RBI releases its Monthly Bulletin for February 2015

1. Annual Census on Foreign Liabilities and Assets of Indian Companies 2013-14

This article presents comprehensive information on overseas liabilities and assets of Indian companies, arising on account of foreign direct investment (FDI) in India, their overseas direct investment (ODI) and other investments. In the latest round of the census, of the 17,211 companies that reported, 15,788 companies had FDI /ODI in their balance sheet in March 2014.

Main Findings:

• The total inward FDI stock stood at ` 15,089.6 billion whereas total ODI was placed at ` 5,390.3 billion at market value in March 2014. FDI stock at market value in the manufacturing and services sectors stood at ` 7,458.1 billion and ` 5,987.2 billion, respectively in March 2014.
• Other investment liabilities with unrelated non-resident entity, stood at ` 10,470 billion in March 2014. Corresponding overseas assets amounted to 40.4 per cent of such liabilities.
• Among the source countries for FDI, Mauritius had the largest share (24.3 per cent) followed by UK (16.0 per cent) and USA (15.9 per cent). The destination for ODI by Indian companies was largely shared by Singapore (23.5 per cent) in March 2014.
• Total sales of Indian subsidiary companies in foreign countries (including exports of ` 919.6 billion) stood at ` 3,140 billion in 2013-14; their total purchase (including imports of ` 1,049.5 billion) was placed at ` 2,353.3 billion.
• Total sales of foreign subsidiaries in India (including exports of ` 4,900.1 billion) stood at ` 15,260.6 billion in 2013-14 while their purchase (including imports of ` 4,395.9 billion) was placed at ` 9,595.6 billion.

2. International Trade in Banking Services: 2013-14

This article provides information on international trade in banking services (ITBS) for India pertaining to branches/subsidiaries of Indian banks operating abroad and foreign banks operating in India. Consistent and comparable data are captured for various financial services rendered by the banks based on explicit/implicit fee/commission charged to customers. The survey covered 188 overseas branches, 260 overseas subsidiaries of Indian banks and 307 branches of foreign banks operating in India.

Main Findings:

• The cross-border presence of Indian banks has expanded steadily in the recent years, with the associated increase in employee-strength of their overseas branches and subsidiaries alongside. The number of branches of foreign banks in India has shown some decline in 2013-14 after the consistent increase in the preceding four years.
• The business of Indian banks’ overseas branches remained robust and grew by 36.5 per cent in 2013-14. The business of foreign banks operating in India recovered in 2013-14 from the slowdown in 2012-13 and their consolidated balance sheet increased by 20.6 per cent in 2013-14.
• Total fee income generated by 188 branches of Indian banks operating outside India moderated to ` 89.6 billion (US$ 1.5 billion) in 2013-14 from ` 93.5 billion (US$1.7 billion) in 2012-13. In the case of foreign banks operating in India, total fee income generated by 307 branches increased to ` 79.6 billion (US$ 1.3 billion) in 2013-14 from ` 74.5 billion (US$ 1.4 billion) in 2012-13.
• The United Kingdom, Hong Kong, UAE, Singapore, Bahrain and USA were the major source countries of banking services provided by overseas branches of Indian banks. Overseas subsidiaries of Indian banks were mainly present in the United Kingdom and Canada.

3. Performance of the Private Corporate Business Sector during First Half of 2014-15

This article analyses the performance of the private (non-financial) corporate business sector during the first half of 2014-15 (April-September) based on the earnings results of 2,965 companies. It also sets out the evolving trend in sales, expenditure and profit margins of the corporate sector over a longer horizon. Along with the discussion on aggregate performance, the article also provides a brief analysis by size and major industry groups.

Main Findings:

• The aggregated sales growth of the private (non-financial) corporate business sector moderated during H1:2014-15. Large companies (annualised sales more than ` 10 billion) witnessed a modest increase in sales growth after undergoing moderation since 2012-13 while small companies continued to contract.
• The manufacturing sector showed a gradual improvement in sales during H2:2013-14 and H1:2014-15. Sales growth of the non-IT services sector declined successively and showed only a minor improvement in H1:2014-15. IT sector reported a moderation in sales growth in H1:2014-15.
• Earnings before Interest, Tax, Depreciation and Amortisation (EBITDA or operating profits) and Earnings before Interest and Tax (EBIT) have grown considerably during the current half year as against a contraction in the corresponding period in 2013-14.
• EBITDA and net profit margins witnessed improvement in H1:2014-15 at the aggregate level and also for medium and large sized companies.
• The EBITDA margin remained close to the average of 11.4 per cent during the seven consecutive half-year periods. Both EBITDA and net profit growth rates for the non-IT services sector shot up in H1:2014-15, pulling up the sunken margins above the average for the seven half-year periods.
• The manufacturing sector in H1:2014-15 witnessed a rise in the non-operating surplus, in particular for the pharmaceuticals industry.

Sangeeta Das
Director

Press Release : 2014-2015/1684