Ex-director seeks stay on Paytm IPO; Delhi HC refuses to halt company’s plans

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

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Delhi High Court on Friday heard arguments by a Former Director of Paytm, seeking a stay on its Initial Public Offer (IPO), but the court decided against halting the fintech major’s plans. The IPO is scheduled for November 8.

Ashok Kumar Saxena had moved the Delhi high court citing a “serious shareholding” dispute with Paytm and Founder – Vijay Shekhar Sharma. He served as the Director on the board of One97 Communciations, Paytm’s parent company, from 2001 to 2004.

As per his petition, Ashok Saxena claims that he is entitled to 55 percent of Paytm’s equity shares. The Former Director bases his claim on his investment of Rs. 13 lakhs in Paytm in 2000. He argued that he had red flagged the shareholding dispute to not just the market regulator Sebi, but had also lodged a complaint with the Delhi Police.

Also Read: As Paytm gears up to launch mega IPO, a look at India’s biggest public offers

In his petition he argued that Sebi’s listing norms required the disclosure of the ongoing “shareholder dispute”. While seeking a stay on the IPO, Saxena’s counsel argued that sufficient disclosure had not been made.

Sebi, appearing before the Delhi high court, had submitted that it had advised Paytm to make a few amendments to the disclosures to comply with the norms. Sebi added that Paytm had agreed and implemented the amendments advised by the market regulator.

Sebi submitted that with the revised disclosures, Paytm’s offer documents were in compliance with the listing norms.

Taking into account Sebi’s arguments, Delhi high court refused to grant the interim relief of a stay on the Paytm’s IPO. However, the high court has agreed to hear the former director’s plea and has issued notice to Paytm, Vijay Shekhar Sharma and Sebi. The high court will now hear the case on January 13, 2022.

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

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

IPO CORNER: Nykaa offering oversubscribed 4.8 times on Day 2; Policybazaar IPO on Nov 1

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

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Nykaa IPO Day 2: Issue oversubscribed 4.8 times; retail portion booked 6 times

The initial public offering (IPO) of Nykaa-owner FSN E-Commerce Ventures has been subscribed 4.82 times on October 29, the second day of bidding.

The offer has received bids for 12.76 crore equity shares against the IPO size of 2.64 crore equity shares.

The IPO that opened on October 28 for bidding at the price band of Rs 1,085-1,125 will conclude on October 30. The company aims to raise over Rs 5,350 crore with this third-largest public issue so far in 2021.

Retail investors subscribed 6.30 times their portion, and non-institutional subscribers put in bids for 4.15 times their reserved portion. Qualified institutional buyers subscribed 4.72 times their reserved portion. Meanwhile, Nykaa’s employees have subscribed to 1.18 times the portion reserved for them.

The Nykaa issue was completely subscribed at the end of the first day of bidding. Retail investors had subscribed to their portion some 3.5 times and qualified institutional buyers some 1.39 times.

Oyo writes to SEBI refuting Zostel’s allegations on IPO

Oyo  has sent a letter to market regulator Securities and Exchange Board of India (SEBI), refuting allegations by Zostel, sources told CNBC TV 18.

Zostel had written a letter to SEBI on October 11 claiming that Oyo’s IPO is “non-maintainable” as Oyo’s “capital structure is not final.”

Oyo has accused Zostel of trying to adversely impact its IPO, and added that the termsheet with Zostel was “mutually terminated” due to “non-completion of the due diligence process and transaction structuring raised by Zostel.”

Oyo also added that there was no restriction imposed on changing shareholding pattern by the Award or by Delhi High Court, and said that no stay has been granted by Delhi High Court on the proposed IPO.

Paytm CEO says the company may not need capital beyond public offer

Ahead of the Paytm IPO in November, the company’s Founder and CEO Vijay Shekhar Sharma said the digital payment and financial services platform may not need more capital beyond the IPO fundraise unless there are any extraordinary circumstances.

Chief financial officer Madhur Deora said the firm’s valuation post-listing on the bourses will be about $20 billion.

“We could raise money from any set of investors at a higher price, but we believe investors should make money,” Deora said. He said apart from ANT Financial, most other shareholders are selling their shares on a pro-rata basis. He added that inbound interest from investors is tremendous from Indian as well as global blue-chip investors.

