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https://wap.business-standard.com/a...it-ll-cut-50-debt-in-fy19-119051900400_1.html
Reliance Capital Ltd., Anil Ambani’s financial services company, protested against a three-step downgrade by Care Ratings that put its credit score two notches above junk.
Care Ratings cut the firm’s long-term debt program to BBB from A and kept it on credit watch with developing implications, according to statements from Reliance Capital and the rating company on Saturday. Reliance Capital said it disagreed with the revision as Care didn’t fully factor in the impact of its plan to raise more than Rs 100 billion ($1.42 billion) via asset sales and “sharply cut” overall debt by more than half this financial year.
“There has not been any adverse change in the company’s operational parameters and/or any other circumstances from the time of the last rating action, just four weeks ago and hence latest revision is completely unjustified,” Reliance Capital said in its statement.
That’s right just like ADAG’s plan to cut RCOM debt drastically proved successful!! More downfall soon.
Reliance Capital Ltd., Anil Ambani’s financial services company, protested against a three-step downgrade by Care Ratings that put its credit score two notches above junk.
Care Ratings cut the firm’s long-term debt program to BBB from A and kept it on credit watch with developing implications, according to statements from Reliance Capital and the rating company on Saturday. Reliance Capital said it disagreed with the revision as Care didn’t fully factor in the impact of its plan to raise more than Rs 100 billion ($1.42 billion) via asset sales and “sharply cut” overall debt by more than half this financial year.
“There has not been any adverse change in the company’s operational parameters and/or any other circumstances from the time of the last rating action, just four weeks ago and hence latest revision is completely unjustified,” Reliance Capital said in its statement.
That’s right just like ADAG’s plan to cut RCOM debt drastically proved successful!! More downfall soon.
https://www.business-standard.com/a...t-pm-will-need-to-find-it-119051900081_1.html
India's working capital is vanishing and the next PM will need to find it
The world of finance will be keenly watching the election results as the future seems uncertain given the current scenario
Andy Mukherjee | Bloomberg May 19, 2019 Last Updated at 08:31 IST
Ask any small Indian firm how long it takes to get paid by larger companies, what kind of a runaround they’re given, what devilish excuses they encounter on the way, and you’ll wonder how they remain in business.
The answer is simple: They raise cash by borrowing against the value of property.
Such advances are tailor-made for the entrepreneur. A term loan for business expansion sometimes comes bundled with a working capital limit, all of it backed by the entrepreneur’s residential or commercial property, preferably self-occupied and in a big city.
Conceptually, there’s nothing wrong here. Peruvian economist Hernando de Soto’s key insight was that poor countries become rich when their toiling masses have clean, marketable titles to property they can mortgage to start businesses.
The problem with the Indian loan against property is more to do with the lenders than the borrowers. Like with most credit creation in India in the past few years, banks have ceded space even here to nonbank, or shadow, lenders.
Shadow lenders got cheap funds from wholesale markets, including mutual funds. They gave credit to small businessmen who then refinanced their loans even more cheaply by going to another shadow lender (I noted in January 2017 that yields on loans against property had fallen by 300 basis points in just 12 to 18 months).
Growth in shadow lenders has spurred from a sudden collapse of IL&FS
Trouble started when the sudden bankruptcy last year of infrastructure financier-operator IL&FS Group triggered a crisis of confidence and raised funding costs for India’s shadow lenders. Since then, the ultimate borrower has been hit by a triple whammy of higher interest rates, fewer refinancing options, and a souring of sentiment among lenders about the collateral. Real-estate valuations are under stress because developers, which themselves need large dollops of refinancing, aren’t getting any.
It used to be that entrepreneurs would take out loans for 10 years to 15 years against property and refinance them in three to five. Now they can’t, so defaults are rising. India Ratings and Research Pvt, a unit of Fitch Ratings Inc., saw delinquencies beyond 90 days increase to 1.77% in January 2019 from 1.05% in January 2018. If these numbers appear low that’s only because the loans that get turned into securities (and are seen by rating firms) are of higher quality. Riskier borrowers, who pawn their homes to more adventurous lenders, are faring far worse.
