OPINION, P8 COMPANIES, P6 INTERNATIONAL, P16 $350-MILLION DEAL MALL MERGER Warburg Pincus to buy a stake in Bharti Airtel’s DTH operation Cuvillier-led Unibail to buy Westfield for $16 billion EDITORIAL Unitech takeover helps home-buyers, doesn’t hurt banks FCI's food stocks cost us `40,000cr extra and upset WTO — just drop this fight NEW DELHI, WEDNESDAY, DECEMBER 13, 2017 FOLLOW US ON TWITTER & FACEBOOK. APP AVAILABLE ON APP STORE & PLAYSTORE WWW.FINANCIALEXPRESS.COM READ TO LEAD VOLUME XLIII NO. 244, 22 PAGES, `5.00 (PATNA `6.00, RAIPUR `7.00) P U B L I S H E D F R O M : A H M E D A B A D , B E N G A L U R U , C H A N D I G A R H , C H E N N A I , H Y D E R A B A D , K O C H I , K O L K ATA , L U C K N O W, M U M B A I , N E W D E L H I , P U N E SENSEX: 33,227.99 ▼ 227.80 NIFTY: 10,240.15 ▼ 82.10 NIKKEI 225: 22,866.17 ▼ 72.56 HANG SENG: 28,793.88 ▼ 171.41 `/$: 64.4 ▼ 0.03 `/€: 75.83 ▲ 0.08 BRENT: $65.58 ▲ $0.89 GOLD: `28,443.00 ▼ `92.00 RINGING IN CHANGE Reliance mulling IPO for Jio Infocomm IN THE NEWS ICICI Bank cuts rates on one-year retail deposits ICICI BANK, the country's second-largest private sector lender, reduced the interest rate on one-year deposits by 15 basis points (bps) to 6.6% per annum, reports fe Bureau in Mumbai. The reduced rate will apply to fixed deposits of under `1 crore with a tenure of between one year and 389 days. The bank has left rates on retail deposits of most other tenures unchanged. EPFO advises against complete funds withdrawal The Employees' Provident Fund Organisation (EPFO) on Tuesday advised subscribers not to completely withdraw funds for petty reasons, saying they will lose out on the social security benefits that come only when continuity is maintained, reports PTI. It also said that PF money is aimed at social security benefit and people should not treat it like a bank account. The EPFO's zonal office in Chandigarh held a press conference on Tuesday with a view to disseminate information in this regard and also to highlight initiatives that have been taken by it. Blended Arpu 156.4 (`) Data per 9,620 user per 4,087 3,805 month (MB) Voice 248 traffic (bn mins) BLOOMBERG New Delhi/Mumbai, December 12 Voice per 626 user per month (mins) Monthly churn (%) INDIA’S RICHEST MAN is weighing an initial public offering of mobileoperatorRelianceJioInfocomm,people with knowledge of themattersaid,aftera$31-billion investment spree that roiled the country’swireless market. Reliance Industries,the conglomerate backed by tycoon Mukesh Ambani, is holding internal discussions about preparing to list Jio as soon as late 2018 or early 2019, according to the people. Jio, which hasn’t made a profit since its official launch last year, is targeting to improve its financial performance before any share sale, the people said, asking not to be identified because the information is private. A Jio listing would cap a triumphant return to the Indian wirelessmarketforAmbani,more than a decade after a family feud that led him to cede control of a previous telecom venture to his younger brother. Jio, which is whollyowned byReliance Industries, launched a free-for-life call service last year that triggered a price war and consolidation in one of the world’s most crowded mobile markets. Bharti Airtel this year agreed to absorb the Tata Group’s mo- Source: Companies REPORT CARD Bharti Airtel Idea Cellular (July-Sept FY18) 145 3,780 Data traffic (bn MB) 518 IIP (% change, y-o-y) Bankers say can't share info with IU 12 9 132 459 bile-phone business,whileVodafone Group and Idea Cellularannounced theywould merge their local operations to create the nation’s largest wireless operator. Despite being the newest entrant, Jio has accumulated more than 138.6 million subscribers, making it the fourth-largest operator at the end of September, according to data from the telecom regulator. Deliberations about a Jio listing are at an early stage, and there’s no certaintytheywill lead to a transaction,the people said. Arepresentative for Reliance Industries declined to comment. Jio