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Reliance Capital gains after board approves independent listing of home finance business

Reliance Capital gains after board approves independent listing of home finance business

Sep 14,2016

The announcement was made yesterday, 13 September 2016, when stock market remained closed on account of Bakri Id.

Meanwhile, the S&P BSE Sensex was down 46.19 points or 0.16% at 28,307.35.

On BSE, so far 6.75 lakh shares were traded in the counter as against average daily volume of 5.01 lakh shares in the past one quarter. The stock hit a high of Rs 561.50 and a low of Rs 546.65 so far during the day. The stock had hit a 52-week high of Rs 574 on 9 September 2016. The stock had hit a 52-week low of Rs 303.60 on 12 February 2016. The stock had outperformed the market over the past one month till 12 September 2016, rising 21.96% compared with 0.71% rise in the Sensex. The scrip had also outperformed the market in past one quarter, rising 32.06% as against Sensexs 6.45% rise.

The large-cap company has equity capital of Rs 252.63 crore. Face value per share is Rs 10.

Reliance Capital said the independent listing of Reliance Home Finance (RHF) is expected to unlock substantial value for existing shareholders of Reliance Capital. The listing of Reliance Home Finance will also lead to increased management focus and accelerated growth in the home finance business. As per the proposal, 49% stake in Reliance Home Finance Limited will be allotted to all shareholders of Reliance Capital, in the ratio of one share free of cost in Reliance Home Finance for every one share held in Reliance Capital.

Reliance Capital will hold a 51% stake in Reliance Home Finance, and the company will be adequately capitalised to grow the lending book to over Rs 20000 crore in the next 18 months. The proposal is subject to necessary shareholders and other approvals. Reliance Home Finance, a 100% subsidiary of Reliance Capital, provides a wide range of loan solutions like home loan, LAP, construction finance and affordable housing loans. The company reported an AUM of Rs 8259 crore ($1.2 billion) during the quarter ended 30 June 2016.

Mr. Anmol A. Ambani, Director, Reliance Capital said Prime Minister, Narendra Modi has set a goal of affordable housing for all by 2022. There is presently an estimated shortage of 10 crore residential units in India. To address the needs of this sector, Reliance Home Finance has charted an aggressive growth plan in this space, and aims to increase its book size to over Rs 50000 crore in the next few years.

On a consolidated basis, Reliance Capitals net profit rose 3% to Rs 207 crore on 48.3% growth in total income to Rs 3663 crore in Q1 June 2016 over Q1 June 2015.

Reliance Capital, a part of the Reliance Group, is one of Indias leading private sector financial services companies.

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Vimal Oil and Foods announces resignation of company secretary and compliance officer
Jan 31,2017

Vimal Oil and Foods announced that Mehulkumar K.Vyas has resigned as Company Secretary (KMP) and Compliance Officer with effect from the closing of business hours on 30 January 2017. Consequently, he has ceased to be designated as a Company Secretary (KMP) and Compliance Officer of the Company with effect from the closing of business hours on 30 January 2017

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Real per capita GSDP between 1983 and 2014, shows across-the-board improvement: Economic Survey 2016-17
Jan 31,2017

The Union Finance Minister Shri Arun Jaitley presented the Economic Survey 2016-17 in the Parliament today. The Economic Survey states that while economic performance has been remarkable in the aggregate, Indias success as a federation depends on the progress of each of its individual states. What is a reasonable standard for assessing how well the states are doing? One intuitive metric is to see how well individual states have done over time on two sets of indicators: economic indicators, such as income and consumption, and health/demographic indicators such as infant mortality rate, life expectancy, and total fertility rate. Our analysis of these indicators begins in the 1980s, when the structural break from the previous era of the n++Hindu Growth Raten++ occurred.

The Economic Survey states that seeing only the shift in the levels of these indicators does not give us the full picture because there is no benchmark for relative assessment. Here, economic theory provides us a useful metric: convergence (or unconditional convergence). Convergence means that a state that starts off at low performance levels on an outcome of importance, say the level of income or consumption, should grow relatively faster over time, improving its performance so that it catches up with states which had better starting points.

The Economic Survey mentions that when studying real per capita GSDP over time between 1983 and 2014 ,there has been a clear increase in levels indicating an across-the-board improvement. For example, between 1984 and 2014, the poorest state (Tripura, with a per capita income of INR 11,537 in 1984 to INR 64,712 in 2014) increased its per capita GDP 5.6 fold; the median state (Himachal Pradesh) increased its income level 4.3 fold.

