JBM group to bet on Electric Vehicles business to boost revenues, says Nishant Arya, Executive Director
There is no doubt about the JBM group being a significant player in the auto components sector with a turnover of Rs 10,000 crore. Like most in the auto sector, the group is also interested in evolving areas like green energy and transportation through electric vehicles (EV). The EV business of the group runs under the name JBM-Solaris (a joint venture). Nishant Arya, Executive Director of the group, shares his thoughts with The Free Press Journal’s Pankaj Joshi on the EV space and why it is set to grow at a rapid pace.
It is estimated that EV could see the kind of strong growth that solar power witnessed in the last five years. What is the reason for this optimism?
We really believe that EV could see a similar growth pattern as solar power in India or even bigger. Solar is a source of green energy, where there are other options like bio-fuels or wind. EV today represents a breakthrough in transportation, which represents a significant part of the GDP and also is a status symbol. Both factors signify growth.
Automobile technology today can be broken into well to tank (fuel technology) and tank to wheel (car technology). EV represents the latter. As the charging concept get acceptance, the efficiency levels will only rise, because we will need the well-to-tank technology to be greener too. Today the regulatory environment is also getting friendlier. Recently the sale of electricity for EVs has been taken out of the purview of the energy market constraints. EV manufacturing also dovetails into the Make-in-India and Skill India initiatives.
For the user, apart from environmental factors, important considerations would be safety, comfort and most of all, the operating cost. Now an EV has 18 moving parts against 1,800 in a conventional vehicle, so you can gauge the maintenance cost difference. Other benefits would become apparent over the life cycle, but till then some kind of regulatory mandate is needed to push the concept, as has been seen in many countries.
What kind of regulatory moves do you anticipate and how will industry players need to respond?
For instance in Delhi, there was a decision taken 20 years ago that all public transport vehicles and commercial vehicles would shift to CNG. We will have similar mandated moves towards EV. JBM-Solaris today is in talks with state transport bodies, municipalities, even smart cities for catering to their requirements through EV solutions.
India sees around 70,000 new buses each year where 50 per cent ply intra-city and 50 per cent between cities. I believe that the intra-city segment should move entirely to EV over the next five years and inter-city would follow later.
Regarding the industry players, they will need to understand that this disruption is both a challenge and an opportunity. The challenges are the changes needed in product portfolio, the periodic evaluation and absorption of technology and lastly the workforce requirement modifications. The evolution coming up is massive. Today EV is a choice and tomorrow it will be a need. Companies must understand that huge demand is on the way and must get ready to service it.
Is there a threat that the equipment/ component market would be captured by overseas players?
There have been reports that companies are resorting to aggressive bidding in order to capture the initial orders and wipe out the competitors. Recent tenders have also shown that products from neighbouring countries are being preferred because of low price. Such intense market grabbing can prove to be a deterrent to the whole ecosystem, also going against government’s Make-in-India initiative by creating more employment opportunities for these neighbouring countries. One should look at the reasons and sustainability for these low prices to ensure that the EV market matures in a desired fashion with room for all players. That said, the pattern of costs coming down drastically on rising volumes, which was seen in the solar power industry, will play out here again and will benefit the industry and consumers.Independent players will face more difficulties but some level of technology independence is necessary, at least in the design department.
This independence is needed if indigenisation has to be successful and local players are to capture any significant market share. A transition period is coming up, which may be unpleasant but is unavoidable if we are to contribute to society.
Do you think ecosystem is formed?
India is promisingly advancing towards graduating to a non-fossil fuel-based public transportation ecosystem. This is in line with the vision that we are aiming for innovation in the EV space. Our first offering is our electric bus, named Eco-Life. This vehicle has been developed in partnership with renowned European bus manufacturer Solaris Bus & Coach, which has a track record in transportation technology across 30 nations.
When we talk of EV, we talk of an ecosystem including battery technology, vehicle technology, charging technology as well as the operating patterns. We aim to be a one-stop solution provider in the EV segment by providing a complete ecosystem solution for e-mobility i.e. electric bus, key aggregates like battery, charging infrastructure and a well-structured operating pattern. The EV business shall contribute substantially to group revenues in the next three-four years.
We have planned an investment of Rs 300 crore in the EV business over the next three years. This includes beyond development and manufacturing of EVs, areas like engineering, design & development, supply chain development for the electric mobility project.
We are offering two charging solutions for Eco-Life. The first one is the regular plug-in charging system wherein energy can be supplied through external chargers. The other is an over-head pantograph for opportunity charging. India reportedly has only 350 charging points at present compared to 2,15,000 installed in China at the end of 2016, as per a recent report by Bloomberg New Energy Finance. Till the current regulations on sale of power are modified, charging stations cannot be currently built in petrol pumps or parking lots. However, as discussed, changes are underway.
