OPINION, P8 COMPANIES, P6 BHUSHAN STEEL EDITORIAL Govt doing its best on Andhra, pity Naidu not convinced SC does well to tell UP it can't change investment rules in an arbitrary manner INTERNATIONAL, P16 $54-BILLION DEAL Subrahmanyan-led L&T moves NCLT seeking dues on priority David Cordani-led Cigna agrees to buy Express Scripts LUCKNOW, FRIDAY, MARCH 9, 2018 FOLLOW US ON TWITTER & FACEBOOK. APP AVAILABLE ON APP STORE & PLAYSTORE WWW.FINANCIALEXPRESS.COM READ TO LEAD VOL XI NO. 162, 24 PAGES, `5.00 P U B L I S H E D F R O M : A H M E D A B A D , B E N G A L U R U , C H A N D I G A R H , C H E N N A I , H Y D E R A B A D , K O C H I , K O L K ATA , L U C K N O W, M U M B A I , N E W D E L H I , P U N E SENSEX: 33,351.57 ▲ 318.48 NIFTY: 10,242.65 ▲ 88.45 NIKKEI 225: 21,368.07 ▲ 115.35 HANG SENG: 30,654.52 ▲ 457.60 `/$: 65.15 ▼ 0.26 `/€: 80.60 ▲ 0.04 BRENT: $64.10 ▼ $0.24 GOLD: `30,459.00 ▼ `106.00 BEEFING UP Jet mulls adding 75 planes IN THE NEWS Sebi returns NSE's consent application THE SECURITIES and Exchange Board of India (Sebi) has returned the National Stock Exchange of India (NSE) consent application seeking to settle a probe into the co-location case, reports fe Bureau in Mumbai. In a statement, NSE said it had received the letter from Sebi returning the consent application in the co-location matter on account of ongoing probes. The release said NSE intends to file the consent application after the completion of investigations. “NSE is committed to resolving the regulatory issues expeditiously. As stated earlier, the timeline for the IPO (initial public offering) is dependent on the resolution of the regulatory matters with Sebi, and we are hopeful we will be able to do the IPO in fiscal 2019,” the statement said. NSE had filed for a settlement with Sebi under the consent mechanism, after Vikram Limaye took over as its MD and CEO in July 2017. The colocation case relates to allegations that NSE allowed preferential access to certain brokers and traders through its co-location service between 2010 and 2015. Order, to be announced shortly, could be placed with either Boeing or Airbus; yet to take final call MANISHA SINGHAL Hyderabad, March 8 INDIA’S SECOND LARGEST airline Jet Airways said on Thursday that it is evaluating thepurchaseof75narrow-bodied aircraftworth about $7-8.5 billion. Jet CEO Vijay Dube said an orderforthe planes could be announced shortly. The company currently operates 119 aircraft and, together with JetLite,hasa16.6%shareofthe Indian market. However, the full-service carrier,whichreportedrevenues of `22,692 crore in 2016-17, did not specifywhether the aircraft manufactureris US-based Boeing or Europe’s Airbus. Jet had announced in October 2017 it was looking to place an orderforBoeing’snewversionof the narrow-body aircraft type MAX.However,onThursday,the FLIGHT PATH Jet Airways is evaluating the purchase of narrow-bodied aircraft worth about The company currently operates 119 aircraft and, together with JetLite, has a 16.6% share of the Indian market $7-8.5 billion Airbus already commands a secretary Rajiv Narayan Choubey said. Choubey,whowas addressing the media at the four-day international aviation summit Wings,saidAssam has decided to offer `100 crore annually for threeyears to launch international operations from Assam to the Southeast Asian markets. INDIAWILLINVITE initial bids forastakesaleinstate-runcarrierAirIndia in the next couple of weeks, civil aviation secretary Rajiv Choubey said on Thursdayduring an airshowin Hyderabad. The Union Cabinet gave the go-ahead last year to sell the flagship carrier, after successive governments spent billions of dollars in recent years to keep it solvent.However,the government has yet to decide onwhat to dowith the carrier’s debt burden of $8.5 billion. Companies including lowcost Indian carrier IndiGo, owned byInterGlobeAviation, TataGroupandTurkey’sCelebi Aviation Holdings have expressedaninterestinbuying some of Air India’s businesses. In January, India cleared a proposal to allow foreign investors to own up to a 49% stake in Air India, paving the way for global airlines to also bid forthe loss-making carrier. A committee of ministers, including finance minister Arun Jaitley,is in charge of the divestment process and has hired Rothschild and Ernst & Young as consultants. The government is considering splitting up Air India’s various businesses before offering it for sale to make it attractive to potential buyers. Continued on Page 2 Continued on Page 2 60% market share Airbus it would mean a nearmonopoly status for the European manufacturer which alreadycommandsa60%market share.Budget airline SpiceJet flies narrow-bodied Boeing 737s but the country’s largest airline,IndiGo,hasafleetof154 aircraftthatareallAirbusA320s (with someATRs). The Tata Group-promoted Vistara, which currently flies A320sandwilladdthe20thaircraft to its fleet this month,too ismullingexpansionofitsfleet. Continued on Page 2 ● TAKING WING UDAN 2.0 to focus on overseas flights FE BUREAU Hyderabad March 8 BUOYED BY THE success of Ude Desh ka Aam Nagrik or UDAN, the government is working on anotherversion of the scheme. States will now have the option to subsidise international flights