The Economic Survey mentions that, when convergence in real per capita GDP is studied for the latest decade (2004-2014), it is found that while incomes converge for provinces in China and for countries in the world, in India, they diverge. When convergence in real per capita consumption for states in India is studied, the same trend of divergence is observed. Despite growing rapidly on average, there is sign of growing regional inequality among the Indian states. This is puzzling because the underlying forces in favor of equalization within Indian++namely strong and rising movements of goods and peoplen++are strongly evident. This is not found to be the case in the previous decade (1994-2004), when we see that incomes in China, India and the world were all diverging/weakly converging.

The Economic Survey elaborates that to observe convergence, we should see a downward sloping line - this means that the countries/provinces/states that start off poorer subsequently grew faster, closing the gap with more developed countries/states. The opposite is happening in India.

The Economic Survey states that a similar trend of consumption divergence is observed within India for the three time periods of 1983-1993, 1993-2004 and 2004-2011. All this suggests that over time, regional income/consumption inequality in India is not narrowing despite such gaps narrowing across countries in the world and within China. The Indian paradox is doubly confounding: thicker international borders that are more impervious to the equalizing flows of factors if production lead to convergence but the supposedly porous borders within India perpetuate spatial inequality.

The Economic Survey further states that one possible hypothesis for seeing a regional dispersion in income and consumption is that there might be governance traps that impede the catch-up process. And if there are such traps, labor and capital mobility might even aggravate underlying inequalities. But why such traps persist if competitive federalism is forcing change upon the lagging states remains an open question.

The Economic Survey remarks that in contrast, on health, there is strong evidence of convergence amongst the states in the 2000s. But here it is the international contrast that is striking. With regards to life expectancy, the Indian states are close to where they should be given their level of income. But that is not true of IMR (Infant Mortality Rate), suggesting that the n++mother and childn++ (discussed also in last years Survey) bear the brunt of weaker delivery of health services.

The Economic Survey states that but what really stands out in the international comparison is fertility (measured using Total Fertility Rate), where we find that for their levels of development, the Indian states have much lower levels of fertility than countries internationally. These unusually large declines in fertility have strongn++and potentially positiven++implications for Indias demographic dividend going forward.

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Apparel and Leather industry key to generation of formal and productive jobs: Economic Survey 2016-17
Jan 31,2017

Apparel and Leather & Footwear sectors are eminently suitable for generating jobs that are formal and productive, providing bang-for-buck in terms of jobs created relative to investment and generating exports and growth. This was stated in the Economic Survey 2016-17 presented by the Finance Minister Shri Arun Jaitley in the Parliament today. The Survey adds that these sectors provide immense opportunities for creation of jobs for the weaker sections, especially for women, and can become vehicles for broader social transformation in the country.

The Survey highlights the opportunity for India in this sector in global context by saying that India has an opportunity to push exports since rising wage levels in China has resulted in China stabilizing or losing market share in these products. India is well positioned to take advantage of Chinas deteriorating competitiveness due to lower wage costs in most Indian states, it adds.

The Survey also lists a number of challenges faced by these sectors. It says that the space vacated by China is fast being taken over by Bangladesh and Vietnam in case of apparels and Vietnam and Indonesia in case of leather and footwear, while Indian companies struggle in face of a set of common challenges related to logistics, labour regulations, tax & tariff policy and disadvantages emanating from the international trading environment compared to competitor countries.

On logistics, the Survey says that costs and time involved in getting goods from factory to destinations are greater in India than those for other countries. On labour costs, Indias source of comparative advantage in this sector, also seem not to work in its favour due to problems like regulations on minimum overtime pay, onerous mandatory contributions that become de facto taxes for low-paid workers in small firms that result in a 45 per cent lower disposable salary, lack of flexibility in part-time work and high minimum wages in some cases.

According to the Survey, in both apparel and footwear sectors, tax and tariff policies create distortions that impede India gaining export competitiveness. India imposes a 10 percent tariff on man-made fibers vis- a-vis 6 percent on cotton fibres. On the other hand, domestic taxes also favor cotton-based production rather than production based on man-made fibers, and leather footwear rather than non leather footwear. The global demand for apparel is moving from cotton fibre products to manmade fibre and similarly footwear of non leather, it adds. Indias competitors enjoy better market access by way of zero or at least lower tariffs in the two major importing markets, namely, the United States of America (USA) and European Community (EU), the Survey says.