Policybazaar’s Rs 5,826-cr IPO to open on Nov 1

The three-day IPO of online insurance platform Policybazaar will open for subscription on November 1, and conclude on November 3.

The company has fixed a price band of Rs 940-980 a share for its Rs 5,826-crore initial share sale. The issue size is 6,07,30,265 shares, with a face value of Rs 2 each.

Through the IPO, the company will raise an amount of around Rs 5,826 crore. The IPO comprises a fresh issue of Rs 3,750 crore, along with an offer for sale (OFS) of Rs 1,959.72 crore by existing promoters and shareholders. The OFS would be driven by investor SVF Python II (Cayman), which would be selling shares worth Rs 1,875 crore. As of now, Cayman holds 9.45 percent stake in the company.

Reinsurance company Swiss Re to buy 23% stake in Paytm Insuretech for about Rs 920 cr

Switzerland-based reinsurance major Swiss Re will buy a 23 percent stake in Paytm Insuretech for about Rs 920 crore.

Paytm’s insurance unit, Paytm Insuretech (PIT), plans to leverage Paytm’s customer base and merchant ecosystem to develop innovative insurance products. Through an investment in PIT, Swiss Re and Paytm will work towards closing the insurance protection gap in the market, the company said in a statement.

“Swiss Re will invest (by way of equity shares and compulsorily convertible preference shares) approximately Rs 9,200 million (Rs 3,973 million upfront, and the remaining in tranches, subject to fulfilment of certain milestones) in PIT for an aggregate stake of 23 percent on a fully diluted basis,” Paytm said.

Snapdeal strengthens board with ESG directors ahead of IPO

SoftBank-backed Snapdeal has strengthened its board ahead of its Rs 3,000 crore ($400 million) IPO by appointing ESG-focused directors.

To join Snapdeal’s board are: Kaushik Dutta, Chairman of Zomato and on the boards of Policybazaar and HCL Infosystems; and Richa Arora, who is the MD and CEO for ESG Stewardship Services at ECube Investment Advisors and has also been on the Board of Tata Group’s e-commerce venture.

The company is considering filing a DRHP in the next few months, joining a growing list of startups preparing to tap capital markets as the nation’s digital economy booms

FHRAI asks SEBI to reject Oyo’s DRHP and suspend IPO 

The Federation of Hotel and Restaurant Associations of India (FHRAI) has sent a letter to SEBI asking it to suspend hospitality startup Oyo’s IPO process.

FHRAI says Oravel, the parent company of Oyo has been involved in “unfair, anti-competitive and fraudulent dealings and business practices, which include entering into anti-competitive agreements as well as abusing its dominant position,” as per the letter, a copy of which CNBC TV 18 has seen.

Oyo on October 1 filed its DRHP with SEBI for raising Rs 8,430 crore through an IPO. Oyo did not comment till the time of filing this story.

This comes days after Zostel sent a letter to SEBI claiming that that Oyo’s DRHP is “illegal” since it is in contravention of SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018.”

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

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

Govt appoints Justice Ashok Bhushan as NCLAT chairperson, Justice R Sudhakar as NCLT president

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

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The government has appointed Justice Ashok Bhushan, a former judge of the Supreme Court, as chairperson of the National Company Law Appellate Tribunal (NCLAT).

Besides, it has appointed Justice Ramalingam Sudhakar, former chief justice of Manipur High Court, as president of the National Company Law Tribunal (NCLT).

Both the NCLT and NCLAT are getting permanent heads after more than one-and-a-half years following the retirement of their respective incumbents.

Also Read: Oyo writes to Sebi refuting Zostel’s allegations on IPO

“The Appointments Committee of the Cabinet has approved the proposal for appointment of Justice Ashok Bhushan, former Judge of the Supreme Court of India as Chairperson, NCLAT for a period of 4 years from the date of assumption of charge of the post, or till he attains the age of 70 years, or until further orders, whichever is the earliest,” as per an official notification dated October 28.

The appellate tribunal NCLAT is going to have a permanent chairperson after a gap of almost 19 months. Its first chairperson Justice S J Mukhopadhaya had retired on March 14, 2020, and since then it was functioning with Acting Chairpersons.

In the last 19 months, NCLAT had three Acting Chairpersons, with two of them getting several extensions. The NCLT, which is handling important insolvency-related matters, was functioning without a permanent president after the retirement of Justice M M Kumar on January 5, 2020.

