Foreign exchange reserves reach life-time high of $466.69 billion

The country's foreign exchange reserves reached a life-time high of USD 466.693 billion after a massive USD 4.535 billion spike in the week to January 24, according to the Reserve Bank of India data.

In the previous week, the reserves had increased by USD 943 million to USD 462.16 billion.

In the reporting week, the increase in reserves was mainly on account of a rise in foreign currency assets, a major component of the overall reserves, which rose by USD 4.470 billion to USD 432.919 billion, the RBI data released on Friday showed.

Expressed in dollar terms, the foreign currency assets include the effect of appreciation or depreciation of non-US units like the euro, pound and yen held in the foreign exchange reserves.

In the reporting week, gold reserves increased by USD 153 million to USD 28.715 billion.

The special drawing rights with the International Monetary Fund (IMF) were by USD 3 million to USD 1.45 billion. he country's reserve position with the IMF declined by USD 85 million to USD 3.615 billion, the data showed.

Economic Survey: Building blocks for 'wealth creation' and $5-trn economy

Wealth creation being the central theme, the Economic Survey highlights the need for strengthening the invisible hand of markets, with pro-business policies, enabling fair competition, ease of doing business, minimising government intervention in markets, facilitating trade for job creation, as well as scaling up the banking sector.

Economic Survey sources data from Wikipedia, other private entities

The Economic Survey 2019-20 has sourced certain data from Wikipedia, which is not considered as reliable source of information.

Besides Wikipedia, the Survey has also relied on data from other private sources such as Bloomberg, ICRA, CMIE, Indian Institute of Management (Bengaluru), Forbes and the BSE.

Wikipedia is a free online encyclopedia, created and edited by volunteers around the world and hosted by the Wikimedia Foundation.

Other sources from which data have been used include heritage.org, fraserinstitute.org and Ambit Capital.

Data have also been sourced from International Monetary Fund, World Bank, Reserve Bank of India, Ministry of Corporate Affairs, Insolvency and Bankruptcy Board of India, CIBIL, National Sample Survey Office, Department of Consumer Affairs, United Nations, SIDBI.

The Survey is also marked by quotes from Shrimad Bhagavad Gita, Rig Veda, Adam Smith's 'An Inquiry into the Nature and Causes of the Wealth of Nations', Kautilya's Arthashastra, and Tamil saint and philosopher Thiruvalluvar's treatise The Thirukural.

The Economic Survey advocates 10 new ideas that benefit markets as well as the economy.

Pace of road construction less than half that of 2018-19: Economic Survey

Stressing the importance of good roads and transport for growth, the Economic Survey 2019-20 pointed out that the per day construction, that had improved in the last few years, less than halved in the first six months of the current fiscal.

The pace at which roads have been constructed grew significantly from 17 km per day in 2015-16 to 29.7 km in 2018-19. However, the pace seems to have moderated in 2019-20 to 12.7 km per day till September 2019.

Road transport is the dominant mode of transportation in terms of its contribution to Gross Value Added (GVA) and traffic share.

The share of the transport sector in the GVA for 2017-18 was about 4.77 per cent, of which the share of road transport is the largest at 3.06 per cent, followed by that of Railways (0.75 per cent), air transport (0.15 per cent) and water transport (0.06 per cent).

READ: Economic Survey LIVE updates here

Similarly, as per the National Transport Development Policy Committee Report, as of 2011-12, road transport is estimated to handle 69 per cent and 90 per cent of the countrywide freight and passenger traffic, respectively.

A good road network is an essential requirement for the rapid growth of the economy, Chief Economic Advisor Krishnamurthy Subramanian said in the survey.

Roads shouldn't be looked at in isolation, but as part of an integrated multi-modal transport system that provides crucial links with airports, railway stations, ports and other logistical hubs.

As on March 31,2018, India had a road network of about 5.96 million km. The total length of National Highways was 132,000 km as on March 1, 2019.

Amazon's Q4 revenue takes a 300 bps hit due to Diwali timing, Japanese tax

Amazon, the world's largest online retailer, said its December quarter (Q4) revenue took a hit as the Diwali festive season in India moved more into the third quarter. The other factor which affected the sales was the increase in Japanese consumption tax from eight per cent to 10 per cent.

"Those two items impacted the Q4 growth rate negatively by about 300 basis points," said Brian T Olsavsky, senior vice-president and chief financial officer of Amazon during an earnings call on Thursday."The Diwali timing, the Indian holiday, which has a very large swing factor on international revenues, it moved more into the third quarter, in 2019 versus 2018. So it was a help to Q3 and a penalty to Q4.”

For the fourth quarter, Amazon net sales increased 21 per cent to $87.4 billion, from $72.4 billion in Q4 2018.

During his India visit this month Amazon founder and chief executive Jeff Bezos pledged to invest $1 billion to help digitise traders and micro, small, and medium-sized businesses (MSMBs) across India, with the goal of bringing more than 10 million MSMBs online by 2025.

The Seattle-based firm said there are more than 550,000 sellers on Amazon India marketplace. More than 60,000 Indian manufacturers and brands are exporting their “Make in India” products to customers worldwide on Amazon. The company said it expects the new $1 billion investment to enable $10 billion in cumulative Indian exports by 2025.

“There are a lot of different facets (of) those types of investments. I won't go into too much for specifics, but a lot of work is being done there,” said David W Fildes, director of investor relations at Amazon, during the earnings call.

Since launching 'amazon.in' in 2013, Amazon has created more than 700,000 direct and indirect jobs in India. This month the firm announced plans to create an additional one million jobs in India by 2025, with continued investments in technology, infrastructure, and logistics.

Since 2014, Amazon has grown its employee base more than four times. Last year it inaugurated its new campus building in Hyderabad — Amazon’s first fully-owned campus outside the United States and the largest building globally in terms of employees and space.

“That team over there continues to do a great job locally of taking a lot of the tenets that we've had at Amazon around innovation building and really run with that over there,” said Fildes. “They have done a great job of coming up with some interesting and new services and features that I think are specific to that region.”

Amazon India on Thursday announced its partnership with the Eastern Railways to set up a pickup kiosk at Sealdah Railway Station in Kolkata. In 2019, as a pilot, Amazon India had partnered with the Indian Railways to launch pickup kiosks in four railway stations across Mumbai.

Fildes said the company would keep identifying different areas over in toolsets and features over in India that “we can bring back to other regions to help benefit other sellers and the other websites more broadly.”

This month Amazon India also announced it will have 10,000 electric vehicles in its delivery fleet by 2025. This investment is part of Amazon’s recent co-founding of The Climate Pledge, a commitment to meet the Paris Agreement 10 years early by achieving net-zero carbon emissions by 2040.

Amazon’s net sales for the full year 2019 increased 20 per cent to $280.5 billion, compared with $232.9 billion in 2018.

Vedanta profit rises 49% to Rs 2,348 cr in Q3 on the back of lower expenses

The company had posted the profit of Rs 1,574 crore in the October-December period of the previous financial year, Vedanta Ltd said in a filing to the BSE.

The profit is "attributable to owners of Vedanta Ltd", the filing said.

In a statement, the company said "attributable PAT (was) at Rs 2,348 crore, up 49 per cent y-o-y (year-on-year)".

However, the company had posted a decline in consolidated income at Rs 22,007 crore in the October-December period, over Rs 25,067 crore in the year-ago period.

The company's consolidated expenses, however, declined to Rs 18,369 crore as against Rs 21,589 crore in the year-ago period.

"We remain on track to become the world's largest long-life integrated zinc-lead-silver producer in two years while maintaining our cost leadership. Our aluminium business continues to benefit from improved integration and systemic cost improvements," Vedanta Ltd Chief Executive Officer Srinivasan Venkatakrishnan said.

The company said revenue was 3 per cent lower on a quarter-on-quarter basis, primarily due to lower volumes in the oil and gas business.

"Revenue was three per cent lower on Q-o-Q basis, primarily due to lower volumes in oil and gas business, partially offset by higher volumes in iron ore and steel, zinc India and aluminium business coupled with past exploration cost recovery in oil and gas business," the statement said.

The company's net debt stood at Rs 23,384 crore in the quarter, higher by Rs 3,303 crore as compared to that in the September 2019 quarter.

Vedanta on Friday announced the acquisition of Ferro Alloys Corporation Ltd (FACOR) for a total consideration of Rs 280 crore.

FACOR is in the business of producing ferro alloys and owns a ferrochrome plant with a capacity of 72,000 tonnes per annum, two operational chrome mines and 100 megawatts of captive power plant through its subsidiary, FACOR Power Ltd.

The consideration will be payable under the approved resolution plan on a debt and cash-free basis.

The portion of payable cash is Rs 10 crore and the rest Rs 270 crore face value in the form of zero coupon, secured and unlisted non-convertible debentures payable to the financial creditors payable equally over four years commencing March 2021.