Another problem faced by the leather sector highlighted by the Survey is that despite having a large cattle population, Indias share of cattle leather exports is low and declining due to limited availability of cattle for slaughter in India.

The Survey suggests several measures to make these sectors globally competitive and unlock its potential for creating new jobs and generating growth. It recommends that there is a need to undertake rationalization of domestic policies which are inconsistent with global demand patterns.

. Several measures have been initiated that form part of the package approved by the Government for textiles and apparels in June 2016, the Survey notes. Accordingly, textile and apparel firms will be provided a subsidy for increasing employment, but these need to be complemented by further actions such as the following:

n++ An FTA with EU and UK in the case of apparel will offset an existing disadvantage by Indias competitors- Bangladesh, Vietnam and Ethiopia. In the case of leather and footwear, the FTA might give India an advantage relative to competitors. In both cases, the incremental impact would be positive.

n++ The introduction of the GST offers an excellent opportunity to rationalize domestic indirect taxes so that they do not discriminate in the case of apparels against the production of clothing that uses man-made fibers; and in the case of footwear against the production of non-leather based footwear.

n++ Third, a number of labor law reforms would encourage employment creation in these two sectors.

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Property Tax can be tapped to generate Additional Revenue at City Level
Jan 31,2017

The Economic Survey 2016-17, presented today in the Parliament by the Union Finance Minister Shri Arun Jaitley, stated that Urban Local Bodies (ULBs), having primary responsibility for the development and service provisioning of cities, face major and inextricably linked problems: large infrastructure deficits, inadequate finances, and poor governance capacities. Every Indian city faces serious challenges related to water and power supply, waste management, public transport, education, healthcare, safety, and pollution.

The analysis carried out for the Survey has found that greater service delivery is correlated with more resources, own revenue, staffing and capital spending per capita. Analysis indicates no clear relationship between service delivery and governance.

Currently, tax revenues are not constrained by inadequate taxation powers of ULBs. One promising source is property tax. The study done for the Survey shows that property tax potential is large and can be tapped to generate additional revenue at city level. Satellite imagery can be a useful tool for improving urban governance by facilitating better property tax compliance. The study has shown that Bengaluru and Jaipur are currently collecting no more than 5-20 per cent of their respective potentials for property tax.

Competition between States is becoming a powerful dynamic of change and progress, that dynamic must extend to competition between States and Cities and between cities. Cities that are entrusted with responsibilities, empowered with resources, and encumbered by accountability can become effective vehicles for competitive federalism and, indeed, competitive sub-federalism to be unleashed.

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Fiscal activism embraced by advanced economies not relevant for India: Economic Survey 2016-17
Jan 31,2017

Indias economic experience shows that the fiscal activism embraced by advanced economies- giving a greater role to counter-cyclical policies and attaching less weight to curbing debt- is not relevant for India. This observation was made in the Economic Survey 2016-17 presented by the Finance Minister Shri Arun Jaitley in the Parliament today. The Economic Survey has also stated that Indias fiscal experience has underscored the fundamental validity of the fiscal policy principles enshrined in the Fiscal Responsibility and Budget Management Act (FRBM) Act 2003.

Since the 2008-09 Global Financial Crisis (GFC), internationally fiscal policy has seen a paradigm shift from the emphasis on debts to deficits, arguing for greater activism in flows (deficits) and minimizing concerns about sustainability of the stocks (debt). But Indias experience has reaffirmed the need for rules to contain fiscal deficits, because of the proclivity to spend during booms and undertake stimulus during downturns. Indias experience has also highlighted the danger of relying on rapid growth rather than steady and gradual fiscal and primary balance adjustment to do the n++heavy liftingn++ on debt reduction. In, short it has underscored the fundamental validity of the fiscal policy principles set out in the FRBM.

Even as the basic tenets of the FRBM remain valid, the operational framework designed in 2003 will need to be modified for the fiscal policy direction of India of today, and even more importantly the India of tomorrow. This setting out a new vision through an FRBM for the 21st century will be the task of the FRBM Review Committee.

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Economic Survey advocates reforms to unleash economic dynamism and social justice
Jan 31,2017

India needs an evolution in the underlying economic vision across the political spectrum and further reforms are not just a matter of overcoming vested interests that obstruct them. This was stated in the Economic Survey 2016-17 presented in the Parliament today by the Union Finance Minister Shri Arun Jaitley.

