BHEL disinvestment likely in April

The Disinvestment Department has completed overseas roadshows for BHEL stake sale in London, Singapore and Hong Kong, says report. 

The government is planning to divest list of PSUs next fiscal, according to reports.

Report said that BHEL divestment is likely in April.

The Disinvestment Department has completed overseas roadshows for BHEL stake sale in London, Singapore and Hong Kong, says report.

Other companies which are on the block include NMDC, NALCO and IOC, with 10% stake sale proposal each. 

Crompton Greaves plans to sell 35% stake in consumer durables business: Reports

The stock was down 1% at Rs 172.

Crompton Greaves is planning to sell 35% stake in its consumer durables business to private equity firm Advent for $300 mn, according to reports.

The announcement is expected soon.

The stock was down 1% at Rs 172. 

The stock has hit a high of Rs 175 and a low of Rs 170.

Total traded quantity on the counter stood at over 1.93 lk shares

Natural gas price to be reduced by 10% from April 1

Report said that the new rate will be around $5.02 per million British thermal unit (mmBtu) as compared to the current price of $5.61. 

Domestic natural gas prices are likely to be reduced by over 10% to $5.02 per unit from April 1, according to reports.

Report said that the new rate will be around $5.02 per million British thermal unit (mmBtu) as compared to the current price of $5.61.

On a gross-calorific value basis, the price will be around $4.67 per mmBtu as compared to $5.05 currently.

Oil Ministry is planning to announce the new rates sometime this week

Sensex, Nifty slip further ahead of Fed policy meet

The BSE Sensex has shed almost 100 points. The Volatility index has jumped 1%.

The market continues to trade on a negative note on the back of sustained selling in select shares.

HDFC is the major dragger today, which alone accounted for a decline of 35 points for the BSE Sensex.

At 11:42AM, the BSE Sensex is down 77 points at 28,659. The NSE Nifty is down 24 points at 8,700.

The Volatility index - India VIX -  has jumped 1 per cent at 15.28.

Sectorwise, the CNX IT and the CNX Auto indices have dropped 0.3-0.4 per cent at 12,346 and 8,773, respectively.

On the other hand, the CNX PSU index is the top gainer - up 1 per cent.

Among Banking stocks - IDBI is the top gainer - up 2.5 per cent at Rs. 77.40. Bank of India and Andhra Bank has spurted around 2 per cent each at Rs. 222 and Rs. 80.85, respectively.

Oriental Bank of Commerce has added 1.6 per cent at Rs. 239. Syndicate Bank, Canara Bank and Punjab National Bank are among the prominent gainers.

So far, around 28 stocks have hit 52-week high, while 47 stocks have registered 52-week low.

Dynamatic Tech soars to 52-week high

The stock has soared 12 per cent after RBI lifted curb on fresh FII purchases. 

Dynamatic Technologies has soared to a fresh 52-week high this morning on the back of near 5-fold jump in volume.

The buying at the counter is attributed to media reports that the Central Bank (RBI) has lifted its ban on fresh purchases of the stock by FIIs. Reports added, that FIIs can now buy up to 25 per cent of the equity stake in Dynamatic Technologies.

The stock has registered a fresh 52-week high at Rs. 3,444, and is now up 12.4 per cent at Rs. 3,390. The counter has seen trades of around 9,317-odd shares so far on the BSE as against the two-week daily average volume of around 1,947-odd shares.

Meanwhile, the Sensex has declined 80 points to 28,657.

Block deal on Federal Bank; stock slips

Around 40 lakh shares were traded in a single block at Rs. 140.25 on BSE.

Shares of Federal Bank were trading lower at Rs.140.30 on BSE today.

The stock opened at Rs.142 as against the previous close of Rs.141 on BSE. It has hit a high of Rs.142 and a low of Rs.139 on BSE today.

Around 40 lakh shares were traded in a single block at Rs. 140.25 on BSE. Total traded quantity on the counter stood at over 0.29 lk shares on BSE.

Meanwhile, the benchmark BSE Sensex is trading at 28,643 down 93 points 

There is no provision in the Companies Act, 2013 for blacklisting of Cos: FM

Inputs have been received from Ministry of Defence regarding twelve companies with which business dealings have been suspended. 

