Axis Bank may be highest bidder for Citi's India retail business
NEW DELHI, Dec 20: Private lender Axis Bank may be the highest bidder for the retail business of Citibank India, according to reports.
Axis is likely to strike an all-cash deal for Citi's India retail assets, which could be worth $1.5 billion with up to $300-400 million milestone payments which depends on performance in the future, the news channel learnt from persons familiar with the development.
Citi, while reacting to the CNBC TV18 report which suggests that Axis may be leading the acquisition race, said: "We continue to move forward with our process with respect to our India consumer business in accordance with our broader strategic refresh."
Axis was yet to issue a statement by the time this report was published.
The news comes amid reports which claimed that Kotak Mahindra Bank and Indusland Bank, apart from Axis Bank, were in the race to acquire Citi's India retail business which involves over 2.5 million customers and more than 1.2 million bank accounts.
On December 7, a report in The Economic Times claimed that Kotak Mahindra Bank and Axis Bank have emerged as the top contenders to clinch the deal. The report, citing a source, said Kotak was more "aggressive" between the two bidders.
The deal will likely be all cash of less than $2 billion, the source had told the publication.
Notably, Citibank runs a profitable franchise in India and had a loan book of Rs 68,800 crores as on March, 2021, of which Rs 28,000 crore was retail loans. These mainly included cards, mortgages and personal mortgages, said a report released by investment group CLSA on September 8.
Citibank is the sixth largest card issuer with market share of 4.2 per cent in cards issued, the report added. As per CLSA's estimates, Citibank could have a credit card book of approximately Rs 9,000 crore.
On 16 April, Citi said it will exit consumer/retail operations in 13 countries across Asia and Europe. The 13 nations include Australia, Bahrain, China, India, Indonesia, Korea, Malaysia, the Philippines, Poland, Russia, Taiwan, Thailand and Vietnam.
Citi’s consumer business in India comprises credit cards, retail banking, home loans and wealth management. The bank has 35 branches in the country and employs 4,000 people in the consumer banking business. It had a 0.6 percent market share in advances and 1.1 percent in deposits, along with 2.58 million credit cards outstanding, as of October 2021.
Sensex Falls 1,190 Points, Closes At 4-Month Low On Omicron Fears
NEW DELHI, Dec 20: The Indian equity benchmarks closed at their lowest in four months as spread of Omicron variant of Coronavirus rattled investors' sentiment.
The Sensex fell as much as 1,879 points, its biggest single day fall since February 26 and Nifty tumbled below its important psychological level of 16,450 to hit an intraday low of 16,410.
The Sensex fell 1,190 points or 2.09 per cent to close at 55,822 and Nifty 50 index dropped 372 points or 2.2 per cent to settle at 16,614.
Markets fell across the globe as surging Omicron Covid-19 cases triggered tighter curbs in Europe and threatened to swamp the global economy into the New Year. The spread of Omicron saw the Netherlands go into lockdown on Sunday and put pressure on others to follow, though the United States seemed set to remain open.
Back home, selling pressure was visible across the board as all the 15 sector gauges compiled by the National Stock Exchange ended lower led by the Nifty Realty index's 5 per cent fall. Nifty PSU Bank, Metal, Private Bank, Media, Financial Services, Auto and Bank indices also fell between 2.5-4.5 per cent.
Broader markets also succumbed to selling pressure as Nifty Midcap 100 index dropped 3.7 per cent and Nifty Smallcap 100 index fell 4 per cent.
Among the individual shares, Shriram Properties made a weak stock market debut, the stock opened for trading at ₹ 94, marking a discount of 20 per cent from issue price of ₹ 118.
Forty seven out of 50 shares in the Nifty 50 basket ended lower led by Bharat Petroleum Corp's 6.5 per cent decline. Tata Motors, Tata Steel, IndusInd Bank, Bajaj Finance, Coal India, Indian Oil, State Bank of India, ONGC, Hindalco, Shree Cement, Adani Ports and HDFC Life also fell 3.35-5.2 per cent.
On the flipside, Cipla, Hindustan Unilever and Dr Reddy's Labs were among the notable gainers in the Nifty 50 index.
The overall market breadth was extremely negative as 2,698 shares ended lower while 747 ended higher on the BSE.
Amazon Fined 200 Crores, Deal To Buy Retailer Future Is Suspended
NEW DELHI, Dec 17: The country's antitrust agency on Friday suspended Amazon.com's 2019 deal with Future Group, potentially denting the US company's attempts to block the sale of Future's retail assets to an Indian peer.
The regulator ruled that the US e-commerce group had suppressed information while seeking regulatory approval on an investment into Indian retailer Future Group two years ago.
The ruling by the Competition Commission of India (CCI) could have far-reaching consequences for Amazon's legal battles with now estranged partner Future.
Amazon has for months successfully used the terms of its toehold $200 million investment in Future in 2019 to block the Indian retailer's attempt to sell retail assets to Reliance Industries for $3.4 billion.
The regulator's 57-page order said it considers "it necessary to examine the combination (deal) afresh," adding its approval from 2019 "shall remain in abeyance" until then.
