Significant jump in NPAs of MSMEs in Punjab, Haryana

Chandigarh :
RBI Governor Urjit Patel’s recent decision to double the moratorium period for non-GST-registered small businesses averting their risk of being classified as non-performing assets (NPAs), will see a surge in number of wilful defaulters, bankers catering to the northern region said.    
Patel on Wednesday relaxed norms for bad loans to all Micro, Small and Medium Enterprises (MSMEs). So far, this relaxation was available to only GST-registered small businesses. As per the RBI’s guideline, all MSMEs can now repay bank loans in 180 days without being categorised as NPAs. Earlier, banks classified a loan account as NPA after payment default for 90 days.  After declaring an account NPA, the financial institution can take all legal means to recover the loan that could eventually lead to attachment of assets.
According to the RBI, many associations represented to them that formalisation of business through registration under GST had adversely impacted the cash flows of the smaller entities during the transition phase with consequent difficulties in meeting their repayment obligations to banks and NBFCs.
There is a surge in NPA accounts in Punjab, Haryana, Chandigarh and Himachal after the demonetisation in November 2016, bank officials said on condition of anonymity.
Punjab and Haryana have more than 3 lakh MSMEs, predominantly in the manufacturing sector. Out of total MSME loans in Punjab, around 14% are NPAs, amounting to Rs 6,791 crore as of March 31, 2018. In Haryana, NPAs under the category of MSME loan, was about Rs 5,480 crore in the corresponding period, which is 9% of the total MSME loans.
Bankers say the RBI move is under the political pressure to appease small businessmen. “In my opinion, 90 days were enough for the genuine businessmen. The extension will impact the financial health of banks,” a banker said.
According to the bankers, this is only about deferment. “I think, banks’ books will be somewhat clean in one quarter, only to reflect NPA in the next quarter,” the banker added.
By allowing the moratorium to the non-GST-registered MSMEs, the RBI intends to bring these units into the formal economy, an industry expert said. “The step taken by the RBI is in positive direction as it will help several MSMEs who were not registered under the GST,” said SC Ralhan, past president, Federation of Indian Export Organisations (FIEO). Experts also believe that the initiative will not only help MSMEs, but also small businesses (vendors) flourish around them.

New Delhi :
Traders’ body CAIT on Monday said it has approached the Competition Commission of India (CCI) against the Walmart-Flipkart deal, stating that it will create unfair competition and an uneven level-playing field for domestic players.

The Confederation of All India Traders (CAIT) said the deal would deny market access to non-preferred sellers and impact small traders on offline platform. It has “filed its objection petition in CCI against the Walmart-Flipkart deal,” it said in a statement.

“The merger of two companies will create an unfair competition and uneven level-playing field and will indulge in predatory pricing, deep discounts and loss funding,” it alleged.
It also claimed that Flipkart is a combination of exclusive tie-ups and preferential sellers, where even online vendors face discriminatory conditions.

Walmart, it said, would sell its inventory on the platform of flipkart.com either directly or through a web of associated preferred sellers.

“This will create an unhealthy competition much to the disadvantage of both offline and online sellers,” the CAIT said, adding this transaction would result in vertical integration which no other player in India would have.

“The complainant apprehends that the deal is bound to circumvent established laws and FDI (foreign direct investment) policy of the government since the ultimate objective of Walmart is to enter the retail trade of the country and in the absence of any policy on e-commerce or retail trade, it would be easy for them to reach out to retail market,” it added.

Mumbai :
The rupee continued its unabated rise for the third-straight day on Monday and surged by 35 paise to end at a new two-week high of 67.43 against the US dollar after a surprise crash in crude prices quickly faded near-term trade deficit and inflation worries.
The domestic currency market heaved a sigh of relief following a significant easing in crude prices that will lead to considerable improvement in India’s position on fiscal front, bolstering investor confidence towards the home currency.

Global crude oil collapsed after Saudi energy minister Khalid al-Falih endorsed prior comments from his Russian counterparts calling for self-imposed output curbs to be relaxed, perhaps as soon as June.

