RBI is focused on implementing steady reforms: Rajan

According to Rajan, “We need arbiters like the IMF to tell us when domestic policies have international effects that do more harm than good.”

RBI governor Raghuram Rajan said that instead of issuing big bang unthinking reforms, RBI is focused on implementing steady regular reforms at a measured pace.

India has been taking regular steps toward full capital-account convertibility but still places restrictions on swapping rupees for other currencies. Rajan has recently called for full capital-account convertibility.

Speaking on the sidelines of the IMF/World Bank spring meetings on Thursday, Rajan said that IMF needs to play a more neutral role and eliminate currency manipulation wherever it can be found.

According to Rajan, “We need arbiters like the IMF to tell us when domestic policies have international effects that do more harm than good.”

The RBI governor further said that one cannot pull himself out of crisis by depreciating the exchange rate, and then point a finger at everybody else.

India is a current account deficit (CAD) country. Though CAD has shrunk, you either finance it through foreign direct investment which is probably the safest mode. But at some level you take other forms of financing also, Rajan said.

Make sure that you don’t take too much of anything and certainly taking too much of short term debt will lead to worries. 

TCS accused of South Asian favouritism in US

India's largest software services exporter TCS, has been accused of playing favorites with the workers of South Asian descent in the United States of America. The company has been sued by a white American information technology worker Steven Heldt who made this accuse, says a media report. 

India's largest software services exporter TCS, has been accused of playing favorites with the workers of South Asian descent in the United States of America. 

The company has been sued by a white American information technology worker Steven Heldt who made this accuse, says an ET report. 

The federal civil rights law has been violated by TCS by giving the South Asian workers special preference in decisions pertaining to hiring, promotion and termination. 95% of Tata's 14,000-person US workforce descend from South Asia, mainly India, said Steven in the complaint filed on Tuesday, as mentioned in the report. Steven, who accused Tata of burdening him with “menial work” and of displaying "substantial anti-American sentiment" which he experienced in his 20 months at Tata, received response from Ben Trounson, a Tata spokesman, in an email who labeled his allegations as “baseless”, stated the report.

 TCS’s employs workers on "legitimate non-discriminatory business reasons," without regard to race or national origin, Trounson added in the report. "The experience of Mr. Heldt is representative of what is happening across the country at Tata. We believe it reflects a broad preference toward a specific race and national origin, and that any such preference violates US anti-discrimination laws,” said Daniel Kotchen, Heldt’s lawyer in a phone interview as mentioned in the report. 

Rajan receives threatening mail from ISIS

The Mumbai police has tightened the security for the RBI governor 

Reserve Bank of India (RBI) governor Raghuram Rajan has received an e-mail threatening to kill him, according to a media report.

Rajan had received the mail from the ID isis583847@gmail.com earlier this month. Since the email ID contains the name of Islamic State of Iraq and Syria (ISIS), the Mumbai Police is not taking it lightly, the report added.

The Mumbai police has filed the case and tightened the security for the RBI governor. The Police has approached the US-based Google Inc and sought details about the ID 

New interest subsidy scheme for farmers to take time: RBI

It has been decided by government, "as an interim measure", to implement the interest subvention scheme for 2015-16, till June 30 

The RBI said a new scheme for interest subvention for farmers is being worked out though it may take "some time".

"As regards the scheme for the year 2015-16, the Government of India has advised that presently various alternative approaches for improving the efficacy of the scheme are being examined, the finalisation of which may take some time," RBI said in a notification on Thursday.

RBI further said it has been decided by government, "as an interim measure", to implement the interest subvention scheme for 2015-16, till June 30, on the terms and conditions approved for the scheme for 2014-15.

"All banks are, therefore, advised to take note and implement the interest subvention scheme for 2015-16 accordingly," it said 

Sun Pharma stock up on signing agreement with Technion university

The company has signed agreement with Israel's Technion university to develop anti-cancer drugs.

Sun Pharmaceutical Industries stock was up 1% at Rs. 1098.

The stock has hit a high of Rs. 1104 and a low of Rs. 1086.

The company has inked a pact with Israel's Technion university to develop anti-cancer drugs. 

 This agreement aims at the development of a joint project, based on new findings by Nobel Prize laureate Distinguished Professor Aaron Ciechanover, Dr. Gila Maor and Professor Ofer Binah, that can potentially lead to the development of novel anti-cancer drugs. The pre-clinical research was funded thus far by Dr. Alfred Mann.

Sensex, Nifty in red; IT, banking stocks drag

The BSE Mid-cap Index is trading down 0.13% at 10,978, whereas BSE Small-cap Index is trading up 0.01% at 11,793. 

 MRF manufacturing plant in Medak district has been in operation since 1990 and about Rs. 4,300 crore has so far been invested in the unit here, report stated.

At 9:33 AM, the S&P BSE Sensex is trading at 28,666 down 50 points, while NSE Nifty is trading at 8,675 down 31 points.

