Ipca Labs gets USFDA warning on mfg lapses at three units

Drug maker Ipca Laboratories Ltd on Monday said that the US FDA issued it a warning letter for three of its factories located at Ratlam (Madhya Pradesh), SEZ Indore (Pithampur) and Piparia (Silvassa). “Ipca receives warning letter from US FDA for Ratlam (Madhva Pradesh), SEZ Indore (Pithampur) and Piparia (Silvassa) manufacturing units,” Ipca Laboratories Ltd said in a filing to the Bombay Stock Exchange on February 01, 2016. The US health regulator had issued the company a warning letter highlighting manufacturing quality lapses at its manufacturing units. These manufacturing factories have already been banned from supplying to the United States after the FDA inspected them in July 24, 2014, January 23, 2015 and March 25, 2015. The drug maker said it has since been trying to fix the problems and has been informing the FDA of its remedial measures. The company further said that it is fully committed to resolving these issues at the earliest. Meanwhile, shares of the company were trading at Rs 639.90 apiece, down 4.33 per cent, from previous close on BSE at 13:30 hours.

Richa industries bags order worth Rs 32 cr

Construction & Engineering firm Richa Industries Limited said that it has received an order worth Rs 32 crore for the construction of multilevel car parking for Public Works Department (PWD) in Mussoorie. It is a complete turnkey project and the scope of work includes Electrical & Maintenance, Civil work along with PEB, the company said in a filing to the Bombay Stock Exchange. The area of the building is approximately 11,000 sqmt. The multilevel car parking will have ground plus four floors with the total height of 20 meters. The project is expected to be complete by next year in January 2017, the filling added. Commenting on this achievement, Sandeep Gupta, Joint Managing Director, Richa Industries Limited says, “This is the first multilevel car parking project acquired by the company. It will be a ready to use building at the time of handover as entire Interior and exterior of the project is under our scope. We are geared up to carry out the project effectively in the desired time frame at the challenging location and expecting to work on more such projects in the near future.” Meanwhile, shares of the company were trading at Rs 35.55 apiece, up 3.80 per cent from the previous close at 13:13 hours on BSE.

Cambridge Innovations invests in Photokharma Inc

IT services provider Cambridge Technology Enterprises Ltd on Monday said Cambridge Innovations has invested in Photokharma Inc, a company focused on using advanced face recognition and other deep learning technologies to automatically share photographs. In a filing to the Bombay Stock Exchange, the company said, “Cambridge Innovations, launched by Cambridge Technology Enterprises, an IT services leader focused on the convergence of big data and cloud, announces its investment in Photokharma Inc., a company focused on using advanced face recognition and other deep learning technologies to automatically share photographs.” However, the company did not disclose the transaction details. Meanwhile, shares of the company closed at Rs 145.40 apiece, up 1.96 per cent, from previous close on BSE.

Post Session: Markets end in red ahead of RBI policy; financial stocks weigh

The Indian equities ended tad lower on Monday, led by profit booking in frontline bluechip stocks coupled with selling across financial space, tracking a subdued cues from Asian peers. The traders refrained from enlarging any fresh positions before the RBI’s policy meet on Tuesday despite surprise expansion in India’s January manufacturing PMI. India’s official manufacturing purchasing manager’s index (PMI) expanded to a four-month high of 51.1 against 49.1 in December, signalling a pickup in Asia's third biggest economy.

The 30-share BSE SENSEX closed at 24824.83, down by 45.86 points or by 0.18 per cent, and the NSE Nifty ended at 7555.95, down by 7.6 points or by 0.1 per cent.

In the volatile trade today, the BSE Sensex touched intraday high of 25002.32 and intraday low of 24788.58, while the NSE Nifty touched intraday high of 7600.45 and intraday low of 7541.25.

Bucking the trend, the broader market ended higher, with the BSE MIDCAP closing at 10476.82, up by 59.56 points or by 0.57 per cent, while the BSE SMLCAP settled at 10901.41, up by 31.57 points or by 0.29 per cent. The apex bank is likely to keep interest rates unchanged amidst the recent acceleration in inflation and as the central bank eyes the progress & direction of key macroeconomic parameters including the fiscal deficit in the upcoming Union Budget. The apex bank had cut borrowing costs by a total 125 bps in 2015.