TransUnion CIBIL, a credit registry, put the size of India’s loans-against-property market at the end of last year at 3.84 trillion Rupees ($55 billion). However, growth in origination of new loans, in money terms, crashed from 54% in the final quarter of 2017 to 11% in the three months through September, when IL&FS blew up. It may have fallen further since then. Slower origination means even more defaults in future because stressed borrowers won’t get refinancing so easily.
Deceleration in loans against property
And borrowers are stressed. Car and SUV sales in India had their worst slump in almost eight years in April. Even soap and biscuit makers are struggling to eke out volumes. These are big, publicly traded companies, whose first response in tough times is to shorten their own working capital cycle by lengthening it for their suppliers – the smaller firms. The response of a government that’s desperate to boost its tax kitty will also be to delay refunds to firms in the supply chain.
A $55 billion source of working capital slipping out of the reach of small firms will trigger a chain reaction. Investors aren’t prepared for it. As India watchers wait for May 23 to see who gets elected as the next prime minister, probably the bigger question is what comes next for finance. Someone will have to fix this broken engine, and quickly.
India's working capital is vanishing and the next PM will need to find it
The world of finance will be keenly watching the election results as the future seems uncertain given the current scenario
Andy Mukherjee | Bloomberg May 19, 2019 Last Updated at 08:31 IST
Ask any small Indian firm how long it takes to get paid by larger companies, what kind of a runaround they’re given, what devilish excuses they encounter on the way, and you’ll wonder how they remain in business.
The answer is simple: They raise cash by borrowing against the value of property.
Such advances are tailor-made for the entrepreneur. A term loan for business expansion sometimes comes bundled with a working capital limit, all of it backed by the entrepreneur’s residential or commercial property, preferably self-occupied and in a big city.
Conceptually, there’s nothing wrong here. Peruvian economist Hernando de Soto’s key insight was that poor countries become rich when their toiling masses have clean, marketable titles to property they can mortgage to start businesses.
The problem with the Indian loan against property is more to do with the lenders than the borrowers. Like with most credit creation in India in the past few years, banks have ceded space even here to nonbank, or shadow, lenders.
Shadow lenders got cheap funds from wholesale markets, including mutual funds. They gave credit to small businessmen who then refinanced their loans even more cheaply by going to another shadow lender (I noted in January 2017 that yields on loans against property had fallen by 300 basis points in just 12 to 18 months).
Growth in shadow lenders has spurred from a sudden collapse of IL&FS
Trouble started when the sudden bankruptcy last year of infrastructure financier-operator IL&FS Group triggered a crisis of confidence and raised funding costs for India’s shadow lenders. Since then, the ultimate borrower has been hit by a triple whammy of higher interest rates, fewer refinancing options, and a souring of sentiment among lenders about the collateral. Real-estate valuations are under stress because developers, which themselves need large dollops of refinancing, aren’t getting any.
It used to be that entrepreneurs would take out loans for 10 years to 15 years against property and refinance them in three to five. Now they can’t, so defaults are rising. India Ratings and Research Pvt, a unit of Fitch Ratings Inc., saw delinquencies beyond 90 days increase to 1.77% in January 2019 from 1.05% in January 2018. If these numbers appear low that’s only because the loans that get turned into securities (and are seen by rating firms) are of higher quality. Riskier borrowers, who pawn their homes to more adventurous lenders, are faring far worse.
TransUnion CIBIL, a credit registry, put the size of India’s loans-against-property market at the end of last year at 3.84 trillion Rupees ($55 billion). However, growth in origination of new loans, in money terms, crashed from 54% in the final quarter of 2017 to 11% in the three months through September, when IL&FS blew up. It may have fallen further since then. Slower origination means even more defaults in future because stressed borrowers won’t get refinancing so easily.
