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ME sector sees no major boost in Budget proposals

Written By Unknown on Sabtu, 28 Februari 2015 | 21.03

Vaishali Karulkar
moneycontrol.com

Not much was announced for the media and entertainment sector in the Union Budget 2015-16 - only service tax would be levied for entertainment events like concerts, non-recognised sporting event, pagents, music concerts and award functions if the ticket price was  more than Rs 500.

However, service by way of admission to exhibition of the cinematographic film, circus, dance, or theatrical performances including drama, ballets or recognized sporting events shall continue to be exempt.

The FM did promise that GST would be put in place by 1st April, 2016.

As the M&E industry that constitutes of television, print, radio, social media, and films continues to entertain and inform plays a critical role in creating awareness on issues affecting and building aspirations for millions of Indians. It also includes smaller segments like radio, music, OOH, animation, gaming and visual effects (VFX) and Internet advertising.

The government has also promised ease of doing business and set the ball rolling for FM radio phase III auctions.

Industry's Expectation from the upcoming Budget

•    Under the purview of goods and service tax industry expects uniform, single-point and simplified taxation across various product categories.
•    Rationalisation of indirect taxes, which currently range from 30-70 percent would be helpful.
•    No tax deduction at source (TDS) on the 15 percent agency commission will reduce the burden of taxes for the broadcasters.
•    Solve the double taxation issue: Licensing of copyright content (other than theatrical exhibition) is liable for service tax and value added tax, which results in double taxation on the same transaction. In a recent judicial.
•    Entertainment  tax be eliminated or at least the rate of tax be moderated.
•    Tax Exemptions for Radio Broadcasting
•    Reduce customs duty on capital equipment for Radio broadcasting to 4%.
•    Export benefits to post production services under service tax legislation.
•    10 Years Tax Holiday for Animation, Gaming, and Visual Effects Industry.
•    Above are the industry expectation for robust growth of the industry.

The key beneficiaries of these announcements would be companies like Balaji Telefilms , DB Corp , Dish TV , Eros Int , Hindustan Media , HT Media, INOX Leisure, Jagran Prakashan , NDTV, PVR, Saregama, Shemaroo, Sri Adhikari, Sun TV , TV Today Network , TV18 Broadcast , Zee Entertainment , etc

State of the Industry

Currently the M&E industry is bogged down by myriad of taxes in various forms – both direct and indirect.

Amidst India's evolving economic environment, MSMEs have been advocating revision of the basic structure of definition of MSMEs to provide for a higher capital ceiling.

MSME which contributes about eight per cent of India's GDP plays a vital role in the country's growth. In India there are more than 30 million MSMEs contributing 40 per cent of the country's total export. MSMEs provide employment to more than 60 million people and are producing more than 8000 quality products for the international and Indian market.

Highlights of 2014 Budget

Service Tax:

•    To broaden the tax base in Service Tax, sale of space or time for advertisements in broadcast media, extended to cover such sales on other segments like online and mobile advertising.
•    Sale of space for advertisements in print media however remained excluded from service tax. Service provided by radio-taxis was brought under service tax.

Some indirect taxes proposals:

•    Colour picture tubes exempted from basic customs duty to make cathode ray TVs cheaper and more affordable to weaker sections.
•    To encourage production of LCD and LED TVs below 19 inches in India, basic customs duty on LCD and LED TV panels of below 19 inches reduced from 10 percent to Nil.


21.03 | 0 komentar | Read More

Union Budget 2015: Hail bankruptcy code; it will aid banks, says Tata Steel

In an interview to CNBC-TV18, Kaushik Chatterjee of Tata Steel shares his views on the Union Budget 2015-16 announced today.

In an interview to CNBC-TV18, Kaushik Chatterjee of  Tata Steel shares his views on the Union Budget 2015-16 announced today.

Below is the transcript of the interview with Latha Venkatesh & Senthil Chengalvarayan.

Latha: As head of finance of such a big company, this Budget is positive or negative for you?

A: If I look at it from a longer term perspective, the direction given for the next five years or up to 2022 is certainly the first time that you will look at specifics on both the social sectors as well as on the other larger framework of regulatory changes which is certainly heartening.

From a shorter term point of view I just had a glimpse of some of the rate changes and duty changes and I saw that there has been a 5 percent increase in customs duty in steel which has been an important issue for the steel industry given the deluge of imports that is coming from Russia and China. So, from that perspective it is a good one.

However, fundamentally if one looks at it from and many commentators would have already spoken about it but the fact is that two or three things which are very important highlights for me; one is the concept of introducing the new bankruptcy code and during this year because that I believe will release a lot of assets that have been invested on the ground in better hands for future productivity and that will also potentially have a big impact on the banking industry which is needing capital for funding the next investment cycle. So, that is an important thing.

Second, there are various small notable steps taken for ease of doing business and those have been the stand of this new government when they came into power and if those continue to happen, there will be confidence in people who undertake businesses in this country to put in more capital and that itself will have a cascading impact and finally on the social side for the first time we are looking explicitly as a pronouncement that India would provide social security system to its citizens and there are many highlights being provided.

At this point of time in the economy and with the kind of demographics that we have, that can actually make people lot more secure and the quality of life improves and that is another plus point.

For entire interview, watch accompanying video.

Tata Steel stock price

On February 28, 2015, Tata Steel closed at Rs 355.65, up Rs 4.60, or 1.31 percent. The 52-week high of the share was Rs 578.60 and the 52-week low was Rs 332.20.


The company's trailing 12-month (TTM) EPS was at Rs 78.29 per share as per the quarter ended December 2014. The stock's price-to-earnings (P/E) ratio was 4.54. The latest book value of the company is Rs 629.60 per share. At current value, the price-to-book value of the company is 0.56.


21.03 | 0 komentar | Read More

Budget 2015-16: Short-term impact of service tax concern, says TCS MD

However, the short term impact arising out of increase in surcharge and service tax are matter of concern. The move to encourage use of financial products and services among a larger proportion of the population as well as the efforts towards monetization of gold are great building block to build a vibrant and deep financial services sector.

TCS Chandrasekaran, CEO & MD, TCS

"The FM has delivered a bold, far sighted Budget that will help raise the country's profile as an investment destination. It aims to make structural changes that will help drive higher corporate investment on a sustainable basis. These include the commitment to simplification and rationalization of the taxation structure and setting a clear roadmap of reform for the next four years. However, the short term impact arising out of increase in surcharge and service tax are matter of concern. The move to encourage use of financial products and services among a larger proportion of the population as well as the efforts towards monetization of gold are great building block to build a vibrant and deep financial services sector. The government's moves to encourage fund managers to relocate to India will also drive greater integration of the India into the global financial services economy."

Mr. N Chandrasekaran added: "The focus on education through greater investment in institutions of higher learning as well as in skill development and the financial support for students will also help India capture its demographic dividend . Another important signal is the ongoing commitment to Digital India which will result in important opportunities for the IT sector. Extending the digital financial infrastructure through its support for greater use of payment systems like Rupay as well as the creation of a widespread broadband infrastructure will spur India's aspiration to become a "Smart Nation".

TCS stock price

On February 28, 2015, Tata Consultancy Services closed at Rs 2675.30, up Rs 11.55, or 0.43 percent. The 52-week high of the share was Rs 2834.00 and the 52-week low was Rs 2000.50.


The company's trailing 12-month (TTM) EPS was at Rs 104.29 per share as per the quarter ended December 2014. The stock's price-to-earnings (P/E) ratio was 25.65. The latest book value of the company is Rs 224.90 per share. At current value, the price-to-book value of the company is 11.90.


21.03 | 0 komentar | Read More

Union Budget 2015: Expected more on manufacturing, housing, says Adi Godrej

Adi Godrej rates Finance Minister Arun Jaitley's Union Budget an 8 on 10. He says Jaitley's Budget will help revive the country's GDP as it lays a lot of emphasis on social infrastructure and Indian agriculture.

In an interview to CNBC-TV18, Godrej says Jaitley's clarity on the GST timeline is a major positive as he has emphasized the government will stick to the April 2016 date for the implementation of the tax.

"GST will put in place a state-of-the-art indirect tax system by 1st April, 2016," said Jaitley today.

However, the big disappointment, Godrej says came on the back on manufacturing sector. Despite high hopes, buoyed by the government's Make in India programme, the FM made no big announcements to boost the manufacturing sector.

BMR Advisors' Bobby Parikh, another guest of the panel says he welcomes the FM's anti black money thrust.

Below is the transcript of Adi Godrej and Bobby Parekh's interview with Menaka Doshi & Senthil Chengalvarayan on CNBC-TV18.

Menaka: What do you make of this Budget, some investors are saying it misses the wow factor, is that a disappointment for you?

Godrej: I think the Budget has been good on many fronts. One, I think it will help gross domestic product (GDP) growth. The large investment into infrastructure, the great emphasis on agriculture and social infrastructure will help. Some of the steps taken for the long-term in terms of black money and others will be very useful. Some of the other announcements for the long-term also will be good. For example, the fact that he wants to bring corporate tax rate to 25 percent in four years time is a good move.

At the same time I think manufacturing has fallen between two stools because he doesn't want to give any new incentives to any sector of the economy because he wants to bring corporate tax rate down but this year he has not brought corporate tax rate, in fact corporate tax rate has gone up because the 2 percent surcharge which he announced he will charge on higher income individuals is evidently applicable to the corporate sector too. So, I feel that manufacturing will not get the boost we expected this 'Make in India' Budget to provide.

Senthil: Goods and services tax (GST) he gave a timetable but it is April 2016, is that a bit of a disappointment?

Godrej: I think nobody expected it to be implemented before that but I am very glad that he has given a date. I think that is a good date, people are encouraged by the date. I hope they are able to stick to it.

