Burnpur Cement to invest Rs 500 crore for capacity expansion

KOLKATA: Cement maker Burnpur Cement plans to invest Rs.500 crore for expansion of its production capacity to 3 million tonnes per annum (mtpa) in the next 3-4 years, a company official said on Wednesday.

“Presently, our installed capacity stands at 0.6 mtpa and we are planning to enhance the capacity to 3 mtpa (million tonne per annum) in the coming 3-4 years,” the company’s vice chairman and managing director Ashok Gutgutia said.

He said the investment for capacity expansion would be around Rs.500 crores which will be spent in the next 3-4 years.

The cement producer has two plants, one in Asansol in West Bengal and the other in Patratu district in Jharkhand. Each plant has 0.3 mtpa installed capacity.

The company also aims to increase its sales revenue to Rs.250 crore in the next year from Rs.100 crore in the last fiscal.

The cement producer plans to build a 2 mtpa greenfield plant in West Bengal.

“For which, we are in a process of procuring 100 acres of land. The location for the greenfield project is not yet finalised, it may be in Bankura or Purulia district,” he said.

The company has already bagged two limestone mines through auction mode.

“In addition, we plan to bag 5-6 limestone mines. We are planning to increase the capacity of our Jharkhand plant to 1 mtpa having raw materials reserve for minimum 50 years,” he said.

Sun Capital

RBI releases ‘Quarterly BSR-1: Outstanding Credit of Scheduled Commercial Banks for December 2015'

The Reserve Bank of India today released the web publication ‘Quarterly BSR-1: Outstanding Credit of Scheduled Commercial Banks (SCBs), December 2015’. Under BSR-1, information on occupation/activity and organisational sector of the borrower, type of account, interest rate, credit limit and amount outstanding are collected for each loan account. Such information is aggregated at the bank group, population group and state level using locational parameters of the reporting bank offices. This web publication contains comprehensive quarterly data on gross bank credit of SCBs (other than RRBs) since December 31, 2014. The data can be accessed at http://dbie.rbi.org.in/DBIE/dbie.rbi?site=publications#!12 through the website: Database on Indian Economy (DBIE) (http://dbie.rbi.org.in). Highlights: Bank credit registered a growth of 9.7 per cent in December 2015 as compared to December 2014 largely due to higher credit growth of private sector banks. In terms of total number of credit accounts, banking sector registered a growth of 12.2 per cent. More than four-fifth of the total credit accounts of the banking sector were concentrated in agriculture and personal loan segment. However, the concentration in terms of outstanding credit in these segments was only 30 per cent. The proportion of credit in terms of amount outstanding to industry was highest at 42 per cent in December 2015. Though large credit accounts (credit limit above ₹ 250 million) registered a y-o-y growth of 3.1 per cent in December 2015, their share in total amount outstanding declined marginally to 46.5 per cent from 47.8 per cent registered in December 2014. The weighted average lending rate (WALR) of all rupee loans and advances was estimated as 11.39 per cent in December 2015 as compared to 11.59 per cent in September 2015. The reduction in WALR was observed in all sectors. Sangeeta Das Director Press Release : 2015-2016/2572

Tallest govt building: A 61-storey headquarter for Surat civic body on the cards

SMC officials said that they are checking the feasibility for this project on the 22,000 sq m land on the Ring Road where old sub-jail once stood

SURAT: The Chinese dragon has set tongues wagging in the Diamond City by proposing that it could help build a towering 61-storey headquarters for the Surat Municipal Corporation (SMC).

If the project, which sounds like a fanciful hope for now, is executed this could be the tallest government building in India. SMC has been operating from the historical Mughal Sarai building that was built way back in 1644 during the reign of Shahjahan.

The Chinese delegation comprising government firms that are into construction business had visited Surat last year and claimed that they could construct this fully environment-friendly skyscraper in very short time using pre-fabricated technology.

SMC officials said that they are checking the feasibility for this project on the 22,000 sq m land on the Ring Road where old sub-jail once stood. At least 13 consultants have been asked to prepare designs and submit them to SMC authorities for selection and approval.

Milind Torwane, municipal commissioner, said, "We are awaiting a feasibility report on building a multi-storeyed structure on the chunk of land with us. The mega project of SMC headquarters will take shape through public-private partnership (PPP)."

Standing committee chairman Rajesh Desai said, "We have to take a policy decision on linking the local body's administrative office with commercial establishments. It has not been seen anywhere else." He added, "We will have to shift the site if the 61-storey structure can't be built on the sub-jail land. We will soon take a decision on it."

Sources said that the concept of skyscraper for SMC headquarters was suggested by the Prime Minister's Office following which the Chinese team visited Surat.

Manoj Gandhi, India head of Anuj Infra Tech, which is an associate partner of seven companies of government of China, said, "Prefabrication construction technology means things are prepared in a factory and later assembled at the site.