The CCI's order said Amazon had "suppressed the actual scope" of the deal and had made "false and incorrect statements" while seeking approvals. The CCI order imposed a penalty of around ₹ 200 crore on the US company.
"The approval is suspended. This is absolutely unprecedented," said Shweta Dubey, a partner at Indian law firm SD Partners, who was formerly a CCI official.
"The order seems to have found new power for CCI to keep the combination approval in abeyance," she added. Amazon will be given time to submit information again to seek approvals, the CCI added.
Future and Reliance did not respond to a request for comment. Amazon said it is reviewing the order "and will decide on next steps in due course."
The 2019 Future deal approval being put on hold could dent Amazon's legal position and retail ambitions, while making it easier for Reliance - the country's largest retailer - to acquire number two player Future, people familiar with the dispute said.
Amazon has argued that terms agreed in its 2019 deal to pay $200 million for a 49 per cent stake in Future's gift voucher unit prevent parent, Future Group, from selling its Future Retail Ltd business to certain rivals, including Reliance.
But after Future complained to the CCI that Amazon had concealed facts, the CCI in June sought explanation from Amazon saying it hid factual aspects of the transaction by not revealing its strategic interest in Future Retail while seeking approvals.
Amazon, in responses to CCI, said it never concealed material information, warning the watchdog that the deal's revocation would send a negative signal to foreign investors.
The Future-Reliance deal has been on hold for months as Amazon got favourable interim rulings from a Singapore arbitrator and courts. Future denies any wrongdoing.
Cabinet clears Rs 76,000 crore PLI scheme for semiconductors
NEW DELHI, Dec 15: The Union Cabinet on December 15 cleared the production-linked incentive scheme (PLI) for semiconductors with the ambition of making the country an electronics hub as the shortage of microchips hurts industrial production.
According to a report, the government proposes to provide incentives worth Rs 76,000 crore for semiconductor production over the next six years.
"The scheme will include provision for 25 percent incentives on capital expenditure for establishing unit of Compound Semiconductor Wafer Fabrication (Fab), assembly, testing, and packaging facility," the report added.
The policy comes at a time when the world is witnessing a severe crunch of semiconductors, a key component in all types of electronic devices ranging from smartphones to automobiles. The supply has been disrupted as a result of the COVID-19 pandemic, which forced production centres to close intermittently.
In order to reduce India's dependence on China, the government in March 2020 announced a scheme with an aim to give companies incentives on incremental sales from products manufactured in domestic units.
On November 11, 2020, the Union Cabinet had approved the Production-Linked Incentive (PLI) scheme for 10 sectors. The list included pharmaceuticals, automobiles and auto components, telecom and networking products, advanced chemistry cell battery, textile, food products, solar modules, white goods, and specialty steel.
The PLI scheme, according to the government, "will make Indian manufacturers globally competitive, attract investment in the areas of core competency and cutting-edge technology, ensure efficiencies, create economies of scale, enhance exports, and make India an integral part of the global supply chain."
Under Imran Khan Government, Pakistani Rupee Depreciated By 30.5%: Report
ISLAMABAD, Dec 7: The Pakistani rupee's value against the US dollar has fallen by 30.5 per cent during the Imran Khan government's tenure, reported local media.
This makes it one of the highest devaluations of the currency in the country's history.
The rupee witnessed massive depreciation from ₹ 123 against the US dollar in August 2018 to ₹ 177 against the US dollar in December 2021, a decline of 30.5 per cent over the last 40 months, reported The News International.
The Pakistani publication further said that the only other higher devaluation occurred when Dhaka fell and Pakistan's currency was devalued by 58 per cent from ₹ 4.60 to ₹ 11.10 against the US dollar in 1971-72.
This recent devaluation of the currency was dictated by the IMF through prior actions, said independent economists stressing that it has nothing to do with macroeconomic fundamentals.
There was a complete breakdown of economic policymaking as Pakistan's fiscal policy had become subservient to monetary and exchange rate policies said former economic adviser Dr Ashfaque Hassan Khan.
Emphasising that the monetary tightening and exchange rate depreciation resulted in higher inflation, public debt and debt servicing, he stressed that the empirical evidence showed that the one per cent monetary tightening hiked the inflationary pressure by 1.3 per cent in the case of Pakistan.
Pakistani currency has experienced massive depreciation against the US dollar compared to other regional currencies like the Indian Rupee and Bangladeshi Taka.
Some studies conducted by economists suggest that inflation stands at 11.5 per cent on a monthly basis, nearly two per cent comes through depreciation of the exchange rate, according to The News International.
India's Trade Deficit Stood At Record $23.27 Billion In November
NEW DELHI, Dec 1: India clocked a record merchandise trade deficit of $23.27 billion in November 2021 as crude oil and gold imports saw a jump, compared to $10.19 billion in November 2020, official data said.
As per preliminary data released by the government on Wednesday, the trade deficit widened to an all-time high of $ 23.27 billion as gold imports grew by about 8 per cent to $4.22 billion.
