AC bus service begins from Indore for Rewa, Jabalpur

The Atal Indore City Transport Services Limited (AICTSL) joined hands with the tourism department and started air-conditioned sleeper bus service between Indore and Rewa and Indore and Jabalpur from Saturday.

AICTSL officials said the buses will ply from the AICTSL headquarters on AB Road.

The bus, heading towards Rawa, will start at 5 pm and reach Rawa at around 9 am.

From Rawa, the bus will start at 5 pm and reach Indore at around 9 am. The fare will be `1,470.

The bus, heading towards Jabalpur, will start at 8 pm and reach Jabalpur at around 7 am.

Cement stocks crack, fall 16-21% in last two months

In the past two months, shares of cement companies have underperformed the benchmark indices due to poor demand, declining profits and low realisations. Shares of UltraTech, ACC, Ambuja and JK Cement have lost 16-21 per cent, against a fall of 8.6 per cent in the benchmark indices.

The sector, considered a proxy for infrastructure development in the country, has seen de-rating in valuations in the past year.

Shares of UltraTech, India’s largest cement maker, have been hit the worst. After an all-time high of Rs 3,399 in early March, the stock has lost about a fifth of its value and is currently at Rs 2,703, down 20.5 per cent. The company recorded a fall of three per cent in sales volume in the March quarter, while profit fell 24 per cent.

The ACC stock lost 17 per cent, from Rs 1,775 to Rs 1,468. The company’s net profit fell 41 per cent in the quarter, while cement sales volume plunged 10 per cent year-on-year.

Ambuja Cements, ACC’s sister company, was also hit. Following a poor quarterly performance, when sales fell nine per cent and profit was down 39 per cent, the stock took a beating. After an all-time high of Rs 286.85, it corrected 17 per cent to Rs 239.

Analysts say a further fall can’t be ruled out, as demand looks grim. Piyush Jain, equity research analyst at Morningstar India, said, “Clearly, the anticipated demand pick-up is missing. Construction activities are yet to start, which will further delay growth in consumption. I believe the corrections in these stocks were overdue; now, these are back to realistic valuations. However, there could be lower entry points for investors.”

Analysts say falling rural income and lack of improvement in the economy pose challenges for the sector. Also, a supply-demand mismatch will continue to put pressure on companies’ operating margins. Against an overall capacity of 380 million tonnes (mt) a year, India’s consumption isn’t more than 285 mt.

Owing to this, capacity utilisation has fallen to 72 per cent, while companies in the sector continue to lose control over pricing.

SOURCE - business-standard

Value of FII ownership on the rise Business Standard May 5, 2015 Last Updated at 22:40 IST

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Foreign institutional investor (FII) ownership in Indian companies fell 10 basis points during the March quarter. However, in value terms, FII ownership in Indian stocks increased from Rs 18.3 lakh crore in December 2014 to Rs 19.3 lakh crore, the highest since Prime Database started collecting the data. The total value of Indian-listed companies also reached highest-ever level during the March quarter. In terms of sectors, FIIs have highest exposure to banking stocks, followed by information technology.

SOURCE - business-standard

SBBJ cuts base rate by 15 bps to 10.10%

State Bank of Bikaner and Jaipur (SBBJ) has reduced its base rate, benchmark used for pricing loans, by 15 basis points to 10.10 per cent.

The new revised rate will be effective from May 06, 2015, said SBBJ, associate bank of State Bank of India, in filing with Bombay Stock Exchange.

SBBJ is one of the banks that reduced key lending rates after much chiding by Reserve Bank of India and government of India. The lender had flagged issue of delay or lack of monetary transmission (passing on benefit of lower cost of funds to final customers).

Few banks including SBI, ICICI Bank and HDFC Bank had reduced base rate after Reserve Bank of India cut policy rate (repo rate) twice by 25 basis points each since January 2015. Now repo rate stands at 7.5 per cent.

According to finance ministry data, following the reduction in the policy rate, out of a total 91 scheduled commercial banks (SCBs), 21 banks (4 Public Sector Banks, 6 Private Sector Banks and 11 foreign banks) reduced their base rates in the range of 10-50 bps so far (up to April 15, 2015).

The weighted average lending rates on fresh rupee loans sanctioned by banks for housing and vehicle loans have also come down in the range of 8-53 basis points during the same period.

SOURCE - business-standard.

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FinMin initiates process of hiring chairmen for PSU banks

The Finance Ministry has initiated the process of identifying persons like retired bureaucrats and bankers who could be appointed as non-executive chairmen of various public sector banks. 

Vacancies for the position of non-executive chairman have arisen following the government decision to bifurcate the post of Chairman and Managing Director at PSU banks last year.