Sun Capital

Alibaba sales surge as Chinese consumers defy economic gloom

Alibaba is capitalizing on the liquidity of households and expanding into rural areas, helping limit the impact of China growing at the slowest pace in 25 years

Hong Kong: Alibaba Group Holding Ltd. posted a 39% surge in revenue as China’s dominant e-commerce operator shrugged off a slowing economy with promotions to woo cash-rich consumers.

Asia’s largest Internet company posted better-than-expected sales of 24.2 billion yuan ($3.7 billion) in the March quarter and said it will start providing annual forecasts. Its shares rose 5.3% in pre-market trading.

Alibaba, often regarded as a proxy for Chinese consumer spending, is capitalizing on the liquidity of households and expanding into rural areas, helping limit the impact of an economy growing at the slowest pace in 25 years. The company’s platforms, which link buyers and sellers, hit a 3 trillion-yuan milestone of goods sold during the period and the online emporium made more from mobile advertising and expanded overseas.

“Alibaba is still growing very nicely and sustaining very high margins in the face of the concerns about Chinese consumers and the face of competition,” said Gil Luria, an analyst with Wedbush Securities Inc. “It’s good results for Alibaba and it seems like their business is holding up.”

Spending weighs

Net income rose 855 to 5.3 billion yuan, just shy of the 5.4 billion-yuan average of estimates. Affiliate Zhejiang Ant Small & Micro Financial Services Group, which owns Alipay, incurred a net loss after spending to drive user growth. Adjusted earnings-per-share were 3.02 yuan, trailing analysts’ projections for 3.52 yuan.

The marketing push helped spur a 21% jump in active users to 423 million. That in turn underpinned a 41% jump in revenue on Alibaba’s Chinese retail e-commerce platforms. Mobile shopping on local retail sites almost tripled and now accounts for 63% of sales.

Vice chairman Joseph Tsai highlighted the $4.6 trillion of net cash reserves held by Chinese households as a key driver of ongoing spending and growth at Alibaba. After free cash flow reached $8 billion last year, he has pledged to keep investing to pursue growth—despite the potential drag on the bottom line.

“Going forward we are prepared to continue investing in high-potential businesses that are highly strategic to Alibaba, from digital entertainment to local services to international expansion,” Tsai said on Alibaba’s blog Thursday. “These businesses contribute to losses in our current income statement.”

New businesses

Alibaba expects last month’s $1 billion deal for control of Lazada Group SA, which gives it access to six Southeast Asian markets, will help Chinese merchants expand sales in the region.

“Lazada is a very important acquisition, Lazada has a very great brand recognition,” chief executive officer Daniel Zhang said. “This is a good vehicle for us to expand to this area.”

Alibaba has also expanded into on-demand services and entertainment, areas that have shown promise but aren’t expected to yield much profit for now. Its cloud computing business almost tripled revenue to more than 1 billion yuan in the quarter, has more than half a million paying customers and is close to breaking even.

Rural push

The company has also pulled out the stops to get its platforms in front of villagers, setting up free Internet-equipped computers and working with local officials to train potential buyers and sellers. It had a presence in 14,000 villages across the country by the end of March, out of about 600,000. That effort to diversify comes as Alibaba is trying to tap more of the 620 million Chinese who access the Internet from their smartphones and tablets.

“Advertisers are finding efficacy on the Alibaba platforms and they’re putting more money in, that’s a big driver,” said Rob Sanderson, an analyst at MKM Partners LLC. “If you’re an investor that wants them to harvest the assets for near term cash generation, then you should find a different stock, because that’s not what this is.”

Tsai said the company isn’t involved in shareholder Yahoo! Inc.’s potential sale of its core business.

“If they sell the core business, then they’ll continue to be a company that would continue to be a 15% shareholder in our company so nothing will change,” he said.

Lok Sabha clears Finance bill: India will grow faster if monsoon forecasts hold true, says Arun Jaitley

The passage of the Finance Bill will allow formation of the six-member monetary policy committee, which will include the RBI Governor and three government nominees. 

After two consecutive years of drought, finance minister Arun Jaitley said, India can grow faster if forecasts of a better monsoon hold true as that will improve agriculture and raise rural income.

While replying to a debate on the Finance Bill in Parliament, Jaitley said: “Economy, which had been expanding on strength of public investment, highest foreign direct investment (FDI) and urban demand, can grow faster if rural demand is added.”

Even though global economic outlook remains bleak, India remains the fastest growing major economy and has the potential to grow at “an even faster pace”, he added. Indian economy grew by 7.6 per cent in 2015-16 and is projected to grow by 7.5 per cent in the current year. Latest forecasts predict above-average rainfall in India after two years of drought.

After the reply, the House passed the Finance Bill that marks the culmination of the three-stage budgetary process in the Lok Sabha. The Bill will now go to Rajya Sabha.

