125 As many as 22 banks and financial institutions have agreed to convert Rs 3,840 crore of debt into compulsorily convertible preference shares, with a maturity period of 29 years and coupon rate of 0.01%, said the banker. The remaining debt of Rs 5,800 crore on the company’s book will carry an interest rate of 9.50%, this banker added.People in the know said the restructuring would lead to an interest write back of nearly Rs 2,000 crore for the company, which in turn would enhance its net worth and make it profitable from the current fiscal year itself.“After the restructuring, the company’s annual interest cost burden will decline from nearly Rs 1,500 crore to less than Rs 600 crore, leading to a gain of nearly Rs 1,000 crore annually in interest cost alone,” said a senior company official, speaking on the condition of anonymity.Under the scheme of arrangement, Jaiprakash Power Ventures has also converted $110 million (equivalent to Rs 663 crore based on the exchange rate when the restructuring process started) of foreign currency convertible bonds (FCCBs) into equity at Rs 12 a share, as against the prevailing market price of less than Rs 2 per share.The company has also converted about Rs 350 crore of corporate loan from JSW Group into equity shares at Rs 10 each. After restructuring, JPVL has become a professionally run power company with original promoter JP group’s shareholding declining to 24%. Banks and financial institutions own a 42.643%, while FCCB holders got 8.36% and JSW Group have a tad over 5.1%. About 19% is held by public shareholders.JPVL has generating capacity of 2,220 MW (400 MW of hydel and 1,820 MW of thermal). It owns a 74% in a 224-km transmission network to evacuate power from the Karcham Wangtoo hydel project.
Source: ET

Jaiprakash Power Ventures to exit insolvency process - economic news of india - world economic news - economics news for students - indian economy news

Jaiprakash Power Ventures to exit insolvency process
NEW DELHI: Jaiprakash Power Ventures’ lenders, led by ICICI Bank, have restructured its debt by converting much of it into equity or convertible instruments, and approached the National Company Law Tribunal (NCLT) to withdraw their application for starting of bankruptcy proceedings.The outstanding debt of the Jaiprakash Associates group company has reduced to less than Rs 6,000 crore, from more than Rs 11,000 crore, following the restructuring. The terms involve an interest write back of about Rs 2,000 crore that will help the company report a net profit this fiscal, people in the know said.ICICI Bank, which had filed for initiating proceedings under the Insolvency and Bankruptcy Code against the company in 2018, last Friday moved an application before the Ahmedabad bench of NCLT for its withdrawal. Since the earlier petition is yet to be admitted, the bank will be allowed to withdraw it, said a person cited above.A Jaiprakash Power Ventures spokesperson confirmed that the lenders had approved the debt restructuring, but refused to divulge details. An ICICI Bank representative didn’t respond to queries until press time Monday.“The consortium of lenders has agreed to a restructuring whereby they reduced outstanding loan of Rs 11,282 crore to Rs 5,800 crore; the balance was converted into equity or compulsorily convertible preference shares,” said a senior banker involved in the process.73237125 As many as 22 banks and financial institutions have agreed to convert Rs 3,840 crore of debt into compulsorily convertible preference shares, with a maturity period of 29 years and coupon rate of 0.01%, said the banker. The remaining debt of Rs 5,800 crore on the company’s book will carry an interest rate of 9.50%, this banker added.People in the know said the restructuring would lead to an interest write back of nearly Rs 2,000 crore for the company, which in turn would enhance its net worth and make it profitable from the current fiscal year itself.“After the restructuring, the company’s annual interest cost burden will decline from nearly Rs 1,500 crore to less than Rs 600 crore, leading to a gain of nearly Rs 1,000 crore annually in interest cost alone,” said a senior company official, speaking on the condition of anonymity.Under the scheme of arrangement, Jaiprakash Power Ventures has also converted $110 million (equivalent to Rs 663 crore based on the exchange rate when the restructuring process started) of foreign currency convertible bonds (FCCBs) into equity at Rs 12 a share, as against the prevailing market price of less than Rs 2 per share.The company has also converted about Rs 350 crore of corporate loan from JSW Group into equity shares at Rs 10 each. After restructuring, JPVL has become a professionally run power company with original promoter JP group’s shareholding declining to 24%. Banks and financial institutions own a 42.643%, while FCCB holders got 8.36% and JSW Group have a tad over 5.1%. About 19% is held by public shareholders.JPVL has generating capacity of 2,220 MW (400 MW of hydel and 1,820 MW of thermal). It owns a 74% in a 224-km transmission network to evacuate power from the Karcham Wangtoo hydel project.
Source: ET

Sunday, January 12, 2020

Indiabulls exits three realty projects of investee firms - economic news of india - world economic news - economics news for students - indian economy news

Indiabulls exits three realty projects of investee firms
MUMBAI: Mortgage lender Indiabulls Housing Finance has exited three realty projects of its investee companies across Mumbai, the National Capital Region (NCR) and Hyderabad, worth nearly Rs 450 crore, said two persons with direct knowledge of the development.In the largest of these three transactions, realty developer M3M has repaid Rs 225 crore to the lender after raising funds from the State Bank of India for its residential development project M3M Golf Estate in Gurgaon. The project is spread over 56 acres and includes an executive golf course.Mumbai-based realty developer Mohan Group has also repaid Rs 110 crore to the housing finance company. The developer raised the funds from Axis Bank for two residential development projects - Mohan Nano Estates in Ambernath and Mohan Altezza in Kalyan.73220201 Both the projects put together have nearly 1,900 flats with 1.3 million sq ft space. The projects have achieved 80% completion and have received Occupation Certificate (OC) for completed towers.Hyderabad-based GSM Mega Infrastructure raised Rs 102 crore from Karnataka Bank against its premium retail property GSM Mall. The operational retail project at Hyderabad’s Kukatpally has total 4.40 lakh sq ft of leasable space and is completely leased out to key anchor tenants like INOX, Central, Reliance Trends and Pantaloons. The funds raised through this exercise have been utilised to repay dues of Indiabulls Housing Finance.Last month, Noida-based real estate developer Logix Group raised Rs 540 crore from IndusInd Bank through a lease rental discounting (LRD) transaction on two of its commercial office space projects. The funds raised through this exercise were also to be utilised to provide an exit to Indiabulls Housing Finance.Over the last few months, Indiabulls Housing Finance has exited from several of its large loans for projects such as One BKC in Mumbai, Vatika Mindscapes in New Delhi, RMZ Centennial and Nxt in Bengaluru, and Chennai’s Ozone TechnoPark.M3M confirmed the debt repayment to Indiabulls Housing Finance stating that the new funds have been raised at around 11%, while the earlier loan was at 14% interest rate. “With this, we have repaid total 60% of Indiabulls' loan to M3M. We will soon be providing them complete exit aided by sales proceeds as sales from delivered projects is good,” said Pankaj Bansal, director, M3M Group.ET’s separate email queries to State Bank of India, Axis Bank, Karnataka Bank, Mohan Group, GSM Mega Infrastructure and Indiabulls Housing remained unanswered till time of going to press.Late in December, CCI Projects sold its 8.8-acre parcel, part of total 22 acre plot, close to the Sanjay Gandhi National Park in Mumbai's Borivali suburb to DMart founder Radhakishan Damani for over Rs 500 crore. The associate company of Cable Corporation of India will use funds from this sale to pay the Rs 360 crore it owes to Indiabulls Housing Finance. The funds remaining after payment to Indiabulls Housing Finance will be used to complete the proposed project.Since the onset of the liquidity squeeze for the financial sector following default by non-bank infrastructure financier IL&FS in September 2018, real estate developers’ ability to raise finance has been impacted.The non-banking finance companies and housing finance companies which used to drive the real estate sector’s funding transactions have since shied away from the sector.However, for a few banks and other financiers, this has turned out to be an opportunity to cherry-pick loans with robust collateral and demonstrated cash flows or sales velocity, and which offer attractive reward for risk.Large banks have recognised an opportunity to capitalise on a slow real estate market, whilst simultaneously also giving the sector a much needed boost. The country’s largest lender, State Bank of India, has for instance introduced a new “Residential Builder Finance with Buyer Guarantee Scheme”.Other banks too are looking to refinance quality projects or offer attractive schemes for prospective home buyers.In addition to a boost in residential sales, such schemes will also instil greater confidence in home buyers.
Source: ET