from regions that are under-served but have the latent demand to become sizeable markets. “UDAN Version II will allow the state governments to provide subsidy for international flights to be launched from their states. UDAN has now become a platform where we have the expertise and the capability. If the state governments want to start flights to international destinations, the central government will provide a platform,”civil aviation First bids for AI stake sale in a couple of weeks REUTERS Hyderabad, March 8 If Boeing loses the deal to Airbus it would mean a near-monopoly status for the European manufacturer management did not specify whether the narrow-body planes being purchased would be the Boeing variant or one fromAirbus. “Wehopetocloseadealvery soon with one of the manufacturers.We were hoping to do it by the end of this fiscal but it may push a little further now,” Dube said. He was speaking to themediaonthesidelinesofthe three-dayannualaviationsummit,Wings,atHyderabad,where both Airbus and Boeing executives are present. If Boeing loses the deal to ● SECRETARYSPEAK METALS LEVY Special Feature Five checks while comparing mutual funds Investors should understand how schemes have performed during various market cycles managed by the fund manager before arriving at a decision ■ Personal Finance, P15 QuickPicks Direct tax collection increases 19.5% during April-February DIRECTTAX collection for the April-February period grew by 19.5% to `7.44 lakh crore against the 18.3% required growth for the current fiscal to meet the revised estimate target of `10.05 lakh crore, reports fe Bureau in New Delhi. Collections for corporate and personal income tax for the period rose by 19.7% and 18.6%, respectively, the government said. Experts attributed the growth to formalisation of the economy as a result of demonetisation and the roll-out of the goods and services tax. PAGE 2 Court dismisses RCom’s appeal against arbitration order A COURT has dismissed Reliance Communications's (RCom) plea against an arbitration court order that barred the telecom operator from selling or transferring its assets without the tribunal's permission, reports Reuters. The company intends to file an appeal against the interim order of the Bombay High Court, an RCom spokesman said in an emailed statement. IBBI brings in draft norms to govern regulation making THE INSOLVENCY and Bankruptcy Board of India (IBBI) has proposed to make regulations to govern the very process of making regulations and consulting the public under the insolvency law, in an unusual move for any regulator in the country, reports fe Bureau in New Delhi. It has now sought shareholders' comments by March 31 on the draft Insolvency and Bankruptcy Board of India (Mechanism for Issuing Regulations), Regulations, 2018. PAGE 3 Canada, Mexico to get initial exemption from US tariff BLOOMBERG Washington, March 8 THETRUMPADMINISTRATION willinitiallyexcludeCanadaand Mexicofromstifftariffsonsteel and aluminium imports, an exemption they would lose if they fail to reach an updated Nafta agreement with the US, WhiteHousetradeadviserPeter Navarro said onWednesday. The two nations won’t be subject to tariffs on their steel and aluminium if they sign a newNorthAmericanFreeTrade Agreementthatmeetsthesatisfaction of the US,Navarro said, adding that other American alliescoulduseasimilarsystem to ask foran exemption. If Nafta talks fall through, Canada and Mexico would face thesametariffasothernations, expectedtobe25%onsteeland Donald Trump, US President ■ Canada, Mexico would be spared stiff tariffs if they agree to new Nafta pact ■ Other US allies can also seek exemptions, White House trade adviser Peter Navarro says 10% on aluminium. “Here’s the situation, and the president has made this public,” Navarro said.“There’s going to be a provision which will exclude Canada and Mexico until the Nafta thing is concluded one way or another.” The decision-making process regarding the tariffs has evolved and more changes could be made before President Donald Trump formally approves them. China on Thursdayvowedtoretaliate,its most forceful comments yet on the threatened tariffs. “A trade war is never the right solution,” China’s foreign ministerWangYitoldreporters inBeijing.“Inaglobalisedworld, it is particularlyunhelpful,as it willharmboththeinitiatorand the target countries. In the event of a trade war, China will make a justified and necessary response.” Continued on Page 2 Women high-fliers The seniormost woman officer to have served in the Indian Air Force, air marshal (retired) Padmavathy Bandopadhyay, with the IAF’s first woman fighter pilot, flying officer Avani Chaturvedi STRESSED GENCOS ● ANDHRA’S DEMAND Don’t just hit SDR, solve issues: Panel Special tags no more: NK Singh FE BUREAU New Delhi, March 8 FE BUREAU New Delhi, March 8 STATING THAT FACTORS beyond the control of the promoters — like coal supply constraints, sub-optimal loading and lack of assured long-term offtake — have crippled dozens of private-sector power projects,a parliamentary committee has called for a more pragmatic approach by the lenders to these firms, rather than applying Reserve Bank of India (RBI)guidelines“mechanically”. Finding