Also Read: Supreme court disallows Bharti Airtel from seeking Rs 923 crore GST refund

After Justice Kumar’s retirement, B S V Prakash Kumar was made Acting President and was also given an extension. This was followed by six Acting Presidents. The NCLT and NCLAT also have a shortage of members and the situation had invited the ire of the Supreme Court.

Earlier this month, the government had appointed 21 members — 11 judicial members and 10 technical members — to various benches of the NCLT. Presently, the NCLT and NCLAT, like other judicial and quasi-judicial bodies, are conducting virtual hearings of cases.

The NCLAT has been constituted under Section 410 of the Companies Act, 2013 for hearing appeals against the orders of the National Company Law Tribunal (NCLT).

Also Read: Aditya Birla Fashion faces contempt of court allegations over patent infringement

It has two benches — one principal bench at New Delhi and the other in Chennai It is also the appellate tribunal to hear and dispose of appeals against orders passed by the Competition Commission of India (CCI) and the Insolvency and Bankruptcy Board of India.

NCLT, besides a principal bench at New Delhi, has fourteen other benches — Ahmedabad, Allahabad, Bengaluru, Chandigarh, Chennai, Guwahati, Hyderabad, Kolkata, Mumbai, Cuttack, Jaipur, Kochi, Amravati, and Indore.

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

Inflation, high inflation, hyperinflation, deflation: Know the difference

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

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Jack Dorsey became the latest big name to fan fears of hyperinflation, which were, however, disproved by Cathie Woods, Founder, CEO and CIO of Ark Invest.

“Hyperinflation is going to change everything. It’s happening,” Dorsey had tweeted on October 23. “It will happen in the US soon, and so the world,” the billionaire added.

But Wood disagreed and countered it with her “velocity still falling” view.

“In 2008-09, when the Fed started quantitative easing, I thought that inflation would take off. I was wrong. Instead, velocity — the rate at which money turns over per year — declined, taking away its inflationary sting. Velocity still is falling,” Wood said in a tweet.

While experts agree that most nations are experiencing higher consumer prices — an effect of higher inflation — here’s a closer look at the concepts of hyperinflation, inflation, deflation and stagflation.

What is inflation?

In simple terms, inflation is the rate of increase in the general price level of any economic system. It is calculated by comparing the price of certain goods and commodities like food, energy and fuel each year. Most central banks prefer to have a relatively stable yet positive level of inflation since it is better than the alternative of a recession. A relative level of inflation makes people invest their money in the economy since bank interest rates are low at those low levels.

Inflationary pressure is often caused by high demand and excessive cash in the economy. Many experts believe that current inflationary pressure is due to the fiscal stimuli that have increased the amount of cash while supplies remain low due to global supply breakdowns.

What is hyperinflation?

Hyperinflation is defined as rapid, excessive, and out-of-control general price increases in an economy, usually measuring more than 50 percent rise in prices per month. Venezuela is currently in a state of hyperinflation, with a 3,012 percent inflation rate, while countries like Sudan, Zimbabwe and Lebanon have very high inflation rates as well.

According to studies and research, hyperinflation only occurs in very specific circumstances, including in the aftermath of war, when fiscal authorities lose control; or as a result of populist monetary policies.

Also read: Explained: What fans US inflation fears

Hyperinflation also occurs as a result of a prolonged economic depression. During periods of economic depression, the economy shrinks over a prolonged period, leading to severe levels of unemployment, increased bankruptcies, lower production output, and less available credit.

Central banks and governments, in response to depression, increase the money in circulation. However, if the national economy fails to support the increased supply of credit, hyperinflation can follow.

The recent accommodative fiscal policies of several central banks have sparked fears of hyperinflation for this very reason. However, current economic conditions do not suffer from low production output, rather there is lower supply due to a global supply chain breakdown that is taking longer than expected to recover.

What is deflation?

Deflation is an economic phenomenon where prices of goods quickly decrease due to the low availability of money in the economy and/or increased production of goods far beyond the current demand for them. As a result of deflation, the purchasing power of cash only increases with time and thus people start hoarding money as less and less money makes its way to the economy, which leads to more deflation.

While experts agree that most countries around the world are suffering from inflation currently, Wood believes technological advances can quickly lead to deflation due to decreased production prices.

