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Reserve Bank of India (RBI) is uniting internally to fight for the preservation of its autonomy amid face-off with the central government over policy issues. After RBI deputy governor Viral Acharya fired the first salvo, the central bank's employees union on Monday launched an attack against the central government. The power tussle has also taken a political colour with the Congress party siding with RBI and its president Rahul Gandhi tweeting about it.

The growing difference between the North Block and the banking regulator came under public glare when for the first time RBI published a dissent note on its website, expressing its disagreement with the government in setting up a separate payments regulator.

"The Payments Regulatory Board (PRB) must remain with the Reserve Bank and headed by the Governor, Reserve Bank of India," the release on its website stated.

The fragile relationship reached breaking point when the government asked RBI to relax lending restrictions imposed on certain weak banks to tackle their NPAs. Last week, Acharya, a close confidante of RBI governor Urjit Patel said undermining a central bank's independence could be "potentially catastrophic". Lending restrictions are imposed on 11 government-owned banks.

"The risks of undermining the central bank's independence are potentially catastrophic," said Acharya. Rash moves could trigger a "crisis of confidence in capital markets that are tapped by governments and others in the economy," he said.

During the speech, Acharya had three of his fellow deputy governors in the audience. Reflecting unity among the RBI officials, Acharya thanked Patel for his "suggestion to explore this theme for a speech."

On Monday, the All India Reserve Bank Employees Association (AIRBEA) came out in support of the Acharya's concerns over the autonomy of the central bank.

In a press statement, AIRBEA said that "undermining the country's central bank is a recipe for disaster and the government must desist."

Backing the deputy governor, AIRBEA said that "Acharya had spoken more in disgust and despondency due to continuous nibbling by the government and the ministry of finance".

Recently, finance minister Arun Jaitley, in reference to the recent developments in Central Bureau of Investigation, had said that the country is higher than any institution or the government.

AIRBEA said that the government is prone to putting pressure on RBI to fall in line with its expediency. "Hence, this is an intrinsic schism and this is not regime specific," it said.

According to AIRBEA, the observations are not "sudden outbursts" but "was waiting to happen due to a long simmering discontent". The RBI Board is "being sought to be stuffed in a particular direction which would prompt the discerning people to look askance, and make it difficult for RBI to frame policies," it added.

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GOING ALL OUT 
All India Reserve Bank's Employees Association came out in support of the Acharya's concerns over the autonomy of the central bank&nbsp;&nbsp;

&nbsp;

It said that "undermining the country's central bank is a recipe for disaster and the government must desist

&nbsp;

The growing difference between the North Block and the banking regulator came under public glare when for the first time RBI published a dissent note on its website, expressing its disagreement with the government in setting up a separate payments regulator.


Centre vs RBI: Governor gets staff union backing in tussle

Pharmaceutical company Cadila Healthcare, through its subsidiary Zydus Wellness Ltd, has agreed to acquire Heinz India for a valuation of Rs 4,595 crore. The deal includes Heinz’s brands Complan, Glucon-D, Nycil and Sampriti Ghee and two manufacturing units in Aligarh (Uttar Pradesh) and Sitarganj (Uttarakhand).

The consideration will be in cash, through a mix of debt and equity, with leading private equity firms committing equity support.

The transaction is expected to be earnings per share accretive and is expected to close in the fourth quarter of this fiscal, subject to regulatory approvals, Ahmedabad-based Cadila said in a statement.

Kraft Heinz has proposed to carve out business related to ketchup, tomato sauce, mayonnaise, before the closing of the transaction.&nbsp;Post announcement, shares of Zydus Wellness closed 4.29% lower at Rs 1203.95 per scrip on BSE while shares of Cadila Healthcare closed 5.17% lower at Rs 358.40 on BSE on Wednesday.

Zydus warded off competition from Tata Group, Wipro, Dabur, Danone, and Coca-Cola for the assets. Cadila’s consumer health business is led by Zydus Wellness.

With this acquisition, the turnover of the consumer business would surge to over Rs 1,700 crore, almost three times its current size, making it one of the strongest players in the fast growing consumer healthcare market, the company said. In FY18, Zydus Wellness reported a turnover of Rs 503.1 crore with a net profit of Rs 133.9 crore, as per its annual report.

The acquisition will expand and strengthen Zydus Wellness’ core business of food and nutrition, which currently contributes for 80% of its revenues, it said.

Zydus Wellness has a presence in the food, nutrition and skincare markets and currently owns brands such as SugarFree, EverYuth and Nutralite, which it acquired in 2006.

