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GDP grows at 5.3% in Q2; slower than 5.7% in April-June quarter
BSE-listed firms’ market value hits
Rs 100-trn mark
IDBI Bank to focus on retail, priority sector lending
Six merchant banks face SEBI action
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HC stays ED’s order on Rose
Valley
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GDP grows at 5.3% in Q2; slower than 5.7% in April-June quarter
New Delhi, November 28
The GDP growth was better than expected due to improved performance of mining, power and certain services sectors. While business sentiment has improved dramatically since the Modi government took over, ground level and anecdotal evidence suggest muted business activity with the economy yet to recover from two years of slowdown. The real estate sector for instance had its worst Diwali in many years. The Gross Domestic Growth in the second quarter was better than 5.2% of the same period last fiscal but was slower than 5.7% rate achieved in April-June quarter of the current fiscal. There were expectations that September quarter growth would fall to 5-5.1% range. There are worries for the government on the fiscal deficit front also. The number touched 89.6% of the Budget Estimates for 2014-15 to cross Rs 4.75 lakh crore at the end of October. Assocham president Rana Kapoor said the GDP number has been completely on the expected lines and strengthens the cause for optimism of witnessing some economic recovery in the current fiscal itself. “However, the business confidence that has been generated needs to be converted into increased ground level activity,” he said. Aditi Nayar, senior economist, ICRA, said the initial growth estimate for Q2 is favourable led by higher-than-expected growth of agriculture and allied activities and community social and personal services, in light of the unfavourable advance estimates for crop production for the 2014 kharif season and slowdown in growth of the Central Government’s revenue expenditure, respectively. Chandrajit Banerjee, Director-General, CII, said there has been a moderate decline in GDP growth over the previous quarter owing to a steep decline in manufacturing output but this does not alter the fact that the economy is on road to recovery as compared to the previous year. This is borne out from the fact that the economy has notched up a growth of above 5% for the second consecutive quarter during the current year on the back of positive investor sentiment indicating that recovery could be taking shape, albeit gradually, he added. CII believes that economic performance would be much better in the second half as companies move to execute cleared projects, said Banerjee. |
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BSE-listed firms’ market value hits
Rs 100-trn mark
New Delhi, November 28 This makes India the 9th largest equity market in the world as it joins an elite club. Investor wealth has grown 10 times in the last decade. Ashish Kumar Chauhan, MD & CEO, BSE, said, “India and the BSE reached a significant milestone today. “It is a reflection on the potential of India as a new-age powerhouse. This is a reflection of India’s growth potential as seen from the foreign investor’s perspective and the competitiveness of Indian entrepreneurs to manage world-class organisations”. Aashish Kamat, CEO of UBS, said this cements India’s place further as a growing world economic power. “I believe this gets India to roughly 2.5% of the world market cap and the 9th largest equity market globally. And if the new government delivers on the economic front then one can see India rise further, given not too many countries are showing the growth and investment potential”, he said. Leo Puri, managing director, UTI Asset Management, said India joins an elite club of countries, with BSE market capitalisation crossing 100-lakh-crore milestone. With faster economic growth and strong polity, the next 100 lakh crore should be faster to achieve. The 30 Sensex companies alone, which are among the biggest companies in the country, now account for nearly 50% or about Rs 47 lakh crore of the total investor wealth. The total market cap of all BSE listed companies had crossed Rs 10-lakh-crore-mark nearly 11 years ago in 2003, while it has doubled from about Rs 50 lakh crore five years ago in 2009. Sanjay Kumar Singh, CEO of BNP Paribas Securities, said though this landmark number seems colossal in itself, when you compare it with GDP, the M-Cap/GDP ratio is still only 86% — just marginally above the 10-year average of 80%.
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IDBI Bank to focus on retail, priority sector lending
Chandigarh, November 28 Other than expanding its retail portfolio and increasing its Current Account, Savings Account (CASA) ratio (from present 22% and decreasing its cost of funding), it plans to increase its footprint across the country. It has already added 305 branches in a year and plans to add another 500 branches by the end of this fiscal. As of now, the bank has 1,560 branches. The bank is also open to acquire any regional rural bank that would help it achieve its target of having the exposure in retail lending. Bank’s CMD MS Raghavan said till last year, the bank’s focus was on infrastructure and corporate sector. “Our exposure in corporate sector advances was 78% of the advances and retail lending formed 22% of our portfolio. Since the profitability of the bank depends on lowering the cost of banking and ensuring that priority sector targets are met, I embarked on decreasing the exposure to corporate sector and increasing retail sector advances. In one year, our corporate sector lending forms 72% of our advances portfolio and retail sector advances have increased to 28% of the portfolio, mainly through increase in the bank branches,” he said, adding the bank proposes to increase its exposure in the retail sector to 35% of total advances in the next two years.
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Six merchant banks face SEBI action
Mumbai, November 28 The six merchant banks have been asked to pay a fine of Rs 1 crore — the maximum penalty applicable for violation of disclosure related norms in IPO documents — within 45 days. Taking a strong view about the violation of SEBI norms as also the Code of Conduct for merchant banks and book-running lead managers (BRLMs) for public issues, SEBI said in its order: “While making disclosures in the Red Herring Prospectus, the BRLMs cannot pick and choose some material facts that they prefer to disclose and suppress some material facts. The IPO came in December 2012, prior to which these six bankers had filed a Red Herring Prospectus for the public issue involving sale of nearly 72 lakh shares.
— PTI |
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Chandigarh, November 28