Menaka: There is an increase in surcharge for FY16, so effective tax rate goes up to 34.6 percent. We have got excise rates going up, we have got service tax rates going up of course to align themselves to GST but will this entire combined mean a big pressure on financials for corporate India for FY16?

Godrej: I think so because the cut in the corporate tax which would have come through has been delayed. He has not done anything this year although he has announced that it will be over four years. So, as I have mentioned many sectors have benefitted especially international investment. All the problems of international investment have been taken care of which is a very good thing but this boost to manufacturing which we were expecting in this Budget has not come through. In fact as you rightly put it there are additional taxes on manufacturing.

Menaka: What stands out most for you and on the balance is it a plus Budget for corporate India?

Parikh: There were a lot of expectations on very specific things that the market had so if there were pain points in a variety of different areas then he seems to have methodically gone and addressed them. So foreign portfolio investment (FPI) - Minimum Alternate Tax (MAT) is a thing which came up now. From 1992 FPIs have been investing but we never had this MAT issue it popped up now and it is been dealt with.

There was AIFs needed a pass through, it is been sort of dealt with. Private equity (PE) risk for private fund managers based here managing foreign money was meant to have been dealt with for many years, has been dealt with. There were a lot of things which have got cleaned up as a result of that. This includes indirect transfers, the General Anti-Avoidance Rules (GAAR) deferral, so in that sense there were all of these kinds of things which had to happen and they happened and therefore it is clear.

They are in a way consistent with what the government has been saying that we will do things to make things easier. So it is helping to make things easier in some way or the other. Is it transformational? May be not, but is it helping things along, yes it is.

For more, watch accompanying videos.


21.03 | 0 komentar | Read More

Is Budget 2015 a gamechanger? Experts debate

In an interview to CNBC-TV18's Shereen Bhan, Sunil Munjal, Joint MD of Hero MotoCorp, Sumant Sinha, Chairman of ReNew Power, Anshuman Magazine, CMD at CBRE (South Asia) and Atul Punj, Chairman of Punj Lloyd gave their take on Arun Jaitely's Union Budget 2015.

In an interview to CNBC-TV18's Shereen Bhan, Sunil Munjal, Joint MD of Hero MotoCorp , Sumant Sinha, Chairman of ReNew Power, Anshuman Magazine, CMD at CBRE (South Asia) and Atul Punj, Chairman of  Punj Lloyd gave their take on Arun Jaitely's Union Budget 2015.

For entire discussion, watch accompanying video.

Hero Motocorp stock price

On February 28, 2015, Hero Motocorp closed at Rs 2682.65, up Rs 12.30, or 0.46 percent. The 52-week high of the share was Rs 3271.80 and the 52-week low was Rs 1940.70.


The company's trailing 12-month (TTM) EPS was at Rs 123.37 per share as per the quarter ended December 2014. The stock's price-to-earnings (P/E) ratio was 21.74. The latest book value of the company is Rs 280.43 per share. At current value, the price-to-book value of the company is 9.57.


21.03 | 0 komentar | Read More

No incentive for anyone to enter REITs: CBRE South Asia

Written By Unknown on Jumat, 27 Februari 2015 | 21.03

For REITs to take off in India, the government needs to provide clarity on the tax structure, says Anshuman Magazine, chairman and  managing director of CBRE South Asia. The tax outgo is much less if a company is listed in India and Singapore, sans REITs, he says.

Under normal listing, the tax comes to 25 percent in India and 13 percent in Singapore, whereas under REITs it is around 50 percent, he says. He adds that foreign investors will only be interested if there is tax clarity on REITs.

According to him, capital gains from exchange of special purpose vehicle (SPV) share must not be subject to MAT.

Below is the verbatim transcript of Anshuman Magazine's interview with Anuj Singhal and Ekta Batra on CNBC-TV18.

Anuj: What are the major tax issues in real estate investment trust (REITs) and how can those be solved?

A: No, in fact what has happened is we are expecting some clarifications on the tax side. So today if you were to do a REITs structure in India, taxation – the tax is less if you are listing in Singapore or listing in the Indian stock exchange. For example, if you are doing a REITs structure, you are paying almost 50 percent tax so it is 30+20 corporate tax and dividend distribution tax (DDT). If you were to just do a normal listing, the tax comes to 24 percent and if you were listing in Singapore it is 13 percent. So there is no incentive for anybody to get into a REITs structure. There are a lot of small things, the major one-two things are that there is a capital gains tax, if you are transferring your assets into a REITs structure.

The second is when you are selling assets to form a REITs structure, again there is a capital gains tax and all this what it does is it yields to the investors also comes down and there is no investment - there is no attraction for any developer to list. The other thing is also that there is a minimum alternate tax (MAT), which is when you are exchanging shares to - if you are holding special purpose vehicle (SPV) where you are holding all the assets which will be 10-15-20 billion, which are rent producing and when you exchange those shares for REITs units, there is a MAT, which has been put on it. So that is another tax. So all these different taxes at different levels make it unattractive for anybody to do the structure.

Ekta: Currently out of MAT, DDI and capital gains deferrals -- which one is the most important one that you will want to hear on to solve the problem of REITs?

A: Capital gains definitely is an important one and the dividend distribution at the SPV level. These two and like I said, I have only mentioned 3-4, there were many other smaller ones which I don't want to go into, the details but these would be the top two which will make a difference. The fact is that the government has announced REITs. I am sure they wanted to come into - it is not only for theory, they want REITs structure to come in. The advantages of REITs are obvious. In today's market, this is going to bring in some liquidity which is required because there is a liquidity problem. What is not understood is besides bringing in liquidity, making the market more transparent, efficient, this will also encourage more investors to come into India especially from outside because REITs provides an exit. So to institutions or institutional assets so for example, if a private equity player or investor from outside comes in and invests in development in India, he knows there is a REITs structure, he can exit after two-three years, five years, seven years whenever he wants to, which itself attracts capital because if you are investing in the US or any other mature market, the foreign investor knows and even that he has other institutions will buy its assets which is literally absent in India right now. Besides foreign investors, even domestic institutional investors would be encouraged to invest in real estate because they know there are these REITs structure which are run professionally, they are listed, there is more transparency and they have the funds which will buy investments that other institutions have made.

Anuj: Any specific real estate company that will benefit out of the tax clarity on REITs?

A: I wouldn't like to take any names but there are many developers and now other institutions who are sitting on income yielding assets so anybody who is sitting on especially the office developments and in India because in other countries there are other segments but primarily offices which are rented out so they own that asset. So in India a lot of times, people just presale so they don't have ownership of fully developed office buildings which are rented out. So any institution, any developer who has got a portfolio of office buildings, which he owns, which are fully occupied or tenanted will benefit from this.

Ekta: Do you expect the REIT kind of structure to be introduced for other sectors like infrastructure, power, renewable?

A: Absolutely, this is not only REITs, there is also Infrastructure Investment Trusts (InvITs), which the government has announced and that would also require similar tax exemptions. I think it is a fantastic tool like I mentioned not only it brings liquidity but the big difference is for infrastructure ore real estate, it will move to institutions owning assets like it has done in mature markets. Like I mentioned that brings in transparency, encourages more investors, retail investors can participate. As you know in India the saving rates are quite high, the participation in the capital markets or in the stock markets, in the public markets, although it is expanded, it is still not there where it should be and when you create structures like this, one end we talk about strategy liquidity, on the other hand we have so much sitting in banks, in low yielding financial instruments and hopefully with these structures that money would go not only into real estate but also into infrastructure projects. Infrastructure is the number one, prime need of our country. If we have to move to the next level, we cannot and everybody knows we cannot move without infrastructure. So therefore an infrastructure needs money, need funding. Therefore it becomes more important that we encourage and these structures be it REITs or InvITs which will really help the infrastructure sector.

Anuj: What is your gut feeling, do you think any clarity will come on REITs in this Budget or again do you think the market will be disappointed?

A: It is very difficult to give a number, I hope if it is a high number for announcement being made in the Budget but my gut feel is that in case Budget doesn't cover it fully, in net few month time we will get clarification and the simple reason is -- we have said that the government has announced it. For me they have not announced it for a fun of it, they want these structures to come in. there has been interacting the industry taking suggestions so I am quite hopeful even if this is not covered in the Budget fully or partially, it will come in next few months time because without this, REITs structure will not come in and if they don't come then the announcement does not have any purpose.


21.03 | 0 komentar | Read More

IT cos see Chennai as an attractive investment destination

High profile shut downs including Nokia, Motorola and Foxconn, it's surely not been great going for big businesses in Chennai. However if real estate transactions are anything to go by, light seems to be emerging at the end of the tunnel

High profile shut downs including Nokia, Motorola and Foxconn, it's surely not been great going for big businesses in Chennai. However if real estate transactions are anything to go by, light seems to be emerging at the end of the tunnel, reports CNBC-TV18's Jude Sannith.


21.03 | 0 komentar | Read More

Motorcycle maker Yamaha to launch small cars in Europe

The firm has been mulling manufacturing four-wheel vehicles for years, exhibiting a prototype 1,000 cc engine car and an electric-car battery at the 2013 Tokyo Motor Show.

Japanese motorcycle giant Yamaha will join the four-wheel market by launching small cars in Europe as early as 2019 to meet rising demand for energy-efficient vehicles, a company official said Today.

The firm has been mulling manufacturing four-wheel vehicles for years, exhibiting a prototype 1,000 cc engine car and an electric-car battery at the 2013 Tokyo Motor Show.

Yamaha is planning to build car plants in Europe to sell them in the region before 2020, the company spokesman said, without elaborating.

"As small cars are already prevalent in Europe, our first car launch will be (there)," he said. "But we are also studying opportunities in emerging countries" as well, he added.

His comments were in response to an interview with company chief Hiroyuki Yanagi that appeared in the leading Nikkei business daily, in which he said Yamaha will supply its own engines for the new European market cars, while outsourcing some other parts production.