There is no provision in the Companies Act, 2013 for blacklisting of Companies. 

Inputs have been received from Ministry of Defence regarding twelve companies with which business dealings have been suspended. 

Ministry of Defence has stated that none of these companies has been removed from the list of barred companies and no contracts for capital procurement have been signed with the firms debarred from further business dealing by Ministry of Defence after the issue of the debarment orders. 

This was stated by Shri Arun Jaitley, Minister of Corporate Affairs in written reply to a question in the Rajya Sabha today. 

Just Dial plans Rs. 100 cr ad spend in FY15-16: Ramkumar Krishnamachari

The total ad spend that we are anticipating for the year 2015-16 would be to the tune of total of about Rs 100 crore says Krishnamachari. 

With the announcement by Just Dial to invest Rs. 100 crore for starting a mega campaign to popularise the Search Plus business, the company elicited a positive response from the brokerage houses and market experts.

In an interview with CNBC TV18, Ramkumar Krishnamachari, CFO of search engine company, Just Dial, said that the launch will take place in April. Presently, 23 products are already live and couple of products are awaited to go live on the mobile platform. To reach the mass consumer for launching the new service, they will spend on both print and television adverstisements, which will start from April-May. As the company will start spending from next financial year, they believe margins to remain stable as in Q2 and Q3 in this quarter.

"There will be a one time spend, the total ad spend that we are anticipating for the year 2015-16 would be to the tune of total of about Rs 100 crore. A substantial portion of this will be one time spending. Thereafter the regular ad spend would be to the tune of 4-5 percent of revenue. This year being the launch year we have to spend. If you exclude the one time spend, the margins we are seeing despite investment in Search Plus is going to be stable and with a likelihood of an upward bias", he said

Talking about the use of Search Plus for the consumers, he said, "What we have essentially done is to make life easier, simple for the consumers and users to make transactions. So any transaction that you can think of be it ticketing, ordering food or fixing an appointment or buying any goods, we have integrated all these transaction on a single platform, on a single app. As a consequence from user perspective they just have to come to our platform, download this single app and do all multiple things in the process. They will be able to discover real time best price for any of the product that they plan to buy and be able to save time and experience a great transaction".

Being part of one of the most booming platform, Just Dial is battling with its competitor companies like Zomato, bookmyshow, etc to reach the consumers.

When asked Krishnamachari how the company is planning to gain user traction while competing with other search engines, he said, "So far Just Dial was known as search destination. However, with the launch of transaction we will be known as search and transaction destination. The users will discover that it doesn't matter, if you want to book a ticket, you do not care from which interface you get a ticket as long as you get a ticket in the most easiest and convenient manner and we are going to provide that and similar is with food order or reserving a table. You keep your personal information, your credit cards in one place. Your personal information or your credit card information will be stored in one place and apart from convenience you will discover real time best prices from offline vendor, which is unique, which is not there anywhere in the world and then the convenience of having the goods delivered in five-seven hours time. So the value proposition to the users is immense".

Infosys plans $500-700 mn acquisitions: Reports

The company also plans to expand its reach in the US business segment.

India’s second-largest IT services exporter Infosys is planning $500-700 million acquisitions, according to reports.

Report said that the company is focusing on certain business verticals.

The company also plans to expand its reach in the US business segment.

The company has a cash reserves of $5.5 bn as of December 2014

RBI Instructs Banks Not To Imported Gold To Jewellers On Outright Basis

RBI Instructs Banks Not To Imported Gold To Jewellers On Outright Basis 

The Reserve Bank of India has asked the banks not to sell gold imported on consignment basis to jewellers on outright basis.

 On 18th February the central bank allowed banks to import gold on consignment basis and also allowed them to provide gold metal loans to jewellers. However, banks were found importing gold on consignment basis and selling that to jewellers against full payment. 

Now RBI has said that gold imported on consignment basis, where payment is to be made after realisation of money after sale, can be used only for providing gold metal loans to jewellers. The loan is for a tenure of 180 days.

