India has bigger scope for chip assembly and testing than fabrication: Micron CEO
Micron is mulling to set up a semiconductor assembly and test facility in India instead of setting up an expensive fabrication unit, The Economic Times reported.
Why it’s important: The US-based world’s fourth-largest semiconductor company is looking for the right incentives on a sustained long-term basis to set up units in the country.
Micron’s CEO Sanjay Mehrotra said India should not lose its focus as a design and innovation hub for semiconductor companies and leverage on its strength and grow it.
India expects its electronics market to be more than $ 400 billion in the next few years.
India imports all the chips it requires.
India unlikely to take a tough stance on cryptocurrencies
India is not planning to take a hard-line stance on cryptocurrencies at the moment, The Economic Times reported.
Why it’s important: The government is considering legislation on the virtual asset to be introduced in the upcoming winter session of Parliament.
An outright ban of cryptos will not be a good idea because of large investments in such instruments by Indians.
But unregulated virtual currencies are also unlikely to be allowed as legal tender.
The government is also looking into the taxation aspects emerging from the trading of digital currencies.
Adani targets food staples business for expansion
The Adani group is planning to pour more money into the food staples business in the form of acquisitions, reports The Times of India.
Why it’s important: Adani is betting big on the food staples business.
The group plans to buy manufacturing facilities in food staples and expand them as it did in the edible oil business.
Most of the edible oil refineries Adani Wilmar owns are buyouts.
The plan is to beef up its presence in food staples, ready-to-cook and ready-to-eat products.
Adani Wilmar will be raising Rs 4,500-crore through IPO.
Out of Rs 4,500-crore, Rs 500 crore will be spent on acquisitions in the food staples business, while the rest will be used to retire debt and expansions.
Adani Wilmar CEO Angshu Mallick says, “We intend to spend about Rs 500 crore on acquisitions of production units in food staples to turn the company into a large player.”
Lenders see corporate loans revive by March
Banks are expecting demand for corporate loans to rebound by March, Mint reported.
Why it’s important: The main reason for the revival is the continued revival in economic activities.
The revival calls for capital expenditure to meet the rising demand for goods and services.
Corporate loan demand has remained muted for several quarters now mainly due to the ongoing deleveraging.
The pandemic has also prompted many borrowers to tap into internal accruals for expenses instead of approaching banks.
As of 30 September, the bank’s corporate loan book stood at Rs 7.56 trillion, down 3.9 percent from a year earlier.
SBI Chairman Dinesh Khara said: “The unutilised loans of SBI are expected to decline from the current 50 percent to 30-35 percent.”
IPOs to mop up at least Rs 20,000 crore from retail investors
Retail investors are expected to spend at least Rs 20,000 crore in IPOs in 2021, Mint reported.
Why it’s important: The main reason for this interest is due to the sterling listing day gains of recent share sales and falling returns from competing asset classes.
Companies have already raised Rs 18,492 crore from retail investors through initial public offerings this year.
Paytm’s IPO, the country’s biggest yet, which opens on Monday, alone has a retail book of Rs 1,830 crore.
Company law compliance site to be revamped by March
The ministry of corporate affairs is set to unveil a revamped version of its compliance portal MCA21 by March, Mint reported.
Why it’s important: This will make a host of statutory filings easier and offer features such as auto-filling of fields.
The idea is to use technology to handle returns and disclosures filed by companies and limited liability partnerships.
The move also helps officials to oversee compliance and improve the ease of doing business.
This can track over 1.4 million active companies and over 220,000 limited liability partnerships easily.
The new version of MCA21 will link up with the systems of other financial and corporate sector regulators, exchange data and raise red flags for scrutiny in case of erring companies.
Lessors hit tax air pocket over SpiceJet dues
The world’s biggest aircraft leasing companies have hit a snag in India, especially with the tax authorities, Business Standard reported.
Why it’s important: The leasing companies are unable to repossess aircraft they had leased to SpiceJet as tax authorities resist efforts.
The tax authorities resisted it as SpiceJet failed to pay GST dues.
At least 13 Boeing 737 aircraft of SpiceJet, which the airline wants to return to trim its operational cost, are awaiting a NOC from tax authorities.
The permission to export these aircraft has been withheld.
SpiceJet had moved the High Court of Punjab and Haryana against the excise and taxation department of Haryana, where it has petitioned to allow it to pay GST dues worth Rs 285 crore in 10 instalments, given that it is facing a liquidity issue due to the Covid-19 pandemic.
· However, tax authorities have opposed this, saying the GST Act doesn’t permit payment in instalments for dues.
We have a bias towards large-caps at this point: UTI AMC
Vetri Subramaniam, chief investment officer at UTI AMC, in an interview with Business Standard said that the biggest risks in the market are always the unknowns and getting overconfident.
What he says: The lesson from history is that valuations are not a perfect timing device.
No crystal ball to forecast the outlook for equities over the next year.
Long-term bullish about the prospects for Indian equities driven by the potential for growth across sectors in the economy and quality of entrepreneurs in India.
While all segments of the market are rich in terms of valuation, the small-cap space is particularly challenging.
We have a bias towards large-caps at this point based on relative valuations.
Our principle in the evaluation of mid and small caps is to filter for companies that exhibit a strong competitive position in their respective industry.
Such companies could have financial metrics comparable to large-cap leaders except for their classification on market cap.
Returns of the past year tell you nothing about the risk and return of the next year. The biggest risks to the market are always the unknowns.We currently find value in financials, healthcare and auto.