While it is best known for its motorcycles, Yamaha has worked with Toyota on car engine development since the mid-sixties, supplying more than three million engines to the world's biggest automaker over that period.


21.03 | 0 komentar | Read More

Union Budget 2015: Housing for all to boost ind demand: Cera Sanitaryware

Atul Sanghvi, ED of Cera Sanitaryware spoke about the likely benefits from government's focus on sanitation and low housing and housing for all

Affordable housing will be the one where we anticipate a big benefit for companies like us.

Atul Sanghvi, ED of  Cera Sanitaryware spoke about the likely benefits from government's focus on sanitation and low housing and housing for all.

Below is the transcript of Atul Sanghvi's interview with Reema Tendulkar and Ekta Batra on CNBC-TV18.

Reema: Can you walk us through the expectations of your industry from the Budget?

A: As the Prime Minister (PM) has announced housing for all by 2022, we anticipate that there will be a big boost in the demand of housing and especially for companies like us. We are very eager to see what exactly transforms in the case of 100 smart cities because I believe that the affordable housing will be the foundation for the smart cities.

Ekta: Can you tell us whether you are already the beneficiary of government orders and in which segment and by how much?

A: Enquiries have started flowing in.

Ekta: Enquiries from where and which segment and for what?

A: We are getting the enquiries for sanitaryware from the corporates who are planning the corporate social responsibility (CSR) activities in sanitation.

Reema: Keeping Swachh Bharat in mind, would you also get into other segments, which could be a beneficiary of that. For instance pipes as well as jet sprays, you are not currently present in that but would that be a segment which would interest you?

A: At the moment, we have decided to concentrate in our core business of sanitaryware and faucets.

Ekta: There was an announcement of bio-toilets in the Railway Budget yesterday; would that in any way be of benefit to you?

A: We are not into that.

Ekta: If you had to tell us whether you have to benefit from one certain programme the most, which one would it be, would it be affordable housing, Swachh Bharat or something else?

A: Affordable housing will be the one where we anticipate a big benefit for companies like us.

Reema: So far you have not got any orders from the government per se?

A: No.

Reema: Would the margins in low cost housing be different from the margins you enjoy otherwise?

A: Definitely, there will be difference. The margins in low cost housing will be less than 50 percent of what we are doing right now.

Reema: If you start targeting, tapping that opportunity should we assume that your margins would be lower than compared to what they are right now?

A: We have to take a balance otherwise overall profitability will get affected.

Cera Sanitary stock price

On February 27, 2015, Cera Sanitaryware closed at Rs 2585.00, down Rs 20, or 0.77 percent. The 52-week high of the share was Rs 2884.00 and the 52-week low was Rs 747.20.


The company's trailing 12-month (TTM) EPS was at Rs 51.27 per share as per the quarter ended December 2014. The stock's price-to-earnings (P/E) ratio was 50.42. The latest book value of the company is Rs 176.98 per share. At current value, the price-to-book value of the company is 14.61.


21.03 | 0 komentar | Read More

Tata Motors' offers VRS to workers

The firm's domestic business has been under pressure for a while now. In the third quarter, it posted a loss of over Rs 2,100 crore on a standalone basis.

Tata Motors  has launched a voluntary retirement scheme for workers across its India plants. The firm's domestic business has been under pressure for a while now. In the third quarter, it posted a loss of over Rs 2,100 crore on a standalone basis. In this light, the VRS will help create a more agile organisational framework.

The vrs has been offered to workers above 40 years of age and the company believes that workers at its older plants in Pune and Jamshedpur are more likely to consider it. The offer will remain open till the March 27.

The terms of the VRS state that workers can avail of basic pay in addition to dearness allowance and this will be payable on a monthly basis till the worker turns 60. What this means is that there won't be a one-time exceptional outflow of funds in a single quarter once the VRS payment starts.

As part of the VRS, the company will also provide workers with medical cover for 10 years after the separation.

The company has told CNBC-TV18 that as of now, the VRS offer has only been made to workers but it could be extended to managerial staff in the future.

Tata Motors stock price

On February 27, 2015, Tata Motors closed at Rs 575.50, up Rs 15.30, or 2.73 percent. The 52-week high of the share was Rs 612.05 and the 52-week low was Rs 379.15.


The latest book value of the company is Rs 59.58 per share. At current value, the price-to-book value of the company was 9.66.


21.03 | 0 komentar | Read More

Rail Budget 2015: Pledge to re-invigorate Railways, says Suresh Prabhu

Written By Unknown on Kamis, 26 Februari 2015 | 21.03

In a post-Budget interaction with the media, Prabhu said a sum of Rs 6,581 crore has been approved to remove around 3,500 level-crossings. He said the ministry has rationalised freight rates in terms of classification.

The Railway Budget has focussed on issues like safety, increasing quota for senior citizens, said minister Suresh Prabhu.

In a post-Budget interaction with the media, Prabhu said a sum of Rs 6,581 crore has been approved to remove around 3,500 level-crossings. He said the ministry has rationalised freight rates in terms of classification.

Stating that Railways cannot depend on sole source of gross budgetary support, Prabhu said the government is looking at various options to raise money. "A large government organisation has committed Rs 20,000-crore investment in Railways, besides we are also in talks with the World Bank for funding.


21.03 | 0 komentar | Read More

Ashiana Homes raises Rs 66cr from Piramal Fund

Ashiana Homes raises Rs 6The company raised Rs 66 crore from Indiareit Fund Scheme V, being managed by Piramal Fund Management, he added. Ashiana Homes would develop 660 apartments under the project, which is expected to be launched in April-May. The company plans to sell flats in a price range of Rs 50-70 lakhs. 6 cr from Piramal Fund

Realty firm Ashiana Homes  has raised Rs 66 crore from Piramal Fund Management to partly finance the acquisition of 10 acres of licensed land at Sohna in Gurgaon. "We have bought 10 acres of land with development rights from local land aggregators for about Rs 100 crore. We will be developing a residential project on this land," Ashiana Homes Director Rohit Raj Modi told Media.

The company raised Rs 66 crore from Indiareit Fund Scheme V, being managed by Piramal Fund Management, he added. Ashiana Homes would develop 660 apartments under the project, which is expected to be launched in April-May. The company plans to sell flats in a price range of Rs 50-70 lakhs.

In 2013, realty firms, Ashiana Homes and Landcraft Projects, had raised Rs 180 crore from Indiareit and India Infoline to develop a luxury housing project at Gurgaon.

Piramal Group's Piramal Fund Management Pvt Ltd (formerly known as Indiareit) is into real estate funding. Delhi-based Ashiana develops projects in the national capital region, Jaipur and Bhubaneshwar.

Commenting on the investment, Piramal Fund Management MD Khushru Jijina said: "Ashiana Homes has been focused on executing and delivering reliable and quality residential housing over the years".

Ashiana Housing stock price

On February 26, 2015, Ashiana Housing closed at Rs 285.90, down Rs 3.6, or 1.24 percent. The 52-week high of the share was Rs 327.30 and the 52-week low was Rs 76.10.


The company's trailing 12-month (TTM) EPS was at Rs 1.82 per share as per the quarter ended December 2014. The stock's price-to-earnings (P/E) ratio was 157.09. The latest book value of the company is Rs 27.81 per share. At current value, the price-to-book value of the company is 10.28.


21.03 | 0 komentar | Read More

Tata-LT consortium shortlisted for mega defence project

In order to give a push to government's defence programme, the ministry has awarded battlefield management system (BMS) development contracts to two consortiums. According to sources, one comprises of  Tata Power SED and L&T Defence and the other consortium includes  BEL and Rolta .

The government will fund 80 percent of the prototype cost and partners will be expected to fork out the remaining 20 percent. The two consortiums are required to develop the prototype in 18-24 months.

Speaking exclusively to CNBC-TV18, MV Kotwal of  L&T said share of Tata Power and L&T is same in the consortium. He also added that the final order win will be between one of the two consortiums.

Below is the transcript of MV Kotwal's interview with Menaka Doshi, Anuj Singhal and Varinder Bansal on CNBC-TV18.

Menaka: We have some preliminary details on this big defence order of the size of Rs 50,000 crore which we understand has been bagged by two different consortia. Around 70 percent of that order has gone to a consortium between BEL and Rolta and 30 percent of that order has come to you and Tata Power as the second consortia. What details can you share with us on this front?

A: Actually, this needs a lot of clarification. First of all this is not an order, it is a programme called Battlefield Management System (BMS) which is part of a 'Make India' programme. The part of the scheme is that they call companies interested in this which they did in last April and we submitted expression of interest and they have now shortlisted the top two.

The scheme is that the top two companies or consortia will be given the chance to produce prototype systems which they would have to field and after they are fielded they would to go through a set of tests and then the chosen party will get the majority of this business.

Today, there has been a short listing of the top two and that includes one, the consortia which you talked about between BEL and Rolta and a second is the consortium, which is between Tata Power SED and L&T; in this particular case led by Tatas. The share of both partners is almost equal and this is the consortium which is announced.

The process of development of the prototype will then commence and 80 percent of the funding for development will be provided by the government of India where 20 percent would be provided by the concerned consortium. This is a normal process of the Make India programme where out of the interested parties the top two are selected, two parties are given 80 percent funding by the government to develop prototype systems and then finally after the due testing then the selected party gets the majority of business.   

Menaka: Is it like a prototype beauty pageant, if you win the beauty pageant you get the order, if you don't, you don't get the order?

A: No it is not like that, for example there will be two systems developed and at the end of the development process which may itself take a few years and after that the one that is selected normally would get a larger portion of that business.

Therefore, the total business as envisaged today is between Rs 40-50,000 crore. But it is not yet an order, this is like a selection for the development partner and there will be two selected partners.

