NCLAT TO DECIDE OVER INSOLVENCY PLEA OF RCOM
The National Company Law
Appellate Tribunal on Monday said it would decide on the insolvency of
debt-ridden Reliance Communications (RCom). RCom has pleaded the tribunal to go
ahead with insolvency proceedings against it as it is unable to pay dues to its
lenders. Swiss telecom gear maker Ericsson, which received its unpaid dues of
Rs 550 crore from RCom last month following a Supreme Court order, is opposing
the move. A two-member bench headed by Chairman Justice S J Mukhopadhaya also
observed that if insolvency proceedings against RCom are allowed, then Ericsson
would have to return Rs 550 crore. Why one party will take amount and let the
financial creditors suffer, said the NCLAT, adding that either it may quash
RCom bankruptcy proceedings in NCLT or allow bankruptcy case to proceed. The
appellate tribunal also said that it would consider the reply filed by the
Department of Telecom (DoT) over the RCom's plea against the show cause notice
issued by it over spectrum charges due on April 30, the next date of hearing.
DOT reply would be considered on April 30. Let us be very clear which are the
assets of corporate debtor, whether they have some right of asset. Can you take
away licence? If yes, what is the value of the company (Rcom) then, the NCLAT
said.
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OBJECTIVE OF INSOLVENCY CODE IS NOT REALISATION OF BAD LOANS –
IBBI
In a letter written to The
Week the Insolvency and Bankruptcy Board of India (IBBI) has stated that the
impression that Insolvency and Bankruptcy Code, 2016 (Code) is for realisation
of bad loans is misleading and incorrect The letter was written with reference
to the article titled Modi report card: What has BJP govt done to help India’s
bleeding banking sector? by Mr. Soumik Dey, in the 4th April, 2019 edition of
‘The Week’. The asid article, inter-alia, carried a statement as under: The
Central Bank of India (CBI) has over Rs 150 billion worth of bad loans, stuck
in the realisation process of the Insolvency and Bankruptcy Board of India, the
insolvency regulator. According to the IBBI, The above statement gives two
impressions, namely,
(a) bad loans of the
Central Bank of India are stuck up with the Insolvency and Bankruptcy Board of
India (IBBI), the insolvency regulator, and
(b) the Insolvency and
Bankruptcy Code, 2016 (Code) is for realisation of bad loans. Both the impressions
are misleading and incorrect as explained in this letter.
The IBBI stated that the
IB Code segregates commercial aspects from judicial aspects of an insolvency
proceeding and empowers and facilitates the stakeholders and the Adjudicating
Authority to take decisions in their respective domain. The IBBI does not have
any role in the proceeding Therefore, the possibility of a proceeding or bad
loan getting stuck up with the IBBI does not arise. Quoting the decisions of
the Supreme Court and NCLT , the IBBI has reiterated that rhe objective of the
Code is reorganization and insolvency resolution and not realisation of bad
loans. The IBBI has requested the Week to publish the said letter prominently
to enable the readers to have a correct perspective.
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NCLAT SEEKS INFORMATION ON EXPOSURE TO IL&FS ‘AMBER’
COMPANIES
In a move to protect the
investments of pension funds and provident funds, the National Company Law
Appellate Tribunal has sought the details of the investment of such funds in
amber companies of the debt laden Infrastructure Leasing and Financial Services
(IL&FS). The tribunal may be keen to release at least those payments that
are due to these funds. The IL&FS group has a total group debt of Rs 94,216
crore. The bench also directed that no organisations including the National
Highway Authority of India take any step to cancel any agreement with any
company in question in response to claims by lenders that NHAI intended to
cancel agreements with certain IL&FS group entities and this would harm
their ability to maintain the status of a going concern. How many companies are
there who have provident funds and pension funds. You release them. We want
that that should be released first. said a two-member bench led by justice SJ
Mukhopadhaya on Monday. The bench directed all financial and operational
creditors of amber companies to hand over details of amounts payable and
matured as well as the amounts generated from provident funds, pension funds,
gratuity funds etc. The tribunal was hearing appeals by senior secured lenders
of amber companies that payments due to them be released. All group companies
of IL&FS are being classified according to their ability to meet payment
obligations. Group companies able to meet all payment obligations are
categorised as ‘green’. Those companies able to meet only operational payments
and senior secured debt obligations are categorised as amber. Others are
categorised as red. Counsel for IL&FS said that if payments were made to
individual creditors of amber companies, it would have a negative impact on the
resolution of other group entities. Counsel for the government said that the
government was confident of resolving many of the cases in two months by
forming a committee of creditors and evaluating bids from prospective buyer of
group entities. Counsel for creditors of amber companies however said that they
would not participate in the planned resolution process as amber companies had
not defaulted. The bench also asked IL&FS and government to submit details
of amber companies as well as operational and financial creditors of amber
companies pursuant to an earlier order as it had not been filed in a format
that the appellate tribunal wanted.
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ERICSSON MAY HAVE TO REFUND RS 550 CR TO RCOM IF INSOLVENCY
PROCEEDINGS REVIVED: NCLAT
An appellate tribunal
Monday said Swedish equipment maker Ericsson would have to refund the Rs 576
crore including interest it was paid back to Reliance Communications if the
insolvency proceedings against the mobile phone operator are revived. In
February, the Anil Ambani-owned telco had approached the National Company Law
Appellate Tribunal (NCLAT) to withdraw the appeal it had filed last year for a
stay on an insolvency petition against the telco admitted by the National
Company Law Tribunal (NCLT). NCLAT, on May 30, 2018, stayed the proceedings,
subject to RCom paying Ericsson Rs 550 crore as a settlement amount. If we
dismiss this appeal (against the admission of bankruptcy proceedings against
RCom), then you (Ericsson) will have to pay back the money. Why should you
(Ericsson) take the amount and the financial creditors suffer? asked a two
member bench led by Justice SJ Mukhopadhayay on Monday. He noted that assets of
RCom, weighed down by Rs 46,000 crore in debt, had not been sold in accordance
with the terms of the agreement under which the insolvency proceedings were
stayed. RCom was forced to scrap its wireless assets sale to Reliance Jio,
owned by Anil’s elder brother Mukesh, following successive legal obstacles. We
should dismiss this appeal and let the ‘insolvency’ proceedings go on, the
bench said. The observations of the NCLAT bench, which will next hear the
matter on April 30, threaten to turn the clock back on Ericsson which forced
RCom to pay Rs 550 crore dues, plus interest, totalling Rs 576 crore, under
threat of jail for the telco’s chairman Anil Ambani, following legal
proceedings in the Supreme Court.
