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India Ratings maintains dim outlook for realty sector
Low-cost airlines in price war again
Govt clears several projects under DMIC
Spectrum trading suggestions by Jan 25: TRAI
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India Ratings maintains dim outlook for realty sector
New Delhi, January 21 Real estate companies have been facing falling unit sales, flat revenue and operating margins and continued deterioration in credit metrics and cash flows. As per a report by India Ratings, credit metrics will continue to deteriorate in FY15, as high residential prices continue to impact sales, even while rising bank credit to the sector indicates an increase in inventory for the sector. The sale of fresh residential units by listed real estate companies has seen a downward trend in the first half of the current financial year. This is due to weak consumer sentiments and low real estate affordability due to high prices. However, bank credit to the sector saw strong double-digit year-on-year growth in 2013, which indicates build-up of inventories. Prices continue to remain high despite the weak end-user demand, as demand from investors and speculators could have been lifted by the Central Government’s efforts to curtail gold imports. The upward movement seen in National Housing Bank’s house price index in the second quarter after a fall in the previous two quarters supports this argument, as it coincides with the imposition of import duty on gold. India Ratings expects subdued commercial property demand to continue in 2014, due to the continued slow economic growth which will impact fresh hiring in most sectors. Demand for retail space is also likely to remain muted in FY15, as retail companies continue to optimise their stored portfolios. The real estate sector has seen strong interest from private equity and foreign investors. During 2013, strong investor interest was seen in rent-yielding commercial properties with conclusion of several large transactions by leading private equity players such as Blackstone. The report expects the introduction of Real Estate Investment Trusts (REITs) to be positive for the sector, as it is likely to attract new investors and hence improve funding availability. As these REITs are likely to invest most of their funds into rent-yielding commercial properties, this could provide further liquidity options to commercial property developers. |
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Low-cost airlines in price war again
Mumbai, January 21 The SpiceJet move was copied soon by two other budget carriers — IndiGo and GoAir — as well with similar offers, said travel agents. However, the airlines' officials were not available for confirmation. Triggering a fresh bout of fare war, SpiceJet announced a 50% rebate on base fares and fuel surcharge on all flights for travel 30 days ahead of booking. "This kind of limited period off-season sale is a routine practice in the airline industry across the world and tactical inventory management, to help airlines fill seats that would otherwise go empty. It is revenue-positive for the airline," The offer is valid for a three-day period starting today, the Chennai-based airline said, adding that the special offer will end on January 23 midnight. "IndiGo and GoAir too have come out with similar offers," a travel agent said. The move is being seen as an attempt by carriers to mop up funds for the March quarter, which is traditionally a weak period both from demand and revenue points of view. "SpiceJet and Indigo slashing airfares is an attempt to garner early bookings for the coming summer season," travel portal Yatra.com president Sharat Dhall said. Under the offer, SpiceJet is offering fares as low as Rs 3,579 for the Mumbai-Delhi route where spot fares are as high as Rs 10,098, while a Delhi-Goa ticket comes at Rs 3,355 where the spot-fare is about Rs 6,000 now. — PTI |
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Govt clears several projects under DMIC
New Delhi, January 21 The Cabinet Committee on Economic Affairs (CCEA) yesterday approved the utilisation of Japanese assistance under the Japan International Cooperation Agency (JICA) for the DMIC. The government is developing the Delhi-Mumbai Industrial Corridor project as a global manufacturing and investment destination by utilising a high-capacity 1,483-km-long western dedicated Freight Corridor as the backbone. The development of industrial cities with world-class infrastructure in the DMIC region will attract an estimated investment of around US $90-100 billion, while providing jobs to over three million people. The proposal for availing the US $4.5 billion facility through Special Terms for Economic Partnership (STEP) loan is expected to bring in Japanese funding, cutting-edge technology and know-how into projects implemented in the DMIC. This would also enable the Japanese companies to establish their manufacturing facilities in India and enable transfer of technology from Japan to India. The CCEA also approved the formation of a Special Purpose Vehicle (SPV) for implementation and operation of the model solar power project at Neemrana, Rajasthan, as a 100% subsidiary of the Delhi-Mumbai Industrial Corridor Development Corporation. The total financial implications for the Government of India is around Rs 35.34 crore, out of which the equity component is Rs 13 crore and the debt component is Rs 22.34 crore. aIt also approved the formation of a joint venture company (JVC), with equity contribution of 50% each from the DMIC Trust and the government of Uttar Pradesh represented by the Greater Noida Industrial Development Authority (GNIDA). The JV is for the development of trunk infrastructure of the integrated industrial township at Greater Noida, in the Dadri-Noida-Ghaziabad Investment Region of the DMIC. DMIC project * It is being developed as a global manufacturing and investment hub by utilising 1,483-km-long western dedicated Freight Corridor * It will provide jobs to over 3 million people * The proposal for availing the $4.5-bn loan is expected to bring in Japanese funding, cutting-edge technology and knowhow * This would also enable the Japanese companies to establish their manufacturing facilities in India |
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Spectrum trading suggestions by Jan 25: TRAI
New Delhi, January 21 "Definitely," Khullar said on sidelines of Convergence India event when asked if the TRAI will be able to release spectrum trading recommendations before meeting of inter-ministerial panel Telecom Commission (TC). The meeting is slated for January 25 to discuss issue of spectrum usage charge and other issues. — PTI |
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