The Survey lists the some of the challenges that might impede Indias progress. These challenges are classified by the Survey as follows: ambivalence about property rights and the private sector, deficiencies in State capacity, especially in delivering essential services and inefficient redistribution.

The Survey highlights difficulties in privatizing public enterprises, even for firms where economists have made strong arguments that they belong in the private sector. In this context, the Survey points towards the need to further privatize the Civil Aviation, Banking and Fertilizer sectors.

The Survey points out that the capacity of the State in delivering essential services such as health and education is weak due to low capacity, with high levels of corruption, clientelism, rules and red tape. At the level of the states, competitive populism is more in evidence than competitive service delivery, the Survey adds. Constraints to policy making due to strict adherence to rules and abundant caution in bureaucratic decision-making favours status quo, the Survey cautions.

According to the Survey, redistribution by the government is far from efficient in targeting the poor. This is intrinsic to current programs because spending is likely to be greatest in states with better institutions and which will therefore have fewer poor.

The Survey notes that over the past two years, the government has made considerable progress toward reducing subsidies, especially related to petroleum products. Technology has been the main instrument for addressing the leakage problem and the pilots for direct benefit transfer in fertilizer represent a very important new direction in this regard, the Survey adds.

Noting that India has come a lon++n++ng way in terms of economic performance and reforms, Economic Survey 2016-17 says that there is still a journey ahead to achieve dynamism and social justice. Completing this journey will require broader societal shifts in the underlying vision, the Survey adds.

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Economic Survey: Universal Basic Income (UBI) Scheme an alternative to plethora of State subsidies for poverty alleviation
Jan 31,2017

The Economic Survey 2016-17 tabled in Parliament today by the Union Finance Minister Shri Arun Jaitley has advocated the concept of Universal Basic Income (UBI) as an alternative to the various social welfare schemes in an effort to reduce poverty. The survey juxtaposes the benefits and costs of the UBI scheme in the context of the philosophy of the Father of the Nation, Mahatma Gandhi. The Survey states that the Mahatma as astute political observer, would have anxieties about UBI as being just another add-on Government programme, but on balance, he may have given the go-ahead to the UBI.

The Survey says the UBI, based on the principles of universality, unconditionality and agency, is a conceptually appealing idea but with a number of implementation challenges lying ahead especially the risk that it would become an add-on to, rather than a replacement of, current anti-poverty and social programmes, which would make it fiscally unaffordable.

Based on a survey on misallocation of resources for the six largest Central Sector and Centrally Sponsored Sub-Schemes (except PDS and fertilizer subsidy) across districts, the Economic Survey points out that the districts where the needs are greatest are precisely the ones where State capacity is the weakest. This suggests that a more efficient way to help the poor would be to provide them resources directly, through a UBI.

Exploring the principles and prerequisites for successful implementation of UBI, the Survey points out that the two prerequisites for a successful UBI are: (a) functional JAM (Jan Dhan, Aadhar and Mobile) system as it ensures that the cash transfer goes directly into the account of a beneficiary and (b) Centre-State negotiations on cost sharing for the programme.

The Survey says that a UBI that reduces poverty to 0.5 percent would cost between 4-5 percent of GDP, assuming that those in the top 25 percent income bracket do not participate. On the other hand, the existing middle class subsidies and food, petroleum and fertilizer subsidies cost about 3 percent of GDP.

The Survey concludes that the UBI is a powerful idea whose time even if not ripe for implementation, is ripe for serious discussion.

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Economic Survey 2016-17 suggests setting up of a centralised Public Sector Asset Rehabilition Agency
Jan 31,2017

The Union Finance Minister Shri Arun Jaitley presented the Economic Survey 2016-17 in the Parliament today. The Survey shows that our country has been trying to solve its Twin Balance Sheet(TBS) problem - overleveraged companies and bad-loan-encumbered banks, a legacy of the boom years around the Global Financial Crisis. So far, there has been limited success. The problem has consequently continued to fester: Non-Performing Assets (NPAs) of the banking system (and especially public sector banks) keep increasing, while credit and investment keep falling. Now it is time to consider a different approach - a centralised Public Sector Asset Rehabilitation Agency (PARA) that could take charge of the largest, most difficult cases, and make politically tough decisions to reduce debt.

