Latest news with #CareEdge
CNA
3 days ago
- Business
- CNA
India accelerates privatisation of more public airports to meet soaring air travel demand
MUMBAI: India is forging ahead with the privatisation of more public airports, as the country anticipates a surge in demand for air travel. The move is expected to bring more infrastructure upgrades, reduce congestion and boost government revenue, said observers. India has already emerged as the world's third-largest aviation market, propelled by major investments in airport facilities and the rise of airlines with expansive flight networks. DEMAND FOR MODERN, EFFICIENT AIRPORTS Analysts said Indian Prime Minister Narendra Modi's government hopes to monetise loss-making assets by packaging them with profitable ones to attract private investors. For instance, Bhubaneswar International Airport, situated in the eastern Indian state of Odisha, is one of 11 airports that India wants to privatise in less than a year. Maulesh Desai, director of credit rating agency CareEdge Ratings said: 'Private players can bring operational efficiency (to) the airports and good technologies, (which) can reduce the turnaround time and provide a better passenger experience as well as airline experience.' The push comes as India's aviation sector gains momentum in its post-pandemic recovery, fuelling the demand for more modern and efficient airports. CareEdge has projected a compound annual growth rate of 9 per cent in passenger traffic over the next two years, with numbers expected to reach about 485 million by 2027 as international travel expands at a faster pace. Investment in the sector is also projected to grow, with an estimated US$12 billion in capital expenditure expected over the next five years, according to ratings agency ICRA. Airport privatisation in India began over two decades ago under a previous administration, aimed at bringing in investment and saving public funds for other uses. The country's busiest airports — Delhi and Mumbai — were among the first to go private in 2006. Six other Indian airports were privatised in 2019. These were done under a public-private partnership model, with the Airports Authority of India owning a 26 per cent stake and private firms holding the majority 74 per cent. HIGHER OPERATING EXPENSES Now, the government plans to sell off its stake in some of these ventures while also expanding the privatisation initiative to more airports. 'I think this strategy of airport privatisation and now bringing in more airports for the private-public partnership model is based out of the government's initiative to totally develop India,' said Milanka Chaudhury, partner at law firm Trilegal. Other airports in cities such as Amritsar, Varanasi, Raipur, and Trichy are also expected to go private by March next year. Industry giants like the Adani Group and GMR Airports, which already operate several privatised airports, are expected to be among the bidders. Observers said the big draw for private investors is the promise of potential profits that come not just from the aviation industry, but other sectors that contribute to a world-class airport experience such as retail and food and beverages. 'There will be these non-aeronautical businesses like duty-free kiosks, there will be restaurants, and it's more like a shopping experience within the airport,' said Trilegal's Chaudhury. 'It also has a lot of commercial aspects to it. So the passengers spend a lot of time and money there, and the government gets a revenue share of that.' But this transformation could come at a cost. Higher operating expenses could eventually be passed on to both airlines and passengers, particularly as demand grows, incomes rise, and environmental concerns around aviation intensify. CareEdge Ratings' Desai said: 'That leads to the higher burden on the airlines as well as the passengers, so that is one challenge we need to (observe).'
India Gazette
28-05-2025
- Business
- India Gazette
Tightened Additional Performance Security norms, alone won't curb aggressive bidding for road projects: CareEdge
New Delhi [India], May 28 (ANI): The government's decision to raise Additional Performance Security (APS) requirements for aggressively bid road projects is a constructive step, but it alone may not sufficiently address the irregularities in the responsible bidding, said CareEdge in a report. The rating agency firm noted that the removal of the APS cap plugs a key loophole in concession agreements. CareEdge cautioned that tighter APS norms alone may not be sufficient to address intense competition in the sector. 'The increase in Additional Performance Security (APS) for aggressively bid projects is a constructive step towards promoting more responsible bidding. Removing the cap on the APS requirement addresses the existing loophole in concession terms. Nevertheless, CareEdge Ratings expects that stringent norms for APS on their own may not be sufficient to curb the intense competition in the road sector meaningfully,' said Maulesh Desai, Director, CareEdge Ratings. The report further adds that ample non-fund-based bank lines, backed by financially strong sponsors, and lower project awards are diluting APS's impact. The release of performance securities based on project progress instead of construction quality is also weakening deterrence, it added. 