Wipro allots 14643 equity shares of Rs. 2/- each

The company also announced that Administrative Committee of the Company's Board of Directors vide Circular Resolution effective date March 17, 2015 resolved to issue and allot 5139 equity shares of par value of Rs. 2/- to JP Morgan Chase Bank

Wipro Ltd has announced that Administrative Committee of the Company's Board of Directors vide Circular Resolution effective date March 17, 2015 resolved to issue and allot 14643 equity shares of Rs. 2/- each pursuant to exercise of the stock options by the eligible employees under Restricted Stock Unit Plan 2005 and Restricted Stock Unit Plan 2007.

The company also announced that Administrative Committee of the Company's Board of Directors vide Circular Resolution effective date March 17, 2015 resolved to issue and allot 5139 equity shares of par value of Rs. 2/- to JP Morgan Chase Bank, the Company’s depository as underlying shares in respect of ADRs to be issued and allocated to the purchasers, pursuant to the exercise of the stock options granted to the employees under the Company’s ADS Restricted Stock Unit Plan-2004.

The stock was down 0.335 at Rs 633

The stock has hit a high of Rs 646 and a low of Rs 639.

Govt to reduce holding in public sector banks: Jayant Sinha

“The government will continue to support those banks with alternative strategies which will still not be able to raise capital,” Jayant Sinha says

To ensure that the capital needs of banks are met, the government has decided to reduce its holding in public sector banks to 52%, Parliament was informed on Tuesday.

The government holding in these banks would be reduced in a phased manner.

“The government will continue to support those banks with alternative strategies which will still not be able to raise capital,” Minister of State for Finance Jayant Sinha said in a written reply to the Rajya Sabha.

The government has been using different criteria in various years for infusion of capital in PSBs, he said

World looking to India to lead the path to higher, sustainable, and inclusive growth: IMF

In her speech titled Spillovers from Unconventional Monetary Policy Lessons for Emerging Markets, Christian Lagarde, IMF Managing Director, said, global growth is still fragile and uneven. 

It is indeed a privilege to share the stage with Dr. Rajan, one of the world’s most highly regarded financial economists, one whom the Fund is fortunate enough to have had as its Economic Counselor. Raghu certainly has been very busy since he took over Governor of the RBI in September 2013. He has deftly steered the Indian economy to safer waters after it was hit by the market turmoil following the “taper tantrum” episode of mid-2013—a point I will come back to shortly.
 


More recently, India has introduced flexible inflation targeting as the new regime for conducting monetary policy—a very welcome step.
 
As India’s monetary policy rests in good hands, let me talk about a topic that I know has been as important a concern for this central bank—as it has been for your colleagues in other emerging market countries. I am referring, of course, to the unconventional monetary easing in the large advanced economies following the global financial crisis.
 
We are perhaps approaching the point where, for the first time since 2006, the United States will raise short term interest rates later this year, as the first country to start the process of normalizing its monetary policy. Even if this process is well managed, the likely volatility in financial markets could give rise to potential stability risks.
 
Let us think today about the risks of such monetary policy “spillovers” – as we have called them – and what can be done to minimize their potentially adverse consequences.
 
1. State of the Global Economy and Challenges
 
It is best to begin this discussion by placing it into the context of current global developments, and the risks that the world economy is still facing.
 
Global growth is still fragile and uneven. Despite a boost to global growth from a decline in oil prices, we now expect the world economy to grow by about 3.5 percent this year, picking up modestly next year to 3.7 percent.
 
The outlook differs significantly across countries and regions. In advanced economies, growth has rebounded in the United States and the United Kingdom and is expected to remain above trend in the near term, but activity is strengthening only gradually.
 
By contrast, in the euro area and Japan, domestic demand, especially credit to private sector and investment, has yet to recover fully.
 
In emerging markets and developing countries, growth is projected to pick up from less than 4.5 percent this year to a little more next year, but it will vary widely across countries as well.
 
Among the emerging markets, India is shining brightly. No doubt India has seen a windfall gain from a sharp drop in oil prices – as have other oil importing countries. More importantly, however, India is reaping the benefits of good policies and policy announcements.
 
My meetings with Prime Minister Modi and Finance Minister Jaitley yesterday have left me strongly convinced that the new government is skillfully shifting the focus to good macroeconomic management, clean and efficient government, and inclusive development. This has raised business confidence and hopes for all levels of Indian society, and is borne out by the latest GDP statistics which suggest a strong pace of economic activity this year and next.
 
