Issue: 1218
· Government may cut taxes on
foreign investments in Indian bonds to attract overseas capital inflows.
· Sensex and Nifty rally over 1%
on optimism surrounding proposed bond-tax relief measures.
· Crisil says India’s financial
conditions remain tight due to oil shock, rupee weakness and FPI selling.
· India plans a centralized
technology back office for Regional Rural Banks to improve digital resilience
and cybersecurity.
· Indian corporates’ foreign
borrowings fall 51% in March due to high global interest rates and hedging
costs.
Govt restricts gold imports
under advance authorization at 100 kilograms: The government on Thursday
tightened rules for importing gold into the country and imposed a limit of 100
kg on gold imports under the Advance Authorisation scheme, which allows
jewellery exporters to import raw or input materials at zero duty. The
government has tightened conditions for the issuance and monitoring of advance
authorisation for import of gold. Earlier, there was no limit on gold imports
under the scheme. The Advance Authorisation
scheme allows the duty-free import of inputs that are incorporated into an
export product. In addition to any inputs, packaging material, fuel, oil, and
catalyst that are consumed or utilised in the process of production of export
product, are also allowed. The DGFT has mandated a
physical inspection of manufacturing facilities for all first-time applicants
to verify their operational status and capacity. The issuance of subsequent
licenses will now be considered only when exporters fulfill at least 50 per
cent of the export obligations from their preceding authorizations before new
ones are granted
(Moneycontrol)
WPI inflation hits 42-month
high at 8.3% as West Asia conflict fuels oil shock: India’s wholesale price
inflation accelerated sharply to a 42-month high of 8.3 per cent in April,
driven by a steep rise in energy prices following disruptions caused by the
ongoing West Asia conflict. Wholesale Price Index (WPI)-based inflation stood
at 3.88 per cent in March and 0.85 per cent in April last year, highlighting
the sharp surge in producer-level price pressures. The fuel and power segment
emerged as the biggest contributor to the surge, with inflation in the category
climbing to a 42-month high of 24.71 per cent in April from 1.05 per cent in
March. Inflation in crude petroleum alone shot up to 88.06 per cent, the
highest level since October 2021.
(Business Today)
India bans sugar exports
with immediate effect to cool domestic prices: In a move seen as aimed at
stabilizing the domestic market, the Government on Thursday imposed an
immediate ban on sugar exports, effective until September 30, 2026. The
intervention comes at a critical juncture as global sugar prices show signs of
a rebound, which had begun to make Indian exports increasingly attractive to
international traders, potentially threatening domestic availability.
(Business Line)
RBI accepts 2 core
investment companies' applications for surrendering registration: The Reserve Bank of India has
cancelled registration certificates for several non-banking financial companies
and core investment companies. This action follows surrender requests from
entities like RR Holdings and Anjali Capfin. HDFC Holdings' certificate was
cancelled as it is no longer a legal entity post-merger. Other companies
surrendered their certificates due to exiting the NBFI business.
(Economic Times)
RBI cancels registrations
of 150 NBFCs; around 67 firms from Delhi, 75 from West Bengal: The Reserve Bank of India has
cancelled the registration of 150 Non-Banking Financial Companies. The highest
number of affected firms are registered in Delhi and West Bengal. These companies
can no longer conduct financial business. This action impacts lending, leasing,
and investment activities. The RBI has taken this step under the RBI Act, 1934.
(Economic Times)
India’s top banks failing
to tackle climate risk as threats grow: India's major banks are
disclosing more climate data but not using it for lending decisions. Physical
climate risks like floods and heat are worsening, impacting bank portfolios.
Few banks conduct climate stress tests or phase out coal lending. The Reserve
Bank of India is providing data but not mandating disclosures. Delayed action
risks financial instability and stranded assets for banks.
(Economic Times)
Outward
remittances: NBFCs don't need prior RBI nod for dealer tie-ups: Non-bank entities facilitating outward
remittances will no longer require prior approval from the Reserve Bank of
India (RBI) to enter into tie-ups with authorised dealer banks, the regulator
said in a revised sectoral framework published Wednesday.
(Economic Times)
Banks back RBI's
proposed 1-hour lag for digital payments above ?10K: RBI’s discussion paper proposing a
one-hour lag on account-to-account transfers above ?10,000 through digital
payment modes to curb rising fraud has drawn criticism from several quarters.
However, banks appear to have broadly supported the idea of some form of delay
but have urged the central bank to raise the threshold to ?25,000. The RBI had
sought feedback from all stakeholders by May 8.
