OPINION, P8 COMPANIES, P6 EDITORIAL Higher CAD makes India vulnerable to portfolio flows INTERNATIONAL, P16 SHELLEY GOLDBERG MAKING WAVES EXIT IN MAY Trump's tariffs will push up costs for local manufacturers and will hit consumers Mukesh Ambani credits daughter Isha for Jio idea Longstanding Asian mogul Li Ka-shing hands reins to son MUMBAI, SATURDAY, MARCH 17, 2018 FOLLOW US ON TWITTER & FACEBOOK. APP AVAILABLE ON APP STORE & PLAYSTORE WWW.FINANCIALEXPRESS.COM READ TO LEAD VOLUME XXXXXV NO. 308, 22 PAGES, `8.00 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: 33,176 ▼ 509.54 NIFTY: 10,195.15 ▼ 165 NIKKEI 225: 21,676.51 ▼ 127.44 HANG SENG: 31,501.97 ▼ 39.13 `/$: 64.94 ▼ 0.01 `/€: 80.03 ▲ 0.20 BRENT: $64.90 ▼ $0.22 GOLD: `30,299 ▼ `21 END OF 4-YEAR-ALLIANCE TDP pulls out of NDA coalition Local, global jitters spook markets S&P BSE SENSEX Intra-day, March 16 33,800 IN THE NEWS PMO approval to CV scrap policy, over 20-year-old vehicles face axe 33,685.86 33,176 33,400 THE MUCH-AWAITED VEHICLE scrap policy was given an ‘in-principle' approval at a high-level meeting at the PMO to pave way for mandatorily disposal of commercial vehicles (CVs) that are more than 20 years old from April 1, 2020, an official said, reports PTI. The development follows Union minister Nitin Gadkari's announcement that the vehicles scrapping policy, aimed at curbing vehicular pollution, has almost been finalised. An official said that since it is a major decision, the policy will go to the Cabinet for approval even though it does not require the council’s nod. YELLOW FEVER: TDP members of Parliament raise slogans demanding special status for Andhra Pradesh during the budget session in New Delhi on Thursday Says PM has no time for allies seeking rights; brings in noconfidence motion against govt LIZ MATHEW & SREENIVAS JANYALA New Delhi/Hyderabad, March 16 CARRYING OUT ITS threat “in the interest of the people of Andhra Pradesh”, the Telugu Desam Party(TDP),which try has full confidence in the prime minister as does the House. The government has the numbers...We are ready to take up everything.” Earlier, ending his party’s four-year alliance with the Bhartiya Janata Party (BJP) over denial of special category status to Andhra Pradesh, Naidu announced in Amaravati that he had decided to leave the NDA. Simultaneously, Thota Narasimhan, floor leader of the TDP in the Lok Sabha, gave notice to move a no-confidence motion against the BJP government. has 16 MPs in the Lok Sabha, walked out of the ruling NDA on Friday. TDP leader and Andhra Pradesh chief minister N Chandrababu Naidu, who directed his party to bring in its own no-confidence motion against the Modi government, told the state assembly that “BJP allies are fighting fortheirrights in Parliament”but the Prime Minister did not have time to address their concerns. The government,however, exuded confidence about its stability. Parliamentary affairs minister Ananth Kumar said:“The whole coun- Continued on Page 2 33,000 Previous close 33,685.54 Open SUNDAR SETHURAMAN Mumbai, March 16 INDIAN EQUITIES TOOK a sound beating on Friday as fresh fears over political, regulatory and global developments spooked investors. Benchmarks Sensex and Nifty ended the day with losses of over 1.5% each. While the Sensex shed 509.54 points to close at 33,176, the Nifty lost 165 points to end the session at 10,195. The move by N Chandrababu Naidu,who leads the Telugu Desam Party, to exit the ruling alliance and introduce a no-confidence motion Govt to get ~`12k a year if ENA in GST AG gives favourable opinion; move to help formalise the IMFL sector Close against the ruling NDA government sparked a fresh selloff in a market already weighed down with other concerns. “The regime continuity was taken for granted as far as India was concerned,but with recent developments there is some uncertainty. Investors are concerned about this and equity risk premium of India has started inching upwards,” said Gopal Agrawal, CIO, Tata Mutual Fund. Andrew Holland, CEO of Avendus Capital Alternate Strategies, seemed to concur. Continued on Page 2 THE IMMINENT INCLUSION of extra neutral alcohol (ENA) used for liquor production within the ambit of the goods and services tax (GST) will give a considerable boost to government revenue, besides assimilating a largely cashbased (and corruption-prone) sector into the formal economy, analysts