Tuesday, December 24, 2019

Foreign tourists shun India amid protests and crime - economic news of india - world economic news - economics news for students - indian economy news

Foreign tourists shun India amid protests and crime
NEW DELHI: A slew of incidents targeting women, protests over the new citizenship law and subsequent travel advisories issued by the likes of the US, UK and Russia, and a recent move to phase out airport passes for tour operators are likely to affect inbound tourism in the peak travel season, tour operators and travel agents said.Tour operators catering to overseas tourists from the US and UK said their clients were increasingly enquiring about safety and security in the country in the wake of these developments.“The numbers in this season will be definitely impacted. Those who have already booked and paid for December are coming but those who were considering have changed their mind,” said R Parthiban, a director of Delhi-based Swagatam Tours that caters to travellers from Italy, France and North America.“Nobody will go to a place where there is uncertainty. It has been two years since tourist offices in key (foreign) markets have been closed down by the government and no alternatives were provided,” Parthiban said.“To counter these advisories and the perceptions, the government needs to adopt a more proactive approach and needs to communicate. Tourists are concerned and I feel that image of India in minds of travellers as a country that respects all religions is going away. Overseas tourists above the age of 50 look at India as a cultural destination and travel in sizeable numbers, and they cannot take risks,” he said.The Indian Association of Tour Operators (IATO) said it has written to ministries of tourism and civil aviation to postpone a move to phase out airport passes for tour operators, which it feels would be inconvenient for tourists.“Tour operators get airport passes through which they go and receive foreign tourists when they disembark or drop them off when they leave,” said IATO chief operating officer Rahul Chakravarty.“Airport passes are going to be discontinued from December 31. If these are withdrawn, touts could misuse this against the tourists and this could also put the safety of woman travellers at risk. We are requesting the government to continue them till April (as December to February is the peak season) as we don’t have time. This will become a very big operational issue,” he added.“The disturbances in India against the Citizenship Amendment Act have been in pockets but travel advisories from countries like the US, UK, Canada and Russia have created a negative perception about the entire country which may affect inbound tourism numbers,” he added.The US and UK updated travel advisories for female travellers visiting India following recent incidents of crime against women.The two countries, besides others like Singapore, Israel, Canada and Russia, also updated their travel advisories following the protests in several cities over the new law.
Source: ET

KKR, Apax Partners in race to buy significant stake in CCD - economic news of india - world economic news - economics news for students - indian economy news

KKR, Apax Partners in race to buy significant stake in CCD
MUMBAI: Private equity firms KKR and Apax Partners are the only ones left in the race for a significant stake in Café Coffee Day (CCD), as three others including Oyo have backed out after showing early interest, three people familiar with the matter said.KKR and Apax Partners are now conducting due diligence of the coffee chain, the people said.SoftBank-backed hospitality chain Oyo was interested only in the CCD brand which its owner Coffee Day Enterprises Ltd (CDEL) was unwilling to offer, while TPG Capital and Bain Capital opted out mainly due to differences over valuation, they said.“After an analysis, the company (CDEL) had arrived at an amount that needs to be invested if CCD were to survive and thrive. That is quite a steep number and the investors (who opted out) are not willing to commit the requisite amount,” said a person involved with the deal. ET on November 25 reported that Oyo and Apax had initiated talks with the CDEL board to buy the group’s coffee business. On November 15, ET had reported about KKR, TPG and Bain Capital signing non-disclosure agreements with CDEL and initiating talks for the stake.CCD, a KKR spokesperson and an Apax representative declined to comment. Oyo said it had no comment to offer. Bain Capital refused to comment and TPG did not respond to ETs queries.72962105 Talks with Oyo collapsed after CCD refused to sell only the brand name as the hospitality company had sought, people in the know said.“Some of the players were only interested in the CCD brand but hiving it off looks tough at this point. Not many investors are willing to take certain reputational risks,” said one of the people.Some of the investors were also cautious about a forensic report that is awaited, the people said. The suitors will be conducting their own forensic due diligence for comfort, said one of them. For the deal, CDEL is expected to carve out the coffee business — cafés, coffee exports, estates and vending machines —that is housed under the Coffee Day Global Ltd subsidiary.The board is expected to speed up talks with interested investors once the investigation report by former Central Bureau of Investigation official Ashok Kumar Malhotra is submitted. He is looking into a letter that CCD founder VG Siddhartha purportedly wrote to the board on July 27, two days before he went missing. He was found dead on July 31.Following Siddhartha’s death, the board has struggled to run operations amid unpaid dues. At the end of July, CDEL’s debt was Rs 4,970 crore, which included that of listed group company Sical Logistics. The promoter shareholding has almost halved and is currently 25.35% but 80% of it is pledged with lenders.With 1,480 outlets nationally, CCD has the largest food and beverage network in the country, even after shutting 280 stores to improve profitability.The CDEL board had previously approached the Tata Group, which runs the Starbucks franchise in India, and the Jatia family, which operates the McDonald’s chain in western and southern India, but both were not interested in taking the talks forward, said people aware of the earlier rounds of talks.The board had also reached out to ITC and Coca-Cola, which wanted the coffee business to be carved out into a separate entity before any potential deal. Neither ITC nor Coca-Cola — which runs Costa Coffee — has participated in the bidding.
Source: ET

Sunday, December 8, 2019

IBC to be amended to protect new owners of bankrupt cos - economic news of india - world economic news - economics news for students - indian economy news

