With the central bank, credit rating agencies and lenders’ community mounting pressure, debt-ridden Infrastructure Leasing & Financial Services (IL&FS) is likely to see a major reshuffle in the top-level management soon.
Companies and Markets
Companies & Markets
The recently released NASSCOM-PwC India E-Commerce report indicates that the Indian e-commerce market of $35 billion is expected to grow at 25 per cent in the next five years and exceed $100 billion by 2022 and create close to 1 million jobs.
India has been enthusiastically embracing digital commerce with open arms and as a result the country is expected to witness a huge surge in on-line buying in the next five years.
Foreign investors pulled out a massive Rs 9,400 crore ($1.3 billion) from the capital markets last fortnight, after putting in money during the previous two months, on widening current account deficit due to a surge in oil prices and depreciating rupee. The latest outflow comes following a net infusion of close to Rs 5,200 crore in the capital markets, both equity and debt, last month and Rs 2,300 crore in August.
Markets regulator Sebi is likely to consider a proposal to introduce a common application form for foreign investors to enter into the domestic capital market, a move expected to improve ease of doing business, senior officials said.
Besides, Sebi is expected to deliberate on a proposal on doing away with the requirement of one per cent security deposits for public issuance of debt securities.
The week saw the market begin on a weak note and Monday’s down day saw the week end in negative territory. The market was super-volatile, and every trading day saw net market movement of 300 points or more on the Sensex. The BSE Sensex lost 467 points on Monday and 509 points on Tuesday before recovering 304 points on Wednesday and 383 points on Friday. The week ended with the Sensex losing 299.18 points, or 0.79 per cent, to close at 38,090.64 points. The Nifty lost 73.90 points, or 0.64 per cent, to close at 11,515.20 points.
The government's rupee depreciation arresting measures announced on Friday may not drive fund inflows and are a negative from a longer term perspective as they increase short-term debt, an HDFC Bank report has said.
"Considering that most of the measures aim at increasing short-term external debt or in effect worsen the risk profile of companies (by increasing un-hedged exposure), could actually be considered negative," the note released on Saturday by one of the largest private sector lenders said.
State-run banks are selling non-performing assets (NPAs) worth Rs 8,500 crore this month to asset reconstruction companies (ARCs), non-banking finance companies (NBFCs) and foreign investors. State Bank of India alone has put up bad loans worth Rs 4,000 crore up for sale as the pressure mounts on banks to recover long-pending dues from defaulting companies.
Despite demands from all quarters, including general insurers and reinsurers, the much sought after catastrophe insurance is unlikely to be implemented in the current fiscal. Keeping an eye on 2019 polls, the government has asked the finance ministry to focus on flagship schemes on health cover for the poor.
Investors in over 33 debt schemes of six mutual funds — LIC MF, Aditya Birla MF, DSP MF, Tata MF, Principal MF and HSBC MF — may be the biggest losers if Infrastructure Leasing & Financial Services (IL&FS) heads to bankruptcy.