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GENDER DIVERSITY: TOP NSE-LISTED COMPANIES IN VIOLATION OF
SEBI'S DIRECTIVE
Corporate India is under
the scanner again for its gender disparity. According to data from
nseinfobase.com, powered by PRIME Database Group, 10 percent of the top 500 NSE-listed
companies are still not in compliance with the diversity initiative of the
Securities & Exchange Board of India (SEBI). The market regulator asked
companies to appoint a female independent director by April 1. However, as many
as 51 companies are yet to do so. Of this, five companies come in the top 100
listed companies on the NSE. Many of the government-backed companies are also
in violation of this directive. Moreover, 42 of the 500 companies inducted
women independent directors only in the last week before the April 1 deadline
even though they had a year's time to follow the new order. Public sector units
(PSUs) are usually found to be negating corporate governance directives. The
reason for violation of this particular directive could be a long-drawn process
of inducting a new member to their board, according to Pranav Haldea
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ACTION ON BANKS' NPA RECOVERY, MERGERS AWAIT NEW GOVERNMENT
According to the sources,
with the announcement of elections, it has been decided to hold the review
meeting of banks only after a new government is in place The review will study
plans for the recapitalisation of banks besides taking note of their NPA
(non-performing assets) recovery target as well as the next merger exercise.
The recent Supreme Court order withdrawing Reserve Bank of India's February 12
circular and letting the PSBs to opt for their own decision on insolvency will
also be discussed. Finance Ministry sources said the review meeting will be
held in July now though the groundwork on the bank consolidation and NPA
trimming would continue at official level during the interim period as well as
it does not require approvals and there will be action on these. The interim
Budget, however, had not provided for funds for recap of banks. Though the
ministry has so far not released the figures of NPA recovery on the target of
Rs 1.8 lakh crore, but sources said with the delay in Essar Steel's fund
distribution due to operational creditors' issues, the target might not have
been achieved and fallen short by Rs 50,000 crore. The review of this would
also be done after the new government takes charge, they added. The NPA
recovery target was dependent on the Essar Steel deal which did materialise at
Rs 42,000 crore but lack of unanimity among the financial and the operational
creditors to get the funds distributed led the case to the National Company Law
Appellate Tribunal (NCLAT) which delayed the lenders getting their share in
2018-19. The amount can be around Rs 1,000 crore and has to be paid out of Rs
42,000 crore proposed by ArcelorMittal. This comes after the NCLAT's order
where it asked the lenders to reconsider the distribution of dues, as Standard
Chartered bank and operational creditors opposed ArcelorMittal's resolution
plan on the ground that they are not getting a justified amount. On the merger
front, the government is closely watching how the Bank of Baroda-Vijaya
Bank-Dena Bank merged entity is working out. Sources said some other
combinations are already in process but since to proceed on concrete proposals,
it needs the approval of the government panel on bank mergers, no movement can
take place. Market buzz says the Punjab National Bank, the Syndicate Bank, and
the Indian Overseas Bank are in various permutations and combinations of a
merger likelihood at an informal level of discussion among themselves and with
other banks. The recapitalisation of PSBs has been exhausted in 2018-19 with
the last tranche on February 20 having infused Rs 48,239 crore in 12 public
sector banks but skipping the Bank of Baroda. In March last week, the pending
Rs 5,000 crore was given for growth capital in the amalgamated entity of the
Bank of Baroda. With this, the government has spent a total amount of Rs 1.06
lakh crore set aside for capital infusion in public sector banks for the
current financial year. On the performance of banks, six banks have come out of
the RBI weak banks framework of PCA -- prompt corrective action -- after
capital infusion while many like the SBI, and the PNB have reported robust
profits. Their Q4 results are awaited. The Bank of India (BoI), the Bank of
Maharashtra, the Oriental Bank of Commerce, the Corporation Bank and the
Allahabad Bank are out of the PCA framework.
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HOW TO RINGFENCE THE IBC
Last week, the Supreme
Court struck down as ultra vires — acting or beyond one’s legal authority — the
February 12, 2018, RBI circular that instructed banks to trigger insolvency
proceedings under the Insolvency and Bankruptcy Code (IBC) against borrowers
with defaults above a specified amount. This means banks are no longer bound by
RBI to take defaulting borrowers to the National Company Law Tribunal (NCLT). A
constructive approach, however, may be used to retain IBC’s promise. NCLT’s
capacity is a critical issue. It’s required to adjudicate on the full gamut of
matters under the Companies Act 2013, as well as those under IBC. This has
placed severe strain on NCLT. About 30% of the more than 800 ongoing cases
under corporate insolvency resolution process (CIRP) have surpassed the time
ceiling statutorily prescribed, with an additional 20% having crossed the
six-month timeline. The recent induction of 38 new members into NCLT is
extremely welcome. But it’s crucial for the tribunal to inculcate
specialisation as well as depth in its expertise. One way could be to set up
specialised NCLT benches to deal only with insolvency matters. China set up
specialised bankruptcy courts during 2007-17. In their 2018 study, ‘Going
Bankrupt in China’ (bit.do/eNKZx), Bo Li and Jacopo Ponticelli show that courts
brought faster resolution of financially distressed firms, improved access to
credit, and pushed local private firms to invest more. India could learn from
this. A major success of IBC has been the deterrent effect it has had. For such
settlements to be more effective, they should take place in a structured
manner, similar to a ‘pre-pack arrangement’. Pre-packed insolvency arrangements
are relatively common in Britain, allowing for the sale of a business as a
going concern prior to the appointment of an administrator or insolvency
professional, subject to the approval of a majority of the creditors. A similar
proposal, the European Restructuring Directive, was approved by the European Parliament
last week. This will, however, require checks and balances to prevent it from
being gamed or used tactically to subvert IBC. They could include a code of
conduct to be issued by the Insolvency and Bankruptcy Board of India (IBBI) to
regulate the behaviour of the resolution professional dealing with the
pre-pack. Additionally, guidelines on the conduct of the creditors, permitting
holding-out creditors to be ‘dragged along’ as well protection for certain
creditors and the manner in which this will be made binding on all creditors,
should be drawn out. The corporate affairs ministry has been working on a
template. Along with industry and IBBI, a framework can be developed. RBI’s
circular had provided for a resolution process prior to referring to a borrower
to IBC. The pre-pack arrangement with safeguards could replace this. Certain
existing provisions of IBC and its subordinate legislation can be revived and
utilised more effectively. Under Section 61, for instance, appeals from NCLT to
the National Company Law Appellate Tribunal (NCLAT) are permitted under certain
tightly circumscribed matters of law, and as a creature of statute, NCLAT has
to comply with this. And, yet, there are multiple instances where it has
overstepped this mandate, ruling on the process of resolution in certain
instances, including on the share of the classes of lenders. It is true that
NCLT and NCLAT have often had to adjudicate on disputes, making the
adjudication process complex and time-consuming. There are, however, certain innovations
possible, even within IBC. Economists Oliver Hart, Philippe Aghion and John
Moore, in their paper ‘Improving Bankruptcy Procedure’ (bit.do/eNK8y), propose
a procedure that should resolve insolvency in 90 days. They acknowledge that
certain contentious claims and disputes can’t be resolved in this period, and
propose that the plan be voted upon with contentious claims remaining
outstanding. It could be settled following the approval of the plan. IBC could
incorporate this principle. IBBI’s Corporate Insolvency Resolution Process
Regulations’ Regulation 14 provides that where the amount claimed by a creditor
is uncertain, the resolution professional shall make the best estimate of the
amount of the claim based on the information available with her, and revise the
estimate of the claims she comes across additional information warranting such
revision. This would allow the resolution process to continue with such
contentious claims being resolved subsequently. Further, under Section 31of
IBC, the order passed by NCLT or NCLAT approving a resolution plan provide for
ongoing implementation and supervision of the plan, which could include the
adjudication of such disputes. With some of these innovations, IBC could
deliver even better outcomes, and lenders voluntarily file proceedings, and not
on account of a dikat from their regulator.
