US BANS DRUG PRODUCTION SITE IN INDIA
MUMBAI- U.S. health regulators have banned a drug production site in India belonging to Divi’s Laboratories Ltd due to manufacturing violations, sending the company’s shares down to a near three-year low.
This comes at a time when an increasingly protectionist stance by U.S. President Donald Trump is threatening to make the operating environment tougher for India’s drugmakers that supply nearly a third of the medicines sold in the United States – the world’s largest healthcare market.
The U.S. Food and Drug Administration’s ban on Divi’s Unit II factory in the eastern Indian state of Vizag – news of which was posted on the FDA website and seen by Reuters on Wednesday- is the second setback this month for India’s drugs industry. The FDA found violations of manufacturing standards at Dr Reddy’s Laboratories Ltd’s drug plant, also in Vizag, during an inspection that ended on March 8.
Several analysts downgraded Divi’s stock to “sell” and others such as Jefferies maintained their “underperform” rating on Reddy’s stock, citing increasing regulatory challenges. About 70 percent of Divi’stotal sales that depend on the plant are now under threat as other countries may go after the factory, prompted by the FDA action, said Edelweiss analysts.
Divi’s did not respond to an email requesting comment on Wednesday, but said in a statement to exchanges that it had started necessary measures to address the FDA’s concerns. Shares in the company haveplunged 18 percent this week and were mired near a three-year low of 611.45 rupees ($9.34) on Wednesday. Dr. Reddy’s stock hit 2,555.20 rupees earlier the day, also their lowest since 2014.
REDDY’S REPEAT VIOLATIONS
Dr Reddy’s told Reuters it plans to submit “a comprehensive response” to the FDA, which said it had found multiple repeat violations at the site – including problems that the agency had notified the company of as far back as in 2015. Issues listed in the report included data manipulation, as well as a Dr Reddy’s employee lying to FDA inspectors. “We are confident in our ability to address these observations and will work with U.S. FDA in resolving these issues,” Dr Reddy’s Chief Financial Officer Saumen Chakraborty said in an emailed statement.
INDIA TRYING TO CUT RELIANCE ON IMPORT OF LARGE SCALE IMPORT OF CHINESE PHARMACEUTICAL INGREDIENTS
NEW DELHI: The government has said that it was working on steps to reduce India’s dependence on large-scale import of active pharmaceutical ingredients (APIs) mainly from China.
As members in Rajya Sabha expressed concern over the issue, commerce minister Nirmala Sitharaman said huge imports of raw materials for pharmaceuticals was a matter of serious concern. She said the government was fully seized of the issue of the country’s dependence on import of APIs and that inbound shipments “are coming from aparticular country and as a result, (there are) national security concerns”.
“We are quite seized of the matter. Quite a few discussions are happening and let me place on record, the Prime Minister himself has sat with many of us and had discussions. There is some work going on it. I may not be able to go into the details at the moment. Let me assure the House, the government is taking it very seriously,” she said.
Raising the issue during zero hour, BJP member Prabhat Jha said large scale imports of raw material used by the pharma industry is from China. He said 92% of the APIs are imported, mainly from China. Jha said Chinese APIs were about four times cheaper than those produced in India. Jha’s concern was shared by Congress member Anand Sharma who suggested that an inter-ministerial committee needs to look into it. Deputy chairman P J Kurien also expressed surprise on the scale of API imports.
LOW OVERSEAS REMITTANCES WIDEN DEFICIT
Mumbai: Remittances from overseas Indians has been dropping continuously for the last five quarters, contributing to the widening of current account deficit (CAD). The trade gap has also widened due to lower software exports.
Balance of payment data released on Thursday, shows that net personal transfers – which are largely remittances by Indians employed overseas-fell to $13.6 billion during the demonetisation quarter from $14.9 billion, a drop of 9.7%.
According to numbers released by the RBI, the current account deficit widened to $ 7.9 billion (or 1.4% of GDP) in Q3FY17 as compared to $ 7.1 billion (1.4% of GDP) in Q3FY16 and $ 3.4 billion in (0.6% of GDP) in Q2FY17. The CAD is the difference between income from exports and imports, plus the difference from between outbound and inbound investment income.
A statement issued by the Central bank said that the CAD widened despite a slightly lower trade deficit year-on-year, primarily on account of a decline in net invisibles receipts. Invisible includes remittances from software, services and money sent by Indians working oversea. Net services receipts moderated compared to Q3FY16, due to a fall in earnings from software, financial services and charges for intellectual property rights. From April to December, however, the deficit halved to 0.7%, from 1.4% a year ago.
This was primarily because of fall in earnings from software, financial services and charges for intellectual property rights. Earnings from software exports have been declining year-on-year, but the third quarter has seen a sequential increase in software exports over the second quarter.
The net foreign direct investment of $9.8 billion during the reporting quarter was marginally lower than last year. The RBI said that there was a net outflow of portfolio investment of about $11.3 billion during the period in both equity and debt segments, as against a net inflow of $0.6 billion in the year-ago period. During the current fiscal, net FDI rose 12.3% to $30.6 billion as compared to April-December 2016. Another reason for the weaker balance of payment position was the large-scale redemption of FCNR(B) deposits raised under a special scheme in 2013 to counter the falling rupee. NRI deposits declined by $18.5 billion as against an inflow of $1.6 billion in the year-ago period due to redemption of these special deposits.
NO PLANS TO COME OUT RS5000 AND RS10000 BANK NOTES
NEW DELHI: The government has no plans to come out with Rs 5,000 and Rs 10,000 banknotes.
