This is a roundup of the day’s top stories in brief.
1. Maharashtra Cuts Stamp Duty...Temporarily
The Maharashtra government has decided to reduce stamp duty on real estate transactions between Sept. 1 and March 31 next year as part of measures to revive the state’s economy and developers who have been battered by the pandemic.
The duty will be reduced in two installments, according to an official statement. Accordingly:
- There will be a 3% reduction between Sept. 1 and Dec. 31, 2020.
- A 2% reduction between Jan. 1, 2021, and March 31, 2021.
The announcement is over and above the 1% reduction in stamp duty for two years that the state government had announced in its maiden budget in March.
The move comes after several real estate bodies had sought reduction in stamp duty to boost property sales.
2. The Big Tata Makeover
India’s Tata Group, the sprawling $111 billion jewelry-to-salt empire, is getting a huge digital makeover.
- The conglomerate is building an all-in-one e-commerce app for its swathe of consumer products and services, a person familiar with the matter told Bloomberg News.
- The prototypes, which consolidate all of the group’s consumer-facing businesses and existing online assets, are ready and a launch is expected by end-2020 or early next year, the person said, asking not to be identified discussing confidential matter.
The all-in-one app wants to capitalise on the scope and scale of the Tata Group.
3. Funding India’s Coal Privatisation
State Bank of India is creating a policy to lend to coal miners before landmark auctions that would end decades of state monopoly on the fuel, a person with knowledge of the matter told Bloomberg News.
- Long-term offtake contracts assuring demand will be central to any lending decision, the person said, asking not to be identified before terms are finalised.
- The nation’s biggest bank would prefer a loan tenor closer to five years, the person added.
The planned policy suggests SBI is open to providing some of the financing required to put 41 coal mines in private hands.
4. Nifty Rises For Fourth Straight Day; U.S. Stocks Rally
Indian equity markets ended higher for the fourth straight day, thanks to a rally in the final hour.
- The S&P BSE Sensex ended 0.6% higher at 39,073.
- The NSE Nifty 50 index ended 0.66% higher at 11,548.
- Banks and autos were the outperformers in today’s session.
Follow the day’s trading action here.
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U.S. equities extended a streak of record gains as investors reviewed expectations for loose monetary policy and mulled the pace of the rally.
- The S&P 500 hit a high for a fourth straight trading session.
- The Dow Jones Industrial Average eased and the Nasdaq Composite registered another all-time level.
- U.S. orders for durable goods rose in July by more than double estimates, indicating factories will help support the economic rebound in coming months.
- The dollar gained while crude oil traded near its most costly in five months as Hurricane Laura bore down on key refining facilities on the U.S. Gulf Coast.
Get your daily fix of global markets.
5. India Looks To Divest 15% HAL Stake
The Government of India plans to sell up to 15% of its stake in the country’s largest aeronautical company, coinciding with its divestment drive in state-run enterprises.
- As many as 3.34 crore shares of Hindustan Aeronautics Ltd., amounting to 10% stake, will be sold through an offer for sale, according to an exchange filing.
- The floor price for the sale has been fixed at Rs 1,001 apiece—a discount of about 15% to its current market price.
- There’s an option for oversubscription for an additional 1.67 crore shares—or 5% stake.
The announcement also comes at a time when the government is looking at local defence companies to ramp up capacities for indigenous fighter jets.
6. Jio Adds Customers; Airtel, Vodafone Idea Bleed
India’s telecom subscriber base fell to 116.36 crore in May 2020 but service providers narrowed the monthly decline to 57.6 lakh, according to TRAI data.
- The user base had declined by 85.3 lakh in April, when the country was under total coronavirus lockdown, to 116.94 crore.
- Reliance Jio Infocomm Ltd. continued to grow its subscriber base with a net addition of over 36 lakh new connections—it leads the telecom market with 39.2 crore users.
- The wireless customer base of Airtel and Vodafone Idea dipped to 31.7 crore and 30.9 crore, respectively.
Read more on how the Indian telecom industry performed in May.
7. Two Steps Forward, One Step Back
Billionaire Vivek Chaand Sehgal’s bid to simplify the structure at Motherson Sumi Systems Ltd. evoked concerns about valuations and debt of the auto components supplier.
- Analysts had questioned the valuations used, saying that these were not favourable to minority shareholders. It’s also expected to increase its leverage in the short-term.
- The two-step restructuring process announced last month is aimed at making the group structure simpler, consolidating the group’s automotive component and allied businesses into listed entities.
But analysts remain skeptic of how the restructuring heavily skewed in favour of the promoter entity.
8. Whistleblower Alleges Rs 148-Crore Tax Evasion By Mobile Equipment Importers
An anonymous whistleblower letter addressed to the finance ministry alleged that mobile equipment importers evaded Rs 148 crore in customs duty on royalty charges or licence fee paid to Ericsson AB for shipping mobile handsets, tablets, dongles and data cards from China.
- Micromax Informatics Ltd., Xiaomi Technology India Pvt., Gionee Communication Equipment Co., Intex Technologies (India) Ltd., Best IT World (India) Pvt. negotiated with Ericsson to pay reasonable royalty on ‘standard essential’ patents after the Swedish equipment vendor in 2013 filed a plea against these companies in the Delhi High Court seeking damages for infringing its patents essential to manufacture and use mobile technologies, said the letter—a copy of which was reviewed by BloombergQuint.
- The court initially ordered an interim arrangement whereby the companies pay royalty ranging from 0.8-1.3% depending on the devices and their net selling price in India.
Here's how much customs duty Micromax, Xiaomi and others allegedly evaded.
9. Will Faceless Assessments Reduce Taxpayer Harassment?
Though the faceless process holds promise, several concerns must be addressed, writes Suranjali Tandon.
- Its success will also depend on smooth co-ordination across units.
- If ambitious targets continue to be set, the underlying incentives may not change.
- The impact on re-opening of assessment orders, among a major cause of disputes, must also be borne in mind.
Read more.
10. Covid-19 Deaths Spike In India
Covid-19 cases in India continued to rise as the country reported its only fifth instance when daily deaths crossed the 1,000-mark.
- India added nearly 67,000 new cases taking the total tally to over 32.3 lakh.
- This includes nearly 59,500 deaths and over 24.6 lakh patients who have recovered.
- Deaths spiked again with 1,059 people dead within 24 hours.
Track all Covid-19 related news and updates in India, here.
Globally, cases topped 2.36 crore leaving over 8.14 lakh people dead.
- A summer infection spike in U.S. Sun Belt states showed more signs of easing as California and Florida reported positive trends.
- Spanish Prime Minister Pedro Sanchez rejected calls for a new national lockdown as the country re-emerges as the epicenter of the pandemic in Europe.
- German infections increased at a pace close to a four-month high, while new cases in France slowed.
- In Asia, Hong Kong will ease some social-distancing rules after new cases fell, while infections in Seoul may have peaked over the past weekend, health officials said.
Follow the global spread of the virus here.
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