Sebi relaxes Angel Funds investment rules for start-ups -The Total Investment & Insurance Solutions

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24 November 2016

To further develop the alternative investment industry and the start-up ecosystem in India, securities market regulator Sebi on Wednesday enhanced the number of 'Angel Funds' in one scheme from 49 to 200. The Total Investment & Insurance Solutions

The regulator announced the changes that are expected to give a boost to the start-up industry after its board met here. The Total Investment & Insurance Solutions

According to the regulator, the upper limit for the number of angel investors in a scheme has been increased by amending -- 'Alternative Investment Funds Regulations, 2012 regarding Angel Funds'.

"Accordingly, Angel Funds will be allowed to invest in start-ups incorporated within five years, which was earlier three years," the regulator said in a statement. The Total Investment & Insurance Solutions

The regulator pointed out that the requirement of minimum investment amount by an Angel Fund in any venture capital undertaking has been reduced from Rs 50 lakh to Rs 25 lakh. The Total Investment & Insurance Solutions

"The lock-in requirements of investment made by Angel Funds in the venture capital undertaking is reduced from three years to one year," the statement said. The Total Investment & Insurance Solutions

To mitigate investment risk, Sebi allowed Angel Funds to invest in overseas venture capital undertakings by up to 25 per cent of their investible corpus in line with other AIFs (alternative investment funds).

On its part, India Inc. welcomed the relaxations proposed by Sebi board.

"While this is a positive news for Angel investors which will augment and strengthen their presence, it will also open multiple avenues for entrepreneurs who intend to seamless exercise their ideas and skills into the business arena," said Gopal Srinivasan, Chairman, Indian Private Equity and Venture Capital Association (IVCA). The Total Investment & Insurance Solutions

Credit rating of Indian corporates to improve: Moody's -The Total Investment & Insurance Solutions

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24 November 2016

The credit profiles of Indian corporates will improve on sustained economic growth and project completions in 2017, said Moody's Investor Service on Wednesday.

"GDP growth of 7.5 per cent, capacity additions and stabilising commodity prices will support Ebitda growth of 6-12 per cent over the next 12-18 months," Laura Acres, Managing Director of Moody's Corporate Finance Group, said in a statement here. The Total Investment & Insurance Solutions

Ebitda is earnings before interest, tax, depreciation and ammortisation.

Noting that "the capex (capital expenditure) cycle for Indian corporates has peaked as projects near completion", Acres said declining investments would also slow the pace of borrowing over the next 12-18 months. The Total Investment & Insurance Solutions

"Refinancing needs are manageable for most corporates in 2017, given their better access to the capital markets and large cash balances," Acres said. The Total Investment & Insurance Solutions

By sector, Moody's stable outlook for exploration and production firms reflects higher production volumes, low subsidy burdens and a recovery in oil prices, which will offset lower natural gas prices and higher royalty payments. The Total Investment & Insurance Solutions

"In the refining and marketing segment, capacity additions will partly offset weaker refining margins, while marketing margins will remain stable," the statement said.

Indian telcos, however, face intense competition, which will pressure margins, but this should be offset by growth in data consumption, thus supporting Moody's stable outlook for this sector.

In the real estate sector, Moody's expects sales volumes to be negatively affected because of demonetisation, but volumes will start to pick up as interest rates decline.

Moody's stable outlook for the ferrous and non-ferrous metals and mining segments reflects its expectation for earnings growth, supported by higher production volumes.

Companies in the auto sector should benefit from improving customer sentiment following an above average monsoon season and from expected falling vehicle prices when the Goods and Services Tax (GST) is introduced in April 2017, replacing a web of taxes.

"In the near term, however, sales volumes could get negatively affected by demonetisation," added the statement.The Total Investment & Insurance Solutions

New vehicles to have digital tags for paying toll -The Total Investment & Insurance Solutions

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24 November 2016

Going by the experience post-demonetisation of high-denomination currency notes, the government has asked automobile-makers to provide a digital identity tag in all new vehicles to enable electronic payment at highway toll plazas. The Total Investment & Insurance Solutions

"As far as toll plazas are concerned, the Ministry of Road, Transport and Highways is advising vehicle manufacturers that in all new vehicles, the manufacturers must provide Radio-Frequency Identification (RFID) facility," Economic Affairs Secretary Shaktikanta Das told reporters here on Wednesday.

