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2% interest subsidy on loans extended to revive exports
12 FDI bids worth Rs 802 cr okayed
Plan panel mulls lowering growth rate
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CARE shares up 23% in strong debut
Banks’ loan, deposit growth slower on weak GDP
‘Grounded Kingfisher lacks funding plan’
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2% interest subsidy on loans extended to revive exports
New Delhi, December 26 As part of the package, the government extended a 2-percentage-point interest subsidy on rupee-denominated export loans for labour-intensive and small-scale industries by one year to the end of March 2014 to cushion the impact of weak demand in developed economies. Commerce & Industry Minister Anand Sharma also announced introduction of a pilot scheme of two per cent interest subsidy for project exports through Exim Bank. The ministry will also offer sops on incremental exports that would be made during Jan-March 2013 over the base period Jan-March 2012. “With these incentives, we will be able to give a push to exports in the last quarter of this fiscal. The objective is to stabilize the situation and move from negative territory to positive and keep the trade deficit in control,” Sharma said. Exports during April-November period this year contracted by 5.95% to US $189.2 billion. Sharma said that it would be difficult to achieve the $360 billion export target for this fiscal. Sharma said the 2% interest subvention scheme on rupee export credit which is available to certain specific sectors including handicrafts, carpets, handlooms, readymade garments, processed agriculture products, sports goods and toys, has been given an extension up to March 31, 2014. At present, the scheme is scheduled to end on March 31, 2013. SMEs for all sectors will now be able to avail of the benefits of the scheme. While highlighting that the engineering sector has been a major contributor for both job creation and value addition of Indian manufacturing, Sharma extended the benefits of 2% interest subvention to certain specific subsectors of the engineering sector. Responding to the additional incentives announced today to boost exports, Federation of Indian Export Organizations (FIEO) president M. Rafeeque Ahmed said extension of interest subvention scheme for another year, much before its expiry, will provide stability. He said the engineering sector had not done well in exports despite having predominant share in exports and the interest subvention extended to large scale industry in certain subsectors of engineering sector would add to the competitiveness of engineering exports. |
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12 FDI bids worth Rs 802 cr okayed
“Based on the recommendations of FIPB in its meeting held on November 20, the government has approved 12 proposals of foreign direct investment amounting to approximately Rs. 802.07 crore,” the finance ministry said in a statement. In addition, the proposal of Swedish furniture major IKEA has been recommended for consideration of Cabinet Committee on Economic Affairs, it said. Even after FIPB clearance, FDI proposals of over Rs. 1,200 crore have to be approved by the CCEA. Ingka Holding Overseas has been given permission to set up a wholly owned subsidiary to undertake single brand retailing of IKEA products. As per the statement, Ratnakar Bank’s proposal to increase foreign equity in the bank from 43% to 55% has been approved. The move is likely to bring in Rs. 300 crore worth of FDI. Taqa Jyoti Energy Ventures has also got the government’s approval to bring in foreign investment of Rs. 252 crore. Other major approved proposals include that of Hyderabad based Mylan Laboratories to acquire an existing pharmaceutical manufacturing facility and of OCS Group Singapore Pte Ltd for acquisition of equity shares of an India company engaged in business of detective and protective services. Mahindra & Mahindra Ltd had sought FIPB’s nod to to set up a new joint venture with Rafael Advanced Defence Systems for production and development of naval defence system and other products. The finance ministry said that, along with M&M, FDI proposals of Coimbatore-based Ampo Valves India and Mumbai based Berggruen Real Estates too have been rejected.
— PTI |
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Plan panel mulls lowering growth rate
New Delhi, December 26 “Our objective is that we should be going in for a more optimistic scenario. And probably if we reflect, what we now know (is that) instead of 8.2%, it would be better to pitch it at 8%. I will raise that issue in the NDC,” Planning Commission deputy chairman Montek Singh Ahluwalia said. This lowering of growth target, he added, follows changes in the global and domestic economy since the approval of the “approach paper” by the National Development Council in October last year. This is the second time that the Planning Commission will be scaling down the growth projection for the 12th Plan (2012-17). After initially estimating the growth rate at 9% in its approach paper, it lowered the target to 8.2% in September 2012 in view of global economic worries and persistent sluggishness in domestic growth. The issue will be considered on Thursday by the NDC, which is headed by Prime Minister Manmohan Singh and comprises cabinet ministers and chief ministers of all states. In the eleventh Five Year Plan, the average annual growth rate was 7.9%. For the current fiscal, which would be the first year of the twelfth Plan, the growth rate has been estimated at 5.7-5.9%, which would be the lowest in the last decade.