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ERICSSON MAY HAVE TO REFUND RS 576 CRORE TO RCOM, SAYS NCLAT
Swedish telecom equipment
supplier Ericsson may have to refund the settlement sum of Rs 578 crore that
the company has received from Reliance Communications (RCom) as the National
Company Law Appellate Tribunal (NCLAT) reiterated the observation that the
Insolvency and Bankruptcy code (IBC) has triggered against the Anil Ambani
company. NCLAT directed Ericsson to clarify the state of proceedings before the
Supreme Court and said if the tribunal allows IBC against RCom, the Swedish
giant has to return the settlement sum of Rs 578 crore. NCLAT will hear the
case on April 30.
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SUPREME COURT SETTLES INSOLVENCY PROCEEDINGS AGAINST MACK SOFT
TECH
The Supreme Court has allowed
settlement of insolvency proceedings against Mack Soft Tech Pvt Ltd, based on
an application filed by group company, Quinn Logistics India Ltd. Quinn
Logistics was the holding company of Mack Soft when the loans were disbursed to
it during 2007-2010, in connection with the ‘Q-City’ project. Quinn Logistics
held 99.9% of Mack Soft’s shareholding. The loan granted by Quinn Logistics was
interest-free. Subsequent to insolvency triggered against a Quinn group company
offshore, Mack Soft Tech diluted Quinn Logistics’s shareholding by issuing
shares to Mecon FZE, in 2011 (which is also currently under dispute). Quinn
International Property Group (Quinn IPG), which had funded the asset, came into
financial trouble in Ireland where it owed money to the Irish Bank Resolution
Corporation (IBRC), a nationalized bank. IBRC alleged that the Quinn family had
tried to take the Q City asset out of Quinn IPG knowing well that Quinn IPG
would be taken over by IBRC. Since 2011, Mack Soft ceased to be a subsidiary of
Quinn Logistics. And since 2011, IBRC and the Quinn Group have been attempting
to take control of Mack Soft and various cases were filed in the courts in
Hyderabad. It appears that the total debt of Rs. 62.9 crores owed to Quinn
Logistics was written off unilaterally by `Mack Soft‘ and adjusted as income in
its balance sheet, for which income-tax was also paid. Quinn Logistics in 2017
demanded the repayment of this debt. Mack Soft did not pay and Quinn Logistics
moved to the NCLT under Section 7 of the Insolvency and Bankruptcy Code. Mack
Soft’s primary line of defence was that the period of limitation had expired
and thus the debt was time-barred. The NCLT did not find merit in this argument
due to acknowledgment in the balance sheet and therefore admitted the
application. On appeal, the NCLAT upheld the NCLT decision and found a
‘continuous cause of action’. Subsequently, an appeal was filed with the
Supreme Court against the NCLAT order upholding admission. The Supreme Court
had, in September 2018, issued an interim stay against the NCLAT order.
However, while the appeal was pending, on March 5, 2019, a global settlement
was reached in respect of the litigation pertaining to Mack Soft between IBRC
and the former shareholders and in terms, thereof the control of Mack Soft has
passed to a new Board. Upon conversion of certain debentures, Mack Soft is now
controlled by Quinn Finance (an Irish entity controlled by IBRC). With this
global settlement being approved by the Supreme Court and the NCLT, the
Resolution Professional appointed for Mack Soft has been removed and a new
stable Irish led Board has been put in place. The Supreme Court has recorded
settlement and permitted withdrawal of the case while disposing of the appeal
against the NCLAT order. It appears that this power was once again drawn from
Article 142 of the Constitution. Despite Section 12A having come into place
last year by the IBC (Amendment) Ordinance, Article 142 is being used to
withdraw cases. Section 12A permits withdrawal of CIRP provided 90% creditors
vote is achieved in favour of settlement. However, the Supreme Court had
previously in the case of Shipra Hotels held that this provision is to apply
only prospectively, implying that all cases under CIRP as of the Ordinance date
would not be entitled to use Section 12A for settlement. Technically, all such
cases should go to the Supreme Court for settlement.
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RP MOVES NCLT FOR EXTENSION OF ASIAN COLOUR COATED ISPAT
DEADLINE
Sole bidder JSW Steel's Rs
1,200 crore offer for downstream company, Asian Colour Coated Ispat Limited, may
be under a cloud, as the resolution professional and the committee of creditors
have moved the National Company Law Tribunal (NCLT), seeking an extension of
deadline. Kuldip Kumar Bassi, said that an extension had been sought in NCLT
Everybody's objective is maximisation of value, it would be good to have some
competition, he said. Asked whether fresh bids would be invited, Bassi said, it
would be a CoC (committee of creditors) decision if the extension was granted.
The 270-day CIRP deadline for Asian Colour Coated would end on April 16. The
maximum stipulated time for a resolution under the IBC is 270 days. The
deadline for submitting bids for Asian Colour Coated was March 8. The
application is to extend the CIRP duration. JSW Steel has submitted a Rs 1,200
crore bid for Asian Colour Coated Ispat which includes Rs 800 crore for secured
financial creditors and Rs 400 crore for unsecured creditors. Asian Colour
Coated - part of the Reserve Bank of India's second list of non-performing
assets - has a debt of around Rs 4,900 crore with SBI having the largest
exposure at Rs 1,600 crore.
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SEAF-BACKED ABHAY NUTRITION NOW IN NCLT
The dedicated bankruptcy
court has admitted an insolvency petition filed by the Swiss emerging markets
fund, Respons Ability Fair Agriculture Fund, against livestock feed
manufacturer Abhay Nutrition for defaulting on around $4.75 million (around Rs
33 crore) of advances. Maharashtra-based Abhay Nutrition is backed by the
US-based and emerging countries focused fund SEAF and currently it owns India’s
largest cotton seed processing unit, with an annual capacity of 2 lakh tonnes.
The company had provided corporate guarantees for its Dubai-based subsidiary
Krishi Nutrition. However, since the subsidiary failed to repay ResponsAbility
Fund, it had approached NCLT to recover its dues from Abhay Nutrition. The
local borrower company had challenged the insolvency petition with the argument
that that the validity and enforceability of the deed of guarantee needs to be
proved under the laws of Switzerland. However, the Mumbai-bench of NCLT, while
allowing the insolvency plea filed by the Swiss lender, observed that it is
always open to the ‘financial creditor’ to initiate Corporate Insolvency
Resolution Process against the corporate guarantor.
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AIRTEL GETS SEBI NOD FOR ₹25,000 CRORE RIGHTS ISSUE
Telecom operator Bharti
Airtel has received market regulator Sebi's approval to raise up to ₹25,000
crore through rights issue, according to sources. The board of the company had
approved the rights issue proposal in February. The Securities and Exchange
Board of India (Sebi) has given green signal to the rights issue of Airtel, the
sources said. The board has earlier approved the rights issue to raise up to ₹25,000
crore through issuance of fully paid up shares at a price of ₹220
per share, and an additional ₹7,000 crore via foreign currency perpetual bond issue.