Menaka: Is the Swayamvar down to two?

A: Yes.

Menaka: Now you'll compete, if you win you stand to gain from an order that sort of represents the majority of that Rs 30-40,000 crore business. It could be an order to the tune of Rs 20,000 crore or Rs 25,000 crore executable over 5-10 years.

A: Yes, after the development process is over. And during the development process, 80 percent funding is provided by the government.

Menaka: Only 20 percent comes out of your pocket over the period of time. Is that 20 percent material in any way that we should know about, will it show up in your financial earnings suddenly as a blip in some quarter in the next two years?

A: The teams will now get together with the user agencies and then we will chalk out what exactly the details are involved in the development process and then we will get a better picture.

The sums involved will be little more than Rs 500 crore for the development process itself but how much they will be, they will come out a little later.

Menaka: It isn't time yet to congratulate you in any fashion?

A: First of all it is a very tough thing to get short listed among the top two. We similarly got short listed in the tactical communications system which was a first one and in that again the consortium that time was led by L&T and part of it is Tata Power.

We got selected so in both these very major programmes of very great tactical communication systems and the BMS, both part have got involved and that is something which is really very difficulty to get as 14 parties were y called for the BMS and that is how the selection was done.

Varinder: I wanted to know that 70-30 ratio which is being talked in the market, is it right to understand that going ahead after two years or 18 months, that will be the proportion which will be divided between two consortiums or is it too early to even discuss about that?

A: It is a bit premature; the reason is very simple that these systems are very complex. It is not something which you just buy off what is available and so, the two parties will independently develop systems which meet customers or the end users requirement.

The user will then get to test both of them and then pick and choose which are the features of which they would want in the final system. So, the composition of how much each consortium will share is rather premature to talk about.

Menaka: Exactly what is it that this BMS entails? Can you talk about what it is that you are building as a prototype or is that classified?

A: In short it is a command and control system. What happens in today's warfare, the digitalised warfare as you call it, you need communication between the command centre and finally the soldier. So, it is a part of the whole process which is called OODA which is Observe, Orient, Decide and Act. That is the kind of loop which is normally used.

This will be a unique system which will place the Indian army on a much higher pedestal because right from the command centre to the soldier who is on the field there will be a complete system which will gather information on what is happening and get back to the final decision on actual actions to be taken.

It is a very complex encrypted system and therefore it will really place us amongst the top forces in the world once such a scheme is implemented.

Varinder: What are the chances that after 18 or 24 months, even after developing the prototype, will it be final that these two consortiums will bag the final order or there could be a slip between the cup and the lip?

A: No, that is absolutely certain. The whole foundation of 'Make India' programme - first of all why such a thing was required is because we are talking about systems which do not exist as readymade system hence have to be absolutely designed to suit our own requirements.

It is a very secure system and is really good that apart from the traditional organisations like BEL other now organisations have also been given a chance. To even qualify or be selected we have to have a track record of having supplied various equipments over the years which have given confidence to the MoD that we can meet the requirements.

Menaka: Will it be down to these two consortia to bag proportions of that order?

A: Absolutely.

Menaka: You keep referring to Make in India or Make India rather. That is the defence programme, right? You are not referring to the Modi government's programme because you said you were called in April and at that point the government hadn't even been elected.

A: No, it is good you brought out this because there is often confusion. Make India is a categorisation of the procurement policy of the Government of India which has been announced sometime back.

The first programme in that category was the tactical communication system which for some years back it has been done because there were some formalities because of which it has not yet got activated but it will soon get activated now we expect.

The second programme is the Battlefield Management and there are several more major programmes which major programmes that are coming into this category. This is quite different from the Make in India which is a general term applicable across.

So, Make India is basically a defence procurement category and this is exclusively meant for systems or equipments which do not readily exist. They have to be developed, designed and built and so there is lot of development, R&D involved. That is why it is quite exciting for us.         


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Govt clears criteria to appoint 5 PSU bank chiefs

The Appointments Committee of Cabinet today approved the criteria and method for selection of managing director and chief executive officers in five public sector banks -- posts that have been lying vacant for long.

The Appointments Committee of Cabinet today approved the criteria and method for selection of managing director and chief executive officers in five public sector banks -- posts that have been lying vacant for long.

The five banks are Bank of Baroda , Punjab National Bank , Bank of India , Canara Bank  and IDBI Bank .

"The guidelines envisage that both governmental and non-governmental candidates can apply," the government release stated. "The candidate should have at least 15 years of mainstream banking experience, of which three years should at least be at the Board level. The candidate should be in the age group of 45 to 55 years and will have a fixed tenure of three years, subject to normal age of superannuation of 60 years."

Bank of Baroda stock price

On February 26, 2015, Bank Of Baroda closed at Rs 172.40, down Rs 4.8, or 2.71 percent. The 52-week high of the share was Rs 231.50 and the 52-week low was Rs 101.80.


The company's trailing 12-month (TTM) EPS was at Rs 18.38 per share as per the quarter ended December 2014. The stock's price-to-earnings (P/E) ratio was 9.38. The latest book value of the company is Rs 167.11 per share. At current value, the price-to-book value of the company is 1.03.


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SBI gets shareholders nod for raising Rs 15K cr from market

State Bank of India  (SBI) on Thursday received shareholders' approval for raising Rs 15,000 crore through a public offer, including a rights issue, to fund business and meet global capital adequacy norms.

The general meeting held on Thursday approved "to create, offer, issue and allot, such number of equity shares of Re 1 each, not exceeding Rs 15,000 crore or such amount as approved by the Government of India and RBI" SBI said in a filing to the BSE.

It would be "subject to the condition that the government's shareholding in equity share capital of the bank does not fall below 52 percent at any point of time, by way of public issue" it said.

Public issue, it said, would include follow on public offer or rights issue or private placement including QIP, ADR, GDR or any other mode decided by the board. Shares of the country's largest lender closed at Rs 289.55 per unit, up 2.03 percent. The bank requires adequate capital to match the anticipated growth in asset and comply with stipulated level of capital adequacy.

The move comes in the backdrop of the Cabinet permitting banks to lower the government holding from 58 percent to 52 percent enabling lenders to raise funds from the market to meet Basel III norms. Government of India holds 58.60 percent stake in the bank. Last year, the bank raised Rs 8,032 crore by selling shares through the qualified institutional placement route to fund its business growth.

Besides, the government infused Rs 2,000 crore capital in the bank during the last fiscal. For the current fiscal, the government has earmarked Rs 11,200 crore for capital infusion in various public sector banks including SBI. The disbursement may take place during this quarter.

The statement further said that the quantum and mode, number of tranches, price or prices, discount or premium, reservations to employees, customers, existing shareholders will be decided by the board at a later date.

SBI had raised over Rs 16,000 crore through a rights issue in 2008. In the last SBI rights issue, the government contribution was in the form of bonds to the bank instead of cash.

Earlier this month, HDFC Bank  raised about Rs 10,000 crore by selling American Depository Receipts and India-listed shares to qualified institutional investors in the largest follow-on offer by a private sector firm.

The bank raised USD 1,270.72 million (about Rs 8,000 crore) by issuing 22 million ADS to global investors. It raised about Rs 2,000 crore from a QIP (Qualified Institutional Placement) in the domestic market. 

SBI stock price

On February 26, 2015, State Bank of India closed at Rs 289.55, down Rs 6, or 2.03 percent. The 52-week high of the share was Rs 2977.85 and the 52-week low was Rs 276.00.


The company's trailing 12-month (TTM) EPS was at Rs 16.61 per share as per the quarter ended December 2014. The stock's price-to-earnings (P/E) ratio was 17.43. The latest book value of the company is Rs 158.43 per share. At current value, the price-to-book value of the company is 1.83.


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LG, Samsung Mobiles top 2 trusted brands in India: Report

Written By Unknown on Rabu, 25 Februari 2015 | 21.03

LG was ranked fourth while Samsung Mobiles was ranked at 379th position in The Brand Trust Report in 2014. The survey was conducted amongst 2,373 respondents across 16 cities.

Korean brands LG and Samsung Mobiles are the top two most trusted brand in the country followed by Sony, Tata and Nokia, says The Brand Trust Report, India Study 2015.

LG was ranked fourth while Samsung Mobiles was ranked at 379th position in The Brand Trust Report in 2014. The survey was conducted amongst 2,373 respondents across 16 cities.

The report is issued annually by TRA (formerly Trust Research Advisory), a Comniscient Group company.

TRA CEO N Chandramouli said: "Korean firm LG and Samsung Mobile have worked their way to become top most trusted companies in a short period of 10 to 12 years. These companies came out with products suiting the Indian market and have earned trust of Indian customers."

Top 20 most trusted companies which have improved their ranking over last year include LG, Samsung Mobiles, Bajaj, Honda, Dell, Godrej, Bata, Amul, Apple, Airtel and Dabur.

Top 20 most trusted companies which have slipped in ranking are Sony, Tata, Hewlett Packard, Reliance, Hero MotoCorp, Maruti Suzuki, Philips and LIC.

Nokia's ranking remained stable at fifth position. In the north India region, top five most trusted brand are LG, Samsung Mobiles, Hero MotoCorp, Sony and Nokia.


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AGs of Texas, California probe DRL's drug pricing mechanism

On or about November 10, 2014, DRL received a Civil Investigative Demand (CID) from the Office of the Attorney General, State of Texas requesting certain information for the period of time between January 1, 1995 and the date of the CID.

Attorney Generals of Texas and California have separately sought information on pricing of some drugs sold by  Dr Reddy's Laboratories in the US, according to the latest filing for the drug maker with SEC.

The development comes after two members of the United States Congress wrote to the company requesting information and expressing "concern" over the "escalating prices" of two products -- divalproex sodium ER and pravastatin sodium -- marketed by it in the United States.

