OPINION, P8 M&M, P10 INTERNATIONAL, P14 LETTER TO PATEL BREAK FROM PEERS RBI union supports Patel, says RBI should be ‘alert inspector’ Kuroda-led Bank of Japan holds tight to stimulus EDITORIAL Huge water scarcity ahead unless govt changes its policies More than govt policy, enrolment driven by rising education-premium MUMBAI, SATURDAY, JUNE 16, 2018 FOLLOW US ON TWITTER & FACEBOOK. APP AVAILABLE ON APP STORE & PLAYSTORE WWW.FINANCIALEXPRESS.COM READ TO LEAD VOL. 58 NO.142, 16 PAGES, `10.00 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: 35,622.14 ▲ 22.32 NIFTY: 10,817.70 ▲ 9.65 NIKKEI 225: 22,851.75 ▲ 113.14 HANG SENG: 30,309.49 ▼ 130.68 `/$: 68.02 ▼ 0.39 `/€: 78.84 ▲ 1.14 BRENT: $74.82 ▼ $1.12 GOLD: `31,068.00 ▲ `19.00 May 31, 2017 Promoters holding before offer 73.31% Offer amount SUNDAR SETHURAMAN Mumbai, June 15 THE BOARD OF Tata Consultancy Services (TCS) on Friday approvedaproposaltobuyback shares worth `16,000 crore. Themovecomesayearafterthe company completed a successful repurchase of its shares, on which too it spent `16,000 crore. This will be the biggest buybackinthelasttwodecades. The country’s biggest software services firm proposes to repurchase 7.61 crore shares at a price of `2,100 each, a 14% premium to the stock’s closing priceof`1,841.45onFridayon the BSE. The offer represents 1.99% ofthetotalpaid-upequityshare capitalofthecompany.Thepromotershold71.92%asonJune 8,2018.The companyhad cash and cash equivalents of `42,646 crore as on March 2018, data sourced from Bloomberg revealed. MD and CEO Rajesh Gopinathan said on the sidelines of the company’s annual general meeting it was beyond him to comment on what analysts expect.“Last year also the premium was close to about 18% and people were sceptical aboutit.Thisisnotadirectional Acquired amount (` cr) (` cr) 16,000 Promoter's holding after offer 73.57% Buyback offers in the last five years No of Issues 2014-15 10 2015-16 16 2016-17 49 2017-18 11,380 5,666 605 436 1,834 1,778 32 59 Offer amount Acquired amount (` crore) 34,468 33,931 53,307 52,847 An investment of `850 in a single share done during the IPO is now valued at over `16,000, accounting for the share splits and bonus issues N CHANDRASEKARAN TATA SONS CHAIRMAN dence over returns but any excess cash will be returned to shareholders. In 2017-18 cash-rich IT companies who returned their surpluses to shareholder, through share repurchases, droveupbuybackofferstoa20year high. In all, 59 companies completed their share repurchase offersworth a staggering `53,306.94 crore. Seven of thesebuybackoffersweremade by software services companies; they spent `44,984 crore or84% of the total amount. call. It is about what the board consideredwherethemarketis and where the opportunities are. It decided that this should be the right amount,” Gopinathan observed. The CEO said a capital allocation policy is paramount to the company.“We have always believed in rewarding shareholders and as the chairman mentioned we have steadily increased our payout,raising it totheupperendoftheband80100%,”he added. Gopinathan noted an acquisition or any other requirementwouldtakeprece- Continued on Page 2 CRISIS-HITJAYPEE group firm Jaiprakash Associates (JAL) has failed to deposit `1,000 crore in the Supreme Court's registry by the Friday deadline, reports Surbhi Prasad in New Delhi. The court had directed that in case of default in depositing the money by June 15,the statutory proceedings against JAL's arm Jaypee Infratech (JIL) shall proceed. Last month, JALwas directed by the SC to deposit `1,000 crore in the registry by June 15. This was in addition to `750 crore the firm had already deposited with the registry to ensure refund to home-buyers. PAGE 3 UK court orders Vijay Mallya to pay costs to Indian banks THE UK High Court has ordered embattled liquor tycoon Vijay Mallya to pay a minimum of £200,000 towards the costs incurred by 13 Indian banks in their legal battle to recover alleged dues, reports PTI. Last month, judge Andrew Henshaw had refused to overturn a worldwide order freezing Mallya's assets and upheld an Indian court's ruling that a consortium of 13 Indian banks led by State Bank of India was entitled to recover funds amounting to nearly £1.145 billion. PAGE 6 Called to account FY17 FY18 Axis Bank (%) Gross NPA FE BUREAU Rupee at 3-week low of 68.01 The rupee fell below the key 68-mark to a new three-week low of 68.01 against the dollar after the country's trade deficit widened more than expected amid renewed global trade war fears. 