Technical Glitch Shields China from New Tariffs

Business, Economy - May 30, 2020

Fertilizers, Steel, Cement, and Electricity. How these sectors performed in April 2020.

Fertilizers, Steel, Cement, and Electricity. How these sectors performed in April 2020.

Fertilizers:

The Fertilizers production observed a fall of 4.5% YoY to 2,748 thousand tones in April 2020. The price of UREA in April 2020 stood at USD $262/MT vs. at USD $248/MT in April 2019. Price of DAP in April 2020 stood at USD $393/MT vs. at USD $424/MT in April 2019. The price of MOP in April 2020 stood at USD $290/MT vs. at USD $240/MT in April 2019.The production of UREA in April 2020 stood at 18.25 LMT vs. 16.51 LMT in April 2019. The estimated target was 17.67 LMT. The imports in April 2020 was observed at 3.40 LMT vs. 1.75 LMT in April 2019. The availability of UREA in April 2020 stood at 25.89 LMT. However, the sales were observed at 20.24 LMT in April 2020 vs. 15.96 LMT in April 2019. The production of DAP in April 2020 stood at 2.60 LMT vs. 4.18 LMT in April 2019. The estimated target was 2.45 LMT. The import in April 2020 observed at 2.62 LMT vs. 5.38 LMT in April 2019. The availability of DAP in April 2020 stood at 12.09 LMT, however, the sales were observed at 6.95 LMT in April 2020 vs. 3.56 LMT in April 2019.

Steel:

The Crude steel production stood at 2.752 MT in April 2020 vs. 9.021 MT in April 2019 with a fall of 69.5%. The Finished steel production stood at 1.346 MT in April 2020 vs. 8.753 MT in April 2019 with a fall of 84.6%. The consumption of steel witnessed a fall of 90.9% at 0.699 MT in April 2020 vs. 7.691 MT in April 2019. The Imports of Finished Steel stood at 407 thousand tones in April 2020 vs. 619 thousand tones in April 2019 with a decline of 34.3%. The Export of Finished Steel stood at 429 thousand tones in April 2020 vs. 516 thousand tones in April 2019 with a decline of 16.8%. The total sales turnover of steel from PSU unit in April 2020 from SAIL stood at 855 MT vs. 4537 MT with a fall of 81.2%. For RINL, in April 2020 it stood at 281 MT vs. 993 MT in April 2019 with a fall of 71.7%. For NMDC in April 2020, it stood at 400 MT vs. 750 MT in April 2019 with a fall of 46.7%. For MOIL in April 2020, it stood at 34.47 MT vs. 55.31 MT in April 2019 with a fall of 37.7%.

Cement:

The cement sector production stood at 4,077 thousand tons with a decline of 86% in April 2020. It observed a fall of 25.08% compared to the preceding month. The yearly Index for fiscal year 2020 stood at 145.7 vs. 147 in FY19. Some insights of cement sectors is that India is on the 2nd position in production of cement all over the globe as of 31st December 2019. Cement production in FY20 amounted to 334.48 MT. The capacity of cement production is projected to reach 550 MT by 2020. 98% of the overall capacity is from the private sector and the rest from the public sector. Around 70% of India’s total cement output is produced by the top 20 firms. Forecast noted the cement industry will meet the demand of 550-600 MT annually by 2025 as a result of the growing demands from different divisions, such as residential, commercial, and industrial construction.

Electricity:

The Total Electricity generation in April 2020 stood at 81,538.34 GWH vs. 1,09,263.44 in April 2019 with a decline of 25%. In April 2020, electricity generation stood at 74% as compared to the same period in the previous year. The Electricity generation in April 2020 from nuclear category stood at 4,144.34 GWH vs. 3,287.32 GWH in April 2019 with an increase of 34.28%. In April 2020, electricity generation from nuclear category stood at 126% as compared to the same period in the previous year. The Electricity generation in April 2020 from the hydro category stood at 9,658.23 GWH vs. 11,072.61 GWH in April 2019 with a fall of 12.77%. In April 2020, electricity generation from the hydro category stood at 87.23% as compared to the same period in previous year.

The Electricity generation in April 2020 from Bhutan IMP category stood at 90.90 GWH vs. 239.70 GWH in April 2019 with a fall of 62.07%. In April 2020, electricity generation from the hydro category stood at 38% as compared to same period in previous year. The Electricity generation in April 2020 from Thermal category stood at 67,644.87 GWH vs. 94,663.81 GWH in April 2019 with a fall of 27.66%. In April 2020, electricity generation from Thermal category stood at 71% as compared to same period in previous year.

Core Data of Coal, Crude oil, Natural Gas and Refinery Products sector in April 2020.

0 Comment

Flexiloans Bags ₹375 Cr in Series C, Targets ₹5,000 Cr AUM Within 18 Months

Economy, Market News, Markets - May 30, 2020

How to choose the best mutual funds?

How to choose the best mutual funds?

Mutual fund is one of the best investment option for a regular investor, where investors can select and invest in a mutual fund scheme according to their financial goals and risk taking capability. However, an investor can directly invest or hire a mutual fund advisor. If an investor is investing directly, they will invest through direct plans of mutual fund scheme and if investor invests through a mutual fund advisor, they will invest in a regular plan of mutual fund scheme.

What are the various types of Mutual funds available to investors?