On or about November 10, 2014, DRL received a Civil Investigative Demand (CID) from the Office of the Attorney General, State of Texas requesting certain information for the period of time between January 1, 1995 and the date of the CID.

Similarly, on November 3, 2014 the drug maker received a "subpoena duces tecum" to appear before the Office of the Attorney General, California and produce records and documents relating to the pricing of 15 products, the filing said.

"The CID includes a broad range of requests for information, documents and data regarding sales and price reporting in the US marketplace of certain products. "We subsequently communicated with the Texas AG, at which time they requested a sample of certain transactional data pertaining to one calendar quarter requested in the CID, and agreed to provide such sample transactional data to the Texas AG no later than February 20, 2015," DRL said in the filing.

According to US legal terminology, a subpoena duces tecum (or subpoena for production of evidence) are court summons ordering the recipient to appear before the court and produce documents or other tangible evidence for use at a hearing or trial.

When contacted, a DRL official while confirming the developments, refused to divulge more details. "We confirm having received the CID.

We are working closely with the office of the Attorney General, State of Texas, in responding to their queries so as to expedite a speedy redress to the information they have sought from us. "At this point, we do not have any further comment as the matter is still work in progress," the DRL official told PTI.

Dr Reddys Labs stock price

On February 25, 2015, Dr Reddys Laboratories closed at Rs 3274.95, down Rs 83.35, or 2.48 percent. The 52-week high of the share was Rs 3662.00 and the 52-week low was Rs 2250.00.


The company's trailing 12-month (TTM) EPS was at Rs 92.70 per share as per the quarter ended December 2014. The stock's price-to-earnings (P/E) ratio was 35.33. The latest book value of the company is Rs 547.55 per share. At current value, the price-to-book value of the company is 5.98.


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Land Act sentimental issue, must not be rushed into: Pros

Road transport minister Nitin Gadkari has refuted the opposition's charges of the amendments to the Land Acquisition Act as being anti farmer. Speaking to CNBC-TV18, RV Kanoria of  Kanoria Chemicals and Chandra Bhushan of Centre for Science and Environment discussed the pros and cons of the bill.

Kanoria believes Land Acquisition Bill cannot be dealt in bits and pieces as it is a big sentimental issue and will affect lives of majority of Indians as agriculture still remains the primary occupation of the people of this country.

Concurring the view, Bhushan also believes farmers must be consulted before making the bill and the government should not hurry in pushing through the land ordinance.

Below is verbatim transcript of RV Kanoria and Chandra Bhushan's interview with CNBC-TV's Menaka Doshi and Senthil Chengalvarayan.

Menaka: Industry has been fairly vocal over the last several years that buying land in this country to set up a manufacturing facility is very difficult. Therefore, are you in favour of several measures that this ordinance short circuits, for instance the consent mechanism or the social impact assessment mechanism in order to make the acquisition of land easier?

Kanoria: The Land Acquisition Act itself was not thought through. It was more of an emotional and political decision and the amendment to the act in the form of an ordinance has also not been fully thought through.

The fact that land is difficult to acquire in the country is a given. At the same time we are dealing with a very emotive issue where we are talking about displacement of farmers, displacement of livelihood and so, it needs to be handled in a very different way.

We have put ourselves in a bind by introducing the act in the first place and then trying to amend it because the act, as it stands, is incapable of actually being implemented in the true spirit that it is meant to be.

It is important to understand that this government has tried to change the procedure through the ordinance. It has not changed the compensation.

What the government is saying is let us not make this a lengthy procedure, let us not have a social impact assessment study, let us not go through a method of consent which is actually a very impractical method because it requires meetings of several gram panchayats and the process itself is so cumbersome that a poor farmer who wants to actually sell his land will virtually not be able to sell it and the ones who want to acquire it will not be able to acquire.

The needs of the farmer, the needs of the development process and the needs of the buyer are all being compromised through the acquisition act as well as through the amendment in the ordinance.

What we really need to understand is that are we willing to sacrifice our development, do we want to condemn our farmers to remain just farmers and not give them better opportunities.

Let us not forget that 65 percent of our population is still dependent on agricultural income whereas only 19 percent of our gross domestic product (GDP) is agriculture.

If you look at it in developed countries, like in US, only one percent of the population is dependent on agriculture. So, we should give our farmers this opportunity and must find a fair and clear method by which acquisition of land can actually happen.

One of the suggestions that we have been making from industry is where there is a willing buyer and a willing seller why do we want to complicate it with rehabilitation and resettlement and all these kind of things because the price discovery happens by the virtue of the transaction itself where you approach someone to sell the land and you negotiate a price and buy the land.

So it is a willing buyer-willing seller situation and even in that case the Land Acquisition Act actually imposes the R&R settlement. So, this is one aspect of it.

The second aspect is that why can't the government designate certified areas, let us say, this 10,000 hectares if it is purchased by the industry there will be automatic change of land use.

Now by not giving that land use change they are actually denying the farmers their right compensation because industry when it buys the land has to factor in the risk of whether the land use will be changed or not, as to what will be the FIR, what will be the regulations associated with the use of land.

There are some fundamental issues we are discussing today and we have put ourselves in a bind. The way I look at it is that two or three years down the road there will be no land acquisition and the farmers themselves will come and say that we need to revisit this act to ensure that at least those who want to move away from farming are allowed to do so.

Menaka: What is eminent domain- where the government acquires land for large national projects like dams and what should be the resettlement and rehabilitation provisions as opposed to what should apply to the private purchase of land which is an industry or a business going to a group of farmers and negotiating with them whereb? If the farmers are agreeable then there should be no rehabilitation and resettlement measures. I think that distinction needs to be made in this conversation. In eminent domain, the worry here is that the concept of eminent domain has been expanded to include a variety of things for instance affordable housing. Now, building a dam in the interest of the nation and building affordable housing where there is private profit maybe even in play or at play, those are two different things. I think that is where some of this opposition to this bill comes up and that is what I am trying to distinguish in this conversation as well. What do you make of what or how this ordinance is attempting to change our land laws?

Bhushan: I will agree with certain point that Mr. Kanoria said. He rightly said that we enacted this law by not looking at many other things and this ordinance we are trying to push through also in a hurry. We need to sit down, think through and come out with a middle path which will ensure that some of the major problems that were there in the past is not repeated again.

Menaka: Could you be specific about which elements of the ordinance you do not agree with?

Bhushan: The ordinance tries to remove two things; one is the consent mechanism and second is social impact assessment. We also believe that the social impact assessment was not a problem. In fact if you look at Chapter 2 of social impact assessment, the first part is investigation to determine social impact assessment and public purpose. This is a very important component. When you are going to acquire land, the point you are making about eminent domain, public purpose and it is very important to investigate what will be the impact. The Chapter 2 B where there is procedure, you have to do social impact assessment.

Menaka: That is a painful one.

Bhushan: That is also premature. 
 
Menaka: Because we do not have the institutions to do it now.

Bhushan: Yes, we do not have institutions to do it therefore it was a premature thing to say that we will have social impact assessment and it all happened and we see what is happening in environmental impact assessment.

Menaka: But what about the consent clause, I understand maybe the consent thresholds are very high, 80 percent, 70 percent but after all we are shareholders to vote on what their companies and their managements are doing. Why should land owners not have a say when their land is being taken away from them?

Bhushan: That is where I disagree with Mr Kanoria. Two things Mr. Kanoria said that it is between buyer and seller and price discovery. A large part of India is not Delhi, Haryana, Ghaziabad and Faridabad, a large part of India has no mechanism of price discovery whether you go to Chhattisgarh, you go to Jharkhand, part of Orissa, part of even Gujarat; there is nothing called as price discovery there.

Price discovery is applicable where you have demand for land; industries go for mining which is there is no demand for land. In fact a large part of India has no title for land, people are customary right; how do you deal with those issues? So, one is that this price discovery part where buyers and sellers can deal with each other is applicable only in certain part of India, not in large part of India and you need a mechanism for land acquisition rehabilitation and resettlement there. It is not a mater with a farmer in Haryana but it is imminently important for a farmer or a tribal in Chhattisgarh, that distinction needs to be understood.

Second point is about consent clause. Some sort of-if not 70 percent or 80 percent that we are talking about, if we can do better investigation of social impact, what impact it is going to have, what will be the public purpose, how the community is going to be effected, if people are involved in this decision making process, if we can from consent if we could come out with a mechanism for consent cum consultation or consultation cum consent, we will have to have some sort of consent.

Menaka: Would you say that an 80 percent or a 70 percent consent threshold may be too demanding but doing away with consent altogether especially in projects that are not necessarily pure eminent domain, affordable housing must require the consent of the land owner especially when there is private profit at play?

Kanoria: I agree that price discovery is also not a process which is relevant to many parts of the country and I think we have to find a solution to it. There has to be proper rehabilitation, there has to be proper settlement wherever there is no price discovery.

One size fits all Land Acquisition Act also may not be the right answer to it.

The second point I would like to make is, when you talk about consent, if the social impact assessment study can be done in advance and designated areas be earmarked for different types of development whether it is affordable housing, whether it is industry, whether it is mining and if that process can be done in advance then the possibility of price discovery also increases because the seller knows what he can expect in terms of the return and the buyer also knows what the land use can be. So, the consent mechanism itself whether it should be a pre-consent or after-consent, the social impact assessment study is also something which should be looked at.

Prima facie I think this law needs a complete revisit. It is not something which can be done in bits and pieces. It is an emotional, sentimental issue, it is fundamental to the livelihood of a large part of the population of this country and we cannot treat it without understanding the implications on every side. At the end of the day we also want development but we don't want it at the cost of people.

Industry also wants to ensure that people get their due returns but at the same time development in the country shouldn't stop, the opportunity for new jobs, the opportunity to change ones life, these are all fundamental questions we need to ask ourselves.

