Plea seeking bad loan details not treated as 'information' under RTI: PMO

The Prime Minister's Office (PMO) has termed as a "roving enquiry" an RTI plea seeking to know details of bad loans submitted by the then RBI Governor Raghuram Rajan to it and which finds mention in his response to Parliament's Committee on Estimates.
The PMO has said the query does not come under the definition of "information" in the RTI Act.

"The information sought is in the form of roving enquiry and does not come under the definition of 'information' as per Section 2(f) of the RTI Act, 2005," Under Secretary and CPIO at the PMO, Praveen Kumar said.
Section 2(f) defines 'information' as any material in any form, including records, documents, memos, e-mails, opinions, advices, press releases, circulars, orders, logbooks, contracts, reports, papers, samples, models, data material held in any electronic form and information relating to any private body which can be accessed by a public authority.
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The applicant had mentioned that he was seeking from the PMO information related to communication received from Rajan when he was RBI Governor on bank loans which is mentioned in his response to the Committee on Estimates during a hearing.
He had sought to know the list of bad loans submitted by Rajan, action taken on them by the PMO and the name of the public authority to which the matter was referred to among others.
The PMO also declined to provide information as to when it received the communication from Rajan and on the note sheet of action taken.
In the note to Chairman of Estimates Committee Murli Manohar Joshi, Rajan said the size of frauds in the public sector banking system has been increasing, though still small relative to the overall volume of non-performing assets(NPAs).
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"The RBI set up a fraud monitoring cell when I was Governor to coordinate the early reporting of fraud cases to the investigative agencies. I also sent a list of high profile cases to the PMO urging that we coordinate action to bring at least one or two to book. I am not aware of progress on this front. This is a matter that should be addressed with urgency," he said.
Rajan, who was RBI governor for three years till September 2016, is currently teaching at the Chicago Booth School of Business.
Noting that the system has been singularly ineffective in bringing even a single high profile fraudster to book, he said frauds are different from the normal NPAs.
"The investigative agencies blame the banks for labelling frauds much after the fraud has actually taken place, the bankers are slow because they know that once they call a transaction a fraud, they will be subject to harassment by the investigative agencies, without substantial progress in catching the crooks," he said.

Govt may have invoked never-used powers in talks with RBI Governor

India has cited a never-used legal provision in trying to resolve disagreements with the nation’s central bank, which could lead to the government directing the monetary authority to do its bidding if invoked, people with knowledge of the matter said.
The central bank has received letters from the government seeking Governor Urjit Patel’s views on issues including the authority’s handling of weak state-run lenders, tight liquidity in the market, and resolving bad loans at power generators, the people said, asking not to be identified because they aren’t authorized to talk to the media. The law cited by the government is Section 7 (1) of the Reserve Bank of India Act, according to the people.

The law empowers the government to consult and give instructions to the governor to act on certain issues that the state considers to be in the public interest. The letters prompted Deputy Governor Viral Acharya’s hard-hitting speech on Friday, in which he warned that toying with the central bank’s independence could lead to dire consequences, the people said.
Representatives at the Reserve Bank weren’t immediately available for comment. Economic Affairs Secretary Subhash Chandra Garg declined to comment, while Finance Secretary Hasmukh Adhia said it was for the Department of Economic Affairs to clarify on Section 7 of the law.
The letters are the latest flare-up in a dispute between the central bank and the government. The RBI under Patel has been pushing for more powers to clean up a banking system saddled with bad debts. The RBI has put lending curbs on some weak state-run banks, while the government -- facing an election early next year -- wants to ensure banks continue to lend to boost economic growth.
“The blame game can continue,” Sonal Varma, chief India economist at Nomura Inc., told Bloomberg Television. “India cannot afford these mistakes. The last thing India needs is to spoil the macro picture with this rift.”
Central banks around the world are facing heat from political leaders. U.S. President Donald Trump expressed his unhappiness with the Federal Reserve’s pace of tightening while Turkey’s leader Recep Tayyip Erdogan attacked his country’s central bank for rate hikes.
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The dispute between India’s central bank and the government has been simmering for a few months now. It has come out in the open at a time when the economy -- currently the world’s fastest-expanding major one -- is facing risks from elevated oil prices, a weak currency and a crisis in the shadow banking sector.
On Tuesday, Finance Minister Arun Jaitley blamed the RBI for India’s huge bad debt pile up, saying it “looked the other way” while banks were allowed to lend indiscriminately in the aftermath of the global financial crisis. While those criticisms refer to events before Patel was governor, they can also be viewed as a counter to Acharya’s comments.
ET Now, a local television station, said on Wednesday that if the Reserve Bank refused to act on liquidity constraints, the government will not shy away from taking steps against it. The channel didn’t identify the people for the information.
“I am not expecting the rift between the RBI and the government to widen, though prolonged tensions cannot be fully ruled out considering the political angle to it in the run-up to the general elections," said Prakash Sakpal, an economist at ING Bank NV in Singapore.

Tata Motors reports loss of Rs 10.49 billion on weak JLR sales in Q2

Tata Motors Wednesday reported a consolidated net loss of Rs 10.09 billion for the second quarter ended September 30, 2018, mainly due to a weak performance by its British arm Jaguar Land Rover (JLR).
The company had reported a net profit of Rs 25.0167 billion in the July-September quarter of 2017-18.

Total revenue from operations, however, rose 3.3 per cent to Rs 721.1208 billion as compared to Rs 698.3868 billion in the year-ago period, Tata Motors said in a regulatory filing.
On a standalone basis, the company reported a net profit of Rs 1.0914 billion. It had reported a net loss of Rs 2.8337 billion in the second quarter of 2017-18.
Total revenue from operations grew to Rs 177.5869 billion during the quarter from Rs 133.1037 billion in the same period of 2017-18.
Standalone volume rose 25 per cent to 1,90,283 units driven by robust sales of commercial and passenger vehicles.
JLR revenue, however, declined 11 per cent to 5.6 billion pounds.
Commenting on the results, Tata Group Chairman N Chandrasekaran said the Tata Motors' domestic business continued to deliver strong improvement in operational and financial performance by implementing the Turnaround 2.0 strategy effectively.
"We have improved our market shares whilst delivering robust improvement in profitability in both the commercial vehicles and passenger vehicles and generated positive free cash flows," he added.
This strong performance in the face of an intensely competitive market situation augurs well for the future, Chandrasekaran said.
"In JLR, market conditions, particularly in China, have deteriorated further. To weather this volatile external scenario, we have launched a comprehensive turnaround plan to significantly improve our free cash flows and profitability," he added.
The leadership team at JLR is in mission mode to achieve the deliverables under this plan, Chandrasekaran said.
"With these concerted actions we remain committed to deliver an improved all-round performance from H2 FY 19," he added.
Tata Motors shares today settled 0.76 per cent up at Rs 178.65 on BSE.

Core sector growth slows down to 4-month low of 4.3% in Sept

Growth of eight infrastructure sectors slowed down to 4.3 per cent in September, the lowest in the last four months, as production of crude oil and natural gas declined.
Previously, the lowest growth rate was in May 2018 when the core sectors expanded at 4.1 per cent.

Eight infrastructure sectors of coal, crude oil, natural gas, refinery products, fertilisers, steel, cement and electricity had grown by 4.7 per cent in September 2017.
The output of crude oil and natural gas dipped by 4.2 per cent and 1.8 per cent respectively in the month under review, according to the data released by the commerce and industry ministry on Wednesday.
Fertiliser, cement and electricity output grew by 2.5 per cent, 11.8 per cent, and 8.2 per cent, respectively.
However, the growth of coal, refinery products, and steel sectors declined to 6.4 per cent, 2.5 per cent and 3.2 per cent respectively in September.
During April-September 2018, the core sector growth was 5.5 per cent as against 3.2 per cent in the year-ago period.
These eight segments comprise 40.27 per cent of the weight of items included in the Index of Industrial Production (IIP).

RBI Governor Urjit Patel may not resign, calls board meeting on Nov 19

RBI Governor Urjit Patel may not resign as he has called a board meeting on November 19 to discuss the pending issues, which created a rift between the government and the central bank, in the previous meeting held last week.
Meanwhile, the finance ministry said on Wednesday that it respects the central bank's autonomy.
“The autonomy of the central bank, within the framework of the RBI Act, is an essential and accepted governance requirement. Governments in India have nurtured and respected this,” the economic affairs department of the finance ministry said in a statement.
The government did not deny reports that it invoked Section 7 of the RBI Act 1934 to initiate discussions on various issues, including easing prompt corrective action (PCA) framework and providing liquidity to the non-banking finance companies (NBFCs).
According to the provision, the Central government may issue directions to the RBI as it may “consider necessary in public interest” after consultation with the RBI Governor. Section 7 deals with ‘management’ of RBI.
The ministry said that both the government and the RBI “have to be guided by public interest and the requirements of the Indian economy.”
The government and the RBI have had disagreements on a host of issues recently which include easing capital adequacy norms for public sector banks, bringing some of them out of PCA, forbearance for the MSMEs and liquidity situation in NBFCs.
“Extensive consultations on several issues take place between the government and the RBI from time to time. This is equally true for all other regulators,” the finance ministry said.
It added that the government has “never made public the subject matter of those consultations.”
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“The government, through these consultations, places its assessment on issues and suggests possible solutions. The government will continue to do so,” the ministry, concluding statement said.
The rift between the government and the RBI gained public attention when recently RBI Deputy Governor Viral Acharya gave a strong public speech advocating the independence of the central bank.

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Acharya made a case for granting more independence to the central bank and said that the governments that did not respect their central bank's independence would invite the wrath of financial markets.
Acharya had also said that the central bank must have more powers to supervise public sector banks and keep its balance sheet strong, and have an adequate regulatory scope. This independence, he said, was necessary to secure greater financial and macroeconomic stability.