1. Equity mutual fund scheme – These funds are directly invested in stocks and returns depends on how these stocks perform over a period of time. These schemes give high returns but are very risky if invested for short term. Investors should invest for long term, at least for five to ten years. There are 10 types of equity mutual fund schemes available based on the capitalization and tenure such as Multi Cap funds, Large Cap funds, Large and Mid-cap funds, Mid Cap Funds, small cap funds, Dividend Yield Funds, Value Funds, Contra Funds, Focused Funds, Sectoral or thematic funds and Equity linked saving schemes (ELSS).

2. Debt mutual fund scheme – This MF scheme directly invests in Debt Securities. Investors who want to invest for short term i.e less than 5 years, should invest in these schemes. These schemes are less risky than equity schemes and provide modest returns. There are 16 debt mutual fund schemes based on tenure and returns such as Overnight Funds, Liquid Funds, Ultra short duration funds, low duration Funds, Money Market Funds, Short duration funds, Medium duration funds, Medium to long duration funds, Long duration Funds, Dynamic Bonds, Corporate bond funds, Credit Risk Funds, Banking and PSU funds, Gilt Funds, Gilt funds with ten years duration and Floater funds.

3. Hybrid mutual fund scheme – This scheme invests in debt and equity schemes. Investors can select these scheme based on their risk appetite. There are six hybrid mutual funds available based on the allocation and investment pattern such as Conservative hybrid Funds, Balanced Hybrid Funds, Aggressive hybrid Funds, Dynamic Asset Allocation, Multi Asset allocation, Arbitrage Funds and Equity Savings.

4. Solution oriented Scheme – These Schemes are especially for a particular solution or goal such as child’s education or retirement. However, they have mandatory lock in period of 5 years.

Mutual Fund Charges:

Total Expenses which a particular Mutual Fund incurred is known as Expense Ratio and this measures per unit cost of the funds managed. Generally, expense ratio is charged around 1.5 to 2.5 percent of the weekly (average) net asset of schemes.

How to select best Mutual Funds?

1. Know your financial goals and risk appetite – As an investor, one must first analyse his financial goals. Ask questions like, what they are looking for, short term or long term investment? Do they want to go for high risk, high return or low risk medium returns? For what purpose is money needed like retirement or any other specific purpose? Do they need money in near future? Or they want to invest for lock in period? By answering these questions, Investor will get a clear picture of their financial goals.

2. Compare the Expense Ratio – Cost of owing some funds can be expensive so choose the lowest possible expense ratio. For example, if one fund has a cost of 0.50 percent while another has a cost of 1.5 percent as an expense ratio. Investors should choose according to the schemes and expense cost.

3. Avoid funds which have high turnover – It is important to see turnover rate for funds, as it impacts the tax rate. It is basically a percentage of the portfolio that is brought and sold in a particular year. Usually, portfolio with more than 50 percent turnover carry higher tax rates.

4. Hire Disciplined Management Team – Fund manager should be selected on basis of the past record track and portfolio manager with high talent and experience team should be chosen.

5. Select No load Mutual Fund – They are basically the fees, which are charged on assets (5% of assets usually). However, not all funds have charges. Investors should choose wisely, no load fund carry no charges and increases overall returns.

6. Check historical data and Diversify assets – investors should check historical data, reports and how they have evaluated them. Diversify whole portfolio, because in case an asset does not perform well due to some reasons, other asset class can balance them.

Some of the best mutual funds:

1. Nippon India US Equity Opportunities Fund – It has an expense ratio of 1.5% and has given returns around 15% per annum in 5 years.

2. ICICI Prudential US Blue Chip Equity Fund – Its expense Ratio is 1.79% and returns of 13.81% Per annum in last 5 years.

3. DSP World Gold Fund – Expense Ratio 1.9% and Returns around 12.81% per annum.

Automakers come up with unique schemes to push sales.

0 Comment

Bharat Forge Ltd Q1 FY23 Result Updates.

Automobile News, Autos, Business - May 30, 2020

Automakers come up with unique schemes to push sales.

Automakers come up with unique schemes to push sales.

Leading passenger car makers are partnering with NBFC’s and banks to give consumers competitive financing solutions and improve market sales. In the several early months, a potential customer will choose to pay considerably low installments and afterwards increase the percentage payable at a pre-specified rate.

Maruti Suzuki:

Maruti Suzuki India Ltd has collaborated with bankers such as ICICI Bank Ltd to include EMI of a maximum of Rs 899 for the first 3 months of its loan value of Rs 1 lakh. Another scheme lets borrowers pay EMI as small as Rs 1797 per lakh over the term of service, including the last payment where the borrower charges one-fourth of the loan value. The Delhi-based auto manufacturer has also partnered with banks to finance 100 percent of the automobile on-road. The firm has recently collaborated with Cholamandalam, to provide plans in which consumers will not have to pay EMI during the first 2 months. Maruti Suzuki has allied with HDFC Bank’s aim of providing financing options to vehicle buyers. Advantages will include low monthly payments over three months each year, up to 100% on-road financing, etc. This will benefit consumers in the entry-level categories in general. Together under tie-up, consumers can make use of a step-up EMI plus balloon plan with a monthly installment of Rs 1,111 per lakh for a loan period of 84 months.

Car leasing:

Maruti Suzuki is currently proposing leasing automobiles to its customers via dealer networks. This change will add optimism to Maruti Suzuki distributors at a time when the company has been under continuous stress owing to decreasing domestic revenues and the financial crisis triggered by the COVID-19 pandemic. This scenario can be suitable for the release of such services by Maruti, as city buyers are likely to favor the vehicle leasing system, rate drop, cost-effectiveness, and less burden on leased automobiles. Innovation presents an interesting alternative for the recovery of demand of purchase of cars in city centres.

