Sensex, Nifty trade positive amid cautious trade


Sensex, Nifty trade positive amid cautious trade

Gainers on the Sensex were led by Sun Pharma, rising 2.49 per cent, followed by ONGC, Bharti Airtel, IndusInd Bank, HUL, ITC, NTPC AND ICICI Bank.

Domestic markets traded higher during the intraday-day trade on Monday, tracking gains in index majors Sun Pharma, ONGC, Bharti Airtel and HUL amid persistent foreign fund inflow.

After hitting record intra-day high of 45,291.56, the S&P BSE Sensex 104.47 points or 0.23 per cent higher at 45,184.02 levels while the broader NSE Nifty rose 124.65 points or 0.95 per cent up at 13,258.55. Nifty touched its intra-day peak of 13,280.05 in early trade.

Gainers on the Sensex were led by Sun Pharma, rising 2.49 per cent, followed by ONGC, Bharti Airtel, IndusInd Bank, HUL, ITC, NTPC AND ICICI Bank.

On the other hand, HDFC Bank, Kotak Mahindra, Nestle, Bajaj Auto, Titan, M&M, TCS and Bajaj Finserv were among the laggards.

In the previous session, Sensex ended 446.90 points or 1 per cent higher at 45,079.55, while Nifty finished 124.65 points or 0.95 per cent higher at 13,258.55 — its record closing high.

Foreign portfolio investors (FPIs) were net buyers in the capital market as they purchased shares worth Rs 2,969.59 crore on a net basis on Friday, according to provisional exchange data.

The Reserve Bank’s commitment to ensure a broad-based growth by maintaining a dovish tone continued to bode well for equities, said Binod Modi Head-Strategy at Reliance Securities.

Further, positive progress on COVID-19 vaccination and increased visibility of fiscal stimulus in the US may continue to attract FPIs into emerging markets including India, he added.

Elsewhere in Asia, bourses in Shanghai, Hong Kong, Seoul and Tokyo were trading in the red in mid-session deals.

Meanwhile, the global oil benchmark Brent crude futures were trading 0.41 per cent lower at USD 49.05 per barrel.




Punish Amazon with Rs 1.44 lakh crore penalty: CAIT to ED


Punish Amazon with Rs 1.44 lakh crore penalty: CAIT to ED

CAIT alleged that Amazon, through Amazon Seller Services Private Ltd (‘Amazon India’) and other wholly owned subsidiaries and benamis, have been carrying on multi brand retail trading (inventory-based model of e-commerce) in the garb of marketplace-based model of e-commerce in complete violation of FDI Policy, Press Notes and FEMA Act, Rules and Regulations.

The Confederation of All India Traders (CAIT) has asked the Enforcement Directorate to immediately punish Amazon for the brazen violations of FEMA Act, Rules and Regulations by imposing maximum penalty of 3 times the value of the illegal investments of Rs 48,500 crore – a penalty of Rs 1.44 lakh crore.

In a letter to Sushil Kumar, Special Director, Enforcement Directorate, CAIT alleged that Amazon’s investments in India are in violation of the provisions of Foreign Exchange Management Act, 1999 (‘FEMA Act’) and the Rules and Regulations.

“Amazon.com Inc. (‘Amazon’) is one of the world’s biggest global corporations, having unbridled access to financial and information resources. Amazon has been operating in India since 2012. Amazon, in every one of its investments and businesses in India, has been brazenly and flagrantly violating the laws, rules and regulations of this Country causing untold misery to crores of small traders (by resorting to predatory pricing ) who are sought to be protected by the FDI Policy and the FEMA Rules and Regulations,” CAIT said.

CAIT alleged that Amazon, through Amazon Seller Services Private Ltd (‘Amazon India’) and other wholly owned subsidiaries and benamis, have been carrying on multi brand retail trading (inventory-based model of e-commerce) in the garb of marketplace-based model of e-commerce in complete violation of FDI Policy, Press Notes and FEMA Act, Rules and Regulations.