The RFID tag ensures that vehicles pass the electronic toll collection booth without stopping as the toll amount is deducted from the RFID card. The Total Investment & Insurance Solutions

Das said the RFID facility in all new vehicles will ensure payment of toll digitally and also curtail the waiting time at check-posts. The Total Investment & Insurance Solutions

"Digital payments will improve the functioning of toll plazas," he said.

The Secretary also said that all government offices have been asked to make payments to stakeholders, contractors and employees only via digital mode. The Total Investment & Insurance Solutions

"Government organisations, PSUs and other government authorities have been advised to use only digital payment methods, such as internet banking, unified payment interface, cards and Aadhar-enabled payment systems, among others, to make payments to all stakeholders and their employees," he said.

"In other words, the option of digital payments to private parties will be mandatorily provided. All these measures are meant to promote digital penetration. It will help farmers in current Rabi season to ensure normal Rabi crops on the back of a good monsoon," he added.

In view of the cash crunch following demonetisation, the government has exempted all national highways from toll payment until November 24. The Total Investment & Insurance Solutions

The government has also announced incentives, including waiver of certain service charges until December-end to help promote electronic payments.

Das said that following the National Payments Corporation of India waiving "switching charges" until December 31 to ensure greater usage of RuPay cards, banks and service providers have agreed to waive the service charge on use of debit cards till the year-end. 

"This will ensure greater penetration of digital transactions. Banks will soon issue their own circulars in this regard," he said.The Total Investment & Insurance Solutions

Government extends suspension of toll charges on National Highways-The Total Investment & Insurance Solutions

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24 November 2016

The government on Thursday announced it was extending till December 1 the suspension of fee collection at all toll plazas on National Highways in the country.

"Toll suspension is extended till 1st December midnight across all national highways," Minister of State for Road Transport and Highways, Shipping, Chemicals and Fertilisers Mansukh Mandaviya tweeted. The Total Investment & Insurance Solutions

Earlier, the government suspended fee collection at all toll plazas on National Highways till the midnight of November 11. This was subsequently extended thrice -- and the last extension was to end on the midnight of November 24. The Total Investment & Insurance Solutions

The Ministry had previously said that instructions for the suspension of fee collection had been issued to all the concessionaires, including BOT (build-operate-transfer), OMT (operate-maintain-transfer) operators and other fee collection agencies.

The decision has been taken to avoid any inconvenience to highway users following the demonetisation of Rs500 and Rs1,000 currency notes.

On November 22, the government had also extended the suspension of vehicle parking charges at all airports till the midnight of November 28. The Total Investment & Insurance Solutions

Even, the Indian Railways have waived off service charges for 'e-tickets' and 'i-tickets' booked through Indian Railway Catering and Tourism Corporation (IRCTC) till December 31.The Total Investment & Insurance Solutions

Nifty loses 7.6% in Nov series – Thursday closing report-The Total Investment & Insurance Solutions

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24 November 2016

I had mentioned in Wednesday’s closing report that Nifty and Sensex, which ended on a positive note might witness volatility. Equity benchmarks snapped their two-day winning streak on Thursday with the Nifty closing below the 8,000 level amid consistent weakness in rupee and expiry of November derivative contracts. The wider 51-scrip Nifty of the National Stock Exchange (NSE) receded by 67.80 points or 0.84% to 7,965.50 points. The key Indian indices closed with losses of more than half a per cent each, as banking, automobile and healthcare stocks witnessed selling pressure. The Total Investment & Insurance Solutions

 

Major Indices (The Total Investment & Insurance Solutions)

Continued disruption in Rajya Sabha by opposition parties over demonetisation also dented market sentiment. Pandemonium over the demonetisation decision continued in the Lok Sabha on Thursday, forcing the adjournment of the house for the day. The government efforts to break the logjam failed to cut ice with opposition lawmakers.

Heightened chances of a US rate hike, continued outflow of foreign funds and subdued derivatives expiry roll-overs suppressed the Indian equity markets on Thursday.

