The Economic Offences Wing (EOW) has filed the second charge sheet against a total of 63 entities in the NSEL scam of 2013, which eventually led to the liquidation of the NSEL. This includes a total of 36 companies and 27 individuals. The NSEL had defaulted on its Rs.5600 crore commitment as an exchange when the FMC banned the illegal non-spot transactions that NSEL was indulging in. Group companies of the Jignesh Shah Empire including NSEL and 63 Moons are part of the charge sheet. Three brokerage firms have also been charge sheeted for mis-spelling the product as an assured return product.
For the Apr-Nov period, the total fiscal deficit stood at 115% of the full year target giving a clear indication that the government will be missing the full year target. The government is unlikely to be able to meet its revised FRBM target of 3.3% of GDP. In addition, now economists are worried that the budget targets may also not be met as the government goes aggressive on farm loan waivers and there is likely to be a shortfall in GST collections. The government is still woefully short of its divestment target and is already coaxing PSUs to give liberal dividends and buybacks to help them meet this target.
Fundraising via the equity route was sharply down by 60% in the full year 2018 at just Rs.63,744 crore. The figure for the previous year was almost Rs.1,60,000 crore. Nearly half of this fundraising happened through the IPO route during the year. Even on the IPO collections were down 50% on a YOY basis as the heightened market volatility and the imposition of 10% LTCG tax dampened the sentiments surrounding equity as an asset class. The sentiments also got dampened because of the sharp correction in the second half of the year which saw a sharp decline in the IPOs during the second half of the year.
Indian Oil, ONGC and NTPC have emerged as the most profitable companies for the fiscal year 2017-18. AT the extreme, MTNL, BSNL, and Air India were the three PSUs that incurred the maximum losses. Interestingly, the combination of MTNL, BSNL, and Air India accounted for 50% of the total losses made by the PSU companies in the last fiscal. In terms of profit-making companies, the top 10 profitable PSUs accounted for nearly 62% of the total profits reported. It is now feared that large profitable PSUs will be increasingly forced to bail out the government divestment program through forced buyouts.
The modified e-commerce rules are clearly weighted in favor of domestic players and the small traders and maybe to the detriment of the global players. At least, these global players will be forced to change their current strategy in India. In recent times, Wal-Mart bought into Flipkart and Buffett took a stake in Paytm. Amazon is already a formidable figure in Indian e-commerce. Effectively, as per the new norms, the global players like Amazon and Flipkart will not be allowed to sell their affiliate products in India via this platform. The new rules will come into effect from February 01st and also bars these global e-commerce giants from either offering special discounts or mandating exclusive rights to sell certain specific products. The model will have to shift fully to the marketplace model from the inventory model.
Global commodity giant, Vedanta, now plans to invest close to $8 billion over the next 3 years as part of a global strategy to improve its top line and the bottom line. The proposed expansions will include increasing oil capacity by 500,000 bbed increasing aluminium production by 1 million tonnes and zinc capacity by 800,000 tonnes. The last one year has been quite tough for most commodities with prices falling sharply on the back of China demand worries. However, the good news is that demand is finally coming back and also companies are keen to invest in expanding their capacities.