HUL reshuffles top management team

FMCG major HUL on Friday announced the appointment of Prabha Narasimhan as Executive Director of its Home Care segment as part of a top level reshuffle within the organisation.

Narasimhan would replace Priya Nair, currently Executive Director - Home Care who moved as Executive Director - Beauty and Personal Care, the FMCG major said in a statement.

Nair will take over from Sandeep Kohli, who will relocate to Dubai as VP Beauty & Personal Care for our North Africa, Middle East, Turkey and Russia markets, it added

"Priya Nair will continue to be a member of the HUL Management Committee and Prabha Narasimhan will join the Management Committee effective February 1, 2020," said HUL.

Nair, who had joined HUL in 1995, had a career spanning of almost 25 years.

While Narasimhan had joined the company in 1999, and has a career spanning two decades, she has worked across businesses and geographies.

In her most recent role, Narasimhan has been leading the skin and colour cosmetics business where she has delivered consistent and market-beating growth in a highly competitive and fast-growing category.

"I look forward to Priya taking the Beauty and Personal Care division to the next level of performance and take this opportunity to thank her for her outstanding contributions to Home Care. And finally, I would like to welcome Prabha to the HUL Management Committee and wish her great success," HUL Chairman and Managing Director Sanjiv Mehta said.

Mining sector's GDP share sees decline due to disruptions in Goa, Karnataka

The contribution of mining sector to the country's GDP has been on a steady decline primarily on intermittent disruptions in operative mines in the key producing states of Odisha, Karnataka and Goa.

From a share of 1.93 per cent in FY13, the mining sector's contribution to the GDP has substantively declined to 1.63 per cent in FY19. The share of mining sector to India's GDP is woeful compared with South Africa (7.5 per cent) and Australia (6.99 per cent).

Closure of mines and disruptions due to changes in legislations has thrown the sector out of gear, curtailing production and endangering jobs. An analysis by the Federation of Indian Mineral Industries (Fimi) reveals that despite its immense employment potential, the mining sector has witnessed massive job losses. The combined job losses both direct and indirect, as a fallout of mining bans in Karnataka and Goa is pegged at 1.28 million. In 2011, 166 mines in Karnataka concentrated in Bellary, Chitradurga and Tumkur, had faced shutdown. Goa has faced a total closure in mining operations since March 15, 2018 after a sweeping order of the Supreme Court declared operations of 88 mines working under the 'deemed extension' clause illegal. Likewise, in Odisha, scores of mines found it profoundly difficult to sustain operations after the apex court ordered payment of hefty compensation worked out by the SC-appointed central empowered committee (CEC). Mine leaseholders in Odisha were asked to pay up Rs 17576 crore for overproduction beyond the approved statutory limits.

Mining sector boasts of the highest employment elasticity after construction (1.13 per cent) and real estate (0.66 per cent). With an employment elasticity of 0.52 per cent, mining has the potential to create 13 times the jobs created by agriculture and six times over manufacturing for every one per cent growth in GDP.

Another appalling trend is the escalating imports of minerals since 2014-15. At the end of 2017-18, imports of minerals and metals excluding coal and gold were valued at Rs 4.91 trillion, four times over the domestic production worth Rs 1.12 trillion.

India is a net importer of an array of minerals - copper ores and concentrates, platinum alloys, nickel ores, diamond, gold, tungsten ores & concentrates, asbestos, flourspar, cadmium, silver, molybdenum, rutile, coal, graphite and others. The country has 100 per cent import dependence on copper ores and concentrates, platinum alloys, nickel ores, diamond, gold and tungsten ores & concentrates.

Despite being endowed with a repository of minerals, India has not been able to tap the potential wealth. India ranks among the least explored countries compared to other leading resource rich nations and mining jurisdictions. Only 10 per cent of the country's Obvious Geological Potential (OGP) has been explored of which a measly 1.5 per cent is mined.

In terms of exploration spending too, India occupies the lowest rungs in the pecking order dominated by Chile, Australia, Canada, United States, China and Brazil. Data by Fimi shows that in FY16, FY17 and FY18, India incurred Rs 13 crore, Rs 15 crore and Rs 17 crore respectively on mineral exploration.

Vedanta Q3 PBT at Rs 3,806 cr, up 9.4% on lower costs, exceptional gain

Anil Agarwal-led Vedanta Ltd reported a consolidated profit before tax of Rs 3,806 crore in the December quarter, up 9.4 per cent from same period last year on the back of lowered costs and a small exceptional gain of Rs 168 crore.

Net sales of the company declined 10 per cent on a year-on-year basis to Rs 21,126 crore in the period under review primarily due to lower commodity prices and muted volumes in zinc, oil & gas and copper business, partially offset by exploration cost recovery in oil & gas.

Lower cost of production mainly in aluminium lent firm support to the total expenses of the company in the quarter gone by which declined 15 per cent in December quarter from same period last year.

"Our aluminium business continues to benefit from improved integration and systemic cost improvements. Our cost of production has started to slide and was at $1,691 per tonne in December quarter. We are on track to bring it lower at the target of $1,500 per tonne as in January itself, the aluminium cost of production has fallen below $1,600 already," informed chief executive officer, Srinivasan Venkatakrishnan.

Drop in power and fuel costs also helped lower expenses in turn pushing up operating margins.

“The exceptional item gain is the claim we have made as part of the unsuccessful exploration that has taken place during our oil&gas explorations. This facility provided by the government is indeed encouraging in risk capital,” G.R. Arun Kumar, executive director (Vedanta Ltd) and group chief financial officer said at the earnings concall today.

The company’s consolidated net profit stood at Rs 2,665 crore in December quarter, up 14 per cent from same period last year.

As per Bloomberg estimates, the company’s bottomline was seen at Rs 720 crore, while the topline was expected to be at Rs 20,223 crore in the December quarter.

Vedanta reported an earnings before interest, taxes, depreciation and ammortisation (EBITDA) at Rs 6,531 crore in the quarter gone by, up 10 per cent from same period last year. The EBITDA margin in the period under review stood at 34 per cent as against 29 per cent in the same period last year.

The company today also announced acquisition of Ferro Alloys Corporation Limited (FACOR) for a total consideration of Rs 280 crore. The acquisition will complement the company’s existing steel business as the vertical integration of ferro manufacturing capabilities has the potential to generate significant efficiencies, said Vedanta in its release.

As on 31 December 2019, company's gross debt was at Rs 58,589 crore, up by Rs 2,691 crore as compared to September 2019. This was mainly due to the increase in temporary borrowing at Zinc India and term debt at Oil & Gas partially offset by debt repayment at Vedanta standalone.

Ride-hailing firm Ola to start in London on Feb 10 with over 20,000 drivers

Bengaluru-based ride-hailing firm Ola on Friday said it will launch its service in London on February 10, 2020. The platform will be fully operational from day one, with over 20,000 drivers who have registered on the platform since it began onboarding a month ago. The SoftBank-backed company said it aims to offer a differentiated experience on the platform with features such as 24/7 helplines for drivers and customers and an in-app emergency button. The company said it would be providing the best quality of service through its large network of drivers across the city of London.

“The overwhelmingly positive reception to Ola since launching in the UK in 2018 illustrates the significant demand from drivers, riders and communities,” said Simon Smith, Head of Ola International. “We are working closely with drivers to build high quality and reliable service for Londoners. Launching in London is a major milestone for us and we are keen to offer a first-class experience for all our customers.”

Ola said it will maintain its differentiated focus on drivers, safety and a collaborative approach through its launch in London and beyond. Drivers joining the platform will benefit from six weeks of zero commission and market-leading commission rates thereafter. Ola said its commission commitment ensures that drivers always receive the best commission rate in every market that Ola operates in. The company said it will continue its collaborative approach with regulators and local authorities, as well as its clear focus on safety, drawing on industry-leading and global best practices.

Earlier last year, Ola received an operating licence from Transport for London (TfL), the UK Capital’s transport regulator. Late last year Ola’s US-based rival Uber lost its licence to operate in London. TfL had said that Uber will not be given a new licence in London after repeated safety failures. A key issue identified was that a change to Uber's systems allowed unauthorised drivers to upload their photos to other Uber driver accounts. This allowed them to pick up passengers as though they were the booked driver, which occurred in at least 14,000 trips - putting passenger safety and security at risk.

Ola has expanded rapidly throughout the United Kingdom (UK) since its launch in 2018 and will now operate across 28 local authorities. Cities including Birmingham, Coventry and Warwick have seen more than double-digit growth in rides in the last quarter. To date, Ola has provided over 3 million rides with more than 11,000 drivers already operating on the platform in the UK.

