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Business News/ Mint-lounge / Mint-on-sunday/  Mobile milestone, PPP reboot and Essar Oil delisting
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Mobile milestone, PPP reboot and Essar Oil delisting

India's cell phone subscribers cross 1 billion; Kelkar panel proposes changes to PPP model; and Essar Oil pays out Rs3,745 crore to go private

Photo: MintPremium
Photo: Mint

1. SpiceJet looks to raise Rs5,000 crore

SpiceJet Ltd announced that its shareholders have approved a proposal to raise funds up to Rs5,000 crore at the company’s 31st annual general meeting held in New Delhi earlier in the week. The management said that SpiceJet is looking to place orders for new planes this fiscal year. SpiceJet posted a net profit of Rs23.77 crore in the three months ended September and a profit of Rs71.85 crore in the June quarter following seven consecutive quarters of losses.

2. Kelkar panel issues recommendations on PPP

The Vijay Kelkar committee has suggested easier funding for public-private partnership (PPP) projects. The panel, set up by the finance ministry to recommend changes in the PPP model, suggested ending the one-size-fits-all approach in dealing with risks and proposed independent regulators. Currently, a significant number of PPP projects have been stalled by legal disputes relating to financial issues. Delays and the termination of a number of PPP projects have accentuated infrastructure bottlenecks. Moreover, the stalled projects have also saddled the banking sector with a large burden of bad loans.

3. External debt rises 1.7% in first six months of FY16

Data released by the finance ministry showed that India’s external debt stood at $483.2 billion in September, rising by $8 billion (1.7%) over the level in March 2015. The 1.7% rise understates the actual increase in debt, as appreciation in the US dollar deflated the recorded value of non-dollar denominated debt. The bulk of external debt continues to be long-term (82% of total), i.e., debt maturing after at least one year. While the absolute quantum of external debt has risen in recent quarters, its value relative to foreign exchange reserves has actually fallen, thanks to a substantial rise in forex reserves in fiscal 2015.

4. Indians reported to join Islamic State

Twenty-three Indians might be reportedly fighting for the Islamic State in Iraq and Syria, as per a CNN-IBN report. The report further stated that out of the 23 Indians who are fighting for the terror group, 17 are from southern states. Foreign fighters joining the Islamic State has not been a new phenomenon, although the participation of Indian nationals has as yet been low, as evident from data compiled by Radio Free Europe Radio Liberty, which shows a much higher participation by even a number of European countries like France, UK, Germany and Belgium.

5. Essar Oil completes delisting

Essar Oil completed its delisting process and offered Rs262.80 per share, which marked an 80% premium to the floor price of Rs146.05. The offer price pegs the valuation of the company at Rs38,000 crore. The company note said that out of the 142.5 million shares held by public shareholders, the promoters have acquired 101 million shares through the open offer, as against the minimum requirement of 92.6 million shares. Essar Oil paid out Rs3,745 crore to complete the delisting process.

6. Mobile phone subscribers cross 1 billion

The number of mobile-phone subscribers in India crossed 1 billion in October, according to data released by the Telecom Regulatory Authority of India (Trai), registering a 7% year-on-year (y-o-y) growth. Rural India seems to be catching up with urban areas, and the annual rise in rural subscriptions (10% y-o-y) continued to exceed the rise in urban subscriptions (5% y-o-y). Nevertheless, the number of urban wireless subscriptions, at 578 million, continued to exceed the 425 million rural subscriptions.

7. RBI releases report on strategy to manage government debt

The Reserve Bank of India (RBI) released the “medium-term debt management strategy" report, which discusses the ways to ensure cheap and low-risk borrowing by the government. The report endorsed the need to continue raising the average maturity of government debt outstanding, by issuing more longer-dated bonds rather than shorter-dated ones. The report concluded that the government’s debt structure is stable and risks are low. The RBI said that it will continue its efforts in development of the G-sec market by a series of measures such as introducing new instruments, expanding the investor base, and strengthening market infrastructure.

8. April-November fiscal deficit at 87% of full-year target

The central government’s fiscal deficit in the April-November period was 87% of the full-year target for fiscal 2016, better than the 98.9% deficit in the corresponding period last year. The performance in the first eight months of the fiscal year has been better on almost all accounts—tax collections, revenue deficit and primary deficit. Apart from the centre, even states have shown progress on the fiscal front and the revenue deficit of 20 large states fell in the first half of fiscal 2016, as reported by the mid-year economic analysis released in December by the finance ministry’s department of economic affairs.

9. Infrastructure output contracts the most on record

India’s core sector output contracted by 1.3% year-on-year in November, posting the sharpest decline since at least 2005, when the current data series was introduced. Steel output fell by 8.4% y-o-y in November, apart from contraction witnessed in crude oil, natural gas and cement. The eight core industries—coal, crude oil, natural gas, refinery products, fertilizers, steel, cement and electricity—account for around 38% of the weight of items included in the Index of Industrial Production. Cumulative growth in 2015-16 till date (April-November) is lower at 2% y-o-y, compared with 6% in the corresponding period in the last fiscal year.

10. Non-food bank credit growth at 8.8% in November

Non-food bank credit rose by 8.8% year-on-year in November 2015, slower than a 10.5% credit growth witnessed in November 2014. The growth in credit to agriculture slowed down to 11.8% y-o-y in November, as compared to the increase of 19.7% a year ago. The growth in bank credit in November was the highest in the personal loans category (18% y-o-y) and the lowest for industry (5% y-o-y). Muted credit growth, despite cumulative 1.25 percentage point interest rate cuts by the RBI in 2015, has continued to worry the policymakers who have often pointed to inadequate monetary policy transmission.

Graphics by Ajay Negi/Mint.

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Published: 02 Jan 2016, 11:31 PM IST
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