1) Truck sales crash 60%; Ashok Leyland sees decline of 70% in August
Sales of medium- and heavy-duty commercial vehicles (M&HCVs), excluding buses, considered a barometer of economic activity, more than halved in August, as transporters — struggling with excess capacity owing to a slowing economy and consumption slowdown — deferred purchases, the monthly sales data released by truck makers shows.
India’s economy grew by 5 per cent in the June quarter, the slowest in over six years. The manufacturing sector fared worse, growing at an abysmal 0.6 per cent. (Read more here)
2) GST Council may cut tax on hybrid vehicles as auto sector battles slowdown
Amid the auto industry’s clamour for a cut in the goods and services tax (GST) rate, the GST Council may give a breather to the hybrid vehicles segment in its upcoming meeting. The government is examining a rate cut for such vehicles by doing away with the cess, which will bring down the tax incidence from 43 per cent to 28 per cent.
Hybrid vehicles use both a small internal combustion engine (ICE) and an electric motor for minimising emission. (Read more here)
3) Auto dealers unsure of a revival in consumer sentiment in festive season
Despite the government announcing a number of sops, auto dealers are unsure of a revival in consumer sentiment in the upcoming festive season.
“On the ground, I can’t say right now if I have seen much change from what we last reported. Enquiries are still there, but postponement continues as of now,” said Federation of Automobile Dealers Associations (FADA) President Ashish Harsharaj Kale. (Read more here)
4) India Inc's investment project announcements fall to Rs 11.3 trillion
The value of new investment projects announced by Indian companies fell to Rs 11.30 trillion in 2018-19 compared to Rs 21.04 trillion in 2014-15, according to the data collated by the Centre for Monitoring Indian Economy (CMIE).
In the coming months, the pace of investments would depend on how soon consumption demand picks up and private sector investment ramps up investment in infrastructure.
“The current fiscal may not see any major upward shift, given the fairly low GDP growth witnessed in first quarter of fiscal 2020 at 5 per cent,” rating firm CARE Ratings said in a statement. (Read more here)
5) New rules to end disputes with infra cos
After years of delay due to resistance from ministries that deal with infrastructure, the finance ministry has moved a plan to make it easier for firms to get 75 per cent of the arbitration award in case of construction projects that are facing disputes, the Times of India reported on Wednesday.
According to the report, the National Highways Authority of India, alone, is to clear claims of over Rs 50,000 crore to road developers, despite the agency having lost cases in arbitration. Further, the amount could easily top Rs 1 trillion if the claims related to railways and power are included, officials told the national daily.
6) IDBI Bank to get Rs 9,300-crore capital infusion from promoters
IDBI Bank is set to get a one-time capital infusion of Rs 9,300 crore from its promoters — the central government and Life Insurance Corporation (LIC) — to deal with its “legacy book”.
Union minister Prakash Javadekar announced the decision taken by the Cabinet on Tuesday. Of the Rs 9,300 crore, LIC will contribute 51 per cent, i.e. Rs 4,743 crore, and the remaining 49 per cent funds, amounting to Rs 4,557 crore, will come from the government as its share on a one-time basis, Javedekar said. The government's capital infusion will come in the form of recapitalisation bonds. (Read more here)
7) Anil Ambani's Reliance Naval risks insolvency as banks say no to debt plan
The shipyard controlled by Anil Ambani is facing the prospect of bankruptcy after failing to get creditors’ approval for restructuring Rs 70 billion ($970 million) of debt, people familiar with the matter said.
The bankruptcy tribunal will consider putting Reliance Naval & Engineering in bankruptcy on Wednesday as no new repayment plan was submitted after lenders, led by IDBI Bank, rejected an earlier offer in July, sources said, asking not to be named as the information is not public. The court can also defer the decision on bankruptcy. (Read more here)
8) Flipkart, Amazon festive sales may see slower growth
Flipkart Group and Amazon India, the country's two largest online marketplaces, are expected to register 25-27 per cent sales growth during the festive season, which would be lower than last year, because of sluggish consumer sentiment, a slowing economy and greater uncertainty about regulations implemented this year, the Economic Times reported on Wednesday.
9) Rupee fall against dollar likely to spur margins of IT companies
At a time when IT services firms are facing cost pressure of various kinds, a depreciating rupee against the US dollar is likely to provide the much-needed support to their operating margins in the second quarter of FY20.
But cross currency fluctuation, especially a weakening pound, is expected to erode some of the gains, say experts. “The recent weakening of the rupee will be a major tailwind for the IT sector, as other cost pressures are increasing,” said Sanjeev Hota, head of research at Sharekhan. (Read more here)
10) Oyo in talks for Lovely varsity's hostel assets
Oyo Hotels and Homes is in advanced talks to acquire Lovely Professional University's (LPU's) student accommodation assets in a $200-million deal, as the SoftBank-backed start-up looks to expand into areas beyond hotels, the Times of India reported on Wednesday, citing three sources familiar with the development.