NOVEMBER HIGHLIGHTS(1st week)

NBFCs borrowing  rose to Rs 74,000 crore from Rs 3,600 crore in the previous 12 months

According to an ICRA report on the NBFC sector, the overall funding mix of NBFCs remained largely stable in FY16. The banking system remains the primary source of funding for retail-focused NBFCs, accounting for close to 42 per cent of the total resource profile as on March 31, 2016. The share of bank funding, however, came down from 45 per cent as on March 31, 2014.The drop in the share of bank funding was the result of NBFCs increasing the proportion of incremental funding through debt market instruments (non-convertible debentures and commercial papers) given the overall softening of debt market rates.

Clinton, Trump clash: Election Awaited

In the Oct 30-Nov 3 opinion poll, 44% of likely voters supported Clinton while 39% supported Trump Democrat Hillary Clinton and Republican Donald Trump battled over the strength of the economy in the final stretch of their race for the White House on Friday, with Clinton praising the latest US jobs report and Trump dismissing it as a fraudulent disaster.

With two days left in an often bitter contest that has tightened in the last week, each candidate attacked the other as unfit to be president in a late push for votes in battleground states that could decide the outcome in Tuesday’s election.

RIL fined $1.55 bn in ONGC gas dispute

Reliance to go for arbitration.  The Union government has slapped a $1.55-billion penalty on the Mukesh Ambani-led Reliance Industries Ltd (RIL) for producing state-owned Oil and Natural Gas Corporation’s share of natural gas in the Krishna-Godavari basin, thus setting a precedent for disputes relating to energy exploration and production. The company, in return, plans to issue an arbitration notice to the government. The company said it proposes to invoke the dispute resolution mechanism in the production sharing contract

GST Council  finalizes  peak rate at 28%

50% of consumer price index basket exempted; minimum rate now at 5%; cess to continue; dual control issue to be taken. The Goods and Services Tax (GST) Council on Thursday decided upon a 4-slab tax structure of 5 per cent, 12 per cent, 18 per cent and 28 per cent, with lower rates for essential items and the highest for luxury and de-merits goods, many of which would also attract an additional cess. A proposal by some states, including Kerala, to have special GST rates on luxury and sin goods was not accepted

HDFC, ICICI Bank cut home loan rate by 0.15%

Competition heats up in the home loan business, with lenders reducing lending rates Competition is heating up in the home loan business, with lenders reducing lending rates. It started with State Bank of India (SBI) reducing its rate by 15 basis points (bps) early this week. The country’s largest lender ICICI Bank slashed lending rate by 15 bps to 9.20 per cent for home loans up to Rs 75 lakh. Soon, mortgage lender HDFC followed with downward revision in rate by 15 bps. HDFC will charge 9.20 per cent rate for loans up to Rs 75 lakh and 9.30 per cent for those above Rs 75 lakh, effective November 4.

 

No Up gradation  for 2 years

Global ratings agency Standard & Poor’s (S&P) on Wednesday reiterated its sovereign rating and outlook on India but ruled out any upgrade for this year and the next, citing weak public finances. The government slammed S&P’s statement saying there was a ‘disconnect’ between rating agencies’ views and investor perception on India.The US-based ratings agency maintained the lowest investment grade rating of ‘BBB-‘ with a ‘stable’ outlook for India citing the country’s sound external profile and improved monetary credibility. While it advocated more efforts to lower government debt to below 60 per cent of the GDP, it did not expect revenues to raise enough to meaningfully lower the deficit over the medium term.

Nano Controversy

Tata Motors, part of India’s Tata group, defended its strategy for producing the $1,500 Nano but shied away from commenting on the loss-making car’s future, after the conglomerate’s ousted chairman said there were emotional reasons for not shutting down production. Tata Motors’ issued the statement to the stock exchange late Friday after an internal letter by ousted chairman Cyrus Mistry said the cost of Nano’s production was always higher than its 100,000 rupees ($1,497.33) price tag and the project needed to be shut down if the company wanted to remain profitable. Mistry was sacked in a boardroom coup last week with group patriarch Ratan Tata taking over the reins as interim chair of Tata Sons. A bitter public feud has since erupted between the two sides, raising prospects of a legal battle. Mistry’s leaked letter, addressed to the Tata Sons directors on Oct. 25, said emotional reasons were keeping Tata Motors away from shutting down the Nano’s production. Nano sales declined more than three-fifths to 4,459 cars in the in the six months of the fiscal year beginning April 2016.The car maker had written off some costs associated with the Nano, it said.Tata Motors also said investments in the Nano factory could be used for making other products and that the company would focus on “growing and attractive segments of the passenger vehicle market.”The company denied Mistry’s accusation of aggressive accounting for product development expenses and said it followed standard norms which present a fair and true picture of its financial health.Tata Sons on Friday announced a new management team for the $100 billion steel-to-software group under interim chairman Ratan Tata.While Mistry has been removed as chairman of Tata Sons, he is still chairman of some of the key listed group companies such as Indian Hotels Co, Tata Motors, Tata Consultancy Services Ltd and Tata Steel.

Tata-Mistry show

Days after Cyrus Mistry was removed as the chairman of Tata Sons on October 24, and Ratan Tata was reinstated as an interim chairman for four months, a bitter war of words between the two continued over the weekend. The decision to oust Mistry had been taken in less than half an hour at a full-strength board meeting in Mumbai. And, amid allegations and counter-allegations flying high, the conglomerate continues its struggle to put things back into place for itself. Sacked unceremoniously, a “shocked” Mistry has levelled a series of allegations against Tata and contended that he was relegated to a “lame duck” chairman and changes in the decision-making process created alternative power centers within the Tata group. The board of Tata Sons Ltd, including nominee directors of Tata Trusts, was kept fully informed about Tata Power’s plan to buy some renewable energy assets from Welspun Energy Ltd, Mistry said on Friday. It was one of the tipping points that forced Mistry’s ouster over his failure to keep Tata Sons’ board informed about the Welspun deal, sources said. Three senior group executives at Tata Sons resigned on Saturday, as management woes appeared to deepen at the $100-billion conglomerate following the ouster of Mistry. The three executives were members of an executive council disbanded after Tata dismissed Mistry. The council, comprising five senior Tata group executives and Mistry, was tasked with creating long-term value for stakeholders and boosting returns on investment.Those who quit were group human resources chief NS Rajan, group business development and public affairs head Madhu Kannan, and group strategy executive Nirmalya Kumar.

After stock exchanges and the market regulator raised their antenna on Mistry’s allegations against Tata Sons, the Enforcement Directorate (ED) pulled up its socks and decided to probe the fraud allegation. The ED would primarily investigate the Rs 22 crore fraud allegations under Section 3 of the Foreign Exchange Management Act (FEMA), 1999.

Mistry had alleged that “a recent forensic investigation revealed fraudulent transactions of Rs 22 crore involving non-existent parties in India and Singapore”. The full-blown war between the Tatas and Mistry is expected to escalate in intensity, with the latter evidently unwilling to step down as chairman of various group companies, including Tata Motors, Tata Steel, TCS and Tata Power .The joint venture between Tata Sons and Singapore Airlines posted a net loss of Rs 401 crore on a revenue of Rs 691 crore for the year to March, according to its investor presentation.

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