(Business Standard)
Air India reports ?26,765
cr loss, biggest since Tata Group takeover amid cost pressures, route cuts: Air India has reported its largest annual loss
since returning to the Tata Group, highlighting the scale of challenges facing
the airline’s transformation journey. Rising fuel prices, airspace restrictions
and supply chain disruptions have emerged as major pressures on both financial
performance and operations. Air India recorded a loss of approximately 3.56
billion Singapore dollars (around $2.8 billion or nearly ?26,765 crore) for the
financial year 2025–26, marking its biggest annual loss since the Tata Group
acquired the airline in 2022, according to details shared by Singapore Airlines
(SIA) in its annual financial statements.
(Business Today)
Adani fraud charges likely
to be dropped by US Justice Department: report: US authorities are moving to resolve the fraud
charges against Indian billionaire Gautam Adani, according to people familiar
with the matter, and end a criminal case that’s hung over Asia’s richest person
for more than a year. The Justice Department may announce that they’re dropping
the charges as soon as this week, said the people, who asked not to be
identified discussing a confidential matter. The Securities and Exchange
Commission is also moving to settle a parallel civil fraud case it brought
against Adani and others in November 2024, some of the people said.
(Business Line)
EU includes India in
eligible list of countries for marine exports: The European Union (EU) has updated its draft
list of countries eligible to export marine products to the bloc to include
India, the commerce ministry said on Thursday. India would not have been able
to export seafood to the EU after September this year without the update. The
EU had in 2024 released a draft list of countries — which did not include India
— that were eligible to supply products of animal origin intended for human
consumption after September 2026, to ensure that the products did not contain
antimicrobial medicines.
(Business Standard)
FinMin confident of coping
with West Asia crisis with adequate fiscal room: Even as the West Asia conflict
continues to linger into its third month, government officials are confident of
coping with its fallout with fiscal discipline, adequate fiscal headroom and
timely intervention. “The Government remains committed to taking necessary
steps to protect citizens, support enterprise and safeguard India’s economic
stability,” said a finance ministry official. The ability to act proactively,
allocate resources and provide relief where needed, the official argued, is the
result of prudent fiscal management and sustained reforms over the last decade.
“The objective has been to respond to global shocks with timely, calibrated and
citizen-centric policy measures that support households, businesses and key
sectors of the economy,” the official said, adding that farmers and exporters
have been shielded from the impact of the global disruption so far.
(Business Standard)
Govt considers
reducing taxes on bond investments by foreign investors: India is considering a significant
reduction in the taxes paid by foreign investors on the nation’s bonds as
authorities seek to align policies with global norms and attract inflows,
according to people with knowledge of the matter. The Reserve Bank of India
recommended the move, which is being seriously considered by the Finance
Ministry, the people said, asking not to be identified as the details are
private. Deliberations to ease the tax burden have gathered pace as authorities
try to curb the rupee’s depreciation, they added.
(Business Standard)
HORIZONTAL ACQUISITION
§ A horizontal acquisition is when one company
acquires another company in the same industry and works at the same production
stage. The new combined entity may be in a better competitive position due to
increased market share or scalability than the standalone companies combined to
form it.
§ During a horizontal acquisition, a company can
expand its production of products, but it doesn't mean a pivot for the company.
Horizontal acquisitions expand the capacity of the acquirer, but the basic
business operations remain the same, unlike an acquisition that creates a
wholly different company.
§ An example of a horizontal acquisition would be a
candy company that purchasing another candy company with different products but
a similar production schedule.
§ The key difference between a horizontal acquisition
and a virtual acquisition is that in the latter, the companies would be in the
same industry but would have completely different production cycles.
RBI KEY RATES
Repo
Rate: 5.25%
SDF:
5.00%
MSF
/Bank Rate: 5.50%
CRR:
3.00%
SLR:
18.00%
FOREX RATES (RBI REF. RATE)
INR
/ 1 USD : 95.7529
INR
/ 1 GBP : 129.5071
INR
/ 1 EUR : 112.1879
INR
/100 JPY: 60.6500
EQUITY INDEX
Sensex:
75398.72 (+789.74)
NIFTY:
23689.60 (+277.00)
Bnk NIFTY: 54128.95 (+672.80)
United Nations'
International Day of Families: May 15 is
globally recognized as the United Nations' International Day of Families.
Established in 1993, this observance highlights the importance of family units
and raises awareness of the social, economic, and demographic processes
affecting families worldwide.
Historical
events: May 15 is a
significant date marked by the birth of reformer Devendranath Tagore, the
incorporation of the Matsya Union into Greater Rajasthan in 1949, and the birth
of Madhuri Dixit. Globally, it is celebrated as the International Day of
Families, featuring the 1928 debut of Mickey Mouse and the 1940 opening of the
first McDonald's.
****Have a nice Day****
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