Also read: Stagflation, not hyperinflation is Europe’s biggest threat: Ex-Italian PM 

“Now we believe that three sources of deflation will overcome the supply chain-induced inflation that is wreaking havoc on the global economy. Two sources are secular, or long term, and one is cyclical. Technologically-enabled innovation is deflationary and the most potent source,” she added in her Twitter thread.

Since deflation can quickly lead to depression and recession due to production losses, slow consumption and falling demand for goods and services, banks are careful to keep their economies at a low level of inflation instead.

What is stagflation?

Stagflation is defined by economists as a period of slow economic growth that is characterised by high rates of unemployment while high inflation rates continue to remain prevalent. Situations of stagflation are harder to deal with as policy changes by governments to bring inflation under control often exacerbate the unemployment levels and vice versa.

The phenomenon is also known as recession-inflation. The 1973-1975 economic downturn that finally brought an end to the post-World War II economic boom was a period of economic stagflation.

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

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

Oyo writes to Sebi refuting Zostel’s allegations on IPO

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

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Hospitality firm Oyo has sent a letter to market regulator Sebi refuting allegations by Zostel, sources told CNBC-TV18. Zostel had written a letter to Sebi on October 11 claiming that Oyo’s IPO is “non-maintainable” as Oyo’s “capital structure is not final”.

The company has accused Zostel of trying to adversely impact its IPO, and added that the term sheet with Zostel was “mutually terminated” due to “non-completion of the due diligence process and transaction structuring raised by Zostel.”

Oyo also added that there was no restriction imposed on changing shareholding pattern by the Award or by Delhi High Court Further, and said that no stay has been granted by Delhi High Court on the proposed IPO. Zostel is still to respond to CNBC-TV18‘s queries.

Also Read: Sebi puts in place guiding principles for bringing uniformity in benchmarks of MF scheme

Zostel had claimed that Oyo’s DRHP is “illegal” since it is in contravention of Sebi (Issue of Capital and Disclosure Requirements) Regulations, 2018″

Reg 5(2) of SEBI ICDR regulations prohibits an IPO if any entity/person has rights that entitle them to receive shares of the issuer. Zostel claims it is due to 7 percent shares in Oyo based on a term sheet between the two parties that was held as ‘binding’ by an arbitral tribunal in March this year. Oyo, however, has maintained that the arbitral award has not issued Zostel or any of its shareholders any shares in Oyo.

In the letter to Sebi, Zostel had said that “the IPO is non-maintainable as Oravel’s capital structure is not final”, and that the “DRHP is replete with material omissions and blatant misstatements, intended to mislead the public into investing into Oravel’s shares without an appreciation of the risks involved.”

Also Read: Sebi eases eligibility criteria related to superior voting rights shares

Zostel had earlier taken the matter to the Delhi High Court, which has adjourned the case to October 21. Zostel had moved the Delhi High Court late last month seeking to restrain Oyo from ‘altering its shareholding pattern, including through an IPO’ since it claims that an arbitral award it won in March this year grants Zostel’s shareholders 7 percent shares of Oyo.

Oyo on October 1 filed its draft red herring prospectus (DRHP) with Sebi for raising Rs 8,430 crore through an IPO. In the DRHP, Oyo said “an adverse outcome in legal proceedings involving Zostel may materially and adversely affect our business, reputation, prospects, results of operation and financial condition,” and has gone on to say that the “arbitrator did not pass any directions for issuance of shares of the Company to the Claimants (Zostel).”

Oyo, in a blog post on September 28, had accused Zostel of “forum hunting”.

Also Read: FHRAI urges SEBI to reject Oyo’s DRHP and suspend IPO

“Without considering the grounds of challenge by OYO of the Award, the Award in itself has not issued Zostel or any of its shareholders any shares in OYO. The only relief, apart from costs, which has been granted to Zostel, is to initiate “appropriate proceedings” to execute Definitive Agreements and seek specific performance of the Term Sheet. As such, till the time that parties do not come to an agreement on the terms of the Definitive Agreements and the same are not executed, no right whatsoever arises in favour of any party for any type of shares to be issued in OYO,” the company said in the blog post.

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

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

Puneeth Rajkumar: Condolences pour in from all the corners

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

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Veteran Kannada actor Puneeth Rajkumar died on October 29 in Bangalore. The superstar suffered from cardiac arrest at Vikram Hospital, leaving behind his wife Ashwini and two daughters. The 46-year-old was the youngest son of legendary Kannada actor Dr Rajkumar and was fondly called ‘Appu’ by fans and friends.