Land Acquisition Act is a difficult act to handle. It is really a tough problem which the government has got to solve today.


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Hyundai to launch 'i20 Active' next month

Korean auto major Hyundai will make the global debut of its new crossover model, i20 Active in India next month as part of its plans to bring new products to touch the 5 lakh sales milestone in the country.

Korean auto major Hyundai will make the global debut of its new crossover model, i20 Active in India next month as part of its plans to bring new products to touch the 5 lakh sales milestone in the country.

"Designed at Hyundai Motor's Design Centre Europe in Russelsheim, Germany, i20 Active is scheduled to make an official global debut in the Indian market in the month of March 2015," Hyundai Motor India said in a statement.

While revealing the design renderings of the "SUV looking car", the company said it has "sporty refinement, with the enhanced practicality and quality" without sharing details.

Earlier this month, the company had launched the updated version of its mid-sized sedan Verna priced up to Rs 12.19 lakh (ex-showroom Delhi). Hyundai Motor India Ltd (HMIL) Senior Vice President, Sales and Marketing, Rakesh Srivastava had said the company's "aspiration is to achieve the 5 lakh sales mark in the domestic market" and the updated Verna would play a significant role in achieving the milestone. In order to achieve the target, he stated HMIL has lined up a slew of products for this year, including models in new segment.

The i20 Active will be competing with the likes of Toyota Etios Cross and Fiat Avventura in the newly emerging premium hatchback-crossover segment in India.


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Ajay Singh infuses Rs 500 crore in SpiceJet: Sources

Singh is learnt to have raised a soft loan for this fund infusion in the airline. Sources also say that investors will pick up a stake in the airline once the restructuring process is completed.

Employees of SpiceJet have some reason to cheer. After some uncertain months, relief is in sight as new promoter Ajay Singh told CNBC-TV18 today that there will be no large scale manpower reduction at the airline for now. Singh said his target was to get to the ratio of 90 people per aircraft and the airline is already close to this target.

Though Singh declined to provide more details on manpower restructuring going forward, a source close to him pointed out that there will be significant rejig of the top management but people at junior and mid levels will not be disturbed. This source also said Singh may earmark up to 5 percent of equity for employee stock options.

Singh today brought in Rs 500 crore of the Rs 1,500 crore committed investment in SpiceJet as per the approved revival plan. The source quoted earlier said Singh has raised a soft loan for this investment So will foreign investors - who were said to be in the reckoning earlier for picking up minority stakes in SpiceJet - now come forward? The source said there seems to be "a lot of interest" from domestic investors and some from abroad and that things will become clearer after some weeks.

Singh has already begun massive operational restructuring. The source said SpiceJet has already reduced the number of stations it operates to, from 36 to 31, and there will be further reduction.

Singh said he has not taken any decision on whether to continue with the fleet of Bombardier aircraft (the Q400) and any decision will be effective only later this year, from the winter schedule. "We have anyway done our fleet planning keeping the Q400 in mind for the summer schedule," he said. But the source quoted earlier said phasing out the Q400 fleet was a possibility. As of now, the airline also has 17 operational Boeing 737 aircraft.

SpiceJet stock price

On February 25, 2015, SpiceJet closed at Rs 24.95, up Rs 0.80, or 3.31 percent. The 52-week high of the share was Rs 25.70 and the 52-week low was Rs 11.10.


The latest book value of the company is Rs -16.49 per share. At current value, the price-to-book value of the company was -1.51.


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SC allows RBI to initiate action against Sahara

Written By Unknown on Selasa, 24 Februari 2015 | 21.03

In a major setback for Sahara, the Supreme Court has allowed the Reserve Bank of India (RBI) to take action against the group for violation of orders by the court and RBI.

It may be recalled that the central bank had moved the apex court accusing Sahara of not depositing securities worth Rs 484 crore with market regulator Sebi.

According to RBI, it had passed order barring SIFCL from selling 'directed securities', which include government bonds, FDRs, etc. As per audited accounts, SIFCL sold securities worth Rs 524 crore, while Rs 6 crore was used for repayment of dues to depositors. However, audited accounts show that Rs 484 crore was diverted to Sahara India, which was against the RBI and SC orders.

Sahara's counsels claim that the money was sent to Sahara India to repay depositors. The group has challenged the correctness of auditors' findings.

However, the SC maintains that it had asked Sahara to pay Sebi and never directed it to repay investors. The apex court wondered how the group can violate a direct order by RBI.

Meanwhile, on Tuesday's hearing the Sahara group also informed the court that its deal with Mirach is not happening now. Calling the deal a 'mirage', Sahara said it is exploring other options for raising funds.

According to the group, it is currently at exploratory stage and has signed term sheets have for a few. It said a European bank has agreed to extend loan of USD 1535 million and even Dutch pension fund has expressed interest in extending loan and investments.

The group is also considering sale of Aamby Valley. It is also seeking conferencing facilities for Roy in Tihar till March 31. However, the SC refused it citing that it will allow facilities when Sahara brings forth a concrete proposal. We can't allow a comfortable arrangement with internet, staff, food etc, the SC observed, adding that Sahara parivar is large enough, and should be doing the groundwork.

The next hearing for the case is on March 13.


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Coal India board directs PSU to withdraw from ICVL

The company also said that its board gave approval for the first year expenditure of Rs 1,019 crore to start the work for setting up MCL's - Coal India arm - 2x800 mw coal-based super critical thermal power plant in Odisha.

State-owned CIL on Tuesday said its board has directed the PSU to withdraw from International Coal Ventures Ltd. ICVL is a PSU consortium formed to acquire coal mines overseas.

The company also said that its board gave approval for the first year expenditure of Rs 1,019 crore to start the work for setting up MCL's -  Coal India arm - 2x800 mw coal-based super critical thermal power plant in Odisha.

"The CIL (Coal India) board, in its meeting held on February 13, directed that Coal India should withdraw from International Coal Ventures Private Limited (ICVL)," the company said in a filing to BSE. CIL had earlier felt that continuing with ICVL only involved financial burden without commensurate advantage. Besides CIL, ICVL's promoters includes PSUs like  SAIL and RINL.

ICVL was created in 2009 to ensure long-term security of the supply of critical raw material for domestic steel industry. In a separate filing to BSE, CIL said "the board reviewed its decision and accorded its approval for the first year expenditure of Rs 1,019 crore to start the work to set up 2x800 mw coal-based super critical thermal power plant (in Odisha)."

The board also advised that as soon as Coal India has a full board, the proposal will be placed for its consideration for the approval of the Project Report, CIL said.

"We have intimated stock exchanges...dated November 28, 2014 about the approval of the project report by CIL board to set up..super-critical thermal power plant (STPP)...with a total investment of Rs 11,368.18 crore," CIL said.

Coal India stock price

On February 24, 2015, Coal India closed at Rs 384.35, up Rs 0.50, or 0.13 percent. The 52-week high of the share was Rs 423.85 and the 52-week low was Rs 240.50.


The company's trailing 12-month (TTM) EPS was at Rs 6.97 per share as per the quarter ended December 2014. The stock's price-to-earnings (P/E) ratio was 55.14. The latest book value of the company is Rs 26.04 per share. At current value, the price-to-book value of the company is 14.76.


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Govt defers auction of schedule III blocks till next week

The e-auction of schedule III blocks, which include the ones that are near commissioning, was due to begin Wednesday. However, it has been deferred owing to litigation in Delhi High Court, said sources.

The government has deferred auction of schedule III coal blocks till next week, sources tell CNBC-TV18.

The e-auction of schedule III blocks, which include the ones that are near commissioning, was due to begin Wednesday. However, it has been deferred owing to litigation in Delhi High Court, said sources.

The Delhi HC is hearing plea of Bhushan Steel  and Monnet Ispat  against two-stage bidding process.

According to sources, the auctions are likely to begin March 4. Despite deferral, the companies are likely to meet prescribed deadline of April 2.

The Delhi HC will hear the plea on February 27.

Bhushan stock price

On February 24, 2015, Bhushan Steel closed at Rs 88.70, down Rs 1.7, or 1.88 percent. The 52-week high of the share was Rs 470.05 and the 52-week low was Rs 81.60.


The latest book value of the company is Rs 399.50 per share. At current value, the price-to-book value of the company was 0.22.


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Govt needs to reduce fisc to 3% in FY17: Fin Comm member

The 14th Finance Commission report, headed by Y V Reddy and tabled by Finance Minister Arun Jaitley in Lok Sabha today, has recommended devolution of 42 percent of central taxes to states.

In an interview to CNBC-TV18, M Govinda Rao, Member, 14th Finance Commission, said the panel did not make distinction between plan and non-plan spends. He thinks the centrally-sponsored schemes should be reduced, besides the government needs to bring down the fiscal deficit to 3 percent from FY17.

The government can look at creating contingency mitigation fund, but should not compromise on fiscal deficit target, he said. Rao however added that the panle did not talk about GST rates.

Below is the transcript of Govinda Rao's interview with Shereen Bhan on CNBC-TV18.

Q: The government has decided to accept the recommendations as far as the 14th Finance Commission is concerned with regards to the devolution. Can you take us through the rationale behind this quantum jump? The government itself is calling this a quantum jump. Can you take us behind the rationale of this quantum jump that the 14th Finance Commission has decided to go in for?

A: There are a number of factors that have gone into the recommendations. Unlike in the past this Finance Commission's terms of preference do not ask the commission to confine itself to meeting the requirements under the non planned revenue accounts of the states which basically implies that it restores the constitutional position of the Finance Commission's task namely looking after the entire revenue expenditure requirement of the states. It is not just the non-planned, so in that sense of the term it is not 32 is not comparable to 42. You should add for 32 the normal central assistance given by the planning commission under the Gadgil formula the transfers given under the special plan assistance and quite a few of the discretionary grants which the Planning Commission was giving including the things like backward region transfer and things like that.