The four major brands Complan, Glucon-D, Nycil, Sampriti Ghee registered a combined turnover of Rs 1,150 crore and Ebitda (earnings before interests, taxes, depreciation and amortisation) of Rs 225 crore for 12 month period ending June 30, 2018.

Heinz India enjoys global rights of Glucon-D, Nycil and Sampriti Ghee, while for Complan the rights are for India, Bangladesh, Nepal and those countries where it has IP rights.

Headquartered in Mumbai, it has around 900 employees across its manufacturing facilities and four branch offices in key metros.

In fiscal 2018, Heinz India has a turnover of Rs 1,185 crore, including Rs 55 crore-worth of sales of business to be carved out.&nbsp; In fiscal 2017 and 2016, Heinz India reported turnover of Rs 1,279 crore and Rs 1,256 crore, respectively.

Heinz India also has a strong distribution network of over 800 distributors, more than 20,000 wholesalers covering 29 states. Most of these brands are 50 years old with Glucon-D first launched in 1933, Complan launched in 1969 and Nycil launched in 1951.

Sharvil Patel, chairman, Zydus Wellness said the development offers immense opportunity to broaden its portfolio and invest in brands and products which it believes as relevant to health conscious consumers.

“This acquisition will be an ideal addition to Zydus Wellness, supporting our aspirations to grow in the consumer wellness space by providing multiple choices to consumers. We also look forward to welcoming the employees, consumers, partners and all stakeholders of Heinz India to the Zydus family,” Patel said.

Amey Chalke, analyst, HDFC Securities, said Zydus Wellness currently contributes 4-5% in topline and 6-7% in earnings with mid-single digit revenue growth over the last few years and 20% plus Ebitda margin. After this deal, Zydus Wellness’s contribution in Cadila’s overall business will move up to 12-13% of revenues.

According to him, Cadila Healthcare is yet to declare the exact deal structure and the amount of debt it is likely to raise for this acquisition.

“After assuming Rs 2,000 crore debt and Rs 2,500 crore equity infusion by PE, we estimate this deal to negatively impact Cadila’s earnings by 4-5% in FY19. It will also reduce Cadila’s stake in Zydus Wellness to 55% from 72% now. Net debt to equity ratio likely to raise to 0.6x from 0.4x now,” Chalke said.

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Abneesh Roy, research analyst - senior vice-president, institutional equities - research, Edelweiss Securities said the deal works out to be approx 3.8x enterprise value/ sales on trail basis, which is much lower than comparable companies under its coverage trade at approx 7.9x trail EV/ sales.

Kraft Heinz has proposed to carve out business related to ketchup, tomato sauce, mayonnaise, before the closing of the transaction.&nbsp;Post announcement, shares of Zydus Wellness closed 4.29% lower at Rs 1203.95 per scrip on BSE while shares of Cadila Healthcare closed 5.17% lower at Rs 358.40 on BSE on Wednesday.


Rs 4,595 cr deal! Cadila Health buys iconic Complan, Glucon-D, Nycil, Sampriti ghee, brands from Heinz

India continues to be among the countries with the lowest values when it comes to measuring pension systems, according to a report by Mercer. The Melbourne Mercer Global Pension Index, which is in its 10th year measures pension systems in 34 countries.

It is shows who is the most and who is the least prepared to meet the challenges of an ageing population According to the Index, the Netherlands and Denmark (with scores of 80.3 and 80.2 respectively) both offer A-Grade world class retirement income systems with good benefits - clearly demonstrating their preparedness for tomorrow’s ageing world.

The countries with the highest value for the adequacy sub-index are Germany (79.9) and France (79.5) with Mexico (37.3) and India (38.7) having the lowest values.

The Mercer report said that India continues to maintain its level of 2017 in the sub-indices of sustainability and integrity, though the overall index value fell marginally from 44.9 in 2017 to 44.6 in 2018 due to the change from using the median income earner to the average income earner to calculate the net replacement rate in the adequacy sub-index.

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“The demographics and macros economic factors in India are diverse and pension systems have to be aligned to other programs in the country. India has been taking slow but steady steps towards strengthening its retirement income system,’’ the report said.

According to Preeti Chandrashekhar, India Business Leader, Health and Wealth at Mercer certain recent reforms by the government have allowed more investments of pension funds in growth assets have added impetus to helping improving the adequacy of the system. “The effect of such changes are not seen overnight,” she said.