Tatas, TCS violated rules in sacking Cyrus Mistry: RTI reply from RoC

The abrupt sacking of Cyrus Mistry as the chairman and director, respectively, of Tata Sons and its crown jewel TCS violated provisions of the Companies Act, RBI rules and more importantly, Tatas' own articles of association, RoC, Mumbai said in an RTI reply.
The right to information (RTI) reply, given by Uday Khomane, the assistant registrar of companies (RoC), Mumbai on October 3, is in response to a RTI request filed by the investment arms of the Shapoorji Pallonji Group on August 31.
The reply said the way Mistry was removed from the chairmanship of Tats Sons and also as the director of Tata Consultancy Services (TCS), violated the relevant legal provisions under the Companies Act, 2013; the Reserve Bank rules governing NBFCs; and more importantly the rule 118 of the articles of association (AoA) of Tata Sons, the parent of the diversified Tata group, which is registered as an NBFC with the monetary authority.
A Tata Sons spokesman refused to offer detailed comments on the questions sent by PTI, saying, "We do not wish to comment on the matter as the matter is sub-judice."
PTI has seen a copy of the RTI reply which is based on the assessment of the documents furnished by the Tatas in the aftermath of the boardroom coup on October 24, 2016 dismissing Mistry as the group chairman.
The report offers an internal view of the RoC, which interestingly is totally opposite of the view taken by the National Company Law Tribunal (NCLT), Mumbai earlier this year while dismissing the petition filed by Mistry challenging his dismissal from the group.
In a boardroom coup, Mistry was sacked as the chairman of Tata Sons on October 24, 2016, two months short of four years in the corner room of the Bombay House, the global headquarters of the 150-old conglomerate that nets over 65 per cent of its income from outside the country.
Mistry, whose family is the single largest non-Tata shareholder with 18.4 per cent stake in Tata Sons, was nudged to take over the reins of the USD 103-billion group as the second non-Tata chairman, after Nowroji Saklatwala(1934-38), in December 2012, after group patriarch Ratan Tata retired.
Mistry was removed as TCS director with 93.11 per cent votes at the EGM held on December 13, 2016, as per its company secretaries Parikh & Associates which cited section 169(2) of the Companies Act 2013 read with section 115 and 100 (2)(a) for his removal.
But TCS did not send out the complete representation of Mistry to all shareholders, which violates section 169 (4)(b) of the Companies Act, noted the RoC reply.
The RTI reply is based on the queries posed by SP Kumar, western regional director, RoC, Mumbai which has found that Tata Sons violated rule 118 of its articles of its AoA, when it removed Mistry.
The report, exclusively available with PTI, states that "article 118 of the AoA of Tata Sons prescribes that its chairman can be removed in the same process as specified for his appointment i.e. by the selection committee consisting of four persons and based on such recommendation of the removal committee only the board is empowered to remove its chairman".
It goes on to add that Tata Sons "being an NBFC duly registered with RBI, any management change requires prior approval of the RBI", which was also not complied with.
The reply also cited several irregularities pertaining to the December 13, 2016 EGM convened by TCS to remove Mistry as a director from its board.
TCS had adopted a letter written by the company secretary and chief operating officer of Tata Sons on November 9, 2016 as a special resolution notice to sack Mistry.
The reply noted that this letter from Tata Sons was sent to TCS without any proof of a board resolution authorising the issuance of such a letter. The report also states that "it appears prima facie that there was no proper 'special notice' received" by TCS.
The RoC also said that the TCS' company secretary thereafter "on his own" forwarded the purported special notice from Tata Sons dated November 9, 2016 to Mistry.
"The letter dated November 11, 2016 written by the VP & CS of TCS is against the provisions of section 169(3) of the Companies Act of 2013 as the power to send such a letter is vested with the board of the company," noted the RoC report.
The RoC further noted that "since there was no TCS board meeting between November 9 and 11, 2016, and in the absence of any board resolution authorising the actions of the TCS' company secretary, such a letter and the resulting actions would be void ab-initio".
Additionally, TCS had also failed to send out the complete shareholder representation of Mistry to all shareholders, "in violation of section 169(4)(b) of the Companies Act", and hence "the consequential resolution of EGM dated December 13, 2016 for the removal of Mistry would also be void".
The RoC, Mumbai in a letter dated January 25, 2017 had written to the regional director of the corporate affairs ministry highlighting these concerns.
"As the verification of the relevant documents further finds that the company has violated the provisions of the Companies Act, and rules there under, I am referring the matter to the regional director to verify the findings in terms of rule 11(2) of the Companies (registration offices and fees) rules of 2014," the letter read.
In the reply, SP Kumar, RoC Mumbai, in a letter dated February 17, 2017, stated, "RoC having come to the conclusion that transactions are void [Annexure C point (1) to (4)] has to express in unequivocal words whether the e-form is to be rejected or e-form or document as the case may be, as invalid in the electronic record in terms of rule 10(4) of Companies (Registration Offices and Fees) Rules, 2014."

However, it is unclear what further action the ministry took on these observations, it noted.
Mistry and his elder brother Shapoor Mistry, through their investment companies, are the single largest non-Tata shareholder in Tata Sons with 18.4 per cent stake.
The group's investment companies are currently waging a legal battle against Tata Sons in the National Company Law Appellate Tribunal alleging oppression of the minority shareholders and mismanagement at Tata Sons. The tribunal began hearing the case Wednesday in New Delhi.

India jumps 23 spots to 77 in World Bank's ease-of-doing-business rankings

India jumped 23 places to come in at the 77th spot in the World Bank's latest ease-of-doing-business global rankings in 2018, a year after it had jumped 30 places.
The World Bank’s ‘Doing Business 2019: Training for Reform’ report, released on Wednesday, showed India's rank in ease of doing business jump up from the 100th place among 190 countries. India had broken into the club of 100 nations easiest to conduct business in last year when it managed to jump 30 places from the 130th position.

The latest rankings could become a major poll plank for the ruling Bhartiya Janata Party in the upcoming national elections, as the World Bank has named India as 'one of the economies with the most notable improvement' for the third year in a row.
India has been adjudged the fifth-best performing nation in reforming the business environment. The country improved its rankings in six of the 10 sub-categories used by the World Bank to judge business climate. It had delivered a similar performance last year.
Interestingly, India's ranking actually took a beating in two categories where landmark government reforms were expected to lead to better results. In 'Paying Taxes', India actually saw its rank slip two notches to 121, despite the implementation of the Goods and Services Tax. The World Bank praised India for merging taxes and significantly revising the tax code, but it didn't lead to a better ranking.
The implementation of the Insolvency and Bankruptcy Code (IBC) could not save India from shedding five positions in 'Resolving insolvency', to 108. Estimates by the Department of Industrial Policy and Promotion (DIPP) suggest that creditors working through the IBC have realised almost 59 per cent of claims.
However, a recent report by Debtwire Asia has pointed out that on average, it took 275 days to approve a resolution plan from the time the corporate debtor was admitted under the Corporate Insolvency Resolution Process of the IBC. The government’s estimate is 233 days.
Major jump in ease of foreign trade, construction permits
However, in 'Trading across borders', India surged 66 places to come in at the 80th spot. DIPP Officials attributed this to the implementation of a risk management system at ports that waives inspection requirement for 80 per cent of products. "Also, the E-Sanchit mobile app makes e-payment of customs documents possible as well, as a number of major seaports that have been made operational 24x7 have been considered by the World Bank" he added.
Among categories, the country had the best performance in 'Dealing with Construction Permits' where it jumped by a massive 129 places to become the 52nd easiest place to construct a business unit. Improved transparency and streamlined procedures were behind India cleaning up its notoriously corrupt land sector and the financial transactions that come with it.
The report, covering all policy reforms undertaken by the government till May 1 of this year, ranked India top among the South Asian nations. There was an improvement in the country's 'ease of doing business score', which indicates the extent to which a country's regulatory practices are in sync with global best practices.
India also remained among the top-30 nations in the same three categories as last year — getting electricity, securing credit and protecting minority investors. However, the World Bank noted that the country needed to do more in areas such as enforcing contracts, registering property and the most fundamental of them all -- ease of starting a business.
The latest report by the Washington DC-based multilateral agency encompasses 128 economies, implementing 314 specific business reforms over the past year. This surpassed the previous all-time high of 290 reforms two years ago.
India is among 11 major economies for which the World Bank took into account two specific metropolitan areas, in this case, Delhi and Mumbai.
Ease of Doing Business: Where India stands now
Doing Business 2018 Report (2017)* Doing Business 2019 Report (2018)* Movement in Rank
India's Country Rank (Out of 190) 100 77 23
Dealing with construction permits 181 52 129
Trading Across Borders 146 80 66
Starting a business 156 137 19
Getting Credit 29 22 7
Getting Electricity 29 24 5
Enforcing Contracts 164 163 1
Paying Taxes 119 121 -2
Protecting Minority Investors 4 7 -3
Resolving Insolvency 103 108 -5
Registering Property 154 166 -12
Note: *Year in bracket represents the year report was launched; Green represents the best development in rank; Red represents the worst development in rank; Source: World Bank Doing Business 2019 Report
India secures highest rank in in South Asia... ... But not in the BRICS grouping
Doing Business 2019 Report (2018)* Doing Business 2019 Report (2018)*
Bhutan 81 Brazil 109
India 77 Russian Federation 31
Nepal 110 India 77
Sri Lanka 100 China 46
Pakistan 136 South Africa 82
Bangladesh 176
Afghanistan 167
Note: Green represents best performing economy; Red represents worst performing economy; Source: Doing Business 2019 Report Note: Green represents best performing economy; Red represents worst performing economy; Source: Doing Business 2019 Report

IL&FS submits revival plan to NCLT, to resolve the crisis within 9 months

The new board of India's Infrastructure Leasing and Financial Services (IL&FS) submitted a plan to revive the debt-laden firm to a company law tribunal on Wednesday, paving the way to a potential resolution of the group's future.
The government this month took control of IL&FS, a major infrastructure financing and development company, after it defaulted on some of its debt, triggering fears of contagion across India's financial system.

