The Indian government has asked a US federal court to dismiss Cairn Energy’s suit seeking enforcement of the $1.2 billion arbitral award. Cairn had asked the US Federal Court to force Air India to pay the amount. This comes just a week after the Indian government decided to scrap the retrospective tax amendment. One condition for dropping of retrospective tax demand is that the other party must undertake to withdraw all demands. Government has sought protection afforded by the US Foreign Sovereign Immunities, 1976.
Hindustan Aeronautics Limited or HAL placed an order worth Rs.5,375 crore to purchase 99 F404-GE-IN20 engines plus support services from GE Aviation to power its Tejas LCA. This is the largest single order every placed by HAL. The PSU is also exploring the potential of exporting the Tejas LCA. This is part of the contract to supply 83 LCAs to the IAF with enhanced GD F404 engines. The latest F404 family of engines from GE incorporate latest hot section materials and Full Authority Digital Engine Control for reliability.
RBI has finally allowed HDFC Bank to issue fresh credit cards; several months after it curbs over outages in its digital payment services. However, the ban on HDFC Bank introducing new digital initiatives will continue. HDFC Bank MD and CEO, Shashidhar Jagdishan, confirmed that the bank had complied with 85% of the RBI stipulations on the technology front. RBI had imposed this freeze in Dec-20. Jagdishan accepted that the bank had lose market share in credit cards due to the ban. It is taking all back-end to the cloud.
The Indian government is most likely to withdraw sugar export subsidies when the new sugar year starts in October. That is because of the sharp spike in global sugar prices in the last few months due to short supply from Brazil. Government does not see price differential as being a constraint any longer for Indian sugar exports. India had incentivized sugar exports for 3 years in a row with subsidies, something that had forced Brazil and Thailand to even approach the WTO. Global benchmark sugar prices are 55-month highs.
Aurobindo Pharma touched a yearly low of Rs.728 even as pharma stocks have done well overall. The stock lost 12% in last 3 days and 25% in the last one month, after a disappointing Q1 due to weak operating performance in the global anti-retroviral market. The company also saw 3.8% lower revenues for the Q1 at Rs.5,702 crore with ARV revenues down 30.3% yoy. EBITDA margins were flat at 21.2%.Aurobindo has been hit by its huge exposure to the US generics business which is seeing weak demand and price erosion.
The stocks of healthcare companies were sharply higher with Apollo Hospitals, Fortis Healthcare and Max Healthcare touching new highs on the NSE. These stocks have rallied 12-15% in the last one week on the strength of a robust June quarter performance. Apart from the growth in top line and bottom line, these healthcare stocks also gained from a sharp increase in occupancy shooting up from 38% last year to 67% in this year. Fortis scaled up to Rs.266 after turning around to profits of Rs.430 crore in Jun-21 quarter.
SpiceJet had recently announced plans to hive off its cargo operations into a separate entity. It now plans to obtain shareholder approval for the same. The cargo and logistics business will be transferred via slump sale with all assets and liabilities. SpiceJet confirmed that its logistics business was valued at Rs.2,556 crore and in lieu of the valuation, SpiceXpress will issue shares to SpiceJet. The separation is expected to be completed by Oct-21. SpiceJet had reported net loss of Rs.731 crore in Q1 Jun-21 on COVID pressures.
NTPC is exploring IPOs by its two units, NTPC Vidyut Vyapar Nigam and NTPC Renewable Energy Ltd. Both these will represent the first clean energy companies to list on the stock exchanges in India. Both these are expected to play a major role in helping NTPC touch 130 GW renewable energy capacity by 2032. NTPC is planning a total investment of Rs.100,000 crore in this side of the business. NTPC Renewables is currently building India’s largest solar park, where it will generate green hydrogen for commercial sale.