Author: PTI

Rupee takes more losses, sheds 10 paise against dollar

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The rupee weakened by 10 paise to trade at a fresh 15-month low of 67.37 against the US dollar in early trade today due to appreciation of the American currency overseas amid sustained foreign capital outflows and soaring global crude prices.

This is the rupee’s second straight slide, which dealers say is mostly due to demand for the US currency.

However, a higher opening in the domestic equity market capped the losses.

The dollar held firm against a basket of currencies overseas after the 10-year US bond yield rose back to the psychologically important 3 per cent mark and investors looked to US consumer price data due later to show an acceleration in inflation.

The rupee had closed 19 paise lower at a 15-month low of 67.27 yesterday against the US currency following a surging demand for the dollar as crude oil prices zoomed past USD 77 per barrel level.

Meanwhile, the benchmark Sensex rose by 128.08 points, or 0.36 per cent, to 35,447.43 in early trade.

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Single body created to strengthen nation’s trade defence system

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The Directorate General of Safeguards (DGS) has been shifted to the commerce ministry as part of government’s plan to create a single authority for imposing trade remedies to protect the domestic industry.

DGS was working under the finance ministry.

According to the commerce ministry statement, the amendment of Allocation of Business Rules has mandated Department of Commerce with work pertaining to recommendation of safeguard measures.

Trade remedies, which include anti-dumping, countervailing and safeguard duties, are allowed under global trade norms to guard domestic industries from significant imports or cheap inbound shipments.

“The Directorate General of Trade Remedies (DGTR) will bring DGAD (directorate general of anti-dumping and allied duties), DGS and Safeguards (quantitative restriction) functions of DGFT (directorate general of foreign trade) into its fold by merging them into one single national entity,” the ministry said on Wednesday.

It said this has paved way for creation of an integrated single umbrella national authority to be called the DGTR for providing comprehensive and swift trade defence mechanism in India.

Presently, the trade defence mechanism in India lacks optimality and takes more than a year to complete proceedings in cases pertaining to unfair trade practices.

“It will also provide trade defence support to our domestic industry and exporters in dealing with increasing instances of trade remedy investigations instituted against them by other countries,” the statement added.

In the last three years, India initiated more than 130 anti-dumping/countervailing duty/safeguard cases to deal with the rising incidences of unfair trade practices and to provide a level playing field to the domestic industry.

The DGTR will function as an attached office of Department of Commerce. The recommendation of DGTR for imposition of anti-dumping, countervailing & safeguard duties will be considered by the Department of Revenue.

It also said that the proposal of creation of DGTR was pending since 1997. Under the Goods and Services Tax (GST) regime, DGS has also been entrusted to investigate complaints of profiteering.

The investigating agency submits its reports to the National Anti-profiteering Authority, which then takes its own view and decides on the penalty. India is one of the largest users of these trade remedies.

Countries initiate anti-dumping probes to determine if the domestic industry has been hurt by a surge in below-cost imports. As a counter-measure, they impose duties under the multilateral WTO regime.

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Government considering 100% FDI in insurance intermediaries

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The government is considering allowing 100% foreign direct investment (FDI) in insurance intermediaries with a view to give a boost to the sector and attracting more funds, sources said.

Intermediary services include insurance broking, third party administrators, surveyors and loss assessors.

The FDI policy, at present, allows 49% foreign investment in the insurance sector, which includes insurance intermediaries.

Sources said that there is a need to de-link the FDI cap in insurance intermediaries from insurance companies.

Representations have been made to the government that these intermediary services should be treated at par with other financial services intermediaries, where 100% foreign investment is permitted.

Further, industry experts stated that the insurance sector is being impacted due to weak distribution networks.

There is a need to strengthen the distribution network to support the sector as a whole.

Insurance penetration in the country was over 3.4% against the world average of 6.2%.

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Iranian nuclear issue should be resolved through talks, says India

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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In a guarded reaction to the US pulling out of the Iran nuclear deal, India today said all the parties concerned should engage constructively to resolve the issue peacefully.

At the same time, spokesperson in the Ministry of External Affairs Raveesh Kumar said Iran’s right to peaceful uses of nuclear energy as also the international community’s strong interest in exclusively peaceful nature of Iran’s nuclear programme must be ensured while finding a resolution to the issue

India has been maintaining that the Iranian nuclear issue should be resolved peacefully through dialogue and diplomacy, he said.

President Donald Trump had yesterday announced that the US was withdrawing from the Iran nuclear deal signed by the Obama administration in 2015 under which Tehran had agreed to limit its sensitive nuclear activities and allow in international inspectors in return for the lifting of crippling economic sanctions.

“India has always maintained that the Iranian nuclear issue should be resolved peacefully through dialogue and diplomacy by respecting Iran’s right to peaceful uses of nuclear energy as also the international community’s strong interest in the exclusively peaceful nature of Iran’s nuclear programme,” Kumar said.

Iran had struck the JCPoA (Joint Comprehensive Plan of Action) deal with the US, the UK, Russia, China, France and Germany after years of negotiations.

Kumar said all parties should engage constructively to address and resolve issues that have arisen with respect to the JCPoA.