India continues to be among the countries with the lowest values when it comes to measuring pension systems, according to a report by Mercer. The Melbourne Mercer Global Pension Index, which is in its 10th year measures pension systems in 34 countries.&nbsp;


Bad news! Your country's retirement income system falls under 2017 level

Finance minister Arun Jaitley on Tuesday said that the country can continue with the high growth path with a strong and decisive leadership at the Centre. “If this path of high growth trajectory is to continue...if these higher growth, higher revenues and higher resources have to continue, better infrastructure objective has to be achieved. India needs a strong and decisive leadership at the Centre,” Jaitley said.

He said that a weak leadership could not have handled IL&amp;FS with swiftness the way the present government did, thus averting a crisis in the making. The Board of beleaguered IL&amp;FS was superseded by the government-appointed nominees led by well-known banker Uday Kotak as its chairman. Jaitley said being a net buyer of oil, a rise in global crude prices adversely impacts the country and hence the economy has to be resilient to deal with it.

Jaitley said that domestic policies of certain countries have spillover effects on India and hoped that such effects will not be everlasting and are transient in character. Jaitley said global oil prices have risen on account of artificial shortages and it has adversely impacted India. India imports 83% of its oil needs.

Talking about the political challenges facing the country, Jaitley said these are thrown up by unstable coalition and aspiring politicians, who want to acquire the top place. “Therefore we have to face that challenge by making our economy so resilient itself that we have the capacity to bear that challenge,” he added.

“Therefore, today what India needs is not individuals with lack of understanding of policies, lack of understanding of directions or inherently unstable coalition, but a government and leadership with absolute clarity about the direction so that this unique position which IMF refers to as a sweet spot in the world, this sweet spot we continue to occupy for the next two decades,” he said.

Jaitley said if India continues on the high growth path, then the country can get rid of poverty and can become a developed country. Indian economy grew at 8.2%in the April-June quarter.

Finance minister Arun Jaitley on Tuesday said that the country can continue with the high growth path with a strong and decisive leadership at the Centre.&nbsp;


Arun Jaitley on what India needs and why

Taking a cautious stand, Reserve Bank of India (RBI) on Tuesday gave only a three-year term to Sandeep Bakhshi, chief executive officer and managing director, ICICI Bank. The bank had sought a five-year term. Bakhshi, an ICICI Bank veteran, took over reins of the bank after the former high-profile CEO Chanda Kochhar first went on leave and later resigned after allegations of quip pro quo dealings while sanctioning loans to corporate clients surfaced.

The ICICI Bank stock closed 2.51% up at Rs 321.05 on the BSE on Tuesday. After Kochhar resigned, ICICI Bank had put out a statement saying that Bakhshi would take over for a period of five years, subject to regulatory approvals. But on Tuesday ICICI Bank informed the stock exchanges that RBI has cleared Bakhshi's appointment for three years, effective October 15, 2018.

When insurance was a sunrise industry, Bakhshi was given the task of setting the general insurance business. ICICI Lombard, the company he was instrumental in setting up, is now a listed entity with a market valuation of Rs 35,000 crore. He was also briefly deputy managing director of the bank after Kochhar took charge, but was sent to manage ICICI Prudential Life Insurance when V Vaidyanathan left the company. It is from the insurance subsidiary that he took charge of the bank as its CEO and MD.

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RBI has been very cautious in extending the tenures of CEOs at various private sector banks. Last month it cut short the tenure of YES Bank CEO and managing director Rana Kapoor, asking the bank to look for a successor. Before that, it asked the Board of Axis Bank to consider a shorter tenure for its CEO Shikha Sharma.

The regulator cutting short the tenures of the chiefs of the private sector banks is a new development which has picked steam under RBI governor Urjit Patel. Kochhar last month resigned abruptly after a nine year term in the top job and Shikha Sharma, CEO and MD of Axis Bank, will also leave in December 2018 after her fourth term was cut short by the regulator. RBI sources said that the regulator has taken a very serious cognisance of under-reporting of non-performing assets by these banks, which was one of the reasons for cutting short the CEO tenures.

Source: DNA Money

Taking a cautious stand, Reserve Bank of India (RBI) on Tuesday gave only a three-year term to Sandeep Bakhshi, chief executive officer and managing director, ICICI Bank.&nbsp;


Chanda Kochhar, ICICI Bank row fallout: Here is what RBI has done to new CEO Sandeep Bakhshi stint

National Company Law Appellate Tribunal (NCLAT) has granted a moratorium on all creditor action against beleaguered IL&amp;FS as well as its group companies to facilitate comprehensive resolution plan.