CAIT said Amazon has apparently invested under the automatic route in Future Coupons Private Ltd (FCPL), a promoter company of Future Retail Ltd (FRL), a listed company engaged in MBRT business. It questioned that how the above investment is only a ‘perception’ but not the truth, how by shareholders’ agreements Amazon is exercising “control” over FRL, how the ‘Control Rights of Amazon’ over FRL have never been publicly disclosed; Not disclosed to DPIIT or ED, how Amazon has mis-represented its investment in FCPL to the Competition Commission of India (CCI) for securing CCI approval and how Amazon is now publicly claiming that it has ‘control rights’ over FRL to such an extent that it can prevent a scheme of arrangement of FRL to re-organize its business and sell the retail business to Reliance.

“Amazon has material control rights which are not available to even an ordinary shareholder of FRL – The law prohibits a non-resident from acquiring even ordinary rights as shareholders without Government approval which is a blatant and flagrant violation. The order of the arbitrator puts paid to any claims of Amazon otherwise,” CAIT alleged.

“Amazon identifies a set of persons who act as benami and sets up companies in which Amazon owns 49 per cent voting rights, 51 per cent voting rights is held by the benami. The benami holds miniscule economic interest in the company. Almost 100 per cent of economic interest is held by Amazon (example Cloudtail, Appario Retail),” it alleged.

In these Nominated Retailers, Amazon has entered into agreements with the benami, which allow Amazon to fully control the business and affairs of these Nominated Retailers. These agreements have never been disclosed in the public or to Government authorities, especially ED and DPIIT.

“This Benami Company (Cloudtail) is, on paper, a company controlled by Indian Residents. But hidden are the shareholders agreements. Further, it is clear that Amazon contributes the entire money and bears all the losses of this entity,” CAIT said.

Amazon (the US entity) has invested Rs 1,431 crore in December 2019 towards 49 per cent equity in Future Coupons Private Ltd (FCPL), a promoter entity of Future Retail Ltd (FRL) under the automatic route. FRL is a listed company engaged in MBRT business. FCPL holds 9.82 per cent in FRL. This looks like an investment by Amazon in FCPL, a company engaged in business of loyalty cards, gift cards, but in reality it is not. It is a controlling investment in FRL, a MBRT Company, made without Government approval in violation of FEMA Regulations, CAIT said.

“The above fact that Amazon has acquired the above ‘control rights’ (with which Amazon has now obtained an injunction restraining FRL from proceeding with the recently announced scheme of arrangement under which FRL is selling its retail undertaking to Reliance) has never been disclosed to the stock exchanges, SEBI, ED, DPIIT. Had it been disclosed, perhaps ED would have immediately taken action,” CAIT said.

CAIT said the nail in the coffin is the award of the Singapore arbitrator restraining FRL from proceeding with its scheme of arrangement – a confirmation that Amazon had control rights to prevent FRL from reorganizing itself.




Reliance retail business receives Rs Rs 9,555 crore from Saudi Arabia’s Public Investment Fund


Reliance retail business receives Rs Rs 9,555 crore from Saudi Arabia’s Public Investment Fund

1. With this latest investment, the firm has raised total Rs 47,265 crore in the last two months.
2. Reliance Retail Limited, a subsidiary of RRVL, operates India’s largest, fast-growing retail business serving close to 640 million footfalls at its 12,000 stores across the country.

Reliance Industries and Reliance Retail Ventures on Thursday announced that they have raised Rs 9,555 crore from Public Investment Fund of Saudi Arabia. PIF will take a 2.04 per cent stake in Reliance Retail Ventures Ltd (RRVL), the Indian conglomerate said.