"It is a dream and hope blueprint for revival," Sanjay Shorey, Director for Legal Prosecution in the Ministry of Corporate Affairs (MCA), told the tribunal.
The MCA is representing the government and the new board at the National Company Law Tribunal (NCLT).
"A universe of options are to be explored. There is no single strategy for revival," Shorey said.
He said the new board of IL&FS was looking at three strategies: an outright sale of the entire IL&FS group, sales of its subsidiaries or assets.
The company later said in a statement after the tribunal hearing that the options could broadly involve significant capital infusion, divestments and debt restructuring at ILFS group, its subsidiaries and asset sales.
The IL&FS defaults have triggered sharp falls in Indian stock and debt markets amid fears of risk in the rest of the country's financial sector.
Earlier in the day, both Infrastructure Leasing & Financial Services and IL&FS Transportation Networks said they were unable to service their non-covertible debenture interest payments due on Oct. 30 and Oct. 31, respectively, due to insufficient funds.
The string of defaults by IL&FS led to a series of credit rating downgrades on the company to junk.
Shorey said the officials appointed by the new board have found discrepancies on how the previous board and management had conducted its business.
A preliminary analysis of the financial statements of IL&FS noted that outstanding loans of the company were in excess of the permissible limit set by India's central bank, Shorey told the tribunal.
"The new board is unable to validate whether transparent process was used by the earlier board to monetise assets," he added.
The NCLT told the MCA that the holding company will have to make all its 346 subsidiaries part of the resolution roadmap within 15 days.
The new board will follow due processes in the finalisation and implementation of the plans and expects to complete the process, in stages and parts, in the next six to nine months subject to market and economic conditions, IL&FS said.
The court will hear an update on the plans on Dec. 3.

Tech Mahindra Q2 profit jumps 27.3% at Rs 10.64 billion, tops estimates

Software services exporter Tech Mahindra Ltd posted a better-than-expected 27.3 per cent rise in second-quarter net profit on Tuesday, as it clocked more deals in the July-September period.
Net profit was Rs 10.64 billion ($144.51 million) in the three months ended September 30, compared with Rs 8.36 billion a year earlier, the Pune-based company said.

24 analysts on average had expected a quarterly profit of Rs 10.04 billion, according to Refinitiv data.
Revenue from operations increased 13.5 per cent to 86.30 billion rupees.

SBI halves daily ATM cash withdrawal to Rs 20,000; all you need to know

The country's largest lender SBI has halved the daily cash withdrawal limit from ATMs for certain debit-card holders to Rs 20,000 from Wednesday.
The withdrawal limit has been curtailed on Classic and Maestro debit cards, held by a large number of the bank's customers.

However, customers with other variants of SBI debit card can continue to enjoy higher daily withdrawal from ATMs.
According to a senior SBI official, the average cash withdrawal from ATMs per card is less than Rs 20,000 and the move will help in checking frauds and promote digital transaction.
About a month ago, the State Bank of India (SBI) had alerted its customers holding Classic and Maestro debit cards regarding the reduction of cash withdrawal limit to Rs 20,000 a day from ATMs starting October 31.
The SBI had put out the following message on its website:
"Daily cash withdrawal limit for Classic and Maestro debit cards has been reduced from Rs 40,000 to Rs 20,000 per day with effect from October 31.
"If you require a higher daily cash withdrawal limit, please apply for a higher card variant."
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SBI Managing Director P K Gupta had said the reduction in withdrawal is intended to protect customers from fraudulent cash withdrawals from ATMs and also to spur more digital transactions.
"We analysed all the ATM transactions and we found that most of them are less than Rs 20,000 a day. In case of frauds reported to us, we found that in all such cases withdrawals of Rs 40,000 (the maximum) have happened. So, this is basically to protect the customers and secondly, we want that more digital transactions should happen," Gupta had said.
If any customer wants a higher limit of cash withdrawal, he or she can ask for a higher variant card.
When asked how many such customers/cards are to be impacted due to this reduced limit, he said a very large number of customers fall into this category.
However, the bank has lots of customers with a higher variant debit card, so they will not be impacted.

Donald Trump wants to end birthright citizenship for some US-born babies

President Donald Trump says he wants to order the end of the constitutional right to citizenship for babies of non-citizens and unauthorized immigrants born in the United States.
The president's comments to "Axios on HBO" come amid a renewed push for hardline immigration policies before the midterm elections. Trump believes focusing on immigration will energize his supporters and help Republicans keep control of Congress.

Revoking birthright citizenship would spark a court fight over the president's unilateral ability to change an amendment to the Constitution. The 14th Amendment guarantees that right for children born in the US.
Asked about the legality of such an executive order, Trump said, "they're saying I can do it just with an executive order." Trump says White House lawyers are reviewing his proposal. It's unclear how quickly he'd act on an executive order.

Vistara bets on upmarket strategy with high fares, superior service policy

In the highly price-sensitive Indian aviation market, Vistara, a full-service carrier backed by local conglomerate Tata Sons and Singapore Airlines Ltd , is betting it can convince passengers to buy higher fares in return for superior service.
Though all airlines in India are feeling the pinch - with debt-laden Air India and Jet Airways in such a parlous financial state they have been struggling to pay staff salaries on time - Vistara says its upmarket strategy is starting to bear some fruit.
The carrier has narrowed its losses and seen average fares rise this year as customers take to its product offering, including a domestic premium economy class, even though ticket prices at most rivals are falling, Vistara CEO Leslie Thng said in an interview at the carrier's headquarters.
"We have seen a steady improvement in terms of demand, in terms of load factor as well as in terms of the fare passengers are willing to pay," said Thng, a Singapore Airlines veteran who previously ran its Southeast Asian regional arm, Silkair.
India's domestic airline market, the world's fastest growing at 20 per cent a year, represents an enticing long-term opportunity for Tata and Singapore Airlines. But in the shorter term it has turned into a financial sinkhole - high oil prices and a weaker currency are not being recouped in fare prices, driving carriers into the red.
"That is a paradox," Association of Asia Pacific Airlines Director-General Andrew Herdman said of India. "It has a lot of exciting potential but from a business point of view, very challenging." Vistara, which started flying in 2015 and now has 22 Airbus SE A320 narrowbody jets and a 4 per cent domestic market share, has struggled financially as it scales up.
It narrowed its losses to $58.9 million in the financial year ended March 31 from $70.9 million a year earlier, according to accounts filed with the corporate regulator this month, but it faces tougher market conditions this year, with consulting firm CAPA India estimating it could lose $150-200 million.
"It was tough. It is getting tougher because of the macro conditions, the higher fuel price, the lower rupee," Thng said of the operating environment.
Path to profitability
Budget airline IndiGo, the Indian market leader with a 43 per cent share, is adding capacity rapidly to protect its dominant position even though fares fell almost 10 per cent in the quarter ended Sept. 30.
As a full-service carrier, Vistara is more focused on obtaining a premium ticket price to cover the higher costs of offering perks such as food, a checked baggage allowance and a frequent flyer programme.
Vistara sees a path to eventual profitability through plans to launch international flights as soon as it obtains regulatory approvals and to more than triple its fleet over the next five years to give it a larger share of the Indian market, Thng said.
A major strategy shift is to own some of its fleet rather than leasing all of it. Vistara will own 19 jets worth a combined $3.1 billion ordered from Boeing Co and Airbus earlier this year, and lease another 37, underscoring its growth plans and strong financial support from its top shareholders.
"This is a market that is strategic for them in terms of aviation and this is a market where Vistara will continue to grow and be profitable," said Thng. "They will have to inject a lot more (capital) going forward."
Tata and Singapore Airlines this month invested $273.4 million in the airline, according to a regulatory filing.
For Singapore Airlines, the growth in India far outpaces its established markets and Vistara provides a strategic opportunity to build a business in a country of 1.3 billion people and a growing middle class that can now afford to fly.
For Tata, which once owned Air India, it represents a way back into the full-service airline business 65 years after that carrier was nationalised.
The idea is to build up a premium Indian brand that stands on its own, rather than an offshoot of Singapore Airlines, the Singapore carrier's general manager for India David Lim said.
"I see benefits for Indian customers. It is an Indian product," he said.

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The international route network will be similarly India-focused, Vistara's Thng said, with the airline looking to send passengers from its New Delhi hub to a variety of international destinations to the east and west - not just Singapore - particularly after six long-range Boeing 787s arrive from 2020.
In India, the government requires an airline to have more than 20 jets before operating international flights. Vistara reached that milestone in June but has been waiting on regulatory approvals before launching into the more lucrative international market.
A government official who spoke on condition of anonymity said Vistara's hopes of doing so by December appeared optimistic but approvals should be granted within "a matter of months".
Economy lite
Vistara's entry into the market has not been without its challenges. Little more than a year after its first flight, the airline reconfigured its planes to cut the number of business and premium economy seats in favour of a larger economy class.
The Indian market is dominated by low-cost carriers like Interglobe Aviation Ltd's IndiGo and SpiceJet Ltd , and selling tickets at a premium is particularly difficult in less wealthy second-tier and third-tier cities where Indian regulators require carriers to place 10 per cent of their capacity.
"What the full-service carriers have started doing is pricing like a low-cost carrier and downgrading their services value - that is the mistake Jet Airways has made," Elara Capital analyst Gagan Dixit said.
ALSO READ: Vistara to invent products matching non-metro market needs: CEO Leslie Thng
In August, Vistara added a new economy-lite fare class that excludes a complimentary meal and has a smaller baggage allowance, raising questions over whether it was changing its business model to compete.
Thng, however, said the lite fares were being offered mostly on smaller routes rather than popular ones such as New Delhi-Mumbai, with the intent of giving more price conscious customers the opportunity to get a taste of the premium Vistara product.
"Hopefully they will move up the value chain," he said. "The economy is still growing. The number of people who can afford to pay, I believe will in the coming years continue to grow very aggressively."

