General Awareness

BUSINESS AND ECONOMY - October 2018

Oct 2018

Jan 03, 2019

China's Factory Activity Contracted

According to a survey, China's factory activity contracted for the first time in 19 months in December as domestic and export orders continued to weaken.
The gloomy readings largely dovetailed with an official survey which showed growing strains on China's manufacturing sector, a key source of jobs.
The findings reinforce views that the economy is losing more steam.
The Caixin/Markit Manufacturing Purchasing Managers' Index (PMI) for December fell to 49.7 from 50.2 in November, marking the first contraction since May 2017.

Subsidy to Merchant Exporters

The government decided to provide 3% interest subsidy to merchant exporters to enhance flow of funds for them with a view to boost outbound shipments.
The decision was taken by the Cabinet Committee on Economic Affairs.
The proposal will entail benefits of around Rs. 600 crore to exporters on interest equalisation for the remaining period of the scheme.

Merger of Three State-owned Banks Approved

The cabinet approved the merger of state-run Vijaya Bank and Dena Bank with Bank of Baroda, in a step aimed at cleaning up the country's banking system.
The merger plan was announced last year amid growing concerns over rising bad loans in the banking sector.
Banking sector reforms are a major plank of Prime Minister Narendra Modi's government's plans to revive lending which has slowed as banks struggle with bad debt.
The merged bank will become India's second largest public sector bank and will help create a strong globally competitive bank.
The merger will come into force on April 1.

India Manufacturing PMI Slowed

According to a private survey, Indian manufacturing activity expanded at a slower pace in December, as growth in new orders and output waned, despite factories cutting their prices.
The Nikkei Manufacturing Purchasing Managers' Index, compiled by IHS Markit, declined to 53.2 in December, below November's 54.0 reading and a Reuters poll median of 53.6.

Shapoorji Pallonji Sold 720 Units

Diversified firm Shapoorji Pallonji's real estate arm sold 720 flats worth Rs. 350 crore in its residential project in Pune, reflecting better demand for homes offered by big corporate houses and credible players.
The 8-acre project 'Joyville-Hinjawadi', scheduled to be completed by June 2022, is being developed by Joyville Shapoorji Housing, a $200 million platform of Shapoorji Pallonji Real Estate along with ADB, IFC and Actis.

Jan 02, 2019

Shilpa Medicare Got USFDA Nod

Shilpa Medicare received a USFDA approval for Irinotecan HCL injection, used for treating certain kinds of cancers.
It has received approval for its ANDA Irinotecan HCL injection USP in the strengths 40 mg/2mL and 100 mg/5mL (20mg/mL) single dose vials.

Debt Recast Norms for MSMEs Relaxed

Following a demand from the government for a debt recast package for micro, small and medium enterprises (MSMEs), the Reserve Bank of India (RBI) has relaxed the provisioning norms for lenders for restructuring loans of up to Rs. 25 crore.
According to the guidelines released, the RBI has allowed one-time restructuring of existing loans to MSMEs that are in default but 'standard' as on January 1, 2019.
Banks have to make only 5% provisioning for restructuring the loans as compared to 15-20% earlier.

India Remained Fastest Growing Economy

India remained ahead of China to retain the tag of world's fastest growing large economy withstanding several ups and downs, spike in oil prices and global trade war like situation during 2018.
Indian economy's roller-coaster ride during the year gone by, was best captured by the GDP growth. In the first quarter of 2018-19 ending June 30, it grew at an impressive 8.2 per cent.

New GST Return Forms

The government has notified new annual GST return forms, which are required to be filed by businesses registered under the Goods and Services Tax (GST) regime by June 30, 2019.
In the annual return forms, businesses have to provide consolidated details of sales, purchases and input tax credit (ITC) benefits accrued to them during the financial year of 2017-18.

Jan 01, 2019

HDFC Raises Home Loan Rate

Mortgage financier HDFC has increased the home loan rate by 10 basis points (bps) with effect from January 1.
For loans up to Rs. 30 lakh, the new rate will be 8.95% and for between Rs. 30 lakh and Rs. 75 lakh, it will be 9.10%. For loans over Rs. 75 lakh, interest rate will be 9.15%.
Interest rates for women borrowers will be 5 bps lower than the above rates.
In December, State Bank of India has hiked interest rates by 10 bps.

Fund Raising via NCD Surges

Indian companies raised over Rs. 29,300 crore by issuing non-convertible debentures (NCDs) to retail investors in 2018 to meet their business requirements, representing a three-fold surge compare to the preceding year.
NCDs are loan-linked bonds that cannot be converted into stocks and usually offer higher interest rates than convertible.
Firms that tapped the NCD route this year are Muthoot Finance, Kosamattam Finance, Srei Equipment Finance, Dewan Housing Finance Corp, JM Financial Credit Solutions, Shriram Transport Finance Company, ECL Finance, Indiabulls Commercial Credit, Tata Capital Financial Services, Aadhar Housing Finance, Manappuram Finance and KLM Axiva Finvest.