The moratorium prohibits initiation or continuation of legal proceedings, enforcement of security over the assets of IL&amp;FS and its group companies. The order will also restrict creditors from accelerating or making demands for payment of their credit facilities, debt securities, premature withdrawal of deposits or appropriating cash balance.

The NCLAT order came in response Ministry of Corporate Affairs (MCA)&nbsp; petition after the NCLT refused to give a moratorium last week. The moratorium comes into effect immediately, and the next hearing of the case before the NCLAT is on November 13.

The MCA on Monday welcomed the stay on all the proceedings against IL&amp;FS and 348 subsidiaries. MCA secretary Injeti Srinivas said,’’ IL&amp;FS Board is taking every possible measure to stop contagion. NCLAT has allowed the moratorium to pay dues as an interim measure.’’

The government had sought interim relief so that IL&amp;FS’s new Board headed by veteran banker Uday Kotak could create a speedier resolution plan for the debt-laden company. NCLAT’s order came over an urgent petition moved by the ministry after the Mumbai bench of NCLT had turned down its plea for a 90-day moratorium over the loans taken by the IL&amp;FS and its subsidiaries.

IL&amp;FS and its subsidiaries have defaulted on several debt obligations recently and are sitting on over Rs 91,000 crore of long and short-term debt.

Srinivas said the priority is to pay salaries and complete ongoing projects, rather than repaying large debt. “IL&amp;FS has to be run and the required funding should be given. It has nearly 4,500 employees, who need to be paid salaries. It has also taken projects both in India and abroad,’’ he said.

He was speaking to reporters on the sidelines of a roadshow on competition law jointly organised by fair trade authority Competition Commission of India and Confederation of Indian Industry.

"Serious Fraud Investigation Office (SFIO) action will follow if erstwhile directors are not found fit and proper. SFIO will look into allegation of corporate fraud and siphoning off the money by the past management of IL&amp;FS. The Enforcement Directorate will also step in if money laundering is found,’’ Srinivas said.&nbsp;“If we use liquidity for repayment, then we can’t go forward. Therefore, the moratorium is needed and NCLAT has given us a temporary relief,” he said.

On why nominee directors were not made respondents, Srinivas said, “Because we thought the question of fit and proper assessment will not apply to them at this stage.”

As far as the matter relating to finding the right suitor, nobody is going to buy IL&amp;FS as a group enterprise, MCA secretary Injeti Srinivas said.

“There could be companies which can be sold as going concerns, there could be assets which could go as slump sale and there could be certain which wound up and undergo liquidation. So we have a multi-pronged approach,” he said.

Commenting on the new IL&amp;FS Board, Srinivas said they have slowly and steadily taken all the decision to address the problems.

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“The Board has decided to have a core committee along with some core employees of the company at a critical management level. They have also decided to see how they can firm up figures with respect to valuation of assets, secured and unsecured loans, what are related party transactions and other issues,” Srinivas said.

&nbsp;

Source: DNA Money

The NCLAT order came in response Ministry of Corporate Affairs (MCA)&nbsp; petition after the NCLT refused to give a moratorium last week. The moratorium comes into effect immediately, and the next hearing of the case before the NCLAT is on November 13.


Crisis hit IL&FS debt at Rs 91,000 crore; Now, relief granted to company

Mahindra &amp; Mahindra (M&amp;M) announced entry into retail leasing market in order to target the millennials who do not want to shoulder the responsibility that comes with owning a car.&nbsp;M&amp;M expects this segment to add around 5-7% to its accrued sales once the market matures in the next few years. The company’s automotive division sold over 5 lakh units during the financial year 2017-18.

The car leasing industry in India is just around 1% of the total sales, and nearly all of it is to the corporate sector. In comparison, over 30% of the new vehicles sales come from leasing in developed markets such as UK (45%), US (33%), Germany (32%) and France (15%).

The challenges in India are manifold as the wear and tear of vehicles is higher due to the road conditions, accidental damages and repair costs are higher, in addition to unregulated and unorganised resale market and the changes in technology, all adding to the costs associated with mobility, analysts said.

According to an industry estimate, the car leasing market in India is estimated to be over Rs 1,500 crore and is poised for 15-20% compounded annual growth rate over the next ten years. 
V S Parthasarathy, group CFO, M&amp;M, said the initiative is not an alternative funding scheme, but a new way of owning a vehicle. “The car leasing business now makes sense after the implementation of GST (goods and services tax) as it has made credit flow seamless and brought level playing field.”