New technology must create more jobs than it destroys, says Mukesh Ambani

Reliance Industries (RIL) Chairman Mukesh Ambani on Tuesday said it is a major task to ensure that new technologies create more employment opportunities compared to the amount of job losses they cause.
Speaking at MobiCom 2018 here, he also said that he is optimistic about technological disruption creating more opportunities despite all the apprehension.
A major task is "to ensure that new and disruptive technologies create more employment opportunities than they take away," Ambani said.
Although he expressed optimism regarding employment opportunities, he said there is apprehension in the society regarding the same and these apprehensions may delay the process of digital transformation.
"These very apprehensions could resist or delay digital transformation of our societies. That would be a mistake," he noted.
ALSO READ: After years of global success, Mukesh Ambani's RIL faces oil shock at home
Ambani emphasised that governments, businesses and civil society organisations should put together an ecosystem for massive upskilling of the workforce.
"Significantly, most of the upskilling can happen on digital platforms."
Apart from employment, the RIL Chairman said the country also needs to prepare for a period of information and digital abundance and adopt to the pace of innovation. He also stressed the need to shift from a system of time-bound education to a mode of continuous learning.
(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

MARKET WRAP: Sensex slips 176 pts, Nifty ends at 10,198 as pvt banks weigh

The benchmark indices settled around 0.5 per cent lower weighed by metal and private bank stocks.
The S&P BSE Sensex ended at 33,891, down 176 points while the broader Nifty50 index settled at 10,198, down 52 points.

Among sectoral indices, the Nifty Bank index ended 0.6 per cent lower led by a fall in the shares of IndusInd Bank and ICICI Bank. The Nifty Metal index, too, settled 1.1 per cent lower weighed by Coal India. However, Nifty PSU Bank index rose for the second consecutive day, ending 2.5 per cent higher led by Union Bank of India and Canara Bank.
In individual stocks, Bharat Petroleum Corporation (BPCL) ended around 4 per cent lower at Rs 265.65 on the BSE after the oil marketing company reported a 48.3 per cent decline in its net profit to Rs 12.1871 billion for the second quarter ended September 2018. Among other stocks, Reliance Industries (RIL) fell 2.7 per cent to Rs 1,058.90 on the BSE.
Global Markets
Asian shares clawed back earlier losses on Tuesday as China made a fresh attempt to stabilise its stock markets although activity was choppy with investors cautious about further escalations in the Sino-US trade war.
MSCI's broadest index of Asia-Pacific shares outside Japan swung in and out of negative territory in morning trade and last traded 0.3 per cent higher on the day. The index has lost 12 per cent this month and is on track for its biggest October decline since 2008, during the global financial crisis.
Mainland China's benchmark Shanghai Composite and the blue-chip CSI 300 gained to 1.0 per cent and 1.1 per cent, respectively, winning back earlier losses in a volatile session. Japan's Nikkei average also erased early losses and climbed 1.5 per cent. Traders said investors were looking for bargains among beaten-down stocks.
(with Reuters input)
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03:43 PM
Nifty Bank index ends 0.61% lower. Top losers:
COMPANY LATEST PREV CLOSE LOSS() LOSS(%) VOLUME
INDUSIND BANK 1363.95 1412.80 -48.85 -3.46 5626406
KOTAK MAH. BANK 1123.70 1138.10 -14.40 -1.27 1899280
ICICI BANK 345.90 349.40 -3.50 -1.00 33777374
HDFC BANK 1914.00 1926.30 -12.30 -0.64 3138745
AXIS BANK 563.65 566.70 -3.05 -0.54 8421020
03:37 PM
Sectoral gainers and losers on NSE

03:37 PM
S&P BSE Sensex: Top gainers & losers

03:34 PM
Market at close

The S&P BSE Sensex shed 176 points or 0.52 per cent to settle at 33,891 while NSE's Nifty50 index ended at 10,198, down 52 points or 0.51 per cent.
03:17 PM
Symphony falls 9% on disappointing Q2 results
Shares of Symphony have slipped 9% to Rs 871 per share on the BSE in intra-day trade after the company reported 38% year-on-year (YoY) declined in consolidated net profit at Rs 310 million in September quarter (Q2FY19), on weak sales. The company engaged in air cooler business had a profit of Rs 500 million in the previous year quarter. READ MORE
03:01 PM
Domino's to offer Pepsi, Mountain Dew, Mirinda across outlets in India
Jubilant FoodWorks on Tuesday announced that PepsiCo was going to be its new beverage partner for Domino's Pizza.

As part of the partnership, the PepsiCo portfolio of carbonated beverages of Pepsi, Mountain Dew, 7Up, and Mirinda, along with Lipton Ice Tea will be sold across all Domino’s restaurants in India.
At 2:30 pm, the company's shares on BSE were down by Rs 24.75, or 2.72 per cent from their previous close, to Rs 1066 apiece. READ MORE
02:45 PM
Oil prices dip on rising supply, trade tensions

Oil prices dipped on Tuesday, dragged down by concerns that the Sino-U.S. trade dispute will dent economic growth and by signs of rising global supply despite upcoming sanctions against Iran. Front-month Brent crude oil futures were at $77.15 a barrel, down 19 cents, or 0.3 per cent, from their last close. Read more
02:30 PM
Nifty IT index is trading 1.79% higher led by Infibeam
02:15 PM
Bank of Baroda up for third straight session

The stock is quoting at Rs 111.65, up 4.25% on the NSE. Bank of Baroda is down 34.28% in last one year as compared to a 0.9% drop in NIFTY and a 0.21% drop in the Nifty Bank index. Bank of Baroda gained for a third straight session today. The benchmark NIFTY is down around 0.09% on the day, quoting at 10241.95. The Sensex is at 34060.62, down 0.02%. Bank of Baroda has risen around 6.94% in last one month. Read more
02:00 PM
Market Check
Index Current Pt. Change % Change

S&P BSE SENSEX 34,044.40 -23.00 -0.07

S&P BSE SENSEX 50 10,725.06 -0.35 0.00

S&P BSE SENSEX Next 50 30,854.14 +267.55 +0.87

S&P BSE 100 10,516.09 +13.38 +0.13

S&P BSE Bharat 22 Index 3,370.93 +5.52 +0.16
01:45 PM
Derivatives strategies: Markets rebound but indicators remain weak

The bear market found at least a temporary bottom last Friday for the Nifty, which was 10,005, and bounced on Monday on the back of short-covering and contrarian buying of beaten-down stocks. The breadth continues to look dismal as the number of stocks that went up outnumbered the ones that declined. Volumes have been generally higher on sessions with net losses. Volatility continues to be very high. The major indices are all trading below their respective 200-day moving averages (200-DMA). Read more
01:35 PM
CESC trades ex-date for demerger; stock gain 5%

Shares of CESC have moved higher by 5% to Rs 704 per share on the BSE in an otherwise range-bound market on Tuesday. The stock turned ex-date for demerger of non-power investments into new companies. CESC transferred the retail undertaking business into RP- SG Retail and of the IT undertaking into RP- SG Business Process Services. Read more
01:23 PM
EARNINGS IMPACT

01:21 PM
NEWS ALERT Dena Bank reports Q2 earnings with net loss at Rs 4.16 bn Vs loss of Rs 1.85 bn (YoY)
01:15 PM
Sensex in Jekyll and Hyde mode as investors weigh outcomes of state polls

India’s benchmark equity index fluctuated as investors weighed the possible outcome of key state elections over the next two months amid company earnings that have broadly been in line with expectations. The S&P BSE Sensex swung between gains and losses to fall 0.2 per cent to 34,014.17 as of 9:44 a.m. in Mumbai, dragged lower by Reliance Industries Ltd., the country’s second-largest company by market capitalisation. Gaining and declining stocks were evenly matched. Read more
01:04 PM
Tech Mahindra is trading higher ahead of Q2 earnings

01:00 PM
PSBs extend gain; Union Bank, Indian Bank up over 8%

Shares of public sector banks (PSBs) were trading higher for the second straight day, with Nifty PSU Bank index rising 4% on Tuesday in an otherwise subdued market. The index had surged 8% on Monday. Oriental Bank Commerce (OBC), Indian Bank, Bank of India, Dena Bank, Canara Bank and Union Bank of India were up in the range of 6% to 13%, while Syndicate Bank, Central Bank of India, Andhra Bank, Punjab National Bank (PNB), State Bank of India (SBI) and Bank of Baroda were up between 4% and 5% today. Read more
12:45 PM
Jaitley to chair FSDC meeting today even as RBI, govt lock horns in public

Finance Minister Arun Jaitley will chair the 20th meeting of the Financial Stability and Development Council on Tuesday. The FSDC is an apex body which also consists of chiefs and senior officials of all the financial sector regulators in India. The meeting, to be held in the Finance Ministry in New Delhi, is coming in the backdrop of an unprecedented churn in financial markets and sectoral regulations in India. Read more
12:32 PM
Top losers in BSE 500:
COMPANY PRICE() CHG() CHG(%) VOLUME
SUPREME PETROCH. 218.85 -14.10 -6.05 5832
8K MILES 74.45 -3.90 -4.98 262726
KWALITY 6.72 -0.35 -4.95 111842
DABUR INDIA 391.20 -17.80 -4.35 174391
HSIL 227.30 -9.00 -3.81 4301
» More on Top Losers
12:22 PM
Edelweiss Securities on Union Bank of India

Apart from high asset quality stress, mid-sized PSU banks are constrained on the operational front as well. We believe dilution risk is imminent at weaker multiples,
which will affect shareholder returns. Moreover, asset quality continues to be volatile. At current price, the stock is trading at 0.5x FY20E P/ABV. We maintain ‘HOLD/SP’.
12:15 PM
Market can get worse before it gets better, says Devangshu datta