“Reliance Industries Limited (“Reliance Industries”) and Reliance Retail Ventures Limited (“RRVL”) announced today that The Public Investment Fund (“PIF”) will invest Rs 9,555 crore (approximately $1.3 billion) for an equity stake of 2.04 per cent into RRVL, a subsidiary of Reliance Industries. This investment values RRVL at a pre-money equity value of Rs4.587 lakh crore (approximately $62.4 billion),” the company said.

With this latest investment, the firm has raised total Rs 47,265 crore in the last two months.

The investment also comes at a time when the country’s retail sector is preparing for the festival season and would help Reliance to launch an assault on rivals such as Walmart-owned e-commerce company Flipkart and Amazon.

This investment will further strengthen PIF’s presence in India’s dynamic economy and promising retail market segment. The investment in RRVL follows PIF’s earlier acquisition of a 2.32 per cent stake in Jio Platforms, the digital services subsidiary of Reliance Industries.

“The transaction is in line with PIF’s strategy as a leading global investor with a proven track record of investing in innovative and transformative companies globally and develop strong partnerships with leading groups in their respective markets,” it said.

“India’s retail sector is one of the largest in the world and accounts for over 10 per cent of its gross domestic product (GDP) which presents meaningful growth potential.”

Speaking about the investment Mukesh Ambani, Chairman and Managing Director of Reliance Industries, said, “we at Reliance have a long-standing relationship with the Kingdom of Saudi Arabia. PIF is at the forefront of the economic transformation of the Kingdom of Saudi Arabia.”

“I welcome PIF as a valued partner in Reliance Retail and look forward to their sustained support and guidance as we continue our ambitious journey to transform India’s retail sector for enriching the lives of 1.3 billion Indians and millions of small merchants,” he added.

Reliance Retail Limited, a subsidiary of RRVL, operates India’s largest, fast-growing retail business serving close to 640 million footfalls at its 12,000 stores across the country.

Reliance Retail’s vision is to galvanize the Indian retail sector through its new commerce strategy, serving millions of customers by empowering millions of micro, small and medium enterprises (MSMEs), the Indian firms said.

Yasir Al-Rumayyan, Governor of PI said, “We are pleased to be furthering our trusted partnership with Reliance Industries, the leading player in some of India’s most exciting sectors. This transaction demonstrates PIF’s commitment to investing and partnering for the long-term with innovative businesses around the world that lead and transform their sectors.”

“This investment further demonstrates PIF’s commitment to generating returns for the Saudi people and driving the economic diversification of Saudi Arabia,” he said.

RRVL had previously raised Rs 37,710 crore from leading global investors including Silver Lake, KKR, General Atlantic, Mubadala, GIC, TPG and Abu Dhabi Investment Authority (ADIA).

The investments equip Reliance Retail with funds to compete in both offline and online formats. The company operates India’s most profitable retail business spanning supermarkets, consumer electronics chain stores, cash and carry wholesale business, fast-fashion outlets and online grocery store JioMart.

The new funding comes weeks after Reliance acquired the retail, wholesale, logistics and warehouse business of Future Group for an enterprise value of Rs 24,173 crore to consolidate its dominant market positioning in offline retail.

The deal, however, is being challenged by US e-commerce giant Amazon, which had taken a stake in Future’s unlisted entity.

Earlier Reliance raised an unprecedented Rs 1.52 lakh crore for Jio Platforms, the group’s telecom and digital services company, from investors such as Facebook, Intel and Google.

The oil-telecom-to-retail conglomerate intends to divest minority stakes in its digital and retail businesses, and hold initial public offerings for each within five years. Retailers are expecting to pick up in sales during the current festive season.

Reliance Retail in May this year launched JioMart, an e-commerce venture, to connect mom-and-pop stores, called Kirana, with consumers. In July, JioMart was serving 4,00,000 orders a day and is currently operational in 200 cities.




Bezos sells more than $3 billion of Amazon shares


Bezos sells more than $3 billion of Amazon shares

This is the third time this year that the world’s richest person has sold Amazon shares worth billions of dollars.