IBC to be amended to protect new owners of bankrupt cos
MUMBAI: The Centre is set to alter the insolvency code to shield new owners of bankrupt companies from criminal liabilities pertaining to the time when the entities were controlled by the outgoing promoters, three people familiar with the matter told ET.The Cabinet is likely to approve relevant changes to the three-year-old Insolvency and Bankruptcy Code (IBC) at the earliest, they said.“The government is expected to shortly seek Cabinet approval on amending the IBC that will give immunity to assets bought through the NCLT (National Company Law Tribunal) route,” said one of the three cited above.“This will bring much-needed confidence to buyers of distressed assets, acquirers who were otherwise wary about the over-reach of the investigative authorities.”72431926 ET reported on December 4 that steel giant ArcelorMittal had approached the government seeking immunity from any future probes into Essar Steel or its erstwhile promoters, the Ruia family. Arcelor-Mittal won the bid for Essar Steel through the IBC resolution process.Amendments to the IBC, which came into effect in December 2016, will require eventual parliamentary approval. The ongoing winter session of Parliament is scheduled to end on December 13.Buyers of distressed assets have been a worried lot after the Enforcement Directorate (ED) attached assets of the Singal family, the erstwhile promoter, on charges of money laundering in the Bhushan Power & Steel case.The ED had attached the assets of Bhushan Power & Steel around the time JSW Steel was looking to acquire the company.The case saw the ED and the National Company Law Appellate Tribunal (NCLAT), the court of appeals in bankruptcies, debate which of the two had priority rights over the assets of an insolvent company.In October, the NCLAT came down heavily on the ED and directed it to release the assets of Bhushan Power & Steel.“You are going to kill the economy of the country... (You are) playing with fire,” the bench headed by NCLAT chairman Justice SJ Mukhopadhyaya had told the directorate, ET reported on October 15. “No outsider will come and purchase (distressed companies)... IBC cannot be annulled in this manner. Money laundering is by an individual.”Last month, India’s Supreme Court cleared billionaire Lakshmi Mittal’s ?42,000 crore bid to take over Essar Steel’s manufacturing complex at Hazira in Gujarat and settle outstanding debt. Essar Steel owes as much as ?54,550 crore to its lenders. But ArcelorMittal is awaiting clarity over amendments to the IBC before transferring money into the lenders’ escrow account.A mail sent to the finance ministry and the Insolvency and Bankruptcy Board of India (IBBI) did not elicit any response.While the details of the amendments are not fully known, experts said blanket immunity may be counter-productive in such cases and should come with a set of riders that ensure assets built through proceeds of crime are not legitimised. Across-the-board immunity could also encourage round-tripping.“The same rule cannot apply to every situation and hence the government should carefully look at giving immunity in cases dealing with bankrupt companies: Otherwise, it may end up permitting the sale of assets gained through illegal routes,” said one of the people cited above. “The sovereign should have rights over such assets.”However, another banker aware of the development said this cannot be an argument against providing immunity to the new buyer.“Investigations similar to Bhushan Power and Steel will keep all potential buyers away. Even without the amendment, IBC had seen promoters attempting to buy their own companies, but that wasn’t allowed and deals could be scrutinised to make sure these transactions are above board,” he said.
Source: ET

IBC to be amended to protect new owners of bankrupt companies - economic news of india - world economic news - economics news for students - indian economy news

IBC to be amended to protect new owners of bankrupt companies
MUMBAI: The Centre is set to alter the insolvency code to shield new owners of bankrupt companies from criminal liabilities pertaining to the time when the entities were controlled by the outgoing promoters, three people familiar with the matter told ET.The Cabinet is likely to approve relevant changes to the three-year-old Insolvency and Bankruptcy Code (IBC) at the earliest, they said.“The government is expected to shortly seek Cabinet approval on amending the IBC that will give immunity to assets bought through the NCLT (National Company Law Tribunal) route,” said one of the three cited above.“This will bring much-needed confidence to buyers of distressed assets, acquirers who were otherwise wary about the over-reach of the investigative authorities.”72431926 ET reported on December 4 that steel giant ArcelorMittal had approached the government seeking immunity from any future probes into Essar Steel or its erstwhile promoters, the Ruia family. Arcelor-Mittal won the bid for Essar Steel through the IBC resolution process.Amendments to the IBC, which came into effect in December 2016, will require eventual parliamentary approval. The ongoing winter session of Parliament is scheduled to end on December 13.Buyers of distressed assets have been a worried lot after the Enforcement Directorate (ED) attached assets of the Singal family, the erstwhile promoter, on charges of money laundering in the Bhushan Power & Steel case.The ED had attached the assets of Bhushan Power & Steel around the time JSW Steel was looking to acquire the company.The case saw the ED and the National Company Law Appellate Tribunal (NCLAT), the court of appeals in bankruptcies, debate which of the two had priority rights over the assets of an insolvent company.In October, the NCLAT came down heavily on the ED and directed it to release the assets of Bhushan Power & Steel.“You are going to kill the economy of the country... (You are) playing with fire,” the bench headed by NCLAT chairman Justice SJ Mukhopadhyaya had told the directorate, ET reported on October 15. “No outsider will come and purchase (distressed companies)... IBC cannot be annulled in this manner. Money laundering is by an individual.”Last month, India’s Supreme Court cleared billionaire Lakshmi Mittal’s ?42,000 crore bid to take over Essar Steel’s manufacturing complex at Hazira in Gujarat and settle outstanding debt. Essar Steel owes as much as ?54,550 crore to its lenders. But ArcelorMittal is awaiting clarity over amendments to the IBC before transferring money into the lenders’ escrow account.A mail sent to the finance ministry and the Insolvency and Bankruptcy Board of India (IBBI) did not elicit any response.While the details of the amendments are not fully known, experts said blanket immunity may be counter-productive in such cases and should come with a set of riders that ensure assets built through proceeds of crime are not legitimised. Across-the-board immunity could also encourage round-tripping.“The same rule cannot apply to every situation and hence the government should carefully look at giving immunity in cases dealing with bankrupt companies: Otherwise, it may end up permitting the sale of assets gained through illegal routes,” said one of the people cited above. “The sovereign should have rights over such assets.”However, another banker aware of the development said this cannot be an argument against providing immunity to the new buyer.“Investigations similar to Bhushan Power and Steel will keep all potential buyers away. Even without the amendment, IBC had seen promoters attempting to buy their own companies, but that wasn’t allowed and deals could be scrutinised to make sure these transactions are above board,” he said.
Source: ET

Monday, October 28, 2019

Diwali sales give retailers relief, finally - economic news of india - world economic news - economics news for students - indian economy news

Diwali sales give retailers relief, finally
KOLKATA | MUMBAI: Sales of apparel, smartphones, electronics and consumer products grew about 7-9% during Diwali thanks to last minute shopping, giving brick and mortar retailers a strong finish to their make-or-break festive season.Most consumer goods makers and offline retailers had been cautious about business during this year’s festive season due to a slowing economy and poor consumer sentiment in both urban and rural India over the past three quarters.While purchase of entry-level products expanded at a slower pace, most retailers reported higher demand for mid-to-premium products, indicating lower-income buyers may have either postponed shopping or shifted to discount-led online portals. Also, wide availability and penetration of consumer finance boosted average transaction size.Consumption patterns have shifted, said Kishore Biyani, founder of Future Group, which runs chains such as Big Bazaar, Central and Brand Factory. Average Billing upFrequent shoppers were outnumbered by those seen as more conservative and typically don’t splurge as much.“Fashion did really well with Central exceeding our expectations,” he said. “Having a loyal customer base, which was supported by Future Pay and cashbacks was a huge advantage to us which helped us immensely this time. Even within packaged consumer goods, gifting segment did brisk business especially at smaller stores such as Easy Day.”Retailers and companies had reported better demand even during the Navratri-Durga Puja-Dussehra period with sales growing 7-8% over last year while Onam sales had reported 3-4% growth on a lower base due to floods in Kerala last year. As a result, overall festive sales grew 5-7% this year.71798714 Diwali and overall festive season sales were much better than initially anticipated, said Brian Bade, CEO of Reliance Digital, India’s largest smartphone and consumer electronics retailer.“There was some pessimism, but at the end we are very happy,” he said. “Performance was much better than last year — same-store sales went up in double digits, average billing went up with brisk demand across categories.”Puma India managing director Abhishek Ganguly said Diwali pointed to possible recovery in retail considering traffic in malls was better than in August and early September despite record sales by ecommerce marketplaces.While footfalls were similar to those last year, sales rose as the average shopping basket was bigger, some retailers said.“There was a high single-digit growth on a like-to-like basis compared to last year Diwali period. We have not seen slowdown in apparel sales yet. Also, the growth was largely driven by an increase in average billing size while the walk-ins were similar to last year,” said Vasanth Kumar, managing director at Lifestyle International, the country's biggest department store chain. “Post Diwali, there is a seasonal change and stores will (get) winter stock, which allows us to liquidate autumn collection at discounted prices.”While OnePlus clocked Rs 1,500 crore in sales from Navratri to Dhanteras, Xiaomi had said it sold more than 500,000 smart televisions in the same period apart from a record number of smartphones. Realme said it sold over two million smartphones.Diwali was a crucial period since sales of most categories had been flat or had declined this year due to poor consumer sentiment. A fortnight ago, the International Monetary Fund (IMF) slashed its economic growth forecast for India to 6.1% for the current fiscal from its July projection of 7%, citing weaker-than-expected outlook for domestic demand.Arvind Fashions managing director J Suresh said Diwali sales grew more than 9% while the overall festive season growth stood at 5-6%. Arvind Fashions sells brands such as Gap, Arrow, Tommy Hilfiger and US Polo Assn.In smartphones and electronics, retailers and brands said sales have grown 6-8% from last year. The relatively lower pricing of Apple’s new iPhone 11 and up to 30% price cuts in televisions boosted demand, with consumer finance schemes adding to the buoyancy. The latter’s contribution to overall sales went up to 75% compared with the usual 55-60%.“There was no doubt some impact of negative sentiments since the number of shoppers who bought this year was lower than last year. However, those who purchased did of a higher value, boosting overall sales,” said Vijay Sales director Nilesh Gupta, adding that sales grew 8%.Overall appliance sales went up by 6-7% with a clear shift toward premium products with little traction for entry-level products, said Vishal Mewani, director of Mumbai’s leading chain Kohinoor Electronics. The festive season — from Onam in Kerala to Navratri-Durga Puja-Dussehra, Karva Chauth, Dhanteras and Diwali — is the biggest shopping period in the country accounting for almost 35-40% of annual sales of most consumer facing companies.
Source: ET