reported a net loss of `271 crore in the quarter ended September 30,though the business made a profit before inter- 1 784 439 437 255 3.9 6.3 est and taxes over the period. The wireless operator is “ahead of our schedule in terms of the returns” generated, Ambani said at a December 1 event in New Delhi. Ambani has a net worth of nearly $40 billion, according to the Bloomberg Billionaires Index. Shares of Reliance Industries have jumped 70% thisyear, giving the company a market value of about $93 billion. India’s benchmark index is trading near an all-time high, which has helped fuel a record IPO haul in the country. Firsttime share sales in the country have raised `75,000 crore this year,more than double the previous record set in 2010,according to data compiled by Bloomberg. SENIOR BANKERSWILLmeetofficialsoftheInsolvencyandBankruptcy Board of India (IBBI), including its chairman MS Sahoo, on December 14 to express their discomfort over sharing loan agreements and other confidentialclient-relateddocumentswith the information utility(IU) set up under the Insolvency and BankruptcyCode(IBC),sourcestoldFE. Though the government has set up an IU and appointed National E-Governance Services (NESL) to act as an IU, bankers have not yet started sharing any informationwiththeutility,citing clientconfidentiality.“Bankshave informed IBBI that without ReserveBankofIndia’s(RBI)permission,wewouldnotbeabletoshare the information,” a banker said. However, Section 215(2) of the IBCstipulatesthatfinancialcreditors are required to share informationwith an IU. Another source privy to the discussion said the meeting on December14isbeingarrangedby NESL to arrive at a settlement on thisissueandwouldbeheldatthe headquartersoftheIndianBanks’ Association here. Continued on Page 2 Retail inflation spurts (% rise, y-o-y) 5.2 10 6.3 8 6 3 3.2 -3 -6 Mining 0.9 Manufacturing Electricity Overall IIP July 2016 Oct 2017 0 0.2 -2 Know the risks of being a loan guarantor Remember, if the borrower defaults, the guarantor is liable to repay the amount. Also, any default on the loan on which stands as a guarantor will reflect in his credit score poorly ■ Personal Finance, P15 2 -4 QuickPicks Unitech case: SC unhappy over govt moving NCLT THE SUPREME Court on Tuesday expressed displeasure at the manner in which the government moved the National Company Law Tribunal for taking over real estate firm Unitech, terming it “extremely disturbing”, since the case is pending before it, reports fe Bureau in New Delhi. The SC bench also flayed the tribunal for suspending the Unitech board and allowing the government to take control of the indebted real estate firm at a time when the apex court was seized of the case. PAGE 6 6.07 Source: MoSPI July 2016 Oil tops $65, first time since 2015, on UK pipeline outage OIL ROSE above $65 a barrel for the first time since mid-2015 on Tuesday following a shutdown of the UK's biggest North Sea oil pipeline, which helps set the benchmark for global prices, reports Reuters. The Forties Pipeline was shut down on Monday after cracks were found in what traders believe is the first unplanned outage for some years. Brent crude was up by 99 cents at $65.68 at 1312 GMT, after breaking above $65 for the first time since June 2015 and trading as high as $65.83. PAGE 14 October IIP slumps even as November CPI jumps FE BUREAU New Delhi, December 12 THE LATEST SETS of economic data released on Tuesday heightened the fear that a recovery mightbarelyhavematerialisedas yet, even as it demolished whateverslimchancesexistedforarate cut by the Reserve Bank of India (RBI)intheFebruaryreviewofthe monetarypolicy.In fact the question nowiswhether2018will see atighteningbythemonetarypolicycommittee,eventhoughsome analysts reckon the rates to be on hold through 2018 as the RBI has asufficientrealratecushiontoabsorb higherinflation. As per Consumer Price Index (CPI) data, retail inflation accelerated in November to a 15month high of 4.88%. Though the main driverof the uptickwas faster rises in prices of food Numbers dim