— PTI |
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Govt clears 12.5% stake sale in Rashtriya Chemicals
New Delhi, December 26 The government currently holds 92.5% stake in RCF and the paid up capital of the company stood at Rs 551.69 crore. The divestment is being done to meet SEBI regulations that every company should have a prescribed float in the market. At the current market price of the Rs 57.80 a share, the 12.5% stake sale could fetch around Rs 360 crore to the exchequer. The stake sale approval is part of government's decision to raise Rs 30,000 crore through disinvestment in the current fiscal. So far, the government has raised over Rs 6,900 crore in FY13 through minority stake sale in state-owned firms. It has already identified 10 companies including NTPC, Oil India, MMTC, SAIL, BHEL for
disinvestment. |
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CARE shares up 23% in strong debut
Mumbai, December 26 CARE shares on the National Stock Exchange ended the day with gains of 23% at Rs 922.55 from its IPO price of Rs 750. The shares had opened at Rs 940 and risen to as much as Rs 985. The IPO received bids for about 41 times the 7.2 million shares on offer. Kotak Mahindra Capital Co., 500247.BY +0.14% DSP Merrill Lynch Ltd. and Edelweiss Financial Services Ltd., along with ICICI Securities and IDBI Capital Market Services, were the managers of the share sale. Investors were attracted by CARE's fundamentals as the ratings provider was seen as having a strong net worth position and no debt on a consolidated basis, analysts said. CARE also allocated most of the shares in its IPO to institutional investors, analysts added, boosting the retail bid on the listing day. "Since people haven’t been able to get decent allotment in the CARE IPO, there is lot of appetite on the day of listing as investors are looking at this stock as a good long-term bet," said Hiten Gala, senior manager advisory at Brokerage Sharekhan. CARE had raised Rs 5.4 billion in an IPO that was over-subscribed by nearly 41 times, receiving overwhelming response from institutional buyers. The listing price was higher than the Rs 900 IPO price expected by most analysts. CARE is the first of three stocks expected to make their debut this week. Jewellery retailer PC Jeweller will start trading on Thursday after raising Rs 6.09 billion at Rs 135 a share. Telecoms tower operator Bharti Infratel Ltd will make its debut on Friday after raising $760 million this month, marking India's biggest IPO in two years.
— Reuters |
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Banks’ loan, deposit growth slower on weak GDP
Mumbai, December 26 As of December 14, banks' advances grew 5.7%, slower than 7.8% in the year-ago period, while deposits grew 5.6%, compared with 6.5%. "Credit growth is linked to the nominal GDP growth. If we are on a slower GDP growth path, naturally credit and deposit growth will be slower," a senior official with a private bank who did not want to be named said. The official expects the full-year credit growth to be 14-16%. In its second quarter review of the monetary policy, the RBI cut its credit and deposit growth projection by 1 percentage point each to 16% and 14%, respectively. India's economy grew 5.3% from a year earlier in the July-September quarter, below the 5.5% posted for the three months ending in June. As of December 14, banks' advances stood at Rs 49,626.49 billion, up 0.1 per cent from two weeks ago, while deposits were down by 0.1 per cent at Rs 64,339.34 billion.
— Reuters |
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‘Grounded Kingfisher lacks funding plan’
New Delhi, December 26 The airline, owned by Vijay Mallya and suspended in October over unpaid debts and salaries, submitted a plan on Monday to the DGCA to resume a limited service. According to reports, Kingfisher's parent company, UB Group, offered to inject Rs 6.5 billion into the carrier — a key condition for getting it airborne again. But Singh told reporters that UB "didn’t say they are going to give anything" to Kingfisher, which has estimated debts of $2.5 bn.
— Reuters |
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New Delhi, December 26