E-shoppers load festive carts with affordable goods - economic news of india - world economic news - economics news for students - indian economy news

E-shoppers load festive carts with affordable goods
BENGALURU: The value of merchandise sold by Flipkart and Amazon during the recent month-long festival sales may have fallen short of analysts’ estimates, marginally, while the number of units sold were in line with industry expectations, according to multiple people aware of the specifics.The slight dip in this year’s projected gross value of sales from the crucial festive sale, which was spread across September and October, at India’s two largest online marketplaces is largely due to consumers’ preference for more affordable products dragging down order value in the midst of a general slowdown in consumer sentiment, said company executives who briefed ET on the matter. On an overall basis though both companies grew sales and units sold when compared to 2018.Flipkart and Amazon were expected to rake in a cumulative $5 billion (Rs 36,000 crore) in sales, or gross merchandise value (GMV), during the festival sale season as reported by ET. Non-metro Areas Drive SalesBoth ecommerce firms were aiming to clock a 30% increase in GMV compared to last year. GMV is overall sales clocked by an online marketplace and does not include discounts, returns, cancellations and cashbacks on products sold, and it is different from the revenue generated by a marketplace. People in the know, however, said, the two companies clocked 10-15% less in terms of overall GMV on the back of lower-priced items selling better this year.71798740 Further, customers from India’s non-metropolitan areas accounted for over two-thirds of the online festive sales, with low-priced items across fashion, home and electronics emerging as top categories, company executives said. Brands and logistics companies that ET spoke to concurred.While Flipkart missed sales targets by value for mobile phones, it did well in categories like large appliances, fashion, home, beauty and lifestyle, sources said.“On the other hand, Amazon India missed estimates on general merchandise and lifestyle, and did well on mobiles and new prime membership,” said a person cited above.Replying to ET’s queries on the matter, a representative for Flipkart said the company does not comment on “category specific metrics,” adding that the company “exceeded all customer metrics we measure ourselves against.”Amazon India said top categories included smartphones, consumer electronics, large appliances, fashion, grocery, and home & kitchen. 83% of customers who shopped were from small towns, the company said.Flipkart did not share sale numbers.Separately, Delhi based Snapdeal said its sales volumes were 52% higher this year fuelled largely by demand from non-metros.“Units shipped in October on average saw a 60% spike for all ecommerce companies,” said a logistics company founder.In the first leg of the six-day sale that ran from September 29 to October 2, Amazon and Flipkart clocked gross merchandise value estimated at $3 billion, or about Rs 21,380 crore, according to Redseer Consulting, missing analysts’ estimate of $3.7-3.8-billion.Analysts are of the view that bank partnerships, luring customers towards flat discounts as high as 10%, along with EMI plans, exclusive launches, private labels, and introduction of features like games and Hindi interface helped ecommerce firms overcome a challenging macro environment.Marketplaces track multiple targets internally to gauge sales including units sold, returns, total value of items sold, delivery time, cancellations, among others. And these vary for different categories.“For instance, for smartphones and large appliances the metric is largely order value and delivery time,” said one person directly aware of the matter.“For long-tail merchandise like home items, that metric is primarily units sold, selection, and return,” the person added RBC Capital Markets in a recent report said that in 2018, Amazon accounted for 30% of India’s ecommerce market, second to Walmart-owned Flipkart, which held 44%.
Source: ET

Diwali sales give retailers relief, finally - economic news of india - world economic news - economics news for students - indian economy news

Diwali sales give retailers relief, finally
KOLKATA | MUMBAI: Sales of apparel, smartphones, electronics and consumer products grew about 7-9% during Diwali thanks to last minute shopping, giving brick and mortar retailers a strong finish to their make-or-break festive season.Most consumer goods makers and offline retailers had been cautious about business during this year’s festive season due to a slowing economy and poor consumer sentiment in both urban and rural India over the past three quarters.While purchase of entry-level products expanded at a slower pace, most retailers reported higher demand for mid-to-premium products, indicating lower-income buyers may have either postponed shopping or shifted to discount-led online portals. Also, wide availability and penetration of consumer finance boosted average transaction size.Consumption patterns have shifted, said Kishore Biyani, founder of Future Group, which runs chains such as Big Bazaar, Central and Brand Factory. Average Billing upFrequent shoppers were outnumbered by those seen as more conservative and typically don’t splurge as much.“Fashion did really well with Central exceeding our expectations,” he said. “Having a loyal customer base, which was supported by Future Pay and cashbacks was a huge advantage to us which helped us immensely this time. Even within packaged consumer goods, gifting segment did brisk business especially at smaller stores such as Easy Day.”Retailers and companies had reported better demand even during the Navratri-Durga Puja-Dussehra period with sales growing 7-8% over last year while Onam sales had reported 3-4% growth on a lower base due to floods in Kerala last year. As a result, overall festive sales grew 5-7% this year.71798714 Diwali and overall festive season sales were much better than initially anticipated, said Brian Bade, CEO of Reliance Digital, India’s largest smartphone and consumer electronics retailer.“There was some pessimism, but at the end we are very happy,” he said. “Performance was much better than last year — same-store sales went up in double digits, average billing went up with brisk demand across categories.”Puma India managing director Abhishek Ganguly said Diwali pointed to possible recovery in retail considering traffic in malls was better than in August and early September despite record sales by ecommerce marketplaces.While footfalls were similar to those last year, sales rose as the average shopping basket was bigger, some retailers said.“There was a high single-digit growth on a like-to-like basis compared to last year Diwali period. We have not seen slowdown in apparel sales yet. Also, the growth was largely driven by an increase in average billing size while the walk-ins were similar to last year,” said Vasanth Kumar, managing director at Lifestyle International, the country's biggest department store chain. “Post Diwali, there is a seasonal change and stores will (get) winter stock, which allows us to liquidate autumn collection at discounted prices.”While OnePlus clocked Rs 1,500 crore in sales from Navratri to Dhanteras, Xiaomi had said it sold more than 500,000 smart televisions in the same period apart from a record number of smartphones. Realme said it sold over two million smartphones.Diwali was a crucial period since sales of most categories had been flat or had declined this year due to poor consumer sentiment. A fortnight ago, the International Monetary Fund (IMF) slashed its economic growth forecast for India to 6.1% for the current fiscal from its July projection of 7%, citing weaker-than-expected outlook for domestic demand.Arvind Fashions managing director J Suresh said Diwali sales grew more than 9% while the overall festive season growth stood at 5-6%. Arvind Fashions sells brands such as Gap, Arrow, Tommy Hilfiger and US Polo Assn.In smartphones and electronics, retailers and brands said sales have grown 6-8% from last year. The relatively lower pricing of Apple’s new iPhone 11 and up to 30% price cuts in televisions boosted demand, with consumer finance schemes adding to the buoyancy. The latter’s contribution to overall sales went up to 75% compared with the usual 55-60%.“There was no doubt some impact of negative sentiments since the number of shoppers who bought this year was lower than last year. However, those who purchased did of a higher value, boosting overall sales,” said Vijay Sales director Nilesh Gupta, adding that sales grew 8%.Overall appliance sales went up by 6-7% with a clear shift toward premium products with little traction for entry-level products, said Vishal Mewani, director of Mumbai’s leading chain Kohinoor Electronics. The festive season — from Onam in Kerala to Navratri-Durga Puja-Dussehra, Karva Chauth, Dhanteras and Diwali — is the biggest shopping period in the country accounting for almost 35-40% of annual sales of most consumer facing companies.
Source: ET