Economic Survey links infrastructure with social reforms to boost growth

Calling for integration of social-economic services, the Economic Survey 2019-20 has proposed a nexus of physical infrastructure and social reforms to ensure sustainable development.

Suggesting a new approach, ‘Nexus of Sustainable Development Goals (SDGs)’, it said this will reinforce several policies and their implementation.

“Since a few SDGs have overlapping objectives with one another, the policies developed and aligned to achieve the goals must consider and identify these linkages. And, in-turn, identify the potential trade-offs that might limit the physical achievement of the target under a goal,” said the Survey.

SDGs were set up in 2015 by the United Nations General Assembly and are to be achieved by the year 2030.

This includes clean water and sanitation, affordable and clean energy, industry innovation and infrastructure, life on land, peace, justice and social institutions, zero hunger and gender equality.

The Survey suggested interlinking electricity supply with health and education. “It is observed that with electricity, the schools’ access to modern methods and techniques of teaching helps holistic development of students and increases their attraction towards learning,” said the Survey.

The Survey observed that states with lower literacy rates have low electricity supply at schools and vice-versa. Many of the health improvement schemes – providing paediatric care, newborn emergency services, and successful vaccination – rely heavily on the availability of electricity at the health centres.

“There is a positive relationship between electricity consumption and fall in the infant mortality rate (IMR) in the country,” said the Survey.

The Survey made note of several states to denote link between electrification of schools and net enrolment. While states with high ‘human development index (HDI)’ have shown positive relation between electrification and school enrolment, for low HDI states, it is dismal.

“It then becomes obvious that schools having quality and reliable power would generally tend to have the facilities that the government is providing under its Sarva Shiksha Abhiyan programme,” said the Survey.

ITC Q3 net profit rises 29% to Rs 4,047.87 cr; net sales up 5.71%

FMCG major ITC on Friday reported a 29.03% increase in its consolidated net profit at Rs 4,047.87 crore for the third quarter ended December 2019.

The company had posted a net profit of Rs 3,136.95 crore in the October-December quarter of the previous fiscal.

Net sales during the quarter under review stood at Rs 13,220.30 crore, up 5.71%, as against Rs 12,506.05 crore in the corresponding period a year ago, ITC said in a regulatory filing.

Total expenses for the said period were at Rs 8,779.14 crore as compared with Rs 8,340.61 crore, up 5.25%.

Shares of ITC Friday settled at Rs 235.25 apiece on the BSE, up 0.60% from their previous close.

Facebook to remove Coronavirus fake news after WHO flags global emergency

Facebook Inc said on Thursday it will take down misinformation about China's fast-spreading coronavirus in a rare departure from its approach to health content, after the World Health Organization declared the outbreak a global health emergency.

The world's biggest social network said in a blog post that it would remove content about the virus "with false claims or conspiracy theories that have been flagged by leading global health organizations and local health authorities," saying such content would violate its ban on misinformation leading to "physical harm."

The move is unusually aggressive for Facebook, which generally limits the distribution of content containing health misinformation through restrictions on search results and advertising, but allows the original posts to stay up.

That approach has angered critics who say the company has failed to curb the spread of inaccuracies that pose major global health threats.

In particular, misinformation about vaccination has spread far on social media in many countries in recent years, including during major vaccination campaigns to prevent polio in Pakistan and to immunize against yellow fever in South America.

Facebook, under fierce scrutiny worldwide in recent years over its privacy practices, has previously removed vaccine misinformation in Samoa, where a measles outbreak killed dozens late last year, after determining the situation was so severe that the inaccuracies were risks to physical harm, a spokeswoman told Reuters, calling the move an "extreme action." It also removed misinformation about polio vaccines in Pakistan, although the imminent harm in that case involved risks of violence against the health workers carrying out the immunization campaigns, she said.

HUL reports 12.95% rise in consolidated net profit at Rs 1,631 cr

FMCG major Hindustan Unilever Ltd on Friday reported a 12.95 per cent rise in consolidated net profit to Rs 1,631 crore for the third quarter ended December 2019, helped by improvement in margins and volume growth.

The company had posted a net profit of Rs 1,444 crore in the October-December period of the previous fiscal.

Net sales during the quarter under review stood at Rs 9,953 crore, up 3.87 per cent from Rs 9,582 crore in the corresponding period a year ago, Hindustan Unilever Limited (HUL) said in a regulatory filing.

"Domestic Consumer Growth was 4 per cent with Underlying Volume Growth at 5 per cent" in the quarter, it said.

"This quarter witnessed an overall challenging market environment, mainly reflecting a sharp slowdown in rural and discretionary spends.

In this tough environment, HUL has delivered a resilient performance which is reflective of the strength of our brands, consistency in strategy and execution prowess," HUL CMD Sanjiv Mehta said.

"Our continued focus on innovation and market development has helped sustain underlying volume growth at a steady 5 per cent. We have also delivered a healthy margin improvement," he added.

Total expenses stood at Rs 7,849 crore as against Rs 7,900 crore earlier.

Shares of HUL on Friday settled at Rs 2,034.15 apiece on the BSE, down 1.18 per cent from the previous close.

Net sales during the quarter under review stood at Rs 9,953 crore, up 3.87 per cent from Rs 9,582 crore in the corresponding period a year ago, Hindustan Unilever Limited (HUL) said in a regulatory filing.

"Domestic Consumer Growth was 4 per cent with Underlying Volume Growth at 5 per cent" in the quarter, it said.

"This quarter witnessed an overall challenging market environment, mainly reflecting a sharp slowdown in rural and discretionary spends.

In this tough environment, HUL has delivered a resilient performance which is reflective of the strength of our brands, consistency in strategy and execution prowess," HUL CMD Sanjiv Mehta said.

"Our continued focus on innovation and market development has helped sustain underlying volume growth at a steady 5 per cent. We have also delivered a healthy margin improvement," he added.

Total expenses stood at Rs 7,849 crore as against Rs 7,900 crore earlier.

Shares of HUL on Friday settled at Rs 2,034.15 apiece on the BSE, down 1.18 per cent from the previous close.

Vedanta implements resolution plan to bag Ferro Alloys via NCLT route

Anil Agarwal-led Vedanta Ltd on Friday said it is implementing the resolution plan for the acquisition of insolvent Ferro Alloys Corporation Limited (FACOR) approved by the Cuttack bench of National Company Law Tribunal (NCLT).

The consideration payable for the acquisition of FACOR on debt and cash free basis under the approved plan stands at Rs 10 crore. Alongside, an equivalent cash balance in FACOR’s subsidiary, FACOR Power Limited (FPL) is also payable upfront having zero coupon, secured and unlisted Non-Convertible Debentures (NCD) of aggregate face value of Rs 270 crore to the financial creditors payable equally over four years commencing March 2021.

Vedanta Limited will acquire management control and as per approved resolution plan as it will hold 100 per cent of the paid-up capital of FACOR, Vedanta said in a regulatory filing.

Through the NCLT route Vedanta Ltd had recently acquired insolvent Electrosteel Ltd.

FACOR owns a ferro chrome plant with capacity of 72,000 tonne per annum, two operational chrome mines and a 100 MW captive power plant through its subsidiary, FACOR Power Limited (FPL). The chrome plant and the mines are located in Orissa and its turnover in FY 2019 stood at Rs 580 crore.

The acquisition will complement Vedanta’s existing steel business as the vertical integration of ferro manufacturing capabilities and has the potential to generate significant efficiencies that will help Vedanta increase steel business portfolio, said the release.

Crisil upgrades Jindal Steel's NCD ratings to positive on restart of plant

Rating agency Crisil has upgraded its ratings on bank facilities and non-convertible debentures (NCDs) of Jindal Steel and Power Limited (JSPL) to 'CRISIL BB/Positive/CRISIL A3+' from 'CRISIL BBB-/Stable/CRISIL A3'.

The upgrade reflects expected improvement in JSPL's business risk profile over the medium term, due to to the restart of the 1.8 mtpa coal gasification process (CGP)-based Direct Reduced Iron (DRI) plant at Angul, Odisha, the ratings agency said in a release.

Crisil has also withdrawn its rating of NCDs worth Rs 300 crore at the company's request and on receipt of an independent confirmation of redemption from the debenture trustee. This is in line with Crisil's policy on withdrawal of debt instruments.

The upgrade also factors in a likely improvement in liquidity following the Supreme Court order on resumption of mining activity at Sarda Mines Pvt Ltd (SMPL). The ruling will allow the Delhi-based JSPL to offtake its 12.22 million tonne duty paid iron ore fines inventory lying in SMPL's premises since mining activity was not allowed as the matter was sub-judice.

The company's financial-risk profile is also expected to improve over the medium term due to healthy operating performance and the absence of any significant capex or acquisition plans, which will make free operating cash flows available for debt repayment.

