QBiz: RBI, Govt Settle for Uneasy Truce; LPG Price Hiked

1. Govt vs RBI: Arun Jaitley, Urjit Patel Settle For an Uneasy Truce, For Now

A day after the two sides publicly and bitterly crossed each other, the Reserve Bank of India (RBI) and the union government took a step back on Wednesday, 31 October. However, going by the signals – including a short statement issued by the Ministry of Finance and new disclosures that have come to light – neither side appears willing to blink, suggesting that both are ready to dig in their heels for what is turning out to be a battle of attrition.

Conceding that differences can arise, the carefully-worded Finance Ministry release admonished RBI, saying, “(The) government of India has never made public the subject matter of those consultations (with RBI). Only the final decisions taken are communicated,” before adding, “The government, through these consultations, places its assessment on issues and suggests possible solutions. The government will continue to do so.”

(Source: Livemint)

2. Subsidised LPG Price Hiked by Rs 2.94 Per Cylinder

Subsidised cooking gas (LPG) price on Wednesday, 31 October, was hiked by Rs 2.94 per cylinder due to tax impact on the change in base price.

A 14.2-kg subsidised LPG cylinder will cost Rs 505.34 from midnight tonight as against Rs 502.40 now, Indian Oil Corp (IOC), the nation’s biggest fuel retailer, said in a statement here.

This is the sixth straight monthly increase in rates since June. In all, rates have gone up by Rs 14.13 per cylinder since then.

(Source: Livemint)

3. India Ease of Doing Business Rank Jumps 23 Places to 77

India’s rank in the World Bank’s Ease of Doing Business 2019 survey climbed 23 places to 77 among 190 countries surveyed, making it the only country to rank among the top 10 improvers for the second consecutive year. The sharp rise in the ranking will burnish the reformist credentials of the Narendra Modi-led National Democratic Alliance (NDA) and help the prime minister build a positive narrative ahead of elections in five states next month and Lok Sabha elections in 2019.

Last year, India saw a record jump of 30 places to reach the 100th position in the rankings. In more than four years of the NDA, India’s ranking improved 65 places from 142nd in 2014 to 77th in 2018, a record for a major economy.

(Source: Livemint)

4. India Second-Most Expensive Emerging Market

Indian bourses continue to be one of the most expensive in terms of the price-to-earnings (P/E) ratio in spite of a sharp sell-off in emerging markets this year. Although the sell-off this year has not made much impact on Indian bourses, making the Sensex one of the least affected in Asia.

The Sensex has lost merely 0.82 percent since the beginning of the year. This is in contrast to Shanghai Stock Exchange Composite Index, which has lost 23.1percent in dollar terms so far in 2018.

With a 12-month P/E of 22.14, Sensex is the second-most expensive market among emerging economies, behind the Mauritius Stock Exchange SEMDEX Index. The P/E ratio of SEMDEX Index is 23.32. Other EM exchanges with high P/E ratios are Brazil’s Ibovespa, Tunis Stock Exchange and the Slovak Share Index, at 20.04, 19.13 and 18.72, respectively. The best performing market in Eastern Europe is Ukraine’s PFTS index, yielding 78.08 percent returns, while due to hyper inflation, Venezuelan’s stock market gave152.3 percent returns.

(Source: Financial Express)

5. NCLT Hearing: IL&FS Board Says Solution Possible in Next 60-90 Days

The new board of the troubled Infrastructure Leasing & Financial Services (IL&FS) on Wednesday, 31 October, said it would work towards the final resolution, in stages and parts, over the next six-nine months. It indicated the possibility of some early outcomes and part resolutions in the next 60-90 days after consent of the National Company Law Tribunal (NCLT).

In a presentation to the Mumbai bench of the NCLT, it identified the primary and core problem of the IL&FS Group as excessive leverage, without commensurate asset values or cash flows, from the perspective of both timing and quantum.

The board said the final resolution will inevitably involve substantial deleveraging from the current levels, notwithstanding the various challenges.

(Source: Financial Express)

6. Railways Flexi-Fares to Be Capped at 1.4 Times

In a relief to passengers, the Indian Railways has revised the flexi-fare system — the peak fare will now be capped at 1.4 times the base fare instead of 1.5 times earlier, and the surge pricing has been completely scrapped for trains with less that 50 percent average monthly occupancy in the last financial year.

“Win-win situation: The reduction of Flexi Fares is going to benefit both the passengers that can now avail tickets at cheaper rates, as well the Railways that will see a surge in demand and occupancy,” Railway Minister Piyush Goyal tweeted on Wednesday, 31 October.

While the surge pricing system will now not be applicable on 15 premium trains completely and in 32 such trains during lean periods (February, March and August), the capping of the peak fare will be applicable on 101 trains.

(Source: Financial Express)

7. NCLAT Tells Mistry to Submit Specific Changes It Wants in Tata Sons Articles

The National Company Law Appellate Tribunal (NCLAT) on Wednesday, 31 October, directed the Cyrus Mistry camp to submit specific changes it wants in the articles of association of Tata Sons.

A two-member bench headed by Justice S J Mukhopadhaya asked the Mistry camp to file within two days the changes it was seeking in the articles.

Mistry, who was sacked as Chairman of Tata Sons in 2016, is fighting against the company, alleging oppression of minority shareholders. The bench also directed Tata Sons and others to file replies within two weeks and posted the matter on 11, 12 and 13 December for the next hearing.

(Source: Livemint)

8. Adani Power Q2 Profit Rises 23% to Rs 387 Cr on Higher Demand

Adani Power on Wednesday reported a profit of Rs 387.4 crore for the quarter ended 31 September, up 23 percent year-on-year, as capacity utilisation (PLF) of its power plants inched up to 65 percent on better coal availability and rising demand from power distribution companies. The company’s revenue went up by 16.6 percent y-o-y to Rs 7,181.5 crore.

Earnings before interest tax, depreciation and amortisation (EBITDA) rose nearly 10 percent to Rs 2,331 crore in the quarter, but the EBITDA margin slipped by two percentage points y-o-y to 32.5 percent. The company’s tax expenses was about Rs 315 crore, compared with Rs 3.5-crore tax refund in the corresponding quarter last year.

There were marginal increase in finance costs, depreciation and amortisation expenses. Higher borrowings raised finance costs, partially offsetting gains from forex hedges.

(Source: Financial Express)

9. Rail Freight up 8.75% For Most Commodities

Indian Railways on Wednesday increased freight rates by 8.75% for major commodities such as coal, iron and steel, iron ore and raw materials for steel plants.This could possibly lead to a spike in inflation.

However, the freight rates for ‘essential goods’ including food grains, flours, pulses, fertilisers, salt and sugar have not been increased, keeping in mind farmers and the common man. Also, the freight rates of cement and petroleum (including diesel) have not been increased.

The transporter also increased haulage charges of containers by 5%. Freight rates for other small goods have been increased by 8.75%. The transporter expects an additional revenue generation of Rs 3,344 crore for the revised freight rates.

(Source: Financial Express)

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