The 30-share BSE Sensex was down 191.64 points or 0.74% at 25,860.17 and the 50-share NSE Nifty slipped 67.80 points or 0.84% to 7,965.50 while the broader markets outperformed benchmarks. The BSE Midcap and Smallcap indices declined only 0.1% as the market breadth was positive. About 1,350 shares advanced against 1,205 declining shares on the exchange.

The BSE market breadth was tilted in favour of the bulls -- with 1,341 advances and 1,215 declines. The Total Investment & Insurance Solutions

The rupee fell to its record low level of 68.862 during the intraday trade on Thursday on account of buying of the US dollar by the banks and importers. The domestic currency has fallen around 4% since the demonetisation of higher currency notes by Prime Minister Narendra Modi on November 8. The Total Investment & Insurance Solutions

In terms of investments, provisional data with exchanges showed that the foreign institutional investors (FIIs) sold stocks worth Rs2,010.15 crore, whereas the domestic institutional investors (DIIs) purchased scrips worth Rs1,648.22 crore.

Shares of exporters from the IT (information technology) sector soared up to 10 per cent in Thursday's trade after the rupee hit a record low of 68.86 against the US dollar. Among IT stocks, Nucleus Software soared 10% to Rs223.60, Tanla Solutions (BSE) spurted 6.41% to Rs41.50 and Intellect Design Arena surged 3.6% to Rs136.10. From four biggies, Infosys gained 1.14%, TCS rose 1.27%, Wipro spurted 0.91% and HCL Technologies spiked 0.56%. 

The top gainers and top losers of the major indices are given below:

 

Top Gainer (The Total Investment & Insurance Solutions)

Stocks rose ahead of the Thanksgiving holiday, with both the Dow Jones Industrial Average and the S&P 500 adding to their impressive 2016 gains with minor upticks. Japan's Nikkei share average rose for a sixth day on Thursday helped by hopes for better exporters' earnings as the dollar jumped against the yen. Precious metals fell below $1,200 per ounce for the first time since February. The Total Investment & Insurance Solutions

The closing values of the major Asian indices are given in the table below:The Total Investment & Insurance Solutions

Asian Indices (The Total Investment & Insurance Solutions)

Rs21,000 crore put in Jan Dhan accounts -The Total Investment & Insurance Solutions

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23 November 2016

Post demonetisation, a whopping Rs21,000 crore has been deposited in Jan Dhan bank accounts.

The money has come in after November 8 when Prime Minister Narendra Modi declared 500 and 1,000 rupee notes would no more be legal tender. The Total Investment & Insurance Solutions

The maximum deposit was reported in West Bengal, Finance Ministry sources said on Wednesday.

A total of 24 crore bank accounts were earlier opened in the Jan Dhan financial inclusion scheme so as to link every household with a bank account. The Total Investment & Insurance Solutions

Seeking to close all the gaps for people to turn their black money into white, the Finance Ministry had warned against using others' accounts to hoard cash and said that those allowing his or her account to be misused would face prosecution. The Total Investment & Insurance Solutions

"It is hereby clarified that such tax evasion activities can be made subject to income tax and penalty if it is established that the amount deposited in the account was not of the account holder but of somebody else," the ministry had said. The Total Investment & Insurance Solutions

Also the person who allowed his account to be misused for this purpose can be prosecuted under the Income Tax Act. The Total Investment & Insurance Solutions

Earlier in the day, all the banks were directed not to take the old Rs500 and Rs1,000 notes as deposits in the small savings schemes with immediate effect. The Total Investment & Insurance Solutions

"The government has decided that subscribers may not be allowed to deposit demonetised currency in small savings schemes. The Total Investment & Insurance Solutions

"Banks are, therefore, advised not to accept the old Rs500 and Rs1,000 notes for deposits in small saving schemes with immediate effect," the RBI said.

The small savings schemes include Public Provident Fund (PPF), Post Office Saving Schemes, National Savings Certificates (NSC), Senior Citizen Savings Scheme (SCSS) and Kisan Vikas Patra (KVP) among others.The Total Investment & Insurance Solutions

Railways waives off service tax for booking online tickets -The Total Investment & Insurance Solutions

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23 November 2016

The Indian Railways on Tuesday announced that it would waive off service charges for E-tickets and I-tickets booked through Indian Railway Catering and Tourism Corporation Ltd (IRCTC) in a bid to encourage cashless transactions from November 23 to December 31, officials said.