Niti Aayog proposes separate regulator for medical devices - economic news of india - world economic news - economics news for students - indian economy news

Niti Aayog proposes separate regulator for medical devices
NEW DELHI: Government think tank Niti Aayog has rejected the health ministry’s proposal to bring medical devices under the Central Drugs Standard Control Organisation (CDSCO), saying the body does not have the required expertise. People aware of the matter said the Aayog has instead moved a draft Bill proposing that medical devices be governed by a separate regulator.Earlier this month, the ministry had issued a draft notification saying that all medical devices would come under the category of drugs from December 1 and would be regulated under the Drugs & Cosmetics Act.A senior official confirmed to ET that there is some support for Niti Aayog’s view in the government that it is inappropriate to allow CDSCO to regulate medical devices as they have expertise in pharmacy/chemicals and not in devices.People familiar with the development told ET that the Aayog has floated a draft Bill to regulate over 6,000 bio medical devices in the country.“The Bill proposes a separate regulator for medical devices on the lines of the Food Safety and Standards Authority of India (FSSAI), an autonomous body under the health ministry,” one of the persons cited earlier said, requesting not to be named.71798654 In India, only 23 categories of medical devices are regulated under the Drugs and Cosmetics (D&C) Act. The ministry’s notification said all medical devices will be brought under regulation in a phased manner.It has proposed seven categories of devices intended for use in human beings or animals as drugs with effect from December 1, 2019, while ultrasound equipment would be treated as drugs from November 1, 2020.“Ministry of health should clearly define that its current regulations to define devices as drugs and their regulation by CDSCO is a temporary measure till a separate medical devices law and a competent regulatory authority is formed as devices are not drugs,” Rajiv Nath, forum coordinator of the Association of Indian Medical Devices Industry said.India’s medical devices market is the fourth largest in Asia–after Japan, China and South Korea–at over $10 billion and is projected to grow to $50 billion by 2025.
Source: ET

Wednesday, October 16, 2019

India-bound FDI may face thorough frisking - economic news of india - world economic news - economics news for students - indian economy news

India-bound FDI may face thorough frisking
NEW DELHI: India is taking a fresh look at security protocols to be followed by foreign direct investors as concerns rise over money coming in from countries that New Delhi has sensitive ties with and monitors closely.The Department for Promotion of Industry and Internal Trade (DPIIT), the finance ministry’s department of revenue and the home ministry are holding discussions on the matter, said people with knowledge of the matter.The review comes amid the rising trend of FDI being screened worldwide. The EU recently adopted a screening framework on the grounds of security and public order. The US has stepped up scrutiny of Chinese investments in the country amid a trade war over concerns about acquisition of American assets.Under the heightened oversight, the framework for disclosures made to the RBI could be enhanced for better capturing FDI inflow data and source of funds, especially in sectors on the automatic route. The DPIIT is also in talks with security agencies to determine whether existing safeguards need to be stepped up. ‘Some Concerns’“There are some concerns,” said a senior official aware of the deliberations. “We are looking at the constituents of the security protocol… What needs to be done.”India has widened the opening for FDI, allowing overseas money into most sectors through the automatic route, having abolished the Foreign Investment Promotion Board (FIPB) in 2017.71623853 The government relaxed FDI norms on August 28, allowing automatic approvals for 100% FDI in mining and sale of coal, among other relaxations. Barring some sensitive sectors or select ones such as real estate, cigarettes and lotteries, the FDI policy has been substantially liberalised.FDI rose 28% to $16.3 billion in the June quarter from $12.8 billion in the year earlier. The government didn’t provide a breakup of the source countries.The current security module, worked out after discussions with concerned agencies, specifies the distance at which a facility can be set up from the international border or a military establishment. There are also restrictions on investments in certain sensitive states.In the wake of fresh concerns, the government is evaluating if these components need to be revisited or new ones need to be introduced.“The idea is to see if some more elements are needed,” the official said.Every company has to furnish a return to the RBI prior to bringing FDI into the country and after the money has flowed in under FEMA guidelines.“We could request the RBI to seek more information in line with requirement of agencies on security front,” the official said.A large amount of data is already captured by the RBI, he added.Countries such as the US have a committee on foreign investment with representation from key departments such as defence, homeland security and commerce.
Source: ET

Restaurant bodies want Zomato to tweak ‘gold’ further - economic news of india - world economic news - economics news for students - indian economy news

Restaurant bodies want Zomato to tweak ‘gold’ further
MUMBAI: Two restaurant and hotel associations have once again asked food aggregator Zomato to further amend its Gold membership programme, which offers one dish or drink free with each order. The National Restaurant Association of India (NRAI) and the Federation of Hotels and Restaurant Association of India (FHRAI), which held a press conference in Mumbai on Wednesday, have also protested against the food delivery company’s high commissions.The two associations said they were putting out guidelines that the Gurugram-based restaurant aggregator needed to follow, and one of these is to reduce discounts even further, because “discounts funded by restaurants are not acceptable.”The two bodies have called Zomato for a meeting to solve the differences. “These aggregators, who are heavily funded by private equity, have to recognise that their role is that of a marketplace… they cannot decide or dictate commercial terms to and on behalf of the industry,” said Gurbaxish Sigh Kohli, president, hotel and restaurant association of India (HRAWI) and vice president, FHRAI.“All of these are baseless allegations, and we would only classify them as false propaganda,” a Zomato spokesperson said.Zomato recently claimed that the number of restaurants adopting its Gold programme have gone up after the #log out movement by the restaurant associations, instead of decreasing. NRAI dismissed that out of hand. “Almost 3,000 restaurants have logged out because all of the top restaurants have left. And others are on notice period,” said Jimmy Shaw, member, FHRAI.Originally, Zomato said it had 6,100 restaurants registered on Gold. Shaw said the associations have started targeting micro markets like malls and were talking to restaurants about Gold.“We have done this in two micro markets in Gurugram and Mumbai and we’ll take it all over the country,” he said.“They’re asking us to go to particular labs to test food or they would give us a lower rating,” Shaw said. Anurag Katriar, president, NRAI said, “We don’t want to fight with any aggregator but if they want to, we’ll be happy to.”
Source: ET

