Moody’s Raises Indian Banks’ Outlook to Stable

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Rating agency Moody’s Investors Service revised its outlook on India’s banking system to “stable” from “negative” on Monday, saying an improving economy would help temper problem-loans on banks’ books.

Moody’s, however, cautioned that any recovery in asset quality would be gradual given the high debt levels in Indian companies.

Indian banks, particularly state-run banks, have been saddled with bad loans estimated at nearly $50 billion as the economy slowed sharply in the last three years.

But recent earnings reports, including from top private sector lender ICICI Bank, suggested asset quality may be stabilising.

Moody’s said it expected India’s economy to grow around around 7.5 per cent in 2015 and 2016 each, supported by low inflation and gradual implementation of structural reforms.

“The stable outlook on India’s banking system over the next 12-18 months reflects our expectation that the banks’ gradually improving operating environment will result in a slower pace of additions to problem loans, leading to more stable impaired loan ratios,” Moody’s said in the statement.
“However, the recovery in asset quality will be U-shaped rather than V-shaped, because corporate balance sheets remain highly leveraged.”
Moody’s also noted that capital levels remained weak for state-owned banks, with common Tier 1 ratios of only 6 to 10 per cent, though lenders retain plentiful of access to funding and liquidity.

Moody’s had downgraded India’s banking system outlook to “negative” in November 2011.

The ratings agency had upgraded India’s sovereign outlook to “positive” in April, while retaining its rating at “Baa3”.

Source: http://profit.ndtv.com/news/banking-finance/article-moodys-ups-indian-banking-sector-outlook-to-stable-1238974

Modi government to provide launchpad for disruptive ideas: Startup Act in works

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The Narendra Modi government wants to provide a powerful launchpad for startups by drastically simplifying the rules and ensuring that innovators are able to take advantage of such an enabling environment, thus unleashing entrepreneurial energiesBSE 1.29 % and creating jobs.

At the heart of the initiative is distilling the cumbersome process of compliances under 22 different laws into a two-page Startup Act, a senior government official told ET. The Department of Industrial Policy and Promotion (DIPP) is looking to turn India into a startup haven.

It plans to cut through the thicket of regulations that holds back creativity and stunts the rapid evolutionary cycle that’s a feature of the sector.
“Compliances are a big issue for aspiring startups,” said the official. “We are trying to see whether we can bypass the multiple laws and draft a separate legislation instead.”

Already home to the fourth largest startup community in the world, India wants to create a robust ecosystem in which entrepreneurship can flourish as envisaged by the Startup India, Stand Up India initiative of Prime Minister Modi announced in this year’s Independence Day address. Jobs created by Indian startups are expected to rise to 2,50,000 by 2020 from 80,000, according to a Nasscom report.
The government plans to unveil a detailed Startup India plan next month. The DIPP is drawing up a clear definition for startups to ensure that the regime is available only to companies that practice innovation. This is necessary because the government is also considering tax incentives for startups, which it doesn’t want other companies to take advantage of.
Companies that qualify for the tag are likely to be less than five years old, providing an innovative product or service. They will also need to conform to financial norms to ensure that the incentives are not spread too thin.
The new policy will address delays in incorporation, employee stock options, lack of initial funding, cumbersome Foreign Exchange Management Act (Fema) documentation and access to external commercial borrowings.
“It will be a colossal help if the government can do something about this,” said Rohan Malhotra, founder of Investopad, a startup incubator and financing company.

“In the US, you can incorporate a company in a few hours. In India, it is a nightmare to do even basic administration work.” Entrepreneurs feel their energies are sapped by the need to negotiate their way through the bureaucratic maze.

“Most startups have a backlog on compliances and simply get a professional to handle these matters when they want to raise funds,” said Gaurav Kachru, founder, 5ideas Startup Superfuel. “Some of it is a waste of time.”

Last week, DIPP held discussions with leaders of the startup community including SoftBank president Nikesh Arora, Snapdeal CEO Kunal Bahl, Oyo Rooms founder Ritesh Agarwal and former Infosys director Mohandas Pai to draw up a list of action points.

PM Narendra Modi promises $10-bn credit line to Africa

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Promising $10 billion in credit to Africa to back a “partnership of prosperity” and pitching a broad alliance for global reform, Prime Minister Narendra Modi called for a permanent solution to the food security and agriculture subsidy issues at the Nairobi WTO meet, to be held later this year.

Addressing the inaugural session of the 3rd India-Africa Forum Summit (IAFS), Modi also made a strong pitch for deeper India-Africa ties in key areas of counter-terrorism, climate change and UN reforms. His nearly half-an-hour speech at the session was attended by 41 heads of state and government, including Presidents Jacob Zuma of South Africa, Mohammadu Buhari of Nigeria and Abdel Fattah al-Sisi of Egypt,t and hundreds of senior officials from 54 African countries.

He said India and Africa also seek a global trading regime that serves development goals and improves trade prospects. “When we meet at the Nairobi Ministerial of the WTO in December, we must ensure that the Doha Development Agenda of 2001 is not closed without achieving these fundamental objectives.”

The WTO’s General Council had accepted India’s demand for extending the peace clause till a permanent solution is found for its food stockpiling issue. For a permanent solution to the food security issue, India had proposed either amending the formula to calculate the food subsidy cap of 10%, which is based on the reference price of 1986-88, or allowing such schemes outside the purview of subsidy caps. If no solution is found by the agreed deadline of December 31, the peace clause will continue till the time a solution is found.

Calling for stronger ties in the strategic areas of counter-terrorism and climate change as well as on UN reforms, Modi told the visiting leaders, “We will raise the level of our support for your vision of a prosperous, integrated and united Africa that is a major partner for the world.”