The scheme will be available on Mahindra’s personal portfolio of vehicles such as the entry-level sports utility vehicle (SUV) KUV100, compact SUV TUV300, mid-sized SUV Scorpio, multi-purpose vehicle Marazzo and premium SUV XUV500. These vehicles can be leased for a period of up to five years.

The person can later return the vehicle to the company without the hassle of reselling it, and get a new vehicle, the executives said.

The leased vehicles will be available at a starting price of Rs 13,499 per month for a KUV100NXT, going up to Rs 32,999 per month for an XUV500, it said, adding that at present customers across Delhi, Mumbai, Hyderabad, Bengaluru, Ahmedabad and Pune can avail the scheme. M&amp;M plans to extend the scheme to another 19 cities in the next phase, it said.

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The company also said it has partnered with global leasing service firms Orix and ALD Automotive for the scheme.

(With inputs from PTI)

Co sees business adding 5-7% to accrued sales once the market matures&nbsp; &nbsp;


M&M enters leasing mart with an eye on millennials 

The newly-appointed Board of the beleaguered Infrastructure Leasing and Financial Services (IL&amp;FS) is likely to soon appoint an independent professional agency to get a clear picture of the company’s real situation, sources said. The Board is scheduled to meet for the second time next week before October 15. On Wednesday, Board chairman Uday Kotak and members Vineet Nayyar and C S Rajan met Union corporate affairs secretary Injeti Srinivas in Delhi to give him a first-hand assessment of the firm’s current position.&nbsp;

The first Board meeting was held in Mumbai on October 4, three days after the new Board was appointed by the government, replacing the old one following a National Company Law Tribunal’s order. “We are consulting the government and making progress,” Kotak said after meeting the secretary.

“The Board is looking at hiring independent specialised professionals to do due diligence and fact-finding for them,” the source said.

The government feels that further efforts are required to get a clear picture of the real situation of IL&amp;FS.&nbsp;So far, only a partial picture has emerged. Sources said a possibility of fraud cannot be ruled out.

The government has so far maintained it to be a case of mismanagement and misrepresentation of facts. The Serious Fraud and Investigation Office, which is probing the firm and its group companies, is likely to give its report in a month.

The debt-stricken firm has been found to have equity in several other companies, including some offshore entities, which led to a jump in the number of subsidiaries of IL&amp;FS, sources said.

While the government had put the number of group companies of IL&amp;FS at 169, Kotak said there were 348 subsidiaries. 
Sources said that the debt-laden company will need around Rs 100 crore a month to stay afloat. It has, however, not made any demand for funds from the government.

“We need to fulfil the working capital requirement, contractual and repayment obligations for the company to stay afloat,” said an official, adding that Rs 100 crore is needed apart from repayment obligations.

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The Board will also look at cutting unnecessary expenditure which may also involve layoffs. “It will have to take tough decisions,” the source said. The Board has already reached out to NHAI for settlement of claims and disputes.

Source: DNA Money

The government has so far maintained it to be a case of mismanagement and misrepresentation of facts. The Serious Fraud and Investigation Office, which is probing the firm and its group companies, is likely to give its report in a month.


Good news! On IL&FS, Uday Kotak says 'we are making progress'

Hyundai Santro 2018: Country’s second largest car maker Hyundai Motor India Ltd (HMIL) on Tuesday brought back its popular Hyundai Santro car, about four years after it had phased it out. Y K Koo, managing director and chief executive of HMIL, expects around bookings of around 50,000 units before the car’s actual launch later this month on October 23. At present, online booking has been initiated for the token amount of Rs 11,100 for the first 50,000 customers.

Speaking at the unveiling session of the car, Koo said, “Since its first launch, Santro created history with its numerous segment-first innovations and became the complete family car for millions of Indians.”

According to the company officials, the relaunch of Hyundai Santro is expected to create a stir in the fast-growing entry-level hatchback segment, which drives the volumes.

<h2>Hyundai Santro 2018 Price:</h2>

 
The expected price of the new Hyundai Santro is around Rs 4 lakh and industry insiders claim that the car will compete against Maruti Suzuki’s WagonR, Renault’s Kwid and Tata Motors’s Tiago.

HMIL has been losing market share in the hatchback segment to rivals Maruti Suzuki, Tata Motors and others. As a result, it decided to bring back Santro in a new avatar, say experts.

<h2>Hyundai Santro 2018 Features:</h2>

 
The car will be powered by a 4-cylinder 1.1-litre petrol engine and debut smart automated manual transmission and offer factory fitted CNG option. It will also feature 17.64 cm touch screen audio video system equipped with smartphone connectivity - Android auto, Apple Carplay and Mirror Link along with supporting voice recognition function and rear parking camera display on screen.

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Santro was first launched in September 1998, around two years after HMIL forayed into India.

New Hyundai Santro 2018: According to the company officials, the relaunch of Hyundai Santro is expected to create a stir in the fast-growing entry-level hatchback segment, which drives the volumes.&nbsp; How to book Hyundai Santro 2018? Check booking Amount and Lunch Date.


Hyundai Santro 2018 Booking Amount: Iconic car is back, book it for just Rs 11,100

The rupee remained under pressure as it dropped 32 paise to another record low of 74.39 per dollar on Tuesday, over the previous close of 74.07. Asian currencies across the board traded lower with the South Korean won down 0.23%, Thai Baht 0.16%, Indonesian rupiah 0.13%, Singapore dollar 0.13%, Hong Kong dollar 0.06% and Taiwan dollar falling 0.06%.

“We expect rupee weakness to persist, heading to 75 against the dollar even as we see a less probability of any unconventional policy measures amid comfortable forex war chest. We do not fully rule it out if the rupee remains volatile and an emerging market outlier in the fragile forex space,” Madhavi Arora, economist, Fx &amp; rates at Edelweiss Securities, said in a note.

Over the weekend China reduced its reserve requirement ratio by 100 basis points, or 1%, to support growth by infusing liquidity. RBI maintained a status quo on the rates it lends to banks for the same reason.&nbsp;

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Experts said the central bank did not want to topple the apple cart and push up rates in the domestic debt market when the green shoots of an economic revival were visible.

Source: DNA Money

Over the weekend China reduced its reserve requirement ratio by 100 basis points, or 1%, to support growth by infusing liquidity. RBI maintained a status quo on the rates it lends to banks for the same reason.&nbsp;


Unbelievable, but your rupee set to hit Rs 75 mark vs US dollar   

Information technology, commodities and retail banks would drive profits in July-September quarter of this fiscal while the overall earnings of the corporate sector will remain tepid, according to stock brokerages. In its earnings preview, Edelweiss Securities said the second quarter is expected to be tepid with year-on-year profit growth for companies in its coverage universe likely to rise 3% and for corporate banks likely to contract 1%.

“This weakness is attributable to rising base and headwinds from input prices, and interest expenses rising ahead of growth cycle. The slowdown in profit growth is broad-based with rupee, interest rate and input prices being the swing factors,” the report said.

According to the Edelweiss report, over 15% profit growth is expected in commodities, retail banks and non-banking financial services, while domestic autos, pharma, cement and industrials are likely to post flat profit growth. Domestic auto has posted 20% of average growth over the last four years, it said.

A deep profit contraction is anticipated for sectors such as telecom, airlines, corporate banks and export auto. Phillip Capital India Research in its preview said the highest profit after tax growth will be seen in IT, NBFC, FMCG, speciality chemicals and capital goods while pharma, infra, cement, automobiles and banks will see contraction. However, FMCG earnings will be a “drag” in the second quarter due to the GST led high base and inflationary pressures.

“Rupee weakness to benefit IT services and pharma (revenues), pharma earnings would remain weak,” it said. For financials, margins will remain under pressure due to no major resolutions, while credit growth would gain momentum. NBFCs’ earnings growth is likely to be strong at 36%, aided by low base. For pharma, revenues will benefit from currwency weakness, but operating performance will be weak due to ongoing price pressure in the US generics business and higher raw material costs due to Chinese supply disruption.

Source: DNA Money

Information technology, commodities&nbsp; and &nbsp;retail banks would drive profits in&nbsp; July-September &nbsp;quarter of this fiscal while the overall earnings of the corporate sector will remain tepid, according to stock brokerages.&nbsp;


India Inc Q2 earnings: As rupee weighs, Banks, FMCG, NBFCs set to bring succour

Nearly four out of 10 consumers, that is, 40% of those purchasing health insurance online prefer a minimum cover of Rs 5 lakh, according to a study by Policybazaar.com Product &amp; Innovation Centre (PIC), indicating that the average health insurance has increased from Rs 2 lakh to Rs 5 lakh. The study took into account the buying behaviour of 10,000+ consumers purchasing health insurance online across 20 states.

Nearly 22% of those surveyed opted for Rs 3 lakh cover, while 12% opted for Rs 10 lakh cover. According to the study, those in the age group 26-45 years were the most active when it came to buying health insurance online. Of those surveyed, nearly 75% belonged to this age group.