The gap between imports and exports totalled $10.19 billion during November 2020. The previous record for the trade gap was $20.2 billion in October 2012.
The country's merchandise exports rose 26.49 per cent on year-on-year basis to $29.88 billion in November 2021 on better performance by key sectors like engineering, petroleum, chemicals and marine products, the data showed. The exports had stood at $23.62 billion in November 2020.
On the other hand, imports in November 2021 stood at $53.15 billion, an increase of 57.18 per cent over $33.81 billion recorded in November 2020.
"India's merchandise exports in April-November 2021 was $262.46 billion, an increase of 50.71 per cent over $174.15 billion in April-November 2020 and an increase of 24.29 per cent over $211.17 billion in April-November 2019,” the commerce ministry said.
Imports in April-November 2021 grew by 75.39 per cent to $384.44 billion, while trade deficit stood at $121.98 billion during the eight-month period of the current financial year.
LIC invites its policyholders to become shareholders by updating PAN and demat details
NEW DELHI, Dec 2: Indians have been used to the Life Insurance Corporation of India’s (LIC) advertisements in newspapers and on television sets exhorting them to buy policies.
Now, the life insurance behemoth has placed an advertisement of a completely different kind. LIC on Wednesday informed its policyholders in India about some of the pre-requisites for investing in its proposed initial public offer (IPO) – updating their PAN details and opening demat accounts
The finance ministry has indicated that up to 10 percent of LIC’s IPO issue size could be reserved for its policyholders. The government has permitted LIC to designate policyholders as one of the reserved categories in any LIC public offering in the future, as per an amendment made this year to the LIC Act, 1956.
“In order to participate in any such public offering, policyholders will need to ensure that their PAN details are updated in the Corporation’s records,” the advertisement said.
In fact, the life insurance major has been running campaigns urging policyholders to update their PAN in its records. “This is very important from a KYC perspective as well as your ability to participate in the proposed public offering by the LIC…this will be used to help you participate in the proposed offering,” the ad said.
It also outlined the process for updating PAN details online through LIC India‘s portal. You will have to enter your PAN, policy number, date of birth and email ID. If you are not comfortable with the online mode, you can approach your agent to complete the process.
“LIC wants to ensure that its policyholders are KYC-compliant, and therefore eligible to apply for IPO. In case there is any reservation for policyholders, then they should not miss it. However, the risks involved in investments should have been explained in detail in the ad,” says Pankaj Mathpal, Founder, Optima Money Managers.
If you do not have a demat account, you can consider opening one if you are keen to invest in LIC’s IPO or capital markets in general. You need to this invest in any IPO or listed stock.
“Policyholders should know the risk of investing in shares and avoid it if it doesn't suit the objective of their investment. Demat account is not very expensive now, it still doesn't make sense if they want to invest only in LIC’s IPO,” says Pankaj Mathpal, Founder, Optima Money Managers. If you are an extremely conservative investor who has never invested in equity markets, you need to tread carefully.
“LIC has a huge customer base and a great reputation. People would invest in anything LIC, so it’s important that they understand the risks that come with equity. I would recommend investment in LIC IPO in future provided the price is right, time horizon is long-term and they have a diversified portfolio,” says Shweta Jain, Founder, Investography.
GST collection hits second highest level of Rs 1.3 lakh crore in November
NEW DELHI, Dec 1: The gross GST revenue scaled its second highest peak of Rs 131,526 crore in November. In April, the collection had hit its record high of Rs 139,708 crore.
The GST collection crossed Rs. 1.30 lakh crore for the second straight month, the finance ministry data showed.
Out of the Rs 131,526-crore gross GST revenue collected in November, CGST was Rs 23,978 crore, SGST was Rs 31,127 crore, and IGST was Rs 66,815 crore.
Revenues for November 2021 are 25 percent higher than the GST revenues mopped up a year ago and 27 percent over 2019-20.
During the month, revenues from import of goods was 43 percent higher and the revenues from domestic transaction were 20 percent higher than the revenues from these sources during the same month last year.
"The GST revenues for November 2021 have been the second highest ever since introduction of GST, second only to that in April 2021, which related to year-end revenues and higher than last month’s collection, which also included the impact of returns required to be filed quarterly. This is very much in line with the trend in economic recovery," Ministry of Finance said in a press statement.
The recent trend of high GST revenues has been a result of various policy and administrative measures that have been taken in the past to improve compliance, it added.
The government has settled Rs 27,273 crore to CGST and Rs 22,655 crore to SGST from IGST as regular settlement. The total revenue of centre and the States after regular settlements in the month of November 2021 is Rs 51,251 crore for CGST and Rs 53,782 crore for the SGST.
Centre has also released ₹ 17,000 crore to States/UTs towards GST compensation on 3rd November.
The finance ministry said a large number of initiatives have been undertaken in the past one year, which include enhancement of system capacity, nudging non-filers after last date of filing of returns, auto-population of returns, blocking of e-way bills and passing of input tax credit for non-filers which led to consistent improvement in the filing of returns over the last few months.