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QBiz: RBI Set to Cut Rates Again; DLF Settles Payments to JV

1. RBI Set to Cut Rates Again as Fiscal Measures Fail to Cheer

The Reserve Bank of India is expected to cut benchmark interest rates for the fifth time this year on Friday, 4 October as recent fiscal measures to boost ailing growth seem largely inadequate and benign inflation offers room for more easing.

The RBI is predicted to lower its key lending rate or the repo rate by 25 basis points (bps) to 5.15 percent, which would take cumulative cuts so far this year to 135 bps.

Most analysts forecast one more cut of 15 bps in December. Some RBI watchers expect a larger cut this week, after it cut the repo rate but an unconventional 35 bps in August.

(Source: The Economic Times)

2. DLF Settles Rs 8,700 Cr Amount Payable to JV with GIC

As part of the settlement, DLF has transferred its shareholding in its arm DLF Info Park Developers (Chennai) at an enterprise value of Rs 1,000 crore. This subsidiary holds nearly 27 acres of land. That apart, it has transferred its shopping mall in Saket, South Delhi for an enterprise value of Rs 1,012 crore.

Realty major DLF has settled the entire Rs 8,700 crore amount payable to DLF Cyber City Developers Ltd (DCCDL), its joint venture with Singapore-based GIC, by transferring various completed commercial properties and land parcels as well as cash payment. With settlement of this dues, the company said it has completed the exercise of transforming its balance sheet and consolidation of all rental assets under the DCCDL.

(Source: Financial Express)

3. No MAT Credit for Firms Opting for Lower Tax: FinMin

The Finance Ministry on Wednesday, 3 October made it clear that companies opting for a lower tax of 22 percent will not be eligible for accumulated additional depreciation and Minimum Alternative Tax (MAT) credit.

On 20 September, Finance Minister Nirmala Sitharaman had announced the lowering of the maximum corporate tax rate to 22 percent from the earlier 30 percent. An ordinance was promulgated to make this cut effective from the current financial year (assessment year 2020-21).

The ordinance prescribed: “A domestic company shall, at its option, pay tax at 22 per cent for any previous year relevant to the Assessment Year beginning on or after April 1, 2020, subject to certain conditions, including that the total income should be computed without claiming any deduction or exemption.” The provision related to MAT was also amended.

(Source: The Hindu BusinessLine)

4. EESL Planning an IPO at Rs 5,000 Cr Valuation

State-run Energy Efficiency Services Ltd (EESL) plans to tap into the capital markets to bankroll its energy efficiency programmes, including leasing electric vehicles to companies and installing smart meters to measure power consumption, a top company executive said.

The company, a joint venture set up by four state-run companies in the power sector, has been valued at around Rs 5,000 crore by financial services company Investec.

“I have a capital expenditure requirement of around Rs 25,000 crore over the next 3-4 years,” Saurabh Kumar, managing director of EESL said in an interview. “While it is one thing that I keep on going back to NTPC and PFC, but they have their own capex plans. We will look at it (listing) next year and then we will decide when to do it.”

(Source: Mint)

5. Startup Funding Jumps 25% Amid ‘Bubble’ Fear

Capital flows to startups continued at an increased pace in the latest quarter as global investors carried on signing huge cheques for entrepreneurs building the next biggie in areas from financial technology to software services, bucking the slowing growth in the economy.

But the rush of capital, which has led to valuation of some startups multiplying overnight without any significant change in business metrics, is also causing concern among investors of a ‘bubble’. This, even as global sentiment turns against highly valued private technology companies with the failure of WeWork’s public offering in the US.

Total money poured into startups increased by 25 percent to $10.9 billion in the first nine months of 2019 as compared to the same period in the previous year, even as the total number of deals fell by 26 percent to 937 transactions, according to the latest data from Tracxn.

(Source: The Times of India)

6. Power Discoms to Gain Rs 2,500 Cr From Tax Cuts

The central government’s recent decision to lower the corporate tax rate is a positive development for the power sector, as it would allow the electricity generators with cost-plus power purchase agreements (PPAs) to pass on the lower tax benefit to the distribution utilities (discoms).

As per Icra’s estimates, the extent of benefit that would accrue to discoms from the power generation and transmission segments (mainly from central and state utilities), would be about Rs 2,500 crore annually.

(Source: DNA)

7. Digital Gift Card Sales Leap on Snapdeal

E-com platform Snapdeal has witnessed a surge in the sale of digital gift cards during this festive season. As compared to last year, there has been a 300 percent increase in the sale of these gifting options.

The company said the gift cards were more popular in the big cities, with three out of four cards sold being purchased by people who live in metros.

The Uber Gift Card, which offers a 10 percent saving on Uber Rides and Uber Eats, was one of the most popular buys on the platform. Similarly, there was high demand for MakeMyTrip’s gift card for a 10 percent discount on all hotel and flight bookings and a 10 percent discount card from BookMyForex for forex purchases, said Snapdeal.

(Source: The Hindu)

8. PMO Seeks Clarity from High-level Panel on Revival of MTNL, BSNL

The Prime Minister Office is learnt to have asked a high-level panel, looking into the revival of MTNL and BSNL, to explain if the two telecom PSUs can be turned around and how.

The direction has come after the finance ministry raised objections to a proposal moved by the telecom department (DoT) for reviving the two PSUs. A group of ministers headed by Home Minister Amit Shah had earlier approved the revival plan proposed by the DoT.

“Prime Minister Office panel under Principal Secretary P K Mishra in its meeting last week asked if MTNL and BSNL can be revived and if they can be revived then how. The panel has set up a committee of secretaries to work on these questions,” an official source told PTI.

(Source: The Economic Times)

9. India Shows Remarkable Resilience Amid Global Slowdown: WEF

India, a young economy with lot of potential, has demonstrated remarkable strength and resilience amid global slowdown, a top official of World Economic Forum (WEF) said on Wednesday, 2 October. Besides, the country can play a crucial role in the development of South Asia and sustainability of global economic growth, WEF President Borge Brende told PTI here.

The WEF, which organises the India Economic Summit in partnership with the Confederation of Indian Industry (CII), engages the foremost political, business and other leaders of society to shape global, regional and industry agendas.

“India is one of the fastest growing large economies in the world. The country is also a young economy with lot of potential and has shown lot of strength and resilience amid an economic slowdown globally,” Brende said.

(Source: The Financial Express)

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