Hyundai:

In the meantime, Hyundai Motor India Ltd is now offering its automobiles on lease. The car manufacturer considers this scheme to increase demand. The Hyundai Assurance Program will be provided on selected Hyundai car variants bought during May 2020. It will also protect the buyer for a term of 1 year since the date of delivery of the vehicle. They introduced a special and industry-leading EMI Assurance Program. It will offer young buyers of Hyundai employed in private companies complete peace of mind through this period and build optimistic and secure feelings for the purchase of Hyundai vehicles.

M&M:

M&M, the manufacturer of Scorpio and Bolero SUV, has now launched car loan plans under which consumers are subject to a 90-day suspension or may pay in 2021. In a 8-year loan period, a 90-day payment moratorium including 100 percent on-road financing, to enable buyers conveniently acquire their cars will be provided in the middle of the lock down. According to the company, the policies provide a 50 percent rebate from the payment charge and the opportunity to “buy now, pay later” for the doctor’s segment, a strong reimbursement program for security officers. While, woman consumers will be entitled to a 10-point reduction on the cost of borrowing. The car manufacturer now gives consumers the option of buying a BSVI-compliant pick-up and charging the same EMI as the BS-IV model while, the SUV buyer will now buy the model now and begin paying the monthly installment from 2021. Also, the firm is selling BS-VI vehicles on the same monthly installation as the previous BS-IV platform. In this program, the EMI for funded vehicles begins with as small as Rs 1,234 per lakh.

Volkswagen:

Volkswagen India has announced a leasing and lending service. In a bid to improve demand and render its vehicles available to customers, the German automaker has unveiled different ownership options, including rental and buy-back options. According to the company, new ownership models have been introduced, predicting that consumers are progressively looking at personal travel through mass transit and car-sharing. Such new initiatives can be used across every dealer network. Whereas, the rental period can vary from 2 to 4 years. Clients can also make use of zero down payment together with premiums, servicing and some other costs provided by the scheme. The lease program also offers buyers the ability to switch to certain Volkswagen vehicles. Although, Tiguan and Vento can be purchased under the promised buy-back program, the business has indicated that more versions will be put within this scheme.

Nissan:

Nissan has also launched Buy Now-Pay Later from January 2021 on selected models.

Tata Motors:

Under its latest Keys of Safety financing system, Tata Motors revealed a personalized EMI program for its Tiago model starting at Rs 5,000 per month for 6 months. As per the update, the EMI sum is slowly raised over a cumulative duration of 5 years. Consumers can select between three choices before waiting for their final EMI. Also providing 100% on-road financing for the full line of automobiles and SUVs.

Skoda:

Skoda Auto India and Toyota Kirloskar Motor claim to give pre-qualified buyers a zero own payment plan. Even though Toyota has extended the offer to pick customers depending on their credit scores, Skoda is now extending the EMI vacation to four months to six months.

Honda:

Honda Cars India give cash discounts of up to Rs 1 lakh on specific variants.

Fertilizers, Steel, Cement, and Electricity. How these sectors performed in April 2020.

0 Comment

Road to Progress: Union Budget 2025 to Accelerate India's Infrastructure Growth

Business, Economy - May 30, 2020

Coal, Crude oil, Natural Gas and Refinery Products. How these sectors performed in April 2020.

Coal, Crude oil, Natural Gas and Refinery Products. How these sectors performed in April 2020.

Coal:

The production of coal in April stood at 47 MT with a fall of 15.46% vs 4% in March 2020. The imports of coal decreased by 29.1% at ₹18.65 MT in April 2020, whereas in April 2019 it stood at 26.34 MT. The fall in the month of April 2020 is due to rise of the pandemic. The coal imports observed a fall of 6.18% in April 2020 over the preceding month. Out of the total imports of coal in April 2020, the volume of non-coking coal stood at 13.05 MT vs. 13.6 MT in the preceding month whereas the volume of cooking imports coal stood at 3.3 MT in April 2020. The total coal import for FY20 stood at 247.1 MT vs. 235.35 MT in FY19, with an increase of 5%. The key coal consumption sector is struggling with poor demand as a result of the lock down and the low capacity of plants. This resulted in a decline of demand for coal. In order to raise coal demand, the government has announced a range of steps such as an expanded availability of dry fuel for linkage consumers. It has also announced a number of relief measures, including the power sector, for CIL consumers.

Crude oil:

The production of crude oil in April 2020 stood at 2.5 MT vs. 2.7 MT in April 2019 with a fall of 6.35%. The production in April was 1.44% less than the monthly target. The target was 2,583.03 TMT whereas production was of 2,545.81 TMT. Crude oil production by ONGC stood at 1,681.77 TMT in April 2020 vs. 1,690.78 TMT in April 2019 with a fall of 0.53%. It was less by 0.65% to achieve the monthly target of 1,692.83 TMT in April 2020. Crude oil production by Oil India Limited stood at 248.25 TMT in April 2020 vs. 250.52 TMT in April 2019 with a fall of 6.39%. It was less by 0.9% to achieve the monthly target of 250.52 TMT in April 2020. Crude oil production by PSC Fields stood at 615.80 TMT in April 2020 vs. 639.68 TMT in April 2019 with a fall of 19.25%. It was less by 3.73% to achieve the monthly target of 639.68 TMT in April 2020.