So, in other words it is not exactly 32 percent, if you add those it will come somewhere around 38-39 percent. In addition to that you have the grants. That is one of the things. In fact this commission has made a number of interesting recommendations in this regard, their entire approach. One is you don't make a distinction between plan and non plan.

Second thing is you don't make a distinction in the tax distribution between general category states and special category states and have a different norm. But what we have done is we have taken into account the revenue disabilities and cost disabilities of the states and in the process of doing that we have mainstream environmental issues which means for example in the tax devolution formula we have included forest cover.

So, in other words there are a variety of innovative things that have been done and strictly adhering to the constitution. Of course this also implies that the state gets much larger quantum of funds which are untied, which are general purpose transfers, which are basically block transfers which they can use. The idea is we have trust in the states.

Q: You are making a valid point and that is the point that is the point that the Finance Minister was also earlier making that you are moving away from a one size fits all approach and the state governments will now have the power to decide what to utilise their funds on. But if I could ask you the question that people want an answer to what does this mean in terms of the fiscal space for the government? Because the Finance Ministry in its releases articulated that its fiscal space will be reduced proportionately on account of the higher devolution to the states. What is this now going to mean in terms of fiscal space with the government which is already pretty much fiscally constrained and what is this then do to the fiscal consolidation road map that this government has presented with 3.6 percent being the fiscal deficit target for the next financial year? 

A: The total transfers that the union government gives to the state is a decision which the union government takes. If you look at present something like 62 percent of the total divisible pool of the taxes is given by way of transfers, 32 by way of tax revolution and then certain amount something like 7-8 percent by way of other grants. The question that comes up is you can continue to give 62-63 percent you do not have to give more. But then you will have to reduce the space as far as the centrally sponsored schemes are concerned. You can re-modify the centrally sponsored schemes and then at present the centrally sponsored schemes constitute somewhere about Rs 3 lakh crore a year. 

If you want to state that I want to give only 62 percent and I do not want to touch the other fiscal space then you can do, that Rs 3 lakh crore will be reduced to Rs 2 lakh crore. We still have Rs 2 lakh crore to manage within that but if you want to increase that either you will have to increases tax revenue or you will have to increase the non tax revenue or you will have to cut down the other unproductive expenditure. In fact the union government is sovereign and then it has to take how exactly it wants to go about. Now that you have given higher tax devolution, higher Delhi purpose transfers, we have trusted the states; states have the responsibility of providing quality public services, public goods to the people because they are the ones who are closer to the people.

Q: If I could come back to the issue of fiscal space at the central level, I am given to understand, this is as per what the finance ministry is has stated officially and this has been the recommendation of the commission to bring down the number of centrally sponsored schemes, we understand that the Centre will now delink about eight centrally sponsored schemes from central support. So, in that sense how much room will this actually give the government? Is there a number, is there a calculation because the centre is saying it will delink eight centrally sponsored schemes from central support. How much will this offset the outgo from the Centre?

A: I have not seen which of those eight centrally sponsored schemes they are removing. There were 147 schemes and then they were consolidated into 66 by the B K Chaturvedi committee and this 66 in terms of the volumes, in terms of the transfer there was not much of a change. Now, what you really need to do is to again- even there there is a reform needed, there is a chapter in the finance commission report which basically-the title of the chapter is towards corporate federalism and that chapter basically tells that in designing this limited number of schemes that you want to undertake, do not do 66, you have some 10-15 of them-in designing them you have the state's involvement, you have the domain experts involvement and along with the spending department, the states and the domain experts should basically design and work out the implementation scheme. There is a very detailed chapter on that.

Q: Do you think that this government ought to stick to its fiscal deficit number of 3.6 percent for the next financial year or do you believe that that need of the hour at this point in time is to pump prime the economies to stimulate growth? Where do you stand as a member of the 14 th finance commission on that issue?

A: The commission has made a very clear recommendation with regards to the fiscal targets. The fiscal targets for the next year as it was adopted by the medium term fiscal plan is 3.6 and the year after wards is 3 but not to pump prime the economy what we can do is one, the higher transfers to the state will result in a higher capital expenditures because they do not really have a serious evidence of that issue in many of the states.

More than anything else it would be useful for the Union government to start, particularly in the case of railways for example, you can have a special purpose vehicle or even for highways you can have a special purpose vehicle. You borrow money from various places, create a contingency mitigation fund so that if there is a contingent liability that is coming up you can deal with that and possibly you can take it off the Budget but the point is-of course it is a contingent liability but then you have to have an arrangement to mitigate that contingent liability if in case it arises but fiscal deficit target we should not compromise that, we should have the fiscal consolidation.

Q: Let me ask you a question on the GST because the government has said that it will study the recommendations of the 14 th finance commission on a bunch of other issues including the goods and services tax. This maybe will pave the way to get the states on board even further as far as implementing and adopting the GST is concerned. Perhaps we could now see a April 1, 2016 GST roll out. What to your mind will be an ideal GST rate?

A: This is one of the things the finance commission has abstained from getting into. The term of reference of the finance commission is very clear. The term of reference of the finance commission basically says, please make recommendations on the implications or the impact of GST on the economy and number two, what should be the compensation scheme, mechanism for compensation? The finance commission has confined itself very strictly to these issues since the entire structure of the GST has to be decided by the empowered committee along with the Union government. The finance commission has not gone into the structure of GST because it is not in the term of reference and it would be inappropriate to take away the powers of the Union and the state governments in doing that.

Q: In your personal capacity do you think that anything above 22 percent as a GST rate would in fact lead to a failure of the GST rollout because the empowered committee was talking about 25-26 percent as being the revenue neutral rate. Do you believe that that should be the ideal rate as far as the GST is concerned? I am speaking to you in your personal capacity.

A: The basic issue is whomever you ask to estimate the revenue neutral rate they are not going to err on the wrong side. They will always have a higher rate there because if you don't realise that revenue tomorrow you are going to blame them for that. 

The statesmanship would require that the governments, the union and state governments should come up and say that, look, if you have to have two tax rates in central GST and state GST you have a lower rate and higher rate we should not have the rate more than 11-12 percent in the case of centre, similarly 11-12 percent in the case of the states and then the centre should come out and say, that any loss of revenue I will make up, in the sense that they need assurance. Once you do that you can move forward, but that requires statesmanship, not playing politics and that is something which we hope that will come in the near future.


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Sugar mills to struggle to export raws despite subsidy

Indian mills are likely to struggle to export raw sugar, despite a government subsidy to boost shipments, as global prices remain weak with large supplies from top producer Brazil set to flood the market soon.

Lower exports by India, the world's biggest consumer of sugar, should take some pressure off benchmark New York prices that are mired near a 5-year low of 14.08 cents per lb.

"Not only are the prices unfavourable, most refineries in the world have sufficient stocks, with the pipeline being full. I do not see our exports going beyond 500,000 tonnes," said Dharmender Bhayana, managing partner at Sugrain Trading LLP.

India, which traditionally produces white sugar, exported nearly a million tonnes of raws in 2014.

"We have nearly missed the bus as the government took a long time to approve the subsidy. There is plenty of sugar and supplies from Brazil will arrive in April," Bhayana added.

After months of indecision, India last week decided to give mills a subsidy of 4,000 rupees (USD 64) a tonne for exports of up to 1.4 million tonnes of raw sugar to help cut stockpiles after five years of surplus output.

But given a premium for Indian supplies, traders do not see this subsidy helping much in terms of boosting exports.

Indian raw sugar is being quoted at USD 350 per tonne free on board for exports, versus USD 330 quoted for Brazilian supplies.

Global prices need to rise to make Indian raws attractive, but that looks unlikely in an oversupplied market, said a Delhi-based trader with an international firm.

"We are not very sure if Iran would import as much as it did last year because sanctions are gradually easing. Iran may turn to Brazil also," the trader added.

Iran had bought 500,000 tonnes of Indian raws in 2014, paying with the rupees it received for oil from India amid curbs on dollar trade with Tehran due to sanctions over its disputed nuclear programme.

In the absence of export deals, Indian mills could turn to the local port-based refineries of Shree Renuka Sugars Ltd, EID Parry and Simbhaoli Sugars Ltd. But prices remain an issue.

"Mills are willing to sell raw sugar at 20,000-20,5000 rupees a tonne which is considered high and needs to come down to 19,000-19,500 rupees for refiners to buy from mills," said a Mumbai-based trader who works with an international company.


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Telecom tariffs to go down as Trai cuts call connect charge

Written By Unknown on Senin, 23 Februari 2015 | 21.03

In a bid to boost fixed line phone connections in the country, telecom regulator Trai on Monday removed charges that a landline service provider has to pay to the other service providers for transmitting its customers' phone calls - a move that is likely to lead to lower tariffs.

Now, calls made from landline-to-landline or landline-to- mobiles will not include the interconnection charge, which was 20 paise. Trai has also reduced network interconnection usage charges (IUC) on calls made from mobile phones by about 30 percent to 14 paise per call from 20 paise earlier.

"To promote investment in, and adoption of, wireline networks, so that they may become an effective vehicle for the delivery of high-speed Internet in the country, the Authority has decided to prescribe FTC (fixed termination) as well as MTC (mobile termination charge) for wireline to wireless calls as zero," Trai said in the new IUC rule issued today.

Telecom subscribers can't communicate with each other or connect with other networks unless necessary interconnection arrangements are in place. A telecom company is required to pay interconnection charges when its subscriber make call to subscriber of other network.

The charge gets added up in final price that a subscriber has to pay. "The Authority is of the opinion that in case the MTC is set to zero for wireline to wireless calls, wireline access providers would be able to provide innovative tariff packages (e.g. flat rental plans with unlimited or a significantly large number of outgoing calls)," Trai said.

