News digest: Andhra politics, govt-telecom deal, rupee fallout and more

Two ministers from TDP to resign from Union Cabinet today

Relief for telecom sector! Govt okays measures to facilitate investments

The government has cleared the much-awaited relief measures for the debt-ridden telecom sector, providing operators the option of paying their spectrum instalments in a longer time frame and easing the spectrum holding limits.

The restructuring of deferred payment liabilities will increase the cash flow in the immediate time frame, whereas the relaxation of spectrum caps will facilitate the consolidation of telecom licensees and may encourage the participation in the future auctions, according to a government release.

The longer duration of deferred spectrum payments — 16 years, as against the current 10 years — is estimated to increase the cash flow of operators by Rs 550 billion. Read more here..

2 TDP ministers to resign from Union Cabinet on Thursday: Andhra CM Naidu 

The Narendra Modi government on Wednesday reached out to its upset Andhra Pradesh (AP) ally, the Telugu Desam Party (TDP), but to little avail.

Hours after Finance Minister (FM) Arun Jaitley promised AP funds equivalent to what a special category state receives, the two TDP ministers in the Modi government were instructed to quit the Union Cabinet on Thursday by their party leader, Andhra Pradesh Chief Minister (CM), N Chandrababu Naidu. Read more here...

Flipkart to set up India's biggest logistics park near Bengaluru 

Homegrown e-commerce giant Flipkart is planning to set up an integrated logistics park on the outskirts of Bengaluru. This will be the largest and one-of-its-kind facility in the country. The facility, for which the company is in the process of acquiring 100 acres of land, will house multiple massive warehouses that will rival in size those set up by Amazon and Alibaba in the US and China, respectively.

The unit, which will help Flipkart consolidate all its warehouses in and around Bengaluru, will also act as the nerve centre or the logistics hub across the four southern states of Karnataka, Tamil Nadu, Kerala and Andhra Pradesh. Read more here...

ArcelorMittal to increase Essar Steel plant's capacity to 18 million tonnes 

ArcelorMittal will scale up the capacity of Essar Steel plant to 18 million tonnes (mt), making it a significant player in the growing Indian steel market.

“It is now operating at 5 mt and can be ramped up to 8.5 mt. The aspiration is to take the capacity to 18 mt,” sources in ArcelorMittal said.

The plan for Essar Steel submitted by ArcelorMittal is likely to have laid out the road map for the company. All the ongoing projects will also be completed. 

Essar Steel was the company’s Plan A and Plan B right now, indicated sources, as it provided ArcelorMittal the perfect opportunity to enter the Indian market. Read more here...

PNB scam fallout: Rupee forwards crash as banks stop issuing LoUs

The upshot of banks’ reluctance to issue letters of credit, letters of undertaking (LoUs) and such guarantees affecting normal functioning of cross-border trades is that one-year rupee forward rates have crashed in the currency market as importers scampered to buy dollars in the spot market to meet their payment obligations.

The crash in the one-year forward rates, about 50 paise in a matter of a few days to as low as 239 paise, reflects the acute dollar shortage in the forwards market. This is accompanied by a spike in spot rates and in the immediate term, typically one month or less, forward premiums. The forward premiums recovered slightly from recent lows to close at 252 paise on Wednesday. Read more here...