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Wednesday,12-May-2021

Business

Government may ask states to set up AMC/ARC for PSE asset monetisation

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Power-demand

The Centre proposes to prod states to initiate asset monetisation of state public sector enterprises (PSEs) by setting up specialised asset management (AMC) and asset reconstruction companies (ARC).

The idea is to expand the scope of government’s asset monetisation exercise and enable state entities to unlock value for the next round of the investment that will help generate growth and employment.

AMC and ARC or a bad bank has been proposed for the banking sector in Budget 2021-22 to acquire, manage and turnaround bad loans. The Budget also talked about asset monetisation to unlock the true value of assets lying with government entities.

The plan now is to create a special purpose vehicle (SPV) under the government route that could take the shape of an AMC/ARC and help to maximise value of assets of PSEs. Similarly, exercise is now being thought as state level, where state specific AMC/ARC could do the same thing for local enterprises.

As per the plan being finalised by the Centre, assets may first be transferred to the proposed SPV which will then devise a plan to improve it before finding a strategic buyer and completing the transaction.

Earlier speaking to IANS, disinvestment department DIPAM secretary Tuhin Kanta Pandey had said that the SPV could look at monetising non-core assets of PSEs that are unable to undertake the work on their own and help them realise better value for assets that are unutilised or underutilised or are just lying idle without generating any revenue.

This would also mean that states, which are unable to undertake asset monetisation on its own, could consider taking the help of the Central SPV. In any case, both central and state SPV are proposed to work in close coordination to see that state assets get maximum value.

Asset monetisation is the process of creating new sources of revenue for the government and its entities by unlocking the economic value of unutilised or underutilised public assets. A public asset can be any property owned by a public body, roads, airports, railways, stations, pipelines, mobile towers, transmission lines, etc. or even land that remains unutilised.

The disinvestment department DIPAM has already asked all government bodies and PSEs to identify a list of assets that needs to be monetised. These would then be transferred to the SPV that will help improve the assets so that to maximise its value in the monetisation exercise.

With regard to land to be under monetisation, the plan is to create a central portal that could act as a land bank housing information about all such assets that have been lined up for utilisation by strategic investors.

Sources said, the AMC/ARC model for asset monetisation would work as it can help in maximising value of public assets thereby giving better returns to government and the PSEs. Certain assets may need to be improved before putting it up for auction. This work can be taken up by the AMC that can then put assets up for sale and complete the transaction.

It is envisaged that only non-core assets may be taken over by the proposed SPV and it would basically support smaller PSEs or those with inadequate infrastructure to undertake monetisation on their own. Larger entities like the Railways or other PSEs can continue on their own to monetise assets.

Though asset monetisation in plan in bits have been undertaken in the past and few PSEs have initiated exercise on this front, the government has given importance to this plan this year in the Budget and is actively looking to create a vast pool state asset that would be sold off.

Business

Samsung, Sony, Hitachi invest in UK healthtech firm Huma

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Dollar

Samsung, Sony and Hitachi have invested in UK heathtech company Huma Therapeutics Limited in its latest Series C funding round with financing of approximately $130 million, the company said on Wednesday.

Leaps by Bayer and Hitachi Ventures led the Series C funding round, which also saw strategic and financial investors like Samsung Next, Sony Innovation Fund by IGV, Unilever Ventures and HAT Technology & Innovation Fund by HAT, as well as individuals Nikesh Arora (former president of SoftBank) and Michael Diekmann (Chairman of Allianz).

The investment will scale Huma’s modular platform which can power digital ‘hospitals at home’ nationally, and support the pharmaceutical and research industries to run the largest ever decentralised clinical trials, the company said in a statement.

The company said an additional $70 million can be raised at a later date as part of the Series C funding, taking the total financing to more than $200 million.

“We’re already demonstrating how ‘hospital at home’ can transform healthcare, and how decentralized clinical trials can advance research in ways that weren’t imaginable even one year ago. Now we want to accelerate the pace of change and continue to innovate for better care and research worldwide.,” said Dan Vahdat, Founder and CEO of Huma.

