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Mumbai:  Public sector banks, especially those under the Reserve Bank of India’s (RBI’s) prompt corrective action (PCA), are likely to recall their risky additional tier-I (AT-1) bonds, a move that could possibly lead to investors taking a hit on their investments, said analysts and bond dealers. AT-1 bonds worth Rs37,600 crore may be prematurely recalled by banks, including those under PCA and those likely to fall under that framework, rating agency Icra said in a note on Tuesday. Bank of Maharashtra will recall Rs1,500 crore of tier-I bonds on 17 March ahead of their call dates in 2020 and 2021, according to a  Bloomberg  report dated 21 February. The lender is among the 11 state-run banks that are under PCA for higher bad loans and negative return of assets. Bank of Maharashtra has recalled these bonds in compliance with all rules, said a senior official of the bank, on the condition of anonymity. Issued under Basel-III capital norms, AT-1 bonds, also known as perpetual bonds, are

Kolkata:  Post its split with Bajaj Auto Ltd on 31 March 2017, India Kawasaki Motors Pvt. Ltd may look at establishing its own manufacturing plant in the years to come, said the company’s managing director Yutaka Yamashita. When asked if Kawasaki would have its own production facility in India, Yamashita said this had not yet been finalized. “May be,” he added. The company is establishing a new development centre in Pune, where it already has its assembling line. Kawasaki will increase its local procurement, Yamashita said. Currently, the company imports bikes as completely knocked down (CKD) and semi-knocked down units. At present, components are imported from Japan, Thailand, Indonesia and the assembling is done in India, according to Yamashita. But there is a high import duty and increase in local procurement would help to reduce costs. “We can then supply at lower price in the Indian market,” he said. Yamashita said since its split with Bajaj Auto on 31 March 2017, the company has

It bears repeating that retail inflation is well above the Reserve Bank of India’s (RBI’s) medium-term target of 4% and there is an outside chance it may breach the upper tolerance level of 6% in the coming months. That would seriously imperil RBI’s and the monetary policy committee’s (MPC’s) credibility. History is witness to what loss of credibility can do. But barring Michael Patra, the central bank executive in charge of monetary policy, none from the six-member MPC has said so categorically. To their credit, every member has stressed on the effects of the government’s abandonment of fiscal frugality on inflation. A fiscal deficit target of 3.3% along with the promise of higher minimum support prices and the customs duty hikes will ensure that rising inflationary pressures get entrenched. Also, the fiscal slippage comes at a time when drivers of inflation are on course to put pressure on prices. Global oil prices are rising, the food price fall has reversed and core inflation rema

In the Union Budget 2018, the finance minister proposed to increase the lock-in period of investments in capital gain tax exemption bonds (under section 54EC of the Income Tax Act, 1961) to 5 years. In the Union Budget 2017, the government had said it would introduce more financial instruments to save tax on capital gains. However, instead of new products, the present lock-in period of 3 years for 54EC bonds has been proposed to increase to 5 years. Given that the lock-in period or tenure of an investment plays an important role in deciding whether it makes sense to invest in or not, let’s look at whether a longer lock-in period could deter investors from investing in these bonds to save taxes. Also, if one does not invest in them, what are the other options for planning your capital gains? Capital gain tax exemption bond Long-term capital gains from transfer of capital assets like real estate, jewellery, and bullion—if invested in capital gain bonds specified under section 54EC of th

New Delhi:  Honda Motorcycles & Scooters India Pvt. Ltd (HMSI), India’s fastest growing two-wheeler maker, on Thursday said that it will not introduce any new product over the next two years (April 2018 – March 2020) on account of investments that it has to make to upgrade to Bharat Stage VI (BS-VI) emission norms, and indicated that price hikes were a possibility. The company will launch its new motorcycle X-blade in March this year. “With the BS-VI norms coming soon, we have already started to work in that direction. So, you can expect the next new model only after BS-VI is launched. There will be slight improvements (upgrades in products) but the big change (in product lineup) will be after BS-VI,” said Minoru Kato, president and chief executive of Honda Motorcycles. The BS-VI norms are equivalent to the Euro-VI norms, considered to be the most stringent in the world. India has decided to move from BS-IV now to BS-VI by 2020, leapfrogging the intermediate BS-V norms. In Delhi,