On the sectoral front, bankex and power indices emerged as top losers, falling 1.4 and 0.55 per cent, respectively.

The top losers of the BSE Sensex pack were ICICI Bank Ltd. (Rs. 217.15,-5.63%), State Bank of India (Rs. 172.90,-3.92%), Maruti Suzuki India Ltd. (Rs. 3946.80,-3.68%), Axis Bank Ltd. (Rs. 399.30,-2.17%), Hindustan Unilever Ltd. (Rs. 800.90,-1.96%), among others.

Meanwhile, Adani Ports & Special Economic Zone Ltd. (Rs. 220.50,+3.67%), Coal India Ltd. (Rs. 328.60,+2.67%), Bharti Airtel Ltd. (Rs. 296.50,+2.35%), Asian Paints Ltd. (Rs. 887.25,+2.12%), Cipla Ltd. (Rs. 597.80,+2.07%), were among top gainers on BSE.

The Market breadth, indicating the overall strength of the market, was strong. On BSE out of total shares traded 2984, shares advanced were 1527 while 1302 shares declined and 155 were unchanged..

On the global front, the Asian equities ended mixed with markets in China and Hong Kong succumbing to losses after underwhelming Chinese factory data which showed continued manufacturing contraction in the world’s second biggest economy, souring sentiment. Japan’s Nikkei 225 soared nearly 2 per cent amidst last week’s surprise central bank stimulus move.

NSE launches e-IPO bidding system; will conduct mock bidding for brokers

The National Stock Exchange of India Limited (NSE) has launched its new e-IPO bidding system and will hold a mock bidding session for brokers to help familiarise themselves for the next two days. The move is in line with markets regulator Sebi's decision to streamline the public issue process by making application supported by blocked amount (ASBA) as a mandatory payment mechanism for all investors from January 1, 2016, said the media reports. NSE had announced the launch of new 'e-IPO Web-based bidding system' on December 31 last year, reported PTI. It had also announced that it would discontinue its IPO terminal which supports non-ASBA bids for all public issues opening on or after January 1, 2016. "To make trading members accustomed to the system, the exchange is conducting mock bidding session from January 12, 2016 to January 13, 2016 in the NSE e-IPO system," NSE said in a notice today. The new bidding system has the facility of Web-based log-in through the Internet, offline bid entry post market hours, download facility of orders and order history, among others. Sebi on January 1 had put in place a new form for ASBA facility, which has become mandatory for all categories of investors applying for a public issue for making payment. The provision allows the bid amount to remain in the applicant's account till the time shares are finally allotted. A keenly-awaited move from Sebi is the e-IPO (Electronic Initial Public Offers) mechanism, through which investment in public offerings can be done online without signing any physical documents. E-IPOs will help fast-track the public offer process and lower costs, besides allowing investors to apply for shares and buy these at the click of a mouse without the need for signature on bulky physical documents. The board of Sebi had already approved a proposal to use secondary market infrastructure for public issuance called e-IPOs.

Wide 'digital divide' between states: Assocham

There exists a stark "digital divide" among states, with Delhi having the highest score of 238 per cent while Bihar and Assam lag behind at around 55 per cent, business chamber Assocham said on Sunday, on the basis of "tele-density" or telephone connections for every 100 individuals. "India may have achieved a significant success in reaching the number of telephone subscribers to over one billion, but the tele-density data points to a stark 'Digital Divide' with large populations in Bihar, Assam, Madhya Pradesh and Uttar Pradesh still being deprived to communicate with the rest of the country," the Associated Chambers of Commerce and Industry (Assocham) said in a statement. "The digital divide is clearly visible between different states with some of the eastern states not finding favour with the telecom service providers. The reasons may vary between the lack of infrastructure like power availability to even indifference in terms of business opportunities," it added. Compared to the national tele-density of 81.82 per cent, the figure for Bihar is 54.25 per cent, Assam 55.76 per cent, Madhya Pradesh 62.33 per cent and Uttar Pradesh 62.74 per cent, the report added. On the other end, while the tele-density in Delhi is over 238 per cent, that of Himachal Pradesh is 123.19 per cent. Other states figuring higher on the tele-density scale are Tamil Nadu, Punjab, Karnataka and Kerala.