Challenges
 
Yet many challenges lie ahead for the global economy, of which two are particularly relevant for India.
 
The first challenge is the recent strengthening of the U.S. dollar that has resulted from the relatively strong U.S. recovery combined with the divergence of monetary policy paths in advanced economies. This has put pressure on countries whose exchange rate regimes are linked to the dollar but yet conduct a substantial share of their external trade in other currencies, as well as on sovereigns who have borrowed in foreign currency heavily.
 
The appreciation of the U.S. dollar is also putting pressure on balance sheets of banks, firms, and households that borrow in dollars but have assets or earnings in other currencies. India’s corporate sector, which has borrowed heavily in foreign currency, is not immune to this vulnerability. Corporate sector debt has risen very rapidly, nearly doubling in the last 5 years to about US$120 billion.
 
The second challenge, and here we come to the main theme of my remarks, is the prospective normalization of monetary policy in the United States and its spillovers to emerging markets. The risk of financial market and capital flow volatility, along with sudden increases in interest rate spreads, remains a real possibility as U.S. interest rates begin to rise.
 
Let us look at this topic in some detail.
 
2. Spillovers from Unconventional Monetary Policies—Lessons for Emerging Markets
 
Unconventional monetary policies—including large purchases of government debt—has been used to provide policy accommodation in advanced economies since the 2007 global financial crisis. These policies have had both positive and negative spillovers.
 
Unconventional monetary policies helped avoid a financial market meltdown in the initial stages of the crisis, and later supported a recovery in advanced economies and elsewhere. I am convinced that these policies were necessary to avert a 1930’s style global depression. To that extent, the unconventional monetary policies have had strong positive spillovers for the global economy, and by implication for India and other emerging markets.
 
However, it is also true that these policies led to a build-up of risks in this part of the world. Between 2009 and the end of 2012, emerging markets received about US$ 4½ trillion of gross capital inflows, representing roughly one half of global capital flows. Such inflows were concentrated in a group of large countries, including India, which received about US$ 470 billion.
 
As a consequence, bond and equity prices rallied, and currencies strengthened. Recent work by Fund staff suggests that spillovers to asset prices and capital flows in emerging market economies from expansionary unconventional monetary policies were even greater than from earlier conventional policies.
 
The danger is that vulnerabilities that build up during a period of very accommodative monetary policy can unwind suddenly when such policy is reversed, creating substantial market volatility.
 
We already got a taste of it during the “taper tantrum” episode in May and June of 2013, when most emerging market economies suffered indiscriminate capital outflows. India was also affected.
 
I am afraid this may not be a one-off episode. This is so, because the timing of interest rate lift-off and the pace of subsequent rate increases can still surprise markets.
 
As economic conditions improve in at least some advanced economies, portfolio rebalancing out of emerging market economies can be expected, and some volatility cannot be ruled out. Emerging markets need to prepare in advance to deal with this uncertainty.
 
Lessons for the international community and emerging markets
 
There are many important lessons we have already learnt from the “taper tantrum” episode that I would like to share with you.
 
First and foremost, advanced economies can help. Clear and effective communication of policy intentions can reduce the risk of creating very large market volatility. While admittedly it is a difficult task, I would also agree that there is scope for greater international policy cooperation to minimize the negative spillovers.
 
Second, emerging markets need to prepare well in advance. Evidence from our research suggests that emerging markets that had already addressed their economic vulnerabilities before the taper tantrum fared better during episodes of market volatility.
 
In particular, higher GDP growth, stronger external current account positions, lower inflation, and more liquid financial markets helped dampen market volatility. In addition, more resilient financial sectors contained the effects of such volatility. The reforms initiated here in India are therefore going in the right direction, are very timely, but will also need to be pursued with the utmost speed.
 
Third, if market volatility materializes, central banks need to be ready to act. Temporary—though aggressive—domestic liquidity support to certain sectors or markets may be necessary, along with targeted foreign exchange interventions. Moreover, cross-country foreign currency swaps lines have proven helpful in enabling necessary access to foreign exchange liquidity at times of market stress.
 
