GENERAL KNOWLEDGE .

NSE launches three new group indices : In a first of its kind in India, the National Stock Exchange (NSE) has launched separate indices on three corporate houses of India : Tata, Aditya Birla and Mahindra Groups. The indices—Nifty Tata Group Index, Nifty Aditya Birla Group Index and Nifty Mahindra Group Index—have been designed to reflect the performance of companies belonging to the respective corporate group, as per a statement issued by the NSE. Each of the indices will comprise all the companies of the respective business group. So, the Nifty Tata Group Index would include 25 companies across 12 sectors with a total market capitalisation of Rs. 7.51 lakh crore, which represents 7.83 percent of the total market capitalisation of companies listed on the NSE.

The Nifty Aditya Birla Group Index consists of eight companies across seven sectors. The market capitalisation of the index is about Rs. 2.08 lakh crore, which is 2.17 percent of the total market capitalisation of companies listed on the NSE. The Nifty Mahindra Group Index has seven companies with a market capitalisation of about Rs. 1.64 lakh crore. The indices have been created by the NSE’s group company India Index Services & Products Ltd., which also plans to launch indices on other corporate groups and third-party products based on such indices.

Government slaps anti-dumping duty on stainless steel: The Centre has imposed an anti-dumping duty ranging from five to 57 percent on import of cold-rolled flat products of stainless steel for five years. Central Board of Excise and Customs said that the duty was imposed on China, South Korea, the US, South Africa, Thailand and Taiwan, besides the European Union. A review with regard to the imports of cold rolled flat products of stainless steel was initiated in April 2014. The highest duty has been levied on steel imports from China at 57.39 percent, followed by the European Union at 52.56 percent. Imports from Thailand will have the least duty imposition of 4.58 percent. China, the world’s largest consumer and producer of the commodity, has been dumping various grades and varieties of steel across the globe on the back of surplus supply. This might be why China attracted the highest anti-dumping duty.

The Government’s decision comes in the wake of rising incidence of dumping, hampering the performance of domestic industry and with steel prices on a decline. The total production of stainless steel in India stood at three million tonnes (mt) in 2013-14 from 0.5 mt in 1994-95, according to the Indian Stainless Steel Development Association. For the past few months, the Government has taken several steps to curtail cheap steel imports into India. It has already levied customs duty on select steel products; in September, it imposed 20 percent provisional safeguard duty on a specific hot-rolled imported steel product, for which domestic steel producers are seeking an extension.

India ranks 4th in black money outflows: GFI Report: India ranks fourth in the world in black money outflows with a whopping $51 billion siphoned out of the country per annum between 2004 and 2013, a Fiji-based think-tank report said on December 9, 2015, .underscoring the need for tough
legislation brought by the NDA government. The illegal capital outflows stem from tax evasion, crime, corruption and other illicit activity, the report said, according to which a record $1.1 trillion flowed illicitly out of developing and emerging economies in 2013. Bringing back black money stashed abroad was one of Prime Minister Mr. Narendra Modi’s key poll promises and the Government has since worked with authorities abroad to crack down on illegal account holders, enacting tough laws to arrest such practices.

China topped the list with $139 billion average outflow of illicit finances per annum, followed by Russia ($104 billion per annum) and Mexico ($52.8 billion per annum), according to the annual report released by Global Financial Integrity (GFI), a Washington-based research and advisory organisation. In October 2015, the Centre said that undisclosed assets abroad worth Rs. 4147 crores ($620 million) had been declared by Indians during the 90-day black money “compliance window” while the Government’s total tax receipt stood at Rs. 2,488 crores ($374 million). Under the compliance window that expired on September 30, disclosures of assets will get another three months till December 31 to pay tax and a penalty. Tax will be levied at the rate of 30% while penalty will be 100%. On the other hand, tough norms await those who did not avail of the ‘compliance window’. The penalties include a hefty 120% of the tax amount due besides a jail term of up to 10 years for holding undisclosed foreign assets. In all, during this decade-long period of 2004-14, GFI estimates that more than half a trillion ($510 billion) went out of India and in the case of China the figure was $1.39 trillion and Russia $1 trillion.

GFI President Mr. Raymond Baker has said that this study demonstrates that illicit financial flows are the most damaging economic problem faced by the world’s developing and emerging economies. In 2015, at the UN the mantra of ‘trillions not billions’ was continuously used to indicate the amount of funds needed to reach the Sustainable Development Goals.

