Key Corporate & Industry News

Perceptive ahead of RBI policy meet today

• The economist at Markit, said, “March’s survey suggests that inflationary pressures in manufacturing are on the upside, with cost burdens rising at the quickest pace in three months and output charge inflation reaching a 16-month high. Falls in commodity and oil prices were offset by the weaker rupee, making imported raw materials costlier. This build-up in inflationary pressures may lead RBI to hold off from cutting rates, especially as solid growth was seen.” However, govt’s resolution to check the fiscal deficit for FY17, slashing rates on small saving schemes and subdued commodity prices, including oil, give hope that RBI may at most cut repo by 25bps to gauge trade-off between growth & inflation.
• Corporate borrowers may continue to go to the CP market to meet their short-term working capital requirements because money market rates continue to remain attractive compared with MCLR (marginal cost of funds-based lending rate). Even if RBI cuts the repo by 25bps, further transmission of rates post MCLR, looks challenging to banking sector, especially from PSB space, as that may compress their NIMs and they have to absorb additional burden from incremental NPAs. Already the Return on Assets (RoA) have reached to pathetic levels, much below to RBI’s prescription norms of 0.25%. Credit-deposit ratios are already tightening with deposit growth (9.9 per cent) lagging credit growth (11.3 per cent) as retail savers have been shopping for financial instruments that offer better post-tax returns shunning term deposits. 

Key corporate news

• RELIANCE INDUSTRIES has let go of at least half the 1,600-odd contracted field engineering officers involved in rolling out telecom arm Jio's pan-India 4G network, saying their work is over. (ET)
• MARUTI SUZUKI upbeat on double-digit growth in FY17; aims to buck industry trend again (BL)
• Fitch Ratings has downgraded JSW STEEL rating with the negative outlook on concerns over prolonged weak international steel prices and high leverage. (BL)
• Blackstone Group is buying a majority stake in Indian IT outsourcing services provider Mphasis Ltd from Hewlett Packard Enterprise Co in an up to $1.1 billion all-cash deal. It also made an open offer to buy a 26% stake in Mphasis from public shareholders for Rs457.54/share to comply with Indian laws. (Reuters)
• KANSAI NEROLAC is optimistic of accelerating growth in FY17 on the back of very aggressive pricing and marketing strategy. (BL)
• Equitas Holdings, the small finance bank licence holder, has roped in several domestic investors as anchor investors by raising Rs652cr ahead of IPO opening today (ET)
• Banks that had acquired JYOTI STRUCTURES under debt restructuring rules, are now getting ready to sell off its assets piecemeal. It has defaulted on loans of more than Rs2,000 crore (ET)
• Lenders to ABG SHIPYARD have decided to issue a public notice inviting expression of interest (EOI) from buyers keen to pick up a controlling stake in the company. The consortium is led by ICICI Bank Ltd and SBI.
• GAMMON INDIA to sell EPC business to GP Group,Thailand for Rs250cr (FE)
• Rs 800 crore loan from CORPORATION BANK without verification; court asks Finance Ministry, RBI to look into it (ET)

Key Industry news

• Indian Oil Corp (IOC) hiked transport fuel rates from Tuesday, increasing petrol by Rs.2.19 a litre and diesel by 98 paise - both at Delhi, with corresponding increase in other states, on the back of a further hardening of global crude oil rates. (IANS)
• The manufacturing PMI rose to 52.4 in March from 51.1 over the previous two months. March data highlighted a third successive monthly rise in order books associated with improved demand from domestic and external clients.
• A majority of the banks in India favour a Banks Board that can help mitigate and manage the risks of the banking industry, according to a survey conducted by KPMG, ahead of its first meeting on 8 Apr The survey said said that in a slow growth environment, banks which make efficient use of models/analytics are likely to grow at a higher rate. (IANS)
• Centre to bid out power transmission projects associated with new solar parks through tariff based competitive bidding estimated at Rs30,000-50,000cr (FE)
• Number of stalled projects highest since Modi govt took office, CMIE data reveals. CMIE adds that consumer sentiments drop and unemployment rate up in March (Mint & FE)
• No immediate credit quality improvement in sight. Indebted firms and metal-linked sectors will continue to face considerable challenge. Situation could reverse if metal prices recovers sharply, said a CRISIL note (BS)
• Realty players unhappy with the recent hike in ready reckoner rates in Mumbai, as they say cost of development will rise (BS)
• India’s gold import drop 34% in Feb to 37 tonne (Reuters)
• Truck rentals up 4%, may maintain trend till Sept (FE)
• The government is considering allowing FDI in online retail of food products (ET)
• The government has no plans to privatise national carrier Air India, a senior official said on Monday. (IANS)
• SEBI plans to allow trading in weather derivatives, a financial instrument for managing this risk in the agricultural sector. Panel meets this week to further discuss issues in this regard (BS)
• SEBI’s technical advisory committee has recommended action against NSE after finding evidence that some traders on the exchange had unfair access to market data and trading systems. (Mint)
• India’s basmati rice export is likely to remain under pressure till 1H’17, on excess supply in destination markets: ICRA
• Multi-Agency Group set up to track 500 Indians on Panama Papers list. The group, set up on PM's advice, includes CBDT, FIU, FT&TR and RBI (PTI)
• Adani Group is looking at buying the local assets of SunEdison, the world’s largest renewable energy company, which is battling a liquidity crisis and facing potential bankruptcy in the US (Reuters)
• TRAI seeks to make set-top boxes interoperable (Mint)