Natural Gas:

The production of Natural gas in April 2020 stood at 2,161.33 MMSCM vs. 2,655.89 MMSCM in April 2019 with a fall of 10.88%. The production in April was 10.88% less than the monthly target, the target was 2,425.32 MMSCM. Natural gas production by ONGC stood at 1,725.69 MMSCM in April 2020 vs. 2,037.71 MMSCM in April 2019 with a fall of 15.31%. It was less by 12.73% to achieve the monthly target of 1,977.42 MMSCM in April 2020. Natural gas production by Oil India Limited stood at 202.05 MMSCM in April 2020 vs. 224.49 MMSCM in April 2019 with a fall of 9.9%. It was less by 4.64% to achieve the monthly target of 211.88 MMSCM in April 2020. Natural gas production by PSC Fields stood at 233.59 MMSCM in April 2020 vs. 393.70 MMSCM in April 2019 with a fall of 40.67%. It was less by 1.03% to achieve the monthly target of 236.02 MMSCM in April 2020.

Refinery Products:

The production of Refinery products in April 2020 stood at 14,745.18 MT vs. 2,20,703.06 MT in April 2019 with a fall of 28.78%. The production in April was 22.01% less than the monthly target, the target was 18907.44 TMT. Refinery Products production by CPSE Refineries stood at 7,103.76 TMT in April 2020 vs. 11,263.33 TMT in April 2019 with a fall of 36.93%. It was less by 28.91% to achieve the monthly target of 9,992.36 TMT in April 2020. Refinery Products production by JV Refineries stood at 925.13 TMT in April 2020 vs. 1,721.66 TMT in April 2019 with a fall of 46.26%. It was less by 22.71% to achieve the monthly target of 1197 TMT in April 2020. Refinery Products production by Private Refineries stood at 6,716.28 TMT in April 2020 vs. 7,718.08 TMT in April 2019 with a fall of 12.98%. It was less by 12.98% to achieve the monthly target of 7,718 TMT in April 2020.

Weekly market update (26th May – 29th May).

0 Comment

Shaping the Future: Key Trends in the Hospitality Industry

Business, Economy - May 22, 2020

Airport Authority of India provides new air travel guidelines.

Airport Authority of India provides new air travel guidelines.

The Minister of Civil Aviation has declared that domestic air operations will start in a structured format starting from 25th May. The Airport Authority of India (AAI) has released new guidance until the nation resumes air services. Stringent sanitation standards will be implemented at all airports while the airplanes restart all around the country. These instructions are provided by the Ministry of Aviation and is to be practiced by travelers beginning from 25th May during their journeys.

Guidelines to be followed:

1. Social distancing and minimal contact is to be maintained.

2. Sensitive individuals such as people with sickness, elderly, and pregnant women, are recommended to avoid traveling. A traveller should not travel if he/she is in containment zone. The traveller should not travel if he/she is tested positive for COVID-19. Passengers will have to wear a mask throughout the journey.

3. If a traveller is not allowed to air travel, he / she will be liable for penal charges.

4. Travellers should give the following declarations:

-I / we are not staying in a containment zone.

-I / we are not experiencing any coughing, fever or breathing difficulties.

-I / we are was never under quarantine.

-If I / we develop any of those mentioned symptoms, should notify the health department immediately.

-I / we have not tested positive for COVID-19.

-I / we are eligible to travel as per the extant standards.

-If needed, I / we should make the mobile number accessible to the airline.

-I agree that if I were to fly by air without satisfying the eligibility criteria, I will be subject to penal charges.

5. Airlines need to ensure that the border pass is provided only when the passenger has confirmed the above declarations.

6. Passengers should arrive at the airport according to the updated arrival period of 2 hours before departure.

7. All departing travellers should be registered with the ‘Aarogya Setu’ App on their cell phones and reviewed by CISFI Airport workers at the entrance gate. Also, Aarogya Setu is not compulsory for children under 14 years of age. If the app is not available, the passenger will be required to go to the counter at which the Aarogya Setu app is available for download.

8. For travellers and employees travelling from and to the airport, either private cars or selected approved taxi services with limited seating is allowed. Travellers must get down from the vehicles with mask, gloves and necessary documents.

9. Travelers will have to walk via the Thermal Scanning Zone at a particular location in the city side before accessing the terminals.

10. Travellers should test their temperature and show the status of the Aarogya Setu application to the employees at the entrance gate.

11. Traveller to display his / her identity, the boarding pass at the entry gate to the CIFS workers

12. The traveller should be given an electronic receipt.

13. Travellers to complete check-in and luggage drop at least 60 minutes prior to departure.

14. Passengers should follow the directions suggested by the authorities to remove all metals on the body to enable security checking.

15. To make sure that social distancing is followed, marks such as triangles, squares will be given across the cart selection of luggage to facilitate social distancing.

16. Limitation on baggage – Only one check-in luggage and one cabin suitcase is allowed.

17. Passengers should be responsible for their own protection by following the health and security directions. Hand sanitizers for travellers and airport personnel at different locations will be made available by the airport operators.

18. While waiting in the security hold zone, travellers must maintain social distancing and sanitization.

19. Usage of trolleys in departure and arrival field will not be allowed. Although, specifying a few travellers needing a trolley for a genuine reason, will be given on request.

20. Airport authorities should make sufficient provisions for the sanitation of luggages.

21. Plexiglass will be used for security test counters and check-in.

22. Passenger seats at airports should be configured in such a way as to preserve the social distancing measures between passengers by utilizing chairs and covering certain seats which will not be utilized, with appropriate identifying marks/tapes.