Jaitley also ruled out rollback of 1 per cent excise on non-silver jewellery saying the levy was not applicable on small traders and artisans and only jewellers with more than Rs 12 crore turnover last year and Rs 6 crore for this year will attract the duty.

“I have not been able to understand the politics of hatred for ‘suit’ but love for gold,” he said, adding that if the Congress has objections to the levy, it can begin by removing the 5 per cent VAT on bullion in Kerala where it is the ruling party.

Jaitley also introduced amendments to the Finance Bill, 2016, for capital gains clarifying that the long-term capital gain period in case of unlisted securities has been reduced to 24 months from 36 months.

Separately, the Central Board of Direct Taxes, in a recent order to field formations, said that income arising from transfer of unlisted shares, irrespective of period of holding, would be taxable under the head capital gain. This has been done to reduce disputes and litigation as the assessing officer could earlier treat these gains as business income.

On black money, he said efforts of government have brought Rs 71,000 crore of undisclosed assets to the books. He, however, ruled out bringing agriculture income under the tax net, saying large farm-based income was rare and people using agriculture as front to hide income from other sources would be dealt with tax authorities.

Jaitley said tax notices have been sent to all the names of those holding offshore accounts that have been disclosed in the Panama papers and action will be taken against those illegally parking money abroad.

Highlighting the problem of non-performing assets (NPAs) of banks, Jaitley said, “NPA issue with banks is an issue of concern. Some loans may have been given wrongly. I am not going into who is responsible for it. But weakened business cycle due to global economy has also impacted bank balance sheets.” He added, “Hiding NPA will not resolve the problem. It should be reflected in balance sheet and addressed via capitalisation.” Jaitley said the government has drafted the amendments to the RBI Act, which will pave the way for creation of monetary policy committee, as was announced in the Budget.

The passage of the Finance Bill will allow formation of the six-member monetary policy committee, which will include the RBI Governor and three government nominees.

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RBI releases “Draft Guidelines for ‘on tap’ Licensing of Universal Banks in the Private Sector”

The Reserve Bank of India today released on its website, “Draft Guidelines for ‘on tap’ Licensing of Universal Banks in the Private Sector”.  It has sought views/comments on the draft guidelines from banks, non-banking financial institutions, industrial houses, other institutions and the public at large. Suggestions and comments on the draft guidelines may be sent by June 30, 2016 to the Chief General Manager, Reserve Bank of India, Department of Banking Regulation, Central Office, 13h floor, Central Office Building, Shahid Bhagat Singh Marg, Mumbai-400001. Suggestions/comments can also be emailed by clicking here.

Final guidelines will be issued and the process of inviting applications for setting up of new universal banks in the private sector will be initiated after receiving feedback, comments and suggestions on draft guidelines.

In a departure from the earlier guidelines on universal banks dated February 22, 2013, the present guidelines include (i) resident individuals and professionals having 10 years of experience in banking and finance as eligible persons to promote universal banks; (ii) large industrial/business houses are excluded as eligible entities but permitted to invest in the banks to the extent of less than 10 per cent; (iii) Non-Operative Financial Holding Company (NOFHC) has now been made non-mandatory in case of promoters being individuals or standalone promoting/converting entities who/which do not have other group entities; (iv) The NOFHC is now required to be owned by the promoter/promoter group to the extent of at least 51 per cent of the total paid-up equity capital of the NOFHC, instead being wholly owned by the promoter group; and (v) Existing specialised activities have been permitted to be continued from a separate entity proposed to be held under the NOFHC subject to prior approval from the Reserve Bank and subject to it being ensured that similar activities are not conducted through the bank as well.

Key features of the guidelines:

(I) Eligible Promoters

1. Existing non-banking financial companies (NBFCs) that are ‘controlled by residents’ and have a successful track record for at least 10 years.
2. Individuals / professionals who are ‘residents’ and have 10 years of experience in banking and finance.
3. Entities / groups in the private sector that are ‘owned and controlled by residents’ [as defined in FEMA Regulations, as amended from time to time] and have a successful track record for at least 10 years, provided that if such entity / group has total assets of ₹50 billion or more, the non-financial business of the group does not account for 40 per cent or more in terms of total assets / in terms of gross income.

(II) ‘Fit and Proper’ criteria

Promoter/promoting entity/promoter group should have a past record of sound financials, credentials, integrity and have a minimum 10 years of successful track record.

(III) Corporate structure

The requirement of Non-Operative Financial Holding Company (NOFHC) is not mandatory for individual promoters or standalone promoting/converting entities who/which do not have other group entities. Individual promoters/promoting entities/converting entities that have other group entities, shall set up the bank only through an NOFHC. The NOFHC shall be owned by the promoter/promoter group to the extent of not less than 51 per cent of the total paid-up equity capital of the NOFHC. Specialised activities would be permitted to be conducted from a separate entity proposed to be held under the NOFHC subject to prior approval from the Reserve Bank and subject to being ensured that similar activities are not conducted through the bank.