The US President’s decision to abandon the agreement has shocked the world, with America’s closest allies such as France, Germany and the UK expressing concern over it while Iran’s foes Israel and Saudi Arabia welcoming the move.

Describing the JCPoA as a bad deal, Trump had said the nuclear deal was unlikely to prevent Iran from acquiring nuclear weapons.

The Indo-Iran ties have been on a upswing after Tehran sealed the nuclear deal with the international community in 2015.

Prime Minister Narendra Modi had visited Tehran in May 2016 with an aim to craft a strategic relationship with Iran and expand India’s ties with West Asia.

During the visit, India and Iran signed nearly a dozen pacts centrepiece of which was an agreement on development of Chabahar port.

Later, India, Iran and Afghanistan inked a trilateral pact providing for transport of goods among the three countries through the port.

In February last, Iranian President Hassan Rouhani visited India during which both sides agreed to further expand their cooperation in number of key sectors.

During Rouhani’s visit here, both sides inked nine pacts including one on handing over Chabahar port’s operation to India for 18 months.

India and Iran have robust economic and commercial ties covering many sectors though it has traditionally been dominated by the import of Iranian crude oil by India.

According to the external affairs ministry, India-Iran bilateral trade during the fiscal year 2016-17 was USD 12.89 billion. India imported USD 10.5 billion worth of goods, mainly crude oil, and exported commodities worth USD 2.4 billion.

It is not immediately clear whether the US decision to withdraw from the nuclear deal will impact India’s trade ties with Iran.

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NCLAT stays Rs 171.55 crore penalty on Eveready

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Battery maker Eveready Industries on Wednesday said the National Company Law Appellate Tribunal (NCLAT) put a stay on the Rs 171.55 crore penalty order imposed on the company by the Competition Commission of India (CCI).

The NCLAT also directed the company to deposit 10% of the penalty amount within 15 days with its Registry.

“The company preferred an appeal and stay application before the NCLAT, New Delhi, against the CCI’s Order dated April 19.

“The same was listed today (Wednesday) and the NCLAT was pleased to stay the penalty with the direction of depositing 10% of the penalty amount within 15 days with the Registry of the NCLAT,” it said in a regulatory filing.

“We are awaiting the order of the NCLAT and would be complying with the same, as applicable.”

The Competition Commission, in a suo moto case against the city-based company and others, passed an order imposing the penalty in Apri

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Sebi finds buyers for Pancard Clubs’ 3 properties

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Capital markets regulator Sebi said it has found buyers for three properties of Pancard Clubs in an auction held today for recovery of funds.

The e-auction for these assets was held today as part of the recovery proceedings against Pancard Clubs, which had raised over Rs 7,000 crore through illegal collective investment schemes (CIS) from more than 51.55 lakh investors between 2002-03 and 2013-14.

These properties are United 21 Royal Resort at Ajmer in Rajasthan, shop at Panvel in Navi Mumbai and office at Goregaon in Mumbai

After the e-auction, Sebi has declared Richa Buildcon as “the highest bidder” for the resort with a bid value of Rs 1.84 crore, one Dimple Barola has emerged as the highest bidder for the office space with a bid amount of Rs 1.33 crore and Dilip Dipchand Manwani for the shop with a bid amount of Rs 67.42 lakh.

While the bidders had submitted earnest money and inspection charges, Sebi, in three separate orders, today asked them to deposit the balance amount along with “poundage fee” of 1 per cent of bid amount.

Pancard Clubs had failed to comply with Sebi’s direction in February 2016 ordering the company to refund the amount raised through illegal collective investment schemes (CIS) to investors. It had mobilised Rs 7,035 crore from 51,55,516 investors from 2002-03 to 2013-14.

Subsequently, the markets regulator had initiated recovery proceedings in the case and attached the properties belonging to the firm and its directors.

Since the entities failed to repay the dues, the Securities and Exchange Board of India (Sebi) has been auctioning properties of the company. During December-May, it had auctioned nearly three dozen properties of Pancard Clubs and its late chairman and managing director.

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Government denies approval for Jet Airways-Jet Lite merger

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Jet Airways on Wednesday said the government has not given approval for the merger of its subsidiary Jet Lite with itself, nearly three years after the proposal was announced by the full service carrier.

The merger proposal was approved by the board of Jet Airways in September 2015 and was later cleared by the airline’s shareholders in April 2016.

In a BSE filing, the airline said the civil aviation ministry has not approved the merger of Jet Lite Ltd with itself. Consequently, the merger scheme stands revoked and cancelled, it added.

“Jet Lite (India) Ltd and Jet Airways (India) Ltd shall continue their respective operations as two separate legal entities with their respective Air Operator Certificates,” the filing said.

The specific reasons for the rejection of approval for the merger could not be immediately ascertained.

Sahara Airlines was renamed as Jet Lite.

A Jet Airways spokesperson said it respects the decision of the ministry on the proposed scheme of merger.

In April 2007, Jet Airways had acquired Sahara Airlines for Rs 1,450 crore after an arbitration award and the latter was renamed as JetLite.