There are a few examples where good fundamentals, as well as decisive and swift policy responses, helped countries reduce, and cope with, market volatility. Think of Korea, which improved the resilience of its financial sector with measures that reduced banks’ short term external debt by half—to 27 percent—between 2008 and 2013. Other countries such as Brazil, Uruguay, and Indonesia used some form of capital flow management measures to discourage short term inflows and thus decrease the build-up of risks. Peru intervened directly, though temporarily, in the foreign exchange market to limit excessive volatility.
 
Here in India too, the RBI took decisive action during and after the taper tantrum episode. It provided foreign currency liquidity support to key sectors, allowed the rupee to depreciate, and provided judicious foreign exchange interventions to minimize disruptive movements in the rupee. The RBI also arrested the surge in gold imports, narrowed its current account deficits sharply, and started to rebuild foreign exchange reserves.
 
So I am very pleased to say that, in a very short time span, India successfully contained its domestic and external vulnerabilities more than in many other emerging economies.
 
Does this mean the work is done? Well, you would be surprised if I answered “yes” to this question.
 
3. Rethinking Financial Development
 
Indeed, there is more work to be done. Apart from short term policy responses to deal with acute economic crises, it is equally important to continue building a safe and inclusive financial system—which will serve well in good times in supporting broad based growth and provide an effective buffer in bad times in ensuring financial stability.
 
But there are questions about the extent and speed with which financial development should be pursued. The experience of advanced economies has shown the dangers that can arise from oversized financial systems.
 
IMF economists have done some work on rethinking financial development and its implications for stability and growth in emerging markets. This work is still being finalized and will be published in the next month or so. Allow me to share with you a few encouraging findings.
 
First, there are many benefits still to be reaped from further financial development in most emerging markets, including India. By financial development, I mean greater depth and efficiency of institutions and markets, as well as higher access of all its citizens to banks and financial instruments.
 
The RBI has taken several encouraging steps. By allowing for a greater role for the private sector in India’s public sector banks, there will undoubtedly be a striking increase in efficiency in the banking sector. Moreover, Prime Minister Modi’s commitment to broadening access to formal finance to all segments of the population through the ambitious Jan Dhan Yojana is impressive, and so are the results which were achieved in just a few months.
 
The second and related finding of the IMF study is that when it comes to financial deepening, there are speed limits! When done too fast, deepening financial institutions can lead to more instability, both economic and financial. It encourages greater risk-taking and high leverage, particularly when poorly regulated and supervised.
 
This puts a premium on developing good institutions and regulatory frameworks.
 
India’s record in promoting good practices has been positive in recent times. It is making progress toward addressing bad loans in public sector banks, and in developing a sound regulatory and supervisory regime for banks, insurance, and securities market.
 
Best international practices are also being adopted. For example, India is well ahead of many countries in implementing Basel III standards. The government’s recent announcement to introduce legislation on a new Indian Financial Code, which will simplify and revamp India’s financial regulatory architecture, is a revolutionary step.
 
The third finding of the IMF study relates to potential tradeoffs of financial regulations. One view is that tighter and more regulations to help safeguard financial stability can hamper financial development.
 
The IMF study provides a new angle. It finds that, among a large number of regulatory principles, there is a small subset that is truly critical for financial development as well as for financial stability. Some examples include regulations related to capital buffers, non performing loans, financial disclosures,and compensation. And, it is essentially the same small subset that matters for both!
 
In other words, there is very little or no conflict between promoting financial stability and financial development if you choose the right regulations to focus on.
 
On this note, let me conclude.
 
I am fascinated by the vibrance I see wherever I go in India. I see hope in the eyes of the small sellers by the street side. I see dreams in the eyes of young people, and there are so many young people! But above all I see change, change for the better.
 
The world is looking to India to lead the path to higher, sustainable, and inclusive growth.
 
The above is an extract of the speech by Christine Lagarde, IMF Managing Director at Reserve Bank of India on March 17, 2015

Top corporate news of the day - March 18, 2015

DLF will save about Rs1.75bn annually after promoters decided to slash coupon rate on securities held by them in realty major's subsidiary from 9% to 0.01%, a senior company official said. 

Mphasis  said it has launched 'Mphasis Next Labs' a strategic initiative for research and innovation on emerging and future paradigms. 
 
Cadila Healthcare announced that it launched an oral therapy called 'SoviHep' to treat Hepatitis-C that would be marketed by the specialty division of the group, Zydus Heptiza. 
 