(IV) Minimum capital requirement

The initial minimum paid-up voting equity capital for a bank shall be ₹5 billion. Thereafter, the bank shall have a minimum net worth of ₹5 billion at all times.

The promoter/s and the promoter group/NOFHC, as the case may be, shall hold a minimum of 40 per cent of the paid-up voting equity capital of the bank which shall be locked-in for a period of five years from the date of commencement of business of the bank. The promoter group shareholding shall be brought down to 15 per cent within a period of 12 years from the date of commencement of business of the bank.

(V) Foreign shareholding in the bank

The foreign shareholding in the bank would be as per the existing foreign direct investment (FDI) policy subject to the minimum promoter shareholding requirement indicated in paragraph (IV) above. At present, the aggregate foreign investment limit is 74 per cent.

(VI) Corporate governance prudential and exposure norms

The bank shall comply with the provisions of Banking Regulations Act, 1949 and the existing guidelines on prudential norms as applicable to scheduled commercial banks. The bank is precluded from having any exposure to its promoters, major shareholders who have shareholding to the extent of 10 per cent or more of paid-up equity shares in the bank, the relatives of the promoters as also the entities in which they have significant influence or control.

(VII) Business plan for the bank

The business plan submitted by the applicant should be realistic and viable and address how the bank proposes to achieve financial inclusion.

(VIII) Other conditions

The bank shall get its shares listed on the stock exchanges within six years of the commencement of business by the bank.

The bank shall open at least 25 per cent of its branches in unbanked rural centres (population up to 9,999 as per the latest census). The bank shall comply with the priority sector lending targets and sub-targets as applicable to the existing domestic scheduled commercial banks. The board of the bank should have a majority of independent directors.

(IX) Procedure for application

• The licensing window will be open on-tap, and the applications in the prescribed form along with requisite information could be submitted to the Reserve Bank at any point of time.
• The applications will be referred to a Standing External Advisory Committee (SEAC) to be set up by the Reserve Bank.
• The Committee will submit its recommendations to the Reserve Bank for consideration.
• The decision to issue an in-principle approval for setting up of a bank will be taken by the Reserve Bank.
• The validity of the in-principle approval issued by the Reserve Bank will be 18 months from the date of granting in-principle approval and would thereafter lapse automatically.
• The Reserve Bank’s decision in this regard will be final.
• In order to ensure transparency, the names of the applicants for bank licences and the names of applicants that are found suitable for grant of in-principle approval will be placed on the Reserve Bank’s website periodically.

Background

It may be recalled that the Reserve Bank of India (RBI) had last issued guidelines for licensing of new banks in the private sector on February 22, 2013. Consequently, the Reserve Bank issued in-principle approval to two applicants and they have since established the banks.

Recognising the need for having an explicit policy on banking structure in India in line with the recommendations of the Narasimham Committee, Raghuram G. Rajan Committee and other viewpoints, the Reserve Bank came out with a policy discussion paper on Banking Structure in India – The Way Forward on August 27, 2013. After a thorough examination of the pros and cons, the discussion paper made out a case for reviewing the current ‘Stop and Go’ licensing policy and for considering a ‘continuous authorisation’ policy on the grounds that such a policy would increase the level of competition and bring new ideas into the system. The feedback on the discussion paper broadly endorsed the proposal of continuous authorisation with adequate safeguards. The first Bi-monthly Monetary Policy Statement 2014-15 announced on April 1, 2014, among other things, then indicated that after issuing in-­principle approval for new licences, the Reserve Bank will start working on the framework for on-tap licensing as well as differentiated bank licences, Building on the Discussion Paper and using the learning from the recent licensing process, such as, the experience of licensing two universal banks in 2014 and granting in-principle approvals for Small Finance Banks and Payments Banks, the Reserve Bank has now worked out the framework for granting licences to universal banks on a continuous basis.

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HDFC Ltd to raise Rs 1,135 cr via debentures

Issue of the NCDs to be on a private placement basis will open for a day on May 6

HDFC Ltd today said it will raise Rs 1,135 crore by issuing debentures this week to meet funding requirements.

"The object of the issue is to augment the long term resources of the Corporation. The proceeds of the present issue would be utilized for financing/refinancing the housing finance business requirements of the Corporation", it said in a regulatory filing.

The issue of the non-convertible debentures (NCDs) to be on a private placement basis will open for a day on May 6.

The NCDs carry coupon rate of 8.34%. ICICI Bank and SBI Capital Markets are the arrangers to the issue. Shares of the mortgage lender closed 2.86 per cent higher at Rs 1,131 a piece on BSE.