The merger would lead to greater efficiency in cash management of the merged entity and “unfettered access to cash flow generated by the combined business which can be deployed more efficiently to maximise shareholder value”, the airline had said in April 2016.

Shares of Jet Airways declined 2.36 per cent to close at Rs 499.80 apiece on the BSE.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Indostar Capital Finance IPO subscribed 41% on Day 1

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The initial public offer of non-banking finance company Indostar Capital Finance Ltd was subscribed 41% on the first day of the bidding today.

The Rs 1,844-crore IPO received bids for 91,83,954 shares against the total issue size of 2,25,75,438 shares, data available with the NSE showed.

The portion set aside for qualified institutional buyers (QIBs) was oversubscribed 1.29 times and retail investors 8%.

The IPO is of fresh issue of up to Rs 700 crore and an offer for sale of up to 2 crore equity shares (including anchor portion of 9,671,328 equity shares).

The issue which opened for subscription today would close on May 11. The price band for the offer has been fixed at Rs 570-572 per share.

Indostar Capital Finance yesterday raised a little over Rs 553 crore from anchor investors.

Proceeds of the fresh issue will be used to augment capital base to meet future capital requirements.

JM Financial, Kotak Mahindra Capital Company, Morgan Stanley India Company, Motilal Oswal Investment Advisors and Nomura Financial Advisory and Securities (India) are managing the IPO.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

It’s a salute to the success of Indian start-up, says ASSOCHAM on Walmart-Flipkart deal

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Industry body ASSOCHAM sees the Walmart-Flipkart deal as a salute to the success of the Indian start-up that pioneered the fledgling online retailing in a country where bulk of the trade is in the unorganised sector.

“Isn’ it so great that a start-up goes on to fetch an enterprise valuation of about $ 21 billion, making the Walmart equity infusion the largest ever FDI into India”, ASSOCHAM Secretary General D S Rawat told PTI.

“Despite several teething troubles, hats off to Indian entrepreneurs, especially those of the ‘First Generation’. For them, it is no-holds barred. Great spirit of enterprise,” he said.

Rawat also said the roll out of the online retailing has also meant formalisation of the Indian economy and a new ecosystem that rewards entrepreneurship.

Former Chief Financial Officer of Infosys Ltd V Balakrishnan said it was a great validation of the potential of Indian consumer market as well as the evolving startup ecosystem.

Large exits like this is very important to attract more and more talent and capital into the Indian startup ecosystem, he said.

“This is a great time for someone to become an entrepreneur in India and success stories like this will only boost their confidence”, he told PTI.

“Having said that, it is also sad to see foreign companies dominating the ecommerce marketplace in India which is one of the largest in the world”, Balakrishnan said.

He expressed hope that the deal would enthuse more Indian capital to be invested in “our startup ecosystem”.

The US retailer Walmart Inc acquired 77 percent stake in Flipkart for about $ 16 billion in its biggest acquisition till date.

The deal values the 11-year old Indian e-commerce firm at $ 20.8 billion.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Walmart-Flipkart deal to vitiate e-commerce, say Indian traders

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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US retailer Walmart’s $ 16 billion acquisition of Indian e-commerce firm Flipkart will vitiate the country’s e-commerce space and create an uneven playing field, traders and retailers said today.

The Confederation of All India Traders (CAIT) said the deal is nothing but a clear attempt to control and dominate the retail trade in India by Walmart through e-commerce in the long run.

On the other hand, Retailers Association of India while staying away from commenting directly on the acquisition, said some e-commerce companies in India have been flouting FDI Policy for marketplaces.

“Digitally powered e-Walmart will certainly vitiate the e-commerce and retail market. There will be an uneven level playing field to the disadvantage of retail traders. Only the venture capitalist, investors and promotors will be benefitted and not the country,” CAIT said in a statement.

CAIT Secretary General Praveen Khandelwal said the key issue is whoever controls the platform controls data and digital intelligence.

“The owner can squeeze and dictate anything. It is much more difficult for the government to control and regulate foreign owned platforms and all indigenous players will have no value if a foreign company runs the platform,” Khandelwal claimed.

He said the government should immediately frame a national policy for e-commerce and constitute a regulatory authority to regulate e-commerce business in India and till such time, the deal should be put in abeyance by the Government and a close scrutiny should be held of the entire deal.

Retailers Association of India asked the government to take strong steps to ensure adherence to FDI policy.

“We believe that some e-commerce companies in India have not been adhering to the guidelines issued under the Press Note 3 of the FDI Policy for marketplaces. These companies have been directly or indirectly participating in pricing and discounting, which is against the policy that seeks to create a level playing field,” Retailers Association of India alleged.

However, Assocham Secretary General D S Rawat said he sees the Walmart-Flipkart deal as a salute to the success of an Indian start-up that pioneered the fledgling online retailing in a country where bulk of the trade is in the unorganised sector.

Walmart Inc today said it would acquire 77 per cent stake in Flipkart for about USD 16 billion in its biggest acquisition till date. The deal values the 11-year old Indian e-commerce firm at USD 20.8 billion.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow