Today Sector News – 01.10.2018
* AVIATION: Debt-laden Air India's dues to vendors have hit unmanageable levels, forcing the aviation ministry to write to the finance ministry asking it to urgently decide on funding the national carrier. The government owes Air India 11.47 bln rupees for VVIP charter flights, according to the latest response from the national carrier to an RTI application.
* BANKING: At a time when markets are concerned about the contagion effect of Infrastructure Leasing & Financial Services to the rest of the sector, data from Reserve Bank of India shows that banks' lending to non-bank finance companies actually rose 43.9% on year at the end of August. Nachiket Mor's second tenure on the central board of the RBI has been cut short by the government abruptly earlier this month, with more than half the term to be completed.
* COMMODITIES: The government has approved 114 proposals by sugar mills across the country for enhancement of ethanol production capacity. For these proposals, the Centre will facilitate soft loans worth 61.39 bln rupees to sugar factories.
- The government has restricted sugar sales by mills in the country at 2.2 mln tn for October in a bid to trim supply in the market. Jittery about the surplus sugar output in the country, the government has mandated mills to export total 5 mln tn sugar during 2018-19 (Oct-Sep) under the Minimum Indicative Export Quantity scheme.
* CONSUMER GOODS: The High Court of Chhattisgarh has directed the state government to frame a new liquor procurement policy within a month, ruling in favour of Diageo and Pernod Ricard, which had alleged unfair practices by the government.
* ECOMMERCE: Amazon has started a new programme 'Select' in India to help emerging brands in the country get access to a suite of brand building tools and services. E-commerce operators will have to register themselves in every state where their suppliers are located for collection of tax collected at source and foreign companies can appoint an 'agent' on their behalf for securing such registration, the Central Board of Indirect Taxes and Customs has said.
* EXCHANGES: The National Stock Exchange said it has received the Securities and Exchange Board of India's approval to launch gold and silver futures and the launch date has been fixed for Oct 12.
* FINANCE: Economic Affairs Secretary Subhash Chandra Garg on Friday met shareholders of beleaguered Infrastructure Leasing & Financial Services to understand the factors that led to the failure of IL&FS in servicing its debt obligations. The government will borrow 2.47 trln rupees through dated securities in Oct-Mar, reducing the total gross market borrowing for the current financial year by 700 bln rupees, Economic Affairs Secretary Subhash Chandra Garg said.
- LIC Mutual Fund on Friday said IL&FS Securities Services, a group company of troubled Infrastructure Leasing & Financial Services, has cleared payments worth 2.95 bln rupees. The rupee may strengthen against the US dollar from its current levels to settle in the range of 69.00-70.00 a dollar over a one-year period as the upward rally in the greenback is likely to reverse, Abheek Barua, chief economist, HDFC BANK said.
- Insurance companies have been asked to declare their exposure to liquidity-strapped Infrastructure
Leasing & Financial Services and its group firms by the sector regulator. IL&FS Financial Services has defaulted on payment of its obligations, which were due Saturday. The board of Infrastructure Leasing & Financial Services has announced hiring Alvarez & Marsal to draft and execute a restructuring plan for the group.
* INFORMATION TECHNOLOGY: While Accenture Plc has forecast lower than expected revenue
growth inc fiscal year 2018-19 (Sep-Aug), its performance in Jun-Aug indicates that the spending environment is strong, which augurs well for Indian technology companies.
* INSURANCE: The Insurance Regulatory and Development Authority of India has allowed distribution of all micro-insurance products through point-of-sales.
* OIL AND GAS: The government on Friday raised the price of domestically produced natural gas to $3.36 per mBtu for Oct-Mar, from $3.06 per mBtu in Apr-Sep on gross calorific value basis, the oil ministry said. Prime Minister Narendra Modi has inaugurated a string of development projects in Gujarat, including a 5 mtpa capacity liquefied natural gas terminal at Mundra and a chocolate factory of the Gujarat Cooperative Milk Marketing Federation in Anand.
- The government is considering a plan to sell liquefied petroleum gas blended with methanol, which could help reduce its cooking gas subsidy by around a third at current prices. State oil marketing companies have hiked aviation turbine fuel price by 7.25% in October. The price of subsidised cooking gas on Sunday was hiked by 2.89 rupees per cylinder to 502.4 rupees per cylinder.
* PHARMACEUTICALS: The Delhi High Court has further extended till Nov 1 its stay on the central government's Apr 27 notification that banned manufacture and domestic sale of oxytocin by private companies.
* POWER: An investment arm of financial services company Edelweiss is closely evaluating buying out 140 MW of solar power assets at the Bhadla solar park in Rajasthan. Power tariff on Sunday touched a decade high of 17.61 rupees per unit in the spot market due to low hydro and wind energy production and coal shortage at thermal plants.
* RAILWAYS: The Indian government and the Japan International Cooperation Agency have signed a loan agreement worth 55.91 bln rupees for construction of the Mumbai-Ahmedabad high-speed rail project.
* REGULATORY: The government has invited applications to fill posts of two whole-time members at Insurance Regulatory and Development Authority of India for a tenure of up to five years.