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ADANI POWER SECURES LETTER OF INTENT TO ACQUIRE KORBA WEST
POWER COMPANY
Adani Power Monday said it
has been awarded a letter of intent to acquire debt-laden Korba West Power
Company. The company has been awarded the letter of intent (LOI) for Korba West
Power Company Ltd (KWPCL). The Committee of Creditors of KWPCL, a company
undergoing insolvency resolution process under the Insolvency and Bankruptcy
Code, 2016, has approved the resolution plan submitted by Adani Power, Adani
Power said in a BSE filing. The closure of the transaction shall be subject to
obtaining the necessary approval from the NCLT, Ahmedabad, and satisfaction of
the conditions precedent under the resolution plan, the company added. KWPCL
owns and operates a 600 mega watt (MW) thermal power plant in Raigarh district
in Chhattisgarh.
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TWO HELD FOR DOCTORING SC ORDER ON ANIL AMBANI
Delhi Police’s crime
branch has arrested two former Supreme Court officials in a case of tampering
of an SC order that had directed Reliance Communications chairman Anil Ambani
to personally appear in a case of contempt of court. The arrested men, identified
as assistant registrar Tapan Kumar Chakraborty and court master Manav Sharma,
had earlier been sacked by CJI Ranjan Gogoi. The two have been charged with
cheating and forgery. While the SC had on January 7 this year directed Ambani
to appear in the contempt case filed by Ericsson, the order that was uploaded
on the court’s website stated that he was not required to show up. After
Ericsson officials pointed out the mistake, the order was corrected online
three days later. Sources have told that the police had filed an FIR in this
connection on March 1 on a complaint given by the SC registrar. A five-member
team carried out an exhaustive probe for 38 days before going for the arrests
on Sunday evening.
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ARCELOR COC REJECTS ROYAL PARTNERS PLAN FOR KSS PETRON
Arcelor Mittal Group-led
Committee of Creditors (CoC) has rejected the resolution plan of Royal Partners
Investment Fund, a sole bidder for KSS Petron and has approached the dedicated
bankruptcy court for liquidation of the stressed asset. On Monday, advocate
Jitendra Kumar, representing the resolution professional (RP) of KSS Petron,
said, the CoC had on February 7 decided to liquidate the firm. We are seeking
court’s approval for the same, he added. Mauritius-based Royal Partners (also
known as RPMG Investments) has submitted a bid to buy the firm. We are
challenging the rejection of our bid and also the constitution of CoC because
one single lender owns over 99% in the firm and they are also related party in
the matter, argued Royal Investment Partners’ lawyer.
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RESERVE BANK OF INDIA ISSUES NORMS FOR BANKS TO SET UP
CURRENCY CHESTS
The Reserve Bank of India
on Monday came out with guidelines for banks to set up new currency chests
which include minimum area of 1,500 square feet for strong room. Area of the
strong room/ vault of at least 1,500 sq ft. For those situated in hilly/
inaccessible places, the strong room/ vault area of at least 600 sq ft, the RBI
said while specifying minimum standards for setting up new currency chests.
Besides, the new chests should have a processing capacity of 6.6 lakh pieces of
banknotes per day. For those situated in the hilly/ inaccessible places,
capacity of 2.1 lakh pieces of banknotes per day. The central bank further said
the currency chests should have CBL of Rs 1,000 crore, subject to ground
realities and reasonable restrictions, at the discretion of the Reserve Bank.
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DECCAN CHRONICLE CASE POSTED TO APRIL 16
The Hyderabad Bench of
National Company Law Tribunal (NCLT) posted Corporate Insolvency Resolution
Process (CIRP) case of debt-ridden Deccan Chronicle Holdings Limited (DCHL) to
April 16. Ratakonda Murali, Member (Judicial), Court-I of NCLT Hyderabad Bench,
was scheduled to deliver orders on the interim application (IA) filed by IDBI
Bank challenging lower allocation of funds for it in the resolution plan
approved by Committee of Creditors (CoC) of DCHL. The orders on the IA will now
be issued on April 16. Orders on the approved resolution plan will also be
announced on the same day. Other 8 IAs related to this case will be also be
taken up on the same day.
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RATAN TATA SAYS CYRUS MISTRY FAILED TO DELIVER ON PROMISES
As many as seven of the
nine members of Tata Sons’ Board approved then chairman Cyrus Mistry’s removal.
They lost confidence in him as Mistry failed to deliver as per the promises,
Ratan Tata counsel Abhishek Manu Singhvi informed the National Company Law
Appellate Tribunal (NCLAT) on Monday. The eighth member of the Board was Mistry
himself, while the ninth member abstained from voting. Singhvi also said that
Mistry insisted that he would not quit from the top post even as the Board,
asked him to resign, peeved with his below-par performance. Tata’s counsel said
Mistry used to make tall claims like taking the company among the top 25 of the
world without giving any details, but during his over four years’ tenure, most
of the Tata Group firms were incurring losses, resulting in a decline in the
profitability of the group. Debts were also on the rise. Only TCS and Jaguar
were earning profits. Hearing Mistry’s plea against his ouster from the top
post, the two-member NCLAT bench, headed by chairperson Justice SJ
Mukhopadhyay, said: We need to know as to why the Board lost confidence in him?
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RETAIL LOAN GROWTH SLOWS IN Q4CY18: CIBIL
Retail loans are starting
to show signs of deceleration due to the slowdown in the economy in the last
few quarters, said a report by TransUnion Cibil. Aggregate retail lending
growth in value terms (balance outstanding in INR) declined from 27.4 per cent
in Q1 2018 to around 19 per cent in Q4 2018. Similarly, the rate of growth in
volume terms (the number of accounts) declined from 30.2 per cent in Q1 2018 to
20.8 per cent in Q4 2018. While the pace of growth of retail loans has slowed,
the demand for credit products has accelerated due to factors like rising
consumerism and the impact of demonetisation. The gap between demand and supply
of credit for retail products continued to widen as seen in the declining trend
of loan approval rates. It is clear there is still significant demand for
credit amongst Indian consumers, with enquiries increasing 40 per cent
year-on-year in CYQ4 2018. However, supply has not quite kept pace and approval
rates have displayed a consistent declining trend from Q1 2017 onward, said
Yogendra Singh. The growth rate of unique consumer enquiries for retail lending
products has accelerated from 26.8 per cent in Q2 2018 to 36.2 per cent in Q3
2018, in contrast to aggregate origination trends as well as the economic
growth trends. Aggregate approval rates have come down from 43% in Q3 2016 to
40.3% in Q3 2017 and further on to 33.9% in Q3 2018. This effect is driven by
an increasing percentage of non-prime, higher-risk consumers entering the
credit marketplace, and shows lenders are actively managing their risk exposure
and thus the profile of their overall portfolio, said Singh. The improving risk
management is reflected in stable or declining delinquency rates for most
retail products, said CIBIL.