The news got worse last week, in many ways. The fiscal deficit is likely to overshoot the target for sure, despite plenty of accounting legerdemain from the finance ministry. The trade deficit is expanding by leaps and bounds. The political establishment is chasing its own tail (vide CBI versus CBI) as assembly elections draw closer and opinion polls suggest that the Bharatiya Janata Party will be hard put to retain its hold on several states. Read more
12:04 PM
Union Bank of India trading over 13% higher post Q2 results

12:00 PM
Market check
Index Current Pt. Change % Change

S&P BSE SENSEX 34,053.16 -14.24 -0.04

S&P BSE SENSEX 50 10,735.05 +9.64 +0.09

S&P BSE SENSEX Next 50 30,910.19 +323.60 +1.06

S&P BSE 100 10,527.45 +24.74 +0.24

S&P BSE Bharat 22 Index 3,376.04 +10.63 +0.32
11:45 AM
Select stocks excluded from ASM list surge; Kiri Ind, Bombay Dyeing up 10%

Shares of select companies that were removed from an additional surveillance measures (ASM) list have rallied by up to 10% on the BSE on Tuesday. Total 81 companies including Kiri Industries, Adani Green Energy, Apex Frozen Foods, Bombay Dyeing & Manufacturing Company, Den Networks, Global Spirits, GM Breweries and Morepen Laboratories have been excluded from the ASM with effect from today. Read more
11:33 AM
S&P BSE Sensex top gainers and losers

11:31 AM
Pledged holdings fall to Rs 2.12 trillion in Q2: Edelweiss Securities

The value of pledged holdings stood at Rs 2.12 trillion for the quarter ended September 2018 compared to Rs 2.38 trillion at the end of the preceding quarter. The fall in the value of pledged shares was largely on account of the weakness in stock prices. High promoter pledging has become a pet peeve for investors at a time when liquidity situation is precarious due to the risk aversion among market lenders following the default by IL&FS. Read more
11:18 AM
Motilal Oswal on Colgate

CMP: Rs 1,106
TARGET PRICE: Rs 1,340
RATING: Buy

With the base getting challenging for volumes now, we cut our forecast by ~5% for FY19/ 20. We believe FY19 is likely to be another year of sub-par EPS growth. However, a few factors are likely to work in favor of CLGT over the medium term – these include (a) its high rural market share of ~60% (which contributes over 40% of its sales), which makes it a promising play on rural recovery, provided CLGT is able to check the urban seepage, (b) Importance of India in global oral care, which demands better execution eventually and (c) its attractive valuation of 35.8x FY20E EPS – at a 15% discount to our ex-cigarette and alcohol consumer peer valuations. With its superior return ratios compared to peers (barring HUL) – which are only likely to improve led by better utilization of expanded capacity, such a discount is unwarranted once CLGT starts delivering on the execution front. Valuing the company at 40x Sep’20 EPS, (in line with three- and five-year average multiples), we derive a target price of Rs 1,340. Maintain Buy.
11:14 AM
Motilal Oswal on BPCL

CMP: Rs 277
TARGET PRICE: Rs 397
RATING: Buy

BPCL is expected to stabilize its Kochi expansion over the next few quarters, which should expand the Kochi refinery GRM by ~USD2/bbl. OMCs have seen a sharp correction in their stock prices due to high oil prices, INR depreciation and the government asking them to absorb INR1/lit on pricing of auto fuels. 1HFY19 standalone EPS stood at INR17.9. We estimate FY19 standalone EPS of INR30. BPCL is trading at 8.0x FY20E EPS of INR35 and 7.5x FY20E EV/EBTIDA. We value the company at 1.7x (unchanged) FY20E PBV to arrive at a TP of INR397. Reiterate Buy. Key risk would be sharing of subsidy burden on LPG/kero and inability to pass on increased cost in auto fuels.
11:02 AM
HDFC Mutual Fund wins equity mandate of $450 million from unnamed FPI

HDFC Mutual Fund on Monday disclosed that it has won an equity mandate of $450 million from a reputed foreign portfolio investor (FPI), of which one-third got funded recently. However, the management declined to comment on the name of the FPI or the terms and conditions of the mandate, while sharing its half-yearly financials. Read more
10:46 AM
Investors should await clarity as Colgate reels under competitive pressure
Oral care major Colgate-Palmolive India's (Colgate's) September 2018 quarter (Q2) numbers may be in line with the Street's expectations but it shows that the company still reels under stiff competition. While net sales rose 7.7 per cent year-on-year to Rs 11.6 billion, led by a seven per cent increase in volumes, net profit grew 10.6 per cent to Rs 2 billion, almost at par with Bloomberg consensus estimates. READ MORE

Cognizant Q2 net profit declines 3.6%, cuts full year revenue guidance

While Information Technology (IT) services major Cognizant's third quarter earnings met street expectations on the revenue front, its net profit was below projections. The Teaneck-headquartered company also cut the top end of its full-year growth guidance, indicating a slower pace of revenue growth in the coming quarter.
During the quarter ended September, the Nasdaq-listed firm reported 3.6 per cent decline in its net profit on year-on-year basis at $477 million owing to higher net non-operating foreign exchange losses arising from rupee depreciation. However, net profit rose 4.6 per cent sequentially.

Revenue of the firm, which competes fiercely with large Indian IT firms including TCS and Infosys, rose 8.3 per cent to $4.08 billion as compared to $3.77 billion reported in the same period of last year. In sequential terms, the revenues went up by 1.74 per cent. According to Bloomberg estimates, revenue for the quarter was projected at $4.08 billion, while profit was estimated to be $658.15 million.
As compared to Cognizant, market leader Tata Consultancy Services (TCS) reported a better dollar term revenue growth of 10 per cent on YoY basis in the July-September period, while Infosys's dollar revenue grew at 7.1 per cent.
"Cognizant delivered strong third quarter results in three of our four business segments. We made continued progress in our shift to digital by building new capabilities and helping our clients excel with digital services and solutions," said Francisco D’Souza, Chief Executive Officer and Vice Chairman of the Board at Cognizant. During the September quarter, revenue from digital services grew around 20 per cent on YoY basis.
On the operating margin (non-GAAP) front, Cognizant witnessed 110 basis points improvement in margins at 21.1 per cent on YoY basis, but sequentially margins contracted by 90 bps. The company said higher levels of utilisation, optimization of employee mix and cost control measures were the factors driving its strong margin profile. In the September quarter, while TCS's operating margin improved 150 bps sequentially to 26.5 per cent, it remained flat for Infosys at 23.7 per cent.
"We delivered solid performance in the third quarter as we continued to focus on sustainable revenue growth while increasing margins,” said Karen McLoughlin, Chief Financial Officer at Cognizant.
For the full year, the US-listed firm has revised its revenue guidance downwards with cut at the top end of the range. The company now expects its revenue to be in the range of $16.09 billion to $16.13 billion in 2018 as compared to its previous guidance of $16.05 billion to $16.30 billion.
Its revised guidance will translate into around 9 per cent growth in revenue for the year as compared to its earlier projections of 8-10 per cent for 2018.
In the September quarter, the financial services business, which accounts to 35.9 per cent of its overall revenue, saw a YoY growth of 2.6 per cent. Cognizant's communications, media & technology vertical grew by 17.1 per cent, while healthcare vertical rose 9.6 per cent on YoY basis.
The IT services firm added 5,300 employees in the quarter to take its total headcount to 274,200. Its attrition level stood at 22.3 per cent, down 30 basis points on sequential basis. Its offshore utilization level remained at 83 per cent, while on site utilization remained flat at 93 per cent in the September quarter.

FSDC discusses NBFC fund crunch; RBI assures adequate liquidity in system

The high-level FSDC meeting chaired by Finance Minister Arun Jaitley on Tuesday discussed liquidity issues being faced by the non-banking financial companies, sources said.
Headed by the finance minister, the Financial Stability and Development Council (FSDC) includes Reserve Bank Governor, Sebi Chairman, and heads of other regulators like PFRDA, IRDAI, and also Chairman of the Insolvency and Bankruptcy Board (IBBI).
Reserve Bank Governor Urjit Patel said the liquidity problem in NBFCs is not as severe as is being projected, but assured the government that it would ensure adequate liquidity in the system, sources said after the meeting.
The meeting assumes significance as the FSDC is meeting for the first time after RBI Deputy Governor Viral Acharya raised the issues regarding the independence of the central bank.
Unlike in the past, all the four RBI deputy governors attended Tuesday's FSDC meeting along with Patel.
ALSO READ: RBI to inject Rs 400 bn liquidity into system via open market operations
Sources said the RBI governor informed the government that there is no liquidity crunch in the system, barring certain sectors and assured they are keeping a close watch on the financial sector.
The government, on its part, asked the RBI to prevent spreading of IL&FS crisis to other sectors of the economy, sources added.
Among other things, the issue concerning cyber-security in financial markets also came up for discussion.
Pension fund regulator PFRDA Chairman Hemant Contractor said there was general discussion on the domestic and global economy.
The FSDC was set up to strengthen and institutionalise the mechanism for maintaining financial stability, enhancing inter-regulatory coordination and promoting financial sector development.

ALSO READ: RBI rejects liquidity window for NBFCs; govt demurs citing cash crunch
In May, the government through a gazette notification, had included Ministry of Electronics and Information Technology (MeitY) Secretary in the FSDC in view of the increased focus of the government on digital economy.
The series of loan defaults by the IL&FS has resulted in doubts over financial soundness of the non-banking finance companies. The government last month took over the board of IL&FS and appointed seasoned banker Uday Kotak at the helm to resolve the crisis being faced by the NBFCs.
Acharya in a speech on Friday had said that undermining the central bank's independence could be "potentially catastrophic".
He had also called for greater powers for RBI to regulate public sector banks as it seeks to clean up the banking system, saying that central bank's independence was necessary to secure greater financial and macroeconomic stability.
The government, however, has not responded to the concerns raised by the RBI.