"Now the passengers won't have to pay the service charges on booking E-tickets and I-tickets through IRCTC from November 23 to December 31," railway Spokesperson Anil Kumar Saxena told IANS.

He said the decision was taken at a meeting here between the senior officials of the railways and IRCTC to encourage cashless transactions following the government's move to demonetise Rs500 and Rs1,000 currency notes. The Total Investment & Insurance Solutions

Currently, the railways charge Rs20 as service tax for booking Sleeper class and Rs 40 as service tax for booking AC class tickets through IRCTC. The Total Investment & Insurance Solutions

On November 8, the government spiked Rs500 and Rs1,000 bank notes to curb black money and corruption. The Total Investment & Insurance Solutions

However, the government also announced that the higher notes will be accepted till November 24 midnight for booking tickets at the railway stations and buying food items in trains and on railway station premises.The Total Investment & Insurance Solutions

Rs3.89 lakh crore owed to banks by 2,071 industrialists -The Total Investment & Insurance Solutions

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23 November 2016

Loan accounts with a cumulative exposure of Rs 3.89 lakh crore held by as many as 2,071 industrialists, each of whom has borrowed Rs 50 crore or more, have turned into non-performing assets (NPAs), or bad loans, Parliament was informed on Tuesday. The Total Investment & Insurance Solutions

Minister of State for Finance Santosh Kumar Gangwar told the Rajya Sabha in a written reply that as of June 30, 2016, NPA accounts with a debt exceeding Rs 50 crore numbered 2,071 with a total outstanding amount of Rs 3,88,919 crore. The Total Investment & Insurance Solutions

"In terms of instructions of Reserve Bank of India (RBI), every bank has to have its own recovery policy, including the manner and procedure of write-offs," the minister said. The Total Investment & Insurance Solutions

In respect of technical write-offs, RBI has permitted write-offs at the head office level, while recovery efforts are still continued at the branch level, he added.The Total Investment & Insurance Solutions

Reliance Capital to sell stakes in TV, FM units to Zee Group -The Total Investment & Insurance Solutions

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23 November 2016

Reliance Capital on Wednesday announced that it will be selling 49 per cent stake in its radio business and 100 per cent interest in the TV arena to Zee Group that will not just cut Rs 1,900 crore in debt but also unlock shareholder value. The Total Investment & Insurance Solutions

The deal pegs the enterprise value of the radio and general entertainment TV business at Rs 1,900 crore, the company said in a filing with the stock exchange. The deal involved the popular 92.7 BIG FM radio channel. The Total Investment & Insurance Solutions 

"The entire proceeds from the stake sale will be used to reduce Reliance Capital's debt by Rs 1,900 crore ($283 million) upon final completion of stake sale transactions. Both these transactions have been approved by the boards of respective companies and are expected to be completed by next year, subject to applicable approvals," the company said. The Total Investment & Insurance Solutions

"We are happy to bring in Zee Media as our partner in the Radio business and divest 100 per cent of our general entertainment TV business to Zee Entertainment," said Sam Ghosh, Executive Director and Group CEO of Reliance Capital. The Total Investment & Insurance Solutions

"This transaction is part of our strategy to reduce exposure in non-core business of media and entertainment and work towards further reducing our debt under Reliance Capital."

Immediately after the regulatory filing, the shares of Reliance Capital rose to Rs 431.40 -- up Rs 11.55 or 2.75 per cent. Ernst and Young was the financial advisor to Reliance Broadcast Network for the transactions. The Total Investment & Insurance Solutions

Rajiv Singh, COO of Zee Media Corp, said his group was looking forward to the partnership with Reliance Capital, and that it will help the group reach out to a larger audience base.

"This transaction shall bring about the desired business diversity and will help in achieving the sound financial objectives at an accelerated pace. We are confident that this investment will enhance value for all stakeholders," Singh said. The Total Investment & Insurance Solutions

Punit Goenka, Managing Director of Zee Entertainment, said that by virtue of the deal, Big Magic will give his group access to comedy genre enhancing the customer offerings. "Big Ganga, a leading Bhojpuri channel, syncs with our strategy of expanding into the regional markets which offers attractive growth potential." The Total Investment & Insurance Solutions

Reliance Broadcast Network said it runs a network of FM Radio channels in India under the brand name of 92.7 Big FM, reaching out to 45 cities, 1,200 towns and over 200 million people. It will be transferring the 45 operational and 14 new channels into two special investment vehicles.

