27.5 C
Mumbai
Sunday, July 12, 2020

Business Live: Shares edge higher even as coronavirus cases surge; factory activity contracts for 3rd straight month in June

Must read

Keke Palmer Has the Classiest Response After August Alsina Slams Her On Twitter – E! Online

Despite August's heated Twitter thread, Keke took to Instagram to seemingly share her response to the situation. It was classy and iconic all at...

Kids’ winning BFI films air on TV

The British Film Institute competition winners will have their two-minute long TV shows aired on national television. Children from across the UK submitted videos...

After Amitabh Bachchan, Abhishek Bachchan Tests Positive For COVID-19

News oi-Srushti Jayadev | Updated: Sunday, July 12, 2020, 1:43 ...


Stocks have opened the day with modest gains after suffering a minor loss yesterday even as coronavirus cases in the country continue to surge.

Credit growth in India continues to be lackluster as the pandemic-hit economy struggled to find its feet.

Join us as we follow the top business news through the day.

12:40 PM

Maruti Suzuki sales down by 53.8%, sells over 51,000 cars in June

The country’s largest car maker Maruti Suzuki on Wednesday said it sold 51,274 passenger vehicles in the domestic market amid gradual re-opening of the country after two-month nationwide lockdown.

On an year on year basis, the company’s wholesale sales were 53.8% lower from 1,11,014 vehicles dispatched to dealers in June 2019. However, it is much higher than sales of about 13,800 vehicles in the month of May this year and zero sales in April due to the lockdown.

“With this, the Company closed the first quarter of FY20-21 with total sales of 76,599 units (66,165 units domestic, 862 units to other OEM and 9,572 units exported.) The sales performance during June 2020 and Q1 FY 20-21 should be seen in the context of the ongoing COVID-19 pandemic, lockdowns and restrictions required for safety,” the company said in a statement.

 

12:20 PM

World Bank approves $750 mln loan for India small businesses hit by pandemic

Enterprises in India may receive a helping hand from an unexpected source amid the lockdown.

Reuters reports: “The World Bank has approved a $750 million loan to India for extending lending to micro, small and medium enterprises (MSMEs) severely hit by the pandemic, a top official of the bank said on Wednesday.

“The MSME sector is central to Indias growth and job creation and will be key to the pace of Indias economic recovery, post COVID-19,” Junaid Ahmad, World Bank’s director for India, told reporters at a virtual conference.

The loan from the International Bank for Reconstruction and Development (IBRD), private arm of the World Bank, will have a maturity of 19 years, including a 5-year grace period, the bank said in a statement.”

12:00 PM

Commercial real estate developers have to pay GST, even if rent is not realised, experts say

Commercial real estate developers have to pay Goods and Services Tax (GST) of 18% on rent, even if it is not realised during the current COVID-19 lockdown, as per norms.

Commercial malls have not been functioning in the State, since the lockdown was imposed towards the end of March. While “If the invoice is raised for rent, then GST has to be paid, even if the rent is not realised. What the commercial developers can do in the current situation, is that if their contract permits, they can re-negotiate the rents and pay the GST on lower rent,” according to Abhishek Jain, tax partner at EY, an auditing firm.

“In a situation where the rental obligations remain unchanged and it is only a case of the tenant refusing to pay or simply being in default, it would not be possible for the landowner to contend that GST is not payable,” K. Vaitheeswaran, advocate and tax consultant said. He pointed out that it is also a matter of irony that when the rentals are not realized, GST is still payable.

 

11:40 AM

ATF price hiked by 7.5%; petrol, diesel rates unchanged

Jet fuel or ATF price on Wednesday was hiked by 7.5 per cent, the third increase in a month, while petrol and diesel rates were unchanged for the second day in a row.

Aviation turbine fuel (ATF) price was hiked by ₹2,922.94 per kilolitre (kl), or 7.48 per cent, to ₹41,992.81 per kl in the national capital, according to a price notification by state-owned oil marketing companies.

This is the third straight increase in ATF prices in a month. Rates were hiked by a record 56.6 per cent (₹12,126.75 per kl) on June 1, followed by ₹5,494.5 per kl (16.3 per cent) increase on June 16.

 

11:20 AM

Vodafone Idea posts highest-ever loss by an Indian firm at Rs 73,878 crore in FY20

Provisioning for AGR dues has caused Vodafone India’s bottom-line figures to plunge.