that the RBI’s strategic debt restructuring (SDR) scheme is not “efficacious enough as it doesn't resolve the reasons which have made the project NPA (non-performing asset)”,thestandingcommittee on energy recommended a reviewof the SDRguidelines so thatchangeinownership/management is pressed onlyafterit is established beyond doubt `1,85,000 cr Current cost of underconstruction projects, up 30% from first estimate; many now ‘stressed’ >20,000 MW Under-construction private coal-based power projects staring at ‘uncertain future,’ according to industry `63,000 cr Cumulative investments by firms in these uncertain projects till December, 2017 `1,74,000 cr Outstanding debt of 34 troubled projects with combined capacity of 40 GW reviewed by panel thatpromoter’snegligencewas the sole reason for a project’s stressed condition. Continued on Page 2 ‘No loans to certain discoms’ POWER MINISTER RK Singh has told state-owned power-sector lenders PFC and REC not to release any fresh loans to state-owned discoms that are making aggregate technical and commercial losses of more than 15%, reports fe Bureau in New Delhi. ANDHRA PRADESH’S CHANCES to get the coveted special category status from the 15th Finance Commission are slim. The practice of categorising states for resource transfers from the Centre outlived its utility, commission chairman NKSinghsaidonThursday,but added his mandate included workingfor“equitableandbalanced growth” across regions and lifting those states which arewellbelownationalaverage against various development parameters, above a certain threshold. ButSingh’spromisedoesn't meanmuchtoAndhraPradesh as a backwardness index similar to the ones recent Finance Commissions have used, is unlikely to put it particularly down the pecking order to be able to qualify for largesse.AP is resource-constrained but doesn’t fare very badly among statesintermsofdevelopment indicators like education, health, household amenities, poverty rate, female literacy and the like that a backwardnessindexislikelytocomprise. Details on Page 2 CBI SUMMONS ‘Impossible’ to return, says Choksi PRESS TRUST OF INDIA New Delhi, March 8 GITANJALI GEMS PROMOTER Mehul Choksi, who is under the scanner of investigating agenciesfollowingacomplaint byPunjabNationalBank(PNB), has said it was impossible for him to return to India and join the investigation. InanemailreplytotheCentral Bureau of Investigation’s (CBI)noticeseekinghisappearance,Choksi said he was not in a position to travel as his passporthasbeensuspendedbythe authorities and he was undergoing medical treatment. He added he was being threatened by individuals with whomhehasbusinessrelation- shipandduetotheseizureofhis assets,hisemployees,customers and creditors have started to showanimositytowards him. Choksialsoallegedtheissue was being “politicised” and the media was conducting a trial which was causing great prejudice to his fundamental rights. Details on Page 3 LEASING OUT OF RAILWAY LAND Project gathers pace, transfer of 30 land parcels by mid-April SAURABH KUMAR New Delhi, March 8 THE INDIAN RAILWAYS has fast-tracked its land monetisation project, a move that could potentially boost its investible resources. The Rail Land Development Authority (RLDA) will invite bids for commercial development of 30 land parcels by mid-April, an official source said, adding that the transporter's potential receipts as lease rentals from these land parcels could be around `7,000 crore over a period of 10 years. The railways’plan is to mop up at least `19,000 crore over the next fiveyears from land monetisation, which means more land parcelswill be put to commercial use soon. Lease rentals to IR over 10 years from 30 land parcels being bid out `7,000 crore “The RLDA is letting out land to developers who will be selected on the basis of premium (rentals) theyarewilling to pay. The premium `19,000 crore Targeted mopup from land monetisation over next 5 years Surplus land at the disposal of RLDA for leasing out 51,648 hectares Total vacant land with IR, a major part of this not commercially viable, being linear stretches on track sides 486 hectares ILLUSTRATION: SHYAM offeredforfivelandpieces—in Shimla, Bandra, Raxaul, Gwalior and Padi (Chennai) — that have been let out recently is around `72 crore. A Jhansi land is also ready (for leasing out) which will fetch `30.5 crore,”said the official.Tenders for nine other land parcels are already floated and six more will be done soon, he added. Developers will be free to decide the type of commercial use,which includes hotel,mall or anything that is commercially viable depending upon the location. The official said the transporter expects bigger sums as premium from Sarai Rohila (`2,000 crore) and Ashok Vihar (`1,500 crore) in Delhi, and another parcel in Bandra (`2,000 crore) in Mumbai. While developers are required to pay 10% of the total premium upfront, they can then enjoy a no-payment option for another two years. Payment will restart from third year onwards and will be staggered till the 10th year. “Developers though have the option of paying full premium upfront, if they so wish,” added the official. Continued on Page 2
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