Today, for the common man, an electric vehicle is more expensive than any vehicle with an internal combustion engine, but that is because he looks at the front-end investment only. Our analysis of the life-cycle cost benefits suggests that both will be even at five-six years and, from thereon, all benefits accrue to the vehicle buyer, both in operation and maintenance costs. This means EV is an optimum long-term usage solution and institutional customers will be the first to appreciate this.
Lenders told to prepare road map to fix NPA woes
Parliament panel enquires about ‘nepotism’ in ICICI Bank-Videocon deal
New Delhi : A parliamentary panel on Monday asked the Indian Banks’ Association (IBA) to prepare a road map for addressing the issue of mounting bad loans and also posed queries on the alleged “nepotism” by ICICI MD and CEO Chanda Kochhar in a loan to Videocon Group.
During a meeting between the bankers and the Parliamentary Standing Committee on Finance, headed by Lok Sabha MP Verappa Moily, it was emphasised that corporates should not be painted with a same brush as all are not wilful defaulters, said sources.
Non-performing assets (NPAs) touched Rs 8.31 lakh crore at end-December 2017.
Among others, IBA Deputy Chairman and SBI chief Rajnish Kumar and PNB MD Sunil Mehta briefed the panel on various aspects of non-performing assets (NPAs) and banking frauds.
Senior advisor of IBA Alok Gautam was also present in the meeting, sources added.
RBI Governor Urjit Patel too will brief the committee later this month.
Sources said that some of the members had questions on allegations against Kochhar. One of the member wanted to know if “nepotism” was also going on in private sector banks.
Sources further said TMC MP and member of the panel Dinesh Trivedi wondered why pubic money was being used to recapitalise the state-owned banks which are losing money due to frauds and defaults by corporates.
Some members quizzed the bank officials whether “aggressive lending” during the successive UPA governments was the reason for the mounting NPAs in the banking system, especially in state-owned lenders.
Gross NPAs of state-owned banks had crossed Rs 7.77 lakh crore at the end of December 2017, according to official data.
BJP MP Nishikant Dubey said Indian banks need not adhere to international capital adequacy norms (Basel-III) as it is leading to more provisioning of capital, sources said. The committee was earlier briefed by Financial Services Secretary Rajiv Kumar about issues related to the banking sector.
Former Prime Minister Manmohan Singh also attended the meeting.
Sources said the issue of merger of banks also came up at the meeting with some members suggesting the need to be extra careful as it involved “different cultures” besides “chemistry”.
They said the proposal of merger of different banks was not the same as merger of associates of State Bank of India.
Sources said the PNB chief was asked about the multi-crore fraud involving jeweller Nirav Modi.
The sources said that bank officials told the members that scams were being dealt with separately and did not represent a systems failure.
Fitch lowers PNB viability rating on weak credit profile
New Delhi: Fitch Ratings on Monday lowered viability rating of fraud-hit Punjab National Bank, citing significant deterioration in its credit profile and oversight gaps. The viability rating (VR) has been downgraded to ‘b’ from ‘bb-‘ and maintained on ‘rating watch negative’ (RWN).
“The two-notch downgrade to PNB’s VR is a reflection of the significant deterioration in its standalone credit profile, mainly due to a drop in its core capital ratio that was bigger than Fitch’s expectation,” the global rating agency said. VRs represent the capacity of the bank to maintain ongoing operations and to avoid failure. The deterioration in its core capitalisation was caused by a sharp increase in its non-performing loans (NPLs), including the $2.2 billion in fraudulent transactions reported in February 2018, and the related increase in credit costs, which resulted in large losses in the financial year ended March 2018 (FY18).
Banking majors hike MCLR rate for one-year loan, making loans costlier for consumers
New Delhi: Days ahead of RBI’s monetary policy review, India’s three major banks SBI, PNB and ICICI Bank on Friday increased their benchmark lending rates or MCLR by up to 0.1 per cent, making loans costlier for consumers. The new rates are effective from Friday.
India’s largest lender SBI has increased the lending rate by 10 basis points across all tenors up to three years. Now SBI’s overnight and one-month tenors’ Marginal Cost of Funds Based Lending Rate (MCLR) stands at 7.9 per cent as against 7.8 per cent, as per the SBI’s website. The MCLR for a three-year tenor increased to 8.45 per cent from 8.35 per cent earlier.