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INTEROPERABILITY IN CLEARING AND SETTLEMENT: SEBI LEADS THE
WAY
The market regulator,
Securities and Exchange Board of India, needs to be commended for its efforts
to introduce interoperability in clearing and settlement in the Indian market.
The move is not only in the interest of the small investor but it will also
make Indian securities markets the first to bring about interoperability in the
derivatives market, in a system where risk management is carried out real-time.
The move aims to protect the collateral that investors deposit with clearing
corporations and shield them against systemic failures. Interoperability of
clearing and settlement in equity, equity derivatives and currency derivatives
from June this year will enable market participants to select either of the
three clearing corporations — NSE Clearing, Indian Clearing Corporation, or
Metropolitan Clearing Corporation of India — to clear and settle the trades. As
of now, post-trade settlement has to be done only on the clearing corporation
linked to the exchange on which the transaction is executed. With consolidation
of client positions, collaterals and settlement with a single clearing house,
SEBI expects that costs will come down and there will be better efficiency in
the settlement process. The SEBI circular that laid down the guidelines for
moving clearing houses towards sharing their facilities was modelled along
Principle 20 of Principles for Financial Market Infrastructures, prescribed by
the Committee on Payments and Settlement Systems and the Technical Committee of
International Organization of Securities Commissions. While such a structure
has been under discussion among global market infrastructure institutions, this
is the first time that interoperability in settlement is being tried in the
derivatives market, where client positions have to move seamlessly between
clearing houses. Also since Indian stock exchanges carry out risk management on
a real-time basis, that is client margins are matched to the trade value as
soon as the transaction is executed, the task gets much more challenging. It is
heartening to note that Indian exchanges are open to accepting this change and
are working towards meeting the June 1 deadline given by SEBI. Various
agreements dealing with communication links between the clearing corporations
and trading venues, settlement processes, market surveillance, sharing of data,
default handling and dispute resolution are being worked out. It is good to
note that the market regulator is closely working with stakeholders to address
the concerns and find solutions. Since this is the first time that a task of
this scale is being attempted, global MIIs (market infrastructure institutions)
are keenly watching this experiment; there will be learnings from this for exchanges
and clearing houses around the world. It is therefore necessary that care is
taken not to show haste, but to give enough time to stakeholders to suitably
test the system and iron out glitches. Trading members should also be given
sufficient time to understand the change and to switch to the new design. Since
the entire post-trade architecture of the stock market is now shifting to a
more complicated structure, any glitches can throw the stock market into
disarray.
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TATAS TO TAKE OVER USHA MARTIN’S STEEL UNIT TODAY
Tata Steel is set to take
possession of Usha Martin's steel unit at Jamshedpur on Tuesday. The deal was
agreed upon in September last year in a transaction worth Rs 4,600 crore. This
is the second acquisition by Tata Steel in less than a year, after it
successfully managed to take over Bhushan Steel limited now renamed Tata Steel
BSL through the NCLT-led process for auction of stressed steel assets in April
2018. Tata Sponge is Tata Steel's chosen vehicle for the acquisition of Usha
Martin's one million tonne steel business for which it issued preference shares
to Tata Steel. The proceeds from the deal will be kept in an escrow account of
SBI and will be utilised to repay Usha Martin’s debt. All employees pertaining
to UML’s steel business will be transferred as part of the divestment. When
contacted a Tata Steel spokesperson said the deal is on course and is likely to
be completed soon but declined to comment on specifics.
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IRDAI EYES INSTALMENT MODE OF INSURANCE CLAIM SETTLEMENT
Insurance regulator IRDAI
is planning to give policyholders an option to receive payment of claims in
instalments under certain policies like personal accident (PA) and benefit-based
health insurance. The regulator had set up a working group to study a proposal
in this regard and the panel had submitted its report in January this year
after examining the concept of settlement of PA and benefit-based health
insurance claims in instalments. Now, the IRDAI has come out with draft
guidelines and sought comments from stakeholders. It is of the view that the
option of settlement of claims in instalments will ensure that claimants have
regular income for a reasonable period of time upon happening of a contingent
event. The draft guidelines said the policyholders may be provided an option of
choosing either settlement of claim in lump sum or in equated instalments, or
both in parts. Further, insurers should put in place a procedure to capture the
option exercised by the policyholder at the point of sale and at various stages
of the policy. To safeguard policyholders' interests and to enable them in
taking an informed decision, the draft said the policy wordings relating to the
benefit stricture should be in simple language and clearly defined.
Stakeholders can offer comment on the draft guidelines by April 17, 2019.
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INVESTMENT IN EQUITY MFS DROPS 35% TO RS 1.11 LAKH CR IN FY19
Investors pumped in more
than Rs 1.11 lakh crore in equity-oriented mutual fund (MF) schemes in 2018-19,
a decline of 35 per cent compared to Rs 1.71 lakh crore inflows in 2017-18,
according to the industry data. However, this was the fifth successive year of
net inflows in equity mutual funds, according to the association of mutual
funds in India's (AMFI) data. There was also a steep correction in small and
mid-cap stocks. The market volatility and corrections pulled down net inflows
in the equities in 2018-19, he said. But despite that the current inflows of Rs
1.11 lakh crore is a substantial investment by the mutual fund industry into
the equities segment which is more than FII investments into the country, he
added. The flows into equity funds in 2018-19 were lower than the flows in
2017-18 primarily due to the equity markets displaying a fair bit of volatility
which made some investors take a break from making fresh equity investments,
said Kaustubh Belapurkar, manager research, Morningstar. According to the AMFI
data, net inflows into equity funds, which also include equity-linked saving
schemes (ELSS), were Rs 1,11,423 crore in 2018-19 as against Rs 1,71,069 crore
in the preceding fiscal. Net inflows in these funds were Rs 70,367 crore in
2016-17, Rs 74,024 crore in 2015-16 and Rs 71,029 crore in 2014-15,
respectively. However, they had witnessed a net outflow of Rs 9,269 crore in
2013-14. The assets under management (AUM) of equity MFs stood at a record high
of Rs 7.73 lakh crore at the end of March 2019 as against Rs 7.50 lakh crore in
March 2018, an increase of 3 per cent. During 2018-19, the SIP (Systematic
Investment Plans) accounts grew by 51 lakh to 2.62 crore from 2.11 crore in
March 2018. Besides, SIP contribution to the industry surged to Rs 92,693 crore
in 2018-19, from Rs 67,190 crore in the preceding fiscal.
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SBI INVITES EOI TO SELL NPA ACCOUNTS TO RECOVER RS 423 CRORE
SBI has invited expression
of interest from asset reconstruction companies and financial institutions to
sell two non-performing accounts to recover dues of over Rs 423 crore The
e-auction for the NPA accounts - Kamachi Industries and SNS Starch - is
scheduled for April 25, 2019, SBI said in an expression of interest (EoI)
invite. In terms of the bank’s policy on sale of financial assets, in line with
the regulatory guidelines, we place these accounts for sale to banks/
ARCs/NBFCs/ FIs, SBI said. Steel maker Kamachi Industries has an outstanding of
Rs 364.80 crore while SNS Starch --which manufactures and exports various
grades of starch -- owes Rs 58.87 crore to SBI. The reserve price for sale of
Kamachi Industries is fixed at Rs 165 crore and SNS Starch at Rs 36.56 crore. The
interested banks/ARCs/ NBFCs/ FIs can conduct due diligence of these assets
with immediate effect, after submitting EoI and executing a non-disclosure
agreement with the bank, SBI said. The sale will be on 100 per cent cash basis,
the bank said.