Zee Group will acquire 49 per cent stake in each of these two vehicles. Both companies shall also have an option for acquiring the balance 51 per cent stake in the vehicles after the stipulated lock-in period.

The General Entertainment TV broadcasting business currently comprises of two channels -- Big Magic and Big Ganga. Big Magic is a Comedy channel catering to Hindi Speaking Markets while Big Ganga is a leading Bhojpuri entertainment channel catering to audiences in Bihar, Jharkhand and the Purvanchal region. The Total Investment & Insurance Solutions

Both these channels would be merged into ZEEL as part of this transaction.The Total Investment & Insurance Solutions

Nifty, Sensex continue to move upward – Wednesday closing report-The Total Investment & Insurance Solutions

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23 November 2016

I had mentioned in Tuesday’s closing report that Nifty and Sensex, which ended on positive note would rise a bit on Wednesday. Indian shares extended gains for a second day on Wednesday led by a gauge of capital goods companies, which snapped its biggest losing streak since January. The S&P BSE Sensex inched marginally to 26,051 while the NSE Nifty increased to 8,033. The market breadth was firmly in favour of the buyers at 1,243 advances, 371 declines and 269 stocks remaining unchanged. The major indices of the Indian stock markets ended positive on Wednesday. The Total Investment & Insurance Solutions

Major Indices (The Total Investment & Insurance Solutions)

The Indian currency fell 0.3% to 68.5 against the dollar, its lowest level since February. According to Deutsche Bank, there is a case for further rupee depreciation despite the constructive balance of payments position of India. In fact, the bank said the rupee could fall to Rs70 versus the dollar by December-end.

Industrial metals traded near a one-year high amid optimism that a recovery in global demand is underway. The Total Investment & Insurance Solutions

The rupee’s slide toward a record low, amid $2.8 billion in outflows from Indian stocks and bonds, is prompting speculation the central bank will step up intervention to stem losses.

With the US Federal Reserve interest-rate increase next month all but a certainty for bond traders, the rupee has slumped 2.6% in November, the most in 15 months. At 68.6 per dollar, the Indian currency is within 0.4% of the unprecedented 68.8 reached in 2013. 

The RBI has been supplying dollars almost on a daily basis. However, there are outflows from the equity and debt markets that are putting pressure on the rupee, along with the dollar strength. 

The bulls managed to push the 50-share benchmark above the crucial 8,000 mark. The Nifty50 traded significantly lower than its opening price for most part of the session, but managed to recoup the losses and closed above the opening level. The Total Investment & Insurance Solutions 

After starting on a positive note, the NSE benchmark witnessed selling pressure in afternoon trade, which took the index below its key support level at 8,000 to hit an intraday low of 7,973. But the bulls managed to push the index higher to 8,033, up 31 points from its previous close of 8,002. The Total Investment & Insurance Solutions

A positive finish on Wednesday marks the first back-to-back gain for Indian stock markets since the demonetization on 9 November 2016. However, traders expect sentiment to remain weak given continued worries about the economic impact from Prime Minister Narendra Modi's action, with volatility expected ahead of the expiry of derivatives on Thursday.

"The rollover ahead of the expiry is 30% as of now, which is significantly lower than the 50-60% percent levels seen in the last three months. The Total Investment & Insurance Solutions

The US dollar steadied near a recent peak on Wednesday, taking a breather ahead of the US Thanksgiving holiday after surging on expectations that a Donald Trump administration will boost growth and inflation, pushing up US interest rates.

Investors are betting the dollar will be strengthened by president-elect Trump's plans for fiscal stimulus, which may drive the Federal Reserve to raise interest rates faster than had been anticipated because of increased inflation and for infrastructure spending and the repatriation of profits earned overseas.

The top gainers and top losers of the major indices are given below:

 

Top Gainer (The Total Investment & Insurance Solutions)

The closing values of the major Asian indices are given in the table below:The Total Investment & Insurance Solutions

Asian Indices (The Total Investment & Insurance Solutions)