Similarly, in case the FTC for calls originating from wireless networks and terminating on wireline networks is set to zero, this "would propel wireless access providers to offer cheaper tariffs for wireless-to-wireline calls," Telecom Regulatory Authority of India said.

Landline connections in the country have been declining since the time mobile incoming calls were made free. While mobile subscriber base at the end of 2014 reached all time high at 94.39 crore, landline connections are only 2.7 crore.

State-run telecom companies BSNL dominates landline phone connections with 62.71 percent market share followed by MTNL  13.04 percent, Bharti Airtel  12.55 percent, Tata Teleservices  5.98 percent and Reliance Communications 4.39 percent. Videocon's Quadrant, Vodafone and Sistema Shyam account for 1.2 percent market share. Landline connections of private players are mainly meant for providing broadband connections.

In mobile segment, Bharti Airtel leads market with 23.01 percent market share followed by Vodafone 18.93 percent, Idea Cellular 15.95 percent, RCom 11.26 percent, BSNL 8.62 percent, Aircel 8.33 percent, Tata Teleservices 7.01 and Uninor 4.62 percent. Sistema Shyam, Videocon Telecom and MTNL account for about 2 percent mobile service market share.

MTNL stock price

On February 23, 2015, Mahanagar Telephone Nigam closed at Rs 29.50, down Rs 0.35, or 1.17 percent. The 52-week high of the share was Rs 39.10 and the 52-week low was Rs 13.76.


The company's trailing 12-month (TTM) EPS was at Rs 115.91 per share as per the quarter ended December 2014. The stock's price-to-earnings (P/E) ratio was 0.25. The latest book value of the company is Rs 80.01 per share. At current value, the price-to-book value of the company is 0.37.


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Tata Power signs pact with Siberian Coal Energy Company

"Tata Power announced that it has signed a Memorandum of Understanding with Siberian Coal Energy Company (SUEK) to identify and evaluate opportunities in energy sector in Russia," the private company said in a statement.

Private power utility  Tata Power on Monday announced signing an initial agreement with Russia's largest coal producer Siberian Coal Energy Company for tapping opportunities in the energy sector.

"Tata Power announced that it has signed a Memorandum of Understanding with Siberian Coal Energy Company (SUEK) to identify and evaluate opportunities in energy sector in Russia," the private company said in a statement.

As part of the agreement, both Tata Power and SUEK will cooperate on identifying and targeting opportunities in the energy sector in Russia and other geographies of common interest in order to develop mutually beneficial transactions, the statement said.

"It gives us immense pride to announce our association with SUEK, company known to be a reliable and world class player in the mining business, and Tata Power looks forward to working with them on identifying opportunities across the energy chain," a Tata Power spokesperson said.

Tata Power generates about 8,621 MW of power of which 7,407 MW is from thermal power generation. According to information on SUEK website, the company delivers coal to more than 30 countries all over the world.

Shares of Tata Power were trading at Rs 87.60, up 1.92 percent on the BSE.

Tata Power stock price

On February 23, 2015, Tata Power Company closed at Rs 85.05, down Rs 0.9, or 1.05 percent. The 52-week high of the share was Rs 115.25 and the 52-week low was Rs 74.45.


The company's trailing 12-month (TTM) EPS was at Rs 3.26 per share as per the quarter ended December 2014. The stock's price-to-earnings (P/E) ratio was 26.09. The latest book value of the company is Rs 52.69 per share. At current value, the price-to-book value of the company is 1.61.


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Accion, SAIF Partners to invest $1 mn in Aye Finance

The north-focused company was founded by bankers Sanjay Sharma and Vikram Jetley and has already opened four branches in the last six months, it said adding that over 300 enterprises have already been backed by the NBFC.

Venture capital funds Accion and SAIF Partners will invest USD 1 million in non-banking lender Aye Finance which serves small businesses. "MSMEs represent a highly undeserved 'missing middle' market in India," Accion's president and chief executive Michael Schlein said.

Such enterprises are too small for commercial finance and too large for traditional microfinance, and hence do not get any working finance, he said.

In a joint statement, the venture capital funds said Aye will offer secured loans from USD 1,000 onwards to help fill the funding gap for MSMEs, estimated at USD 198 billion.

The north-focused company was founded by bankers Sanjay Sharma and Vikram Jetley and has already opened four branches in the last six months, it said adding that over 300 enterprises have already been backed by the NBFC.

Aye serves enterprises working in clusters, which helps it manage costs, SAIF's managing director Vishal Sood said.


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Brokers modified 3 lk client codes before NSEL scam: Jt MD

According to Prakash Chaturvedi, Joint MD, NSEL, these modifications amounted to Rs 2,200 crore, which is nearly half of the Rs 5,600-crore scam.

In a fresh twist to the NSEL scam, company's Joint MD Prakash Chaturvedi has made big accusation against top brokers. In an exclusive interview to CNBC-TV18's Prerna Baruah, Chaturvedi said the brokers modified over 3 lakh client codes just 4 months before the scam was exposed. He also claimed these modifications amounted to Rs 2,200 crore, which is nearly half of the Rs 5,600-crore scam.

Below is the transcript of Prakash Chaturvedi's interview with Prerna Baruah on CNBC-TV18.

Q: On the issue…

A: We are giving them all the data that they are asking for. You mentioned and reminded me rightly of this client code modification. I can tell you courtesy the so many modifications which have happened in the last four months April, May, June, July of 2013 after which the operation of the exchange was stopped. These modifications add up to changes or modifications in the about three lakh plus contracts amounting to in terms of value about Rs 2,230 crore.

Q: This is out of the total Rs 5,600-crore default?

A: Out of the Rs 5,600-crore default that we are talking about. Now, these numbers are quite shocking and one has to really go to the bottom of it. What was genuine? The client whose ID was used for trading or the client who's ID was modified.


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Over 56% polled expects a radical Budget: Grant Thornton

It's less than six days to go for the Union Budget and expectations are running high. In an interview to CNBC-TV18, Pallavi Bakhru, director, Grant Thornton, said the euphoria quotient has never been higher.

Discussing the firm's pre-Budget poll on India Inc's expectations from Finance Minister Arun Jaitley, Bakhru said that 56 percent of the respondents see it to be radical Budget.

According to her, people are keen on the roadmap to GST in the indirect tax front, while on direct taxes the majority sees reduction in income tax and higher exemption in the housing loan interest.

Below is the transcript of Pallavi Bakhru's interview with CNBC-TV18's Nayantara Rai.

Q: A lot of people are saying that perhaps this Union Budget is going to be the most important one after 1991. What is your survey showing up; can we expect radical tax reforms?

A: Absolutely, the euphoria quotient has never been higher in terms of expectations and it is on the back of some of the statements that have been made by the Prime Minister and the Finance Minister to say we want more investments and we want India to be open to business and of course the Make in India slogan.

So a large percent of the people we polled, to be precise 56 percent of the people who voted on our poll are actually banking on this reformist tax Budget.

Q: What kind of changes are being envisaged and let us first cover indirect tax and corporate tax?

A: In indirect tax people are more keen to see on what is going to happen on Goods and Services Tax (GST). We know that the GST bill has got the Cabinet Committee approval but nothing more has happened thereafter and if you are really looking at 2016 timeline then people are sort of wondering is every milestone going to be achieved. So it is nice to see some kind of path being laid out in terms of how that is going to be achieved in terms of rolling out GST.

There is no drastic change that people are expecting on rates as far as customs and excise and service tax are concerned because it is a build up to the GST but yes what people are looking for is a lot of rationalisation around some of the procedural issue. For example there has been a lot of buzz around making excise and service tax which are both central levies, the compliance should be based on similar forms. So somewhere along the way people are anticipating a lot of tinkering to be done to make sure that compliance becomes easier in anticipation of GST.

On the corporate tax side of course things take a different colour. There is this whole conversation around SEZs getting a new lease of life by Minimum Alternate Tax (MAT) being taken away and Dividend Distribution Tax (DDT) being taken away. I don't think people are anticipating a change in rate for corporate tax but yes, there is a lot of clarification that people would like to see in things like indirect transfer. That has been quite a pain point with foreign investors for quite a while.

Q: What is your survey showing as far as personal income tax rates go?

A: There is an overwhelming majority of people who feel there is going to be a reduction in personal tax rates or there is going to be an increase in slab rates. We have had a very overwhelming response on the personal income tax side and there is of course very overwhelming sentiment that the limits under 80C which is the limit for investments is probably going to go up or at least that is the anticipation. People are expecting that there will be a higher level of interest on housing loan which would now be allowed as a deduction.

If you look at the trend when you look at all these exemptions the general trend is that people want more surplus money in their hands and that makes a lot of sense because if you want to sort of really push the economy you would like people to have more disposable income, so that there is more consumption and there is more investment and savings.

Q: In light of the fact that Finance Minister said, yes, this daunting challenge of meeting 4.1 fiscal deficit, how realistic is it. Is there enough headroom for them to actually tinker so much with the personal income tax slabs?

A: It is a balancing act, every Budget is and there is very little expectation for corporate tax rates to be going up really. In fact we were quite surprised that the survey results even showed that MAT; there has been a lot of buzz within the media amongst corporates saying that MAT rates at 18.5 percent are prohibitive and specially if you want to sort of encourage companies to come and invest and specially for manufacturing which are typically capital intensive then 18.5 percent MAT to be paid even when you don't have taxable profit is a little intimidating but surprisingly we find that people are being realistic and they haven't sort of predicted the rate of change as far a corporate tax is concerned or even MAT is concerned.

So I guess somewhere there will be a trade off. There are individuals who definitely feel that there could be lowering of rates, so they could have more consumable income left behind in their hands.


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