Govt mulls sale of beleaguered IL&FS to a financially strong investor

India is examining options including an outright sale of Infrastructure Leasing & Financial Services Ltd, a person with knowledge of the matter said, as the government tries to stem defaults at the lender with $12.6 billion of debt.
A plan to be presented to a bankruptcy court Wednesday by the state-appointed board of the lender includes selling the entire stake to a financially strong investor and ensure business continuity, the person said, asking not to be identified as the matter is private. Other options include splitting businesses according to verticals and disposing them off to several buyers or injecting liquidity at group level to avoid an outright sale.
The beleaguered financier hasn't stopped missing payments even after the government sacked the lender's board and pledged to stem defaults. Fixing the cash flow crisis at the company is vital to revive confidence in India's credit markets at a time when Asia's third-largest economy grapples with rising oil prices and a plunging currency. The Serious Fraud Investigation Office this month started an investigation into IL&FS.
ALSO READ: IL&FS mess: Normalcy to return to system in couple of weeks, says SBI chief
The plan finalised by the new board led by Asia's richest banker, Uday Kotak, will be put up before the National Company Law Tribunal on October 31. The court had approved the government's move to take over the lender and accepted the plea that the move was crucial to protect the financial markets. Finance Ministry spokesman D S Malik declined to comment.
The lender's borrowing from banks and financial institutions is Rs 630 billion on a consolidated basis, according to the balance sheet for the year ended March 2018, the official said. Exposure of the banking sector to IL&FS is pegged at around Rs 530 billion, about 16 per cent of all lending to non-banking finance companies.

ALSO READ: Govt stands committed to no more defaults by IL&FS, says P P Chaudhary
While the matter is being heard in the court, the board could look at selling assets, both core and non-core, for infusing liquidity and ensuring timely loan repayments, the official said.
The troubles at IL&FS had been intensifying since July, when company founder Ravi Parthasarathy stepped down, citing health reasons. Defaults from August within the group rattled India's money markets, added to the pressure on corporate bond yields and sparked a sell-off in the stock market.
ALSO READ: No bailout for IL&FS?
The IL&FS Group is a bewilderingly complex conglomerate, with 348 direct and indirect subsidiaries. Its investors include Life Insurance Corp, India's largest life insurer; State Bank of India, its largest bank; and Housing Development Finance Corp, its largest mortgage lender. Japan's Orix Corp is the company's second-largest shareholder.

Wrong time to fight? RBI-govt dispute can further damage investor sentiment

Long-simmering discord between the Indian central bank and the government is turning into a very public brawl. The timing couldn’t be more awful for markets.
In a hard-hitting speech Friday on central-bank independence, Reserve Bank of India Deputy Governor Viral Acharya startled his audience by invoking Argentina of 2010.
Back then, the Argentinian central bank chief quit after being coerced to hand over a part of its reserves to the government, causing panic in the markets. Knowing that similar pressures exist in India, investors would be right to ask if Acharya’s boss – Governor Urjit Patel – is also contemplating a showdown with Prime Minister Narendra Modi’s government.
Acharya said the suggestion to explore the theme of institutional independence came from Patel, a strong hint that the topic is of more than academic interest to the central bank, which recently made public its displeasure over losing a part of its turf to a new payments regulator. Last week’s stormy and inconclusive RBI board meeting, where the government’s nominee directors turned up the heat on Team Patel, is being seen as another indication of a rapidly souring relationship.
Wrong time to fight
Cash the central bank is plowing into the system is returning because lenders are afraid to take credit risk; discord between the RBI and the government could further damage sentiment.
The governor, whose three-year tenure ends in September, already seemed resigned to a single term, like his predecessor Raghuram Rajan who went back to Chicago in 2016. Now, as the Times of India says, “questions have arisen over his continuance.” That’s disturbing speculation in an emerging market facing a hawkish U.S. monetary tightening cycle on one side and a crisis of confidence in domestic lending institutions on the other. A debilitating liquidity squeeze caused by defaults by IL&FS Group, until recently a highly rated infrastructure lender, is causing its own set of problems.
ALSO READ: Govt vs RBI: When governors of central bank fought for its autonomy
Disagreements on monetary policy between the government and the central bank are common. Even Donald Trump says he “maybe” regrets giving the Federal Reserve’s top job to Jerome Powell, who has been busy countering the U.S. president’s late-cycle fiscal stimulus by raising interest rates. The pressure on the RBI is on the banking side, with influential voices portraying it as a regulator that’s destroying state-run lenders, and denying credit to small businesses.
Modi’s government, the biggest shareholder in 70 per cent of the country’s banking system, hasn’t done enough to restore calm. Quite the opposite. Forcing Patel to carry out an overnight ban on 86 per cent of the country’s cash was bad enough, especially since the much-touted $45 billion fiscal bounty from that harebrained exercise never materialized. The ultimate insult, though, was the recent appointment of Chennai-based accountant S. Gurumurthy to the central bank’s board. In early 2016, this RBI troll had run a relentless campaign against Rajan’s “sledgehammer” approach, saying the former IMF chief economist’s purpose in making lenders come clean on asset quality was perhaps to weaken them so that they could be sold to foreigners.

ALSO READ: Govt and RBI must resume consultations, instead of airing their differences
Rajan is long gone, but the spin that the RBI’s Western-trained economists are inadequately nationalistic – and out of touch with the reality on the ground – is stronger than ever. Now Patel is under pressure for further tightening the screws on undercapitalized banks and errant corporate borrowers that are worried they may lose prized assets.
Risks Abound
India's rupee has been the weakest currency in Asia so far this year
Bloomberg Source: Bloomberg
“Governments that do not respect central bank independence will sooner or later incur the wrath of financial markets, ignite economic fire, and come to rue the day they undermined an important regulatory institution,” Acharya said in conclusion. The rupee is Asia’s worst-performing currency this year, and foreigners have pulled the most money out of Indian stocks this month since January 2008.
ALSO READ: Govt-RBI consultation way forward, says Jaitley after Viral Acharya speech
If the standoff with the government gets any worse, a test of the central bank’s dire warning could come soon.

SC gives CERC 8 weeks to decide on revised tariffs for 3 Gujarat power cos

India's top court Monday directed the federal electricity regulator to decide within 8 weeks on approving revised tariffs for three power producers in the western state of Gujarat due to increased cost of imported coal.
The Gujarat government sought the top court's intervention to implement a state government panel's report that recommended implementing a cost-reflective tariff, which would mirror any increase or decrease in input costs. The plea also includes a provision to extend the contract period for the plants run by Tata Power Co, Adani Power Ltd and Essar Power.
The two judge Bench led by Rohinton F Nariman said the decision for tariff should not be bound by an earlier single-judge order, which had rejected the power producers demand for higher tariff last year. Tata Power jumped as much as 25 per cent, the biggest jump in intra-day trade in a decade, while Adani shot up as much as 21 per cent, the highest since January.
ALSO READ: Stressed power assets: Gujarat seeks relief for Tata, Essar, and Adani
Higher tariffs would allow these plants, with a combined capacity of nearly 10 gigawatts, to run at full capacity, after lying under-utilised since the Supreme Court last year denied an increase in tariffs. Bringing these plants back into the grid could improve the reliability of supply as well as ward off chances of these projects slipping into non-performing assets.
The plants had bid for a fixed tariff to win the projects, but those tariffs turned unviable after Indonesia changed its coal pricing regulations in 2010, linking prices of the fuel to an international standard.
The revival plan also includes lenders writing off a part of their loans and project developers absorbing accumulated losses, according to people familiar with the plan. The court today asked the Central Electricity Regulatory Commission to hear all consumer groups on the proposals.

ALSO READ: Gujarat govt's panel may bring Rs 1.29 bn relief to Tata, Adani and Essar
Tata Power operates a 4,000 megawatt plant in the coastal town of Mundra in Gujarat, while Adani Power runs a 4,620 megawatt plant at the same location. Both generating plants are fuelled by coal imported from Indonesia. Essar operates a 1,200 megawatt plant at Salaya in the same state.
The plants haven't been running at full capacity after the court ruled last year that a change in regulations overseas couldn't be a ground for increasing power prices.
Adani's plant ran at 44.3 per cent capacity during the first half of the fiscal year that began April 1, compared with 66 per cent in the same period a year earlier, according to the Central Electricity Authority. Tata Power's Mundra station ran at 67.7 per cent capacity, down from 69.2 per cent in the previous year. Both these companies have coal mining rights in Indonesia, which hedges against the increase in coal prices. Essar, which doesn't have a mine, kept its plant shut during the time, data show.

How a bank credit shortage has hijacked Indian real estate's growth story

India’s banking liquidity crunch is extending to the nation’s developers, threatening to derail a nascent recovery in the property sector.
Home builders in India have increasingly been turning to non-bank lenders for funding as traditional financiers struggle under bad loans. But following the government’s seizure of troubled shadow bank Infrastructure Leasing & Financial Services Ltd. earlier this month, that avenue may be choked off too.

With non-banking financial companies themselves struggling, “their disbursal of loans to developers has slowed significantly,” said Anuj Puri, the chairman of Anarock Property Consultants Pvt. This has “hijacked Indian real estate’s growth story over the short to mid-term.”
Things had been looking up for real estate in India with apartment sales increasing 8 per cent in the nine months through September and new project launches up 18 per cent from a year ago, according to Anarock. That’s after a sustained period of uncertainty caused by 2016’s demonetization and the roll-out of a nationwide sales tax.
Companies with delayed projects or those currently under construction are at the biggest risk of defaulting on their debt obligations, JM Financial Ltd. analyst Abhishek Anand wrote in a note earlier this month. From fiscal 2014 through 2018, non-bank lending to real estate companies expanded at a compound annual growth rate of 45 per cent versus 4.7 percent for bank advances, data from JM Financial show.
Some Rs 4.64 trillion ($63 billion) of residential projects are in limbo, according to Anarock, and Jaypee Infratech Ltd. and Unitech Ltd. are among developers that have been taken to court by irate homeowners.
Under-construction properties could see a price correction of 5 percent to 10 percent, according to Samir Jasuja, the CEO of consultancy PropEquity. Small- to mid-sized developers are more likely to be impacted by lending restrictions, he said.
Larger players could find M&A opportunities. Oberoi Realty Ltd. said last week it may be able to buy land parcels at a reasonable price now that “fly-by-night" developers are out of the market.

