Indian farmers could lose nearly Rs.14,500 crore this Rabi season due to low prices. On an average most crops were being sold at Rs.200 to Rs.600 below the Minimum Support Price (MSP) fixed by the government. This is the immediate assessment based on the prices prevailing at 14 key mandis across India. These losses will stem from crops like gram, groundnut, mustard, maize, masoor and barley. In most cases, the prices had crashed in the mandis due to bumper harvests. Farmers had increased production on the hopes of a good MSP but the outcome has turned out to be disastrous for them.
In the after of the unilateral trade war initiated by Donald Trump, China has accused the US of violating trade laws and has also affirmed that China is fully prepared to take retaliatory action at the appropriate time. Trump’s proposed tariffs that will hit nearly $60 billion worth of Chinese imports into the US. Currently, the US runs a record $375 billion trade deficit with China and it was always clear that the ultimate target of all these trade wars was only China. The US has not only accused China of dumping but also alleged that China stole secrets through forced transfer of technology from the US.
In a bid to cut down on its debt burden, Indiabulls Real Estate plans to sell 50% in its Mumbai assets to Blackstone for a consideration of Rs.4750 crore. The company expects to use a substantial part of the proceeds of the sale to reduce its debt burden. This deal gives the Mumbai real estate assets of Indiabulls an enterprise value of Rs.9500 crore ($1.50 billion). It may be recollected that Indiabulls Real Estate had hived off its commercial real estate business last year with a view to roping in foreign partners. Foreign investors are seeing tremendous value in the commercial rental market in India.
The coming week is likely to be uncertain in the light of the trade war triggered off between the US and China. For the Indian markets, the volatility will be high ahead of the March expiry. There are also expectations that the last week will trigger profit booking to avoid paying LTCG tax on gains. The Nifty has already dipped below the 10,000 mark and is trading at a 5-month low. There is also the US GDP data that is expected this week and the India fiscal deficit data which will be the key from the global investors’ perspective. 29th and 30th of March are also banking holidays in India.
In the intense price war among Indian telecom companies, Goldman Sachs expects Sunil Mittal’s Bharti Airtel to come out on top. The price war was triggered off by Reliance Jio in late 2016 and has been capturing market share at a rapid pace since then. Jio managed to virtually commoditize voice and shift the battle ground to data. The Goldman report says that the bundled offering of Jio could give it an advantage in the world’s second largest telecom market but that is unlikely to make a dent on Bharti Airtel which still relies largely on the enterprise business. Goldman believes that content could only offer a limited advantage in the Indian context as most content is available free of cost anyways. In the light of the price war, Idea and Vodafone merged their operations under a single umbrella.
Tata Steel has offered a whopping Rs.35,000 crore for Bhushan Steel to gain a controlling interest in the ailing steel maker. While the details are not yet public, it is expected to be an all-cash deal. For Tata Steel, the acquisition of Bhushan Steel gives them the inorganic jump in capacity to over 21 million tonnes making them the largest steel producer in India. There are concerns that the valuation may be aggressive but it may not be too bad considering that Tata Steel will be looking to becoming a key player in the Indian market which is likely to triple in demand by 2030. That could be huge for Tata Steel.
