Below is a shortlist of all the important articles from newspapers.
RBI may go against convention on raising funds via bonds
The RBI will use the existing 10year bond to raise at least ₹ 14,000 crore from the markets on Friday, says Business Standard.
What it means: It takes the outstanding of the paper to more than ₹ 1.33 trillion, possibly the highest ever amount raised against a security.
This gives credence to the theory that the central bank may not want to issue a fresh set of 10-year paper in a hurry and would rather continue with the existing security.
The central bank is targeting the 10year segment to keep yields at around 6 per cent.
Few takers for offers from airlines to book in advance
Domestic air traffic is growing month-on-month in June but passengers remain wary about booking tickets 30-60 days in advance, reports Business Standard.
What it shows: Advance purchase discount offers launched by airlines in the last week had limited traction.
Daily traffic has doubled from the lows of May.
Small travel agents, too, have resumed operations upon easing of Covid19 restrictions.
But average load factors are still around 55 per cent and most of the bookings are for travel within seven days.
Uncertainties on Covid curbs in various States and hassles in securing refunds for cancelled flights are also possible reasons for customers not booking advance tickets.
A total of 1,32,309 passengers flew in 1,245 flights on Sunday, the highest in June, so far. The number of daily departures also crossed the 1,000mark on June 11 after a gap of over a month, indicating signs of recovery.
Huawei seeks access to ‘trusted’ source portal
Chinese telecom gear giant Huawei Technologies has sought permission for access to the government’s ‘Trusted Telecom Portal’, reports Business Standard.
How it is important: So that it can share details about the telecom products which telecom service providers have agreed to buy from it.
The move is significant as the new National Security Directive on the telecom sector does not in any way prohibit them from participating in the process of selling telecom equipment of any kind to private telcos.
The directive makes it mandatory for providers to get a ´trusted product´ and ´trusted source´ stamp on all new telecom equipment they want to buy from OEMs.
It is aimed primarily to allow for closer scrutiny of Chinese telecom products and ensure that companies like Huawei and ZTE are discouraged from selling any new equipment, especially in 5G.
Govt working on tax breather for overseas investors in alternative investment funds
The government is evaluating ways to bring down high taxes on foreign investors that pool money in alternative investment funds (AIFs) domiciled in India, reports Business Standard.
How it is important: Such investors have had to bear higher taxes on their investment because of the GST borne by such funds, which is passed on to the investors.
In the past there have been requests for remission or reduction in rates for such funds.
Now, the Indian Private Equity and Venture Capital Association (IVCA) has written to the Central Board of Indirect Taxes and Customs, requesting an extension of deemed export status for fund management services rendered to onshore AIFs.
Investment management fees constitute 2 3 per cent of the value of the assets managed in an AIF per year.
The fees, charged to a venture capital/private equity fund located in an offshore jurisdiction, are exempt from GST.
However, India-domiciled AIFs, managed by Indian fund managers, are supposed to pay GST even if they pool the same overseas money.
Tatas plan to raise $2-2.5 billion for e-commerce
Tata Sons is understood to have approached global investors to raise an estimated $2-2.5 billion for its digital business, reports The Economic Times.
How it is important: The group readies for a pilot launch of its super app in Bengaluru in September.
Tata Sons chairman N Chandrasekaran visited US in May and is learnt to have met investors to showcase the group’s foray into ecommerce.
Tata Sons is likely to tap PE funds in the initial stage of fundraising and would look at strategic investors after the business demonstrates a sizable scale-up.
Health and fitness startup Curefit cofounder Mukesh Bansal, who has joined Tata Digital as president after the Mumbai-based conglomerate picked up a stake in his company, is a key member of the fundraising team.
Unlock 2.0 sparks 15% growth in FMCG sales
India’s fast-moving consumer goods market has recovered sharply after several states eased restrictions as the second Covid-19 wave abated, reports The Economic Times.
How it is important: It has helped the market expand 15% in the first two weeks of June from the month earlier.
Sales were also boosted by a 28% increase in the number of kirana outlets that reopened this month, a contrast from the last two months, when the local grocer count fell sharply.
Companies said consumption of daily groceries and essentials in villages is now returning to pre-lockdown levels.