SC bans 15-yr-old petrol, 10-yr-old diesel vehicles in NCR due to pollution

The Supreme Court on Monday prohibited the plying of 15-yr-old petrol and 10-yr-old diesel vehicles in the national capital region and directed the transport department to announce that such vehicles will be impounded if found plying.
The apex court, which described as "very critical" the prevailing situation of pollution in the Delhi-NCR region, said that the list of 15 yr old petrol and 10 year old vehicles be given on the website of Central Pollution Control Board and transport department of NCR.

The CPCB will immediately make social media account on which citizens can complain about pollution, the top court ordered.
Earlier, the National Green Tribunal had also banned 15-yr-old petrol and 10-yr-old diesel vehicles in Delhi-NCR.

Govt angry with RBI for being kept in the dark about PCA, NPA norms

Amid difference between the Reserve Bank of India (RBI) and the finance ministry, officials said the government was upset with the central bank for not consulting it before finalising norms for prompt corrective action (PCA) and classification of non-performing assets (NPAs). The RBI did not discuss these at its board meetings either, a senior government official said.
“The PCA framework was revised and tightened in April 2017, but there was no discussion in any board meeting. The government does not know the rationale behind revising the framework and how the RBI arrived at it. Similarly, there was no discussion in the board meeting on the revised NPA framework,” said an official.

One of the main areas of contention between the RBI and the government is the revised PCA framework, notified by the regulator in April last year.
The government wants the RBI to align the PCA norms to the globally-accepted Basel regulations. However, the RBI feels imposing the PCA helped in “stabilising the banks at risk”; any relaxation could be avoided at this stage.
This issue was discussed at length at the RBI board meeting last Tuesday. Economic Affairs Secretary S C Garg and Financial Services Secretary Rajiv Kumar, who are government nominees on the board, were at the meeting.
“The government nominees do not have voting rights on any decision taken by the RBI board. So the board is independent. Flagging some issues does not take away its independence,” another government official said.
Finance Minister Arun Jaitley on Saturday emphasised the need for holding detailed discussions for regulators to arrive at policy decisions.
ALSO READ: Govt and RBI must resume consultations, instead of airing their differences
“I think, for any regulatory mechanism, stakeholder consultation has to be of a very high quality, which will probably lead to a revisiting of traditional thoughts and opinions. And that’s why, (when) several regulators publish their approach papers or tentative drafts, hold hearings, meet individuals, meet groups of stakeholders together and improve upon what’s being said,” Jaitley had said during an event.
The RBI took the decision to tighten the PCA framework last year, following recommendations of a sub-committee of the Financial Stability and Development Council (FSDC) in December 2014. The meeting, chaired by the then RBI Governor Raghuram Rajan, was also attended by senior officials in the finance ministry.
Jaitley’s statement came a day after RBI Deputy Governor Viral Acharya made a case for granting more independence to the regulator.
Acharya said the central bank must have more powers to supervise public sector banks, keep its balance sheet strong, and have adequate regulatory scope. This independence, he said, was necessary to secure greater financial and macroeconomic stability.
The government had also demanded the RBI relax its February 12 circular directing lenders to undertake insolvency resolution of defaulting companies within a strict timeline.
However, not only was the RBI relentless, it did not send its representative to attend a crucial meeting of the high-powered committee for resolving stress in the power sector on directions of the Allahabad High Court.
A senior government official said the RBI had equal regulatory and supervisory powers over both state-run banks and private lenders. The official said the selection of board members of PSBs starts with the Banks Board Bureau (BBB), which has an RBI nominee. The BBB sends its recommendation to the government. The government also takes the approval of the RBI.
“For private banks, their boards select their own chief executives and take the RBI’s approval directly,” the official said.
In case of removing chief executives of PSBs from their post, the government has agreed to the RBI’s demands in the past, the official added.
The official cited the example of the ~144-billion fraud case at Punjab National Bank (PNB). The government had sacked Allahabad Bank Managing Director (MD) and Chief Executive Officer (CEO) Usha Ananthasubramanian on her last day before retirement. She was PNB MD and CEO in her previous tenure.
This was following the RBI’s criminal case against Ananthasubramanian, exercising its power under the Banking Regulation Act, 1949, for her involvement in the PNB fraud. Similar action was taken against two PNB executive directors.
However, the action was taken as the RBI and the Central Bureau of Investigation could not have acted against these executives, who are public servants, without sanctions from the government.
The official also said the merger of New Bank of India with PNB in 1993 was based on recommendations of the RBI.
“In the case of amalgamation of Bank of Baroda, Vijaya Bank and Dena Bank, the government took the permission of the RBI even before approaching the banks. After the proposal was approved by their respective boards, it was sent to the RBI for in-principle approval,” the official said, adding a final approval will also be taken from the RBI.

Amid falling rupee, trade war, FPIs have pulled out Rs 356 bn in Oct so far

Foreign investors have pulled out a massive Rs 356 billion (about $5 billion) from the Indian capital markets this month on concerns over rupee depreciation, global trade war tiff and rising crude prices.
The latest outflow is higher than Rs 210 billion worth of net withdrawals seen in entire September. Prior to that, overseas investors had invested a net sum of Rs 74 billion in the capital markets (both equity and debt) in July-August.

According to the latest depository data, foreign portfolio investors (FPIs) sold equities to the tune of Rs 241.86 billion during October 1-26 and bonds worth Rs 114.07 billion, taking the total to Rs 355.93 billion ($4.8 billion).
FPIs have been net sellers almost throughout this year barring a couple of months such as January, March, July and August. In these four months, overseas investors have put funds totalling over Rs 320 billion. However, experts believe in withdrawal of funds in October has shaken the market.
So far this year, FPIs have pulled out a total of Rs 970 billion from the capital markets. This includes over Rs 370 billion from equities and close to Rs 600 billion from the debt markets.
ALSO READ: FPIs dump banks, mutual funds lap up metals in September quarter
According to Rahul Mishra, AVP (Derivatives), Emkay Global Financial Services, macro issues like liquidity crunch created post IL&FS default, Indian currency move and volatility in crude oil price have kept the investors at bay.
"The continued selling pressure from FPI is needed to be looked from the angle of what is happening globally. From the Indian context, the current issues faced by the NBFC (non-banking finance company) is not helping either," R Sreesankar Co-head equities at Prabhudas Lilladher.
Going ahead, market experts said volatility is likely to continue for other reasons too such as US sanctions on Iran, which take effect next month, as Iran is a major source of crude oil for India. Besides, India has some key state elections coming up, which could provide cues to FPIs for next year's central elections.

GST Council met 30 times, took 918 decisions in 2 yrs: FinMin report card

The all-powerful GST Council, chaired by Finance Minister Arun Jaitley, has met 30 times and taken 918 decisions related to laws, rules and rates for the new tax regime within a span of just over two years, the Finance Ministry said Sunday.
The Goods and Services Tax (GST) Council, which comprises state finance ministers and Union Minister of State in charge of Revenue as members, was set up on September 15, 2016, as the country's first 'federal institution'.

"Till date, GST Council has taken 918 decisions related to GST laws, rules, rates, compensation, taxation threshold etc. More than 96 per cent of the decisions have already been implemented through 294 notifications issued by the Central Government," the ministry said in a statement.
The remaining decisions are under various stages of implementation. Almost equal number of corresponding notifications have been issued by each state, it added.
The working of GST Council has ushered in a new phase of cooperative federalism where the Central and state governments work together to take collective decisions on all issues relating to indirect tax regime of the country, it said.
Besides, tax officers of the Centre and states met ahead of the GST Council meetings to enable the council members to fully discuss the issues under consideration.
ALSO READ: How to make taxpayers comply with GST laws? CBIC now has a solution
The Council has held discussions in a "harmonious and collaborative spirit" in the 30 meetings that have taken place so far, it added.
The detailed agenda notes for the 30 GST Council meetings ran into 4,730 pages, while the minutes of the meetings ran into 1,394 pages, the statement said.
After 17 tumultuous years, a nationwide GST was rolled out at the stroke of the midnight hour on July 1, 2017, overhauling India's convoluted indirect taxation system.
The GST, which replaced 17 central and state levies including factory-gate, excise duty, service tax and local sales tax or VAT, is India's biggest tax reform in 70 years of independence and will help modernise Asia's third largest economy.

Essar to deleverage Rs 1.25 trn debt if its Essar Steel offer is accepted

Ruia-family owned Essar Group would deleverage about Rs 1.25 trillion of debt - the largest by any corporate if its offer to repay lenders of Essar Steel in full is accepted, company sources said.
Last week, the Committee of Essar Steel Creditors picked world's largest steelmaker ArcelorMittal's Rs 420 trillion takeover offer over the company promoter's Rs 543.89 billion proposal to pay off all of the lenders' dues.