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FPIS POUR IN ₹8,634 CRORE IN APRIL SO FAR
Overseas investors have pumped
in a net sum of Rs8,634 crore into the Indian capital markets in the first five
trading sessions of April, mainly due to positive market sentiment. As per
analysts, the positive change has been triggered by domestic as well as global
factors and the trend is likely to continue for some time. In March, the
overseas investors had pumped in a net ₹45,981 crore into the
capital markets (both equity and debt). For the 2018-19 fiscal, they were net
sellers to the tune of ₹44,500 crore. According to depositories data, foreign
portfolio investors (FPIs) put in a net amount of ₹8,989.08
crore in equities during 1-5 April. However, they pulled out a net ₹355.27
crore from the debt markets, leading to an overall investment of ₹8,634
crore in the capital markets.
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TURNING ASH INTO GOLD: SBI EYES RS 423 CRORE RECOVERY FROM TWO
DUD ACCOUNTS
SBI has invited expression
of interest from asset reconstruction companies and financial institutions to sell
two non-performing accounts to recover dues of over Rs 423 crore. The e-auction
for the NPA accounts — Kamachi Industries and SNS Starch –is scheduled for
April 25, 2019, SBI said in an expression of interest (EoI) invite. In terms of
the bank’s policy on sale of financial assets, in line with the regulatory
guidelines, we place these accounts for sale to banks/ ARCs/NBFCs/ FIs, SBI
said. Steel maker Kamachi Industries has an outstanding of Rs 364.80 crore
while SNS Starch –which manufactures and exports various grades of starch —
owes Rs 58.87 crore to SBI. The reserve price for sale of Kamachi Industries is
fixed at Rs 165 crore and SNS Starch at Rs 36.56 crore. The interested
banks/ARCs/ NBFCs/ FIs can conduct due diligence of these assets with immediate
effect, after submitting EoI and executing a non-disclosure agreement with the
bank, SBI said. The sale will be on 100 per cent cash basis, the bank said.
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MORE REASONS TO HIRE WOMEN WORKERS: THESE MSMES TO GET
PRIORITY IN GOVT PROCUREMENT
Narendra Modi led BJP released its manifesto and while the
traders’ community had a lot to rejoice, the ruling government has also taken
steps to improve gender balanced workplaces. To encourage MSME’s (micro, small
and medium enterprises) for hiring more women employees, the BJP has promised that
the government will take steps to source supplies from MSMEs where at least
half the workforce consists of women. To generate better work opportunities for
women, 10% material to be sourced for government procurement will be done from
MSMEs having at least 50% women employees in their workforce, BJP manifesto
said. It also gave an idea about the import substitutions that the government
is looking to make. Items such as apparels, leather, paper and wood articles,
stone items like idols, plastic and rubber items, furniture, clocks, toys etc
will be sourced from such enterprises. However, the list is not exhaustive. Traders’
body welcomed the move. Praveen Khandelwal, General Secretary of the
Confederation of All India Traders (CAIT) told that it is a welcome step by the
government for the empowerment of women. He added that CAIT had demanded for
more, but for now, 10% procurement is a good start. Apart from women
empowerment, BJP manifesto has much to offer for the trading community, which
had earlier voiced their dissatisfaction with the FDI policy for e-commerce
websites such as Flipkart and Amazon. Even though the issue still remains
unaddressed, CAIT’s Praveen Khandelwal told that it will continue to pressurise
the government until their demands are met. Meanwhile, the traders’ community
has sent charters to various parties to raise their demands. We have sent our
charter to all political parties. And we will wait for the responses to analyze
them before giving our mandate to traders on whom to vote, Khandelwal added. The
government has announced its plan to five times the current credit loan to Rs
1,00,000 crore by 2024. Also, with changes such as Kisan like credit cards for
GST registered merchants, BJP has swayed the traders’ community to its side.
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INDIA HAS NEARLY 10 TIMES GOLD AS PAKISTAN
While India’s penchant for
yellow metal gold is well-known, the country’s bullion reserves at a whopping
607 tonnes is far ahead of Pakistan. Notably, India is the single largest
consumer of gold and has the 11th largest gold reserve with the current holding
pegged at 607 tonnes, as per the latest report by the World Gold Council (WGC).
In comparison, Pakistan’s total gold reserves were pegged at 64.6 tonnes, just
over one-tenth of India’s massive gold pile. Interestingly, China has upped the
ante on gold and is lapping up the yellow metal in recent times. The world’s
second-largest economy expanded its gold reserves for the fourth straight
month, as the People’s Bank of China raised reserves to 60.62 million ounces in
March from 60.26 million a month earlier, Bloomberg reported citing data from
the central bank’s website. China’s total reserves stands at a whopping
1,864.30 tonnes, as per the WGC report. If China continues to accumulate gold
at the current rate over 2019, China may end the year as the top buyer after
Russia, which added 274 tons in 2018. As per data from WGC, Mainland China with
reserves at 1,864.30 tonnes comes at the 7th spot, while Russia’s reserves stands
at 2,119.20 tonnes, at the sixth spot. The top five countries in terms of gold
reserves include United States (8,133.50 tonnes); Germany (3,369.70 tonnes);
Italy (2,451.80 tonnes); France (2,436 tonnes); and Russia (2,119.20 tonnes).
Notably, as per the WGC report, IMF with a reserve of 2,814 tonnes, comes third
on the list. Switzerland with a total reserve of 1,040 tonnes, Japan (765.20
tonnes), Netherlands (612.50 tonnes) rank ahead of India in the list.
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GOLD CROSSES RS 33,000-MARK, SILVER FIRMS UP
Gold prices surged by Rs
425 to Rs 33,215 per 10 gram in the national capital Monday due to increased
buying by jewellers amid firm trend overseas, according to the All India Sarafa
Association. Silver too rose by Rs 170 to Rs 38,670 per kg on increased offtake
by industrial units and coin makers. Traders said, positive trend overseas and
rise in demand from local jewellers led to upward movement in the prices of
yellow metal. In the international market, spot gold was trading higher at USD
1,298.30 an ounce, while silver moved upward to USD 15.23 an ounce in New York.
In the national capital, gold of 99.9 per cent and 99.5 per cent purity rose by
Rs 425 to Rs 33,215 and Rs 33,045 per 10 gram, respectively.
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5.6 LAKH HOUSING UNITS WORTH RS 4.51 LAKH CRORE FACING DELAYS
IN 7 MAJOR CITIES: ANAROCK
Around 5.6 lakh housing
units, worth Rs 4.5 lakh crore in seven major cities are running behind the
delivery timelines mainly due to demand slowdown and fund diversion by
developers, according to property consultant Anarock. These 5.6 lakh flats were
launched before 2013 in these seven cities -- National Capital Region (NCR),
Mumbai Metropolitan Region (MMR), Chennai, Kolkata, Bengaluru, Hyderabad and
Pune. The top 7 cities currently have a total stock of 5.6 lakh delayed housing
units worth a whopping Rs 4,51,750 crore, Anuj Puri said. Lakhs of buyers
across top cities, particularly MMR and NCR - have been left in limbo, leading
to inconceivable mental stress and financial pain, he added. As per the Anarock
data, the NCR and MMR account for 72 per cent of the total stuck housing units.