The 'positive' outlook is based on an expected improvement in financial risk profile due to timely completion of refinancing of debt at overseas subsidiaries.

Monetisation of overseas assets may further improve financial risk profile, particularly liquidity, said Crisil.

The Naveen Jindal-led JSPL expects to complete restructuring the debt in its Australian subsidiary and refinancing the debt in its Mauritius subsidiary through dollar bond issuance in fiscal 2020. This, along with sustained improvement in operating performance, can result in consolidated debt/EBITDA (earnings before interest, tax, depreciation, and amortisation) improving to below 3.5 times over the medium term; from around 4.7 times during fiscal 2019.

The ratings reflect JSPL's superior position in the value-added long steel products segment, improving operating efficiencies, and well-diversified operations. These strengths are partially offset by average, albeit improving, financial risk profile, limited raw material integration, and susceptibility to economic cycles.

Marico reports 5% increase in profit before tax to Rs 358 crore for Dec qtr

Marico on Thursday reported a 5 per cent increase in its profit before tax to Rs 358 crore for the December quarter against Rs 341 crore seen a year ago.

Net sales declined two per cent to Rs 1, 824 crore versus Rs 1,861 crore. The company said volume growth in its India business, declined one per cent as the consumption slowdown in staples got worse in the December quarter.

Specifically, Parachute hair oil rigid packs saw a two per cent decline in volume growth, while value-added hair oils saw a decline of 7 per cent.

Arvind Krishna named IBM CEO as company fights for cloud business spot

International Business Machines Corp Chief Executive Officer Ginni Rometty will hand over the reins to the head of the company's cloud business, as the pioneer tech company continues its efforts to rejuvenate itself.

The company was a late entrant to the business of cloud services, a segment now dominated by Amazon.com Inc and Microsoft Corp, and Rometty, a 40-year IBM veteran and one of the highest profile women in U.S. business, bet on acquisitions to cut the lead.

During her eight years at the helm, the Big Blue completed 65 acquisitions, culminating in the $34 billion deal for Red Hat last year - the biggest purchase in its 108-year history - while selling some of its legacy businesses.

She leaves on a recent high note, days after IBM reported its first revenue growth in six quarters, but shares have lost about a quarter in value since she took charge, and the turnaround she began remains a work in progress.

Arvind Krishna, 57, who spearheaded the Red Hat deal, will take over in April.

IBM will likely continue its trajectory under Krishna, but may pursue more small acquisitions in the cloud and analytics space, said Tim Hubbard, assistant professor at the University of Notre Dame and a former IBM consultant.

Shares of the company were up nearly 5% in extended trading.

IBM also said Red Hat CEO James Whitehurst will become its president. Rometty, 62, will continue as executive chairman and will retire at the end of the year.

"Arvind is the right CEO for the next era at IBM," Rometty said in a statement.

Abidali Neemuchwala quits as Wipro CEO and MD, cites 'family commitments

Abidali Z Neemuchwala has quit as the chief executive officer and managing director of Wipro, the IT services company said on Friday.

Neemuchwala, 52, is leaving due to "family commitments” and will continue to hold office until a successor is appointed, said Wipro in a regulatory filing.

He joined Wipro in April 2015 as the president and chief operating officer, after having served at larger rival Tata Consultancy Services.

Neemuchwala was made CEO the following year and took on the additional role of managing director in 2019 when billionaire and philanthropist Azim Premji step down as the company’s chairman and his son Rishad Premji was appointed in his place.

Wipro's stock rose about 13 per cent under Neemuchwala's tenure as the CEO, compared to a 59 per cent rise in India's blue-chip NSE Nifty 50 index, reported news agency Reuters.

Wipro, India's fourth largest IT services company, on January 17 reported a 35.1 per cent year-on-year (YoY) jump in its net profit at Rs 2,552.6 crore for the second quarter of the financial year 2019-20 (FY20). On sequential basis, the figures grew 6.9 per cent.

Growth has remained a concern at the Bengaluru-based company. Wipro has been hit by a spending crunch from its key Western clients, who seek better services at cheaper rates, said Reuters.

"lt has been my honour and privilege to serve Wipro, a company with a rich legacy of almost 75 years," said Neemuchwala about his resignation in a company press release.

A company representative declined to provide further details on Neemuchwala's resignation or on his future plans, said Reuters.

'We thank Abid for his leadership and his contributions to Wipro," said Rishad Premji.

New IBM CEO Arvind Krishna described as 'brilliant, right person to lead'

Indian-origin technology executive Arvind Krishna has been elected Chief Executive Officer of American IT giantM IBM after a "world-class succession process", succeeding Virginia Rometty, who described him as the right CEO for the next era at IBM and well-positioned" to lead the company into the cloud and cognitive era.

The IBM Board of Directors elected Krishna as company CEO and member of the Board of Directors effective April 6. Krishna is currently IBM Senior Vice President for Cloud and Cognitive Software and will succeed Rometty, 62 who will retire after almost 40 years with the company at the end of the year.

Krishna, 57, had joined IBM in 1990 and has an undergraduate degree from the Indian Institute of Technology, Kanpur, and a PhD in electrical engineering from the University of Illinois at Urbana-Champaign.

I am thrilled and humbled to be elected as the next Chief Executive Officer of IBM, and appreciate the confidence that Ginni and the Board have placed in me," Krishna said in a press statement released by IBM.

Krishna said IBM has such talented people and technology that we can bring together to help our clients solve their toughest problems.

I am looking forward to working with IBMers, Red Hatters and clients around the world at this unique time of fast-paced change in the IT industry. We have great opportunities ahead to help our clients advance the transformation of their business while also remaining the global leader in the trusted stewardship of technology," Krishna said.

Krishna's appointment as head of the global IT giant adds to the growing list of Indian-origin executives at the helm of some of the biggest multinational companies. Krishna joins the club that includes Microsoft CEO Satya Nadella, Google and Alphabet CEO Sundar Pichai, MasterCard CEO Ajay Banga, PepsiCo's former CEO Indra Nooyi and Adobe CEO Shantanu Narayen.

Rometty, who had been IBM's Chairman, President and CEO, will continue as Executive Chairman of the Board and serve through the end of the year, when she will retire. She described Krishna as the right CEO for the next era at IBM who is well-positioned to lead IBM and its clients into the cloud and cognitive era."

Rometty said Krishna is a brilliant technologist who has played a significant role in developing our key technologies such as artificial intelligence, cloud, quantum computing and blockchain. He is also a superb operational leader, able to win today while building the business of tomorrow.

She said Krishna has grown IBM's Cloud and Cognitive Software business and led the largest acquisition in the company's history. Krishna was a principal architect" of the company's acquisition of Red Hat.

Through his multiple experiences running businesses in IBM, Arvind has built an outstanding track record of bold transformations and proven business results, and is an authentic, values-driven leader.

The IBM Board also elected James Whitehurst, IBM Senior Vice President and CEO of Red Hat, as IBM President.

Rometty added that in both Krishna and Whitehurst, the Board has elected a proven technical and business-savvy leadership team.

Lead Director of the IBM Board of Directors Michael Eskew said with the strong foundation now established by Rometty for IBM's future, the Board is confident that Krishna is the "right CEO to lead IBM.

The Board ran a world-class succession process and found in Arvind a leader with the business acumen, operational skills, and technology vision needed to guide IBM in this fast-moving industry," Eskew said.

Chairman of the Board's Executive Compensation and Management Resources Committee Alex Gorsky said Krishna thinks and executes squarely at the intersection of business and technology. Gorsky said he is an ideal leader to succeed Rometty and take IBM and its clients into the next chapter of the cloud and cognitive era.

The IBM statement said that as IBM Senior Vice President for Cloud and Cognitive Software, Krishna led the IBM business unit that provides the cloud and data platform on which IBM's clients build the future.

His current responsibilities also included the IBM Cloud, IBM Security and Cognitive Applications business, and IBM Research. He leads the unit's strategy, product design, offering development, marketing, sales and service and also guides IBM's overall strategy in core and emerging technologies including artificial intelligence, quantum computing, blockchain, cloud platform services, data-driven solutions, and nanotechnology, according to his profile on the IBM website.

Previously, he was general manager of IBM Systems and Technology Group's development and manufacturing organisation, responsible for developing and engineering advanced semiconductor materials through microprocessors, servers, and storage systems. Prior to that, Arvind was general manager of IBM Information Management, which included database, information integration, and big data software solutions. He served as vice president of strategy for IBM Software. He also held several key technical roles in IBM Software and IBM Research, where he pioneered IBM's security software business.

According to his profile on the IBM website, Krishna is the recipient of distinguished alumni awards from IITK and the University of Illinois, is the co-author of 15 patents, has been the editor of IEEE and ACM journals, and has published extensively in technical conferences and journals.