The state-owned Punjab National (PNB), the country’s second largest lender, raised the MCLR for three-year and five-year tenors to 8.55 per cent and 8.7 per cent, respectively. Country’s second largest private bank ICICI Bank too said it has raised five-year tenor MCLR by 10 bps to 8.70 per cent. It has also raised the MCLR by 10 bps in loans with tenor of one year and three years.
However, lending rate remains unchanged in case of loans up to three months. PNB has also increased the base rate to 9.25 per cent from the earlier 9.15 per cent. Private sector bank ICICI Bank too has raised one-year MCLR by 10 bps to 8.40 per cent from Friday. Other banks, sources said, were also likely to follow suit.
Most of home and auto loans are linked to MCLR. Meanwhile, mortage lender HDFC said that it has increased its retail prime lending rate (RPLR), on which its adjustable rate home loans (ARHL) are benchmarked, by 10 basis points, effective tomorrow. Karnataka Bank has raised its interest rates on deposits. Interest on domestic and NRE rupee term deposits for a period of one year to two years stands revised to 7.25 per cent from 7.10 (for deposits up to Rs 10 crore) representing a hike of 15 basis points, it said in a regulatory filing. The revised rates are effective from yesterday, it added.
Telangana government, NASSCOM ink pact for cyber security centre
Hyderabad: Telangana government today announced its partnership with Data Security Council of India (DSCI), an initiative of Nasscom, to set up a cyber security centre of excellence here. A press release from the National Association of Software and Services Companies said the aim is to accelerate the momentum of cyber security and make the state one of the leading cyber security hubs in the country over the next five years.
The centre of excellence, based on a public-private partnership model, would strengthen the eco system by focusing on strategic areas including, innovation, entrepreneurship and capability building, the release said.
RBI’s monetary policy committee to hold 3-day meeting in June
Mumbai: In a first, the Reserve Bank of India (RBI) announced that its monetary policy committee (MPC) will hold a three-day meeting in June, as opposed to the usual two-day schedule.
In a statement, the RBI stated that the meeting would be held from June 4 to 6, instead of the scheduled dates of June 5 and 6. “Owing to certain administrative exigencies, the Second Bi-monthly Monetary Policy meeting for 2018-19 will now be held on June 4-6, 2018 instead of on June 5-6. There is no change in the dates of all other MPC meetings for the year 2018-19,” the statement read.
For those unversed, the RBI’s six-member committee has been entrusted with the task of setting the benchmark interest rate after an amendment was passed through the Finance Act, 2016. Prior to the establishment of the MPC, the RBI Governor was responsible for setting the interest rate.
In the previous Bi-Monthly Monetary Policy statement announced in April, the MPC had kept the repo rate and reverse repo rate unchanged at 6 percent and 5.75 percent respectively. The Committee also projected real Gross Domestic Product (GDP) growth of 7.4 percent in FY19, as against 6.6 percent in FY18. On a related note, the second Bi-monthly Monetary Policy statement of this fiscal will be announced on June 6.
CBI books former PEC CMD, other officials for cheating
New Delhi: The CBI has booked ex- chairman cum managing director of PEC, A K Mirchandani, and its several serving and former officials, along with two private companies, for allegedly cheating the PSU under the Commerce Ministry to the tune of Rs 531 crore, officials said today.
The agency has booked Pisces Exim (I) Pvt Ltd and Jet Link Infotech Pvt Ltd, their officials along with officials of PEC on charges including criminal conspiracy and corruption, they said.
PEC had entered into 15 agreements between 2010-12 with Pisces Exim Ltd for export of iron ore to a foreign buyer for which funds were released by it, they said.
In its complaint, PEC has claimed that Pisces Exim allegedly defaulted on its agreement, they said.
Not only it failed to supply iron ore, as required, but also failed to refund the amount paid to it by PEC, they said.
“Presently, a sum of Rs 531.72 crore (including the interest up to September 30, 2016) is due and payable to PEC along with interest till realisation. Importantly, the said monies due are public money,” the PEC has alleged in its complaint, now a part of the FIR.
The agency has booked 15 persons and companies in this connection.
SEBI bans Cypress Money, partners from markets, orders refund
New Delhi: SEBI has barred Cypress Money Investment Adviser and its partners from the securities market for at least three years and asked them to refund the fees collected from clients in respect of the unregistered investment advisory as well as research analyst services.
A Sebi probe found that Cypress Money was providing investment advisory services and was also offering stock recommendations and technical and fundamental calls in form of research analyst services in exchange of consideration from October 2015 to June 2017.
It has provided services to 90 clients and collected a total of Rs 14.7 lakh as fees from these clients.
However, Cypress Money and its partners were acting as investment advisors and research analyst without securing registration from the regulator.
By indulging in such activities, they have violated the regulator’s investment advisors as well as research analyst services norms.
