Slowdown Blues in India

SGB fixed at Rs.3,890/gram

The issue price for the next subscription period for Sovereign Gold Bonds 2019-20 has been fixed at Rs.3,890 per gram with Settlement on September, 2019.

As per the Ministry of Finance, the next subscription period will be from September 9 to 13, 2019.

The Government of India, in consultation with the Reserve Bank of India (RBI), has also decided to allow discount of Rs.50 per gram from the issue price to those investors who apply online and the payment is made through digital mode.

Minimum investment in the bonds is one gram with a maximum limit of subscription of 500 gram per person per fiscal year (April-March).

India’s forex reserves

India’s foreign exchange reserves declined by $446 million during the week ended August 30, official data showed on Friday.

According to the Reserve Bank of India’s weekly statistical supplement, the overall forex reserves declined to $428.60 billion from $429.05 billion reported for the week ended August 23.

India’s forex reserves comprise Foreign Currency Assets (FCAs), gold reserves, Special Drawing Rights (SDRs) and India’s reserve position with the International Monetary Fund (IMF).

On a weekly basis, FCAs – the largest component of the forex reserves – edged lower by $1.12 billion to $396.005 billion.

However, the RBI’s weekly data showed that the value of the country’s gold reserves went up by $682 million to $27.55 billion.

Nonetheless, the country’s reserve position with the IMF decreased by $5 million to $3.61 billion.

IVRCL up for sale

The liquidator of Iragavarapu Venkata Reddy Construction Limited (IVRCL) Limited has invited expression of interest (EoI) from prospective bidders for sale of the city-based infrastructure company as a going concern and set Rs 1,654.47 crore as the reserve price, an official announcement has said.

At the end of the first quarter, the company incurred a net loss of nearly Rs 800 crore resulting in an accumulated loss of Rs 6,102 crore and erosion of its net worth.

The company has obligations towards fund-based borrowings (including interest) aggregating Rs 9,593 crore as per books of accounts and non-fund based exposure aggregating Rs 857 crore.

Currently, IVRCL’s shares are under suspension from trading.

Suzlon in tailspin

Denmark’s Vestas Wind Systems A/S has reportedly backed out from the debt-resolution plan for Suzlon Energy Ltd, thus forcing the troubled Indian wind turbine maker to withdraw its repayment offer to lenders, according to Bloomberg reports.

In mid-July, Suzlon failed to make a USD-172-million (EUR 156m) payment on convertible bonds with a total value of $546.9 million. Indian wind-turbine maker has been struggling since 2017 after Prime Minister Narendra Modi’s government shifted to auctions as the preferred method to install wind projects.

Automobile slowdown, Minister heckled

In a minor heckling, Union Minister Anurag Thakur on Friday was confronted at the industry event here with the allegation that government’s demonetisation exercise was to blame for the current slowdown that has impacted the economy.

Speaking at the ACMA (Automobile Components Manufacturers Association) annual convention here on Friday, Minister of State for Finance and Corporate Affairs Anurag Thakur asked the industry to introspect the reasons for the slowdown despite the government’s recent announcements to address the concerns raised by the industry and the fact that heavy discounting was taking place.

“Couple of things which I want to understand, for example, if there is reduction in the interest rates after the RBI announcements; you are also giving discounts; many other initiatives have been taken by the Central government, then why are we still not seeing the same kind of demand in the automobile industry?” Thakur asked.

According to Meghwal, when the government can extend the Parliament session to remove (abrogate) an “evil thing” such as Article 370, then auto sector’s woes are minor and will be settled very soon as the Centre is aiming to make India a $5 trillion economy.

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