economic outlook and dash any hopes of a cut in interest rates by the RBI in February review products including the seasonal and about-to-abate spurts in key vegetables like tomato, core inflation — non-food/non-manufactured goods — alsowitnessed a worrisome 26-basis-point increase to 4.86% in October. Despite being a festive month that also saw post-goods and services tax restocking by the trade which could have boosted production, industrial output growth slowed to a threemonth low of 2.2% in October IndiGo owner’s offer for sale begins today INDIGO AIRLINES owner InterGlobe Aviation, in an exchange filing on Tuesday, said its offer for sale (OFS) will begin on Wednesday, reports fe Bureau in Mumbai. It plans to sell around 1.1 crore shares, representing 2.91% of the total paid-up capital. The OFS will be open for non-retail investors on Wednesday and for retail investors on Thursday. Promoter group entity Acquire Services proposes to sell up to 79.52 lakh shares and IGE, Mauritius, another promoter entity, proposes to sell up to 32.40 lakh shares through the offer. FE BUREAU Mumbai, December 12 11TH MINISTERIAL The farm sectorprovides employment to about 47% of the totalworkforce although its contribution to GDP is only 18%. Moving workers from farm to non-farm is keyto increasing income levels and higher GDP growth,analysts have long said. According to Garg, the government is committed to “devoting more and more of Budget on capex”. Currently, the Centre’s budget capex is around 1.8% of GDP. In FY18, it would be spending `3.1 lakh crore, which is nearly at the previous year’s level. Continued on Page 2 Continued on Page 2 PNB floats `5,000-cr QIP, sees 14% equity dilution Prime Minister Narendra Modi takes a seaplane from the Sabarmati riverfront in Ahmedabad to visit the Ambaji temple on Tuesday, the last day of campaigning for the second phase of the Gujarat assembly elections. EXPRESS PHOTO: JAVED RAJA — SUBHASH GARG compared with 4.2% a year ago— consumerdurables output in the month was down 6.9% annually; the mining sector that exhibited robust growth in the previous two months lost steam in October to record a flat growth of 0.2%. Most analysts said the latest headline inflation figure and the core component of it were higher than they expected, and some of them upped their March-end projection to close to 5%. The RBI’s monetary policy committee, which avers on its objective of keeping retail inflation close to 4% on a sustained basis,lastweek estimated it to be in the range of 4.3-4.7% in Q3 and Q4 of this year, compared with 4.2-4.6% seen in the October policy review. ● SHORING UP CAR Campaign conclusion ECONOMIC AFFAIRS SECRETARY Nov 2017 DARK DATA FE BUREAU New Delhi, December 12 We expect $12-13 billion to be invested in infrastructure via NIIF in due course. The Government is also strategically divesting infrastructure assets like Air India... 4.42 4.6 Tap people power for infra, says Garg A STEPPING-UP OF infrastructure creation and a sharperfocus on digitisation will contribute more to India’s economic growth in coming years rather than the manufacturing and farm sectors, economic affairs secretary Subhash Garg said on Tuesday. The official added that the Centre’s budgetary investment in infrastructure will be raised from the current level of 2.5% of the gross domestic product with the aid of innovative financing instruments. “We need to get financing (of infrastructure) directly from people and bond markets, not banks,” Garg said at an event organised by CII here. Bank lending to infrastructure projects surged during 2010-13, but many projects turned out to be less robust,leading to a piling up of non-performing assets in the books of banks. According an estimate by Vinayak Chatterjee,noted infrastructure expert,the country requires annual investments to the tune of `15 lakh crore, over half of which could possibly be met from public investments. Infrastructure-sector investment in the 2017-18 Budget is `3.96 lakh crore. While the government’s target is to grow