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Recap plan to boost public sector bank stake sale

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recapitalisation of public banks
recapitalisation of public banks (representative image)

New Delhi, Oct 29 : The change in market perception of public sector banks (PSBs) following the announcement on their recapitalisation has the potential to fetch the government much higher values than that envisaged in the bank support plan via stake divestment in PSBs, industry chamber Assocham said on Sunday.

“If the change of perception for PSU banks, post the mega capital infusion scheme is any indication, dilution of government equity, up to 52 per cent in the state-owned lenders can fetch valuation much higher than the estimated potential of Rs 58,000 crore as provided in the Rs 211,000 crore re-capitalisation plan,” Assocham said in a report.

“As PSU banks have been given over-weightage following the government announcement of capital infusion, their valuations have already gone up between 20-30 per cent in the first few days, even before unveiling of details of the recapitalisation bonds and the reform roadmap,” the industry chamber said.

“As the details emerge in the coming few weeks and months, these stocks, particularly of the larger banks can easily move up by another 30-40 per cent, taking their market capitalization commensurately high. This would surely mean, that if the banks are able to encash the sweet spot, they can easily raise much more than Rs 58,000 crore,” it added..

According to Assocham, once bank lending begins to pick up, there would be consequent advantages by way of higher economic growth and tax buoyancy.

“All this financial revamp would ultimately lead to a huge benefit to the government itself, in terms of higher market capitalisation. After all, the largest shareholder would still be the government of India,” Assocham Secretary General D.S. Rawat said in a statement here.

In a major bid to boost flagging economic growth and increase bank credit flow, the Union cabinet, earlier this week, accorded approval for a massive recapitalisation plan for state-run banks worth Rs 2.11 lakh crore.

Of this amount, a sum of Rs 1.55 lakh crore will be raised through recapitalisation bonds, while another Rs 76,000 crore would be available from budgetary support and raised through market borrowings.

Making the announcement here, Finance Minister Arun Jaitley said the details of reform measures for PSBs would be unveiled at a later date.

Expectations of faster economic growth on the back of the announced recapitalisation measures for state-run banks lifted banking stocks and key Indian equity indices this week and led the 30-scrip Sensex to close above the 33,000-points-mark.
(IANS)

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Petrol costs Rs 82.44/litre in Delhi, Rs 89.80 in Mumbai

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Petrol Price

Sep 22 : Fuel prices climbed to fresh highs across the metros cities on Saturday as in Mumbai, where the fuel cost is highest due to the highest VAT, petrol prices inched up to the psychological Rs 90 a litre-mark and sold at Rs 89.80 per litre.

In the national capital, petrol was sold at Rs 82.44 per litre, up from Rs 82.32 per litre on Friday, data on the Indian Oil Corp’s website showed.

As per rates released daily by state-run Indian Oil Corp, the depreciating rupee and expensive crude oil further pushed petrol and diesel to new record highs on Monday.

Fuel prices in the country have been rising almost daily since August 1. They fell only once on August 13 and have been on record levels for over two weeks now.

Sector experts say a weak rupee and high excise duty are major factors for the rise in fuel prices.

Inflationary risks along with broadly negative global cues depressed the Indian rupee to a new low of 72.91 against the US dollar.

Also, high global crude oil cost has become a major concern for the country, which imports over 80 per cent of its oil requirements. The UK Brent crude oil price hovers around $78 per barrel.

Since the start of the calendar year, the petrol price in Delhi has gone up by over 15 per cent from Rs 69.97 on January 1, 2018. The hike in diesel price has been even more steep. It has gone up by more than 22 per cent since January 1 when it cost Rs 59.70.

Last week, the West Bengal government reduced the excise on petrol and diesel by Re 1 per litre each.

The Karnataka government announced on Monday that petrol and diesel will be cheaper by Rs 2 per litre each across the state from Tuesday following the reduction in cess on these fuels.

As per the country’s pricing mechanism, the domestic fuel prices depend upon the international fuel prices on a 15-day average and the value of the rupee.

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Sensex swings 1,500 points, closes 280 points lower

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Sensex equity Nifty

Mumbai, Sep 21: High volatility, following a likely credit crisis in the infrastructure lending and development sector, dragged the market in the red, with the S&P BSE Sensex swinging in around 1,500-point range on Friday.

A plunge of over 1,100 points was witnessed on the BSE Sensex around 1 p.m, only to recover from the day’s low within few minutes. Similarly, the NSE Nifty50 also recovered after dropping below the 11,000-mark.

The sudden sell-off took place across the board with banking and financial stocks losing the most.

At 3.30 p.m, the wider NSE Nifty50 provisionally closed at 11,143.10 points, lower 91.25 points or 0.81 per cent from the previous close of 11,234.35 points.

The BSE Sensex, which had opened at 37,278.89 points, provisionally closed at 36,841.60 points, lower 279.62 points or 0.75 per cent from the previous close of 37,121.22 points.

The Sensex touched an intra-day high of 37,489.24 points and a low of 35,993.64 points.

The fourth consecutive session’s slide was triggered also by other factors, including lower possibility of the Reserve Bank of India cutting its key lending rates, analysts said.

IANS

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Man finds insect in cake at Ikea Hyderabad store, Tweets video

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IKEA Cake insect
The photo tweeted by the customer who bought a cake at IKEA's Hyderabad restaurant.

Hyderabad, Sep 21: Swedish furniture major IKEA’s first ever store in India in Hyderabad has again landed in controversy. Weeks after a customer had complained about finding a caterpillar in his biryani, ordered at Ikea’s store in Hyderabad, another customer has said that he found an insect in a chocolate cake that he ordered at the Ikea store.

The customer, Kishore, tweeted on September 12 that he found the insect inside a slice of chocolate cake while his daughter was eating the dessert at the IKEA store. He also posted a video in which an insect can be seen crawling over the chocolate cake.

The Greater Hyderabad Municipal Corporation has reportedly fined the Swedish furniture major Rs. 5,000 based on Kishore’s complaint.

IKEA on Thursday expressed regret over the incident. “In our Hyderabad restaurant when a customer was eating a chocolate cake which he bought, a fly was seen on the cake which eventually flew away. We regret this and apologise to our customer for the unfortunate experience. We are taking steps to avoid such occurrences,” an IKEA spokesperson said.

This is the second such incident that happened at the Ikea Hyderabad store that was opened on August 9. On September 2, a customer reported a caterpillar in the vegetable biryani supplied to him. Ikea India subsequently took vegetable biryani and samosa off its menu and apologised to the customer.

Read More: IKEA stops selling biryani, samosa after complaint

In the incident of the caterpillar in biryani, the furniture giant was fined Rs. 11,500 by the Hyderabad civic agency.

IKEA opened its first India store in Hyderabad on August 9. It has a 1,000-seater restaurant that serves a wide range of food, from Swedish to Indian snacks.

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