Cement sector growth declines to 2% in 2019, say industry experts

India's cement sector growth witnessed a decline of almost 3 percentage points in last year due to various factors, including global sentiments and cash flow, an industry expert said on Thursday.

The growth rate came down to 2 per cent during last year from a compound annual growth rate (CAGR) of 5-6 per cent in last five years, Wonder Cement MD Jagdish Chandra Toshniwal told reporters here.

He said there are multiple factors including global sentiments and cash flow which led to the slowdown.

He noted that while some sectors felt the immediate impact of demonetisation, the cement industry experienced it at a later stage.

However, he expressed hope that efforts for the revival of the country's economy by the government will bring back growth in this sector, which is associated with construction and infrastructure development.

He also said that 2020 is likely to be a volatile period for this sector.

The demand for cement in India has gone up to 400 million tonnes (MT) from 30 MT four decades back.

Earlier, Wonder Cements Director Vivek Patni announced the launch of company's new grinding unit in Badnawar, Madhya Pradesh. It was developed at a cost of Rs 350 crore.

Patni informed that this is second grinding unit of the company in the country. The first grinding unit is located in Dhule, Maharashtra, which was launched in August 2018.

The next grinding unit is being developed in Jhajjar, Haryana.

The company will achieve combined production capacity of 13 MT per annum by the end of 2020, he said.

Wonder Cement Executive Director Sanjay Joshi said the country has been facing the overall economic slowdown but this has not affected the company.

LIC HFC Q3 PBT down 13% on a sharp rise in provisions for stressed loans

LIC Housing Finance Ltd's profit before tax (PBT) fell by 13 per cent to Rs 859.59 crore in the third quarter ended December 2019 (Q3Fy20) on sharp rise in provisions for stressed loans.

It had posted a PBT of Rs 745.32 crore in the third quarter ended December 2018 (Q3Fy19).

Its stock closed 4.05 per cent lower at Rs 440.15 per share on BSE.

Net profit for reporting quarter was almost flat at Rs 597.53 crore compared with Rs 596.31 crore in Q3Fy19.

The provisions for expected credit loss stood at Rs 2,584.72 crore as on December 31, 2019 as against Rs 1,555.33 crore as on December 31, 2018. It set aside Rs 390.68 crore for impairment of financial instruments in Q3Fy20 as against reversal of provisions of Rs 3.14 crore in Q3Fy19.

The exposure at default stood at 2.73 per cent as on December 31, 2019 stood as against 2.38 per cent as on September 30, 2019.

Its Net Interest Income (NII) grew by 18 per cent to Rs 1,228 crore in Q3Fy20, as against Rs 1,043 crore Q3Fy19. Net Interest Margin (NIM) for the quarter improved to was 2.42 per cent as against 2.33 per cent in the same period previous year.

The outstanding loan book rose by 13 per cent to Rest 2, 05,692 crore in December 2019 from Rs 1, 81,553 crore a year ago.

The total disbursements were Rs 13,177 crore in Q3 FY20 as against Rs 12,778 crore in Q3Fy19. Out of this, disbursement in Individual Home Loan segment saw a healthy growth of 16 per cent from Rs 9,170 crore to Rs 10,655 crore.

The disbursement of project loans slowed down Rs 931 crore compared with Rs 1,238 crore for the same quarter in previous year, it added.

The capital adequacy ratio stood at 14.37 per cent.

Arvind SmartSpaces reports 118% jump in Q3 PBT at Rs 33.11 crore

The real estate development company of the $2 billion Lalbhai Group, Arvind SmartSpaces Limited (ASL) saw its consolidated profit before tax (PBT) jump by 118.25 per cent to stand at Rs 33.11 crore for the quarter ended December 31, 2019.

The company's consolidated total revenue grew by 21.46 per cent to Rs 94.54 crore for Q3 of FY'20, up from Rs 77.83 crore during the same period of the last financial year.

According to the company, the consolidated earnings before interest, tax, depreciation and amortization (EBITDA) for the quarter ended December 31, 2019 is Rs 39 crore as against Rs 21 crore for the same period of last financial year.

The third quarter also saw sales of 118,000 sq ft in terms of volume, mostly from residential projects in Ahmedabad and Bangalore with a total booking value of sales worth Rs 61 crore.

According to Kamal Singal, Managing Director and CEO, Arvind SmartSpaces the company has already delivered seven projects of around 2.8 million square feet (msf) and has other nine projects totaling 13 msf under various stages of development which would be completed over the next 3-4 years.

Further, the company is planning to launch three new projects with a total developable area of four million sq. ft during last quarter.

"We believe that this is an appropriate time to invest in new projects and pipeline given the fact that due to overall market sentiments, good land deals are available at attractive valuations and affordability for home buyers has improved consistently," said Singal. The company intends to clock the desired growth rate of 20-25 per cent for the whole of fiscal 2019-20.

Singal, however, stated that despite challenges such as overall consumption and liquidity issues, the current stagnant phase of real estate industry seems to have bottomed out.

"Confluence of factors like regulatory actions (demonetization, RERA, GST), rising brand consciousness/aspirations amongst home buyers and easing of funding constraints —is leading to rapid consolidation in this historically fragmented industry. This paradigm shift, which is resulting in disproportionate market share gains for organized developers, implies that organized players will grow handsomely despite the overall challenges faced by the industry," Singal added.

Mahindra Electric Mobility plans a global journey, unveils a new brand

Mahindra Electric Mobility Ltd, a part of the $20.7 billion Mahindra Group, is planning to go global and export its indigenously developed EV technology products and solution to overseas markets such as Europe and South Korea. Mahindra Electric CEO Mahesh Babu said the company plans to supply products such as vehicle control unit and powertrain to SsangYong Motor Company, which is Mahindra Group company in South Korea.

“Through SsangYong, our technologies are going to go to Europe, we are already engaged with some of our partners in Europe, with whom we are in talks to supply our technology (products) like powertrain, battery packs and power electronics,” said Babu. “Our aim now is to have a global ambition to reach to multiple players across the globe. If somebody wants to import our Treo (electric three-wheeler) and then wants to sell it in Europe, in the US or in developing countries, we are open (to that as well).”

In a motor vehicle, the powertrain comprises the main components that generate power and deliver that power to the road surface, water, or air.

Mahindra Electric Mobility on Thursday also unveiled a new corporate brand identity with a new logo and tagline - ‘Spark the New’. The new brand is meant to give the brand a renewed thrust to achieve its global ambition of being a leading player in electric mobility technology solutions.

Experts say traditional automakers are making investments in new-age companies because with autonomous driving, electrification and shared services, the car industry is going through a massive shift. Also firms like Tesla, Google and Apple are becoming the new competitors for traditional players such as Daimler and Hyundai. Babu said what differentiates Mahindra Electric Mobility from global competitors is its technology and variety.

The Mahindra Group has one of the most diversified portfolios of electric vehicles with the e2oPlus hatch, the eVerito sedan and the eSupro mini-van and Mahindra Treo range of three-wheelers.

“There is a clear scalability advantage for Mahindra, because we (make products) from three-wheelers to buses, which is very unique,” said Babu. “More than the competition, I think collaborations and partnerships are more important (which) I strongly believe are possible at this stage for the near future.”

The firm said it has completed over 200 million electric kilometres by Mahindra EVs (electric vehicles) on Indian road. The 200 million-plus e-kilometres done by Mahindra’s electric vehicles has helped save over 22,000 metric tons of CO2 emissions in India. This translates into the need to plant over 10 lakh trees to absorb the equivalent levels of emissions. The insights from the data is also helping the company to customise its EVs as per the conditions and requirements of different locations. “We are talking about the learnings from... various locations such as altitude and temperatures across India. How your car can behave differently when it is in Delhi in summer versus Bengaluru,” said Babu. “So, there are technological trends we are working on where we will use our knowledge (gained from) 200 million kilometres and create customized (vehicles).”

The company is also planning to set up a research and development centre in Bengaluru in the next 18-24 months. The facility would focus on creating intellectual property in the electric mobility space. “We strongly believe that electric mobility is a platform where India cannot lag behind in technology when compared to the global players and luckily in Bengaluru we have software engineers and most of the EVs are about software integrating into hardware in a very efficient way,” said Babu.

Interest in India’s fledgling electric vehicles industry is getting super hot with the government pushing for the segment in order to curb pollution and reduce reliance on import-dependent fossil fuel. Many large traditional vehicle makers, as well as startups, are now betting big on this space. Last week, TVS Motor Company, the manufacturer of two-wheelers and three-wheelers, announced its foray into electric mobility with the launch of the scooter TVS iQube Electric in Bengaluru.

