Mutual Funds Commodities Research Tax Planning IPO Our Team Contact Us    
Interesting Articles

| More

Views on Finance Minister's Announcement - Acuité Ratings & Research Limited

Posted On: 2020-05-13 20:29:48

Suman Chowdhury, Chief Analytical Officer, Acuité Ratings & Research


The FM's announcements today promptly follows the PM's announcements yesterday on an overall stimulus package of Rs. 20 lakh Cr to repair, revive and reform the Indian economy post the Covid crisis. One of the key components of the package has clearly been for the MSMEs, a segment whose business sustainability has been clearly impacted by the lockdown. The collateral free loans to small businesses up to an aggregate amount of Rs. 3 lakh Cr will be completely guaranteed by the government and importantly, have a longer tenor of 4 years with a moratorium in the first year. Such an emergency credit line will go a long way to fund the working capital required to restart the MSME's operations, protect against any job losses and also address the challenge of credit aversion being seen in lenders. Further, a provision for infusion of funds through equity or subordinated debt has also been made to support stressed MSMEs through funds created for the purpose. Additionally, significant support is envisaged through the expansion of the MSME definition, disallowance of foreign companies in global procurement and temporary liquidity relief by the payment of EPF liabilities on behalf of the small businesses.


Given the liquidity challenges in NBFCs and MFIs, the special liquidity scheme for Rs. 30,000 Cr which will invest in investment grade papers of NBFCs/HFC/MFIs backed by a government guarantee is a big positive. This has been further supplemented by the second version of the Partial Credit Guarantee (PCG) Scheme which was adopted last year to facilitate securitisation transaction. Under the PCG mechanism, Rs. 45,000 Cr can be invested in NBFC papers with a 20% first loss absorption by the Government. While the already announced TLTRO and the refinance programmes for the sector were being constrained due to the credit concerns of banks, these measures will address the latter concern and more effectively resolve the immediate liquidity problems in the NBFC and the MFI sector, enabling them to revive lending to MSMEs and self-employed individuals.

Infrastructure:The stimulus package also includes a relief for the infrastructure sector. The one-time liquidity support of Rs. 90,000 Cr for the distribution companies is critical since customer payments are currently delayed which has led to the transmission of liquidity stress to the power generation companies. In the current disruptive scenario where resumption of project execution work may pose challenges, an extension of all construction work up to 6 months without any penalty will also come as a relief to the construction, EPC and real estate companies."

Source: Equity Bulls

Click here to send ur comments or to

Other Headlines:

Nifty Gained 8% in the June Series, Bank Nifty Surged 12%-Highest Since March 19 - HDFC Securities

IMF Growth Revision for India - Acuité Ratings & Research

Co-operative Banks - RBI Supervision - Acuité Ratings & Research

HDFC Securities views on relaxations announced by SEBI

India can reduce China trade deficit by over $8 billion in FY21-22 - Acuité Ratings & Research

How can investors preserve their wealth during times of crisis

JM Financial Yield Enhancer (Distressed Opportunity) Fund I raises Rs.160 crore in its first close

Samco Securities launches BTPT - Buy Today, Pay In Two days for Investors Buying Stocks

No data breach of BHIM app: Report

India's sovereign rating downgrade by Moody's - Acuité Ratings & Research

Banking Sector Credit Trends - Unusual trends - HDFC Securities

Rollover Report for May - June 2020: Angel Broking

Suman Chowdhury, Chief Analytical Officer, Acuité Ratings & Research on Q4 GDP

Mr. Dhiraj Relli views on GDP Numbers - HDFC Securities

Banking Sector Update - NIM compression on the cards - HDFC Securities

May series ends with a bang: Angel Broking

May 2020 F&O Series Expiry - Mr. Nandish Shah, Technical Research Analyst, HDFC Securities

Views on Impact of Locusts Attack on Agriculture - Acuité Ratings & Research

ICAI establishes Center for Audit Quality

Bharti Telecom raised over Rs. 8433 crores through Accelerated Book-build offering of equity shares of Bharti Airtel

SATYA MicroCapital raises INR 105 crore equity funding from Japan-based Gojo & Company Inc.

Mr. Rajnish Kumar, Chairman, SBI & IBA on the announcements made by RBI today

Views of Mr. Umesh Revankar, MD and CEO, Shriram Transport Finance on RBI announcement

Views of Mr. George Alexander Muthoot, MD, Muthoot Finance on RBI announcement today

Views of Ms. Anagha Deodhar - Economist, ICICI Securities on the RBI announcement today

Views on RBI Policy announcement today - Federal Bank

RBI Monetary Policy (May 2020) by Shanti Ekambaram, Group President - Consumer Banking, Kotak Mahindra Bank

Religare Finvest Ltd. on today's monetary policy by RBI

RBI monetary policy announcement - Mr. Jyoti Roy, DVP Equity Strategist, Angel Broking Ltd

RBI's proactive measure will help revive economy: Dr.Niranjan Hiranandani

Mr. Dhiraj Relli views on today's announcement made by RBI

Views of Mr. R K Gurumurthy, Head - Treasury, Lakshmi Vilas Bank on the RBI announcement today

Suvodeep Rakshit, Vice President & Sr. Economist, Kotak Institutional Equities on RBI announcement

Suman Chowdhury, Chief Analytical Officer at Acuité Ratings & Research, on today's RBI announcement

General Insurance Sector Update - GDPI continues to decline due to Lockdown - HDFC Securities

Stress in Banking Sector to Continue: Geojit Financial Services

Banking Sector Update - What have banks said - HDFC Securities

Satyam Shivam Sundaram, EY India on measures announced by Finance Minister today

HDFC Securities: Mr. Dhiraj Relli views on Fourth Set of Economic Measures announced by Finance Minister

Structural intervention to spur investments - Ramesh Nair, CEO and Country Head (India) JLL

MNCs & their unlisted subsidiaries - A case of misplaced premium & forgotten risk

India Equity Strategy - FM's package: Addressing liquidity concerns - HDFC Securities

Mr. Umesh Revankar, MD and CEO, Shriram Transport Finance on package announced by FM

Mr. Rajnish Kumar, Chairman, SBI on FM's announcement

Central Government's Atmanirbhar Bharat Initiative - Tata Projects Ltd

FM Stimulus View: Mr. Shachindra Nath, Executive Chairman at Ugro Capital

Fiscal interventions set to do the heavy lifting

Views of Mr. R.K.Gurumurthy, Head - Treasury, Lakshmi Vilas Bank on the FM announcement today

Finance Ministry's announcement - Mr. Jyoti Roy, DVP Equity Strategist, Angel Broking Ltd

Mr. Dhiraj Relli views on Economic Package announced by Finance Minister - HDFC Securities

Website Created & Maintained by : Chennai Scripts
West Mambalam, Chennai - 600 033,
Tamil Nadu, India

disclaimer copyright © 2005 - 2019