The last rites for Rajkumar are scheduled for Sunday, October 31, according to his brother Raghavendra Rajkumar. Security arrangements have been made in front of the late actor’s house.

Everyone from political leaders, members of the film industry, celebrities, fans and others sent condolences, expressing their shock at the actor’s sudden and untimely death.

“A cruel twist of fate has snatched away from us a prolific and talented actor, Puneeth Rajkumar. This was no age to go. The coming generations will remember him fondly for his works and wonderful personality. Condolences to his family and admirers. Om Shanti,” tweeted Prime Minister Narendra Modi.

A cruel twist of fate has snatched away from us a prolific and talented actor, Puneeth Rajkumar. This was no age to go. The coming generations will remember him fondly for his works and wonderful personality. Condolences to his family and admirers. Om Shanti. pic.twitter.com/ofcNpnMmW3

— Narendra Modi (@narendramodi) October 29, 2021

“My heartfelt condolences to the family, friends and fans of Kannada actor Puneeth Rajkumar. Gone too soon,” added Congress leader Rahul Gandhi.

My heartfelt condolences to the family, friends and fans of Kannada actor Puneeth Rajkumar.

Gone too soon.

— Rahul Gandhi (@RahulGandhi) October 29, 2021

“I cannot process this. Cannot believe you’ve left us Puneeth. Kind, gifted, fearless…so much to give to the world. This is not fair brother. Heartbroken,” said fellow actor Siddharth.

I cannot process this. Cannot believe you’ve left us Puneeth. Kind, gifted, fearless…so much to give to the world. This is not fair brother. Heartbroken.

— Siddharth (@Actor_Siddharth) October 29, 2021

Fellow South Indian actress Pooja Hegde also wrote, “Cannot believe what I’m hearing.”

“Life is so unpredictable. Such a big loss for Indian Cinema. Sending out loads of love and light to his family and loved ones in these difficult times. R.I.P Puneeth Rajkumar,” she added.

Cannot believe what I’m hearing 😔 Life is so unpredictable. Such a big loss for Indian Cinema. Sending out loads of love and light to his family and loved ones in these difficult times. R.I.P Puneeth Rajkumar. 💔😞

— Pooja Hegde (@hegdepooja) October 29, 2021

“Apart from the shocking tragedy that Puneeth Rajkumar’s sudden death is, it is also a scary and terrifying eye opening truth that any of us can die anytime,” said filmmaker Ram Gopal Varma.

Apart from the shocking tragedy that @PuneethRajkumar ‘s sudden death is, it is also a scary and terrifying eye opening truth that any of us can die anytime 😳😳😳 So it is best to live life on a fast forward mode , while we are still alive🙏🙏🙏

— Ram Gopal Varma (@RGVzoomin) October 29, 2021

Film personalities like Kamal Hassan, Lakshmi Manchu, Boney Kapoor, and cricketers Harbhajan Singh, Virender Sehwag and Venkatesh Prasad also mourned the death of  Rajkumar.

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

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

Covaxin delays: Dr Renu Swarup hopeful of WHO EUL for vaccine soon

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

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The coronavirus hasn’t gone off anywhere; it is going to mutate and new strains will emerge, that is the word coming in from the outgoing Secretary at the Department of Biotechnology, Dr Renu Swarup. She also weighed in on the emergency use listing (EUL) for Covaxin at the World Health Organisation (WHO) and said she was hopeful that clearance will be given to the home-grown vaccine soon.

Talking to CNBC-TV18, she said, “First of all, it is very important to understand that the government has been a partner with the entire vaccine development initiative so far. It’s not all about what really is the quantum of the financial investment that has been made but as a partner in addition to the financial investment, we have been with all vaccine manufacturers right through the development process, right through the regulatory process of clearances, facilitating their access to the ecosystem. This whole augmentation of Covaxin is an important part of that.”

“So, under that project of augmenting the Covaxin production, we have a number of groups that have come together (at) Bharat Biotech’s facility in Bengaluru. We have the Gujarat consortium which is led by Hester, the Indian Immunologicals in Hyderabad, we have BIBCOL and Haffkine. So, they are all into action,” said Dr Swarup.

