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Steel executives’ guild urges PM Modi for ‘hassle-free’ SAIL-NINL merger



Lenders prepare Monnet Ispat for recovery

Neelachal Ispat Nigam Ltd (NINL) which is in the dumps following its lead promoter MMTC’s decision to exit the public sector steel unit, has elicited support from a confederation of steel executives.

Kolkata-based Steel Executives Federation of India (SEFI) has written to Prime Minister Narendra Modi, demanding the merger of loss accumulating NINL with the bigger PSU steel maker Steel Authority of India Ltd (SAIL).

With MMTC already going public on its intent to sell stake in NINL and two other key promoters- the state government controlled Odisha Mining Corporation (OMC) and Industrial Promotion & Investment Corporation of Odisha Ltd (Ipicol) no longer keen to retain their stakes, revival of proposal to merge NINL with SAIL can inject a dose to hope to the ailing NINL. MMTC is the biggest equity partner with a share of 49.9 per cent. Between them OMC and Ipicol own 26 per cent stake. Other central public sector enterprises like NMDC, BHEL Ltd and Mecon are minor equity participants in NINL.

Though NINL officials are tight-lipped, market sources claim NINL’s blast furnace at Duburi (Odisha) is already under shutdown for over two weeks now. With MMTC clogging cash flows, NINL was forced to bite the bullet by going for temporary closure of the blast furnace whose capital repair it successfully completed in May 2018.

SEFI’s general secretary Bimal Kumar Bisi claimed that the proposed merger will be a hassle-free process since it involved transfer of shares by MMTC and other PSUs to SAIL. In his letter to the Prime Minister, Bisi pointed out how SAIL, in the past, had made several abortive attempts to take over NINL and it is prudent to revive the proposal now since MMTC, the main promoter has decided to quit the steel venture.

Detailing NINL’s strengths Bisi said, the steel plant possesses 2500 acres of unencumbered land suffice to expand capacity to five million tonne, a state-of-the-art coke oven battery with dry quenching facility, an already commissioned Steel Melting Shop (SMS), proximity to the major port at Paradeep and to top it all an iron ore mine boasting of 110 million tonne deposits and with a lease validity spanning 50 years.

According to the contents of the letter, Mecon has revalued the assets of NINL at approximately Rs 8300 crore on conservative estimates. NINL’s liabilities are below Rs 5000 crore.

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Sitharaman’s sops for NBFCs may perk up lending, ease liquidity stress



Illustration by Binay Sinha

To further ease the liquidity stress in the non-banking sector and nudge them to revive their lending activities, Finance Minister (FM) Nirmala Sitharaman on Friday announced a slew of measures for non-banking financial companies (NBFCs) and housing finance companies (HFCs). The government hopes this will result in more credit support for purchase of houses, vehicles, and consumption goods.

The government has provided additional support of Rs 20,000 crore to the stressed housing finance companies from National Housing Bank (NHB). With this, the additional liquidity support for the HFCs from NHB has gone up to Rs 30,000 crore.

In the Union Budget last month, the FM had encouraged public sector banks (PSBs) to buy high-quality pooled assets of NBFCs up to Rs 1 trillion for which the government would provide a one-time six-month partial credit guarantee for the first loss of up to 10 per cent.

The Reserve Bank of India (RBI) had also chipped in by tweaking banks’ bond-holding norms. This will allow banks to borrow an additional Rs 1.34 trillion exclusively for buying such pooled assets and giving loans to NBFCs. The FM on Friday said this partial credit guarantee scheme will be monitored at the highest level in each bank. Through this, it is expected that many of the assets will get quickly pooled and NBFCs will receive the necessary liquidity. “NHB has already settled some of the issues. NBFCs are receiving money from the banks and are moving towards funding,” said Sitharaman.

Sanjaya Gupta, managing director, PNB Housing Finance, said “This will support growth and ease the liquidity crunch. HFCs will now get an additional Rs 20,000 crore from NHB. The initiatives have potential to kick start the real estate sector.”

The government has also permitted NBFCs to use Aadhaar-authenticated bank KYC to avoid repeating the same process when a customer approaches it for credit. This has been a long-standing demand. The necessary changes in the Aadhaar regulations and Prevention of Money Laundering Act rules will be made, the FM said.

“This will streamline the process and also reduce frauds,” said Raman Aggarwal, chairman, Finance Industry Development Council.

The government has also asked PSBs and NBFCs to fast-track their collaboration to provide credit to micro, small and medium enterprises, small traders, self-help groups, and micro finance industry client borrowers.

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PACL Case: Sebi panel invites expression of interest for 28,974 properties




A committee headed by Justice R M Lodha has invited expression of interest (EoI) from prospective buyers for a total of 28,974 properties belonging to PACL Group.

Market regulator Sebi had set up a committee headed by former Chief Justice of India R M Lodha following a Supreme Court order to refund money to investors in the matter of PACL Group.

As per the notice issued by Sebi, the committee has divided the total 28,974 properties belonging to PACL group in four zones — east, west, north and south — with maximum properties being located in the southern zone.

Regarding PACL properties, the apex court’s order dated July 30 observed “we also leave it open to the committee to receive any further offers and to explore them after duly publishing a further notice on the website,” the notice said.

In pursuance of apex court’s order, the committee “invites Expression of Interest from prospective buyers clearly indicating therein, list of properties in each zone, its circle rate, the offer amount and other relevant details,” the Friday notice said.

“The proposal should be for properties in each zone aggregating in value not less than Rs 1,000 crore,” the notice added.

The notice further said that the last date of receipt of proposals is September 9.

PACL, also known as Pearl Group, had raised Rs 60,000 crore from public in the name of agriculture and real estate businesses and was found by Sebi to have collected these funds through illegal collective investment schemes over 18 years.

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Improved market access for domestic retail investors with Aadhaar-based kYC



Markets, Investors, Indices, Stocks

The government will allow Aadhaar-based KYC for domestic retail investors, and necessary amendments to the rules under the Prevention of Money Laundering Act will be issued.

Announcing a slew of measures to boost the economy, the government said the Depository Receipt Scheme 2014 is expected to be operationalised soon by Sebi. “This will give Indian companies increased access to foreign funds through American Depository Receipt (ADR)/ Global Depository Receipt (GDR),” she said.

In order to improve market access for the domestic retail investors, Aadhaar-based KYC will be permitted for opening of demat account and making investment in mutual funds. In this regard, necessary notification for amendments in PMLA rules would be issued.

Besides, steps would be taken with regard to offshore rupee market.

“To bring offshore rupee market to domestic stock exchanges and permit trading of USD-INR derivatives in GIFT IFSC, Ministry of Finance is working with RBI to introduce this measure shortly,” the government said.

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