said. Officials reckonthatan18%taxonENA for potable alcohol could yield a revenue of `1,000 crore a month,shareable between the Centreandstategovernments. While many states had opposed the bringing ENA of this variety under GST at a recent meeting of the GST Council,the Centre’s hand has been strengthened now with a favourable legal opinion from attorney general KK Venugopal.TheAG is learnt to have opined that since ENA itself is not fit for human consumption, bringing it under GSTwon’t require a Constitu- BINANI CEMENT TAKEOVER Notwithstanding the fact that PFC and RECL have corrected by 32% and 20%, respectively, in the last 12 months, there still isn't any reason to own these stocks ■ Investor, P15 Stephen Hawking: Making sense of time Did the universe have a beginning? What happened before that? Hawking used theoretical physics to find answers to impossible questions on the universe’s origin ■ Science & Tech, P15 QuickPicks UK judge: It’s ‘obvious’ Indian banks broke rules in Mallya case THE BRITISH judge hearing the extradition case of liquor baron Vijay Mallya on Friday said it was “blindingly obvious” that rules were being broken by Indian banks which sanctioned some of the loans to the erstwhile Kingfisher Airlines, reports PTI. Judge Emma Arbuthnot described the case as a “jigsaw puzzle” with different pieces of “massive evidence” to be put together to paint a picture, which she said she was now able to see “more clearly” than a few months ago. PAGE 19 PNB-led consortium looks to offload 51% stake in Jindal unit LED BY PNB, a consortium of lenders to Jindal India Thermal Power (JITPL) is looking to offload 51% stake in the company, reports fe Bureau in Mumbai. This is the second attempt by lenders after a similar effort in August last year. “The security trustee to the lenders of JITPL holds 51% of equity shares on behalf of the lenders. The Lenders now propose to sell these shares,” the bid document said, adding that the debt on the balance sheet of JITPL may be refinanced. PAGE 6 Edelweiss scraps deal to buy Religare unit; shares fall EDELWEISS FINANCIAL Services said on Friday its acquisition of Religare Enterprises' securities business fell through after Religare failed to get the necessary regulatory approvals, reports Reuters. Edelweiss Financial, the wealth management unit of Mumbai-based Edelweiss Group, said in December it would buy Religare's securities business for about `250 crore ($38.5 million). Shares of Religare and Edelweiss fell by up to 2% following termination of the deal. Creditor panel picks Dalmia Bharat bid Binani Cement (FY17, ` crore) Binani Inds 6,000 4,500 3,000 1,500 6,000 1,527 Net loss Total assets -2,000 3 -461 Net sales Net profit THE COMMITTEE OFcreditors (CoC) of the debt-laden Binani Cementhasapprovedtheresolution plan submitted by Dalmia Bharat-controlled Rajputana Properties to acquire the cement firm. This is the third resolution plan to be approved under the Insolvency and Bankruptcy Code, 2016, (IBC) for a large stressed asset. It follows Tata Steel being declared the H1 bidder for Bhushan Steel and LibertyHouse the highest preferred bidder for Amtek Auto earlier this month. “The CoC of Binani Cement has recommended the resolution plan to the National CompanyLawTribunal(NCLT)forits requisite approval,” Dalmia BharatsaidinstatementonFriday, adding that the resolution planhasreceivedalmost100% approval of the CoC members. Continued on Page 2 Binani Industries moves NCLAT over sale of Binani Cements, Page 6 1.4 1 Total debt “Binani’s acquisition is the firstbillion-dollartransactionat the bankruptcy court where all secured financial creditors are being paid 100% of their verifiedclaims,”BharatDalmiasaid. As per details on Binani Cement’s website, financial creditors of the company had claimed`6,470.26crore,while the NCLT had admitted claims worth `6,469.36 crore. Creditors to Binani Cement include State Bank of India,IDBI Bank, Canara Bank, Bank of Baroda, Bank of India and Edelweiss Asset Reconstruction Company, among others. Binani Cement is the flagship unlisted subsidiaryofBinaniIndustries. InFY17,BinaniCementhad posted a net loss of `348 crore on revenues of `1,527 crore, according to Capitaline data. 2.5 2 2 Source: Capitaline FE BUREAU Mumbai, March 16 Continued on Page 2 Current account deficit Dalmia Bharat 345 0 348 Sales turnover tional amendment. Currently, ENA (for potable alcohol) is not taxed by either the Centre or state governments, even though Maharashtra and Karnataka have tried to bring it undertheir tax administrations. However, ENA used for industrial alcohol is taxed at 18%;also,itsrawmaterialsugarcane molasses attracts the peak GST rate of 28%. “Pharmaceutical companies using ENA would be able to claim input tax credit (ITC) if GST Council brings ENA in GST fold,” Abinash Verma, director general of Indian Sugar Mills Association said. (% of GDP) 2,000 0 -1,500 4,000 ENA for industrial use is already taxed 18% CAD widens to 2% of GDP in Q3 5,075 10,000 8,000 Nearly 160 crore litre of ENA being produced every month ● ON THE RISE 6,595 8,040 No grounds for backing the power financiers 3,666 7,016 Special Features Govt to garner over `1,000 crore a month from GST on ENA for potable alcohol SUMIT JHA New Delhi, March 16 33,600 33,200 ENABLING PROVISION 0 Boxing day BEGINNING SUNDAY Uber, Ola drivers say to go off roads DRIVERS OF CAB aggregators Uber and Ola have threatened to go on an indefinite strike from the midnight of March 18.The strike is expected to be observedincitieslikeMumbai, New Delhi, Bengaluru, Hyderabad and Pune,among others. “Ola and Uber had given big assurances to the drivers, but today they are unable to cover DRIVERSPEAK ■ Defaulting on repay- ment despite assurances as costs are not covered ■ Rue priority given to company-owned cars over driver-owned ones their costs.They have invested `5-7lakh,andwereexpectingto make`1.5lakhamonthbutare 0.6 0.6 Q2 Q3 Q4 FY17 Q1 Q2 Q3 FY18 FE BUREAU Mumbai, March 16 Prime Minister Narendra Modi with boxer MC Mary Kom and Manipur chief minister N Biren Singh during the launch of development projects in Manipur on Friday PRESS TRUST OF INDIA Mumbai, March 16 1.1 unabletoevenmakehalfofthis, owing to the mismanagement bythesecompanies,”Maharashtra Navnirman Vahatuk Sena’s Sanjay Naik,who is organising the strike,told PTI on Friday. Naik also said these companies gave first priority to company-owned cars rather than driver-owned vehicles. While Ola declined to comment, an Uber spokesperson termed the strike call speculative. INDIA’S CURRENTACCOUNT deficit (CAD) jumped — both sequentially and on an annual basis—intheOctober-December2017quarterasaccelerated importsbyarevivingeconomy widened the country’s merchandise trade deficit. According to balance of payments data released by the Reserve Bank of India (RBI) on Friday,the CAD stood at $13.5 billion or 2% of GDP in Q3FY18, compared with $8 billion or 1.4% of GDP in the year-ago quarter. The deficit had risen to a three-year high of $14.3 billion or 2.4% of GDP in Q1FY18, but since moderated to $7.2 billion or 1.1% of GDP in the subsequent quarter. Continued on Page 2 BAD PR After Kylie, RiRi drags down Snap shares REUTERS Los Angeles, March 16 POP STAR RIHANNA urged fans on Thursday to delete Snapchatafterthesocialmedia app ran an ad making fun of her 2009 beating at the hands of then boyfriend Chris Brown. Shares of Snap, the company that makes the app, were down 4.7% in trading on Thursday. Rihanna “SNAPCHAT I know you know you ain’t my fav app out there! But I’m just trying to figureoutwhatthepointwaswith this mess!,”the singerwrote on Instagram onThursday. “You spent money to animate something that would intentionallybringshametoDV victims and made a joke of it!!!,” sheadded,referringtodomestic violence.“Shameonyou.Throw thewhole app-oligyaway.” The “Wild Thoughts” singer, 30, was speaking out after Snapchat earlier this week apologised and took down an advert on its platform for a mobile video game called “Would You Rather!” The ad showed pictures of Rihanna and Brown with the captions “Slap Rihanna” and “Punch Chris Brown.”Both the ad and the gamewere unaffiliated with Snapchat. R&B singer Brown pleaded guiltyto assaulting Rihanna in 2009 in an incident that made headlines around the world when a photo of her bruised face was released. Snapchat on Thursday said the ad was “disgusting and nevershouldhaveappearedon ourservice”.“Wearesosorrywe made the terrible mistake of allowingitthroughourreview process.Weareinvestigating how that happened so that we can make sure it never happens again,” the companysaid in a statement. Rihanna’s comments werethelatestbadpressfor Snapchat. Continued on Page 2 Kylie Jenner
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