The premium and super-premium motorcycle space in India has seen several players competing for a market share in the recent past, including overseas players Honda, Triumph, Harley Davison and others, and local players like Royal Enfield and Bajaj. The recent entrant now is BMW Motorrad. In an interaction with T E Narasimhan, Timo Resch, Vice President, Sales and Marketing, BMW Motorrad spoke about the company’s strategy for India. Edited excerpts: How big is the opportunity in India and what is BMW Motorrad’s strategy? BMW Motorrad is the most successful premium manufacturer of motorcycles in above 500 CC category. In 2017 we sold 164,000 units worldwide. We have a strategic goal to achieve 200,000 units worldwide by 2020. One of the important markets to reach that target is India, as it is one of the largest two-wheeler markets. India, for that reason, has a lot of importance for us. It is important for us to build a solid foundation. That’s the reason you don’t see us rushing i

UM Lohia Two Wheelers on Thursday unveiled three motorcycles at the Auto Expo 2018 – The Renegade Thor, which is also the world’s first electric cruiser, along with the Renegade Duty S and the Renegade Duty Ace.The Renegade Thor produces 30 Kw of power, along with 70 Nm of torque, and is equipped with a 5-speed transmission gearbox, a hydraulic clutch, and a liquid cooled motor with controller. The Renegade Thor also comes packed with a reverse gear allowing easy manoeuvering.Rajeev Mishra, CEO of UML, said: “The Indian market is opening up to electric motorcycles, and with the Thor we have a first mover’s advantage.”Both Renegade Duty S and Duty Ace come with a 223 cc single cylinder engine mated to a 5-speed gearbox. The four-stroke oil-cooled engine churns out 17Ps of power at 8000 rpm and 17Nm of torque. Weighing 142 and 140 kg, respectively, the Renegade Duty S and the Duty Ace can be ridden on road as well as off road, allowing the light weight to aid in their nimble handling an

UM in partnership with Lohia Two-Wheelers unveiled three motorcycles at the Auto Expo being held in Greater Noida on Thursday. The motorcycles include one electric cruiser Renegade Thor and two petrol-based motorcycles Renegade Duty S and Renegade Duty Ace. Renegade Thor is, as the company claims, the world’s first geared electric cruiser. The engine in the bike delivers a maximum 30 Kw of power @8000 rpm and produces a maximum torque of 70 Nm. The engine is mated to 5-speed transmission gears. The bike features twin-adjustable shocks at rear and hydraulic telescopic suspension at the front. Starting price of Renegade Thor is Rs 4.9 lakh. The range of the motorcycle is up to 270 km in a single charge and can reach a maximum speed of 180 kmph. The Li-Po battery which powers the bike can reach 80 percent of charging in 40 minutes with a fast charger. The company also announced that free charging facility will be available to customers at UM dealers for the first two years. “The Indian m

The bond markets in India have been witnessing significant volatility l ately. The 10-year Gsec yield has risen from the low of 6.37 percent in the month of Jan 2017 to 7.52 percent as of date. By any count, this is a major bear grip on the market. The bond market has been wary on two counts — One is the rising CPI inflation and the second is the slipping fiscal deficit. The CPI inflation has risen from 1.5 percent in June-17 to 5.2 percent in December 2017. This rise is partially on account of the seasonality of food & vegetables. But, a more important contributor of this increase in inflation has been the energy segment. Since June-17, the crude oil has risen by 49 percent and is presently trading at around US$67 per barrel On the other hand, the major taxation changes due to GST; and the impact of demonetisation, may have led to some hiccups in tax collection. That and the need for supporting vital investment in infrastructure and social sector led to marginal slippage in the

Twenty Two Motors on Thursday unveiled a ‘smart’ scooter for Indian roads at the Auto Expo – Flow. The electric scooter is AI-enabled and equipped with machine learning technology. Praveen Kharb, CEO of Twenty Motors said that the scooter has multiple sensors which record data while the scooter is in use. The data is then sent to a cloud server operated by the company. The cloud server has a digital model of every scooter the company manufactures. The digital scooter will run a simulation of the actual scooter, ahead in time, i.e., if your scooter has run 450 km, the simulation on the cloud would be at 500 km, forewarning the user about the need to replace any spare part such as brake pads, Kharb informed the media persons present at the Expo. Flow’s engine delivers 2100 watt power at its peak. The engine produces a torque of 90Nm @ 100 rpm. It is powered by a Li-ion removable battery which can charge up to 70 percent in an hour (fast charging). The charging can be done through a norm

