TRACKPAD

Conscious RBI maintains status quo

The Reserve Bank of India (RBI), in its bi-monthly monetary policy review, disappointed corporate India and bourses as it kept the rate of interest unchanged. Though the apex bank pointed towards “accommodative” policy stance, it remains unfazed by the widespread expectation of another rate cut. It kept its benchmark repo rate at 7.25 per cent while the cash reserve ratio (CRR) and statutory liquidity ratio (SLR) were maintained at 4 per cent and 21.5 per cent respectively. It is important to note that the repo rate has been slashed by 75 basis points since January 2015.

In its policy statement, the RBI has quoted that “inflation projections in this bi-monthly statement are elevated by the higher-than-expected June observation but reduced by prospects of softer crude prices and a near-normal monsoon thus far.” Justifying its action of maintaining status quo the RBI said that “given that policy action was front-loaded in June, it is prudent to keep the policy rate unchanged at the current juncture while maintaining the accommodative stance of the monetary policy.” This is an indication to banks to pass on the benefits to customers of past rate cuts, in response to which the banks have said that they are awaiting greater transmission of the front-loaded past actions.

UD Ministry releases Rs 120 crore under AMRUT scheme for 482 cities

The Ministry of Urban Development (MUD) has given around Rs 120 crore to states and union territories for the preparation of service level improvement plans (SLIP) for the ambitious Atal Mission for Rejuvenation and Urban Transformation (AMRUT) scheme. Under this scheme 482 cities have been identified and Rs 25 lakh would be given for the preparation of SLIP to each identified city. Announced on June 25, 2015, the primary objective of the scheme is to cover all the urban households with water supply and sewerage.

Other projects like storm water drains, urban transport and provision of public and green spaces would be considered later. As per the communication of the ministry, “SLIP for each selected city/town should identify the gaps in provision of water supply and sewerage connections and draw up detailed plans for bridging the gaps.” The ministry has called for SLIP from various state governments and every state has been allotted designated cities. The number of cities for each state are: UP (60), West Bengal (59), Maharashtra (43), Madhya Pradesh and Tamil Nadu (32), Gujarat (31), Andhra Pradesh (31), Rajasthan (28), Karnataka (27), Bihar (26), Haryana (20), Punjab (16), Telangana (11), Chattisgarh (9) and Odisha (9).

NTPC signs JV with Jharkhand government

NTPC, the Government of Jharkhand and its power generation arm, Jharkhand Bijli Vitran Nigam Limited (JBVNL), signed a joint venture (JV) agreement for performance improvement and capacity expansion of  Patratu Thermal Power Station (PTPS). This agreement was signed in the presence of Jharkhand’s CM Raghubar Das. Chief Secretary, GOJ, CMD, NTPC and Director (Commercial), NTPC were also present at the ceremony.

Maruti launches S-Cross

The country's largest car maker Maruti Suzuki India (MSI) last week launched its "premium crossover" vehicle, the S-Cross, at a starting price of Rs 8.34 lakh (ex-showroom, New Delhi). The company and its suppliers have invested over Rs 600 crore towards development of the vehicle over a period of four years. With the S-Cross, Maruti is trying to introduce a new image for itself. Through its ‘Nexa’ sub-brand, it wants to become a major player in the premium car segment; it has been un-successful at cracking this segment in the past with products like the Vitara, Kizashi etc.  More premium products across different categories will be launched later to continue the momentum created by the S-Cross.

DLF seeks board approval to raise Rs.7,500 crore by pledging unit stakes

DLF, the realty major will seek stockholders’ approval to pledge more than 50 per cent of the company’s shares in three of its profitable rent-generating units to raise as much as Rs.7,500 crore. Through its three wholly owned units—DLF Cyber City Developers, Caraf Builders and Constructions and DLF Assets—the developer runs its annuity or leasing business of office space, IT park, IT special economic zone and retail mall properties. DLF will seek approval from shareholders at its annual meeting on 28 August.

The money raised by DLF through pledging its shares in the units, may help the builder reduce its interest burden by replacing costly loans with cheaper funds. The company was barred from accessing the capital markets for three years by the regulator in 2014. The order was subsequently set aside by a tribunal.

ICICI Bank to raise USD 500 million from overseas debt market

ICICI Bank hit the US dollar debt market with a benchmark issue, under which it plans to raise up to ISD 500 million. The five-year bond sale is a part of the lender's USD 7.5 billion global medium-term note programme and will be carried out from its Dubai IFC branch. The bonds will be listed on the Singapore Exchange. International rating agencies Standard & Poor's and Moody's Investors Service have rated the proposed US dollar-denominated senior unsecured notes at BBB- and Baa3, respectively.