SECTORS ALERT – 02.06.2014
* AVIATION: AirAsia India slashed its ticket fares to 5 rupees per ticket only a day after
it announced opening of ticket bookings. Air India has entered into a code share
agreement with Hong Kong Airlines. Air India is may seek permission from the new
government to raise 100 bln rupees through an issue of tax-free bonds in the current
financial.
* AUTOMOTIVE: Volkswagen is studying the possibility of introducing a budget brand
for the Indian market. Toyota Kirloskar May sales 13,230 units, up 6% on year. Domestic
sales were 11,833 units, up 18% on year.
* BANKING: An accumulation of foreign currency non-resident (bank) deposits and
foreign currency borrowings pushed up international liabilities of Indian banks by 35.8%
on-year as of December, RBI data showed. Maharashtra state co-operative commissioner
has launched a probe against the erstwhile directors and officials of the Maharashtra State
Co-operative Bank to probe their role in the losses caused to the bank. Reserve Bank of
India Deputy Governor R. Gandhi said high level of stressed assets in the banking system
were a cause for concern for the central bank.
* BOND MARKETS: India Infradebt and L&T Infrastructure Finance Co raised 5.5 bln
rupees between them from the bond market.
* DEFENCE: Home ministry is believed to have raised strong objections on the draft
Cabinet note, floated by the department of industrial policy and promotion, for allowing
100% FDI in the defence sector.
* ENERGY: ILFS Energy Development Co has begun talks with Shanghai Electric
Group to sell up to 74% stake in eight projects. Power cuts could spread to many parts of
the country as the electricity deficit more than doubled in May, while spot power prices
have doubled in the last few days.
* INFRASTRUCTURE: India signed three loan agreement worth $310.20 mln with the
World Bank for water supply, sanitation, and watershed development
projects. Government is looking to push loan flow to projects worth 5 bln rupees and
above in a bid to revive investment and accelerate economic growth.
* INSURANCE: The Finance Ministry could recommend an increase in the limit on
foreign direct investment in the insurance sector to 49% from 26%, albeit with a few
restrictions to push the crucial reform.* IT: Enterprise software maker Covacsis Technologies has received funding from the
venture capital arms of RELIANCE INDUSTRIES and Cisco.
* REGULATORY: Officials from the department of economic affairs are expected to
make a case for merger of the Securities and Exchange Board of India and the Forward
Markets Commission to the Finance Ministry.
* TAXATION: Japan has asked the government to drop a $3 bln retrospective tax bill
raised on Japanese companies including Honda and Mistubishi operating in India.
* TELECOM: After a meeting with senior executives of Vodafone, finance ministry
officials "have got an impression" that the company wants to resolve the long- pending
tax issue with the Indian government, a senior official said. Operators are offering salary
hikes and retention packages that are far more generous than in recent years, as they try
to ring-fence core teams from Reliance Jio Infocomm.
* TRANSPORTATION: The Narendra Modi government has drawn up a 250-bln-rupee
plan to create a national waterway grid linking Ganga, Brahmaputra, Mahanadi and
Godavari rivers.
* TRADE: The fertiliser ministry plans to import 7.2 mln tn urea during 2014-15 (Apr- Mar).
IPO NEWS
* The BSE plans to sell a part of its stake in Central Depository Services (India) through
an initial public offer
* AVIATION: AirAsia India slashed its ticket fares to 5 rupees per ticket only a day after
it announced opening of ticket bookings. Air India has entered into a code share
agreement with Hong Kong Airlines. Air India is may seek permission from the new
government to raise 100 bln rupees through an issue of tax-free bonds in the current
financial.
* AUTOMOTIVE: Volkswagen is studying the possibility of introducing a budget brand
for the Indian market. Toyota Kirloskar May sales 13,230 units, up 6% on year. Domestic
sales were 11,833 units, up 18% on year.
* BANKING: An accumulation of foreign currency non-resident (bank) deposits and
foreign currency borrowings pushed up international liabilities of Indian banks by 35.8%
on-year as of December, RBI data showed. Maharashtra state co-operative commissioner
has launched a probe against the erstwhile directors and officials of the Maharashtra State
Co-operative Bank to probe their role in the losses caused to the bank. Reserve Bank of
India Deputy Governor R. Gandhi said high level of stressed assets in the banking system
were a cause for concern for the central bank.
* BOND MARKETS: India Infradebt and L&T Infrastructure Finance Co raised 5.5 bln
rupees between them from the bond market.
* DEFENCE: Home ministry is believed to have raised strong objections on the draft
Cabinet note, floated by the department of industrial policy and promotion, for allowing
100% FDI in the defence sector.
* ENERGY: ILFS Energy Development Co has begun talks with Shanghai Electric
Group to sell up to 74% stake in eight projects. Power cuts could spread to many parts of
the country as the electricity deficit more than doubled in May, while spot power prices
have doubled in the last few days.
* INFRASTRUCTURE: India signed three loan agreement worth $310.20 mln with the
World Bank for water supply, sanitation, and watershed development
projects. Government is looking to push loan flow to projects worth 5 bln rupees and
above in a bid to revive investment and accelerate economic growth.
* INSURANCE: The Finance Ministry could recommend an increase in the limit on
foreign direct investment in the insurance sector to 49% from 26%, albeit with a few
restrictions to push the crucial reform.* IT: Enterprise software maker Covacsis Technologies has received funding from the
venture capital arms of RELIANCE INDUSTRIES and Cisco.
* REGULATORY: Officials from the department of economic affairs are expected to
make a case for merger of the Securities and Exchange Board of India and the Forward
Markets Commission to the Finance Ministry.
* TAXATION: Japan has asked the government to drop a $3 bln retrospective tax bill
raised on Japanese companies including Honda and Mistubishi operating in India.
* TELECOM: After a meeting with senior executives of Vodafone, finance ministry
officials "have got an impression" that the company wants to resolve the long- pending
tax issue with the Indian government, a senior official said. Operators are offering salary
hikes and retention packages that are far more generous than in recent years, as they try
to ring-fence core teams from Reliance Jio Infocomm.
* TRANSPORTATION: The Narendra Modi government has drawn up a 250-bln-rupee
plan to create a national waterway grid linking Ganga, Brahmaputra, Mahanadi and
Godavari rivers.
* TRADE: The fertiliser ministry plans to import 7.2 mln tn urea during 2014-15 (Apr- Mar).
IPO NEWS
* The BSE plans to sell a part of its stake in Central Depository Services (India) through
an initial public offer