Essar plans to legally challenge the decision as it believes its offer would ensure 100 per cent recovery for lenders while accepting ArcelorMittal's offer would entail a haircut, sources said.
Sources said Essar Group had so far used $650 million (about Rs 42 billion) from the sale of Aegis US operations, Rs 720 billion from sale of Essar Oil to Russia's Rosneft and partners, Rs 20 billion from sale of Aegis and Rs 24 billion from sale of Equinox to deleverage group debt.
If the offer for Essar Steel is accepted, the deleveraging would total to Rs 1.25 trillion, they said. This is over 85 per cent of total group liabilities.
Essar invested Rs 1.2 trillion -- the highest by any corporate in recent times -- between 2010 and 2015 in building world-class assets in energy, infrastructure, metals and mining, and services sector.
With the completion of its investment and deleveraging programmes, Essar is growing its substantial portfolio of businesses, sources said, adding revenues of Essar portfolio companies presently stand at Rs 800 billion.
Essar, they said, is a leaner, smarter and wiser corporate with a lighter balance sheet.
Insisting that banks that lent to Essar did not lose money, they said loans are being serviced and more than Rs 200 billion has been paid to Essar Steel lenders by way of interest.
The quality of assets created by Essar is attracting aggressive bids from high profile players and will help banks recover their dues without a haircut, they said.
For better management of its portfolio of businesses, Essar has transitioned to a fund-led structure, investing long-term capital into the portfolio companies and holds 100 per cent stake (largest equity holding among peers) in all its investments.
Sources said Essar has brought global investors who have infused over $32 billion in FDI demonstrating the quality of assets it builds and the quality of management they have.
These include stake sale in Vodafone-Essar ($18 billion of value created), stake sale in Aegis in two tranches ($910 million of value created), stake sale of Essar Oil ($12.9 billion of value created) and stake sale of Essar Telecom Tower Ltd ($360 million of value created).
Sources insisted that in each of these cases, the group exited at the right time, on its own terms, at globally compelling valuations. Essar Group, they said, has invested upwards of Rs 2000 billion (of which Rs 1200 billion was invested in 2010-16) in setting up world-class facilities in steel, power, ports and oil and gas.
The assets included 10 million tonnes of integrated steelmaking facility, 20 million tonnes of refining capacity and 3,500-strong petrol pump network (which is now owned by the Nayara Energy), 4,800 MW of power capacity as well as a 465-km transmission network and over 150 million tonnes of ports capacity.

Sanjay Mishra to replace Karnal Singh as Enforcement Directorate chief

IRS officer Sanjay Kumar Mishra was on Saturday appointed the new chief of the Enforcement Directorate in an additional capacity, a government order said.
Mishra, a 1984-batch Indian Revenue Service officer of the Income Tax cadre, has been appointed as the Principal Special Director in the agency and has been entrusted with the additional charge of ED Director for three months.

Mishra will take over from incumbent Karnal Singh whose tenure at the agency ends on Sunday.
Singh, a 1984-batch IPS officer of Union Territories cadre, will complete an over three-year tenure as the ED Director.
Official sources said Mishra, posted as chief commissioner of Income Tax in Delhi at present, has not been empanelled as an additional secretary in the central government and hence has been given the top ED charge in an additional capacity.
He is expected to be empanelled soon and subsequently will head the ED in a regular capacity, they said.
The ED director post is an additional secretary rank post in the Union government.
The ED enforces two major laws in the country to check black money the criminal Prevention of Money Laundering Act (PMLA) and the Foreign Exchange Management Act (FEMA).

Gemalto issues public apology for a report claiming Aadhaar data breach

Digital security firm Gemalto on Saturday issued a public apology in national newspapers for its report which claimed a breach in the Aadhaar database.
The company withdrew its report which claimed that data breach incidences in India were the second highest globally, in the first half of 2018, on account of a compromise in the Aadhaar database.

The company said it is issuing the public notice to clear the misperceptions against the country's unique identity number project.
"Gemalto published an inaccurate Breach Level Index report and press release that included a news article about an alleged and unverifed Aadhaar data breach," said the notice, titled 'Gemalto apology to the People of India'.
"I, Philippe Vallee, as CEO of Gemalto, extend my sincerest apologies on the grave error on our part for the publication of this erroneous report and press release," it added.
The company is learnt to have issued the apology in all editions of five national dailies.
"We never intended to malign Aadhaar, India's prestigious identity mission project, by unknowingly committing the mistake. We are launching an internal investigation and will take additional appropriate action internally," Vallee said.
In addition to publishing and correcting the facts in the Breach Level Index report on its website, Gemalto said it is placing this advertisement as part of the company's effort to ensure that authentic and accurate information reaches out to the public.
The cyber security firm, in the report released on October 15, had claimed that over 1 billion records were compromised in the Aadhaar breach incident, including name, address and other personally identified information.
In the report, Gemalto claimed that there were 945 data breaches which led to 4.5 billion data records being compromised worldwide in the first half of 2018. Of this, over 1 billion data records were exposed in India.
"Gemalto is deeply regretful for releasing this unverified information in this report and failing to conduct sufficient due diligence prior to publishing the information. We are taking the opportunity to revisit the methodology behind this report and introduce more stringent criteria and validation of entries," the notice said.
The company issued a correction, saying that there were 944 data breaches that led to 3.2 billion data records being compromised worldwide in the first half of 2018.
"... as an organisation providing cybersecurity expertise and solutions, we have not been able to find any evidence of any Aadhaar data being breached. Any inconvenience caused to the people of India by our action is deeply regretted," the notice said.

Gujarat diamantaire gifts 600 cars, FDs as Diwali bonus to employees

Diamond merchant Savjibhai Dholakia, whose lavish Diwali gifting is among the corporate world's most talked about events, this year gave away 600 cars, fixed deposits and insurance policies to 1,700 "diamond artists and engineers" working at his firm.
The ceremony this year, held at Dholakia's Harikrishna Exports here Thursday, had Prime Minister Narendra Modi address the employees through video-conferencing.
It was titled the "Skill India Incentive Ceremony".
In a statement, the company said, "As a part of its loyalty bonus programme, the company gave incentives to around 1,700 diamond artists and diamond engineers in the form of cars and fixed deposits."
It added that the firm had also given life insurance ranging from Rs 5 million to Rs 10 million to the employees.
Each car gifted this year costs between Rs 4-4.5 lakh, the cumulative cost of 600 cars adding up to around Rs 2.7 million.
An employee had to pay around Rs 40,000 as down payment for the car, while the company will bear rest of the cost.
While the firm did not bestow gifts last year, in 2016 it gave employees 400 flats and 1,260 cars.
In 2015, the Diwali gifting count stood at 491 cars and 200 houses as employee incentives.
Dholakia said that he wanted each of his 5000-odd employees to have a car and a house and the annual Diwali gifting is a way to achieve this target.
Beneficiaries are selected through a software-based system after they qualify for the company's loyalty bonus programme, he added.
"We at Hari Krishna Exports believe that employees are the base to a strong and long-running organisation. We truly value and admire the hard work of our employees and we wanted to express our gratitude towards their proficiency and enthusiasm," Dholakia said.
"The ceremony will encourage and motivate our employees to work with the same synergy in the future," he said, adding that such bonuses will make employees "become serious in their work."

Incidentally, the firm in September this year had given high-end SUVs to three senior employees, who had completed 25 years with the firm, for being "pillars of the company".
"It benefits the company, the employee's family, society and, in turn, the country. And more than anything, it gives me immense pleasure," he said.
"I could not sleep at night when I got my first car. God has given us wealth to give happiness to others," he said at the firm's Skill India Incentive Ceremony Thursday.
Dholakia's advice to those who got these cars was "maintain discipline and drive the car with respect".

Crude impact: Integrated model may aid RIL growth, despite refining woes

Reliance Industries Ltd, which operates the world's largest single-location refinery, is facing certain difficulties. While the gross margin of its refining business hit a multi-year low, the petcoke gasification plan is stuck with a ‘scaling up’ hurdle.
Also, part of its margin upside prospects hinges on timely implementation of new regulations for bunker fuel.

For the September 2018 ended quarter, RIL reported a gross refining margin (GRM) of $9.5 per barrel. The company last reported a single digit GRM in the December 2014 ended quarter.
“A tight crude market has reduced RIL’s competitive advantage of sourcing difficult-to-process cargoes as the premium on these items has come off,” analysts at JP Morgan wrote in a recent note on the company.
The benchmark Singapore refining margins, to which RIL enjoys a premium, has also been under pressure. “Singapore refining margins have been particularly weak this month as gasoline cracks slumped in line with weakness in the US and Europe but should improve over the next couple of months as demand picks up seasonally,” said Platts Analytics, a provider of energy and commodities information.
A lot also depends on how crude oil prices move from here on, as well as demand from customers.
Rahul Prithiani, director with CRISIL Research, said the rise in crude oil prices will have a further impact. “Rise in crude oil prices is expected to impact GRMs of refiners if high crude oil prices can't be passed on to end consumers. Moreover, sluggish growth in demand for petroleum products alongside supply glut in the Asian market is expected to put further pressure on the GRMs of Indian refiners.”
The JP Morgan analysts note that in the current scenario, IMO 2020 and the gasifier are extremely important for RIL’s FY20-21 earnings and de-leveraging.
However, there are some uncertainties on both counts. Closer home, RIL at present, is facing concerns on the scale-up of its ambitious petcoke gasification project. The company informed analysts that there have been technical challenges in the continuous synchronised operations of petcoke gasifiers.
The company hopes the problem will be over by March next year. The project, once fully operational, is expected to add $2 per barrel as GRMs for the company.
Both RIL’s management and analysts expect the IMO regulations to further add to RIL’s earnings.
chart The JP Morgan report hopes IMO 2020-related earnings before interest, taxation, depreciation and ammortisation (Ebitda) addition will be at Rs 32 billion and Rs 59 billion in FY2020 and FY2021, respectively. But delay in implementation of these regulations could curtail the expected upside.
The United States is reported to have proposed certain changes to the implementation of these rules. However, not everyone is concerned on what stand the US takes.
“The global refining industry and the shipping industry have invested good amount of resources to comply with the new regulations on time. They have been preparing for it for a few years now. Companies will aim to comply, although the level of implementation may vary from country to country,” said Sambit Mohanty, senior Asia oil editor at S&P Global Platts.
However, not everyone is worried but is hopeful RIL’s integrated model will save the day.
“If one was to look at the company’s earnings between 2009 and 2015, it is clear that RIL managed to expand earnings (now in the range of Rs 300 billion or above in the last three years), either through good refining performance or through petrochemicals. RIL’s integrated model helps it ride commodity uncertainties and that should continue,” said an oil and gas analyst, who did not wish to be identified.
Moreover, on a consolidated basis, consumer businesses such as telecom (digital services) and retail have started to deliver.