Credit costs to erode bank’s profits in FY17

India Ratings and Research (Ind-Ra), a part of Fitch group, has maintained a stable rating and sector outlook on private sector banks and a stable to negative sector outlook for public sector banks (PSBs) for financial calendar year 2017. Ind-Ra expects credit costs to increase sharply in FY16E and FY17, given the persistent stress from large levered corporates and increasing recognition of the stress by the banking system. Impaired assets are expected to rise to 12.5 per cent of loans by FY17 (including gross non-performing loans, standard restructured assets and asset reconstruction company receipts) compared to 10.8 per cent in FY15. Private sector banks continue to improve their funding profile, on the back of their growing market share in current and savings account deposits. Conversely, most PSBs continue to report high funding gaps and may see a negative impact on their margins from increasing requirements on liquidity coverage ratio and the guidelines relating to the marginal cost of funding based lending rate. Ind-Ra also expects the small finance bank and payment banks to lead the change in the banking landscape, by cornering increasing share of small ticket transactions and gaining market share in both granular liabilities and well as retail assets. Capital requirements towards Basel III transition continued to increase in FY16, despite Rs 700 billion as announced under the Indradhanush plan. Ind-Ra will watch out for any addition capital infusion announcement in the forthcoming union budget. The agency expects large private banks and the some large PSBs to be better placed with healthy internal accruals, strong capitalisation and better access to the capital markets. “Most PSBs are likely to be under pressure to consolidate growth and focus on profitability given their significant capital requirements both from government and capital markets,” the agency said in a statement. Ind-Ra has also assigned a stable outlook to small finance banks.

Ind-Ra upgrades pharma sector to stable for FY17

India Ratings and Research (Ind-Ra), a country’s leading rating agency, on Monday revised the outlook on the pharmaceuticals sector to stable for FY17 from positive as the sector’s growth momentum is likely to moderate due to muted export growth. The agency expects export revenue to grow at modest 5 per cent over FY16 and FY17 due to increased regulatory actions and a lower value of drugs going off-patent. Higher depreciation of emerging market currencies is likely to impact export growth to semi-regulated markets. However, Ind-Ra expects the domestic pharmaceutical market to sustain the recently gained momentum and grow at 13 per cent-15 per cent over FY17. Overall sector growth is likely to be 8per cent-10per cent over FY17. The agency believes that a majority of pharma companies will be able to generate positive cash from operations on the back of stable operating profitability and working capital cycle. CFO margins are likely to remain at the current level of 12 per cent-13 per cent in FY17. Free cash flow is also expected to continue to be positive at around 4 per cent on no major increase in annual capex outflows. The strong cash flow generation ability of sector companies is likely to keep the credit metrics stable over FY16 and FY17. Large capex or medium-sized acquisitions would need debt funding. Individual company’s credit metrics may be affected by large debt-funded acquisitions. Ind-Ra continues to maintain a stable rating outlook as the sector’s credit metrics continue to be strong and most of the pharmaceutical companies are rated at ‘IND A’ category or above.

