Stocks
Nifty, Sensex may continue to rally – Tuesday closing report
We had mentioned in Monday’s closing report that Nifty and Sensex were headed higher. On Tuesday, the major indices of the Indian stock markets opened weak but still closed with gains. The trends of the major indices in Tuesday’s trading are given in the table below:
 
 
Negative global cues, coupled with profit booking, subdued the Indian equity markets on Tuesday. Consequently, the key indices of the Indian equity markets traded flat -- marginally in the green in the morning. With value buying in capital goods, healthcare and bank stocks lifting prices, by afternoon, the major indices closed with small gains. The BSE market breadth was marginally tilted in favour of the bears -- with 1,315 declines and 1,298 advances.
 
Steel exports fell 27% in April this year to 0.308 million tonnes (mt), while finished steel production in the country grew 3.2% to 7.48 million tonnes in the first month of the current fiscal, as per the steel ministry's latest report. "Export of total finished steel was down by 27% in April 2016 (0.308 mt) over April 2015 and declined by 12% over March 2016," said the report of the ministry's Joint Plant Committee (JPC). India imported 0.654 mt of total finished steel in April 2016, down 15.5% over the same month last year.  According to the provisional data released by JPC, production for sale of total finished steel at 7.487 mt, registered a growth of 3.2% during April over year-ago month. "During April 2016, the ISP (integrated steel plants) producers produced 3.956 mt, which was a growth of 1.2% while production for the other producers was up by 3.3%," the report said. The country's steel consumption posted a 5.2% growth in April 2016 at 5.75 mt over corresponding month last year. The report pointed out steel consumption in April was down 29% as compared to March (2016) consumption under the influence of a declining supply side as both production for sale and imports declined. Steel Authority of India shares closed at Rs42.40, down 1.17% on the BSE.
 
Even as Reliance Industries doesn't intend to offer doles on its 4G handsets under the "LYF" brand, some concessions are certainly expected given the state of play in India's mobile phone and data market, global investment advisory CLSA has said in an analysis. "While Reliance has said categorically it is not looking to give handset subsidies, we expect it to come up with some bundled promotional offerings. In a prepaid market like India, any bundled offering may be very different from the handset-subsidy model popular in several other markets," it said. "Unlike the bundling of the phone with the service, we expect Reliance to bundle the service with phones," it said, adding Jio may offer a phone for around Rs.3,400 and free services in the first 3-months, which can cover a part of the handset price and reduce the cost of ownership. "In fact, in the recently launched invite-based scheme, Jio is offering unlimited 4G data, 1,500 voice minutes and 9,000 SMS free for three months on purchase of a LYF phone," it said referring to the scheme under which each employee is allowed to extend the offer to 10 friends. The brokerage was also upbeat on the use of 4G in India. Reliance Industries shares closed at Rs981.35, down 0.16% on the BSE.
 
The top gainers and top losers of the major indices are given in the table below:
 
 
The closing values of the major Asian indices are given in the table below:
 

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COMMENTS

DYNAMICLEVELS

9 months ago

Yesterday FII have sold 97258 contracts in the futures markets and 282930 contracts in the Options market in the current expiry. Nifty is expected to open gap down at 7795 as per SGX at 8:30 am IST. Small Cap trend change confirmation level is 5089 and Nifty recent low was 7700. We might see continued selling in the market today.

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Depositors Stunned by RBI’s Benevolence to Jaiprakash Associates
Fixed deposit (FD) investors of Jaiprakash Industries are shocked. On 21st April, The Economic Times reported that the Reserve Bank of India (RBI) had removed 20 companies from the list of 150 entities whose loans had to be provided for by banks against risk of default. One of these was the beleaguered Jaiprakash Associates which figures in Moneylife Foundation’s survey (1,596 complaints) among the top six companies that have the maximum complaints regarding failure to pay the principal or interest on FDs. 
 
