Mid Night News – 27th Jun 2017

Midnight News Update –Jun 27th2017


CRISIL has estimated that the banks will have to take a haircut of up to 60% in case of the 12 accounts that have been identified for classification under the Insolvency and Bankruptcy Code (IBC). Under the IBC, the RBI will give the banks 180-day time frame (extendable to 270 days) for finding a resolution to the problem. In the absence of any resolution, the said companies will be automatically referred for liquidation. The RBI has already underscored that the first priority will be to find a resolution. In most cases, the banks may have to take as much as 60% hair cut to reach a compromise solution.


Addressing US business houses, prime minister Narendra Modi focused on the major contribution that India had made towards creating jobs in the US. Modi also underscored the fact that for the US India remains one of the largest untapped markets with demographics in its favour. Addressing the Indian diaspora in the US, Modi called upon them to come to India and help create the enabling environment that could help professionals flower in the same way as they have done in America. Mr. Modi is expected to take up critical issues like terrorism and the visa issue with Donald Trump later today.


Even as India readies to launch GST on an all-India basis from July 01st, the GSTN has also confirmed that the infrastructure and the support system may not be fully geared up for the launch of the GST on July 01st. Many of the leading banks have already indicated that the banking backbone, which forms a key component of the entire GST ecosystem may not be fully prepared. In fact, the head of GSTN has also admitted that the software may require another month or so to be fully tested. While the government is keen to go ahead with the launch on July 01st, the logistics will be the key to its success.


Downstream giant, HPCL, is all geared up to make a joint bid for a 49% stake in the Vankor oil fields of Russia, as part of an investing consortium. Some of India’s largest oil companies like ONGC, Oil India, IOCL and BPCL are already part of this consortium. The Vankor oil field is owned by Rosneft and is located in the highly oil rich region of Northern Siberia. While OVL already has access to 7.31 million tonnes of oil through this deal, BPCL and IOCL have access to 6.56 million tonnes of oil through their stake. Vankor produces nearly 4% of Russia’s daily oil production, which is among the biggest.


Minimum basic income, which has been a debatable area for India but then it could empower millions of Indians and improve general purchasing power in a big way. Of course, the only fear is that the cost of such a move could be quite prohibitive. In India, nearly 22% of the Indian population lives below the poverty line and a Minimum Basic Income will go a long way in helping create demand at the bottom of the pyramid. But the big worry of this move could be the costs involved. For example, the basic per capita income is defined as Rs.6450 per capita per year. If 75% of the population received this as Universal Basic Income (UBI), it would cost nearly 4.2% of GDP. That will surely pose a huge cost on the fiscal deficit. Many experts have been talking of right to basic income that that is what UBI is.


Cadilla Healthcare Board has approved raising up to Rs.18,500 crore in terms of fresh funds. This will include issue of securities in the domestic and the international market. The company has, however, not spelt out how it proposes to use the capital so raised. Over the last few months, Cadilla has been one of the few pharma companies to actually create positive value for shareholders and has become the second most valuable pharma company in India after Sun Pharma; a position that was long held by Lupin. Cadilla’s product portfolio includes formulations, APIs, animal healthcare and wellness.


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