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PNB shares slump for second day, plunges almost 12%

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Mumbai, Feb 15: Shares of the Punjab National Bank (PNB) on Thursday continued to drop for a second consecutive day — closing almost 12 percent lower — after a $1.8 billion fraud was detected in one of its branches in Mumbai.

Its scrips dipped by 11.97 per cent to close at Rs 128.35 per share, lower by Rs 17.45 from the previous close at Rs 145.80.

Stocks of jewellery companies like Gitanjali Gems and PC Jewellers too declined after authorities blamed billionaire diamond trader Nirav Modi for the fraud.

Stocks of Gitanjali Gems, the luxury jewellery brand promoted by Modi’s maternal uncle Mehul Choksi, plunged almost 20 per cent. Scrips of PC Jewellers fell 5.31 per cent on the BSE.

On Wednesday, PNB — the second largest public sector bank in India — informed the stock exchanges through a regulatory filing that it has detected a $1.8 billion fraud in one of its branches in Mumbai.

In the filing, PNB put the quantum of fradulent transactions at $1,771.69 million (around Rs 11,515 crore), which is equivalent to eight times the bank’s net income of about Rs 1,320 crore ($206 million).

The bank’s shares had plunged drastically on Wednesday following the regulatory filing to close lower by 9.81 per cent at the BSE.

The fraud, which includes money-laundering among others, concerns the Firestar Diamonds group in which the Central Bureau of Investigation last week booked Modi, his wife Ami, brother Nishal and uncle Choksi.

On Thursday, the Enforcement Directorate launched a nationwide raid on the offices, showrooms and workshops of Nirav Modi.

Sunil Mehta, MD and CEO of PNB said the company “will not spare anyone” involved in the wrongdoing.

“We are known for clean banking. The fraud started in 2011. We have brought it under the notice of regulatory and law enforcement agencies as soon as we came to know about it. We will not spare anyone involved in the fraudulent practice,” Mehta told reporters on Thursday.

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Govt may sweeten deal further for Air India sale bid

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Air India 777

New Delhi, Oct. Oct 21 : The government may further extend the date for submission of bids for Air India sale date beyond October 30 to give investors more time to make an offer while sweetening the deal terms further, finance minister officials privy to the development said.

The submission of initial bid or expression of interest (EoI) may be extended by 45 days to two months to December. Also, officials said that bidders would be given the option to decide on the quantum of debt in Air India books that they will like to absorb rather than freezing the debt amount and seeking investors bids.

As per the Air India EoI floated by DIPAM in January, of the airline’s total debt of Rs 60,074 crore as of March 31, 2019, the buyer would be required to absorb Rs 23,286.5 crore, while the rest would be transferred to Air India Assets Holding Ltd (AIAHL), a special purpose vehicle.

With the proposed changes, buyers will decide on the level of debt that they will take and the one taking the largest debt may be considered favourable to be declared winner.

Disinvestment secretary Tuhin Kanta Pandey has also hinted at changes in the current structure of Air India transaction process in an interaction with journalists last week.

For the government, Air India has now become a test case on how to get investor interest in adversarial market conditions. While the airlines financials are already under severe pressure, the Covid -19 pandemic had further dented the prospects of the aviation industry putting the sale process under further problems. The bidding process for the debt-ridden airline has been postponed four times earlier and of October 30 deadline is changed now, it would be fifth such extension.

Sources said that changes in the structure of the sale process to facilitate investors would go by the principle of letting buyers decide the enterprise value of Air India rather than its market cap or using other valuation methodology. The enterprise valuation determines the value of an entity based on its market capitalisation and also debt in books and cash balances.

Sources said that changes in the valuation method has be approved by a CGD (Core Group on Disinvestment) headed by the cabinet secretary at its meeting last week and now it would be has placed before AISAM (Air India Specific Alternative Mechanism).

For Air India, the government is finding it tough to get investors on board. A Tata Group led consortium was considered favourite to take over the airline earlier but its interest in the airline lately has been subdued. With foreign airlines bleeding over fall in air travel during the pandemic, getting investors would be difficult. But Air India, with vast pool of international flying slots and a running overseas operation under the Vande Bharat scheme, is expected to get some investor interest.

Air India has been been unprofitable since its 2007 merger with state-owned domestic operator Indian Airlines Ltd., and since then is flying on government budgetary support adding pressure to central resources.

Air India disinvestment will be a key component of this years sell target of Rs 2.1 lakh crore. The government has so far mobilised a mere Rs 5,500 crore as disinvestment receipt.