Amazon Founder and CEO Jeff Bezos this week has sold more than $3 billion worth of shares in his company, according to new filings with the US Securities and Exchange Commission (SEC).

This marks a significant jump from last year when Bezos sold $2.8 billion worth of shares, CNBC reported on Wednesday.

According to Forbes, Bezos now owns a 10.6 per cent stake in the e-commerce and cloud computing colossus Amazon.

This is the third time this year that the world’s richest person has sold Amazon shares worth billions of dollars. In August, he had sold Amazon shares worth $3.1 billion. Prior to that, he had offloaded shares worth $4.1 billion in February earlier this year.

The latest stock sales are part of a predetermined plan in accordance with insider trading laws, according to the filings with the SEC.

According to a Forbes report on Wednesday, the Amazon CEO remains the world’s richest person with an estimated net worth of $189.6 billion.




M&M’s Oct sales drop 14%, utility vehicles sale up 3%


M&M’s Oct sales drop 14%, utility vehicles sale up 3%

The passenger vehicle segment of the company which includes utility vehicles, cars and vans recorded a 1 per cent growth in sales at 18,622 vehicles last month, M&M said in a statement.

Mahindra & Mahindra (M&M) on Sunday reported a 14.5 per cent fall in its overall sales in October at 44,359 vehicles.

The company had sold 51,896 units in October last year.

The passenger vehicle segment of the company which includes utility vehicles, cars and vans recorded a 1 per cent growth in sales at 18,622 vehicles last month, M&M said in a statement.

Its utility vehicle segment, however, witnessed a 3 per cent growth at 18,317 units in October 2020, compared to 17,785 vehicles in October 2019.

Commenting on the passenger vehicles performance, Veejay Nakra, Chief Executive Officer, Automotive Division, M&M Ltd said: “We are happy to achieve a growth of 3 per cent in utility vehicles, despite certain supply constraints. Our brands Scorpio, Bolero and XUV 300 continue to do well, while the bookings for the All-New Thar have set new records within just a month of its launch.”

He noted that for Mahindra, the festive season has started on a positive note with deliveries and bookings being higher than last year.

“Going forward, this augurs well for a robust festive demand which in turn will help the industry in the short term,” Nakra said.

Sale of Mahindra’s commercial vehicles including three-wheelers dropped 22.8 per cent to 23,716 units in October.

On the sales of commercial vehicles, Nakra said: “We are witnessing a strong demand for our Bolero Pik Up, Supro and Jeeto and have recently launched our BS6 version of the Alfa 3-wheeler, both load and passenger. We are aligning our supply chain and ramping up to meet this demand.”

M&M’s exports for the month of October 2020 were at 2,021 vehicles, 25 per cent lower on a year-on-year basis.




Rs 1,05,155 crore gross GST revenue collected in October 2020


Rs 1,05,155 crore gross GST revenue collected in October 2020

The government has settled Rs 25,091 crore to CGST and Rs 19,427 crore to SGST from IGST as regular settlement.

The gross GST revenue collected in the month of October 2020 is Rs 1,05,155crore of which CGST is Rs 19,193 crore, SGST is Rs 25,411 crore, IGST is Rs 52,540 crore (including Rs 23375 crore collected on import of goods) and Cess is Rs 8,011crore (including Rs 932 crore collected on import of goods). The total number of GSTR-3B Returns filed for the month of October up to 31st October 2020 is 80 lakh.

The government has settled Rs 25,091 crore to CGST and Rs 19,427 crore to SGST from IGST as regular settlement. The total revenue earned by Central Government and the State Governments after regular settlement in the month of October 2020 is Rs 44,285 crore for CGST and Rs 44,839 crore for the SGST.

The revenues for the month are 10% higher than the GST revenues in the same month last year. During the month, revenues from import of goods were 9% higher and the revenues from the domestic transaction (including import of services) are 11% higher than the revenues from these sources during the same month last year.

