OPINION, P8 COMPANIES, P6 INTERNATIONAL, P16 RENU KOHLI EDITORIAL SAHARA CASE BREXIT DEAL Informal sector units rarely join the formal sector, they just die GST taxes are below target, direct taxes are not showing buoyancy expected after DeMo Anybody obstructing Aamby Valley auction would be jailed: SC Michel Barnier chides talks deadlock with time running out CHENNAI/KOCHI, FRIDAY, OCTOBER 13, 2017 FOLLOW US ON TWITTER & FACEBOOK. APP AVAILABLE ON APP STORE & PLAYSTORE WWW.FINANCIALEXPRESS.COM READ TO LEAD VOLUME XXXVII NO. 448, 22 PAGES, `5.00 P U B L I S H E D F R O M : A H M E D A B A D , B E N G A L U R U , C H A N D I G A R H , C H E N N A I , H Y D E R A B A D , K O C H I , K O L K ATA , L U C K N O W, M U M B A I , N E W D E L H I , P U N E SENSEX: 32,182.22 L 348.2 NIFTY: 10,096.40 L 111.6 NIKKEI 225: 20,954.722 L 73.45 HANG SENG: 28,459.03 L 69.46 `/$: 65.09 L 0.05 `/€: 77.19 M 0.19 BRENT: $56.39 M $0.55 GOLD: `29,732.00 L `73 ADHIASPEAK WIN-WIN DEAL Bharti to get Tatas’ ‘Invoice-matching heart of GST’ mobile biz for free Bharti gets panIndia 800-MHz footprint, Tata Group the chance to restructure its telecom business Videocon Telecommunications Before TTSL & TTML spectrum holding Band TTSL & TTML (MHz) acquisition 900 1800 2100 120.8 235.65 125 2300 800 1800 2100 52.5 81 45 Aug 201 2 After TTSL & TTML acquisition 52.5 120.8 316.65 170 570 800 900 1800 2100 570 2300 TTSL: Tata Teleservices Ltd, TTML: Tata Teleservices Maharashtra Ltd Tikona Digital Networks only around 2021-22, Bharti can liberalise it at one-third of its true value since it would have to pay only for the balance five to six years. Since TTSL has 2.5 MHz of spectrum in the 800 MHz band in most circles, going forward Bharti can pick up additional carriers in future auctions and strengthen its holding for effectivelycompeting with Jio byproviding 4G LTE services. Though Bharti would be getting spectrum in the 1800 MHz and 2100 MHz bands as well from TTSL, the most prized possession would be of the 800 MHz band. The merger structure is also in favour of Bharti. Apart from not taking over the `31,000crore debt of TTSL and not paying anycash to it,it is taking only a small portion of its deferred spectrum liability. SUMIT JHA New Delhi, October 12 THERE HAVE BEEN few national-level complaints over businesses tending to profiteer after the goods and services tax (GST) roll-out and so the proposed authority to check such practices might not be required, revenue secretary Hasmukh Adhia said on Thursday. In an exclusive interview with FE, he also said more than `8,000 crore has already been released to the states for their GST-related revenue shortfall for JulyAugust period, as “almost all states except one or two” have Convergence (of rates) is unlikely to materialise this year. In the interim, more items could be shifted from higher to lower tax slabs on the basis of the principles enunciated in the approach paper approved by the council. HASMUKH ADHIA REVENUE SECRETARY sought the constitution-guaranteed succour. Calling invoice-matching the “heart”of GST,the official said it would have to start in right earnest soonerratherthan latter, although the GST Council was still open to relaxing the schedule for filing the comprehensive returns (GSTR-1, 2 and 3) and concomitant invoice-matching afterlearning from the Julycycle that is underway. The review could mean that even larger businesses that are now filing returns on a monthly basis could get leeway to upload bills on the GST Net- Changing lanes to accelerate electric mobility The major reasons behind poor adoption of electric vehicles in India are range anxiety, high initial capital costs and a long charging time—running into about 8 hours I Motobahn, P15 QuickPicks GIC Re IPO subscribed 0.9 times on second day THE INITIAL public offering (IPO) of General Insurance Corporation of India (GIC Re) was subscribed 90%, or 0.9 times, on Thursday, the second day of the offer, with investors bidding for 11.16 crore against a total of 12.47 crore shares on offer, reports fe Bureau in Mumbai. The quota for qualified institutional buyers was oversubscribed with wholesale investors bidding for 10.43 crore shares against the 6.22 crore shares reserved for them. PAGE 11 SC rejects banks’ plea to let them sell pledged Fortis shares Rupee closes at 1-week high of 65.08 on dovish Fed minutes (` cr) Q1FY18 Q2FY18 % change Revenue Ebit Ebit margin (%) Net profit 8.4 « 10.8 « 3.2 « 23.4 25.1 171 bps « EXHIBITING STRENGTH against the beleaguered dollar for the fourth straight day, the rupee rose by another 6 paise to end at a fresh one-week high of 65.08 on continued selling of the greenback, reports PTI. Overall forex market sentiment got a much-needed leg up after the minutes from the Federal Reserve's last monetary policy meeting sounded dovish on rate rise outlook. Consistent selling of dollars by some foreign banks and unwinding of short-term forward contracts by exporters boosted rupee trade. PAGE 10 TATACONSULTANCYSERVICES (TCS) on Thursdayreported a net profit of `6,446 crore for the three months to September, an increase of 8.4% quarter-on quarter, beating analysts’ estimates on the back of volume expansion,growth in revenues and improved profitability. Operating margins stood at 25.1%, a good jump of 171 basis points sequentially. Bloomberg consensus estimates had forecast the IT major’s net profit at `6,287 crore on revenues of `30,508 crore. Revenues at the country’s biggest software services exporterwere in line with forecasts at `30,541 crore, rising 3.2% over the June quarter. Volumes grew 3.2% sequentially while revenues in dollar terms were up a reasonably good 3.2% at $4.7 billion. CEO and managing director Rajesh Gopinathan noted that the volume increase had been driven by demand across multiple industry verticals. « REFUSING TO “tinker” with its earlier orders, the Supreme Court on Thursday rejected banks’ request to allow them to sell pledged shares of Fortis Healthcare Holding to recover their dues, reports fe Bureau in New Delhi. It said that it wasn’t inclined to hear the lenders now and would hear Daiichi Sankyo’s main plea to block the sale of shares by Fortis’ promoters Malvinder and Shivinder Singh in the hospital group. Four banks had requested the court to allow them to dispose of the mortgaged shares. PAGE 6 FE BUREAU Mumbai, October 12 “Large deal wins this quarter, a good pipeline, and bottoming out of the retail sector softness positions us well,” Gopinathan said. Gopinathan said the apprehension that fintech would disrupt the BFSI space had not proven to be true.“I think everybody realises that fintech will be one more component in the ecosystem.Banks are nowtrying to transform their systems to participate in the fintech area and are experimenting with new business models,”he said. The CEO said the offline retail space had been hugely disrupted by the threat of e-commerce where the primary value proposition was price. “Customers are now looking for enhanced experience and that is where the brick-and-mortar players are scoring over online as theycan offera more connected experience to the customer,” he said. The CEO believes the company’s customer base is vibrant and that TCS is well-positioned to participate as and when companies scale up. Gopinathan said retail could see recovery in the next few quarters. Of the increase in margins, 50 basis points came from currency gains while the larger portion of 120 basis points came in through operational efficiencies and savings in multiple areas of business.The companyreported an operating profit orEbit (earnings before interest and tax) of `7,660 crore. Executive vice-president and global head,HR,Ajoy Mukherjee said the company is hiring at junior levels from campuses and also making lateral hires. Source: Company Continued on Page 2 Continued on Page 2 Shapoorji Pallonji, Allianz tie up for $500-m realty fund FE BUREAU Mumbai, October 12 Continued on Page 2 I Jio offers cashback, rate lock-in on `399 recharge by Oct 18: P6 TCS net up 8%, beats estimates work after longer intervals, say quarterly or half-yearly. Recently,the council allowed firms with a turnoverbelow`1.5 crore (over 90% of the taxpayer base) to move to quarterly-filing mode from October. Asked how much of the `65,000 crore transitional credit claimed against input taxes (excise/service tax) paid in pre-GST regime was allowed against the claimants’ July GST liability, the revenue secretary said that these credits were difficult to segregate from the fresh credits for July purchases. However, he added that the whole transitional claims will be exhausted “in six months” (starting July). “Some people may not have a big (tax) liability so they could continue (to utilise transitional credit) for a few more months and reduce (government) revenue in the