businessfortnight

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 perpetu...

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...

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 Del...

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 ro...