PTI reports: “Vodafone Idea, the country’s third largest telecom operator, on Wednesday reported a staggering Rs 73,878 crore of net loss in fiscal ended March 2020 – the highest ever by any Indian firm – after it provisioned for Supreme Court mandated statutory dues.

The firm, which has to pay Rs 51,400 crore dues after the apex court ordered the non-telecom revenues to be included in calculating statutory dues, said the liability has “cast significant doubt on the company’s ability to continue as a going concern“.

In a regulatory filing, Vodafone Idea (VIL) reported widening of March quarter net loss to Rs 11,643.5 crore. Its losses stood at Rs 4,881.9 crore in the same period a year ago and Rs 6,438.8 crore in previous October-December quarter.

The Department of Telecom (DoT) estimates the firm’s adjusted gross revenue (AGR) dues at Rs 58,254 crore for period up to FY 2016-17, but the company put the dues at Rs 46,000 crore “after adjustment of certain computational errors and payments made in the past not considered in the DoT demand.”

Of the total dues, it has made a payment of Rs 6,854.4 crore.

The company took a hit of Rs 1,783.6 crore on account of AGR-related liabilities, and Rs 3,887 crore on account of one-time spectrum charges (OTSC), both of which were recognised as exceptional items during the quarter ended March 2019.

Revenue from operations for the just-ended quarter came in at Rs 11,754.2 crore.

For the full year FY20, losses ballooned to Rs 73,878.1 crore. Vodafone Idea’s losses stood at Rs 14,603.9 crore in FY19.

The company said that the financial results for the year ended March 31, 2020, are not comparable to those reported for the same period of the preceding year (merger between Vodafone India and Idea Cellular had taken effect in August 2018).

The revenue from operations for full year FY20 stood at Rs 44,957.5 crore. The same was Rs 37,092.5 crore in FY19.”

11:00 AM

India’s factory activity contracts for 3rd straight month in June

The gradual unlocking of the economy doesn’t seem to be doing much good for the manufacturing sector.

Reuters reports: “India’s manufacturing activity contracted for a third straight month in June, albeit at a much shallower pace, as demand and output continued to suffer from three months of lockdowns to quell the spread of the coronavirus, a private survey showed.

The virus has infected over half a million people in the world’s second-most populous nation, stalling economic activity, but Wednesday’s survey suggested the worst may be over for the economy, at least for now.

While the Nikkei Manufacturing Purchasing Managers’ Index , compiled by IHS Markit, increased to 47.2 last month from 30.8 in May it was still below the 50-mark separating growth from contraction. Analysts polled by Reuters had expected 37.5.

“India’s manufacturing sector moved towards stabilisation in June, with both output and new orders contracting at much softer rates than seen in April and May. However, the recent spike in new coronavirus cases and the resulting lockdown extensions have seen demand continue to weaken,” noted Eliot Kerr, an economist at IHS Markit.

The April-June period was the worst quarterly performance since the PMI survey began in March 2005, in line with a Reuters poll predicting Asia’s third-largest economy contracted last quarter for the first time since the mid-1990s.

Input and output prices declined for a third consecutive month in June, and manufacturers continued to cut staff.”

10:40 AM

Ola enables in-app ‘tipping’ globally

Ola, the mobility platform and a ride-hailing company, has rolled out a global feature for customers to reward drivers for going the extra mile to deliver a safe and high-quality ride experience.

Through Ola’s new in-app ‘tipping’ functionality, customers can now include a tip as a token of appreciation for their drivers’ for providing a great ride experience. The feature has been rolled out to all Ola users across India, Australia, New Zealand and the United Kingdom.

As restrictions eased, the driver-partners on the Ola platform have had to follow a comprehensive safety protocol and sanitising cars after every trip, drivers have taken extra steps personally to keep themselves and their families safe. In this scenario, the in-app tipping feature serves as an opportunity for customers to reward drivers for going the extra mile, and contribute to increasing their earning potential. Customers can choose to voluntarily tip their drivers and the amount will be credited to the drivers’ account in its entirety as part of the regular earnings cycle, as per a company statement.

 

10:20 AM

External debt rises $15.4 billion to $558.5 billion in March

India’s external debt stood at $558.5 billion in March, an increase of $15.4 billion compared with the year-ago period, according to RBI data.