period to that extent,” he said. G SCOUTING FOR OFFICE ASSETS QUARTERLY JUMP Special Feature 5,945 6,446 INDIA HAS a “serious” hunger problem and ranks 100th out of 119 countries on the global hunger index, according to an International Food Policy Research Institute report, reports PTI. Bharti Airtel's spectrum holding 6,914 7,660 India 100th on hunger index AIRTEL’S ACQUISITIONS to bolster its spectrum holding. In February and March this year it had acquired the spectrum of Telenor India and Tikona Digital Networks to enhance its 4G network. With the current deal the only area where Bharti lagged Reliance Jio — lack of 800 MHz spectrum — would get covered. Though the bulk of the spectrum Bharti would get from TTSL is unliberalised — of the total 178.5 MHz spectrum TTSL has, only 71.3 MHz is liberalised — but since the bulk of the spectrum is due for renewal 29,584 30,541 A US government weather forecaster said on Thursday conditions were favouring La Niña weather pattern during the Northern Hemisphere fall and winter 2017-18, reports Reuters. The Climate Prediction Center, an agency of the National Weather Service, in a monthly forecast said the chances of La Niña were seen at 55% to 65%. Qualcomm AP’s India Telenor (India) Communications Mar 2 017 IN THE NEWS US forecaster sees 55-65% chance of La Niña THE COUNTRY’S LARGEST telecom operator, Bharti Airtel, and the loss-making,struggling Tata Teleservices (TTSL, which includes Tata Teleservices Maharashtra) said on Thursday that they have entered into an agreement by which the consumer mobile business of the latter will be merged into that of the former. The move at one stroke gives Bharti a huge benefit in terms of expanding its pan-India footprint of spectrum in the 800 MHz band which is key to providing 4G LTE services, while providing the Tata Group the opportunity to restructure its telecom business without having to shut down the company. The cash-free and debt-free deal would be Bharti’s seventh acquisition in the last five years Apr 2 016 012 y2 Ma FE BUREAU New Delhi, October 12 16 r 20 Ma Aircel Dishnet Wireless 017 b2 Fe Augere Wireless Broadband India Says `8,000 cr given to states for JulyAugust GST revenue deficit; ‘no nationallevel complaint yet of profiteering’ GST roadmap FM Arun Jaitley delivers a lecture at Harvard University in Boston on Wednesday. Jaitley said the government will discuss bringing realty under GST next month Report on Page 3 Bright spots FE BUREAU IIP rebounds, retail inflation steady IIP touched a five-month high of 4.3% in August, as fresh output rose following pre-GST stock clearances. Retail inflation remained unchanged at 3.28% in September due to higher fuel and HRA-induced housing inflation offsetting a drop in food inflation. IIP at five-month high (% change, y-o-y) Retail inflation stays steady Mining 9.4 12 Electricity 9 8.3 8 CPI core IIP Manufacturing 4 3 3.1 0 0 -4 July 2016 Aug 2017 CPI 6 4.3 -8 (% rise, y-o-y) -3 4.5 3.28 CPI food July 2016 1.25 CONSTRUCTION MAJOR SHAPOORJI Pallonji Group and German insurer Allianz Group have tied up for a $500-million (`3,250 crore) equity fund to pick up office assets in India. While Allianz will invest $250 million, the remaining amount will be brought in by a clutch of investors and deployed in various Tier I markets over the next three to five years,the Shapoorji Pallonji management said. This is the latest example of a global fund partnering with a domestic real estate companyto jointly develop assets and the first instance of Allianz’s real estate transaction in India. The platform would develop or acquire office property across six cities — Delhi NCR,Mumbai, Bengaluru,Pune,Hyderabad and Chennai.“In growth economies like India and China, real estate provides a scalable entryinto the market forAllianz in terms of investments/asset management exposure,”said Francois Trausch, global CEO of Allianz Real Estate. On March 3,FE had reported that in its maiden deal, the $140-plus-billion Allianz Group is set to partner with Shapoorji Pallonji. Unlike its peers Canada Pension Plan Investment Board (CPPIB),Blackstone and GIC,Allianz is leaning towards building projects rather than buying leased out assets since the upsides in such projects are far higher. Sept 2017 Source: MoSPI ved o em r en ice” s be adv a y h egal r sto ng l his owi “T ll fo Continued on Page 2
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