Companies said there is a revival in out-of-home consumption too.
Auto companies ramping up output
India’s passenger vehicle makers are ramping up production to recoup the output lost during the lockdowns since April, reports The Economic Times.
How it is important: The industry expects pent-up demand to reflect in the market in the coming months as was after the lockdown last year.
Maruti Suzuki is scheduled to produce 198,000 units next month. The July production volume of Hyundai Motor pegged at 60,000 vehicles and Tata Motors at 30,000 units, taking the total expected output of the top three automakers alone to close to 300,000 units.
Including the output of other passenger vehicle makers, the industry output could be around 350,000 units next month.
This will be just short of the high of 364,000 units produced in January 2019, when consumers trying to beat a price hike before the transition to BS-VI emission standards had driven up demand.
For the next quarter, industry insiders are projecting India’s passenger vehicle production to top 1 million units, provided there is no third wave of the pandemic.
CPPIB, Tata Realty in talks to form ₹2,000 crore property platform
Canada Pension Plan Investment Board (CPPIB) and Tata Realty and Infrastructure are in advanced talks to set up a commercial property development platform in India with a ₹2,000-crore equity base, The Economic Times says.
How it is important: Their proposed alliance indicates unabated appetite among global institutional investors for office properties in India despite the noise around hybrid and work-from-home models in the backdrop of the ongoing Covid-19 pandemic.
Both companies are expected to infuse ₹1,000 crore equity each.
Both entities will be looking for greenfield assets to beef up the portfolio and brownfield commercial properties across the country to develop them.
While CPPIB’s contribution will be direct investment of ₹1,000 crore, Tata Realty’s investment will be in the form of 49% stake in two of its marquee information technology SEZ parks to be offered to the proposed platform.
The two SEZs are expected to be Intellion Park Chennai, previously known as Ramanujan IT City, and Intellion Park on Golf Course Extension in Gurugram.
Retailers may close shops in NCR malls over ‘delay’ in rental relief
Dozens of retailers including Aditya Birla Fashion, Arvind, Puma, Levi’s, Biba, Global Desi and Lacoste are threatening to shut their shops at malls in the National Capital Region on Thursday and Friday to protest against what they termed delays in getting rental reliefs from the shopping centres, The Economic Times reports.
How it is significant: Retailers have been demanding malls to adopt a pure revenue-share model with no minimum guarantee on rent for a year.
Retailers are bleeding even more in the second wave.
Retailers could take their protest to other cities as well.
Retailers were asking for complete revenue-sharing with sales pegged to 2019 sales.
Their plan is if sales are 100% of the 2019 levels, they will pay 100% rents and if it is 60%, they will pay 60%.
US solar firm plans $300 million investment in India
Bill Gates’ Breakthrough Energy Ventures-backed 1366 Technologies plans to invest $300 million to set up a 2-gigawatt (GW) solar wafer and cell manufacturing facility in India, says Mint.
How it is important: The plan under the government’s production-linked incentive (PLI) scheme, said chief executive and founder Frank van Mierlo.
The US-based firm is in talks for an Indian partner, who will handle the module manufacturing part of the production chain and use the equipment to set up solar parks in India.
We’re seeing steady demand for pure protection policies: N.S. Kannan
ICICI Prudential managing director and CEO N.S. Kannan discusses the impact of Covid-19 pandemic on the company and emerging trends in an interview with Mint.
He says: Despite the rise of claims due to covid-related deaths in the past one year, ICICI Prudential Life Insurance Co. Ltd, one of India’s largest private insurers does not see the underwriting risk going up for the company.
Greenfield FDI may shrink for second straight year in 2021
The value of greenfield foreign direct investment (FDI) into India contracted 19% to $24 billion in 2020 and the second wave of the pandemic may lead to a larger dip in 2021, Mint says citing an UNCTAD report.
How it is important: However, overall FDI inflows into India, including through mergers and acquisitions, increased 27% to $64 billion in 2020.
This is pushed up by acquisitions in the information and communication technology (ICT) industry, making it the fifth-largest recipient in the world.
The second wave of the Covid-19 outbreak in India weighs heavily on the country’s overall economic activities.
The outbreak severely hit main investment destinations such as Maharashtra and Karnataka.