The India electric vehicle ecosystem market is expected to reach $216.3 billion by 2030, according to a report by BIS Research. The government target for 30 per cent adoption of electric vehicles by 2030 is expected to be majorly driven by the electrification of two-wheeler, three-wheeler, and commercial vehicles

LIC Housing Q3 profit marginally falls to Rs 602 cr on high provisioning

LIC Housing Finance on Thursday reported a marginal fall in consolidated net profit to Rs 602.25 crore in December quarter from Rs 607.29 crore in the year-ago period due to higher provisioning for bad loans.

The consolidated income in the third quarter of 2019-20 rose to Rs 5,006.12 crore, from Rs 4,465.76 crore in same period year ago.

"In the third quarter, there was an increase in NPAs, and so we had to make higher provisioning of Rs 390 crore," LIC Housing Finance MD and CEO Siddhartha Mohanty told reporters here.

On standalone basis, the net profit was almost flat at Rs 597.53 crore during the quarter under review against Rs 596.31 crore in the year-ago period.

Net interest margin in third quarter of 2019-20 stood at 2.42 per cent as against 2.33 per cent during the same period last year.

Net interest income for the three months to December 2019 grew 18 per cent at Rs 1,228 crore, as compared with Rs 1,043 crore in the year-ago quarter.

NPAs in the said quarter increased to 2.73 per cent as against 1.25 per cent in the year-ago period.

The provisions for the period under review stood at Rs 2,584.72 crore as against Rs 1,555.33 crore in third quarter of 2018-19.

During the quarter, total disbursements were at Rs 13,177 crore as against Rs 12,778 crore in third quarter of previous fiscal.

Out of this, disbursement in individual home loan segment grew 16 per cent to Rs 10,655 crore from Rs 9,170 crore a year ago.

"Our focus in the affordable housing segment has led to a healthy growth in the individual home loan segment," Mohanty said.

In the December quarter, the housing finance company disbursed Rs 3,400 crore as loans under the Pradhan Mantri Awas Yojana (PMAY).

Project loans for third quarter of current financial year were at Rs 931 crore compared with Rs 1,238 crore in the year-ago period.

"As far as the disbursement in project loans is concerned, we have continued to be selective considering the overall market conditions," he said.

The cost of funds reduced to 8.22 per cent.

The company raised USD 200 million through external commercial borrowing in the third quarter.

Stock of LIC Housing Finance closed at Rs 440.75, down by 3.92 per cent over previous close.

Amid Coronavirus scare, phone, electronics cos say production to be hit

Smartphone vendors and consumer electronics companies do not expect any immediate business impact in India on account of the coronavirus outbreak in China, but warned that production could be hit if the situation continues beyond February.

Consumer Electronics and Appliances Manufacturers Association President Kamal Nandi said brands usually stock for components for about a month.

"We generally plan for a month for the imported items. We had planned for holidays in China (Lunar New Year) but if the situation continues (on account of Coronavirus outbreak), it would be challenging for us in manufacturing," Nandi said.

He cited the example of ACs and refrigerators that see a scale up in production ahead of summers to cater to increased demand.

"...a lot of components come from China, particularly electronics, because we do not have the complete ecosystem in the country. Therefore, it could get challenging if the holidays get extended beyond February," he said.

China's State Council had announced that the Lunar New Year/Spring Festival holiday will be extended to February 2 across the country, which was earlier slated to end on January 30.

Haier India President Eric Briganza said there is bound to be an impact on production.

"If it (production) gets delayed by a week or so, then there is no problem. But if factories do not open in February and the situation extends to March, then it would be (a problem) -- not only for my company but for a lot of brands that get their raw material and components from China," he said.

According to him, there could be an impact in the coming days and it could get severe if the holidays get extended, affecting production capability and supply of products in India.

India Cellular and Electronics Association (ICEA) Chairman Pankaj Mohindroo said there has been no impact as of now.

"However, there is a concern. There will be an impact on the (mobile phone) industry if the situation continue as it is," he added.

A Xiaomi spokesperson said its operations are not affected since it had planned ahead for the Chinese new year.

The spokesperson said the company -- which has the largest share of India's smartphone shipment -- has issued an advisory to employees on the virus epidemic in China.

"We are curbing any outbound and inbound travel to/from China till February end unless absolutely crucial for business," the spokesperson added.

realme and vivo declined to comment on the impact on operations.

China accounts for the lion's share of components used in making smartphones, televisions and other electrical appliances. These include components like printed circuit boards (PCBs), mobile displays, TV panels, compressors and motors.

Wuhan in China has been the epicentre of the coronavirus outbreak that has so far killed 170 people. The virus has spread to various other countries, including India.

India reported the first case of novel coronavirus from Kerala on Thursday. A female student of a university in Wuhan has tested positive for the virus and has been kept in isolation in a hospital.

Panasonic India and South Asia President and CEO Manish Sharma said it is early to predict any impact.

"The impact, if any, will be known after February 3 when China opens post holidays," Sharma said.

Bajaj Auto chairman Rahul Bajaj to step down from executive role

Bajaj Auto's long serving Chairman Rahul Bajaj will step down from executive role to become a non-executive director while continuing to hold his current position, the company said on Thursday.

Bajaj, who has been a director of the company since April 1, 1970, was last reappointed by the board for a five-year term with effect from April 1, 2015, and his term as executive chairman is expiring on March 31, 2020, the company said in a regulatory filing.

"Due to certain commitments and other pre-occupation, Rahul Bajaj has decided not to continue as a whole-time director of the company after the expiry of his current term on March 31, 2020," it added.

Bajaj Auto further said its board of directors in a meeting held on Thursday approved his appointment as non-executive director with the designation continuing as the chairman of the company with effect from April 1, 2020, subject to shareholders' approval.

Since Bajaj has already attained the age of 75, approval of shareholders will be taken by special resolution by way of postal ballot for his appointment as non-executive chairman as required under SEBI regulations, the company added.

After taking charge of the Bajaj Group business in 1965, Rahul Bajaj led the company to its growth path. Under his stewardship Bajaj Auto, the group's flagship company, saw its turnover grow to Rs 12,000 crore from just Rs 7.2 crore with the firm's scooters becoming the mainstay.

He steered the diversified entity during India's transition from a closed economy to a liberalised one and drove the company to expand its product portfolio with the Bajaj brand finding foothold in global markets.

In 2005, Rahul Bajaj started passing the baton of the company to son Rajiv Bajaj, who became the managing director of Bajaj Auto and led the company to become a truly global automobile player.

Rahul Bajaj, an Economics graduate from Delhi University as well as an MBA from Harvard Business School, was also a member of Rajya Sabha from 2006-2010.

Air India sale: Entities can bid based on affiliates' financial strength

Entities can bid for national carrier Air India on the basis of the financial strength of their affiliates, a proposition that could attract more bidders.

In its second attempt in as many years to divest loss-making Air India, the government came out with the Preliminary Information Memorandum (PIM) on Monday.

The government has proposed selling 100 per cent stake in Air India along with budget airline Air India Express and the national carrier's 50 per cent stake in AISATS, an equal joint venture with Singapore Airlines.

As per the PIM, a bidder may also "qualify on the basis of net worth of its affiliate, provided such IB (Interested Bidder) itself has a positive net worth...," subject to certain conditions.

This means that an entity can bid based on the financial strength of its parent, according to a source involved in the disinvestment process.

Such a provision could also help in attracting more bidders.

In case an IB is taking the benefit of financial strength of its affiliate, then the net worth of only the affiliate would be used for the purposes of evaluation of financial capability of the IB, as per the PIM.

To make the disinvestment more attractive, the government has eased the bidding norms. Prospective bidders now need to have a minimum of Rs 3,500 crore net worth.

In 2018, when the government tried to divest Air India, the net worth criteria was fixed at Rs 5,000 crore.

Meanwhile, the source said that complete foreign ownership of the national carrier would not be possible.

Under the Foreign Direct Investment (FDI) norms, the Substantial Ownership and Effective Control (SOEC) framework and provisions in the bilateral agreements, it would not be practical for Air India to have 100 per cent foreign ownership, the source said.

Through the automatic route, a foreign investor or an airline can have up to 49 per cent stake in an Indian carrier. The limit can be 100 per cent under approval route but would not be applicable for overseas airlines.

In the case of Air India, only 49 per cent FDI is allowed through the approval route, the source said.

As per the SOEC framework, which is followed in the airline industry globally, a carrier that flies overseas from a particular country should be substantially owned by that country's government or its nationals.

In the case of Air India, the government has signed bilateral flying rights agreements with more than 100 countries. As per these pacts, flying rights would be given to carriers that are substantially owned by the Indian government or Indian nationals, the source said.

According to the source, in case the substantial ownership of the carrier is to be changed, then all these pacts would have to be renegotiated. In such a situation, the countries concerned might also ask for increased bilateral flying rights, the source added.