While banks celebrate the fact that not providing for the loans will help their bottomlines, hapless depositors are in shock. Worse still, the company has selectively paid a few investors, especially those who had invested through agents who were large fund mobilisers. Media reports also indicate that the RBI breather has followed the Jaypee group’s effort to cut it massive outstanding debt of Rs75,000 crore and its intention to hire experts to restructure its business. Jaiprakash Associates alone has a debt of Rs21,731 crore, according to a Credit Suisse report. 
 
As a proportion of its outstanding, the FD component of Jaiprakash’s debt is bound to be really small and it would be a smart move, reputation-wise, if the company decided to pay them back. A little nudge from the ministry of corporate affairs (MCA) would have made a difference; but it has shown no interest. SD Israni, a well-known lawyer and company secretary and columnist, however, offers an interesting perspective. He says that although the Companies Act, 2013 had not included any provision to punish defaulting companies and their officials, the National Democratic Alliance (NDA) has, in fact, made amends. Section 76A, was inserted into the Companies Act on 29 May 2015 providing imposition of heavy fines and imprisonment for defaults. However, there is a catch. Mr Israni points out that the provision remains a paper tiger because the tribunal that can exercise the power has yet to be constituted and the CLB (company law board) cannot exercise these powers. 
 
Abhay Datar, consumer activist and former banker, points out that Section 76(1) requires companies to create a charge on fixed assets equivalent to the amount of FDs raised. Does this mean that FD-holders are secured creditors, he asks. But here, too, he points out that there is no clarity on whether this would be a first charge or a second charge on the assets. When it comes to small depositors, MCA clearly moves at snail’s pace. So what will push the MCA to give teeth to Section 76A and protect depositors? We are still looking for answers. Meanwhile Moneylife continues to advise savers to avoid investing in corporate FDs lured by a slightly higher interest rate and endangering the principal invested. 

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COMMENTS

George Williams

1 month ago

Is there any association formed for jaypee FD investors?

REPLY

Sandeep Talwar

In Reply to George Williams 1 month ago

This is a good idea. Can we form a WhatsApp group or collect email ID's for a Google group ?

George Williams

In Reply to Sandeep Talwar 1 month ago

Contact me on [email protected]

George Williams

In Reply to Sandeep Talwar 1 month ago

Yes sandeep.Already such an initiative has been started by Helios and matheson investors and running a legal battle in Chennai high Court

Sandeep Talwar

In Reply to Sandeep Talwar 1 month ago

I am stuck with 4 FD with Jaiprakash associates and 4 with Jaypee Infratech

Pradeep Bose

2 months ago

RBI) had removed 20 companies from the list of 150 entities one of these was Jaiprakash Associates. who exceeded maximum complaints regarding their failure to pay the principal amount & interest on matured FDs for more than one year.Requested RBI,Finance Ministry,MCA etc. to take strong action against the aforesaid company & also to see that the small,retired investors',etc get back their delayed hard earned investment amount along with interests at all cost. Hoping for early action .

Sumon Mukhopadhyay

8 months ago

The investors would be getting their FDs back - may be there could be some delay.

The shares of Jaiprakash Associates Ltd which is trading near Rs.7.64, will cross Rs.12, in the short term, as the company is in the process of hiring consultants to quickly turn into black. It is also offering banks land parcels, which are non-core assets, to tide over this debt issue.

I am sure with NDA government now, speaking of converting debts to equities, the Reliance Communications and Jaiprakash Associates will be one of the biggest beneficiaries. We have already seen a rally in Gammon India, Gammon Infra, Lanco Infra and Unitech Ltd during the last few days.

Mahesh S Bhatt

9 months ago

Vijay Mallya today news is saying that UK government shall not deport.So what will few thousand rupess repayment done when thousands of crores are nit being paid back.

Audacity of Vijay Mallya is that I have given offer but banks are not accepting hence not wilful defaultor.

