Changes Landscape in EV and Space Sector of India

 

A big changes going to happen in the Automobile/EV industry and space sector of India with entering of Elon Musk in India.

The Indian government this week amended its foreign direct investment (FDI) policy in the space sector to attract investors in the satellite manufacturing and launch vehicles segments.

Musk was planned to land in India for a visit on April 21-22 to meet with Prime Minister Narendra Modi as well as executives of Indian space companies, but he postpones India trip; to visit later this year, the Indian government this week amended its foreign direct investment (FDI) policy in the space sector to attract investors in the satellite manufacturing and launch vehicles segments.

The American billionaire is well-known for his ambitious—and audacious—space exploration endevours through his company SpaceX and his desire to establish a human colony on the Red Planet.

Now, another one of his space-related businesses may get a shot in the arm from India with the government close to finalising approvals for Musk’s satellite internet project Starlink.

The government has allowed up to 74% FDI for satellite manufacturing and operation, and satellite data products under the automatic route. FDI beyond 74% for these activities will require prior government approval. Previously, India allowed FDI for satellite operations through the government approval route only.

The government has also permitted FDI up to 49% for launch vehicles and associated systems, creation of spaceports for launching and receiving spacecraft under the automatic route. Again, FDI beyond 49% will require government permission. Besides, the government has allowed 100% FDI for manufacturing of components and systems or sub- systems for satellites, ground segment and user segment without prior approval.

Musk’s association with India is likely to go beyond space, into the fast-growing sector of electric vehicles where his company Tesla dominates the world and is now about to enter the South Asian nation.

Musk, who is also CEO of electric vehicle maker Tesla, could announce a $2-3 billon investment in setting up a manufacturing unit in India during his visit, if all goes well.

Tesla has expressed interest in entering the Indian market over the past few years, but was reluctant due to steep import duties. However, with the government recently easing its EV policy, it is now presumed that Tesla will finally make its much-awaited India entry. The new policy reduced import tariffs on EVs priced above $35,000, provided the manufacturer invests at least $500 million and sets up a factory within three years.

But Tesla is not the only carmaker eyeing India’s fast-growing EV market. China’s MG Motor and BYD have already established a presence in India. Vietnam-based VinFast has announced plans to set up a Rs 16,000 crore EV manufacturing plant in Tamil Nadu. And now, Tata Motors is doubling down on India.

List of Top Credit Rating Agencies (CRA) and a Quick Guide on Credit Ratings

List of Top Credit Rating Agencies (CRA) AND a Quick Guide on Credit Ratings

//Credit Rating Agencies (CRAs)//

Credit Rating Agencies (CRAs) assesses, calculates and assigns the credit ratings to the companies, organizations and enterprises. It performs a detailed analysis of financial instruments of various entities. CRAs help lenders and investors determine the potential risk involved in lending money to a particular borrowing entity.

//Credit Ratings//

It depicts the risk involved with investing in debt instruments. The rating scales used by the Credit Rating Agencies are scaled from ‘AAA’ to ‘D’, wherein ‘AAA’ stands for highest ratings and ‘D’ as lowest or Bad Credit Rating.

Similarly, as the  credit score range which is defined by the credit bureaus, wherein any score above 750 and as close to 900 is considered good by the potential lenders.

You may have heard of the CIBIL score which shows how good an Individual is at managing their borrowings. Similarly, Companies who want to borrow get a grade or score known as ‘Credit Rating’. These Ratings are assigned by independent agencies known as ‘Credit Rating Agencies’.

There are 7 Credit Rating agencies in India of which CRISIL, CARE, ICRA and India Ratings are the top ones.

1. Credit Rating Information Services of India Ltd. (CRISIL)
2. Investment Information and Credit Rating Agency of India (ICRA) Ltd.
3. Credit Analysis and Research (CARE) Ltd.
4. Acuite Ratings & Research Ltd.
5. Brickwork Ratings India Private Ltd.
6. India Ratings and Research Pvt. Ltd.
7. INFOMERICS Valuation and Rating Private Ltd.

//What do the agencies look at while assigning a Rating?//

*Quality and strength of Promoter
*Financial strength – Profitability, Net Worth, Ability to Service Debt
*History of borrowing and servicing the loans
*Competition of the Industry and Economic conditions

//What is the rating that is appropriate for Investing?//

Credit ratings are broken down into Investment Grade and Speculative or Junk Rating. Credit ratings from AAA to BBB- are Investment Grade and lower than that are Non-Investment Grade.

In India, the Securities and Exchange Board of India (SEBI) is the primary authority that approves or regulates Credit Rating companies in India and their various functionalities.

AIF Related SEBI Circular Standardization of the Private Placement Memorandum (PPM) Audit Report

 

AIF Related Circular

Standardization of the Private Placement Memorandum (PPM) Audit Report

In terms of Regulation 28 of SEBI (AIF) Regulations, 2012 and
Clause2.4 of SEBI Master Circular SEBI/HO/AFD/PoD1/P/CIR/2023/130 dated July 31, 2023(Master Circular) it is mandatory for AIFs to carry out an annual audit of compliance with the terms of Private Placement Memorandum (PPM).

In terms of Clause 2.4.2 of Master Circular, AIFs are required to submit Annual PPM Audit Reports to the Trustee or Board of Directors or Designated Partners of the AIF, Board of directors or Designated Partners of the Manager and SEBI, within 6 months from the end of the Financial Year.

In order to have uniform compliance standards and for ease of compliance reporting, standard reporting format for PPM Audit Report applicable to various categories of AIF has been prepared in consultation with pilot Standard Setting Forum for AIFs (SFA).

The said reporting format shall be hosted on the websites of the AIF Associations which are part of SFA within 2 working days of issuance of this circular. The associations shall assist all AIFs in understanding the reporting requirements and in clarifying or resolving any issues which may arise in connection with reporting to ensure accurate and timely reporting.

The PPM audit reports shall be submitted to SEBI by AIFs online on the SEBI Intermediary Portal (SI Portal) as per the aforesaid format.

Link of Full Circular is given below:

https://www.linkedin.com/feed/update/urn:li:activity:7188477343147954176/