The BSE Mid-cap Index is trading down 0.13% at 10,978, whereas BSE Small-cap Index is trading up 0.01% at 11,793.

Some buying activity is seen in oil and gas, fmcg, metal and realty sectors, while IT, consumer durable, banking and auto  sectors are showing weakness on BSE.

Reliance Industries, Sun Pharma, ONGC, Hindalco Industries and Bharti Airtel are among the gainers, whereas TCS, Bajaj Auto, Wipro and Hero Motocorp are losing sheen on BSE.

On expected lines, IT companies continue to disappoint to some extent. TCS saw ~30% drop in net profit for Q4 after it rewarded staff with a one-off bonus. Overall weakness and cross currency issues also weighed on the performance.

The attention now will shift to Reliance in particular. Though crude oil prices fell, no major change was seen in demand for petroleum products, which means product spreads have increased leading to better GRMs. Reliance Industries could well report one of its best GRM in Q4. The recent movement in the stock seems to suggest that the street is speculating on whether RIL can clock a net profit close to the Rs.6000 mark.

MMTC is ready to divest 15 per cent more of its equity in the current fiscal in line with the government’s intent of increasing public holding in State-run units to at least 25 per cent.Based on current market valuation, the stake sale could fetch the exchequer an estimated Rs. 800 crore, a report stated.

Meanwhile, Prime Minister Narendra Modi has vowed to “clean up” the mess left behind by the others. “There is a new atmosphere of trust in our nation... We say ‘jan gana man adhinayak’ — that ‘Jan Man’ has changed,” Modi said in Canada.

California-based Glaucus Research, issued a "strong sell" report on software firm Rolta India, saying the company does not produce free cash flow and cannot repay offshore bondholders without refinancing. Rolta's crashed on the report. Rolta Chief Financial Officer Hiranya Ashar rejected the Glaucus report as "inaccurate and completely baseless".

Maharashtra has emerged on top with a share of over 21 per cent in the total investments attracted by real estate sector across India as of 2014-15 followed by Uttar Pradesh (14 per cent), Gujarat (13 per cent), Karnataka (12 per cent) and Haryana (eight per cent) that are amid top five states in this regard, apex industry body ASSOCHAM said.

Among sectors, the CNX IT index has dropped over a percent at 11,917. The Bank Nifty, Auto, Infra and PSU Bank indices are the other notable losers.

On the other hand, the Energy index has gained over 0.5 percent at 8,970. The Realty and FMCG indices have added 0.2 percent each.

In the Nifty space - TCS slipped 2.4 percent to Rs. 2,520. Lupin, Tech Mahindra and IndusInd Bank have dropped over 2 percent each.

Ultratech, Wipro, HCL Technologies, Bajaj Auto and Yes Bank are the other prominent losers.

On the other hand, Reliance jumped 1.5 percent at Rs. 942 ahead of earnings. Bharti Airtel, Sun Pharma, ONGC and Sesa Sterlite are the other notable gainers.

Top corporate news of the day - April 17, 2015

TCS announces one-time bonus worth Rs26bn for employees. The company will pay staff one week salary for every year served. 

TCS announces one-time bonus worth Rs26bn for employees. The company will pay staff one week salary for every year served.
 
US-based sport bike maker Erik Buell Racing, Inc. in which Hero MotoCorp holds a 49% stake, has announced a closure of operations and filed for bankruptcy protection from creditors.
 
Tata Steel's FY15 crude steel output up 2% at 9.33mn tonne. 
 
Hindustan Construction Company said its infrastructure development arm will sell its stake in a highway project to Sadbhav Group for Rs.2040mn as part of a strategy to exit operational assets.
 
BHEL said it has fully commissioned 2,400 Mw OP Jindal thermal power project in Chhattisgarh. 
 
MRF Ltd outlined its plans to expand its manufacturing facility located at Sadasivpet in Medak district of Telangana. 
 
KEC International said it has entered into a pact with ATC Telecom Tower for sale of telecom assets in Chhattisgarh, Meghalaya and Mizoram comprising 381 telecom sites. 
 
National Mineral Development Corporation is aiming to raise its output by 20% to 35mn tonnes by the end of this fiscal year. 
 
Future Group, Bharti Retail in talks for partnership. A multi-structured deal based on share swap is being worked out between the two, post which Kishore Biyani-led Future Group will become majority partner. 
 
SpiceJet has sought a deferment of three years on the payment of dues of Rs.2110mn to AAI. 
 
Jindal Saw shareholders have approved a proposal for entering into a contract worth up to Rs.100bn with group firm JSW Steel, from which it purchases raw material. 
 
Blue Star said it is looking to commission a new manufacturing facility in South India and will be making an investment of about Rs.1500mn this year. 