Foreign investment in financial services more than doubles : Foreign investment in India’s financial services sector rose sharply in 2015, led by interest in retail service providers and a higher cap for foreign investment in the insurance sector. Data compiled by VCCEdge, the financial research arm of VCCircle and Grant Thornton India Lip, shows that deals worth $3.8 billion were closed in the financial services sector in 2015, more than twice than $1.6 billion in 2014. The data includes inbound mergers and acquisitions (M&As) and purchases by foreign private equity funds. While some deals were driven by the higher foreign investment cap in insurance allowed since March 2015, investors also sought to get exposure to the retail financial services sector, which they expect will grow as penetration of financial products deepens.

One of the largest foreign investors in India’s financial services in 2015 was billionaire Prem Watsa, whose Fairfax Financial Floldings Ltd. invested in Quantum Advisors Pvt. Ltd. and IIFL Holdings Ltd. Earlier, Fairfax invested an undisclosed amount in Quantum, which advises and manages the India allocations of foreign portfolio investors. IIFL is a
diversified financial services company with a major focus on retail investors. Fairfax invested $211.38 million to acquire a minority stake in IIFL in July 2015, according to VCCEdge. In the same month, French bank BNP Paribas SA acquired retail brokerage firm Sharekhan Ltd. for nearly Rs. 2,200 crore (about $345 million at the average exchange rate of Rs. 63 per dollar in July). In August 2015, it bought out its partner in BNP Paribas Sundaram Global Securities Operations Pvt. Ltd. for Rs. 44.30 crore, according to Grant Thornton’s deal database.

Non-banking financial companies (NBFCs) and housing finance firms have also seen strong interest from private equity funds. Deals in this segment include Apax Partners Lip’s $384.55 million investment in Shriram City Union Finance Ltd. and Bain Capital’s $198.47 million deployment in L&T Finance Holdings Ltd. SME (small and medium enterprise) finance is also a segment that is attracting a lot of foreign investment. Several transactions were seen in the insurance sector as well after the foreign investment limit in the sector was raised to 49% from 26%. At least Rs. 10,000 crore in deals have been announced, according to data compiled by Mint. The largest such transaction saw Nippon Life Insurance Co. buying Rs. 2,265 crore in Reliance Life Insurance Co. to raise its stake to 49%. At least 11 more deals have been closed. According to a report by India Brand Equity Foundation, between April and September 2015, the life insurance industry recorded a new premium income of $8.4 billion, indicating a growth rate of 14.45%. The general insurance industry recorded a growth of 12.6% in gross direct premium underwritten in fiscal year 2016 till October, at $8.23 billion. The life insurance sector is expected to grow at a compound annual growth rate of 12-15% over the next five years, the report added.

Micromax to invest Rs 300 crore for Make in India :

Handset-maker Micromax will invest Rs. 300 crore over the next few months as it sets up three new manufacturing units in India to ramp up domestic production and reduce dependence on imports from China. The new plants will be set up in Rajasthan, Telangana and Andhra Pradesh and will become operational in 2016. Micromax co-founder Mr. Rajesh Agarwal said that Micromax had been allotted 20 acres of land in Telangana and the civil structure is almost ready. Similarly, in Rajasthan, it has got 25 acres of land and construction will start in a few days. Tirupati would also start soon, he said. He added that once all the units were functional, the company would have a capacity of about 4 million units and would be able to provide employment to some 3,000-3,500 people in each factory. Mr. Agarwal added that Micromax would invest about Rs. 100 crore on each of the new projects. Currendy, the company has an assembly unit in Rudrapur, Uttarakhand that produces about one million units. This accounts for about 30-35 percent of its requirement and the remaining are imported from China. According to Mr. Agarwal, as an industry by 2017, Micromax will start making batteries and other components in India.

Global handset-makers like Samsung and domestic players like Spice have assembly units in India. International players like Xiaomi, Gionee and Asus have announced assembly units in partnership with electronics major Foxconn in Andhra Pradesh in the recent past. Handset-makers are looking to tap the multi-billion dollar opportunity in India, which is one of the fastest-growing smartphone markets in the world. Indian Cellular Association (ICA) National President Mr. Pankaj Mohindroo said that the Fast Track Task Force had a target to cross 500-million mobile phone manufacturing, employment to 15 lakh plus and a compQpent industry of Rs. 50,000 crore besides other terms of reference by 2019-20. He said that manufacturing value would grow 95% in 2015-16 compared to 2014-15 and they were confident of crossing the target set out for 2019-20 by that time. Domestic brands, particularly Micromax and Lava, would play a leading role in spearheading this task of nation building, he said. ICA also expected global giants like Foxconn to play an equally significant role, he added.

In December 2014, the Government had set up a joint task force, which included industry representatives from Samsung, Microsoft and Lava, to rejuvenate nation’s mobile phone manufacturing ecosystem with a view to achieving production of 500 million units of mobile handsets by 2019. Lava is also looking to bring the entire manufacturing ecosystem to India. It is investing Rs 2,615 crore over the next seven years to set up two manufacturing units in India. The Indian handset industry is poised to overtake the US as the second-largest market in the next few years.