Bharat Biotech’s Bengaluru facility has started operations and in the next couple of weeks, it will see capacity augmentation. Indian Immunologicals has started delivering the drug substance and drug products. Hester is next to go by the end of this year, and it should deliver. Haffkine and BIBCOL have started their work, she said, adding that since these are greenfield projects, they will come online maybe by early next year, or end of the first quarter. They will also add to production volumes. This is a PPP partnership, said Dr Swarup.

Also Read: Covaxin a Eureka moment; India needs to be more than just pharmacy of the world

She further said the technology transfer for Covaxin is a complex process, which has already started. The targets for all the others are up, and so they are looking at augmenting Covaxin production. The greenfield project has been one of the biggest challenges because it needs the BSL3. A lot of work has already gone into it, and now there is progress, but technology transfer itself is complex, Dr Swarup explained.

“So, while targets may have moved from December to the first quarter of next year, the complexity that goes into this whole manufacturing process should also be appreciated. And also considering the fact that the new facilities are going to be relevant not just for Covaxin and not just for the COVID vaccine, this is the good infrastructure that we are creating within the country for viral vaccines, which will be required maybe for other disease targets. It is an infrastructure capacity building exercise for the ecosystem,” said Dr Swarup.

On WHO EUL delay for Covaxin

She said WHO has its own norms, and they are examining it as per their own requirements.

“All I can say is that from the Government of India, from Bharat Biotech, there is an effort to make available whatever is required by them on time. But how WHO will do it and how long they are going to take is something which (will depend on) their procedures. It is important also because it will go through their entire regulatory ecosystem, their regulatory mechanism to be able to (receive) the clearance,” Dr Swarup said.

Also Read: Review of Covaxin by WHO underway; expect a recommendation within 24 hours: Spokesperson

“We are hopeful that they will be able to do it soon because Bharat Biotech has submitted all the documents that they need, and if they need any additional data, they will come back. That is something that is being responded to on a real-time basis,” Dr Swarup specified.

For the full discussion, watch the video

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

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

Commerce Ministry recommends continuation of anti-dumping duty for 5 years on certain steel imports from China

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

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The commerce ministry’s investigation arm DGTR has recommended continuation of anti-dumping duty for five years on certain steel imports from China with a view to guard domestic manufacturers from cheap inbound shipments from the neighbouring country.

In a notification, the Directorate General of Trade Remedies (DGTR) has said there is a likelihood of continuation/ recurrence of dumping and injury to the domestic industry in the event of revocation of the existing duty on imports of certain ‘bars and rods, hot-rolled, in irregularly wound coils, of iron or non-alloy steel or alloy steel‘ from China.

“The authority recommends continuation of anti-dumping duty on the imports of the subject goods…originating in or exported from the subject country (China) for five years from the date of notification to be issued in this regard by the central government,” it said.

The recommended duty is the difference between the landed value of the goods and $546 per tonne. If the landed value is more than $546 per tonne, anti-dumping duty will not be applicable, it added.

Also Read | Explained: How China’s energy crisis can benefit Indian steel, chemical firms

“The authority is of the view that continued imposition of anti-dumping duty is required on the imports,” the DGTR said. The existing duty was applicable till January next year.

In a separate notification, the DGTR has recommended withdrawal of anti-dumping duty on PVC flex films imported from China. “Even though there is a continued dumping of the subject goods from China, the likelihood of continuation/recurrence of injury to the domestic industry in the event of revocation of the duty could not be conclusively established due to lack of sufficient independent corroborative evidence,” it said.

In international trade parlance, dumping happens when a country or a firm exports an item at a price lower than the price of that product in its domestic market. Dumping impacts the price of that product in the importing country, hitting margins and profits of manufacturing firms.

According to global trade norms, a country is allowed to impose tariffs on such dumped products to provide a level-playing field to domestic manufacturers. The duty is imposed only after a thorough investigation by a quasi-judicial body, such as DGTR, in India. In its probe, the directorate has to conclude whether the imported products are impacting domestic industries.

Imposition of anti-dumping duty is permissible under the World Trade Organization (WTO) regime. India and China are members of this Geneva-based organisation, which deals with global trade norms. China is a key trading partner of India. The duty is aimed at ensuring fair trading practices and creating a level-playing field for domestic producers vis-a-vis foreign producers and exporters.

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

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