Air India buyer may be allowed to retrench staff in a year - economic news of india - world economic news - economics news for students - indian economy news

Air India buyer may be allowed to retrench staff in a year
NEW DELHI: The government is considering a plan to make Air India more attractive for potential buyers by allowing employees to be retrenched a year after divestment, said people aware of the matter.“There are the two proposals being discussed — one is to allow them to retrench after one year and the other is to give three years,” said one of them. “It would make sense to allow future owners to retrench staff after a year’s time.”Another person said the government will ensure that the interests of employees are protected.“There would be conditions like employees can only be retrenched through the government’s voluntary retirement scheme (VRS),” he said.Under VRS, an employee gets an amount that’s equivalent to monthly salary multiplied by either the years of service completed or those left, whichever is less, along with other compensation that the person is eligible for, said the people cited above. 71623800 Any move to allow future promoters to terminate the jobs of employees will mark a key change in last year’s failed divestment process, when the government had promised job protection.All proposals are being discussed and will be put before the committee led by home minister Amit Shah for consideration, said the people cited above.The government’s attempt to divest a 76% stake in Air India drew a blank last year due to various reasons. These included staffing levels, employee medical benefits as well as flying privileges for workers and their families even after retirement, alongside its towering working capital debt. The government is now looking to fully exit the carrier.Unlike last time, the government is open to suggestions from industry to ensure that the national carrier finds a buyer this time, said the people cited above.“The government is also likely to provide clarity on these terms around the time bidding process begins,” said one of them. “The expression of interest (EoI) is likely to be issued (in) middle or late November.”The government is also working on a plan that will shield any buyer from having to bear the cost of health coverage for current and past employees.
Source: ET

Friday, May 31, 2019

Amit Shah as finance minister? The subtle message in Modi 2.0 - economic news of india - world economic news - economics news for students - indian economy news

Amit Shah as finance minister? The subtle message in Modi 2.0
Two big recusals, Arun Jaitley and Sushma Swaraj, both for reasons of health, paved the way for major changes in portfolios in Narendra Modi’s Cabinet. The irony lies in the fact that both Jaitley and Sushma were seen as potential rivals and claimants to the top job in case the BJP fell short on numbers in 2014. But Modi made sure that didn’t happen. The verdict of 2019 has put paid to any BJP politician harbouring hopes of a hung verdict, where someone other than Modi could have had a shot at No 1.Team Modi 2.0 marks a clear power-shift below the level of Prime Minister, with Amit Shah, who is expected to replace Jaitley in the finance ministry, now likely to position himself as No 2. Shah is clearly a claimant to the top job if and when Modi moves aside. He will be hoping to show that his capabilities are not restricted to the ballot box and panna pramukhs.The oath-taking order, which put Rajnath Singh ahead of Shah, and Nitin Gadkari just after him, indicates the broader hierarchy after the exit of Jaitley and Swaraj. Modi and Shah represent the force that built BJP into the central pole of Indian politics; the other two, Singh and Gadkari, represent the backroom power of the Sangh Parivar, which steps in if and when a power vacuum arises.A big caveat: Given the exit of two big names in Jaitley and Swaraj, one wonders if there has been any net gain in talent beyond Shah and former Foreign Secretary S Jaishankar. Suresh Prabhu has been inexplicably dropped. Quite clearly, Modi evaluates his worth differently from Vajpayee. And one minister who was not known for achieving anything in particular, Sadananda Gowda, remains in the cabinet.The inclusion of Jaishankar indicates that when Modi looks for lateral inductions, he prefers to go with tried and tested bureaucrats. Hardeep Puri and RK Singh, two other former bureaucrats who were inducted in Team Modi 1.0, have been retained, and so has former army chief, Gen VK Singh. Jaishankar played a key role along with NSA Ajit Doval in ending the eyeball-to-eyeball with China over Doklam in 2017. As a former ambassador to the US, Jaishankar, if he comes in as External Affairs Minister, is well-placed to deal with the uncertainties that came bundled with Donald Trump.The big change – the induction of Shah -- has the potential to up-end many power equations, both within the Modi government, and outside. Unlike his predecessor, Jaitley, who did not have much of a finance or business background, Shah has actually run a (cooperative) bank and turned it around; he has an acute understanding of the markets, and the capacity to focus on several things at the same time. So, one thing one can expect is a budget that makes waves. Another crucial difference between Jaitley and Shah is that the latter has an eye for detail, while the former was happy to leave it to the bureaucracy to fill in the blanks after the broad policy was enunciated. Shah is likely to be more hands-on at the finance ministry than Jaitley, and given his double clout – in the party and government, and standing as Modi’s closest confidant – the bureaucracy will know that they can’t run rings around him.If the rest of the cabinet picks sound underwhelming, the answers are not far to seek. Consider first the supply side of ministerial aspirants, given the nature of the verdict, where the BJP alone has 303 Lok Sabha MPs and its allies the remaining 50. These numbers rule out too many lateral inductions, for every lateral induction means one less berth to offer to party hopefuls and allies. One ally, the Janata Dal (U) has already opted out of the first stage of cabinetformation as it was not given enough posts by Modi and Shah.Consider also the geographical spread of the BJP’s new political footprint, where it has grown eastwards (West Bengal, Odisha and the North-East), and made an exceptionally strong showing in north and west India, apart from Karnataka in the south. No Prime Minister can afford to ignore specific demands for higher representation from the states where the BJP has won big.In sum, the two big take-outs of Team Modi 2.0 are these: one, the cabinet is no longer unipolar, despite Modi’s supremo status. Shah adds new ballast to the team, both from the party angle and governance capabilities. Two, if Shah gets finance, one can expect him to use his heft to revive animal spirits in the economy. He did that in politics, and one cannot presume he can’t repeat the trick with economics.(The author is Editorial Director of Swarajya)
Source: ET

Deloitte, KPMG in 1st IL&FS chargesheet - economic news of india - world economic news - economics news for students - indian economy news