23. In compliance with the guidelines provided by the Ministry of Health and Family Welfare (MOHFW), all airport personnels managing the airplane should be supplied with hand sanitizers and other necessary safety equipment like face masks, etc.

24. Passengers will need to do a web check-in and then will get a boarding pass.

25. Travellers will have to download the luggage label, print it, and affix that to the luggage in a significant place. If the traveller is unable to print the luggage tag, he/she must note the PNR and the traveller name on paper and affix it to a strong string.

26. Magazines and newspapers will not be made available in lounges and terminal buildings.

27. Wherever feasible, open-air ventilation in airports will be used rather than air conditioning systems.

28. Chairs labelled “Not for use” should not be used

29. Travellers should be aware of social distancing and preserve hygiene when going to F&B, retail stores, etc.

30. The whole terminal disinfection with legally registered disinfectants should be done by spraying disinfectants or by physical cleanings at periodic times.

31. The airport operator must maintain cleanliness and hygiene in all buildings, nooks and corners and public spaces, like restrooms, railings, tables, shelves, escalators, walls, ramps, trolleys etc., to be completed prior the flight arrives and after the last person exits the terminal.

32. Travellers must dispose of all bio hazardous items such as used gloves, masks, tissues, etc, in a yellow disposable bin situated at a convenient place in the airport.

33. Travellers should be pay attention to the different communication materials shown at the airport on the numerous safety advisories related to pre-boarding and during flight precautions.

34. Throughout the aircraft, passengers will observe hygiene and sanitation. Face-to-face engagement should be limited.

35. Travellers to minimize the use of toilets and avoid any activity which is not necessary.

36. No queuing outside the bathroom and one person to aid the kids and seniors citizens will be allowed.

37. No food will be served on the airplane. Bottle of water will be made accessible in the galley area or on the chair.

38. When the traveller is feeling uneasy or suffering from renal distress, it should be immediately notified to the crew.

39. The airlines will disembark passengers in a sequential manner.

40. Trolley to be used sparingly in the arrival area.

41. Travellers to wait in the luggage hold area until the luggage arrives in batches.

42. Passenger travel will not be allowed to leave the transit zone.

43. Daily disinfection should be done at the pick-up taxi and drop off locations outside the airports.

44. Upon arrival at the airport, travellers must comply with the safety guidelines specified by the destination state / Union Terriority.

FPIs exit markets after economic package announcement.

0 Comment

Business, Market News, Markets - May 19, 2020

BSE, NSE cut listing fees for SMEs

BSE, NSE cut listing fees for SMEs

Due to COVID-19 pandemic, all the sectors have been affected badly but SMEs segments are affected the most. Therefore, during the announcements of details of Rs 20 lakh crore stimulus package, Finance minister Nirmala Sitharaman made special announcements related to MSMEs.

Reduction in listing fees:

Now to support SMEs and MSMEs, Indian stock exchanges BSE and NSE came forward. They have relaxed listing norms and reduced listing fee for small and medium enterprises by 25%. However, this norms are applicable to both existing and new firms which are looking forward to list on BSE SME platform and NSE SME platform.

What are the Current charges?

Currently for SMEs, Rs 25,000 or 0.1 percent of market capitalization of firm is the listing fee charged by BSE. The NSE charges around Rs 10,000 to Rs 45,000, depending on the SME firms market capitalization. Until now, BSE has 322 small and medium companies listed and has raised around Rs 3,278.84 crore from the market. Their market capitalisation is of Rs 15,865.39 crore so far. On the other side, so far only 209 small and medium companies are listed on NSE and have raised over Rs 3,200 crore.

What measures have been announced by government?

Due to the covid-19 lock down, many industries are facing problems like job losses and are cash strapped. During this situation, the main concern for MSMEs is that they are not able to restart their operations due to supply issues and non-availability of labour. Last week, while making announcement for packages in tranches, government changed the definition for MSMEs and linked it to the turnover limits of the companies so that their businesses grow with benefits. They announced measures for MSMEs and Rs 3 lakh crore package for collateral free automatic loans with separate funds for equity support.

However, these Rs 3 lakh crore will also be useful for existing borrowers who have over Rs 100 crore turnover and Rs 25 crore outstanding. Fresh loans can be taken by companies up to 20% of their outstanding. These loans have tenure of 4 years, with moratorium repayment period of 12 months. However, the government will also give them credit guarantee of 100 percent which will cover interest and principal to banking and non-banking institutions. Government will give around Rs 4,000 crore funds to Credit Guarantee Fund Trust for Micro and Small Enterprises (CGFTMSE) with partial credit guarantee to banks. However for expansion of MSMEs, the government will provide corpus of Rs 10,000 crore so that they can also list after expansion.

Further Expectations:

Micro, small and medium enterprises (MSMEs) are very cautious while taking any kind of fresh loans, as they are not sure about the demands for their products after all activity resumes. Most of the micro, small and medium businesses and enterprises are expecting from the government, to give them direct relief by waiving their electricity bills and other fixed expenditure such as payment of salaries. However, banks have already reduced their loans such as credit limit. Anil Bhardwaj, Secretary general of federation of Indian micro, small & medium enterprises (FISME) said, for all the small business and enterprises, government will take care of their fixed expenses. MSME industry has three major demand, interest payments, easy access to loans and payments of salaries from the government, during this situation due to COVID-19 lock down.

