Rising home loan interest, Vedanta in spotlight, fake GST invoices, and more

The Federal brings you what’s keeping the business world abuzz on Wednesday (April 26).

Home loan borrowers turn to refinancing as rates rise

With the RBI increasing repo rate except for the last month, lenders have steadily increased home loan interest rates, reports Business Standard. Last year, it was as low as 7.6 per cent but has now jumped to around 10 per cent.

What it implies: The immediate fallout of the current situation would be a reduction in home loan borrowings, which could also hurt the real estate market and the banking industry. As a result, experts say, people should refrain from taking a home loan based on lower interest rates, and those who have already taken a loan should not seek tenure extension and start repaying more.

Vedanta very comfortable; concerns over its debt misplaced

Anil Agarwal, the chairman of metal and mineral multinational Vedanta, has in an interview with The Economic Times said that the group is well-positioned to meet its future debt obligations.

What it implies: Vedanta Group has been in the spotlight following the Hindenburg report, which claimed that the Adani Group was involved in stock manipulation, accounting fraud and corporate governance lapses. Vedanta has piled up a lot of debt and its plans to reduce it hit a roadblock.

The Indian government has opposed selling Vedanta’s international zinc business for nearly $3 billion to Hindustan Zinc Ltd. Vedanta owns almost 65 per cent of Hindustan Zinc. In comparison, the Indian government owns 30 per cent.

Also read: Vedanta’s sale of global zinc assets to HZL: Govt says will explore all legal options

S & P Global Ratings recently said Vedanta’s debt scores might come under pressure if it cannot raise $2 billion or sell its international zinc business. The group’s gross debt stands at $6.8 billion in April 2023 from $9.7 billion.

GST body says auto dealers are raising fake invoices

A Business Standard report said that GST authorities are investigating some automobile dealers for allegedly generating fake invoices without providing service.

What it implies: According to the report, some dealers raised fake invoices in the name of marketing and sales service in collusion with insurance companies. If proven guilty, insurance companies could face huge penalties and suspension of licences as well.

IndiGo in talks to buy 20 wide-body planes for international operations.

According to a Mint report, this will be the first time Interglobe Aviation, which owns IndiGo, will be placing an order for wide-body aircraft. This will enable the airline to operate long-haul flights.

What it implies: This decision would effectively make IndiGo take Air India head-on on long-haul flights even though the domestic airline does not have the expertise to operate such flights. The airline will need much more money to sustain such operations over an extended period, which the defunct Kingfisher Airlines could not do. It had to hurriedly close down London-Bangalore-Colombo flights after British Airways and a few other international airlines lowered their airfares to sustain their market share.

Also read: IndiGo plane suffers technical problem; diverted to Hyderabad

Book Corner: Just Aspire: Author Ajay Chowdhry, cofounder, HCL Technologies. Publisher: Harper Collins.

Entrepreneur, sportsman, salesman, engineer, educationist, jazz aficionado and investor — meet Ajai Chowdhry, the HCL co-founder who dons many hats, all with equal ease. Growing up in the sleepy town of Jabalpur in a family that had migrated from Abbottabad post-India’s Independence, Ajai’s life was set for a linear trajectory — engineering, a well-paying job and a comfortable life — but for the year 1975.

This was the year when Ajai quit his job at DCM Data Products and jumped into the uncharted waters of entrepreneurship, founding HCL with Shiv Nadar, Arjun Malhotra, Yogesh Vaidya, Subhash Arora and DS Puri. In the 1970s, leaving a stable job with one of India’s leading brands was like madness. To add to that, not many Indians knew what a computer was. The word ‘start-up’ was decades away from its use in common parlance.

Over the next four decades, HCL will become a household brand and one of India’s largest IT companies. In Just Aspire, Ajai not only shares the story of a successful business behemoth but also of dreams, aspirations, hope and achievements from the eyes of a small-town boy. Along this journey, he shares timeless lessons on entrepreneurship, technology and the future. This book is a treasure trove of inspiration for all dreamers and doers. (Content courtesy: Harper Collins).