 There are eight vacancies for this slot at various public sector banks including Punjab National Bank, Bank of Baroda, Syndicate Bank and Canara Bank. 

The government is also looking for appointing chairmen at Bank of India and IDBI Bank in place of the incumbents.

 In December, the government had appointed Managing Director and CEO in four state-owned banks -- Indian Overseas Bank, Oriental Bank of Commerce, United Bank of India and Vijaya Bank. According to sources, people would be shortlisted as per the eligibility guidelines issued by the Finance Ministry.

 There would be no interviews for these people who could either be former private or public sector bankers or retired bureaucrats, they said. 

The Finance Ministry has initiated the process of selection and decision in this regard would be taken soon, the sources said. Besides, the ministry has also invited applications from eligible candidates for appointment of CEO and Managing Directors at five large public sector banks. 

The last date for filing application for these vacancies is on Tuesday as per the relaxed eligibility criteria. Last month, the ministry had issued norms for the appointment of non-official directors.

 As per the new norms, the applicant would need to have at least a graduation degree and should be less than 67 years of age, with 20 years of work experience. 

Eminent persons with special academic training or practical experience in the fields of agriculture, rural economy, banking, cooperation, economics, business management, among others would be considered for the post.

 Retired senior government officials; academicians; directors of premier Management; Banking Institutes; professors and Chartered Accountants with 20 years experience would also be considered. 

A high-level search committee would go through the applications and recommend names to the government for approval.
SOURCE - moneycontrol

Govt includes subsides under income in Fin Bill amendment

It’s turning out to be a summer of tax discontent. The Finance Bill 2015, as passed by the Lok Sabha last week includes a surprise amendment, one that was not in the Finance Bill tabled earlier. The government has decided to tax all central and state subsidies and grants.

 The definition of income has been amended to include any subsidy, grant, waiver, cash incentive or similar assistance. This has been a vexed issue for long. And there have been judgments that determine whether a subsidy is a revenue or capital receipt. 

For instance, a sales tax subsidy to encourage new capital investment is a capital receipt and not liable to tax, whereas revenue subsidies are. Now this amendment brings both capital and revenue subsidies to tax. It’s counterintuitive – a subsidy is an incentive, and taxing it reduces its full benefit!

 Dinesh Kanabar, Founder & CEO, Dhruva Advisors says, “So what we are now saying is on the one hand the government is giving you 100 and taking away 35 by way of taxes. There is actually a SC judgment in the case of Ponni Sugars & Chemicals where the SC held that any subsidy has to be regarded in the light of the scheme for which it was received. And it went on to say that take for example if the purpose of the government was to develop a backward area, a state, to promote any industry etc, then all such grants are capital in nature and not liable to tax. What this amendment seems to do is to nullify a host of judgments, the Bombay High Court in the case of Reliance has held that any sales tax subsidy received in not capital in nature and not liable to tax etc.” 

Experts say this will undoubtedly have a material impact on a large number of companies in India.

 Kanabar adds, “A number of assesses will get impacted. In Maharashtra there was a scheme for dev of multiplexes and any such subsidy received for multiplexes is not liable to tax because it was a capital receipt those would now be liable to tax. Similarly sales tax subsidy is being granted by all the states to promote capital investments and the subsidies range from between 50-100 percent of the capital investment made. All such subsidies will now be liable to tax as income. And this entire program of Make In India which requires industrialisation will now be impacted as a result of this amendment. 

Besides the oddity that an incentive is being sought to be taxed, that it was quietly introduced in the Finance Bill and passed without debate has also disturbed tax experts.

SOURCE - moneycontrol

RBI likely to lose power to regulate government bonds

Government plans to strip the Reserve Bank of India's (RBI) of its powers to regulate government bonds, but leave the central bank in charge of other money market instruments, three government sources with direct knowledge of the matter said on Wednesday.

The move is part of a major overhaul of the financial system that aims to deepen bond markets by increasing the participation of retail investors and improve the transmission of monetary policy, the sources told Reuters.

"The objective is to push financial sector reforms," said one of the sources, who declined to be identified because he was not authorised to speak to the media.

"You need a bond market that is well functioning where retail and corporate investors can participate."

Changes proposed by Finance Minister Arun Jaitley in his Budget last month triggered speculation that the government was also looking to transfer money market regulation from the RBI to the Securities and Exchange Board of India (Sebi), India's stock market regulator.

However, the sources said the government's plan is to only take the regulation of government bonds from the central bank.

"The RBI will continue to regulate all other monetary instruments," another source said.

The sources said the central bank opposes the proposed overhaul, which will diminish its powers and leave it primarily as a body that sets interest rates and regulates the banking sector.

Source - business today