'Availability of substantial non-fund-based bank lines with moderate to strong sponsors amid lower project awarding activity, besides the release of performance security linked to project progress instead of quality of construction, are prominent factors negating the favourable impact of APS in curbing bidding aggression in NH-HAM projects,' Desai added. Earlier, the Ministry of Road Transport & Highways (MoRTH) tightened the bidding norms for central road projects by tightening the additional performance security (APS) norms, aimed at easing competitive pressure. The report lauded the synchronisation of project approvals and appointed dates with land and statutory clearances as a strategic effort to reduce delays and cost overruns. However, the report by the rating agency warned that the success of these reforms depends on timely coordination among stakeholders and strict on-ground implementation. 'The success of these measures will depend heavily on the timely and coordinated efforts of various stakeholders and effective enforcement of contractual terms on the ground,' said Setu Gajjar, Assistant Director, CareEdge Ratings. (ANI)
Economic Times
26-05-2025
- Business
- Economic Times
RBI's ₹2.7 lakh cr dividend fuelled by dollar gains, interest income, analysts say
Substantial gains from US dollar sales and interest income from securities prompted the Reserve Bank to announce a record Rs 2.7 lakh crore annual dividend to the central government, according to analysts. The Reserve Bank on Friday announced a record Rs 2.69 lakh crore dividend to the government for FY25, helping the exchequer to tide over challenges posed by US tariffs and increased spending on defence due to the conflict with Pakistan. The decision on the dividend payout was taken at the 616th meeting of the Central Board of Directors of Reserve Bank of India held here under the Chairmanship of Governor Sanjay Malhotra. The central bank has transferred Rs 2.1 lakh crore dividend to the government for the fiscal 2023-24. The payout was Rs 87,416 crore for 2022-23. DK Srivastava, Chief Policy Advisor, EY India, said the RBI has been making higher and higher surplus transfers to the government after the Covid year of 2021-22. "This transfer is in spite of the RBI raising the Contingent Risk Buffer to 7.5 per cent for 2024-25 from its previous level of 6.5 per cent for 2023-24. The main reason for RBI's increased income relates to its foreign exchange operations, which included the selling of large amounts of USD and higher interest income," Srivastava said. In a report, CareEdge said though the RBI dividend is higher compared to the previous year, it has come below the market expectations centred around higher than Rs 3 lakh crore. Increased risk provisioning under the revised Economic Capital Framework (ECF) reined in the dividend at Rs 2.7 lakh crore, it said. "With the RBI yet to release its annual report, the reasons behind the higher surplus reported for FY25 are still awaited. However, we expect that the substantial gains incurred from dollar sales throughout the year may have been the key contributing factor for this record dividend transfer," CareEdge said. Furthermore, other factors like the interest income from rupee securities and foreign securities could have also underpinned the higher dividend amount to some extent, it added. Economists at SBI, in a report, said the Reserve Bank's bumper dividend will ease the fiscal position of the government and help bolster growth in the world's fourth-largest economy. Finance Minister Nirmala Sitharaman in her Budget for 2025-26 projected a dividend income of Rs 2.56 lakh crore cumulatively from the RBI and public sector financial institutions. With the RBI's transfer, this number would now be much higher than the budgeted estimates. "We expect the fiscal deficit to ease by 20 basis points from the budgeted level to 4.2 per cent of GDP. Alternatively, it will open up for additional spending for around Rs 70,000 crore, other things remaining unchanged," according to the latest edition of SBI Research's Ecowrap. In a report, Emkay Global Financial Services said the lower-than-expected surplus transfer appears to be largely on account of the RBI revising the risk provisioning range under the Contingent Risk Buffer (CRB). "As of now, we do not expect Centre's fiscal math to change drastically because of this. The incremental gain from the higher RBI dividend is expected to partly offset potential shortfalls in tax revenues and lower-than-expected nominal GDP growth. Accordingly, we maintain our FY26 gross FD/GDP target at 4.4 per cent, in line with the budget estimate," it said. On Friday, the central bank said the transferable surplus for the year (2024-25) has been arrived at on the basis of the revised ECF, which stipulates that the risk provisioning under the CRB be maintained within a range of 7.50 to 4.50 per cent of the RBI's balance sheet. During accounting years 2018-19 to 2021-22, owing to the prevailing macroeconomic conditions and the onslaught of the Covid-19 pandemic, the Central Board of Directors of the Reserve Bank of India decided to maintain the CRB at 5.50 per cent of the RBI's Balance Sheet size to support growth and overall economic activity. The CRB was increased to 6 per cent for FY 2022-23 and to 6.50 per cent for FY 2023-24. Based on the revised ECF, and taking into consideration the macroeconomic assessment, the Central Board decided to further increase the CRB to 7.50 per cent.