As per the Survey, gross NPAs has climbed to almost 12 per cent of gross advances for public sector banks at end-September 2016. At this level, Indias NPA ratio is higher than any other major emerging market, with the exception of Russia. The consequent squeeze of banks has led them to slow credit growth to crucial sectors-especially to industry and medium and small scale enterprises (MSMEs)-to levels unseen over the past two decades. As this has occurred, growth in private and overall investment has turned negative . A decisive resolution is urgently needed before the TBS problem becomes a serious drag on growth.

The Survey reaches to the conclusion that a PARA may be necessary because

n++ Public discussion of the bad loan problem has focused on bank capital. But far more problematic is finding a way to resolve the bad debts in the first place.

n++ Some debt repayment problems have been caused by diversion of funds. But the vast majority has been caused by unexpected changes in the economic environment after the Global Financial Crisis, which caused timetables, exchange rates, and growth rate assumptions to go seriously wrong.

n++ This concentration creates a challenge since large cases are difficult to resolve, but also an opportunity since TBS could be overcome by solving a relatively small number of cases.

n++ Restoring them to financial health will require large write-downs.

n++ Among other issues, they face severe coordination problems, since large debtors have many creditors, with different interests. And they find it hard -financially and politicallyn++to grant them sizeable debt reductions, or to take them over and sell them.

n++ It increases the costs to the government since bad debts of the state banks keep rising, and increases the costs to the economy, by hindering credit, investment, and therefore growth.

n++ Since, private run Asset Reconstruction Companies (ARCs) have not been successful either in resolving bad debts, though international experience (especially that of East Asian economies) shows that a professionally run central agency with the government backing could overcome the coordination and political issues that have impeded progress over the past eight years

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Good fiscal performance by States should be incentivized to keep the overall fiscal performance on track: Economic Survey 2016-17
Jan 31,2017

The Economic Survey 2016-17 presented in the Parliament today has highlighted the need for fiscal prudence both by the Centre as well as the States in order to maintain overall fiscal health of the economy. The Economic Survey states that the Centres Fiscal Responsibility and Budget Management (FRBM) Act, was mirrored by Fiscal Responsibility Legislations (FRL) adopted in the States.

As per the Economic Survey, there has been an improvement in the financial position of the States over the last few years. The average revenue deficit has been eliminated, while the average fiscal deficit was curbed to less than 3 percent of GSDP. The average debt to GSDP ratio has also fallen.

However, just because fiscal progress followed the introduction of the FRL, it doesnt mean that the progress can be attributed entirely to FRLs. The following points are important with respect to the improvement in fiscal variables:

I. The deficit reduction owes much to favorable exogenous factors:

n++ An acceleration of nominal GDP growth (of 6 percentage points on average after 2005) helped boost States revenues by about 1 percent of GSDP;

n++ Increased transfers from the centre of about 1 percent of GSDP both because of the 13th Finance Commission recommendations and the surge in central government revenues;

n++ Reduced interest payments of about 0.9 percent of GSDP on account of the debt restructuring package offered by the Centre; and

n++ Reduced need for spending by the Statesn++estimated at about 1.2 percent of GDP--as the Centre took on a number of major social sector expenditures under the Centrally Sponsored Schemes (CSS).

I. Desisting from splurging rather than belt-tightening was probably the real contribution of the States. Despite the revenue surge, non interest revenue expenditure rose by only 0.4 percent of GSDP.

II. Off-budget expenditures fell, as measured by the flow of explicit guarantees and loans to public utilities fell.

III. There was a sharp drop in the magnitude of forecast errors suggesting an improvement in the process of budget formation. The shortfalls between budgeted and actual own tax revenue went from an average of 5.9 percent of actuals (optimistic forecasts) before the FRL to -0.6 percent of actuals after.

IV. All of these positive indicators show signs of decay in later years; fiscal deficits for example are close the limit of 3 percent on average 10 years after the FRL.

Economic Survey 2016-17 elaborates that as the fiscal challenges mount for the states because of the Pay Commission recommendations, and mounting payments from the UDAY bonds, there is a need to review how fiscal performance can be kept on track. Greater reliance will need to be placed on incentivizing good fiscal performance, not least because states are gradually repaying their obligations to the Centre, removing its ability to impose a hard budget constraint on them says the Economic Survey. Above all, however, incentivizing good performance by the States will require the Centre to be an exemplar of sound fiscal management itself.