BJP/UPA mili juli bhagat sarkar.All businessmen buy Politicians & donot pay taxes & get quick rich.For common man there are taxes & laws.

For Businessmen /Politicians State Immunity/Political support so where is the parity & expectation of justice is false.

Its political entertainment between Politicians/Businessmen & Media every day new story very very few convictions.Ask Sucheta? She is experienced in getting Harshad Mehta culprits behind the bars after 23 years.Respect her resilence.

CJI cries/CBI cries for shortage of staff/Police does shoddy investigations of big cases Peter Mukhejea/Salman /Malageon blasts lists goes on..

God Bless Forget & Forgive & Move on is best way to live otherwise pay lawyers for timeless commitments Mahesh

Simple Indian

9 months ago

Corporate FD depositors ought to be aware of the risks involved in investing their money in such FDs which are unsecured. Most such depositors invest for the lure of higher interests offered by such FDs, despite the risks involved. However, RBI, MCA etc. should ensure that investors' interests are protected at all times. Instead, crony-capitalism has thrived in India for so long that most big companies have enough political clout to escape any action by govt agencies. With the politician-businessman nexus here to stay, retail investors would do well to assess their risks before investing in corp FDs and such.

9 months ago

I am also one of the victim of J P Associates having 3 fds already matured . CLN extended the time up to june 2016 . Yesterday only I emailed them citing that their dead line is nearing and as I am senior citizen I have requested to pay my long matured FDs immediately. Mr. Raghram Rajan our RBI governor should have seen the complaints of FD holder and then only removed this company from the list. Now at least J P Associates will honor their commitments to FD holder at an earliest.
Narayan Kamath

vnrao

9 months ago

Investors of fds in companies well aware that these are unsecured loans no gaurantee of retirn of principal/interest taken the risk and invested instead of giving some potive suggetion like insurance svheme etc negative writing does not augur well will only bring few subscribers to mag we cannot make whole india sick by naming every debt ridden compay to write off give some positive suggetions

vnrao

9 months ago

Investors of fds in companies well aware that these are unsecured loans no gaurantee of retirn of principal/interest taken the risk and invested instead of giving some potive suggetion like insurance svheme etc negative writing does not augur well will only bring few subscribers to mag we cannot make whole india sick by naming every debt ridden compay to write off give some positive suggetions

REPLY

Sucheta Dalal

In Reply to vnrao 9 months ago

Is it your suggestion that since FDs are unsecured companies have the right not to return the money? Is it a gift? All of Moneylife Foundation's financial literacy efforts inform people to beware of corporate FDs. But financial literacy in India is poor and those who have fallen for this are largely senior citizens who need some help.
Most developed countries do not allow companies to raise corporate deposits. It is corporate India that lobbies with the government to ensure that this dubious practice continues, with a pretence at having tightened rules.
So it may be in your best interest and that of the country to join our efforts in fighting this, unless there are other reasons why you have chosen to support the non-repayment.

Abhijit Joshi

9 months ago

Time & again investors fell prey to lure of FDs advertisements & false sense of security thinking FDs are safer than equity where principle is preserved.
Equities can be sold even if at loss & investors can deploy them elsewhere.
There is no such exit route to FDs.

Ashok Sachdeva

9 months ago

If we see the new law, as The Company act, 2013, section 73(4) provides opportunity to fd holders to file their claim in case of default by company. Either clb will accept application or reject. Let it reject and approch to court for true remedy. What is wrong in that?

REPLY

Sucheta Dalal

In Reply to Ashok Sachdeva 9 months ago

Approach court... what is wrong in that? Everything!!! Just the process of approaching court will cost more than the deposit in most cases and take a decade to resolve.

SuchindranathAiyerS

9 months ago

The RBI does the Nehruvian thing. "Show me the person, and I shall show you the law"

Srikanth Matrubai

9 months ago

Pathetic.
Its "Rishwat" speaking.
Really sad!!!

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