In MMR, as many as 1,92,100 apartments worth Rs 2,17,550 crore are delayed,
while the NCR has 2,10,200 units worth Rs 1,31,460 crore running behind the
schedule. The main southern cities of Bengaluru, Chennai and Hyderabad together
account for a mere 10 per cent of the overall stuck housing units of a total
worth of Rs 41,770 crore. The Southern cities have predominantly been driven by
service-class end-users, leaving limited scope for developers to be
unprofessional. It has become a 'chicken and egg' situation - buyers have
understandably stopped releasing funds to builders, and builders claim they
have no funds to complete construction, he added. Every delayed project results
in cost overruns which compound the funding crunch even further.
Anarock chairman said the
lack of project clearances for whatever reason also contributes to the piling
up of housing stock. In the pre-RERA era, many builders launched greenfield
projects without the requisite approvals in place, resulting in their projects
getting stuck. The consultant said that by amending the Insolvency and Bankruptcy
Code and treating buyers at par with banks and other creditors, the government
has safeguarded the interests of affected buyers. Whichever government is in
power after the upcoming general elections, it has a mammoth task to complete.
Delayed projects have severely weakened faith in under-construction properties
and reviving buyers' trust is a herculean task, Puri said. If buyers stop
purchasing under-construction properties, builders would have a far more
challenging time to get funds from external sources for project construction,
he added.
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DELIVER ON TIME OR PAY BACK WITH INTEREST: MO-HUA TO FRAME NEW
RULES FOR DEVELOPERS
Considering the endless
delays in the delivery of thousands of apartments the Union Ministry of Housing
and Urban Affairs (Mo-HUA) is mulling the framing of new rules under which
developers would have to refund home-buyers’ full payment with interest if the
project is delayed beyond a stipulated time frame. There are large numbers of
cases where the home-buyer’s money is stuck because of delays in the delivery
of flats. While under RERA there is provision for punitive measures against
developers, there is no easy exit route for stricken home buyers, a senior
official from Mo- HUA said. Despite the provisions for a refund included in
RERA law, regulators have been discouraging refunds in many cases, arguing that
such a move would further delay the project. During our interaction with Real
Estate Regulatory Authorities (RERA) in different states, project delay was one
major concern. The proposal is that if a developer is delaying residential
projects beyond one year, the buyers will have the option to exit and they can
claim a refund with interest equal to home loan interest rates, the official
added. The proposal is being seriously considered by the ministry and it is
expected to begin consultations on it with various state regulators soon. In
the last two-three years, there has been a surge in the number of stalled
projects. Various reports from property firms suggest that there are currently
roughly three lakh homes in NCR alone which are either stuck due to errant
builders and lack of funds or are already facing insolvency. This list includes
all the top names like Unitech, Amrapali, Jaypee, 3C Developers and Logix,
which remain in limbo for one reason or another. As many as 100 builders have
defaulted in the UP-NCR region with their projects having been delayed by three
to six years on an average. If they do not complete the projects, we will go
ahead and deregister or take over the projects, Balwinder Kumar, member of UP
RERA bench said. While the average delay is of 3-5 years, there are 21,000
apartments in residential projects of Logix group, Today Homes, Rudra
Buildwell, Omaxe and Supertech which fall under the ‘extremely delayed’
category over seven years. Regulatory bodies are already imposing penalties on
developers, deregistering them and taking over projects. For instance, last
month, the Uttar Pradesh Real Estate Regulatory Authority (UP-Rera) decided to
deregister six builders for failing to meet their commitments to buyers over
project delays. Earlier this month, MahaRERA had also issued a Standard
Operating Procedure (SOP) allowing homebuyers to remove developers from the
project. However, these measures are not helping distressed homebuyers paying
both EMI and house rents. Last week, the Supreme Court in one of its rulings
had observed that a buyer cannot be required to wait indefinitely for
possession of his apartment.
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MUMBAI HAS RS 4,000-CRORE WORTH OF READY-TO-MOVE-IN PROJECTS
With developers focusing
on timely execution, over Rs 4,000 crore worth of ready-to-move-in luxury
residential inventory is available in the south and southcentral zones of the
megapolis as against Rs 2,800 crore a year ago, say industry experts. According
to industry veterans, luxury residential projects worth Rs 75,000 crore have
faced delays up to seven years due to various reasons, including lack of timely
approvals among others in the prime locations of the island city alone as of
end March forcing all these projects to set fresh completion deadlines in their
MahaRera listings. Construction delays happen due to several reasons, ranging
from liquidity crisis, delay in approvals, litigations to downright
mismanagement. Also, developers are declaring longer-than-usual timelines for
completion due to Rera stipulations with some of them still unable to hand over
the projects on time, Ashutosh Limaye told PTI. As per statistics, the
ready-to-move in stock were worth Rs 2,500-2,800 crore as of as of March 2018,
which has jumped to over Rs 4,000 crore as of March 2019, mainly due to faster
execution. Luxury residential inventory in these markets ranges from Rs 7 to Rs
80 crore comprising 3/4BHK units along with half-floor and full-floor plates
offering beyond 10,000 sqft. Such projects are sold for their expertise,
advanced technology along with faster delivery and premium offering and such
offerings does create goodwill for the brand in the long-run, says Omkar
Realtors founder and managing director Babulal Varma. He further says they
delivered the first phase of two towers of their Omkar 1973 at Worli almost
eight months ahead of the deadline and now has limited ready-to-move-inventory.
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HIRING ACTIVITY SEES 12% GROWTH IN MARCH LED BY IT INDUSTRY
Hiring activities
registered 12 percent growth this March mainly led by the IT industry that
clocked a 38 percent growth, says a report. The Naukri JobSpeak Index for March
2019, stood at 2,378, which is 12 percent higher in hiring activities from
March 2018, at 2,129. The IT-industry has shown a continuous growth in the
recruitment landscape over the past six months, recording a rise of 38 percent
growth. Recruitment for functional areas like human resources and marketing
observed a growth of 13 percent and 12 percent respectively. The JobSpeak index
continues with its positive growth in hiring with a 12 percent rise when
compared to the same period last year. Our latest hiring outlook survey showed
89 percent recruiters from the IT industry stating that new jobs and
replacement hiring will play a strong role in hiring. Hopefully the momentum
will be sustained in the coming months, InfoEdge India CMO Sumeet Singh said.
The industries in March 2019 which saw growth in recruitment activity were
construction and engineering (13 percent), BPO and ITES (9 percent), insurance
(6 percent), FMCG (5 percent), education (7 percent) and IT hardware (3
percent). Recruitment activity for mid-management roles with 8-12 years of
experience grew by 9 percent, while senior management roles with 13-16 years of
experience recorded a 5 percent rise in hiring. Moreover, it said, hiring for
leadership roles with experience band of over 16 years remained flat.