The growth in GST revenue as compared to that in months of July, August and September 2020 of -14%, -8% and 5% respectively clearly shows the trajectory of recovery of the economy and, correspondingly, of the revenues.

The chart shows trends in monthly gross GST revenues during the current year. The table shows the state-wise figures of GST collected in each State during the month of October 2020 as compared to October 2019 and for the full year.




Petrol, diesel prices unchanged as crude remains subdued


Petrol, diesel prices unchanged as crude remains subdued

Prices in the other key cities of Mumbai, Chennai and Kolkata were Rs 87.74, Rs 84.14, Rs 82.59 per litre, respectively.

Prices of petrol and diesel continued to remain unchanged on Sunday on the back of weak crude oil prices. In the national capital, petrol was sold for Rs 81.06 per litre.

Prices in the other key cities of Mumbai, Chennai and Kolkata were Rs 87.74, Rs 84.14, Rs 82.59 per litre, respectively.

Prices of both petrol and diesel have been unchanged for over a month now. Diesel prices in Delhi, Mumbai, Chennai and Kolkata on Sunday were at Rs 70.46, Rs 76.86, Rs 75.95 and Rs 73.99 per litre, respectively.

Oil marketing companies (OMC) have kept the prices of both the key transport fuel unchanged largely due to the subdued crude oil price globally.

The Brent crude is currently just below the $38 per barrel mark.

However, consumers can cheer as OMCs may actually bring down the retail prices of petrol and diesel in the coming week and provide relief to them ahead of Diwali.

Oil sector experts said that with global oil prices under pressure from slowing demand in the second wave of the Covid-19 pandemic sweeping through several countries in the West, crude prices have fallen in recent days and could fall further.

If the trend holds, there could be positive gains for auto fuel consumers in India by way of a fall in the retail prices of petrol and diesel.




Futures Retail anticipates liquidation if deal with RIL fails


Futures Retail anticipates liquidation if deal with RIL fails

Sector experts too are of the view that if the acquisition of the company does not go through, then it may have to wind up its operations or go for bankruptcy.

As a Singapore arbitration court has temporarily halted the acquisition process of Future Group’s retail business by Reliance Retail, there has been speculation over what happens to Future Retail if the deal does not actually go through.

Future Retail’s representative told the arbitration panel that if the deal with Reliance Retail fails, then the company would go into liquidation. The closure of the company would lead to over 29,000 job losses, the company’s counsel said, according to the order copy.

Futures Retail, however did not respond to a query on the matter from IANS.

Sector experts too are of the view that if the acquisition of the company does not go through, then it may have to wind up its operations or go for bankruptcy.

Arvind Singhal, Chairman of Technopak Advisors said: “On the face of it, this seems stands to be a correct statement. The liabilities of Future are so large that you are looking at around Rs 25,000 crore of payment being in the line.

“If this was not for Covid, then in any case, many of the lenders would have invoked not only all the personal guarantees given by the promoters, including their pledges, but many of the creditors would taken the company to the NCLT.”

In an interim order on Sunday, V.K. Rajah, the arbitrator directed the Kishore Biyani-led Future Retail not to proceed with the deal with Reliance Retail for now.

Future Group is likely to approach an Indian court in the matter. Indicating that the matter should not have been dealt with by an overseas arbitration court, Future Retail said that all the relevant agreements are governed by Indian law and provisions of the Indian Arbitration Act for all intents and purposes and “this matter raises several fundamental jurisdictional issues which go to the root of the matter”.

According to Future, the order will have to be tested under the provisions of Indian Arbitration Act in an “appropriate” forum.

Future Group faced mounting debt and was scouting for buyers for its massive retail business till Reliance Retail Ventures Ltd (RRVL), a subsidiary of RIL, in August announced that it will acquire the retail, wholesale, logistics and warehousing business from the debt-laden group as a going concern on a slump sale basis for lumpsum aggregate consideration of Rs 24,713 crore, subject to adjustments as set out in the composite scheme of arrangement.