* TELECOMMUNICATION: Telecom tower players are in discussions with the government to lease out fibre from BharatNet, the broadband network to connect rural hinterlands. The Department of Telecommunications is planning to speed up the process of wireless license allocations by taking it online as part of various steps to facilitate ease of doing business in the sector.
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* BANKING: At a time when markets are concerned about the contagion effect of Infrastructure Leasing & Financial Services to the rest of the sector, data from Reserve Bank of India shows that banks' lending to non-bank finance companies actually rose 43.9% on year at the end of August. Nachiket Mor's second tenure on the central board of the RBI has been cut short by the government abruptly earlier this month, with more than half the term to be completed.
* COMMODITIES: The government has approved 114 proposals by sugar mills across the country for enhancement of ethanol production capacity. For these proposals, the Centre will facilitate soft loans worth 61.39 bln rupees to sugar factories.
- The government has restricted sugar sales by mills in the country at 2.2 mln tn for October in a bid to trim supply in the market. Jittery about the surplus sugar output in the country, the government has mandated mills to export total 5 mln tn sugar during 2018-19 (Oct-Sep) under the Minimum Indicative Export Quantity scheme.
* CONSUMER GOODS: The High Court of Chhattisgarh has directed the state government to frame a new liquor procurement policy within a month, ruling in favour of Diageo and Pernod Ricard, which had alleged unfair practices by the government.
* ECOMMERCE: Amazon has started a new programme 'Select' in India to help emerging brands in the country get access to a suite of brand building tools and services. E-commerce operators will have to register themselves in every state where their suppliers are located for collection of tax collected at source and foreign companies can appoint an 'agent' on their behalf for securing such registration, the Central Board of Indirect Taxes and Customs has said.
* EXCHANGES: The National Stock Exchange said it has received the Securities and Exchange Board of India's approval to launch gold and silver futures and the launch date has been fixed for Oct 12.
* FINANCE: Economic Affairs Secretary Subhash Chandra Garg on Friday met shareholders of beleaguered Infrastructure Leasing & Financial Services to understand the factors that led to the failure of IL&FS in servicing its debt obligations. The government will borrow 2.47 trln rupees through dated securities in Oct-Mar, reducing the total gross market borrowing for the current financial year by 700 bln rupees, Economic Affairs Secretary Subhash Chandra Garg said.
- LIC Mutual Fund on Friday said IL&FS Securities Services, a group company of troubled Infrastructure Leasing & Financial Services, has cleared payments worth 2.95 bln rupees. The rupee may strengthen against the US dollar from its current levels to settle in the range of 69.00-70.00 a dollar over a one-year period as the upward rally in the greenback is likely to reverse, Abheek Barua, chief economist, HDFC BANK said.
- Insurance companies have been asked to declare their exposure to liquidity-strapped Infrastructure
Leasing & Financial Services and its group firms by the sector regulator. IL&FS Financial Services has defaulted on payment of its obligations, which were due Saturday. The board of Infrastructure Leasing & Financial Services has announced hiring Alvarez & Marsal to draft and execute a restructuring plan for the group.
* INFORMATION TECHNOLOGY: While Accenture Plc has forecast lower than expected revenue
growth inc fiscal year 2018-19 (Sep-Aug), its performance in Jun-Aug indicates that the spending environment is strong, which augurs well for Indian technology companies.
* INSURANCE: The Insurance Regulatory and Development Authority of India has allowed distribution of all micro-insurance products through point-of-sales.
* OIL AND GAS: The government on Friday raised the price of domestically produced natural gas to $3.36 per mBtu for Oct-Mar, from $3.06 per mBtu in Apr-Sep on gross calorific value basis, the oil ministry said. Prime Minister Narendra Modi has inaugurated a string of development projects in Gujarat, including a 5 mtpa capacity liquefied natural gas terminal at Mundra and a chocolate factory of the Gujarat Cooperative Milk Marketing Federation in Anand.
- The government is considering a plan to sell liquefied petroleum gas blended with methanol, which could help reduce its cooking gas subsidy by around a third at current prices. State oil marketing companies have hiked aviation turbine fuel price by 7.25% in October. The price of subsidised cooking gas on Sunday was hiked by 2.89 rupees per cylinder to 502.4 rupees per cylinder.
* PHARMACEUTICALS: The Delhi High Court has further extended till Nov 1 its stay on the central government's Apr 27 notification that banned manufacture and domestic sale of oxytocin by private companies.
* POWER: An investment arm of financial services company Edelweiss is closely evaluating buying out 140 MW of solar power assets at the Bhadla solar park in Rajasthan. Power tariff on Sunday touched a decade high of 17.61 rupees per unit in the spot market due to low hydro and wind energy production and coal shortage at thermal plants.
* RAILWAYS: The Indian government and the Japan International Cooperation Agency have signed a loan agreement worth 55.91 bln rupees for construction of the Mumbai-Ahmedabad high-speed rail project.
* REGULATORY: The government has invited applications to fill posts of two whole-time members at Insurance Regulatory and Development Authority of India for a tenure of up to five years.
* TELECOMMUNICATION: Telecom tower players are in discussions with the government to lease out fibre from BharatNet, the broadband network to connect rural hinterlands. The Department of Telecommunications is planning to speed up the process of wireless license allocations by taking it online as part of various steps to facilitate ease of doing business in the sector.
