New Delhi: Japan will give development assistance loan worth Rs 5,479 crore to India for Chennai and Ahmedabad Metro projects, the Finance Ministry said on Sunday.
Both countries have signed agreements in this regard.
India and Japan have inked agreements "for an official development assistance loan of an amount of 19.981 billion yen (about Rs 1,069 crore) for the Chennai Metro Rail Project (IV) and 82.434 billion yen (about Rs 4,410 crore) for Ahmedabad Metro Project," the Finance Ministry said in a statement.
In last few years, economic cooperation between India and Japan has strengthened and grown into strategic partnership, it said.
With overall consensus and popular support for the greater cooperation between India and Japan, the partnership is poised for a great future, it added.
The agreements were signed by the Joint Secretary in the Department of Economic Affairs S Selvakumar and Yutaka Kikuta, Deputy Chief of Mission of Japan to India, here on last Friday.
India attaches highest importance to infrastructure projects, it said, adding that an important component of infrastructure is urban infrastructure.
"Within urban infrastructure, provision of metro rail gains more importance because of its environment friendly nature. It reduces the traffic congestion in the cities where the traffic is over flowing and also reduces Green House Gas Emission," the statement said.
In this regard, India is continuously making efforts to obtain bilateral and multilateral funding to meet this financial requirement, it added.
New Delhi: Large foreign investors including Goldman Sachs, Temasek and Morgan Stanley have approached the government to expedite the process for listing of top stock exchanges BSE and NSE, where they hold significant stakes.
This group of 17 overseas investors, which also includes Deutsche Boerse, Singapore Exchange, Argonaut PE, SAIF Partners, Tiger Global, Acacia Partners and General Atlantic, has said that the listing of the bourses would help various public sector entities and others who have invested there.
These investors together hold 31.12 per cent in NSE and 25.30 per cent stake in BSE.
In a letter addressed to Finance Minister Arun Jaitley, they said each of them have "long-term commitment to India" and steps like listing of exchanges can help in the government's plans to deepen India's financial markets and make India a global financial hub.
Copies of the letter have also been sent to the Prime Minister's Office, capital markets regulator Sebi and the two exchanges.
The listing of exchanges have been hanging fire for a long time in India, even as the regulator Sebi had put in place a regulatory framework in this regard more than three years ago.
In the meantime, an interesting development has taken place following merger of commodities regulator FMC with Sebi, which has led to all commodity exchanges becoming securities exchanges. The largest commodity bourse MCX is already listed and the unified norms have made it a listed stock exchange as well theoretically, even as BSE continues to seek listing.
Since then, BSE has approached Sebi several times with its plans for an IPO, but necessary clearances have not been forthcoming on one or other issue.
Last week also, Sebi Chairman U K Sinha said that the regulator would "very soon" issue fresh guidelines for listing of the exchanges.
"There are some impediments with respect to the listing norms but we are hoping to resolve them very soon," Sinha had said, while adding that the sub-committees have submitted their report on listing norms for exchanges and the regulator is now looking into it.
The foreign investors, as also some domestic institutions such as SBI, have been pressing for listing of the bourses for a long time to get an opportunity to monetise their holdings in part or full, but the exchanges' IPOs continue to get delayed amid lack of regulatory clarity on the matter.
As per existing Sebi norms, exchanges can get listed provided they put in place appropriate mechanisms for tackling conflicts of interest. However, the exchanges are not allowed to list on their own platforms. Still, there remain some regulatory gaps that are coming in way of their listings.
"In the evolutionary process of any stock exchange, 'listing' is the next logical step after demutualisation," the group of 17 investors said in their memorandum.
These also included Atticus Mauritius, Beacon India, Caldwell Securities, Deccan Value Investors, GTI Capital, Norwest Venture Partners and Wolfensohn Fund Management.
Listing out the benefits of the IPOs, these shareholders said that listing of BSE and NSE would help in improving governance and transparency, open the Indian financial markets to new classes of regulated investors like long-term capital providers such as pension funds and key investors would continue to keep their faith in the country.
A number of foreign and domestic investors have already begun the process of liquidating their stakes in NSE in recent months through private transactions in the absence of the IPO.
These include private equity major Actis, while some public sector entities like IFCI and IDBI Bank are also looking to further dilute their holdings.
New Delhi: With the retirement fund body EPFO bruising its hands on debut in stock market, an irony of sorts has emerged in its allocation of funds -- more money was invested in SBI's Nifty ETF but returns turned poorer.
After years of dilly-dallying on whether to take the risk of investing in stocks, Employees Provident Fund Organisation (EPFO) finally invested Rs 2,322.10 crore in ETFs during August-October period, but could earn only a meagre annualised return of 1.52 per cent.
SBI Mutual Fund was mandated to make the investments in its two exchange-traded funds -- Sensex ETF and Nifty ETF.
Officials said that the EPFO invested nearly Rs 590 crore in Sensex ETF, while over Rs 1,730 crore was put in Nifty ETF.
While fund allocated to Nifty ETF was nearly three-times of the same for the Sensex fund, the returns came out almost in the opposite ratio.
The Sensex ETF has earned an annualised return of 2.97 per cent for EPFO -- nearly three-times of 1.03 per cent for the Nifty ETF, officials added.
This has led to the officials and fund managers beginning to have a rethink on their fund-allocation strategies, while the poor returns have also triggered calls from trade unions to altogether stop the stock market investments.
While the government is still hopeful of better returns over a longer period of time with right allocation of funds, saying three months is a very short time, the union members of EPFO are playing hardball and are asserting that they always warned against the risks associated with the stock market.
At a meeting of EPFO's apex decision making body Central Board of Trustees (CBT) headed by Labour Minister Bandaru Dattatreya last week here, the trustees raised concern over the meagre returns and decided to have a rethink on its move to invest a total of Rs 6,000 crore in ETFs this fiscal.
"Trade unions have raised their concerns on low returns and the issue will be discussed at the Finance Audit and Investment Committee (FAIC) to be convened shortly," EPFO's Central Provident Fund Commissioner K K Jalan had told reporters after the CBT meeting.
EPFO has paid 8.75 per cent rate of return on PF deposits for the two consecutive years in 2013-14 and 2014-15. The main purpose of the body's decision to start investments in the equity and equity related schemes was to maximise returns.
Officials said they are analysing the comparative returns of Sensex and Nifty over longer periods of up to ten years.
Besides, other issues such as profile and liquidity of individual stocks forming part of Sensex and Nifty are also being analysed to ensure that the funds are allocated on the basis of higher and sustained growth prospects.
The CBT had decided to invest in ETFs finding them safer than direct investments in individual stocks.
Being cautious on investment in stock market, EPFO decided to begin with infusion of 5 per cent of its incremental deposits in the ETFs during the current fiscal.
This can go up to 15 per cent in coming years.
EPFO is estimated to receive over Rs 1 lakh crore as incremental deposits during 2015-16. Thus, it may end up investing around Rs 6,000 crore in stock market this fiscal.
EPFO was earlier told by financial advisors that long-term investment in equity or equity-related schemes can give returns as high as 15 per cent.
Between August and October, EPFO invested Rs 758 crore from Employees' Pension Scheme and Rs 1,564.1 crore from Employees Provident Fund Scheme into ETFs.