Earlier this month, Amazon said that Future Group violated a contract with it by entering into the sale agreement with the Mukesh Ambani-led retail major.

Last year, Amazon acquired a 49 per cent stake in Future Coupons, a Future group entity.

This battle seems to be turning into major war between two of world’s richest tycoons, Jeff Bezos and Mukesh Ambani.




States’ fiscal deficit to almost double in FY21, suggests RBI report


States’ fiscal deficit to almost double in FY21, suggests RBI report

The RBI report gives a grim picture of states’ finances, giving a downside rise going forward.

The states’ finances are going deeper into a crisis situation with a new Reserve Bank of India report now pegging average gross fiscal deficit of all states at 4.6 per cent of GDP in FY21, almost twice the level earlier budgeted for the year.

The alarming situation has been pushed by the Covid-19 pandemic that has sharply reduced states’ revenue while increasing the expenditure largely on pandemic relief measures.

“States have budgeted their consolidated gross fiscal deficit (GFD) at 2.8 per cent of GDP in 2020-21; however, the Covid-19 pandemic may alter budget estimates significantly, eroding the gains of consolidation secured in the preceding three years – the average GFD (gross fiscal deficit) for states that presented their budgets before the outbreak of Covid-19 is 2.4 per cent of GSDP, while the average for budgets presented post-lockdown is 4.6 per cent,” the 2020-21 version of RBI annual report on state finances said.

Before the the current fiscal and outbreak of the pandemic, states were on closures to fiscal consolidation, improving their finances while reducing deficits to close to 2 per cent of gross state domestic product (GSDP). A large part of improvement in state finances came from reforms carried out strengthen state power utilities and robust growth in GST revenues. But, economic disruptions unleaded by the pandemic has changed all that.

The RBI report gives a grim picture of states’ finances, giving a downside rise going forward.

“The associated increase in indebtedness, coupled with persisting losses of power distribution companies (DISCOMs) and rising guarantees, slants risks to state finances to the downside, going forward,” the report said.

Sustaining the recovery from the pandemic will reshape state finances, entailing boosting investment in health care systems and other social safety nets in line with the states’ demographic and co-morbidity profiles, the report said.

The next few years are going to be challenging for the states. Going forward, they need to remain empowered to provide growth impulses to the Indian economy and build resilience against future pandemics as well, the state finances report said.

With states in the frontline in the battle against Covid, the fiscal arithmetic for 2020-21 is likely to suffer. While the focus during the first few months of 2020-21 has been on managing the health crisis, it is the regional and spatial dimensions of structural features like demography, health care systems, migrant workers, digitisation and strength of the third tier which are likely to play an important role going forward in determining the fuller macroeconomic impact of the pandemic on state finances, the report said.




Maruti, Microsoft develop smartphone-based tech for testing applicants seeking driver’s license


Maruti, Microsoft develop smartphone-based tech for testing applicants seeking driver’s license

HAMS, developed in partnership with Microsoft Research India, is an important tool to modernise the driving license test in our country.

Country’s largest carmaker Maruti Suzuki India (MSI) and technology major Microsoft India has developed a smartphone-based technology for testing applicants seeking driver’s license.

In a statement MSI said, the technology called, HAMS (Harnessing Automobile for Safety), has been deployed at Automated Driving Test Centre (ADTC), Dehradun, in association with the Transport Department, Government of Uttarakhand.

The technology is being developed and tested jointly by Maruti Suzuki-promoted Institute of Driving and Traffic Research (IDTR) and Microsoft Research India, it added.

“HAMS, developed in partnership with Microsoft Research India, is an important tool to modernise the driving license test in our country. Starting with ADTC Dehradun, this technology will be introduced in more centres across several states,” MSI Executive Advisor Ajay Kumar Tomer said.




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