In its order dated May 3, Sebi has asked Cypress Money and its partners — Anubhav Kandpal, Saumya Kala and Suman Kala — to refund the money received from its clients as fees, issue public notices with modalities of the refund.
They have been asked to submit a certificate from a chartered accountant after the repayments within three months, failing which Sebi would initiate recovery proceedings against him.
Sebi also barred them from all direct or indirect dealings in securities market till three years from the date of refund, while partners have also been restrained for at least three years from associating with any listed company or any company intending to raise money from public.
The regulator further prohibited the company and its partners from undertaking any investment advisory services, research analyst services or any other activity in the securities market without obtaining registration from Sebi.
Sensex tanks 188 points to end below 35k-mark
Mumbai: The BSE Sensex tumbled over 188 points today to close at a one-week low of 34,915.38, extending its slide for the second straight session due to selling in auto, healthcare, metal and FMCG stocks.
Unabated foreign fund outflows, disappointing earnings and a weak rupee added to the gloom.
Global cues too were weak as investors eyed the outcome of US-China trade talks as well as the US jobs report.
The BSE 30-share barometer opened higher at 35,144.96 and advanced to 35,206.55 in morning trade on value-buying in recently battered stocks.
However, across-the-board profit booking at every rise pulled it down to a low of 34,847.61.
It finally finished at 34,915.38, down 187.76 points or 0.53 per cent. This is its weakest closing since April 26, when it had settled at 34,713.60.
The gauge lost 73.28 points in the previous session.
The wider NSE Nifty too fell by 61.40 points or 0.57 per cent to end at 10,618.25. It shuttled between 10,700.45 and 10,601.60 during the session.
On a weekly basis, the Sensex recorded its first drop in six, losing 54.32 points, or 0.16 per cent, while the Nifty lost 74.05 points, or 0.69 per cent.
Meanwhile, foreign institutional investors (FIIs) net sold shares worth Rs 148.42 crore and domestic institutional investors (DIIs) sold shares worth Rs 578.92 crore in yesterday’s trade, provisional data showed.
GST Council meet: Council defers decision on sugar cess, refers digital payments incentive issue to GoM
New Delhi: The all-powerful GST Council today deferred a decision on levying a cess on sugar and referred the issue of incentivising digital payments to a group of state finance ministers.
The panel, the highest decision-making body of the Goods and Services Tax (GST) regime, in its 27th meeting agreed to a proposal to convert the GST Network — the company that provides IT backbone to the new indirect tax regime — into a government-owned entity.
Announcing the decisions taken today, Finance Minister Arun Jaitley, who chaired the meeting conducted through a video conferencing, said a roadmap for introduction of simplified return filing has been decided. A single monthly return filing system would come into force in six months, Finance Secretary Hasmukh Adhia said.
Jaitley said while most states were in favour of giving a 2 percent incentive if all payments are paid digitally or through cheques, some wanted a small negative list and so the issue will be referred to a five-member group of state finance ministers.
Another group of ministers (GoM) would look at the issue of levy of cess on sugar beyond the GST tax rates. West Bengal Finance Minister Amit Mitra said some states were not in favour of such a levy.
Jaitley said the GST Network or GSTN currently is 24.5 percent owned by the central government and a similar percentage is held by state governments collectively. The remaining 51 percent is with five private financial institutions — HDFC Ltd, HDFC Bank Ltd, ICICI Bank Ltd, NSE Strategic Investment Co and LIC Housing Finance Ltd.
The council agreed to a proposal of buying out the stake of private entities to make GSTN a government-owned entity, he said adding the central government will own 50 percent and the remaining would be collectively held by state governments.
North Korea: Kim Jong-Un condoles death of bus accident victims
Beijing [China]: North Korean leader Kim Jong-Un visited the Chinese embassy at Pyongyang to express his condolences for the people killed in a bus accident at North Korea on Monday.
32 Chinese tourists were killed and two injured after a bus traveling from Kaesong to Pyongyang fell from a bridge in North Korea, as reported by CNN. Further four North Korean citizens were also killed in the accident. A team of rescue vehicles and doctors were rushed to the location to bring the situation under control. Kim Jong-Un also met the injured at the hospital and sympathised with the families of the deceased.
Chinese President Xi Jinping assured of all the possible efforts to be taken to save the lives of two Chinese tourists who were injured in the accident. China’s state-run news agency Xinhua said President Xi asked the Chinese Ministry of Foreign Affairs and the embassy in the Democratic People’s Republic of Korea on Monday to use “all necessary means.” Earlier on Monday China’s embassy official in North Korea also visited the location to take stock of the situation.