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Fuel reforms, poll results cheer markets
Gas pricing will ensure profit, not windfall gain: FM
Centre to infuse Rs 3,000 crore in Air India
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Hero lines up Rs 5,000 crore to raise output
Biz talk
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Fuel reforms, poll results cheer markets
New Delhi, October 20 On the diesel deregulation, while prices have been cut by Rs 3.37 a litre for now, clarity is missing whether the government will intervene if the global prices move up. Industry body FICCI said the moot question that requires urgent clarity is, in case of a high volatility in international oil prices, will the government intervene or let the prices be determined by the market forces. India Ratings said the present order is, however, silent on government intervention in the eventuality of global prices flaring up again. Although the fuel price deregulation was scheduled to begin from April 2002, it took more than 12 years to deregulate petrol and diesel prices. India Ratings said the government’s decision to deregulate diesel prices will significantly improve the country’s finances as the oil subsidy will come down by Rs 15,000 crore. Also, the cut in diesel prices will go a long way in fighting inflation, which is trending downwards. This will create more space for the RBI to ease its policy stance and cut policy rate sooner. Petroluem Minister Dharmendra Pradhan today said the re-launched cash transfer scheme for LPG will help save Rs 10,000 crore in subsidy. Pradhan said the DBT will help check diversion of subsidised cooking gas to unintended users besides bringing efficiency in the system. For now, CNG prices will not go up as a result of increase of natural gas price. Narendra Kumar, managing director, Indraprastha Gas Limited (IGL), said it shall be the endeavour of IGL not to increase the retail price of CNG and domestic PNG in the interest of the consumers. The government is moving ahead on reforms and today announced steps to streamline the procedure for grant of industrial licences and setting up a panel to an entrepreneur-friendly legal bankruptcy framework would be developed for SMEs to enable easy exit. The government is likely to divest 5% stake in ONGC in the first week of November which is likely to fetch around Rs 18,000 crore to the exchequer. The Insurance Bill, which seeks to raise FDI cap in the sector to 49%, is expected to be taken up in the forthcoming Winter Session of Parliament. The government is also considering re-imposing some restrictions on gold imports after Diwali as higher inward shipments of the metal in the last few months have pushed up the trade deficit.
Assocham president Rana Kapoor said a clear dominance of the BJP in Haryana and Maharashtra Assembly elections will strengthen the Prime Minister Narendra Modi’s Government at the Centre and give it a further crucial political support for going ahead with key economic reforms, including the long-pending GST, better subsidy targeting and labour laws. More measures expected
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Gas pricing will ensure profit, not windfall gain: FM
New Delhi, October 20 "It is a rational decision... Even at this ($5.61) price, the explorers are going to make profit. They won't have a windfall profit. At the same time, the burden of consumers will be minimal," he said. Jaitley said the CCEA approved price of $5.61 per million British thermal unit as against $8.4 per mmBtu approved by the previous UPA government and higher rates demanded by private firms like Reliance Industries and BP, balances incentives for investment and consumer interest. "With this decision, the explorers may not make a windfall profit, they will make a profit." Jaitley added that he was not against business. "Well it is a balancing act. I am not against business, or against big business. I don't consider profit a bad word. I think it is windfall profit that is a bad word. Therefore, this (gas price hike) ensures profit rather than windfall profit, at the same time this also factors into interest the aam aadmi," he told a news channel.
— PTI |
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Centre to infuse Rs 3,000 crore in Air India
Visakhapatnam, Oct 20 V Somasundaram, Secretary of Ministry of Civil Aviation, also said there is no proposal to build a Greenfield airport at cyclone-hit Visakhapatnam. “Air India has a turnaround plan, under which a little over Rs 6,000 crore has to be infused this year. I think more than half of that has been given already. Another around Rs 3,000 crore will be infused by the end of the financial year,” he said. Air India, which is sitting on a huge debt pile, is surviving on the Rs 30,000-crore government bailout package. “The problem was they (Air India) had lot of uneconomical routes and lot of loss-making operations. So during the last two to two-and-half years these have been reduced. They have been successful in bringing down the loss substantially. And
by 2015 they are expecting to be profitable, that is next financial year,”
he said. — PTI |
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Hero lines up Rs 5,000 crore to raise output
Neemrana, October 20 The company, which will inaugurate its plant here tomorrow, plans to enter Europe by the end of next year. “We have lined up total investment of over Rs 5,000 crore across the globe, including manufacturing plants in Colombia and Bangladesh and the new plants coming up at Gujarat and Andhra Pradesh and the Hero Global Centre for Research & Design at Kukas in Rajasthan,” Hero MotoCorp vice-chairman and managing director Pawan Munjal said. The company has invested Rs 1,000 crore at the Neemrana facility and has also started work on the Colombia plant. The work on Bangladesh facility will begin soon, he added. “By November we will start work on the Halol plant in Gujarat that will be followed soon at the Andhra Pradesh plant. We won’t wait for Gujarat plant to come up for setting up the plant in Andhra Pradesh,” Munjal said. The Gujarat plant will have an annual capacity of 1.8 million units while the Colombia and Bangladesh will have 1.5 lakh units each annually, he added. The plant at Andhra Pradesh will also have an annual capacity of 1.8-2 million units. The company plans to invest Rs 653 crore at Kukas, Rs 1,600 crore each at Andhra Pradesh and Gujarat plants, Rs 200 crore at Colombia plant and Rs 100 crore on the Bangladesh facility, Munjal said. He said: “We could enter Europe possibly toward the end of 2015. We are looking to launch the hybrid scooter Leap there in Western Europe first”.