Source: http://www.financialexpress.com/article/economy/pm-narendra-modi-promises-10-bn-credit-line-to-africa/158751/

SEBI cuts IPO paperwork drastically

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From December 1, companies filing for a public issue of securities (IPO/FPO and the like) have to come out with abridged prospectus containing all material and appropriate information on the issue to enable informed decision-making by investors.

Amending its public issue regulations, equities and commodities market regulator SEBI said the abridged prospectus should consist of five sheets of paper printed on both sides in A4 size booklet form.

SEBI has mandated that information given in tabular format should not be repeated in text format in the abridged prospectus. The abridged prospectus would also contain the application form in a manner by which tearing off the application form would not mutilate the prospectus, SEBI said.

Generic information not specific to the issuer shall be brought out in the form of a General Information Document, said SEBI.

Govt approves 16 FDI proposals worth Rs 4,722 cr

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The government has cleared 16 foreign investment proposals, including that of HDFC Capital and Ageon Religare Life Insurance Company, amounting to Rs 4,722 crore.
The investment proposals were approved following the recommendation for the same by the Foreign Investment Promotion Board (FIPB), headed by economic affairs secretary Shaktikanta Das.
“The government has approved 16 proposals of foreign direct investment amounting to Rs 4,722 crore,” the finance ministry said in a statement.
However, it rejected 8 proposals including that of Cipla Health Limited and Apollo Hospitals Enterprise Limited.
The Board cleared proposal of HDFC Capital Advisors Limited which alone entails investments of Rs 2,400 crore.
The company sought approval for issue of units to Green Light, it said.
“HDFC Fund proposes to make investments in equity, equity linked instruments, redeemable preference shares, non-convertible debentures and other debt securities of listed or unlisted investee companies engaged in real estate construction development projects which are permitted under the SEBI AIF Regulations as a Category II AIF,” it said.
Besides, Ageon Religare Life Insurance’s proposal worth Rs 559.96 crore was cleared by FIPB.
The approval was sought for the transfer of shares to Aegon India Holding thereby raising the foreign shareholding from 26 percent to 49 percent.
Among others, Sun Pharma Research Advanced Company Ltd’s proposal worth Rs 250 crore, Synergia Life Sciences Pvt Ltd (Rs 40 crore) and the post facto approval for Aditya Birla Nuvo’s Rs 377 crore plan were cleared during a meeting held on 29 September.

Govt proposes patent rule changes to boost ease of doing business

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The government on Thursday proposed amendments to the rules under the Patents Act to streamline the application process, as part of its efforts to improve the ease of doing business in India.

The government on Thursday proposed amendments to the rules under the Patents Act to streamline the application process, as part of its efforts to improve the ease of doing business in India. The rules also seek to encourage the manufacturing sector by offering expeditious processing of patent applications in cases where an investor has committed to use that innovation for its manufacturing activity in India.

Having a robust intellectual property rights (IPR) regime is one of the priorities of Prime Minister Narendra Modi, who recently agreed with his US counterpart Barack Obama to conduct annual technical dialogue between the nations in this area and take steps that would foster innovation and job creation.

The Indian Patent Amendments (Amendment Rules), 2015 released by the Department of Industrial Policy and Promotion (DIPP) on Thursday seeks to fast-track the patent application and processing procedure, and clarifies the manner in which certain information and supporting drawings are to be furnished. Stake holders have 30 days to give their feed back. The rules, however, do not touch substantive parts of the law — the demands from pharma MNCs for the removal of Section 3(d), the extra filter for patentability, have not been met. While some quarters allege that Section 3(d) is a TRIPS-plus provision, India has long maintained that it is meant to prevent ‘evergreening’ of patents by way of incremental changes sans therapeutic value, and is fully in conformity with the TRIPs.

The new rules also introduce ‘expedited examination of applications’ under certain circumstances that include cases where an applicant in the corresponding international application has designated the Indian Patent Office as the International Searching Authority.

Expedited examination is also available when the applicant or his assignee or prospective manufacturer (licensee) has already started manufacturing of the invention in India, or has undertaken that the manufacturing shall commence within two years from the grant of patent.

India e-commerce story strong, to hit $35 bn by 2019: Nomura.

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India e-commerce story strong, to hit $35 bn by 2019: Nomura

 

Indian e-commerce sector’s growth looks strong and is expected to reach $35 billion by 2019, says a report.

“The growth of India e-commerce remains strong, tracking our expectations of reaching $35 billion by 2019,” Nomura said in a research report.

The report, however, noted that the focus needs to move towards the roadmap to profitability, where “some progress is visible but a lot is still in the works”.

 

It further said that there are areas where significant progress needs to be made and that include diversification of categories, less discounting, improved logistics and benign legislation like GST. On these fronts, there are “still works in progress and remain big areas of investment”, the report said.

 

According to Nomura, the festive sale season kicked off with a bang for Indian eCommerce players, but still is lower in comparison with China and the US.

 

In China, Alibaba during its ‘Singles Day’ on November 11, 2014 sold goods worth $9 billion, while in the US, during Cyber Monday (Monday after Thanksgiving) and Black Friday, sales of around $3 billion each were recorded in 2014.

 

In comparison, the quarterly expectations for India’s holiday sales are closer to $4 billion.

 

Typically the festive season (October to December) accounts for about 35-40 per cent of annual sales for the e-commerce firms.

 

According to Technopak, e-commerce in India recorded around $7 billion in annual sales in FY15, and is expected to generate about $10 billion in FY16, leading to sales expectations of around $4 billion for the e-commerce firms this festive season.