Deceleration in loans against property
And borrowers are stressed. Car and SUV sales in India had their worst slump in almost eight years in April. Even soap and biscuit makers are struggling to eke out volumes. These are big, publicly traded companies, whose first response in tough times is to shorten their own working capital cycle by lengthening it for their suppliers – the smaller firms. The response of a government that’s desperate to boost its tax kitty will also be to delay refunds to firms in the supply chain.
A $55 billion source of working capital slipping out of the reach of small firms will trigger a chain reaction. Investors aren’t prepared for it. As India watchers wait for May 23 to see who gets elected as the next prime minister, probably the bigger question is what comes next for finance. Someone will have to fix this broken engine, and quickly.
I see very serious banking crisis looming in India in coming months/quarters.
The domestic loan growth rate is declining since 2010. NBFC, Mutual funds other shadow banks all are struggling with liquidity crunch, things will get ugly soon with lot many defaults.
The loans against sensitive sectors like power/infrastructure have been kept away from declaring NPA's for now. Although, some of discom's debt is offloaded to state governments, the discoms have done not much to improve profitability.
I could see electricity prices rising soon as it was demand from several generators who bidded very low just to get contract now want prices increased out of terms. This already happened with private sector energy producer (Adani, Tata and Essar) in Gujarat where prices were increased by changing agreement even after supreme court rejected the price increase for consumers citing agreement is agreement.
Export growth is low, Import is rising and will rise based on Oil and Gold price hike, so don't see any room for next govt to help protect end users from rising fuel, electricity and interest costs..
My analysis which does not consider any political stability or instability. In my opinion whichever govt however stable comes to power things looks ugly for Indian economy.
The domestic loan growth rate is declining since 2010. NBFC, Mutual funds other shadow banks all are struggling with liquidity crunch, things will get ugly soon with lot many defaults.
The loans against sensitive sectors like power/infrastructure have been kept away from declaring NPA's for now. Although, some of discom's debt is offloaded to state governments, the discoms have done not much to improve profitability.
I could see electricity prices rising soon as it was demand from several generators who bidded very low just to get contract now want prices increased out of terms. This already happened with private sector energy producer (Adani, Tata and Essar) in Gujarat where prices were increased by changing agreement even after supreme court rejected the price increase for consumers citing agreement is agreement.
Export growth is low, Import is rising and will rise based on Oil and Gold price hike, so don't see any room for next govt to help protect end users from rising fuel, electricity and interest costs..
My analysis which does not consider any political stability or instability. In my opinion whichever govt however stable comes to power things looks ugly for Indian economy.
If market goes up tomorrow (high probability)
Nifty will break first target very easily and might settle down in eve here after crossing second target.
p.s. I'm still learning so not trying to predict anything but based on earlier support/resistance area and result of polls could take it to higher highs tomorrow very easily.
Nifty will break first target very easily and might settle down in eve here after crossing second target.
p.s. I'm still learning so not trying to predict anything but based on earlier support/resistance area and result of polls could take it to higher highs tomorrow very easily.
Let's see how AshokLey reacts to this news tomorrow.
https://auto.ndtv.com/news/ashok-leyland-ready-to-ride-on-elon-musks-india-dream-2040192
Ashok Leyland Ready To Ride On Elon Musk's India Dream
Indian commercial vehicle maker Ashok Leyland has extended an invitation to Tesla CEO Elon Musk to drive in his electric cars in the country, making India his next big market.
https://auto.ndtv.com/news/ashok-leyland-ready-to-ride-on-elon-musks-india-dream-2040192
Ashok Leyland Ready To Ride On Elon Musk's India Dream
Indian commercial vehicle maker Ashok Leyland has extended an invitation to Tesla CEO Elon Musk to drive in his electric cars in the country, making India his next big market.
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