Mumbai, January 9
Relaxing FDI norms, the Reserve Bank of India today gave foreign investors an option to exit their investments by selling their holdings of equity or debt.

"It is expected that this relaxation will facilitate greater FDI flows into the country," the RBI said.

According to the modified norms, foreign direct investment (FDI) contracts can now have optionality clauses, which allow investors to exit, subject to the conditions of minimum lock-in period and without any assured returns.

Until now, only equity shares or compulsorily and mandatorily convertible preference shares or debentures could be issued to persons resident outside India under the FDI policy and these instruments were not allowed to have any optionality clause, the RBI said.

FDI in India declined by about 15% to $12.6 billion (Rs 74,971 crore) in April-October. According to the Department of Industrial Policy and Promotion, FDI in the same period a year earlier was $14.78 billion.

Food processing industries received $2.14 billion, services $1.36 billion, pharmaceuticals $1.08 billion, automobile $784 million and construction development $699 million.

In a separate notification, the RBI said banks may include a close NRI relative as a joint holder in an individual resident's existing or new bank account on an "either or survivor" basis.

Such accounts will be treated as resident bank accounts for all purposes and all regulations applicable to a resident bank account will be applicable.

Cheques, instruments, remittances, cash, card or any other proceeds belonging to the NRI close relative will not be eligible for credit to this account, it said.

Such joint account holder facility may be extended to all types of resident accounts, including savings bank accounts, it added. — PTI 

New Delhi, January 9
It has never been as bad for the car industry as has been the year 2013, with the sales dipping a huge 9.59%, a first decline in the yearly sales in the past 11 years as the auto industry reeled under a prolonged demand slump due to continuing high interest rates and fuel costs.

As the automobile industry’s umbrella body, the Society of Indian Automobile Industry (SIAM), released the annual sales figures, it emerged that over the past 18 months, there were only five months when the car production increased while for the rest of the 13 months, production had to be curtailed as sales declined.

As per statistics, domestic car sales fell to 18,07,011 units last year from 19,98,703 in the previous year.

Industry watchers pointed out that the earlier euphoria over spurt in two-wheeler sales is also subsiding and with the decline in rural sales, the growth of bikes and scooters is already down to low single digit and unless buying in the hinterland picks up in the next few months after the harvest season, even two wheelers will be in a sorry state.

"The decline in annual car sales that we witnessed in 2013 was the first time after 2002. The negative sentiments have deepened due to the current state of the economy," SIAM Director-General Vishnu Mathur said.

He said high inflation, fuel prices and interest rates — which resulted in high cost of ownership — have affected sentiment.

As per SIAM, as many as 22 new cars were launched between April and December 2013, during which time another 40 new variants of existing cars and another 10 model refreshes were also unleashed, but they failed to lift the overall sales.

"We expect some rebound happening in commercial vehicles in the second half of the year," Mathur said, adding it could have some rub-off on passenger cars as well.

Any recovery is now pushed to the second half of calendar year 2014. 

New Delhi, January 9
A group of ministers headed by Finance Minister P Chidambaram today deferred a decision on disinvestment in Indian Oil Corp (IOC) following opposition to the stake sale by the Oil Ministry.

"It has been deferred," Oil Minister M Veerappa Moily told reporters after the meeting of the Empowered Group of Ministers (EGoM) here.

While Moily refused to elaborate on the reasons for the deferment, sources said his ministry had raised concerns over pricing of IOC shares.

The EGoM may again meet next week, they said.

The Finance Ministry is aiming to garner Rs 4,500 crore by selling 10% (19.16 crore shares) of the government stake in the oil major.

At today's closing price of Rs 198.95 on BSE, IOC has a market capitalisation of about Rs 48,000 crore. This m-cap is after factoring in IOC's 7.69 per cent holding in ONGC worth Rs 17,9711.78 crore at today's closing price. This leaves less than Rs 30,000 crore market value that is attributable to IOC. — PTI

New Delhi, January 9
Almost Rs 2 lakh crore of debt from the top 100 companies is due for refinancing in the next 12-15 months and banks may face a tough time due to the macro-economic situation.

The exercise will be tough because nearly half of this debt is from corporates in stress or facing high risks, says an India Ratings report.

The Rs 1.9-2.1 trillion (Rs 1.9-2.1 lakh crore) debt coming up for refinancing accounts for 27-29% of the banks aggregate net worth as of end of financial year 2013.

The report said about 50% of this refinancing amount, equivalent to 13% of the banking system net worth as of FY13, may present a significant underwriting challenge to bankers under the prevailing macroeconomic situation.

"The refinancing requirement may present significant challenges to lenders. Around 24% of the refinancing requirement is attributed to the companies already in distress," the ratings agency said in a note today.

This category includes 20 corporates who have already earned the tag of a defaulter or undergoing distress, it said, adding such companies will not need any refinancing so long as they do not successfully finish their restructuring. They constitute around 5% of the banking system's total networth.

The report said apart from this another 26% come from corporates with weaker credit parameters.

"Under normal market conditions, they should be able to refinance at a high cost or with stringent covenants. However, this group may face significant challenges in refinancing during stressed market conditions," it said. 

New Delhi, January 9
The Union Cabinet today gave its approval for return of more than Rs 11,000 crore to the two beleaguered state-run telecom companies, the BSNL and the MTNL, in lieu of the return of the BWA spectrum allocated to them at the time of 3G spectrum auction in 2010.

The cabinet also gave its nod for comprehensive guidelines for the television rating agencies which come out with the TRP ratings, while clearing the new National Youth Policy.

Giving approval to the proposal of Group of Ministers (GoM) looking into the revival of the two state-run telcos, the government has decided to return a total of Rs 11,258.48 crore deposited by them with regard to the BWA spectrum allocated to them.

Information and Broadcasting Minister Manish Tewari said while Rs 6,724.51 crore would be returned to the BSNL, MTNL would get back Rs 4,533.97 crore. The payment would, however, be made in a staggered manner.

BRIEFLY

Partial rollback of bulk diesel prices under consideration
New Delhi: The government is considering partial rollback of market price of diesel sold to bulk users like road transport buses because those sales have dipped, Oil Secretary Vivek Rae said on Thursday. Last year’s decision to ask bulk users of diesel to pay market price, which is about Rs 10 a litre more than petrol pump rates, had led to protests from several state transport utilities. — PTI

Michelin launches radial tyres for superbikes
New Delhi: French tyre major Michelin is looking to have a bigger play in the Indian two-wheeler market for which it is expanding its product portfolio. The company, which on Wednesday launched two series of radial tyres meant for medium and superbikes in India, is also looking to tap the lower end of the motorcycle market in India with bias tyres. — PTI

Axis Bank inaugurates branch in Shanghai
Mumbai: Axis Bank on Wednesday said it has opened a branch in Shanghai after receiving permission from the China Banking Regulatory Commission. With this, Axis Bank has become the first domestic private sector lender to have a branch presence in China. — PTI

India faces slow recovery in 2014, says Citigroup
New Delhi: The year 2014 is likely to be a "slow recovery year" for India, with economic growth rising, inflation easing and currency and rates largely stable, Citigroup has said. The global financial services major also said while the emergence of the Aam Aadmi Party may change the political landscape in India, the priority for the markets will be a single-party-led and stable alliance, with acceleration in economic policy making. — PTI