CRISIL-Assocham report says India needs to spend Rs 1,700/day to build infra : India needs to invest Rs 1,700 every day over the next five years to provide uninterrupted power supply to our homes and factories, and improve our roads, telecom, transport and other urban infrastructure, according to a joint study by rating agency CRISIL and the Associated Chambers of Commerce of India. The study pegs the total investment needed to build infrastructure in India at Rs. 31 lakh crore between 2015 and 2020. The report said that although banks had traditionally been the largest financiers, their increasing exposure to infrastructure projects posed the risk of an asset-liability mismatch as the investment horizon is generally long. CRISIL believes that, given their long-term investment horizon, bond markets are better placed to play an active role in funding. As bond market investors are risk averse, credit enhancement mechanisms are essential to bridge the gap between their low-risk appetite and the higher risk associated with infra projects.

The report said that there was a “glimmer of hope” for the power sector given the list of States that have agreed to participate in the UDAY (Ujjwal Discom Assurance Yojana) package announced by the Central Government for the struggling state-owned distribution companies (discoms). CRISIL believes that the scheme has the potential to wipe out losses of discoms in Haryana, Andhra Pradesh and Telangana by fiscal 2018. The rating agency estimates that 46,000 mw of power generation capacities is at risk. Of this, nearly 36,000 mw are coal-based and about 10,000 mw, gas-based.                       i

Anil Ambani, Spielberg join hands for new entertainment company : Mr. Anil Ambani-led Reliance Entertainment and acclaimed Hollywood director Mr. Steven Spielberg’s DreamWorks has announced formation of Amblin Partners—a film, television and digital content-creation company. Participant Media led by Jeff Skoll and Entertainment One, a leading US-based media company, are also part of the joint venture. Reliance Entertainment said that together with Reliance Entertainment and DreamWorks Pictures, they would work closely with Amblin Partners to develop and produce specific content for the new venture, in addition to exploring opportunities for co-productions and other content. Amblin Partners has a mandate to develop and produce films using Amblin, DreamWorks Pictures and Participant banners as well as Amblin Television.

DreamWorks Studios and Participant Media have collaborated on many Academy Award-nominated films such as Uncoln’ and The Help as well as the critically-acclaimed The Hundred-Foot Journey, and the recently released Bridge of Spies. Amblin Partners’ film projects include The BFG, and The LJght Between Oceans, scheduled for release by Disney in 2016; The Girl on the Train (October 2016); A Dog’s Purpose (first quarter of 2017) and Read)’ Player One, scheduled to be released in December 2017.            EiH

 

diversified financial services company with a major focus on retail investors. Fairfax invested $211.38 million to acquire a minority stake in IIFL in July 2015, according to VCCEdge. In the same month, French bank BNP Paribas SA acquired retail brokerage firm Sharekhan Ltd. for nearly Rs. 2,200 crore (about $345 million at the average exchange rate of Rs. 63 per dollar in July). In August 2015, it bought out its partner in BNP Paribas Sundaram Global Securities Operations Pvt. Ltd. for Rs. 44.30 crore, according to Grant Thornton’s deal database.

Non-banking financial companies (NBFCs) and housing finance firms have also seen strong interest from private equity funds. Deals in this segment include Apax Partners Lip’s $384.55 million investment in Shriram City Union Finance Ltd. and Bain Capital’s $198.47 million deployment in L&T Finance Holdings Ltd. SME (small and medium enterprise) finance is also a segment that is attracting a lot of foreign investment. Several transactions were seen in the insurance sector as well after the foreign investment limit in the sector was raised to 49% from 26%. At least Rs. 10,000 crore in deals have been announced, according to data compiled by Mint. The largest such transaction saw Nippon Life Insurance Co. buying Rs. 2,265 crore in Reliance Life Insurance Co. to raise its stake to 49%. At least 11 more deals have been closed. According to a report by India Brand Equity Foundation, between April and September 2015, the life insurance industry recorded a new premium income of $8.4 billion, indicating a growth rate of 14.45%. The general insurance industry recorded a growth of 12.6% in gross direct premium underwritten in fiscal year 2016 till October, at $8.23 billion. The life insurance sector is expected to grow at a compound annual growth rate of 12-15% over the next five years, the report added.