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GDP growth in 2017-18 is projected at 6 n++ to 7 n++ percent Post-demonetisation
Jan 31,2017

The Government says that the adverse impact of demonetisation on GDP growth will be transitional. The Economic Survey 2017 presented in Parliament today by the union Finance Minister, Shri Arun Jaitley states that once the cash supply is replenished, which is likely to be achieved by end March 2017, the economy would revert to the normal. Therefore the real GDP growth in 2017-18 is projected to be in the range of 6n++-7n++ percent.

The Economic Survey points out that demonetisation will have both short-term costs and long-term benefits as detailed in the attached table. Briefly, the costs include a contraction in cash money supply and subsequent, albeit temporary, slowdown in GDP growth; and benefits include increased digitalization, greater tax compliance and a reduction in real estate prices, which could increase long-run tax revenue collections and GDP growth.

On the benefits side, early evidence suggests that digitalization has increased since demonetisation. On the cost side, effective cash in circulation fell sharply although by much less than commonly believed - a peak of 35 percent in December, rather than 62 percent in November since many of the old high denomination notes continued to be used for transactions in the weeks after 8th November Additionally, remonetisation will ensure that the cash squeeze is eliminated by April 2017. The cash squeeze in the meantime will have significant implications for GDP, reducing 2016-17 growth by n++ to n++ percentage points compared to the baseline of 7 percent. Recorded GDP will understate impact on informal sector because, for example, informal manufacturing is estimated using formal sector indicators (Index of Industrial Production). These contractionary effects will dissipate by year-end when currency in circulation should once again be in line with estimated demand, which would also allow growth to converge to a trend by FY 2017-18.

The Economic Survey states that the weighted average price of real estate in eight major cities which was already on a declining trend fell further after November 8, 2016 with the announcement of demonetization. It goes on to add that an equilibrium reduction in real estate prices is desirable as it will lead to affordable housing for the middle class and facilitate labour mobility across India currently impeded by high and unaffordable rents.

The Survey suggests a few measures to maximize long-term benefits and minimize short-term costs. One, fast remonetisation and especially, free convertibility of cash to deposits including through early elimination of withdrawal limits. This would reduce the GDP growth deceleration and cash hoarding. Two, continued impetus to digitalization while ensuring that this transition is gradual, inclusive, based on incentives rather than controls and appropriately balancing the costs and benefits of cash versus digitalization. Three, following up demonetisation by bringing land and real estate into the GST. Four, reducing tax rates and stamp duties. And finally, an improved tax system could promote greater income declaration and dispel fears of over-zealous tax administration.

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Fitch: Risks to Indian Homebuilders Rise; Sales to Fall in 2017
Jan 31,2017

Fitch Ratings expects property sales in India to fall by at least 20%-30% in 2017, owing to disruption caused by demonetisation and general caution on the part of buyers. Homebuilders already have high levels of unsold inventory and are likely to cut selling prices as demand weakens. We expect risks to homebuilders to rise further this year, with leverage likely to increase and liquidity to tighten. Homebuilders with access to diversified funding channels are likely to be more insulated from the downturn.

We expect home prices to decline this year because demand for residential property has weakened significantly in 4Q16, following the demonetisation of large denomination notes in November last year. Demonetisation has made it harder for home buyers to use undeclared wealth for property payments. The number of residential property units sold in 4Q16 fell by 44% yoy, dragging down overall units sold in 2016 by 9%, based on data compiled by Knight Frank Research. The volume of new units launched fell by 61% yoy.

We expect the largest cuts to selling prices in the National Capital Region (NCR) followed by Mumbai, where unsold inventory is the highest at 16 and 10 quarters of sales, respectively, based on market estimates. The NCR is also known to have the largest cash-based economy in the country, and therefore demand is likely to suffer more from the currency demonetisation than other regions. We expect demand for homes in Chennai and Pune to be less affected by the downturn, as unsold inventory is the lowest in these cities, at around 6-7 quarters of sales.

Top-tier homebuilders like Indiabulls Real Estate Limited (IBREL, B+/Stable) and Lodha Developers Private Limited (Lodha, B/Negative) - whose sales benefit from their brand strength - have yet to start cutting home prices substantially. However, we understand that smaller and second-tier homebuilders across the country have started offering discounts of around 25%-30% to attract buyers.

The worst of the downturn in home sales is likely to occur in 1H17. Demand is likely to recover moderately in 2H17 as the festive season approaches, and because banks have cut interest rates on home loans by 50bp-60bp over the last 12 months to multi-year lows.