Bilateral flying rights refers to an agreement between two countries that allows each other's airlines to operate services with a specific number of seats.

Among others, the government would withdraw its guarantee extended to loans taken by Air India.

"Government of India (GOI) may prescribe additional conditions (including but not limited to replacement of all GOI guarantee or other GOI support extended on behalf of the companies) in the Request for Proposal (RFP)," the PIM said.

Qualified Interested Bidders (QIBs) would be required to demonstrate availability of funds for the proposed transaction "including but not limited to appropriate expression of support from financial institution(s)... confirming ability of the IB to discharge all its obligations defined under RFP and definitive documents related to the proposed transaction," it noted.

The successful bidder would have to take over only debt worth Rs 23,286.5 crore while the liabilities would be decided depending on current assets at the time of closing of the transaction. Air India is in the red for long.

Novel coronavirus fear now spreads to the start-up ecosystem in India

The novel coronavirus fear has now spread to the start-up ecosystem in India. Around half a dozen Chinese venture capital (VC) firms with active presence in India have postponed their trips to the subcontinent.

“There is a complete lockdown for these VCs till February 11. They have been asked not to travel out of China. One of the investors has moved his team to a hotel and they would be operating from there,” said a start-up founder who works closely with Chinese investors. This could lead to delay in the funding process, said industry insiders.

Some of the top Chinese investors who have been frequently investing in India are CDH Investments, BAce, Qiming, Morningside, Hillhouse, GGV, and Shunwei. They have invested in over two dozen start-ups, including unicorns such as business-to-business e-commerce platform Udaan and food delivery platforms, Zomato and Swiggy. These VCs visit India every six to eight weeks looking for new investment opportunities.

In fact, Beijing-headquartered CDH Investments, which has Cashify and XpressBees as some of its portfolio companies, had committed to deploy up to 90 per cent of its $200-million emerging markets fund in India starting March this year. The fund has set eyes on early-stage investments in consumer internet and financial technology segments, according to reports.

E-commerce giant Alibaba, along with its affiliate Ant Financial, has been the most successful Chinese investor in India, with investments in successful start-ups such as Paytm, Zomato, and Bigbasket.

Ant Financial-backed BAce Capital is also planning to invest around $90 million in early-stage companies in India.

Xiaomi’s investment unit Shunwei Capital has also made big bets in India, especially on vernacular platforms such as ShareChat, Pratilipi, and Vokal.

Strides Pharma posts threefold rise in profit-before-tax at Rs 103.6 crore

Pharmaceutical major Strides Pharma Science posted a threefold rise in profit-before-tax (PBT) at Rs 103.6 crore for the third quarter ended December 31. It had posted a pre-tax profit of Rs 27.6 crore in the corresponding period of the previous fiscal.

Led by stellar growth in regulated markets, the Bengaluru-headquartered company posted a 358 per cent rise in net profit at 101 crore as compared to the corresponding quarter of the previous financial year.

“Our contrarian strategies continue to play out for the regulated markets, which are now delivering growth with industry leading post R&D EBITDA margins,” said Arun Kumar, founder of the company.

US business clocked $66 million quarterly revenues with 90 per cent revenues from the own front end. However, the performance in the emerging market registering a decline of 62 per cent YoY on account of strategic realignment initiated in the last financial year.

The company posted a 28 per cent growth in revenue at Rs 735 crore as compared with Q3FY19. Its EBITDA margins stood at 25.2 per cent for the period.

Rural market turns positive for carmakers on the back of good monsoon

While the price sensitive rural markets turned positive for major carmakers on the back of improved sentiment thanks to a good monsoon and better crop, the question is whether the momentum will continue during the BS-VI era, which will see an increase in prices.

Rural sales of the country's largest passenger car maker Maruti Suzuki India Ltd (MSIL's) increased by 2 per cent and accounted for 38 per cent of company's sales during the quarter ended December, 2019. During the same period, however, the urban market grew by 0.6-0.7 per cent, said Shashank Srivastava, executive director, marketing & sales, MSIL.

Speaking on the way forward, Srivastava said that the challenge lay in converting enquiries into sales once prices went up after the BS-VI transition.

Meanwhile, Tarun Garg, director, sales and marketing division, Hyundai Motor India Ltd, added that things were really improving in the rural market. "One year back there was a lot of stress. In the Indian market, for the last four five years, all the growth was coming from the rural market. Then for 6 to 8 months things were quite bad. However, this year the monsoon was quite good and we are seeing some kind of a turnaround," he said.

The entire industry, in the April to June and July to September periods, showed a double-digit degrowth both in rural and urban markets. However, this has become more flattish in the December quarter. "We are now witnessing a flat growth in rural areas," Garg said, adding that the industry is expected to see an improvement in growth by the second half of this year.

"We are positive about the near future, but at the same time we cannot expect double-digit growth or something like that. We are looking at low single-digit growth in rural markets," added Garg.

According to Motilal Oswal, initial signs of rural sector bottoming out are emerging, as indicated by return of food inflation, favourable 'terms of trade' for farmers, multi-year high rural spending by the Centre, unusually good water reservoir levels and good start to the Rabi season.

Importance of the rural market has been increasing consistently - especially in the last 2-3 years - when rural market growth was around twice that of the urban market. This is reflected in increasing contribution of rural markets to auto volumes (40%/45% of volumes for two-wheelers/passenger vehicles), said an anlayst from Motilal Oswal.

Faster rural growth was driven by expansion in the distribution network and increasing finance penetration, resulting in easy product accessibility for the rural customer. However, 2HFY19 onwards saw auto volume momentum in the rural market get impacted due to culmination of several headwinds.

In the normal course, two-wheelers would have benefitted the most from rural recovery. However, 10-15% cost inflation in mainstream two-wheelers would dilute benefit of rural recovery. The two-wheeler segment should get impacted by the 7-15% increase in ex-showroom price. Also, there is a risk of value migration within the segment (down trading from Executive 100cc to Economy segment, 125cc Scooter to E-Scooter, etc.). While MOSL estimate around 6% volume growth for the two-wheeler industry in FY21, there is a risk of mix deterioration as well as a change in competitive dynamics.

Tractors are best placed to benefit from the rural recovery due to high correlation with farm economics as well as no BS-VI related challenges. Tractor volumes are expected to recover from the nearly 11% decline in 9MFY20, driven by favourable farm economics and positive sentiment in the on-going Rabi season. MOSL expects volume recovery to reflect from March 2020 and estimates 8-10% volume growth in FY21 for the tractor industry.

Passenger vehicles (PV), particularly petrol PVs, should be the least impacted due to BS-VI transition.

FMCGs scale-up rural distribution networks to combat economic slowdown

FMCG major ITC and Emami are scaling up their reach in rural areas to battle the subdued consumer sentiment hoping it can help push sales. The move is backed by consumer connect initiatives.

In view of the ongoing slowdown, which has impacted demand in rural India, ITC doubled its rural stockist network in the current fiscal year with significant increase in coverage across low population group markets.

“We have actively increased our direct reach in rural areas by adding more than 25 per cent new markets to the existing large serviced base”, an ITC spokesperson told Business Standard.

ITC’s handler base currently stands at 6.2 million outlets and it continues to deploy resources to augment the coverage aggressively. Nearly 80 per cent of new handlers added in the current year come from the rural sector.

Meanwhile, Emami Ltd, which has one of the highest exposures in rural areas among its peers, is banking on its Project Dhanush initiative which it undertook three years back to reach the deepest and remotest of the geographies.

In the last three years, Emami expanded its footprint to more than 20,000 towns with a population of around 3,000 across India. “Van branding and visual merchandising at outlets through point-of-purchase visibility have proved to be an effective consumer influencer fuelling rural channel growth,” Mohan Goenka, director at Emami Limited told this newspaper.

With more than 3,000 distributors and more than 600,000 square feet of trade assets, which incidentally is the largest in-store merchandising in the country, HUL also has prioritised increasing its direct distribution network.

According to the International Journal of Research – Granthaalayah, since its launch in 1997, HUL has appointed 6000 sub-stockists because of which its distribution network directly covered about 50,000 villages and is reaching about 250 million consumers.

This translates into 37 per cent of rural consumers. The rural distributor has a set of stockists attached to it who drives distribution in villages using unconventional transport like tractor, bullock cart and others.

Nearly all of the FMCG companies like Marico, HUL, ITC, and others have been pointing out that the operating environment has been challenging with a drop in consumption, especially in rural areas, severe crunch in market liquidity conditions and disruptions and floods in several parts of the country.

FMCG players are also leveraging e-commerce platforms and using digital technology to drive sales.

Both HUL and ITC are using big data analytics to attract consumers from small towns or rural India by offering suitable products, SKUs and communicating its portfolio. HUL has also come up with an online ordering app for its salespeople as well as opt for customised promotions.