The meltdown could be a blessing in disguise for India as gradual uptick in inflation made investors jittery and they fear the RBI may shift its stance from neutral to tightening which led to hardening of yield, a forex dealer said. Brent crude futures was trading lower at $75.37 a barrel, down 1.14% in early Asian trade.

In a further sign of confidence, currency traders and other speculators unwound a part of their bullish long-dollar positions built up over the last few weeks. 

However, geopolitical uncertainties after US President Donald Trump pulled out of the planned talks with North Koreas leader Kim Jong Un along with importers demand for the dollar limited further gains in the local unit. 

New Delhi :
Fortis Healthcare said the Munjals-Burmans combine, whose bid for investing Rs 1,800 crore was approved by its Board, have consented to reopening the bidding process to enable the company to move ahead with the fund-raising transaction.
The development comes at a time when there is an uncertainty over the process of sale of Fortis as four of the directors, who had approved the Munjals-Burmans bid, are no longer on the company’s Board.

In a regulatory filing, Fortis Healthcare said it has received a letter from Hero Enterprise Investment Office and Burman family Officer ...giving their consent to reopen the bidding process to enable the company to move ahead with the fund-raising transaction.
In a letter to the Board of directors, Munjals-Burmans combine said “it appears that there may be indecision on the part of the company regarding the bid process, which we understand could be on account of a few shareholders indicating their preference to the company for reopening of the bid process”.

While expressing “deep anguish and regret” over the matter, Munjals-Burmans combine said they have consented to reopening of the bidding process “in order to facilitate the company to expeditiously finalise and close its fund-raising so that the company’s business does not suffer any further”.

Fortis Healthcare, however, did not clarify whether it will reopen the bidding process.
When contacted, a Fortis spokesperson said the company’s Board will take a decision on the matter without specifying when the meeting would take place.
“Necessary intimation to the regulator and stock exchanges would be given accordingly,” the spokesperson added.

Fortis’ Board of directors is scheduled to meet on May 30 to consider and approve the audited financial results for the quarter and financial year ended March 31, 2018. — PTI
Board meeting scheduled for tomorrow 

The development comes at a time when there is an uncertainty over the process of sale of Fortis as four of the directors, who had approved the Munjals-Burmans bid, are no longer on the company’s Board

Munjals-Burmans combine said they have consented to reopening of the bidding process in order to facilitate the company to expeditiously finalise and close its fund-raising so that the company’s business does not suffer any further

Fortis Healthcare, however, did not clarify whether it will reopen the bidding process

New Delhi : 

Reliance Industries (RIL) has received environment clearance for the expansion and optimisation of its petrochemical complex at Nagothane in Raigad district of Maharashtra at an estimated cost of Rs 2,338 crore.

“The environment clearance has been given to the RIL’s expansion and debottlenecking of petrochemical project at Nagothane,” a senior Environment Ministry official said.

The approval, given based on the recommendations of an expert panel, is subject to compliance of certain conditions, the official said.

The proposal is to expand the gas cracker and downstream plants located at Nagothane village in Raigad district by way of debottlenecking, expansion and change of fuel in captive power plant (CPP) along with expansion and rebuilding of residential township.

The cost of the proposed project, expected to be commissioned in stages, is estimated to be Rs 2,338 crore, the official added.

As per the proposal, no additional land and manpower is required for the proposed project. It has 744 hectare land and 1,794 manpower at present.

The company manufactures wide range of products such as Ethylene Oxide, Ethylene Glycol, Linear Low Density High Density Polyethylene (LLHDPE), Hexene-1 and others along with a gas-based CPP.

Presently, RIL Nagothane uses a mixture of ethane and propane to produce downstream products and by-products. The proposal is to modify its feedstock ratio in its gas cracker plant owing to availability of imported shale gas ethane.

With the proposed change in feedstock mixture resulting in higher production of ethylene, the company wants to expand the capacities of downstream products/by-products to accommodate the increased ethyelene production.

That apart, the company has proposed to enhance CPP capacity from 85 mw to 100 mw by way of refurbishing and also use ethane as a fuel owing to its economic viability and availability.

Further, the proposed project also includes expansion of the existing township with additional residential apartments within the township area.