“The matter was examined in consultation with the Reserve Bank of India and it has not been fund suitable to introduce of Rs 5,000 and Rs 10,000 note,” minister of state for finance Arjun Ram Meghwal said in a written reply to the Lok Sabha.
He replied in negative when asked whether the government proposes to introduce Rs 5,000/10,000 denomination notes with a view to reduce the expenditure on printing of notes in future. The government had recently introduced Rs 2,000 note along with a new Rs 500 note following the demonetisation which scrapped 86 per cent of the currency in circulation on November 8.
TOYOTA LAUNCHES THREE LUXURY MODELS
NEW DELHI: Japanese auto major Toyota’s luxury brand Lexus entered India with the launch of three models priced up to Rs 1.09 crore (ex-showroom).
Lexus introduced the RX Hybrid model priced at Rs 1.07 crore, RX F Sport hybrid at Rs 1.09 crore and ES 300h hybrid sedan priced at Rs 55.27 lakh (all prices ex-showroom). The company also unveiled its top end SUV LX450d, but didn’t announce the price, along with the fifth generation Lexus LS which would be available for sales from next year.
Lexus is entering the Indian market with an aim to tap the growing number of luxury customers, specially the Toyota customers who are looking to upgrade. “Toyota manufactures Camry hybrid already in India and many of these customers are looking to upgrade. Therefore, it is the right time for Lexus to enter the Indian market so that our customers don’t go to other brands,” Lexus International President Yoshihiro Sawa said.
“The Indian luxury customers are growing and it’s part of our future strategy to tap them,” he added. The company will start retailing the products from four dealerships – Delhi, Gurgaon, Mumbai and Bengaluru – to start up in the country. Additionally it will also establish service centres in Chandigarh, Hyderabad, Chennai and Kochi. Lexus India Senior Vice President Akitoshi Takemura said they will have to first see the response in the country before before taking a call on having local manufacturing in India.
“There is scope for local manufacturing, we support Prime Minister’s ‘Make in India’ initiative but for the time being, we are just starting operations. We will have to see how the market functions. If volume consolidates and reaches a critical level, we may think of local manufacturing,” Takemura said.
ELECTRICITY GENERATION TARGET
MUMBAI: With commissioning of 800 MW Unit at Kudgi in Karnataka, 250MW Unit at Bongaigaon in Assam and 20 MW at Bhadla Solar in Rajasthan today, the total installed capacity of National Thermal Power Corporation (NTPC) group has become worth 49943 MW. The 12th plan capacity addition target of 11920 MW has been exceeded by adding 12840 MW, the highest ever capacity addition in any 5 year plan by NTPC.
NTPC and Group NTPC also achieved highest ever daily generation of 784.74 MUs & 870.11 MUs on 22nd March 2017 surpassing previous best of 782.95MUs & 866.47MUs achieved on 9/9/16. NTPC coal stations clocked highest ever daily generation of 749.63 Mu on 22nd March 2017 over previous highest of 742.51 Mu in 2016. NTPC (Coal+ Gas +Hydro +Solar) achieved highest ever generation of 243.326 BUs on 22nd March 2017 in FY17 against previous best of 241.976 BUs achieved in FY 2016. The higher generation from coal based stations indicates uptrend in electricity demand in the grid.
NTPC has total installed capacity of 49943 MW from its 19 coal based, 7 gas based, 10 solar PV, one Hydro and 9 Subsidiaries / Joint Venture power stations. Company has capacity of over 22,000 MW under implementation at 23 locations across the country including 4300 MW being undertaken by joint venture and subsidiary companies. NTPC’s First coal mine Pakri-Barwadih at Hazaribagh became operational in December 2016. First wind power project of NTPC- Rojmal Wind Energy Project 50 MW is being set up in the State of Gujarat.
ENDOWMENT FUNDS IN INDIAN STOCKS
Hit by low returns and starved of lucrative investment avenues, endowment funds of some of the top American universities are betting on Indian stocks. Endowment funds of Harvard University, Massachusetts Institute of Technology (MIT), University of Notre Dame and Washington University are testing their luck in Dalal Street, largely preferring the primary market.
The assets under management (AUM) of global university funds in Indianequities touched Rs 2,592 crore in January 2017, up 74% in a year. The total AUM of FPIs in India rose 26% in the same period, according to data compiled from the depository NSDL.
Endowment funds of universities are built on money received from donors or alumni. The earnings from the fund’s investments are used to run the university.
EASING RULES FOR OLD OIL BLOCKS
India approved a policy allowing extra time to contractors of old blocks to unlock oil and gas reserves of more than 426 million barrels, worth over $21 billion, as it seeks to cut its dependence onimports. The policy approved by the Cabinet will help companies including Cairn India and Oil and Natural Gas Corp that are exploring blocks awarded before 1999.
Prime Minister Narendra Modi’s Bharatiya Janata Party has been taking steps to boost local oil and gas output, which had been almost stagnant for decades. India imports about 80 percent of its oil needs. Modi set a target in 2015 to cut dependence on oil imports from about by four fifths to 67 percent by 2020. Brent crude was trading at $50.2 a barrel at 1627 GMT.
During the extension period, contractors are expected to make an additional investment of more than $5.4 billion, a government statement said.
“This policy will enable the contractors to extract not only the remaining reserves but also plan to extract additional reserves by implementing new technologies,” a government statement said. During April-February, the production from these old oil and gas blocks was around 55 million barrels of oil and 965 million cubic metres of natural gas, the statement said.
The Cairn-operated Barmer block in the desert state of Rajasthan accounts for about half India’s onshore production of crude oil.
During the extension period, the government’s share in the profit earned from these blocks will rise by 10 percent, the statement added.