Mint
26-05-2025
- Business
- Mint
Gains from dollar sales, interest income key factors for higher RBI dividend to govt: Analysts
Mumbai, May 26 (PTI) Substantial gains from US dollar sales and interest income from securities prompted the Reserve Bank to announce a record ₹ 2.7 lakh crore annual dividend to the central government, according to analysts. The Reserve Bank on Friday announced a record ₹ 2.69 lakh crore dividend to the government for FY25, helping the exchequer to tide over challenges posed by US tariffs and increased spending on defence due to the conflict with Pakistan. The decision on the dividend payout was taken at the 616th meeting of the Central Board of Directors of Reserve Bank of India held here under the Chairmanship of Governor Sanjay Malhotra. The central bank has transferred ₹ 2.1 lakh crore dividend to the government for the fiscal 2023-24. The payout was ₹ 87,416 crore for 2022-23. DK Srivastava, Chief Policy Advisor, EY India, said the RBI has been making higher and higher surplus transfers to the government after the Covid year of 2021-22. "This transfer is in spite of the RBI raising the Contingent Risk Buffer to 7.5 per cent for 2024-25 from its previous level of 6.5 per cent for 2023-24. The main reason for RBI's increased income relates to its foreign exchange operations, which included the selling of large amounts of USD and higher interest income," Srivastava said. In a report, CareEdge said though the RBI dividend is higher compared to the previous year, it has come below the market expectations centred around higher than ₹ 3 lakh crore. Increased risk provisioning under the revised Economic Capital Framework (ECF) reined in the dividend at ₹ 2.7 lakh crore, it said. "With the RBI yet to release its annual report, the reasons behind the higher surplus reported for FY25 are still awaited. However, we expect that the substantial gains incurred from dollar sales throughout the year may have been the key contributing factor for this record dividend transfer," CareEdge said. Furthermore, other factors like the interest income from rupee securities and foreign securities could have also underpinned the higher dividend amount to some extent, it added. Economists at SBI, in a report, said the Reserve Bank's bumper dividend will ease the fiscal position of the government and help bolster growth in the world's fourth-largest economy. Finance Minister Nirmala Sitharaman in her Budget for 2025-26 projected a dividend income of ₹ 2.56 lakh crore cumulatively from the RBI and public sector financial institutions. With the RBI's transfer, this number would now be much higher than the budgeted estimates. "We expect the fiscal deficit to ease by 20 basis points from the budgeted level to 4.2 per cent of GDP. Alternatively, it will open up for additional spending for around ₹ 70,000 crore, other things remaining unchanged," according to the latest edition of SBI Research's Ecowrap. In a report, Emkay Global Financial Services said the lower-than-expected surplus transfer appears to be largely on account of the RBI revising the risk provisioning range under the Contingent Risk Buffer (CRB). "As of now, we do not expect Centre's fiscal math to change drastically because of this. The incremental gain from the higher RBI dividend is expected to partly offset potential shortfalls in tax revenues and lower-than-expected nominal GDP growth. Accordingly, we maintain our FY26 gross FD/GDP target at 4.4 per cent, in line with the budget estimate," it said. On Friday, the central bank said the transferable surplus for the year (2024-25) has been arrived at on the basis of the revised ECF, which stipulates that the risk provisioning under the CRB be maintained within a range of 7.50 to 4.50 per cent of the RBI's balance sheet. During accounting years 2018-19 to 2021-22, owing to the prevailing macroeconomic conditions and the onslaught of the Covid-19 pandemic, the Central Board of Directors of the Reserve Bank of India decided to maintain the CRB at 5.50 per cent of the RBI's Balance Sheet size to support growth and overall economic activity. The CRB was increased to 6 per cent for FY 2022-23 and to 6.50 per cent for FY 2023-24. Based on the revised ECF, and taking into consideration the macroeconomic assessment, the Central Board decided to further increase the CRB to 7.50 per cent.
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Business Standard
23-05-2025
- Business
- Business Standard
Banks, NBFCs shift focus away from unsecured loans to loan against property
As stress continues to linger in the unsecured segment of retail lending, LAP has emerged as an attractive avenue for banks and NBFCs besides gold loans Anupreksha Jain Mumbai Listen to This Article Amid rising stress in unsecured lending, banks and non-banking financial companies(NBFCs) are turning towards loan against property, a secured lending retail product. Further, with a rising push towards lending to the micro, medium and small enterprises (MSME) sector, the loans against property (LAP) portfolio has seen a significant growth as loans to MSMEs are also classified under the LAP portfolio. According to a recent CareEdge report, the MSME LAP market has grown over 50 per cent, from Rs 7.5 trillion to Rs 11.3 trillion over the past two years. Within this, the micro-LAP rose by 60 per cent to Rs