Source: DNA Money

Nearly four out of 10 consumers, that is, 40% of those purchasing health insurance online prefer a minimum cover of Rs 5 lakh, according to a study.


Health insurance: What do online buyers prefer

The new Board of IL&amp;FS headed by non-executive chairman Uday Kotak has revealed that the infrastructure financier has a maze of 348 entities. This means that the debt could far exceed the Rs 91,000 crore liabilities that was earlier estimated. Initial assessment had revealed that the financier has 169 subsidiaries.

Uday Kotak, the non-executive chairman of the Board, said at a press conference that “it is a complex structure with a number of subsidiaries. We need to assess the exact extend of liabilities. There are bank loans, NCDs, preference capital and there is off balance-sheet exposure and contingent liabilities. So in that sense it is far more complex than the Satyam case. The debt of Rs 91,000 crore was as of March 31, 2018. So that figure is a moving one.”

Calling the scale of the crisis in IL&amp;FS much bigger than Satyam, Kotak said, “There are three to four options before the newly constituted Board and the Board will take steps to preserve the value. Unlike the Satyam case, they have not found any evidence of felony so far.”

“We are a legally constituted body unlike a shareholder led Board. The Board will meet frequently to prepare the roadmap” added Kotak.

The Board will ensure that an enabling environment is created so that the institution can carry on its work, said Vineet Nayyar, vice-chairman and MD of IL&amp;FS.

The committee, in the meantime, has formed four committees the audit committee headed by board member Nand Kishore, nomination and a remuneration committee headed by Uday Kotak, a stakeholders’ committee headed by former Sebi chairman G N Bajpai, and a corporate social responsibility committee headed by ex-bureaucrat Malini Shankar.

“We have four different options before us so that we protect the intrinsic value of the institution. We will study those in detail and decide the best way forward,” said Kotak.

The Board is expected to meet frequently to work out a resolution plan that may involve sale of its non-core assets, a rights issue among others.

Source: DNA Money

The new Board of IL&amp;FS headed by non-executive chairman Uday Kotak has revealed that the infrastructure financier has a maze of 348 entities. This means that the debt could far exceed the Rs 91,000 crore liabilities that was earlier estimated. Initial assessment had revealed that the financier has 169 subsidiaries.


Uday Kotak says IL&FS debt is over Rs 91,000 crore, has whopping maze of 348 entities, not just 169; worse than Satyam  

Reserve Bank of India (RBI) countered the rupee fall on Wednesday by allowing oil marketing companies (OMCs) to raise foreign loans to fund their working capital needs under the automatic route with immediate effect. With the rupee closing at Rs 73.34 against the dollar and Brent price touching $85 a barrel, RBI was forced to push the oil companies demand for dollars out of the market.&nbsp; &nbsp;

The rupee, which has weakened 14.82% this calendar year, opened at 73.26 against the dollar on Wednesday, lower than its previous close of Rs 72.91 and hit a new all-time low of Rs 73.41 during the day. By taking the oil marketing companies away from the market, RBI hopes to keep the demand for dollars under check.

“All state-run OMCs will now be able to raise external commercial borrowings (ECBs) for working capital purposes with a minimum average maturity of three to five years from all recognised lenders under the automatic route,” the central bank said in a late evening release.

The $750 million cap for individual state-run refiners has been waived off while the overall annual foreign currency borrowing under the new norms has been capped at $10 billion with immediate effect. Under the current regulations, the OMCs are allowed to raise ECBs from direct or indirect shareholders or group companies if the loan is for an average maturity of five years.

“This will allow the country to borrow foreign currency from the market via the oil companies,” Ananth Narayan, a currency expert and professor at SP Jain Institute of Management, said.

“In the short run, this should take away the demand for dollars and help strengthen the rupee. Of course, the oil companies will take on a substantial currency risk. While this is a good step to control the short-term sentiment and buy us time, we still need to address our core issues around the current account deficit,” Narayan said.

Conscious of the forex risk, RBI has asked the OMCs to have a Board approved forex mark-to-market procedure and prudent risk management policy, for such ECBs.

“The last time when RBI had opened a similar window in 2013 there was also a swap window of the central bank, but this time the Boards have to decide on the hedging mechanism. The rates in the overseas markets are also not soft, there is liquidity but it will come at a cost,” said Bhaskar Panda senior vice-president, treasury advisory group, HDFC Bank. The swap window subsidised some of the borrowing cost for the companies.

According to the provisional data from Securities and Exchange Board of India on the foreign inflows into equities show that investors&nbsp; withdrew Rs 1,550 crore on a net basis from capital markets on Wednesday.