Micromax to invest Rs 300 crore for Make in India :

Handset-maker Micromax will invest Rs. 300 crore over the next few months as it sets up three new manufacturing units in India to ramp up domestic production and reduce dependence on imports from China. The new plants will be set up in Rajasthan, Telangana and Andhra Pradesh and will become operational in 2016. Micromax co-founder Mr. Rajesh Agarwal said that Micromax had been allotted 20 acres of land in Telangana and the civil structure is almost ready. Similarly, in Rajasthan, it has got 25 acres of land and construction will start in a few days. Tirupati would also start soon, he said. He added that once all the units were functional, the company would have a capacity of about 4 million units and would be able to provide employment to some 3,000-3,500 people in each factory. Mr. Agarwal added that Micromax would invest about Rs. 100 crore on each of the new projects. Currently, the company has an assembly unit in Rudrapur, Uttarakhand that produces about one million units. This accounts for about 30-35 percent of its requirement and the remaining are imported from China. According to Mr. Agarwal, as an industry by 2017, Micromax will start making batteries and other components in India.

Global handset-makers like Samsung and domestic players like Spice have assembly units in India. International players like Xiaomi, Gionee and Asus have announced assembly units in partnership with electronics major Foxconn in Andhra Pradesh in the recent past. Handset-makers are looking to tap the multi-billion dollar opportunity in India, which is one of the fastest-growing smartphone markets in the world. Indian Cellular Association (ICA) National President Mr. Pankaj Mohindroo said that the Fast Track Task Force had a target to cross 500-million mobile phone manufacturing, employment to 15 lakh plus and a component industry of Rs. 50,000 crore besides other terms of reference by 2019-20. He said that manufacturing value would grow 95% in 2015-16 compared to 2014-15 and they were confident of crossing the target set out for 2019-20 by that time. Domestic brands, particularly Micromax and Lava, would play a leading role in spearheading this task of nation building, he said. ICA also expected global giants like Foxconn to play an equally significant role, he added.

In December 2014, the Government had set up a joint task force, which included industry representatives from Samsung, Microsoft and Lava, to rejuvenate nation’s mobile phone manufacturing ecosystem with a view to achieving production of 500 million units of mobile handsets by 2019. Lava is also looking to bring the entire manufacturing ecosystem to India. It is investing Rs 2,615 crore over the next seven years to set up two manufacturing units in India. The Indian handset industry is poised to overtake the US as the second-largest market in the next few years.

CRISIL-Assocham report says India needs to spend Rs 1,700/day to build infra : India needs to invest Rs 1,700 every day over the next five years to provide uninterrupted power supply to our homes and factories, and improve our roads, telecom, transport and other urban infrastructure, according to a joint study by rating agency CRISIL and the Associated Chambers of Commerce of India. The study pegs the total investment needed to build infrastructure in India at Rs. 31 lakh crore between 2015 and 2020. The report said that although banks had traditionally been the largest financiers, their increasing exposure to infrastructure projects posed the risk of an asset-liability mismatch as the investment horizon is generally long. CRISIL believes that, given their long-term investment horizon, bond markets are better placed to play an active role in funding. As bond market investors are risk averse, credit enhancement mechanisms are essential to bridge the gap between their low-risk appetite and the higher risk associated with infra projects.

The report said that there was a “glimmer of hope” for the power sector given the list of States that have agreed to participate in the UDAY (Ujjwal Discom Assurance Yojana) package announced by the Central Government for the struggling state-owned distribution companies (discoms). CRISIL believes that the scheme has the potential to wipe out losses of discoms in Haryana, Andhra Pradesh and Telangana by fiscal 2018. The rating agency estimates that 46,000 mw of power generation capacities is at risk. Of this, nearly 36,000 mw are coal-based and about 10,000 mw, gas-based.

Anil Ambani, Spielberg* join hands for new entertainment company : Mr. Anil Ambani-led Reliance Entertainment and acclaimed Hollywood director Mr. Steven Spielberg’s DreamWorks has announced formation of Amblin Partners—a film, television and digital content-creation company. Participant Media led by Jeff Skoll and Entertainment One, a leading US-based media company, are also part of the joint venture. Reliance Entertainment said that together with Reliance Entertainment and DreamWorks Pictures, they would work closely with Amblin Partners to develop and produce specific content for the new venture, in addition to exploring opportunities for co-productions and other content. Amblin Partners has a mandate to develop and produce films using Amblin, DreamWorks Pictures and Participant banners as well as Amblin Television.

DreamWorks Studios and Participant Media have collaborated on many Academy Award-nominated films such as Unco In’ and The Help as well as the critically-acclaimed The Hundred-Foot Journey, and the recently released Bridge of Spies. Amblin Partners’ film projects include The BFG, and The ITght Between Oceans, scheduled for release by Disney in 2016; The Girl on the Train (October 2016); A Dog’s Purpose (first quarter of 2017) and Beady Player One, scheduled to be released in December 2017. Wgn

 

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