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India’s April-August FDI inflow rises 13%

“FDI equity inflow also increased by 57 per cent from $160.46 billion during 2008-14 to $252.42 billion (2014-20).”

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New Delhi, Oct 21 : FDI inflows into India have increased by 13 per cent during April to August 2020 on a year-on-year basis, official data showed on Tuesday.

According to the Ministry of Commerce and Industry, $35.73 billion has been received during the period under review.

“It is the highest ever for first 5 months of a financial year and 13 per cent higher as compared to first five months of 2019-20 ($31.60 billion),” the ministry said in a statement.

“FDI equity inflow received during F.Y. 2020-21 (April to August, 2020) is $27.10 billion. It is also the highest ever for first 5 months of a financial year and 16 per cent more compared to first five months of 2019-20 ($23.35 billion).”

Besides, the ministry’s data showed that FDI inflows have risen by 55 per cent during the last 6 years.

“Total FDI inflow grew by 55 per cent, i.e. from $231.37 billion in 2008-14 to $358.29 billion in 2014-20,” the statement said.

“FDI equity inflow also increased by 57 per cent from $160.46 billion during 2008-14 to $252.42 billion (2014-20).”

The ministry said that measures taken regarding FDI policy reforms, investment facilitation and ease of doing business have resulted in increased inflows into the country.

“Continuing on the path of FDI liberalisation and simplification, Government has carried out FDI reforms across various sectors,” the statement said.

FDI is a major driver of economic growth and an important source of non-debt finance for the economic development of India, it added.

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Gadkari lays foundation for India’s first multi-modal logistic park in Assam

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Nitin Gadkari

Guwahati, Oct 21 : Indias first Rs 694 crore international Multi-Modal Logistic Park (MMLP) would be set up at Jogighopa in western Assam under the Bharatmala Project of the Union Ministry of Road, Transport and Highways.

According to the officials, the first MMLP at Jogighopa, which would be connected to road, rail, air and waterways, would be developed in 317-acre land along the Brahmaputra River, and would provide direct or indirect employment to nearly 20 lakh youth in Assam.

While laying the foundation stone for the project virtually from Delhi on Tuesday, Union Minister for Road Transport, Highways and MSMEs, Nitin Gadkari, said that his ministry envisages to develop 35 MMLPs in the country, of which work on preparing DPR (detailed project report) and feasibility report is underway.

Gadkari said that Assam’s MMLP is being made by the National Highways and Infrastructure Development Corporation (NHIDC), and the first phase of construction is scheduled to be completed by 2023 and the work would begin next month.

He informed that works worth Rs 280 crore have already been awarded, including Rs 171 crore for road construction, Rs 87 crore for erecting the structure, and Rs 23 crore for rail lines.

The minister said that the distance of 154 km between Jogighopa and Guwahati would be covered by making a four-lane road on this stretch, while a 3 km rail line would connect Jogighopa station with the MMLP. Another 3 km rail link would connect it to the Inland Water Transport and the road to newly developed Rupsi airport would be upgraded to four lanes for better connectivity.

He said the MMLP would have all the necessary facilities including warehouse, railway siding, cold storage, customs clearance house, yard facility, workshops, petrol pumps, truck parking, administrative building, boarding and lodging, eating joints, water treatment plant etc.

The minister further informed that his ministry has plans for national highway works worth Rs 80,000 crore in Assam.

He said, NH works for 575 km worth Rs 3,545 crore are going to be completed within this financial year and NH works of nearly Rs 15,000 crore would be awarded by next year, while DPRs will be completed for works of Rs 21,000 crore for the state.

Union DoNER (Development of North Eastern Region) Minister Jitendra Singh said that more than 10 waterways are being developed in the northeast, bringing down the logistic cost by one fourth.

He said this cost effective mode of transport would be a cheaper option for trade, business and transportation and would boost trade across the borders, especially with the eastern neighbours by leaps and bounds.

He said that MMLP is a novel idea, and would be replicated by other states soon.

Assam Chief Minister Sarbananda Sonowal, Union Ministers Gen (Retd) V.K. Singh, Rameshwar Teli, and Assam Ministers Himanta Biswa Sarma, Chandra Mohan Potwary and Phani Bhushan Choudhury also addressed the event.

Historically, Assam and the northeastern region used to have a very vibrant trade activity with the neighbouring countries.

The region had multi-modal transportation networks, roadways, railways and riverine waterways through the territories along Bangladesh and Myanmar.

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