Fitch continues to expect homebuilders that have a large pipeline of pre-sold projects, such as IBREL and Lodha, to be better off than those that do not. However, even these homebuilders credit profiles may weaken if demand does not recover for an extended period. Although property construction was hampered for a few weeks after the demonetisation announcement, we understand that most homebuilders have been able to work around practical issues related to making payments to suppliers and contractors, and that construction has since resumed.

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Rane (Madras) revises payment date for interim dividend
Jan 31,2017

Rane (Madras) has revised the payment date for interim dividend to 10 February 2017. There is no change in record date i.e. 03 February 2017.

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Bharti Infratel leads losers in A group
Jan 31,2017

Bharti Infratel slumped 11.33% to Rs 291.50 at 12:25 IST after telecom giant Vodafone acknowledged that it was in talks with third largest telecom operator for a possible merger. The merger deal if materializes, could dent Bharti Infratels revenue, whose towers are used by both Idea Cellular and Vodafone, report said. The stock topped the losers in the BSEs A group. On the BSE, 6.15 lakh shares were traded on the counter so far as against the average daily volumes of 1.68 lakh shares in the past two weeks.

Adani Enterprises tumbled 5.86% to Rs 86.75. The stock was second biggest loser in A group. On the BSE, 10.5 lakh shares were traded on the counter so far as against the average daily volumes of 8.33 lakh shares in the past two weeks.

HCL Technologies fell 5% at Rs 797.70. The stock was the third biggest loser in A group. On the BSE, 61,000 shares were traded on the counter so far as against the average daily volumes of 59,000 shares in the past two weeks.

TCS shed 4.81% to Rs 2,221.95. The stock was fourth biggest loser in A group. On the BSE, 86,000 shares were traded on the counter so far as against the average daily volumes of 72,000 shares in the past two weeks.

IT stocks declined after US President Donald Trumps administration has drafted an executive order aimed at overhauling the work-visa programmes tech companies depend on to hire employees.

Grasim Industries dropped 4.56% at Rs 926. The stock was the fifth biggest loser in A group. On the BSE, 54,000 shares were traded on the counter so far as against the average daily volumes of 61,000 shares in the past two weeks.

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Alicon Castalloy declines after uninspiring Q3 numbers
Jan 31,2017

The result was announced after market hours yesterday, 30 January 2017.

Meanwhile, the S&P BSE Sensex was down 187.54 points or 0.67% at 27,662.02.

On the BSE, 5,278 shares were traded on the counter so far as against the average daily volumes of 1,695 shares in the past one quarter. The stock had hit a high of Rs 397 and a low of Rs 373 so far during the day.

The stock had hit a record high of Rs 491 on 10 November 2016 and a 52-week low of Rs 242.20 on 15 February 2016. The stock had outperformed the market over the past one month till 30 January 2017, advancing 9.55% compared with the Sensexs 4.59% rise. The scrip had, however, underperformed the market over the past one quarter, sliding 16.74% as against the Sensexs 0.29% fall.

The small-cap company has equity capital of Rs 6.13 crore. Face value per share is Rs 5.

Alicon Castalloy is a part of the Alicon group and is into business of castings.

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Walchandnagar Industries drops after reverse turnaround in Q3
Jan 31,2017

The result was announced before market hours today, 31 January 2017.

Meanwhile, the S&P BSE Sensex was down 150.40 points, or 0.54%, to 27,699.16.

On the BSE, 32,000 shares were traded on the counter so far as against the average daily volumes of 40,697 shares in the past one quarter. The stock had hit a high of Rs 158.05 and a low of Rs 153.50 so far during the day.

The stock had hit a 52-week high of Rs 177 on 18 October 2016 and a 52-week low of Rs 115.80 on 12 February 2016. The stock had outperformed the market over the past one month till 30 January 2017, advancing 10.55% compared with the Sensexs 4.59% rise. The scrip had, however, underperformed the market over the past one quarter declining 1.42% as against the Sensexs 0.29% fall.

The small-cap company has equity capital of Rs 7.61 crore. Face value per share is Rs 2.

Walchandnagar Industries net sales fell 22.3% to Rs 99.77 crore in Q3 December 2016 over Q3 December 2015.

Walchandnagar Industries is engaged in engineering, fabrication and manufacturing of machinery.

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