Big Jump in Bank Frauds

As per the Reserve Bank of India, there has been a four-fold increase in the quantum of money swindled by fraudsters from banks in the last four years.
Looking at the progress in the first half of the ongoing fiscal, the pace of frauds seems to be continuing on the upward trajectory.
RBI said that 5,917 frauds involving an amount of Rs. 41,167 crore were reported by the banks in fiscal year 2017-18, as against 4,306 frauds entailing an amount of Rs. 10,170 crore in FY14.

Core sector Growth Slowed

Core sector growth slowed to 3.5% in November, the slowest in 16 months, from 4.8% in October, due in large part to a slowdown in the coal, cement and electricity sectors.
Coal production increased by 3.7% in November 2018, dramatically slower than the 11.3% growth seen in October.
The cement sector similarly saw growth in November slowing to 8.8% from 18.4% in October.
The electricity sector grew 5.4% in November compared with 10.9% in October.

Dec 29, 2018

NPAs of State-run Banks Declined

Various initiatives taken by the government have yielded results, with the bad loans of public sector banks declining by over Rs. 23,000 crore from a peak of Rs. 9.62 lakh crore in March 2018.
Public sector banks (PSBs) have also made a record recovery of Rs. 60,726 crore in the first half of the current financial year, which is more than double the amount recovered in the corresponding period last year.

Steel Tariff Exemption

India is in talks with the United States over exemptions on steel tariffs.
India will also seek relief from Canada over quotas and tariffs next month as Indian steel companies have been affected by Canadian tariffs.

Tighter ALM Norms for NBFCs

The liquidity crisis at the Infrastructure Finance and Leasing Services (IL&FS) has prompted the Reserve Bank of India (RBI) to tighten the asset-liability management (ALM) framework for non-banking finance companies (NBFCs) and bring them on par with the commercial banks.
The Reserve Bank intends to strengthen the ALM framework for NBFCs on lines similar to that for banks and harmonise it across different categories of NBFCs.

London's Gatwick Airport Sold

Vinci SA agreed to acquire control of Gatwick Airport for 2.9 billion pounds ($3.7 billion) as the French construction company jumped on the chance to add a major London hub to its aviation portfolio.
The purchase of the 50.01 percent stake in the world's second-busiest single runway airport from a group of investors including sovereign wealth funds from Abu Dhabi and Australia will be financed with pound-denominated debt.
With 45.7 million passengers in 2018, Gatwick will become the largest airport in Vinci's global network spanning Brazil to Sweden.

IPOs of Six CPSEs Approved

The Union Cabinet approved the listing of central public sector enterprises (CPSEs) on the stock exchanges through initial public offering (IPO) or follow-on public offer (FPO).
The companies that will go for IPOs include Telecommunication Consultants (India) Ltd, RailTel Corporation India Ltd, National Seed Corporation India Ltd, Tehri Hydro Development Corporation Limited, Water & Power Consultancy Services (India) Limited and FCI Aravali Gypsum and Minerals (India) Limited.

Dec 28, 2018

GAVS Eyes $200 mn Revenue

GAVS Technology will mainly take the mergers and acquisitions (M&A) route to achieve a revenue of $200 million in three years.
Currently, the company is in talks with a couple of companies and the first deal involving a U.S. firm will be completed by March end 2019.
Based in Chennai, GAVS is a digital transformation company with focus on artificial intelligence, predictive analytics and robotics-led enterprise solutions and services.

PSBs to Receive Rs. 28,615 crore from Centre

The government is likely to infuse Rs. 28,615 crore into seven public sector banks (PSBs) through recapitalisation bonds by the end of this month.
The amount infused will help the banks meet regulatory capital requirement.
Some of the banks are Bank of India, Oriental Bank of Commerce, Bank of Maharashtra, UCO Bank and United Bank of India.

NIC Rating Downgraded

ICRA has downgraded the long-term rating for National Insurance Company Limited's (NIC) subordinated debt programme to AA from AA+ due to weak underwriting performance.
The rating takes into account NIC's continued weak underwriting performance driven by a high combined ratio, resulting in pressure on profitability, and the high portfolio concentration in the motor and health segments, leading to a weak solvency ratio below the regulatory minimum.

L&T Construction Bagged Orders

Larsen & Toubro's (L&T) construction arm has won orders worth Rs. 2,357 crore. L&T's water and effluent treatment and transportation infrastructure business had secured an order worth Rs. 1,281 crore from APCRDA.
The firm's water and effluent treatment business had also secured orders worth Rs. 1,076 crore from the Madhya Pradesh Jal Nigam Maryadit (MPJNM).

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