After Budget 2018, all eyes are on RBI monetary policy scheduled to be released on February 7. Economists largely expect status quo on policy rates but key to watch would be the commentary. According to a majority of economists, RBI may start hinting about rate hike in forthcoming policies in line with a tightening global interest rate cycle. "We continue to expect the RBI to persist with its slightly hawkish pause in its Wednesday policy, from February, to err on the side of caution," Bank of America Merrill Lynch said in its research note. "That said, falling onion prices, after tomatoes, support our call that inflation risks are overdone," it added. In fact, the government has reportedly removed the US$700/t minimum export price for onions. Inflation is seen cooling to 5 percent in January from 5.2 percent in December with the vegetable price spike expectedly reversing, according to the research house. December inflation actually printed a benign 4 percent, well

Expediting public services and ensuring fairness in procurement will supplement rapid economic growth in the South Asian region including India, Finance Minister Arun Jaitley said today. The pick and choose system in public procurement, he warned, leads to unfairness and serious allegations of corruption and nepotism. Speaking at the South Asia Region Procurement Conference here, Jaitley said: "Countries across the world, and we in India, have have seen this evolve administratively within the governments and jurisprudentially when it came to matters of procurement. "When it came to matter of awarding largesse, contract, public private partnership itself, there had to be procedural fairness that state had to follow." Procedural fairness would always ensure that it could eliminate all elements of nepotism, favouritism and ensure transparency, he added. "This is the region (South Asia) where the fastest growth in the world is taking place and therefore this is the regi

N- Urjit Patel, Governor of the Reserve Bank of India (RBI), and his five colleagues on the Monetary Policy Committee will not find it too hard to keep the key policy interest rate unchanged at the upcoming policy review on February 7. The 2-day deliberations on February 6 and 7 by the MPC on the repo rate decision are expected to remain tilted towards a pause mode, keeping the near term outlook hawkish. However, they may raise rates later given the risks of higher inflation with fiscal slippages and higher food prices with the government planning to increase the Minimum Support Price (MSP). In the Budget last week, the government promised to ensure MSP of key crops at 1.5 times the cost of production. This could mean at least a 50-70-basis-points increase in the headline inflation number. While banks and bond markets have already signaled the end of the interest rate easing cycle, the MPC may keep the repo rate unchanged at 6 percent. Inflation risks Although, experts suggest the infl

#Business #EconomyWith the Budget spooking the market sentiment with the 10 percent long-term capital gains tax on equities gains, American brokerage Morgan Stanley has opined that life insurance products, particularly Ulips could be relatively attractive from a medium-to-long-term. The Dalal Street has been bleeding in since the Budget announcement, after the finance minister sought to reintroduce the long-term capital gains (LTCG) tax on equity investments at 10 per cent on profits in excess of Rs 1 lakh. It also has slapped a 10 per cent distribution tax on long-term capital gains from equity mutual funds. That apart there is also a dividend distribution tax at the hands of the receiver. While on the day of the Budget, the market was on see-saw ride and closed marginally down, the next day (on Friday), it saw the worst plunge since November 2014 with a massive 2.3 per cent drop. "We believe against the given backdrop, life insurance products, particularly Ulips (unit-linked ins

Hindustan Petroleum Corp Ltd (HPCL) Chairman and Managing Director Mukesh Kumar Surana will continue to hold his designation if the firm's new promoter, ONGC is to follow the Coal India Ltd-model for governance of subsidiaries. ONGC last week completed acquisition of government's 51.11 per cent stake in HPCL for Rs 36,915 crore. HPCL is now a subsidiary of ONGC and it has been speculated that Surana will lose the Chairman's tag and would be reduced to Managing Director who would report to ONGC Chairman and Managing Director. Industry sources said this situation can be completely avoided if ONGC follows the Coal India Ltd's (CIL) governance model. CIL, the world's largest coal producer, is the holding company whose board is headed by a Chairman and Managing Director. It has eight subsidiaries like Eastern Coalfields Ltd and Bharat Coking Coal Ltd, all of whom have a board headed by Chairman and Managing Director. The Chairman and Managing Directors of the subsidiarie