Deloitte, KPMG in 1st IL&FS chargesheet
MUMBAI: The Serious Fraud Investigation Office filed its first chargesheet in the IL&FS case against 30 individuals and entities, including businessman C Sivasankaran and nine former directors of unit IL&FS Financial Services (IFIN) on Thursday. It accused auditors BSR & Co LLP and Deloitte Haskins & Sells (DHS) LLP along with others of concealing information and falsifying accounts. SFIO said loans were given to the Siva Group without adequate collateral.Those charged include former IL&FS vice chairman Hari Sankaran and former IFIN MD Ramesh Bawa, both of whom are under arrest. BSR and Deloitte were charged along with audit partners Udayan Sen, Kalpesh Mehta and Sampath Ganesh. Others on the list were audit committee members, independent directors and the Siva Group chairman and his group companies. The other directors charged include Ravi Parthasarthy, Vibhav Kapoor and K Ramchand.‘SENIOR EXECS COVERED UP INFORMATION’The charges are under sections of the Companies Act and the Indian Penal Code, including those for cheating and criminal conspiracy. 69590261 Infrastructure financier IL&FS unexpectedly defaulted on repayments in September last year, triggering a crisis in the market and a liquidity squeeze that has gripped nonbanking financial companies (NBFCs). The government replaced the board of IL&FS as part of a cleanup and the SFIO has been seeking to uncover the reasons why the seemingly sound company was forced to default.SFIO said the IL&FS unit’s management knew that a crisis was building.“IFIN extended loans to companies of Siva, ABG, A2Z, Parsvnath Group and other companies,” said the SFIO in its 840-page chargesheet, which ET has seen. “A number of these borrowers were not servicing their debt obligation… The top management was aware of the potential problematic accounts which were getting stressed in the succeeding month from the reports generated through the Management Information System (MIS) of IFIN.”Senior executives covered up the information, SFIO said.“The management of IFIN adopted fraudulent practices in order not to let aforesaid loan/ credit facility be classified as NPA (nonperforming assets),” the chargesheet said. “They started lending to other companies belonging to the borrowers for repaying the principal and/or interest of the aforesaid defaulting borrowers.”SFIO said the auditors didn’t raise any red flags.“The auditors, despite having knowledge of funding of the defaulting borrowers for principal and interest which was prejudicial to the interest of the company and its creditors besides having awareness of the impact of the same on financial statements, failed to report in the report for FY13-14 to FY17-18,” SFIO said.HARSH VIEW OF AUDITORSThe investigative unit of the corporate affairs ministry was harsh in its view of the auditors.“The auditors colluded with the coterie to conceal material information and in fraudulently falsified the books of accounts and thereby financial statements from FY13-14 to FY17-18... They knowingly did not report the true state of affairs of the company particularly the negative NOF (net owned funds) and negative CRAR (capital to risk asset ratio), which have resulted in causing loss to the creditors of the company who had lent and invested in the NCDs (non-convertible debentures),” it said.Audit partners Sen and Ganesh had cited reliance on the Reserve Bank of India (RBI) inspection report rather than stating whether they had obtained the details necessary for the purpose of their audit, SFIO said.“The auditor relied on the oral discussion of the company officials with RBI for reporting NOP and CRAR rather than RBI guidelines in FY17-18 and not disclosed this material departure from regulatory requirements and thus caused loss to the creditors of IFIN,” SFIO said. “Auditors with their engagement teams did not use professional skepticism to ensure true and fair disclosure of state of affairs of the companies. They in fact colluded with official of the companies in order to conceal their fraudulent activities and this they failed to perform their duties.”The SFIO pointed to the close ties between Sivasankaran and the erstwhile IFIN directors, citing email exchanges that revealed he allegedly arranged hospitality for Parthasarthy, Kapoor and Sankaran, including private jets, helicopter rides, resort bookings and redecorating the interiors of their apartments in Brussels, besides foreign trips.“IFIN had entered into 15 transactions of advancing loans to or investing in debentures of different Siva Group companies,” SFIO said. “Out of the 15 lending transactions, repayment of loans pertaining to only first four transactions were done.”LOANS INVOLVING SIVA GROUPThe SFIO detailed various loan transactions involving Siva Group companies, including the lack of collateral.“In 2014, while lending to Siva India Commercial Traders Pvt Ltd, an additional security in the form of stock of Emerald Stone valued at Rs 59.26 crore was taken,” the charge-sheet said. “As on 31March 2015, the aggregate exposure to Siva Group companies stood at Rs 182.45 crore… The said exposure continued as loan from March 2015 to December 2015, with no security cover as so-called security of Emerald stock was existing only on paper without any physical verification.”The SFIO pointed to emails directing IFIN employees not to securitise outstanding dues while entering into a fresh lending exercise with the Siva Group companies. “It was observed from an email (of) February 1, 2018, (from) Parthasarathy to Sivasankaran that instead of protecting the interest of the company, Parthasarthy is found being apologetic to Sivasankaran for taking time for finalising the loan transaction of Rs 175 crore.”Calling the independent directors “mute spectators,” the SFIO said they ignored all warnings and failed to serve the interest of the company and its stakeholders by not raising the issue in board meetings.“Investigation revealed that the audit committee members, independent director and CFO, IFIN, and group CFO of IL&FS were aware of the stressed asset portfolio, the modus operandi used for granting loans to group companies of existing defaulting borrowers to prevent them being classified as NPA,” SFIO said. “They connived with the management… they being part of the board were aware of the various RBI reports and overlooked the numerous impairment indicators in contravention of the accounting standard and principals.”Counsel Sachin Midha, who was appearing for Bawa, told ET he will apply for bail shortly. “Since the chargesheet has been filed, the SFIO’s contention that Bawa could influence the witness or tamper with the evidence and hence shouldn’t be granted bail, won’t hold ground.”
Source: ET

How Modi picked his team for second innings - economic news of india - world economic news - economics news for students - indian economy news

How Modi picked his team for second innings
New Delhi: The composition of the new Cabinet shows that PM Modi has ensured a regional balance, with a focus on states where BJP did well in the Lok Sabha polls.UP, the most populous state, is represented by eight ministers apart from the PM, from east, west, Bundelkhand and Awadh regions. BJP won 62 seats in UP, and the Cabinet reflects that. From western UP, the party gave ministerial berths to four MPs.Muzaffarnagar MP Sanjeev Balyan, who defeated RLD leader Ajit Singh, has been rewarded for keeping Jat voters intact with the party. Mukhtar Abbas Naqvi, a Rajya Sabha member, is the only Muslim face in Modi’s Cabinet. From Awadh region, the party has once again relied on the familiar faces of Rajnath Singh, Smriti Irani, who defeated Congress president Rahul Gandhi in Amethi, and Niranjan Jyoti. Purvanchal has got one ministerial berth in UP BJP president Mahendra Nath Pandey. With no inclusions from Apna Dal, a BJP ally in the state, the party has given a strong message of strengthening its own organisation rather than focusing on allies.Three states — Maharashtra, Haryana and Jharkhand — are scheduled to go to the polls later this year and together the three states have got 11 ministerial berths. From Maharashtra, there are seven faces in the new Cabinet. While five are from BJP, one each is from the Shiv Sena and RPI. From Jharkhand, the party chose former CM Arjun Munda for representation in the Cabinet. Munda was a CM candidate in 2014, but he lost the assembly election and Raghubar Das became the CM. The rivalry between the two leaders is well known and by shifting Munda to Delhi, the PM has resolved the leadership issue in the state. Munda is also a strong tribal face from Jharkhand. From Haryana, three out of 10 party MPs have got ministerial berths. BJP’s focus in Haryana is on non-Jat voters and the party has given positions to a Yadav (Rao Inderjeet), a Gurjar (Krishan Pal Gurjar) and a Dalit (Ratan Lal Kataria).Rajasthan, Gujarat, Himachal, Delhi and Uttarakhand recorded 100% results for BJP, with the party winning all the seats in these states. Rajasthan and Gujarat have been given three ministerial positions each while Uttarakhand, Delhi and Himachal have got one each. In Bihar, NDA won 39 out of 40 seats. There are six ministers from the state, including LJP’s Ram Vilas Paswan. Five BJP ministers come from Bhumihar, Brahmin, Rajput, Kayastha and Yadav communities, in line with the BJP’s vote base.From southern India, BJP has given ministerial positions to six leaders. In Karnataka, where BJP did exceedingly well, the party has given positions to four leaders. These include Nirmala Sitharaman, who is currently a Rajya Sabha member from Karnataka. DV Sadanand Gowda has also been inducted and is likely to get a key portfolio.Four-time MP from Dharwad, Pralhad Joshi, and four-time MP from Belgaun, Suresh Angadi, have also been inducted into the new Cabinet. One ministerial position has got to Kerala and Telangana each. Rajya Sabha member from Kerala, V Murleedharan, has been inducted into the Cabinet while G Kishan Reddy has been inducted from Telangana. From West Bengal, Babul Supriyo and Debasree Chaudhary have been inducted as ministers of state.From Odisha, Dharmendra Pradhan and Pratap Sarangi have been included in the Cabinet.
Source: ET