FPIs exit markets after economic package announcement.

0 Comment

Godha Cabcon & Insulation Reports Q1 2026 Results

Economy, Market News, Markets - May 19, 2020

FPIs exit markets after economic package announcement.

FPIs exit markets after economic package announcement.

On 12th May 2020, Prime Minister Narendra Modi announced an economic package of ₹ 20 lakh crore under government’s Atma Nirbhar Bharat Abhiyan / Self-Reliant India. The national movement of Atma Nirbhar Bharat Abhiyan / Self-Reliant India initiated by Prime Minister Narendra Modi is to support India’s all small and local business. He emphasized on slogan viz. #VOCALFORLOCAL.

Scamper among FPIs:

Approximately 40% of FPI sales in cash and derivatives sectors were observed in second week of May. The data derived from stock exchange indicates some break up figures such as FPI’s sold stock worth ₹6,486 crore. Additionally, sales worth ₹2,869 crore and ₹737 crore were observed in index futures and stock futures respectively. These sales was executed in just 4 trading days in the second week of May 2020. The data further states that since the announcement of economic booster package of worth ₹20 lakh crore, FPIs buying activity has drastically declined.

Decline in NIFTY:

On 13th May 2020, Nifty observed its peak of 9,584 within the span of 2 days. Nifty abruptly fell by 534 points and on 15th May 2020 Nifty observed its low of 9,050. In the same time period, it has also been observed that there is a sudden decline in Nifty Bank. Nifty Bank dropped 1,440 points from 20,122 to 18,663.

If we compare between Indian stock market and global stock market, the sudden change is only observed in Indian stock market and not in global stock market. The Nifty and Nifty Bank indices are two of India’s largest traded derivatives, and both of these derivatives are struggling under pressure from FPI’s as they are selling their investment in a massive quantity since the announcement of economic booster package by Indian government. In second week of May 2020, the indices decreased by 5.6% and 7.15% respectively, compared to their respective highs.

Support from DII’s:

During the same period i.e. in the second week of May, there was no support from Domestic institutional investors (DIIs). Purchases from domestic institutional investors (DIIs) was also low, and they purchased stocks of only ₹1,896 crore in cash. There are several rules and restrictions on the companies who are doing business of mutual funds & insurance on derivative speculations. Therefore, they are virtually absent in the field of futures and options.

Massive sales by FPIs:

The media report noted that FPIs have been selling massively since the second week of May 2020 and have been slamming markets after the announcement of the financial package by Indian Government. In addition, the figures apart from second week of May 2020, the FPI’s net figures appear to be clearly positive, this is a bit misleading.

Loopholes while extracting data:

Exchanges will not adapt these facts when foreign companies sell shares and FPIs buy them This was the case on 7th May 2020, when a massive block of shares entered the market of Hindustan Unilever (HUL). Shares of HUL worth ₹26,300 crore were sold by international investors on 7th May 2020. The FPI’s bought a total worth ₹19,000 crore from the market in the same period, while DIIs bought stocks from the market in the same period worth ₹3,818 crore. Nearly all FPI’s and DIIs purchases were in HUL for that particular period.

When these ₹19,000 crore investments are removed from Hindustan Unilever shares, then FPI’s were net sellers in the cash and future segments. Sellers and major buyers of HUL were both international entities, but only those registered as FPIs are required to report their numbers to Securities and Exchange Board of India (SEBI) and stock exchanges viz. NSE & BSE. Meanwhile, net buying by DIIs in the month of May 2020 is just ₹1,056 crore after adjusting the activity of Hindustan Unilever.

Corporate bond funds: A mix of risks and returns.

0 Comment

Coastal Corporation Q1 2026: Robust Performance and Rising Profits

Economy - May 18, 2020

Fifth tranche of economic package covers MNREGA, Health and more.

Fifth tranche of economic package covers MNREGA, Health and more.

Finance Minister Nirmala Sitharaman, on May 17, 2020 announced the 5th and concluding tranche of the economic package. In order to make India “Atma Nirbhar”, the last tranche of the economic package emphasizes on land, labour, liquidity and laws. The focus is on 7 things including, Health and Education related sector, Mahatma Gandhi National Rural Employment Guarantee Act (MNREGA), businesses and COVID-19, ease of doing business, decriminalization of Companies Act, Public Sector Enterprises- related points and State Governments and related resources.

The 1st tranche was announced on May 13, 2020 following the 2nd, 3rd and 4th tranche on May 14, 15 and 16. All the 5 tranches sums up the detailed guidelines and strategy of allocation of total fund as announced earlier by Prime Minister Narendra Modi. This pool of the Rs 20 lakh crore package, that amounts to 10 percent of our GDP aims to help Nation survive the economic crisis that has arisen due to cross country lockdowns laid to curtail spread of COVID-19.

Let’s have a look at the 7 points as aired on May 17, 2020:

Mahatma Gandhi National Rural Employment Guarantee Act (MNREGA):

The government has planned to increase the budgeted estimate by Rs 40,000 crore. Previously, the budgeted estimate for the same was Rs 61,000 crore. This increase is estimated to generate 300 crore additional labour days of work. Also, this will aid in provision of work for the returning migrants.

Health and Education Sector:

Since public expenditure on health will increase, Government has planned to ramp up investments in building health and wellness centers both in rural and urban regions. Further, every district will have special blocks in hospitals for treatment of infectious diseases.