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GOOD TIDINGS FOR BIG 5 IT FIRMS IN Q4
India’s big five IT
companies are expected to post strong revenue growth in the seasonally-weak
fourth quarter on the back of large deal wins, but margins could come under
pressure as the costs of expanding headcount in the US begin to bite. IT
companies have had to spend more to hire people in the US and Europe and pay subcontractors
where talent is scarce. They are also spending millions of dollars to reskill
employees in India, to build their offshore base. We expect a steady quarter
with strong growth from Infosys, TCS and HCL Tech and muted growth for Wipro
and Tech Mahindra. Profitability will face the test of increasing cost onsite,
Kawaljeet Saluja, said in a note. TCS and Infosys are set to announce their
fourth quarter results on April 12, kicking off the earning season for tech
companies. Saluja expects Infosys to report 1.9 per cent constant currency
revenue growth in the fourth quarter, and 1.8 per cent growth from TCS. He
expects Wipro to grow1.5 per cent, HCL Technologies at 2.5 per cent and 1 per
cent growth from Tech Mahindra. Last year, Infosys cut its target margin band
to 22-23 per cent from 23-25 per cent to allow it room to invest in its US
talent model. It has already hired over 7,500 of the targeted 10,000 US local
talent, but some analysts believe the Bengaluru-headquartered company may need
to cut its margin band further. Infosys’ margin guidance may drop further to
21-23 per cent, in our view, Ashish Chopra, research analyst with Motilal
Oswal, said. Our expectation comes on the back of a weak 4Q exit and the
typical margin cycle of low 1Q followed by a gradual increase. TCS, too, is
expected to miss its target margin band of 26-28 per cent.
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MUKESH AMBANI SETS OUT TO CHANGE THE FACE OF INDIAN CITIES,
FIRST PROJECT ALREADY ON
Reliance Industries is tying
up the last loose ends in its blueprint for setting up a megacity in the
vicinity of Mumbai. It is going to be Reliance Group's single biggest projects
within a project initiative, where every component of a project will be a
project in itself. Ambani's megacity will be developed on the lines of
Singapore. It will have airport, port and sea link connectivity. Once
completed, the city will accommodate over half a million inhabitants and
thousands of businesses. The project is expected to draw in as much as $75 billion
in investments over the next decade. Ambani is likely to roll out his new
brainchild on a massive, never-before-seen scale. Analysts say it could be a
Jio redux — the mega 2016 launch that had all India gasping in wonder in its
wake. In terms of affordability and quality of product, Ambani's mega city
could match the Jio phenomenon, experts have said. By all measures, this new
Reliance project is likely to script a new chapter for India primarily because
it could recast the whole urban infra scene. Mumbai may be a changed place
after this megacity comes, said the story. It will likely lead to reverse
migration as property prices in the new city will be lower than in Mumbai, it
added quoting a top real estate analyst. This licence, apart from reducing red
tape and transaction time, will enable Ambani to sharply — even dramatically —
bring down the costs involved, says the report. It was Dhirubhai Ambani, the
legendary founder of the Reliance Group, who had first come up with the idea of
setting up a world-class city in Navi Mumbai. He had thought of a project on
these lines as early as the 80s — a project for linking South Mumbai and Navi
Mumbai by road. The plan, had it succeeded, would have decongested Mumbai long
back. Reliance had announced early last month about its leasing of 4,000 acres
of land from Navi Mumbai SEZ (NMSEZ) for an initial payment of Rs 2,180 crore
to develop an economic hub on a global scale. NMSEZ had been given this land in
2006 to develop a world-class SEZ. In 2018, under the Maharashtra Industrial
Policy, the state government permitted SEZs to migrate to Integrated Industrial
Area and make available the land for industrial units. NMSEZ later applied and
received the consent to convert the SEZ into the Integrated Industrial Area (IIA)
as per the policy.
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FACEBOOK IS REMOVING 1M ABUSIVE ACCOUNTS A DAY AS IT GEARS UP
FOR INDIAN ELECTIONS: AJIT MOHAN
As Indians prepare to vote
in the General Election for the 17th Lok Sabha, Facebook is blocking or
removing about one million accounts a day using artificial intelligence and
machine learning, Ajit Mohan said. He said Facebook and its family of apps are
making sure the elections are fair and free from interference, both foreign and
domestic. Facebook will activate new regional operations centres, focused on
election integrity, in Singapore and Dublin. These teams include engineers,
operations specialists and data scientists, and will work closely with staff in
our Menlo Park, CA headquarters, as well as with local experts in Delhi. This
structure helps strengthen our global coordination and speed our response
times, adding another layer of defence against false news, misinformation, hate
speech and voter suppression, wrote Mohan, who took charge as Facebook’s India
head earlier this year. He said Facebook has gotten better at using artificial
intelligence and machine learning to fight interference, and tools such as
artificial intelligence and machine learning helps the company, at a large
scale, identify abusive or violating content, quickly locate it across the
platform and remove it in bulk, dramatically reducing its ability to spread. This
dramatically reduces its ability to spread. We continue to expand on this
initiative, adding 24 new languages — including 16 for India — to our automatic
translation system, Mohan wrote. He said one of the most important new product
changes Facebook has launched in this effort is its political ad transparency
tools, giving people a clearer picture of who is placing the ads they see. He
said Facebook expanded its partnerships with third-party fact-checkers to seven
accredited organizations in India. These groups cover eight of the most spoken
languages — English, Hindi, Bengali, Marathi, Telugu, Tamil, Malayalam and
Gujarati — and Facebook is looking to add more. In a country largely driven by
local and community news, we knew it was critical to have fact-checking
partners who could review content across regions and languages, he wrote. He
said promoting election integrity in India isn’t something Facebook can do
alone, and it recently joined other social media companies in a voluntary code
of ethics for the general elections with the Election Commission of India
(ECI).
__ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _
UK CONSIDERS DIRECT REGULATION OF SOCIAL MEDIA COMPANIES
The UK for the first time
on Monday proposed direct regulation of social media companies with senior
executives potentially facing fines if they fail to block damaging content such
as terrorist propaganda or images of child abuse. The regulations would create
a statutory duty of care for social media companies such as Facebook and
Twitter to protect young people who use their sites. The rules would be
overseen by an independent regulator funded by a levy on internet companies. No
one in the world has done this before, and it’s important that we get it right,
Media Secretary Jeremy Wright told the BBC. And I make no apologies for the
fact that we will put forward proposals here, which we believe are the right
way to approach this, but we will then listen to what people have to say about
them. A 12-week consultation will now take place before the draft bill is
published. Wright insisted the regulator would be expected to take account of
freedom of speech while balancing against preventing harm. What we’re talking
about here is user-generated content, what people put online, and companies
that facilitate access to that kind of material, he said. So this is not about
journalism. This is about an unregulated space that we need to control better
to keep people safer.
#For Source of Information copy and paste the heading in google.
Thanks & Regards,
CS Meetesh Shiroya
Thanks & Regards,
CS Meetesh Shiroya
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