Over $150 bn investments required for smart cities: Study

The Modi government’s vision of creating 100 smart cities will require an investment of about USD 150 billion in the next few years, with private sector being a significant contributor, reported PTI. According to Deloitte, nearly USD 120 billion will come from the private sector. The government has already initiated two programmes with an initial outlay of nearly USD 7.5 billion for the Smart Cities Mission and the Atal Mission for Rejuvenation of Urban Transformation (Amrut) for upgrading 500 existing cities. “Even as funding for these smart cities is an area of concern, the major challenges remain with respect to the development of smart cities project management, government decision making and policy and regulatory framework,” Deloitte India Senior Director P N Sudarshan said. The government recently announced the list of first 20 cities to be developed as 'smart cities' with Bhubaneswar topping the list followed by Pune, Jaipur, Surat, Kochi, Ahmedabad, Jabalpur, Vishakapatnam, Sholapur, Davangere, Indore, New Delhi, Coimbatore, Kakinada, Belagavi, Udaipur, Guwahati, Chennai, Ludhiana and Bhopal. While several cities have made incremental investments in smart solutions, the challenge will be to replicate these on a larger scale, he said. According to the study, in 2016, service providers and over-the-top content providers will invest heavily in city-wide Wi-Fi networks which will be the backbone for smart city services. “As smart solutions are heavily dependent on ICT, service providers will play a significant role in smart cities. In 2016, service providers will participate in (and lead in many cases) consortiums for responding to RFPs for smart/digital solutions for various city and state governments,” Sudarshan said. Reliance Jio is likely to roll out Wi-Fi services across over 50 cities in 2016. Similarly, Bharti and Vodafone are deploying Wi-Fi through a joint venture company, Firefly. Facebook is working with BSNL to deploy Wi-Fi in 100 areas in rural India, while Google has announced a partnership with the railways to provide hotspots in 400 railway stations by 2016. “Over the next 10-15 years, these cities will emerge as key technology, economic, and social hubs for the country. We believe that service providers that expect to be serious players in smart cities will take a center-forward position in leading consortiums in the development of smart cities,” he added.

India to face tough test in sticking to fiscal roadmap: S&P

Rating agency Standard & Poor's has said that India will face challenges in sticking to the fiscal consolidation roadmap as the expected revenues may not be fully realised and subsidy cuts may be delayed. Commenting on the issue, a S&P Official told the media,” Although we expect the administration to pursue its stated fiscal consolidation programme, we foresee that planned revenues may not fully materialise and subsidy cuts may be delayed." "India's fiscal challenges reflect both revenue under performance and constraints on expenditure (mainly related to subsidies for food, energy, and fertilisers)," he added. The Official further added that in the medium term, S&P expected improved fiscal performance primarily from revenue-side improvements, brought about by the planned introduction of the Goods and Services Tax (GST) and administrative efforts to expand the tax base. As per reports, in the Budget 2015-16 Government deviated from the fiscal consolidation path, postponing fiscal deficit targets by a year. The original target was to bring it down to 3.6 per cent of the GDP in 2015-16 but it had been postponed by a year. Now, Government is targeting 3.9 per cent in the current fiscal and 3.5 per cent by next year.

RBI unlikely to cut interest rates on Tuesday

The Reserve Bank of India (RBI) which meets this Tuesday for a sixth bi-monthly policy review is unlikely to tinker with interest rates as a recent acceleration in inflationary pressures in Asia’s third biggest economy leaves little room for the central bank to undertake further monetary easing. The central bank is tipped to leave its repo rate unchanged at 6.75 per cent, while the cash reserve ratio is set to be maintained at 4 per cent. The apex bank had cut borrowing costs by a total of 125 basis points (bps) in 2015. At its last policy meet in December, the RBI had indicated that further cuts in borrowing costs will hinge on the inflation trajectory in the country’s economy. Consumer inflation accelerated to the highest level in fifteen months to 5.6 per cent in December 2015, rising for the fifth straight month, but staying below the RBI’s 6 per cent goal for January 2016. However, a continued global commodity rout may exert downward pressure on inflation over the coming months. The RBI is also awaiting the progress and direction on key macroeconomic parameters including the fiscal deficit in the upcoming Union Budget. Singapore-based DBS Bank expects the RBI to maintain status quo on interest rates on Tuesday with a 25 bps cut in borrowing costs likely in March or April depending upon the government’s fiscal consolidation efforts that will be unveiled in the budget.