The Finance minister announced about the technology driven education via “Diksha”. The government is soon planning to launch PM e-VIDYA programme. This programme will provide digital and online access to education. Also, there will be one earmarked channel on television catering to students of class 1 to 12. Adding further, the substantial use of community radio and podcasts will be made. Special online content will be made available for visually and hearing impaired students.

Further, top 100 universities have been granted authorization to start online courses by May 30. Apart from this, an initiative under the name “Manodarpan” will be launched soon. This programme will help in extending socio-psychological support to students and families regarding mental and emotional well-being.

Insolvency and Bankruptcy Code (IBC):

Under this, the debts related to corona cirus pandemic will be excluded from defaults under IBC. No new proceeding for insolvency to be carried out for the next one year. Special provisions will be notified under section 240-A of IBC for MSMEs. In order to insulate MSMEs, the minimum threshold limit to initiate proceedings of insolvency has been raised to Rs 1 crore from previous limit of Rs 1 lakh.

Companies Act:

Announcement as to decriminalize the companies Act was made in order to reduce the burden of criminal courts and the National Company Law Tribunal (NCLT).

Ease of Doing Business:

Public companies can go for direct listing of securities in permitted foreign jurisdictions. Private companies will be considered as unlisted even if they have debentures in the stock exchanges.

Public sector enterprise policy:

Under this policy, the government thinks that it is high time that India sees private sector participation in all the sectors while public sector still plays important role. Therefore, the government has planned to broadly categorize sectors into strategic and others. In strategic sector there will be minimum one to four public sector enterprises in order to safe guard public interest and others will be privatized or merged Whereas in other sectors, public sector enterprise will be privatized. List of the same will soon be notified.

State Governments:

The Central Government is facing steep fall in revenues in the same manner State Governments are also facing huge revenue losses. Around Rs 46,038 crore was delegated as tax revenue from the Centre to State Governments. Adding to this, nearly Rs 12,000 crore was also distributed on timely basis. In spite the borrowing limits of states raised, states have only borrowed 14 percent of the authorized limit, 86 percent still remains unused as of date. Government has now raised the borrowing limit of Gross State Domestic Product (GSDP) from 3 percent to 5 percent. This will result in availability of additional borrowing amount of Rs 4.28 lakh crore for the states.

Market update 18th May 2020. SENSEX crashes 1,069 points on a volatile day.

0 Comment

Prakash Industries Announces ₹1.5 Dividend; Multibagger Stock Confirms Record Date

Economy - May 17, 2020

Fourth tranche includes structural reforms in various sectors

Fourth tranche includes structural reforms in various sectors

In the 4th tranche of the economic package, Finance Minister Nirmala Sitharaman basically focuses on various sectors aiming towards growth stimulation and job creation. This time the utmost focus has been on sectors like coal, minerals, defence, aviation, power distribution, space and atomic energy sector. All the 4 tranches sums up the detailed guidelines and strategy of allocation of total fund as announced earlier by Prime Minister Narendra Modi. This pool of Rs 20 lakh crore package, that amounts to 10 percent of our GDP aims to help the nation survive the economic crisis that has risen due to cross country lockdowns laid to curtail spread of COVID-19.

Details of previous tranches:

The 1st tranche was announced on May 13, 2020 following the 2nd and 3rd tranche on May 14 and 15 respectively. The announcements in 3 tranches summed up to Rs 10.73 lakh crore. Similarly, 4th tranche has been aired on May 16, 2020 providing further details regarding the balance amount of fund dispersal strategy.

The 20 lakh crore package includes the amounts of earlier announcements made in March. Like the fund of Rs 1.7 lakh crore to take care of provision of free food grain and cash to poor for three months period, and monetary policy announced by RBI amounting to Rs 5.6 lakh crore. The First 3 tranches focuses on MSMEs, NBFCs, relief measures for poor migrant workers, street vendors, small businesses and farmers and agricultural sector.

Major announcements and reform in policies:

Investment upgradation:

States will be ranked on investment attractiveness to compete for new investments for industrial upgradation and infrastructure facilities and expansion of its reach. Major sectors in radar are Coal, Minerals, Defence, Airspace, Power distribution, Space and Atomic Energy. Let us consider them one by one.

Coal:

Government removes its monopoly over coal and announces commercial mining of this black diamond. Emphasizing on reduction of imports and increasing “Atma Nirbharta”. She also announces that government will spend Rs. 50,000 crores to develop this sector and looks forward to transparent and healthy competition welcoming private sector participation. Adding further, she tells around 50 blocks of coal will be auctioned.

Minerals:

Similarly, she announces that the government is looking forward to enhance private investment in this sector. Open and transparent auctions will be held to offer around 500 mining blocks. In order to boost competition in Aluminium industry, joint auction will be arranged for Bauxite and coal ores.

Defence Production:

With the aim of reducing dependence and becoming Atma Nirbhar, Foreign Direct Investment (FDI) in manufacturing under automatic route has been raised to 74% as compared to 49% previously. For domestic production of imported spares, budget provisioning has been done. These steps are taken to enhance autonomy, accountability and improvise efficiency in this sector.

Civil Aviation:

Limitations levied on usage of Indian Air Space will be uplifted, in order to make flying more efficient. This liberation will earn an annual benefit of around Rs. 1,000 crores for this sector. She also mentions vision of building world-class airports via Public Private Partnerships (PPP). Adding further, she said Government is taking efforts to make our country an international hub for repairs and maintenance and overhaul for aircrafts under authorization of the Airports Authority of India. Untill now 3 out of 6 airports have been authorized for the same on PPP basis.