Cooling economy set to be Modi's first big test - economic news of india - world economic news - economics news for students - indian economy news

Cooling economy set to be Modi's first big test
by Anirban NagNarendra Modi’s biggest economic challenge as he starts his second term will be how to boost flagging growth to hold onto the crown of the world’s fastest-expanding major nation.Gross domestic product data later today is expected to show the economy grew 6.3% in the first three months of the year, the fourth straight quarter of cooling. The annual expansion in the 12 months to March 2019 likely slowed to 6.9%, the lowest level in five years.The economy has been on a steady slowdown since last year on the back of weaker consumption, waning global growth and an escalating U.S.-China trade war. Growth is now almost neck-to-neck with expansion in China, where authorities are already ramping up efforts to spur subdued activity. After securing a bigger election victory than in 2014, Modi is now under pressure to unveil measures to bolster growth.“Arresting the slowdown and reviving the economy will be the first challenge for the new government," said Sunil Sinha, principal economist at Fitch Ratings Ltd. in New Delhi. Reviving investments, easing a credit crunch among shadow banks and taking steps to cushion India from a global slowdown will be key, he said.Budget ConstraintsFiscally, Modi has little room to stimulate the economy, having already pledged cash handouts of more than $10 billion to farmers from April this year. He is due to announce his cabinet later on Friday, including a finance minister to help implement economic policies.The government has already deviated from its budget deficit goals, and with revenue collections trailing targets there’s a risk the shortfall for the fiscal year that ended in March could be higher than the estimated 3.4% of GDP. A miss will make India vulnerable to a credit-rating downgrade and push borrowing costs higher for local companies.“Many of the policy choices to stimulate growth, like GST rate cuts, fiscal stimulus, monetary easing, also entail rising macro stability risks like inflation and current account deficit ahead,” UBS Group AG analysts, led by head of India research, Gautam Chhaochharia, wrote in a note.The Reserve Bank of India may play its part to support the economy on June 6, with analysts betting on another interest rate cut to spur lending. Inflation remains well below the RBI’s 4% medium-term target, giving policy makers room to ease.Prachi Mishra, chief economist at Goldman Sachs Group Inc. in Mumbai, expects one more rate cut — though not in June — and the RBI injecting more liquidity into the financial system.“Going forward, we anticipate the banking system liquidity situation to normalize as currency in circulation reduces from its high post elections, and with potential liquidity operations by the RBI,” she said.
Source: ET

HC asks J&J to pay Rs 25 L to 67 patients who had revision surgery for faulty hip implants - economic news of india - world economic news - economics news for students - indian economy news

HC asks J&J to pay Rs 25 L to 67 patients who had revision surgery for faulty hip implants
New Delhi: The Delhi High Court Thursday directed Johnson and Johnson to make interim payment of Rs 25 lakh each to 67 patients who have undergone revision surgeries for alleged faulty hip implants made by the company. The court's direction came after the company said it has verified that these patients have undergone revision surgery and it was voluntarily paying them Rs 25 lakh as compensation. Justice Vibhu Bakhru asked the company to disburse the cheques to the claimants within two weeks and listed the matter for further hearing in August 8. The company, through senior advocate Amit Sibal, clarified that the payment should not be considered as an admission of liability or a precedent. The court made it clear that the court has not examined the controversy involved and this payment will not prejudice the rights of patients from seeking any further sum of compensation from the company. It also said that in case any other judicial forum awards a compensation higher than Rs 25 lakh to the patients, the company would pay the balance amount only. The court further said that in case the affected patients do not succeed in their claims before any other forum, the company would not be entitled for any refund of its voluntary payment of Rs 25 lakh. The Central Drugs Standard Control Organisation (CDSCO) had earlier asked the company to pay Rs 65 lakh, Rs 74 lakh, Rs 1 crore and Rs 90.26 lakh respectively to four patients. As an interim, the court had asked the company pay Rs 25 lakh to these four patients for whom CDSCO has already issued orders, after verification of their documents. The court was hearing the company's plea challenging a press release issued by the Ministry of Health and Family Welfare asking it to pay compensation to all the affected patients, as determined by the reports of the Committees formed to examine the issues relating to its faulty hip implants. The company also challenged the orders by which it was directed to pay compensation to patients. It contended that the Centre has no jurisdiction under the Drugs and Cosmetics Act to fix and enforce the compensation. It said the Centre's orders fixing the compensation was based on a formula and reports by a set of expert committees and recommendations which have already been challenged by the company and are pending in the high court. It maintained that the Drugs and Cosmetics Act does not have any provisions that provide for a formula for payment of compensation in the matters pertaining to medical devices. In the earlier petition filed in December last year, the company sought quashing of a government's press release informing the general public about the formula worked out by an expert committee to compensate patients who received the faulty hip implants produced by the pharma major's subsidiary, DePuy Orthopaedics Inc (USA). It has also challenged the report of the expert committee -- headed by R K Arya, Director, Sports Injury Centre -- which worked out the compensation formula. Besides, it has sought quashing of the report of another committee -- headed by Arun Agarwal, Professor of ENT, Maulana Azad Medical College -- which was appointed by the Health Ministry for looking into the allegations of faulty hip replacement implants. According to the Arya committee report, compensation payable to patients would be determined in terms of the disability by the faulty hip implants in relation to their age. The pharma major had earlier told the court that as a result of the press release, people are "landing at its doorstep" for compensation and contended that the government's public announcement was made without any legal basis. A public interest litigation (PIL), which was earlier before the Supreme Court, has alleged that "faulty" and "deadly" hip implants have been fitted into the bodies of 4,525 Indian patients. The plea has contended that DePuy makes, sells and exports medical implants, including articular surface replacements (ASR) hip implants which have been withdrawn by the firms on their own in 2010 on the ground that they were defective. According to the PIL, the firms "illegally sold DePuy ASR Hip Implants in India from 2005 to 2006". SKV URD HMP SA
Source: ET

Adani wins one of last two permits it needs for Australia coal mine - economic news of india - world economic news - economics news for students - indian economy news

Adani wins one of last two permits it needs for Australia coal mine
The Australian state of Queensland on Friday approved Adani Enterprise's management plan for an endangered bird at the site for a controversial coal mine, leaving only one more permit before construction can start on the project. India's Adani has been working for a decade to obtain approvals to develop the Carmichael mine in the remote Galilee Basin, but the process has been slow as the project has become a touchstone for concerns about climate change. "The Department of Environment and Science (DES) approved Adani's black-throated finch management plan," the Queensland regulator said. "DES has met regularly with Adani to ensure that the plan is robust and is well-placed to deliver the best outcomes for the protection of the black-throated finch." Adani said it had received notice that its plan had been approved. The approval leaves just one permit outstanding, which relates to management of a sensitive groundwater source. That is expected to be issued by June 13. Adani has faced difficulties obtaining finance for the mine and accompanying rail project as climate change concerns have discouraged lenders from backing new thermal coal developments, while falling prices have also raised doubts about the mine's economics. But voters worried about jobs in the downtrodden region returned the ruling Liberal-National coalition to power in an Australian election this month, renewing momentum for the project. A local conservation group condemned Friday's approval, saying in a statement that "Australians should be alarmed by this decision."
Source: ET