Commercial borrowings remained the largest component of the external debt, with a share of 39.4%, followed by non-resident deposits at 23.4% and short-term trade credit at 18.2%.

The data showed valuation gains due to the appreciation of the U.S. dollar against the Indian rupee and other major currencies were at $16.6 billion. “Excluding the valuation effect, the increase in external debt would have been $32 billion instead of $15.4 billion at end-March 2020 over end-March 2019,” it said.

 

10:00 AM

Indian shares edge higher even as coronavirus cases surge

It looks like equity investors have priced in the surge in India’s coronavirus cases.

PTI reports: “Indian shares inched higher on Wednesday as investor optimism was boosted by strong factory data out of China, offsetting fears of rising coronavirus cases, with Bharti Airtel Ltd leading small gains after a deal with Carlyle.

The NSE Nifty 50 index rose 0.25% to 10,327.65 by 0350 GMT, while the benchmark S&P BSE Sensex was up 0.3% at 35,019.67.

Broader Asian stocks struggled for traction as better than expected Chinese factory activity could not soothe persistent worries that a surge in coronavirus cases in the United States could hinder an economic recovery.

Cases in India jumped by more than 18,000 to 585,493 as of Wednesday morning, including 17,400 deaths, according to federal health ministry data.

Bharti Airtel topped gains in Mumbai, rising as much as 2.7% after Carlyle said it will buy a 25% stake in Bharti’s data centre arm for $235 million.”

 

9:40 AM

Non-food credit growth slows to 6.8% in May

The ongoing economic contraction is now being confirmed by credit indicators.

PTI reports: “The non-food credit growth decelerated to 6.8 per cent year-on-year in May from 11.4 per cent in the same period of last year, RBI data showed.

The outstanding incremental non-food credit stood at Rs 90.3 lakh crore as of May 22, 2020, as against Rs 84.51 lakh crore on May 24, 2019.

In April, non-food credit growth decelerated to 7.3 per cent on a year-on-year basis from 11.9 per cent in the same month last year.

Bank loan growth to industry decelerated to 1.7 per cent in May from 6.4 per cent in the same month last year.

Within industry, credit growth to beverage and tobacco, petroleum, coal products and nuclear fuels, and paper and paper products accelerated, according to the RBI’s release on Sectoral Deployment of Bank Credit — May 2020.

However, credit growth to chemicals and chemical products construction, infrastructure, food processing, textiles, and all engineering decelerated/contracted.

Credit growth to agriculture and allied activities decelerated to 3.5 per cent during the reporting month from 7.8 per cent in May 2019, as per RBI data.

Loans growth to the services sector slowed down to 11.2 per cent from 14.8 per cent in the same month of last year.

Personal loans growth decelerated to 10.6 per cent in May 2020 from 16.9 per cent in May 2019, RBI said.”

9:30 AM

Carlyle to acquire about 25% stake in Airtel’s Nxtra Data

The Carlyle Group will acquire about 25% stake in Airtel’s data centre business, Nxtra Data, for USD 235 million (about ₹1,780 crore), the company said in a statement on Wednesday.

This will peg the enterprise valuation of Nxtra at USD 1.2 billion which is over ₹9,084 crore.

On completion of the deal, Carlyle will hold about 25%in the business with Airtel continuing to hold the remaining stake of about 75 per cent.

“Bharti Airtel and Comfort Investments II, an affiliated entity of CAP V Mauritius Limited, an investment fund managed and advised by affiliated entities of the Carlyle Group, today announced an agreement under which Comfort Investments II will invest USD 235 million in Nxtra Data Limited, a wholly owned subsidiary of Airtel engaged in the data centre business,” a Bharti Airtel statement said.

 



The Hindu – Business

Source – www.thehindu.com

Rob K. Jones
Rob K. Jones
Rob K. Jones has worked at Ethical Editor since its launch. In the years since, he has led by example the company's Business news team and published over multiple articles — a mix of breaking news, reviews, helpful how-tos, industry analysis, and more.
- Advertisement -Business Live: Shares edge higher even as coronavirus cases surge; factory activity contracts for 3rd straight month in June

More articles

LEAVE A REPLY

Please enter your comment!
Please enter your name here

- Advertisement -Business Live: Shares edge higher even as coronavirus cases surge; factory activity contracts for 3rd straight month in June

Latest article