The dollar index improved by 1.2% to 1.3%, which led to the dollar appreciating against a host of Asian currencies and also to the euro and yen after news came in that US added a record number of jobs.

“The oil window will be a&nbsp; great relief for the market,” Ritesh Bhansali, assistant vice-president, forex risk consulting, Mecklai Financial.

The dollar index improving and the foreign investors withdrawing money from Indian equities is creating a scarcity of dollars in the domestic market. “Foreign portfolio investors have withdrawn $3 billion from the Indian markets in September alone, which is putting tremendous pressure on the rupee. The escalating oil prices is another big dampener,” Bhansali said.

Source: DNA Money

Reserve Bank of India (RBI) countered the rupee fall on Wednesday by allowing oil marketing companies (OMCs) to raise foreign loans to fund their working capital needs under the automatic route with immediate effect.


Indian rupee suffers big crude blow, RBI scrambles, orders risky move

Mumbai: A month after a wave of rate hikes hit home hunters in September, home loan rates are going up again.&nbsp;What is baffling home buyers is the fact that the fresh hikes, just announced effective October 1, on the eve of the Reserve Bank of India’s (RBI) bi-monthly monetary policy, are not the end of the rate hike cycle. It is just gaining momentum as RBI is attempting to shore up a falling rupee.

Analysts and bankers believe that RBI may be all set to hike the policy rate on Friday (October 5) for third time in a row, and it is bound to trigger another round of hikes soon. Your equated monthly installments (EMIs) will be at the receiving end.

The policy review closely follows two others in which the central bank hiked the repo rate (the rate at which RBI lends to banks) 25 basis points (bps) each.

Last week, State Bank of India (SBI) hiked the marginal cost of funds based lending rate (MCLR) by five bps across the board with effect from October 1.

Several others have followed suit over the last couple of days. ICICI Bank, Punjab National Bank and Housing Development Finance Company (HDFC) have all increased their MCLR and retail prime lending rate (RPLR) by 5-10 basis points.

MCLR is the benchmark lending rate used to lend by banks and RPLR is used by non-banking finance companies. One basis point is one-hundredth of a percentage point.

SBI hiked the rate after the bank’s asset liability committee met on the evening of September 27.

It said one-year MCLR, which is the benchmark rate to which most of the loans, including to the retail, SME and corporate segments, is 8.5% against 8.45% earlier.

Home loan rates of the lender now range from 8.70% to 8.95%, with women borrowers getting a relaxation of five bps. Loans up to Rs 30 lakh are available at 8.70%, bigger loans between Rs 30 lakh to Rs 75 lakh at 8.85% and all loans above Rs 75 lakh at 8.95%.

If there is a reset clause, then the rates on the home loans also get revised. A year ago, in November 2017, the one-year MCLR of India’s largest bank was 7.95%. In March 2018, this rate moved up to 8.15%. Recently, on September 1, rates were hiked by 0.20%.

For an amount of Rs 30 lakh, SBI will now provide home loan at 8.70-8.85%, up from 8.65%-8.80%.

ICICI Bank has increased its six-month MCLR from 8.50% to 8.60% and one-year MCLR to 8.65% from 
8.55%.

The bank charges a ‘spread’ ranges between 30 bps and 90 bps, depending on the type of loan, type of borrower and the loan amount. Loans are available on both six-month and one-year MCLR. HDFC is providing home loans at 8.80-8.85% for a loan amount up to Rs 30 lakh, up from 8.70-8.75%.

Soumya Kanti Ghosh, group chief economic adviser of SBI, said in a note that he expected a 25 bps hike in repo rate in October policy.

“As the case is similar to the 2013 currency crisis, RBI should raise the policy repo rate at least 25 bps. We rule out a hike of 50 bps, as it may spook the market. However, there is an outside probability of change in neutral stance too, as three successive rate hikes with a neutral stance could contradict RBI message,” he said in the note.

Watch this Zee Business video

<iframe allow="autoplay; encrypted-media" allowfullscreen="" frameborder="0" height="315" scrolling="no" src="https://www.youtube.com/embed/draVv2x4CWY" width="100%"></iframe>

Some analysts believe that RBI may be forced to go for two more rounds of rate hikes in this financial year to shore up rupee.

Source: DNA Money

Analysts and bankers believe that RBI may be all set to hike the policy rate on Friday (October 5) for third time in a row, and it is bound to trigger another round of hikes soon. Your equated monthly installments (EMIs) will be at the receiving end.


DNA Money Correspondent