CBDT signs two bilateral deals with United Kingdom

The Central Board of Direct Taxes (CBDT) has entered into two bilateral advance pricing agreements (APAs) with United Kingdom on 29th January, 2016, according to an official statement released by the ministry of finance. With this signing, CBDT has concluded three bilateral APAs the first one being a bilateral APA signed with Japan in December, 2014, the ministry notified. The two bilateral APAs were signed with two Indian group entities of a UK based Multi-National Company (MNC). The APAs have been entered into soon after the Competent Authorities of India and United Kingdom finalised the terms of the bilateral arrangement under the Mutual Agreement Procedure (MAP) process contained in the India-UK DTAA. The APAs cover the period 2013-14 to 2017-18 and also have a “Rollback” provision for 2 years (2011-12 and 2012-13). Transfer pricing disputes on the same transaction were recently resolved under MAP for each of these two companies for the years 2006-07 to 2010-11. With the signing of the bilateral APAs, the two Indian companies have been provided with tax certainty for 12 years each (5 years under MAP and 7 years under APA). This is a significant step towards providing a stable and predictable tax regime. The two APAs are also significant because they address the issues of payment of management & service charges and payment of royalty. These transactions generally face prolonged and multi-layered transfer pricing disputes, it said. With this signing, CBDT has so far signed 41 APAs out of which 38 are unilateral and 3 are bilateral, FinMin said.

India's core sector growth slows to 0.9 pct in December

Output of the eight core sectors expanded in December, albeit at a slower pace, indicating the challenges faced by the Modi government as it aims to jumpstart capital investment in a bid to boost growth in Asia’s third biggest economy, bolstering the case for further monetary policy easing by the RBI in the near-term. The index comprising of core infrastructure sectors which includes coal, crude oil, natural gas, refinery products, fertilisers, steel, cement and electricity climbed by 0.9 per cent in December 2015 from the same month a year ago, government data showed on Monday.

In November 2015, output of the core industries declined 1.33 per cent from the year ago month amid sharp decline in steel production due to weak demand and imports.

The index of the eight core industries has a 38 per cent weightage in the index of industrial production (IIP). India’s industrial output contracted 3.2 per cent in November as against 9.8 per cent growth in October 2015.

Steel production contracted by 4.4 per cent, year on year in December 2015 as cheaper Chinese imports hit domestic manufacturers while output of crude oil and natural gas, declined by 4.1 per cent and 6.1 per cent, respectively, a sign that capital spending remains soft as a global slowdown weighs.

Meanwhile, growth of output of coal, petroleum refinery, fertilizer, cement and electricity accelerated to 6.1 per cent, 2.1 per cent, 13.1 per cent, 3.2 per cent and 2.7 per cent respectively.

Railways signs MoU with AP, Kerala for rail projects

The Indian Railways has said that it has signed MoUs with Kerala and Andhra Pradesh Governments for formation of joint venture companies to ensure faster implementation of rail projects in the respective states. As per reports, the JV companies will have 51 per cent stake of the respective state governments and 49 per cent stake of the railways. Commenting on the issue, Railway Minister Suresh Prabhu told the media, "It is always necessary to have partnership with state governments and we have declared it in our Rail Budget." "We will have this with 17 states. We have decided to work together. It is a unique idea to enter into JVs with state governments for project implementation," he added. As per the plan, project specific SPV (special purpose vehicle) will be formed to execute a project under the JV arrangement. Earlier, Odisha and Maharashtra had signed similar agreements with the railways to execute projects in their respective states.

30,000 Megawatt thermal power added in last 20 months: Goyal

The Minister of State (IC) for power, Piyush Goyal on Thursday said that 30,000 megawatt more capacity of thermal power has been added during last 20 months of present government. Addressing an interactive session organized by Indian Chamber of Commerce in Kolkata, Goyal Said, power being the most important ingredient of infrastructure for nation’s development, the government is laying utmost emphasis on this sector. The Minister informed that his ministry has achieved 60 per cent working capacity of power plants and has a target of 90 per cent working capacity which will be achieved in near future. Asserting that India’s Coal production has increased substantially by 9.6 per cent which has resulted in remarkable reduction in our coal imports, the Minister said, his ministry is now emphasizing on creating more marketing facilities for coal. Goyal said that more than 5 crore 36 lakh LED bulbs have been given out at government subsidized rates due to which the rate per bulb has come down from Rs.310 to Rs.64 and within a short time it will come down further to make it affordable for common man. He added that this has resulted in 1600 MW reduction in power consumption and said that by this year March, 10 crore of LED bulbs will be given out. This will result in a huge reduction in power consumption and drastic cut in pollution. Regarding transmission, the Minister said, during the present government 22,000 circuit Kms of transmission line has been drawn which is a record. During last 18 months, 71 per cent of additional transmission capacity has been created and by 2019 it will reach 200 per cent.