Top economic news of the day - April 17, 2015

The southwest monsoon is expected to be normal at 102% of the Long Period Average, private weather agency Skymet said. There is a model error of plus or minus 4%. 

The Food Minister said that the common demand of sugar millers, cane farmers and state governments, after two days of deliberations on the sector, is creation of a buffer stock of a tenth of annual output.
 
The southwest monsoon is expected to be normal at 102% of the Long Period Average, private weather agency Skymet said. There is a model error of plus or minus 4%. 

Indices to open on a flat note

While the main indices may remain directionless, activity will heat up in select counters especially those announcing their results. 

On expected lines, IT companies continue to disappoint to some extent. TCS saw ~30% drop in net profit for Q4 after it rewarded staff with a one-off bonus. Overall weakness and cross currency issues also weighed on the performance.

The attention now will shift to Reliance in particular. Though crude oil prices fell, no major change was seen in demand for petroleum products, which means product spreads have increased leading to better GRMs. Reliance Industries could well report one of its best GRM in Q4. The recent movement in the stock seems to suggest that the street is speculating on whether RIL can clock a net profit close to the Rs.6000 mark.

The outlook is a flat start. While the main indices may remain directionless, activity will heat up in select counters especially those announcing their results. Shares of Tata Motors and Tata Motors DVRs  could gains as the Rs. 7,500-crore rights issue opens today and closes on May 2.

MMTC is ready to divest 15 per cent more of its equity in the current fiscal in line with the government’s intent of increasing public holding in State-run units to at least 25 per cent.Based on current market valuation, the stake sale could fetch the exchequer an estimated Rs. 800 crore, a report stated.

Meanwhile, Prime Minister Narendra Modi has vowed to “clean up” the mess left behind by the others. “There is a new atmosphere of trust in our nation... We say ‘jan gana man adhinayak’ — that ‘Jan Man’ has changed,” Modi said in Canada.

California-based Glaucus Research, issued a "strong sell" report on software firm Rolta India, saying the company does not produce free cash flow and cannot repay offshore bondholders without refinancing. Rolta's crashed on the report. Rolta Chief Financial Officer Hiranya Ashar rejected the Glaucus report as "inaccurate and completely baseless".

Maharashtra has emerged on top with a share of over 21 per cent in the total investments attracted by real estate sector across India as of 2014-15 followed by Uttar Pradesh (14 per cent), Gujarat (13 per cent), Karnataka (12 per cent) and Haryana (eight per cent) that are amid top five states in this regard, apex industry body ASSOCHAM said.

“Investments attracted by real estate sector from various public and private sources in Maharashtra have increased slightly by about one per cent i.e. from a level of Rs 3.01 lakh crore as of 2011-12 to Rs 3.04 lakh crore as of 2014-15,” according to sector-specific analysis conducted by The Associated Chambers of Commerce and Industry of India (ASSOCHAM).

Tata Consultancy Services announced that it will pay employees a Special Reward or one-time bonus to mark the 10th anniversary of the company’s initial public offering in 2004.Globally all employees who have completed at least one year of service will be eligible for the special bonus payment. Each employee will be given a reward equivalent to one week’s salary for every year of service completed at TCS. For the company, the total consideration for this Special Reward to employees to mark ten years of listing on India’s largest stock exchanges will be Rs 2,628 crore.

Aditya Ghosh, president – IndiGo reportedly said that no decision on the IPO has been taken yet. The airline is not looking for any partners, he added.

Budget-carrier SpiceJet is seeking a deferment of three years on the payment of dues of Rs 211 crore to AAI, according to reports. The airline has also requested the Airports Authority of India (AAI) to waive the interest against these dues.

Sun Pharma dropped 2.7 percent to Rs. 1,087. Lupin slipped 2.5 percent to Rs. 1,903 on the back of sustained selling pressure at the counter in the last few trading days. The weakness at the counter was also attributed to reports of likely negative impact on Lupin's earnings going forward following the US Food and Drug Administration (USFDA) nod to Aurobindo Pharma to manufacture and market its generic version of oral suspension of antibiotic Cefixime. 

Eicher Motors rallied to a high of Rs. 16,350 on getting RBI nod for higher cap on FII investment limit. According to reports, the Reserve Bank of India (RBI) has allowed Foreign investment up to 49 percent of the equity in the company. 

Insecticides India ended almost unchanged at Rs. 571 on going ex-bonus. The company will issue bonus shares in the 1:2 ratio, as per record date of 17 April. 

KEC International surged 9.5 percent to Rs. 110 on the back of plans to sell its telecom assets. According to a release issued by the company to the BSE, KEC has entered into a binding agreement for sale of its telecom assets in the states of Chhattisgarh, Meghalya and Mizoram consisting of 381 telecom sites to ATC Telecom Tower Corporation for a consideration of Rs. 81 crore.

Gammon India skyrocketed 12.3 percent to Rs. 23.30 on winning two orders worth Rs. 840.66 crore.