the share of manufacturing in GDP from around 15% now to 25%, the sector hasn’t picked up in recent years. Several initiatives like the Modi government’s Make-in-India programme are yet to gather steam. Even labour-intensive manufacturing sectors like textiles and leather remain stagnant, unable to tap export prospects aggressively. CPI core CPI food 4.88 4.86 FUNDING GAP Special Feature CPI 4 2.2 8.35 6 2.5 2.1 0 SHAYAN GHOSH Mumbai, December 12 Holds internal talks about potential share sale, could list by early 2019; targets improving financials before any share sale Reliance Jio ● AHEAD OF IBBI MEET Key members spar over the future of the WTO BANIKINKAR PATTANAYAK Buenos Aires, December 12 AFTER OVER TWO decades of existence,theWorldTradeOrganisation(WTO)haswitnessedabarrage of criticism over its role by oneofitsstaunchestoriginalproponents,namely,Washington,DC, while most others have renewed their pledges to further strengthen its framework, exposing stark differences over how a rulebasedmultilateraltradingsystem is being perceived today.The di- vergences have also squeezed the scope for a substantial, positive outcome from the ongoing 11th ministerial conference. Speaking at the plenary session of the ministerial, US trade representative (USTR) Robert Lighthizer said the WTO was increasinglybecoming a litigationcentred organisation, losing its essential focus on negotiation, apart from going soft on fastgrowing andwealthydeveloping countries. The EU, China, India and most others,however,called on all members to shore up to further bolster the rule-based multilateral trading framework. TheUSTRquestionedthespecial and differential treatment to majordevelopingnations,aveiled reference to countries like China and India.“We cannot sustain a situation in which new rules can onlyapplytothefew,andthatotherswillbegivenapassinthename of self-proclaimed development status,” he said. Continued on Page 2 DIFFERENTSTROKES ...WTO is losing its essential focus on negotiation and becoming a litigationcentred organisation. For the EU, this is clear: To preserve and to strengthen the rulesbased multilateral trading system. Let us join hands and take real actions to uphold the authority and efficacy of the WTO — ROBERT LIGHTHIZER, USTR — CECILIA MALMSTROM, EU TRADE COMMISSIONER — ZHONG SHAN, CHINA'S COMMERCE MINISTER STATE-RUN LENDER PUNJAB National Bank launched a `5,000-crore fund-raising programme late on Mondayevening through qualified institutional placement (QIP) of shares at a likelyprice of `168 pershare in a move that will shore up the bank’s capital adequacy ratio (CAR). The base size of the QIP is `3,000 crore or 17.9 crore shares, with an option to retain an additional `2,000 crore through issue of another 11.9 crore shares.Shares issued under the QIP will account for 14% of the bank’s total share capital, if the entire 29.8 crore shares are issued. The Delhi-based bank,which is the country’s second largest public sector lender, said the floor price of the shares is `176.35.“Adiscount of not more than 5%, or `8.80 to the floor price is herebyapproved,”Punjab National Bank said in a notification to the stock exchanges. DSPMerrill Lynch,Credit Suisse Securities (India), Goldman Sachs (India), HSBC Securities and Capital Markets (India), Kotak Mahindra Capital, Morgan Stanley (India) and PNB Investment Services are the book runners for the QIP. Analysts said the QIP, combined with the capital the bank has raised through selling its stake in PNB Housing Finance earlier this month, will strengthen the bank’s capital adequacy ratio. “PNB might seek another`5,000 crore to `10,000 crore from the government as a part of the government's recapitalisation programme,” an analyst with a large brokerage said on condition of anonymity.Analysts are largely of the view that this fund infusion should see the bank comfortably through till the end of this fiscal, and most likely till the recapitalisation resources are received. Continued on Page 2
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