The central government has raised the minimum support price (MSP) of kharif crops for the 2023-24 year by 5-10%. While the MSP of cotton was hiked by 10%, paddy saw an MSP hike of 7.01%. The real big hikes were in moong and groundnut. The MSP of Jowar and sesame seeds were raised to encourage farmers to plant more of this nutritious crop. The government expects that lower inflation and higher MSP will work to the benefit of farmers. Adequate output is the key to containing food inflation and thus CPI inflation.
Union Cabinet approved the third revival package for BSNL, the non-metro PSU telecom giant. The latest package entails an outlay of Rs89,047 crore. It was also decided to allot 4G/5G spectrum for BSNL through equity infusion; and as a result, authorized capital was raised from Rs1.50 trillion to Rs2.10 trillion. With this spectrum allocation, BSNL will be able to provide captive and non-captive networks. The first revival package in 2019 was worth Rs69,000 crore. Total debt will reduce from Rs32,944 crore to Rs22,289 crore.
Torrent Power signed MOU with government of Maharashtra for 3 pumped-storage hydro projects. These projects will have total capacity of 5,700 MW and entail an investment of Rs27,000 crore. It will create 13,500 jobs. The project will be executed at 3 places including Karjat (3,000 MW), Maval, (1,200 MW) and Junnar (1,500 MW). Pumped Storage Hydro is an established, cost-effective technology for managing power supply produced through renewable sources. Torrent Power is a part of the Samir Mehta group.
Government approved continuation of “Exploration of Coal and Lignite scheme” for 5 more years, at a cost of Rs2,980 crore. An area of approximately 1,300 square kilometres will be covered under regional exploration and 650 square kilometres covered under detailed exploration. This exercise is needed to estimate coal resources available in the country, to make a detailed project plan to start coal mining. These reports are used for auctioning new coal blocks, and costs are recovered from successful allocatees.
RBI is expected to pause on rates in the June policy also, although the markets would be watching to see if there is a shift in stance of the RBI. The street was almost unanimous that the RBI would hold rates in June at 6.50%. The RBI had paused in April and is expected to sustain in June also at the repo rate of 6.5%. However, the focus this time would be more on liquidity with bank liquidity already in excess of Rs2 trillion and the RBI may adopt tightening by other means. RBI is likely to keep growth but cut inflation estimates.
IIFL Finance is planning to tap the bond markets to raise up to Rs1,500 crore via NCDs. The NCDs will offer up to 9% return to investors and the fund raising will be launched on 09th June. IIFL Finance is already backed by Prem Watsa of Fairfax group Canada. The base issue is worth Rs300 crore with a green shoe option to retain an additional Rs1,200 crore. The tenor of the NCDs will extend up to 60 months. The funds raised will be used to meet the credit needs of its customers and accelerate digital transformation process.
The Directorate General of Civil Aviation (DGCA) is assessing flight resumption plan submitted by Go First. This was confirmed by the civil aviation minister, Jyotiraditya Scindia. Go Air had suspended operations on 03rd May and despite repeated assurances of resumption, it has not yet started service. It has also filed voluntarily for bankruptcy to protect its assets from being taken over by the lessors. Go First had a 7% market share and used to operate 300 flights a day. Problems in P&W engines triggered the problem.
In what could have deeper repercussions, Byju’s just skipped paying $40 million interest on a $1.2 billion loan due on 05th June. This default could push lenders to invoke guarantees and initiate insolvency action. Byju’s has refused to pay any further interest on the Term Loan B (TLB) until the US court decided on its petition against some of its lenders. Byju’s has objected to the inclusion of distressed debt funds like Redwood as secondary investors. Byju’s also criticized the predatory tactics used by lenders like Redwood.
