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RBI builds Rs  31 bn forwards position as dollar tide rises The Reserve Bank of India (RBI) has built upa Rs 31billion position in rupee dollar forwards as a continuous foreign fund inflow has necessitated active intervention by the central bank in the spot market.Forwards contracts are designed to buy foreign currencies at preagreed prices. A buyer has to payafee, the forward premium, for the right to buy at that price.Economists and currency dealers said the RBI action could also beaform of insurance against an outflow of dollars as central banks around the world had begun normalising their easy money policie In August and September, the markets witnessed outflows from the equity markets, highlighting the need to remain cautious on funds flow.Foreign investors brought Rs 31.33 billion into India in 2017, of which Rs 22.6 billion has moved into debt This is almost equivalent to the RBI´s net forward position of Rs 31.13 billion, as of September.Of this, Rs 3.44 billion m...

FMCG companies brace for new set of GST challenges It is the sixth month since the country´s biggest tax reform after independence was implemented.And just when consumer goods companies were managing to come over the initial hiccups emanating from the goods and services tax (GST), new pain points have emerged The biggest is the issue of antiprofiteering norms.Simply put, these are the rules to prevent companies from making excessive profits from the GST. While anti-profiteering provisions were cleared in June, just before the GST rollout, no clear guidelines have been specified to date on how the calculation should be done. Companies that Business Standard spoke to say they are awaiting a proper frame work to determine what constitutes profiteering and what doesn´t.The reason they said they would wait is because there is growing speculation of a likely product specific approach to anti-profiteering as opposed to a company specific approach In other words, the anti-profiteerin...

Central govt counts on divestment to deliver A sit tries to meetatight fiscal deficit target for 201718, the government hopes that the proceeds from disinvestment would not only be met but exceeded, by as much as Rs 20,000 crore.This will compensate for some of the expected short fall in other revenue heads, officials have told Business Standard. The divestment target for FY18 is Rs 72,500 crore, the highest fixed so far for any year.After successful launch of the government´s Bharat22 exchange traded fund last month, the proceeds so far are Rs 52,500 crore, already ahead of 201617´sRevised Estimate of Rs 45,500 crore. The finance ministry´s department of investment and public asset management has options (Dipam) which, it is hoped, will take stake sale proceeds even beyond Rs 90,000 crore.“We are sure the target will be met. Given the pipeline of stake sales Dipam is working on, it could be exceeded comfortably,” said an official involved in the Budget making process. “Even a Rs 2...

CBEC calls for reality check to boost GST mop-up Amid concerns over slowing goods and services tax (GST) collections, the Central Board of Excise and Customs (CBEC) has sought detailed field reports with a special focus on the top taxpayers.Finance secretary Hasmukh Adhia will review the revenue position with senior officials in the department on December 9. Field officers have been asked to submit a detailed analysis comparing tax payments, before and after GST was imposed, of the top 100 taxpayers in their jurisdictions as the government seeks to understand the reasons for collections slowing. The officials have been authorised to contact the assessees personally or even visit their premises. India’s GST collections in October fell to Rs 83,346 crore from a high of over Rs 92,000 crore in September. Moreover, the Centre’s share has been low after payment of compensation cess to states. The total central GST collection in the first four months of the new tax — July, August, Se...

Private equity calling the shots on hiring in portfolio firms On a dusty October day in Allahabad more than 200 sales executives queued up for an interview for the post of regional sales manager at a non-banking financial company. The person who interviewed them was not a company official, but a principal of a private equity fund that had recently invested in the NBFC. Private equity has come a long way in the country, from fund management and investing to micro managing businesses, and their influence is not limited to the CXO level but increasingly extend to senior and middle management.PE funds such as Kedaara Capital, TrueNorth and Advent International are extensively engaged in hiring mid-senior to CXO level talent for their portfolio companies, industry insiders said. Principals, managing directors and investment teams at these funds are the first line of filters for hiring at the investee companies. Others like Sequoia Capital, Multiples Asset Management, Everstone Capit...

Banks set norms to select bidders for troubled assets Banks, stung by fear of investigative agencies disrupting their lives even if they follow the bankruptcy process, have evolved a common set of evaluation criteria to short list potential buyers to be admitted in the bidding for assets put on the block under the Insolvency and Bankruptcy Code, said two people familiar with the developments The ability of the bidders to bring in equity funding, future potential to borrow, past track record of turning around projects are among the criteria evolved after weeks of deliberations, said the people who did not want to be identified. The other criterion that could go in favour of bidders are: higher amount of sustainable debt, shorter duration of the repayment schedule, equity upside for the lenders, allotment of redeemable instruments to lenders and the optional cash flows at the disposal of the bidder. “As a bank I am interested in getting most of my money back in the short- est pos...

Power firms top fundraising via IPOs After remaining muted between FY12-FY15, the number and size of initial public offerings (IPOs) is on the rise. State Bank of India in its recent Ecowrap report highlighted that FY18 has witnessed a significant interest in the IPO market with Rs49,175 crore being raised in just a seven-month period. Interestingly, this is more than the amount raised between FY12-FY16 put together. Among sectors, between FY10 and FY18 (up to 31 October 17), a maximum amount of Rs43,921 crore has been raised by power firms, followed by insurance, mining, minerals and metals, finance, and construction. The insurance sector has come to the market in FY18 with four firms alone raising Rs31,320 crore, said the report. It expects the current upsurge in fundraising via the IPO route to last as long as the upswing in market continues. Further, the performance of firms which got listed in recent years will determine the future course for the IPO market, it added. Th...