The Patent Office has refused to proceed with the patent application of Wockhardt for an oral salt form of Diacerein, used to treat osteoarthritis, stating that the application lacks inventive step. 
 
DLF will save about Rs1.75bn annually after promoters decided to slash coupon rate on securities held by them in realty major's subsidiary from 9% to 0.01%, a senior company official said. 
 
Jet Airways will launch dedicated freighter operations in April becoming the first private Indian passenger airline to offer all-cargo services.
 
Hitachi India Ltd and Siemens Ltd signed an MoU with the Confederation of Indian Industry (CII) to form a consortium that would create pilots and replicate them throughout the country for setting up 100 smart cities.
 
Tata Power said it has commissioned the second unit of 63 MW of its 126 MW Dagachhu Hydro Power Corporation (DHPC) in Bhutan.
 
Amtek Auto announced the acquisition of Germany-based Scholz Edelstahl GmbH through its wholly-owned Singapore-based subsidiary Amtek Precision Engineering Pte Ltd.
 
Balaji Telefilms Ltd has said it will be launch its first fashion label EK shortly to tap into the merchandising opportunities.
 
HDFC Bank  launched Chillr, a mobile app that allows users to instantly transfer money to any contact in their phonebook.
 
 Tata Consultancy Services (TCS)  said it has set up a new 1,000-seater centre in Singapore to focus on clients in banking and financial services space.
 
Wipro said it has acquired a minority stake in cloud applications systems integrator Drive stream for US$5 mn. 
 
Pricol said it has divested its 49% stake in the joint venture with Denso Corporation to the Japanese partner for Rs0.2bn 

Indices to open flat

The market movement turned quite wobbly on Tuesday and a firm close did raise hopes that things are better off for India. But nervousness could remain ahead of the FOMC meet which concludes today.

The market movement turned quite wobbly on Tuesday and a firm close did raise hopes that things are better off for India. But nervousness could remain ahead of the FOMC meet which concludes today. The market’s patience will be tested as it awaits new words of wisdom from the Fed.

Back home in Parliament, the government is getting on the defensive and the Finance Minister has sought the opposition’s cooperation as  India has a great opportunity to move forward. FY16 GDP growth is likely to be 8% he said adding that most investors are optimistic on India at this point. Developments on the Land Bill will be watched.

The outlook is a flat start. Sun Pharma could gain further as the government has cleared its acquisition of Ranbaxy Labs. Not much of a clear trend emerging from global market though the bias seems more on the negative side for now. US indices closed mixed with Dow and S&P 500 shedding weight while Nasdaq notched some gains. Asian markets are all in the green for now.

IMF Chief Christine Lagarde said that the growth has rebounded in the US and UK. However, domestic demand in Eurozone and Japan yet to recover fully. Lagarde, who is on her two-day visit in India, said that the global economy is expected to grow by about 3.7% next year. 

Sun Pharmaceuticals Industries has surpasses the State Bank of India (SBI) in overall market capitalization ranking. Sun Pharma's market cap was Rs 2,16,637 crore, while SBI's market cap stood at 2,11,467 crore.

FIPB has sent HDFC Bank's proposal for further approval of the cabinet committee on economic affairs (CCEA), says a report.

Pricol Limited sold its 49% of shareholding in DENSO Pricol India Private Limited (DPIN) to DENSO Corporation, Japan on March 17, 2015 for a consideration of Rs. 200 mn.

KPIT Technologies stock was ended 6% lower at Rs. 193 after company has updated outlook for Q4FY15.The revenues for the fourth quarter of FY15 will be flat. There will be marginal growth in PAT for FY15 as compared to PAT for FY14.

Amtek Auto rallied 2.6% to Rs. 153 on reports that the company is all set to acquire Germany's Scholz Edelstahl through its Singapore-based subsidiary Amtek Precision Engineering for an undisclosed amount.

Jindal Steel & Power Ltd stock ended 9% lower at Rs 174 on reports that reports that the government is expected to reject two bids for Gare Palma and Tara coal blocks.

Gulf Oil Corporation hit the 20% upper limit at Rs. 169 after nearly 30 million shares changed hands in multiple block deals at the counter this morning. The stock finally ended with a 10 per cent gain at Rs. 155.