The new investment will be used to expand Huma’s digital platform in the US, Asia and the Middle East.

Its digital ‘hospital at home’ was co-created with clinicians and has been independently shown to almost double clinical capacity, reduce hospital readmissions by over a third and has patient adherence levels of over 90 per cent.

“The service is supporting governments’ pandemic responses on a not-for-profit basis and is now used for a range of patients,” the company said.

Huma works with leading life science companies including AstraZeneca, Bayer and Janssen and academic institutions such as Stanford Medicine, the Johns Hopkins Bloomberg School of Public Health and the University of Cambridge.

“We are excited to explore how the Huma platform and its digital biomarkers portfolio could work with the Samsung ecosystem for lasting impact in proactive care across hospitals, life sciences and population health initiatives,” said Jonathan Machado, Senior Investment Director of Samsung Next.

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Business

Sensex down 400 points; banking, oil & gas stocks fall

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Bombay-Stock-Exchange

The key Indian equity indices declined on Wednesday morning with the BSE Sensex losing over 400 points.

Heavy selling pressure was witnessed in banking, finance and oil and gas stocks.

Around 10.25 a.m., Sensex was trading at 48,717.15, lower by 444.66 points or 0.90 per cent from its previous close of 49,161.81.

It opened at 49,171.28 and has so far touched an intra-day high of 49,171.28 and a low of 48,712.42 points.

The Nifty50 on the National Stock Exchange was trading at 14,722.10, lower by 128.65 points or 0.87 per cent from its previous close.

Manish Hathiramani, technical analyst with Deen Dayal Investments said: “The Nifty is keeping above the 14,700 level. We will threaten the current uptrend if we close below 14,700.”

“The situation would need to be reviewed then. Until then the trend continues to remain up and traders can strategically find ways to enter the market on dips. The markets can scale higher to 15,200-15,250,” he said.

The top gainers on the Sensex so far were Power Grid, Larsen & Toubro and NTPC, while HDFC, Hindustan Unilever and IndusInd Bank were the major losers.

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Business

Fuel prices rise for third day, closing on Rs 100/lt in Mumbai

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Petrol

Maintaining its rising trend, fuel prices increased for the third day in a row on Wednesday as state-owned fuel retailers hiked rates of petrol and diesel by 25 paise per litre each in the national capital.

In Delhi, petrol now costs Rs 92.05 per litre and diesel is priced at Rs 82.61 up from yesterday’s level of Rs 91.80 and Rs 82.36 a litre respectively.

Across the country as well the petrol and diesel prices increased on Wednesday but its quantum varied depending on the level of local levies in respective states.

In Mumbai, petrol now comes for Rs 98.36 a litre and diesel for Rs 89.75, according to a price notification from oil marketing companies.

Petrol prices in some states including Rajasthan, Madhya Pradesh and in some places in Maharastra have breached the Rs 100 per litre mark while premium petrol has been hovering above that level for some time now.

Fuel prices have now increased on each of the day this week. Prior to holding back auto fuel prices on Saturday and Sunday, its pump rates had increased sharply on previous four days as well.

Petrol prices have risen by Rs 1.50 a litre in Delhi in May in seven hikes so far. Similarly, diesel prices have risen by Rs 1.88 per litre in capital this month.

IANS had written earlier that OMCs may begin increasing the retail price of petrol and diesel post state elections as they were incurring losses to the tune of Rs 2-3 per litre by holding the price line despite higher global crude and product prices. The oil companies had already increased the ATF prices by 6.7 per cent effective this month.

OMCs benchmark retail fuel prices to a 15-day rolling average of global refined products’ prices and dollar exchange rate. In the last fortnight global oil prices have hovered in $66-67 a barrel range higher than the levels when petrol and diesel prices were last revised. Crude prices have jumped around $69 a barrel now.

With global crude prices at around $69 a barrel mark, OMCs may have to revise fuel prices upwards again if there is any further firming up.

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