Power:

In accordance with the newly laid tariff policies, Government opens doors for private players to enter into power distribution sector in the Union Territories. This is supposed to strengthen, stabilize and improvise efficiency in this sector.

Stimulating investments:

A revival scheme amounting to Rs 8,100 crores, has been launched to stimulate social infrastructure. This will boost private sector investment in social infrastructure.

Space:

Government welcomes private sector to become part of journey in space, launching rockets, satellite services and others. This will stimulate private participation in this sector. The finance minister also mentions that the government is trying to liberalize geo-spatial policy.

Atomic Energy:

Government wishes to see new startups in the nuclear sector. For stimulating this vision, government will set up incubation centres. These incubators are termed as Technology Development cum Incubation Centres. The welcoming the PPP model will help in establishing research reactors and making of medical isotopes.

Lastly, the above mentioned strategic plans and reforms are built with a vision of creating opportunities for businesses and at the same time generating employment and contributing to economic upswing.

Third tranche of economic package to support farmers along with governance reforms

0 Comment

Govt Raises Agri Credit Target to ₹28 Lakh Cr, But Efficiency Concerns Remain

Economy - May 17, 2020

Third tranche of economic package to support farmers along with governance reforms

Third tranche of economic package to support farmers along with governance reforms

On 12th May 2020, Prime Minister Narendra Modi announced a Rs 20 lakh crore stimulus package to tackle the impact of COVID-19. This special economic package is equivalent to about 10 percent of India’s GDP. It includes all the previous packages announced by the government and the Reserve bank of India with new reforms and packages to make the country self-reliant. New governance includes supply chain mend for agriculture. Other factors include simple and clear laws, rational tax system, a strong financial system and capable human resources. However, the main focus of the packages are labour, land, liquidity and laws and sectors such as micro, small and medium enterprises, cottage industries and middle class working people.

On 13th and 14th May, the finance minister, Nirmala Sitharaman announced first and second the tranches of Rs 20 lakh crore package. First tranche includes funds for MSMEs, NBFCs, HFCs and MFIs while focus of second trance was migrant workers, street vendors, small farmers and the poor. She also announced that single ration card will be applied across the country and free ration will be given to those, who do not have ration card in the states they are currently residing. Announcement related to incentives for rental accommodation for migrant workers were also made.

Third tranche of 20 lakh crore announcement:

Total eleven measures were announced in the third tranche, to deal with the farm infrastructure, fisheries, agriculture and animal husbandry. However, some governance reforms were also included. Among these measures, eight measures are related to strengthening infrastructure and rest are related to governance and administrative reforms. Most of the announcement is related to the infrastructure because government wants to empower people and to make sure that India is assisted to stand up on its own through creation of skills and development in logistics sector.

During the last 2 months, the government has already announced relief packages for agriculture and dairy sector which includes Rs 74,300 crore purchase of MSP and under PM Kisan yojana and fasal bima yojana, Rs 18,700 crore and Rs 6,400 crore are transferred and claimed to farmers.

Animal husbandry:

Dairy sector is already facing losses and severe difficulty as demand for milk is reduced by 20-25% during the lock down. Around 560 lakh litres of milk per day is procured by overall co-operatives. Therefore, Rs 5,000 crore liquidity funds will be given to the farmers and around 2 crore farmers will be benefited. A new scheme will provide interest subvention at 2 percent per annum for 2020-21 and 2 percent for prompt service. The government has decided to give Rs 15,000 crore for overall dairy infrastructure.

Around 800 hectare of area is been allocated to develop the corridors of medical plant near River Ganga. Rs 4,000 crore is allocated for growing herbal and medical plants which will cover ten lakh hectares of land and provide income of nearly Rs 5,000 crore to farmers.

Marine and fisheries:

Under Pradhan Mantri Matsya Samapada yojana, Rs 20,000 crore will be given to fulfil the gap between value chains and for development of the marine and inland fisheries. This will give fish production of around 70 lakh tons and produce employment to 55 lakh people in next five years. Under national animal disease control programme, Rs 13,343 crore is given for vaccinations and for eradicating foot and mouth disease.

Schemes for micro food enterprises and bee-keepers:

Government has allocated Rs 10,000 crore fund for micro food enterprises which will benefit up to 2 lakh micro food enterprises and also promote PM’s vision “ vocal for local with global outreach”. For example, Telangana can have turmeric cluster and Bihar can have Makhana cluster. To increase the income of bee-keepers, government has implemented Rs 500 crore for development of infrastructure related to bee-keeping development and storage centers and other value added facilities such as post-harvest. Around 2 lakh beekeepers will be benefitted with this scheme.

Agri-infrastructure:

For Agri-infrastructure, the government has allocated Rs 1 lakh crore so that farm gate infrastructure such as cold chain is strengthened and Rs 500 crore for operation greens has implemented, for better price realisation for farmers. Government will amend essential commodities act and allow market force to deregulate price. The government will intervene if any emergency situation arise such as drastic hike in price or any other crisis.

Reforms:

Government will formulate law for farmers so that they have adequate choices to sell produce at attractive prices and ensure that there is barrier free interstate trade. Framework for e-trading agriculture products will also be made. To ensure that farmers are engaged in fair and transparent deal with processors, aggregators, large retailers and exporters government will facilitate legal framework which will include risk mitigation measures.

Goods exports decline in April

0 Comment