“FMCG brands are leveraging e-commerce platforms to offer their products catering to the growing demand and in 2020 we got orders from big cities as well as smaller cities such as Ajmer, Bharuch, Chittoor, Dharwad among others. We are consistently widening our selection of FMCG daily essentials making them available for customers throughout the country with our growing infrastructure capabilities”, an Amazon spokesperson told this business daily.

According to Nielsen India, FMCG sales via the e-commerce route is expected to grow to $4 billion by 2022.

Pointers –

*ITC’s 80% of new handler base came in from rural

*Emami expanded its footprint to more than 20,000 towns and rural locations

*HUL’s distribution network directly covered about 50,000 villages

*HUL & ITC employing e-commerce platform and digital route in rural areas

*Emami banking on online routes for urban centers only

As steel demand picks up, companies turn to home market; prices may go up

A pick-up in demand for steel and successive price increases is prompting companies to bring back focus on the domestic market.

Steel companies are mulling an increase in prices up to Rs 2,000 a tonne in February, which would be the fourth increase in a row. The price differential between domestic steel and imports is approximately $30 a tonne currently.

JSW Steel, director (commercial & marketing), Jayant Acharya said there is a potential for prices to increase to that extent.

Add to it, an increase in international prices by $50-$100 a tonne in the last few months and an upward push in raw material prices, and there is a case for an increase in steel prices.

After a slump in September-October, prices started moving up since November. International prices of hot rolled coil (HRC) in April (last year) were at around $530 a tonne. In September-October, it dropped to $430 a tonne and now it's around $505 a tonne.

"There is an improvement in demand. Prices have bottomed out," Acharya added.

It holds for domestic prices too that have been moving up since November. In the last three months, the increase passed on to customers is about Rs 3,000 a tonne.

Restocking is one of the major factors fuelling the increase. "Infrastructure and construction sector has seen some of the demand coming back as has auto," said an official of another major steel producer.

As a result, there has been some correction in inventories across supply chains. JSW's inventory over the last quarter, for instance, has reduced by 245,000 tonne. Over the next few months, Acharya expects demand to pick up further.

The improvement in demand is prompting steel companies to focus on the domestic market.

Acharya said, JSW's exports moderated from 31 per cent of total sales in the second quarter to 24 per cent in the third quarter. "Some moderation was expected in the fourth quarter as well," he said, while reminding that the fourth quarter was seasonally a strong quarter.

"The focus is clearly on the domestic market. Whenever there is an increase in prices, the focus is on the domestic market. Even if there is some differential in import and domestic prices, transportation time makes up for it. Exports to Europe take about 2-3 weeks," said another producer.

With the increase in prices, there is clear-cut case for companies to increase focus on the domestic market, said Jayanta Roy, senior vice president, ICRA.

To bring down the inventory levels, steel companies had resorted to increase exports in the second quarter. However, month-on-month, exports have been coming down.

"The key thing to watch out for would be whether the price increase planned in February would be sustainable," Roy added.

Currently, prices of HRC are at around Rs 36,000 a tonne, that's at the same level as August 2019.

The only difference between now and then, said Roy, is that coking coal prices were at around $200 a tonne last August and it's currently at $150 a tonne. "So there is a coal cost saving of $35-$40 a tonne," he added.

Coking coal prices had dipped further to $130 a tonne and then moved to $150-levels.

Infosys signs multi-million contract with ABN AMRO to accelerate operations

Infosys announced on Thursday that it has signed a multi-year, multi-million contract with ABN AMRO Bank to accelerate its cloud and DevOps (development and operations) transformation journey.

As part of this renewed contract, the Bengaluru- headquartered IT major will enable ABN AMRO Bank to achieve its business and operational goals by aligning its IT transformation with its cloud platform strategy, an Infosys statement said.

"Leveraging its expertise in cloud and data management services, Infosys will help ABN AMRO Bank to navigate to a single public cloud to deliver agility and cost efficiency in business operations," it said.

Axis Bank plans to raise Rs 4,175 crore via NCDs on private placement basis

Private sector lender Axis Bank on Thursday said it plans to raise up to Rs 4,175 crore through the issuance of non-convertible debentures (NCDs) on a private placement basis.

"The committee of whole-time directors of the Bank, today approved the allotment of 41,750 senior unsecured redeemable non-convertible debentures of the face value of Rs 10 lakh each, for cash, at par aggregating to Rs 4,175 crore," Axis Bank said in a regulatory filing.

The coupon rate for the issue will be 7.65 per cent per annum, the filing added.

The said debentures rated 'AAA/Stable' by rating agencies CRISIL and ICRA, will be listed on the wholesale debt market segment of BSE and NSE, the filing said.

The shares of Axis Bank were trading at Rs 729.80 a piece on BSE, down 0.75 per cent from the previous close.

RBI accepts Kotak Bank promoters' plan to cap voting rights, reduce stake

Private sector lender Kotak Mahindra Bank on Thursday said that the Reserve Bank of India (RBI) in a letter to the bank on January 29 has agreed in-principle to cap promoters’ voting rights in the bank to 20 per cent of the paid up voting equity share capital until March 31, 2020.

The banking regulator has also said that the promoters' voting rights should be brought down to 15 per cent of the paid up voting equity share capital (PUVSEC) from April 1, 2020.

Moreover, the RBI has conveyed to the bank that the promoters have to bring down their shareholding in the bank to 26 per cent of the PUVSEC within six months of receiving the final approval from RBI.

Promoters led by Managing Director and CEO Uday Kotak owned 29.96 per cent of the share capital as on December 2019.

Thereafter, the promoters will not purchase any further paid up voting equity shares’ of the bank till the percentage of promoters’ shareholding reaches 15 per cent of the bank or such higher percentage as may be permitted by RBI in future.

The RBI has further said that the promoters of the bank will be entitled to purchase additional shares of the bank’s equity capital up to 15 per cent or such higher percentage as may be permitted in the future, and exercise voting rights on such shares.

The private sector lender informed the stock exchanges that it has withdrawn the writ petition it had filed in the Bombay High Court against the regulator.

In December 2018, Kotak Mahindra Bank had moved a writ petition in the Bombay High Court against the RBI after the central bank did not accept the reduction of promoter shareholding through an issue of preference shares.

The RBI had mandated the bank to reduce its promoter shareholding to 20 per cent by December 31, 2018 and to 15 per cent by March 2022. In August 2018, the lender had issued perpetual non-convertible preference shares, which it said would trim promoters' shareholding from 30.3 per cent to 19.7 per cent but the regulator did not agree with this method.

The bank had sought interim protection from the RBI directive and proposed capping of voting rights of the promoters. The private lender was ready to issue an undertaking to limit its promoter voting rights to 20 per cent until May 2020 as concentration of power by the promoter is the main issue for the banking regulator.

According to RBI norms, a bank needs to bring down its promoter shareholding to 40 per cent in the first three years after starting operations. Thereafter, the bank needs to bring down its promoter shareholding to 20 per cent in 10 years and 15 per cent in 15 years.

Coronavirus: Exporters ask govt to review possible impact on China trade

Exporters on Thursday urged the government to review the possible impact of deadly Coronavirus on trade as China is one of the top trading partners for India.

The Federation of Indian Export Organisations (FIEO) said that if the problem persists for long, it may impact domestic mobile manufacturers as they import certain components from China.

"Mobile exporters may face issues if the problem will continue for long as they import lot of components from the neighbouring country," FIEO Director General Ajaya Sahai said.

He added that certain Indian exporters have received inquiries from Hong Kong and China for import of N72 masks.

"We have provided details of those suppliers to them," he said.

Engineering exporters said that China is among the top ten destinations for engineering shipments.

"We urged the government to review the possible impact of deadly Coronavirus on trade as well," the Engineering Export Promotion Council (EEPC) of India said in a statement.

Indian engineering exports to China increased by a significant 27.60 per cent to USD 1.77 billion (about Rs 12,600 crore) during April-December 2019-20 from USD 1.33 billion (about Rs 9,500 crore) a year ago, according to EEPC India analysis.

"In fact, China has emerged as our 10th largest export destination for engineering goods, dominated by iron and steel as also industrial machinery,'' EEPC Chairman Ravi Sehgal said.

With disruptions reported in China due to transport and travel restrictions in several cities, the council is trying to ascertain the exact impact on trade, Sehgal said.

"Exports to China showed significant increase against the backdrop of overall negative trend of 1.95 per cent in total engineering exports of USD 57.9 billion for the April-December 2019-20 period," he said.

The deadly Coronavirus continues to wreak havoc in China with 25 new fatalities reported from central Hubei province, taking the death toll to 132 and confirmed infection cases to nearly 6,000, as health experts warned that the epidemic may reach its peak in the next 10 days resulting in large-scale casualties.