— PTI In the pipeline
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Mymoneymantra eyes revenue
of Rs 100 crore in two years
Raj Khosla MD, Mymoneymantra talks to Girja Shankar Kaura Financial services distributor Mymoneymantra offers a spectrum of financial products and services. Owned and managed by Raj Khosla and Rahul Soota, the company is looking to hit Rs 100-crore revenue in the next two years. Raj Khosla, managing director and founder, Mymoneymantra, talks about the company’s plans. Q. Mymoneymantra has been a pioneer in the financial distribution space and it completes 25 years this year. What has the journey been like? A. Mymoneymantra started with only 2 employees and Rs 1,000 as seed money in 1989. It (then called Shelters) was set up with the vision to assist and enable customers to avail retail loans, including loans for two wheelers, cars, consumer durables and salaried personnel loans. It was a pioneering concept at that time, as consumer loans were in their infancy. As distributors, we found ourselves having to educate customers about the basic concepts like EMIs, reducing balance, post-dated cheques, guarantors, etc. We worked closely with our partner banks to build a workforce that was talented and client-centric. Today, mymoneymantra is one of India’s leading distributors of financial products such as credit cards, loans and insurance. We have a record of having successfully serviced more than 11 lakh customers. We are India’s largest credit card distributor with 1 lakh customers a year; and we manage more than 1% of all mortgage loans disbursed annually in the country. We continue to invest significantly in technology, training and client experience and are on track to hit revenue of Rs 100 crore in two years. Q. How has the financial landscape changed over this 25 years’ time frame? A. In the late 80s and early 90s, the maximum home loan that you could avail from the very few institutions was Rs 5 lakhs; interest rates were close to 20% and two guarantors were required. Credit cards were almost an alien concept, restricted to the elite. Private sector banks did not even exist back then. The biggest change we find is in the consumers’ mindset. Today, the youngsters start a job and within two years they want to start buying assets. The concepts of loan and credit cards are well accepted and better understood. Q. What are the advantages for an individual and/or company to avail the services of a financial distributor? Similarly, for financial institutions such as banks, why would they go through a distributor as opposed to directly? A. Mymoneymantra is financial services distributor that brings together the widest range of financial institutions under one roof so that the customer does not have to search multiple websites or speak to various companies to find the right product for their requirements — be it taking a loan (home /personal/business/against property), credit cards, insurance, etc. Q. What are some of the significant trends being observed across the various products that mymoneymantra distributes, namely loans and credit cards? A. These days, there is high demand for credit cards; unfortunately banks are sceptical as they have burned their fingers. They prefer to deal with people who have accounts with them or are salaried customers. So we have only two crore credit cards in circulation today. There is high demand in the personal loan space for home renovation, travel, children’s education etc. This is because people believe they have the ability to repay these loans. Home loans are derived demand. There have to be home sales for people to take loans. So we are not seeing a large pick-up in the demand for home loans whereas in business loans, the demand is picking up since January 2014. Q. As India’s middle-income group rises and more and more people shift upward on the income pyramid, what is the outlook for the personal finance space over the next five years? A. In the next five years, we are going to see a tangible growth. While the banks are growing at 15% today, they will easily do 20%. As far as credit cards go, there is a big demand, and I am sure the banks will open up and bring in these customers.
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IFCI’s NCD issue opens for subscription till Nov 21 Arise India forays into
e-commerce space Snapdeal forays into premium designer-wear segment IDBI Bank raises
Rs 2,500 crore via Basel III compliant bonds Adlabs gets SEBI go-ahead
for initial public offer
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Neemrana, October 20