66.50 67.50 `/$ (inverted scale) 68.02 June 15, 2018 68.11 May 15, 2018 68.00 68.50 to oil refiners that the euro payment route to buy oil from Iran will be not available after November 3 ■ But alternative crude oil sources in West Asia, US and Russia can be tapped should Iranian supplies dry up due to this, a BPCL official has said (Iran)hastodecideifitwantsto tradewith us in rupee or sell oil on credit in anticipation of channels reopening in future,” Sharma said. India pays its third-largest oilsupplierineurosusingEuropean banking channels and imports can continue on alter- CRAR ● HARD NUMBERS Exports jump 20% in May, trade deficit widens FE BUREAU New Delhi, June 15 MERCHANDISE EXPORTS IN Mayjumped 20.2%,the fastest paceinsixmonths,asariseinoil prices helped boost outbound shipmentvalue,although engineering goods, chemicals and pharmaceuticalproductsregistered decent expansion. The trade deficitwidened to a four-month high of $14.62 billionasahighernetoilimport bill negated gains from a contraction in gold and precious stone imports. The labour- Continued on Page 2 New roadmap for mandatory purchase RPO targets (% of total power purchase) 17.5 FY19 FY20 19 21 3,679 276 Axis Bank ICICI Bank Return on assets Source: BSE The companyis expectedto make the investment through afundbackedbySaudiArabia’s government, NHK said. Saudi Arabiaisthelargestinvestorin SoftBank’s Vision Fund, which raised over $93 billion last year. A SoftBank spokesman declined to comment. In 2015 SoftBank pledged to invest $20 billion Holy day arrives Devotees offering namaaz outside the Jama Masjid on the occasion of the last Friday of Ramzan in Jaipur on Friday EXPRESS PHOTO: ROHIT JAIN PARAS in Indian solar projects with a goal of generating 20 gigawatts (GW) of energy as the majority partner in a joint venture with India’s Bharti Enterprises and Taiwan’s Foxconn. Last month SoftBank secured 200 megawatts of solar capacity at an auction in Karnataka. In April it teamed up with China’s GCL ILLUSTRATION: System Integration ROHNIT PHORE FY21 FY22 FE BUREAU New Delhi, June 15 SoftBank’s Son sees sunrise sector, to invest up to $100 bn SOFTBANK GROUP HAS decided to invest $60-100 billion in solar power generation in India, Japanese public broadcaster NHK reported on Friday. SoftBank and the Indian government are expected to reachaformalagreementsoon after final arrangements are made, the report said without naming its sources. intensive garment segments continued slide, with exports declining 16.6% in May.Leatherexports inched up only2%. Butwhatcouldcomfortpolicymakers is that, even discounting petroleum and gems and jewellery, exports rose a decent 13.9%.For the first two monthsofthisfiscal,non-petroleum and non-gems and jewelleryexportsgrew12.8%from a year ago, slightly higher than the 12.6% rise in overall goods exports during this period. ● RENEWABLE POWER INDIAN SOLAR REUTERS Tokyo, June 15 Continued on Page 2 17 9,801 6,777 18.42 8.84 FY17 FY18 ICICI Bank Net NPA Macro-liquidity shocks ■ SBI has communicated native modes should it be blocked,he said. Currently, oil firms first transfer funds to SBI,which in turn uses Germany-based Europaeisch-Iranische HandelsbanktopayineurostoIran. During the first round of sanctions in 2012 when European Union joined the US in imposing financial restrictions, India initially used a Turkish bank to pay Iran for the oil it bought but beginning February2013paidnearlyhalf of the oil import bill in rupees while keeping the remainder pending till opening of payment routes. It began clearing the dues in 2015 when the restrictions were eased. Besides,NewDelhisoughtto get around the restrictions by supplying goods including wheat,soyabeanmealandconsumer products to Iran in exchange foroil. Backin2012,EUputrestrictionsoninsuranceofIranianoil and ships carrying them.To get around the problem, Iran supplied oil in its own tankers. Net profit (` cr) FY17 FY18 0.87 Jaypee fails to deposit `1,000 cr in SC by deadline Detailed report on Page 14 OVER A BARREL Continued on Page 2 4.77 AMID HEIGHTENED fears of an escalating global trade war, senior officials from India and the US will soon hold talks to resolve contentious trade issues, including the US’ tight visa regime and a duty on Indian steel and aluminium supplies, according to commerce and industry minister Suresh Prabhu, reports fe Bureau in New Delhi. The minister was on a two-day visit to the US through June 12. Stakes are high as the officers' level meeting comes close on the heels of US President Donald Trump renewing his criticism of India’s alleged high-tariff regime. PAGE 2 17.39 Trade row: India, US officials to soon hold talks, says Prabhu IN A BLOW to Axis Bank, Fitch Ratings on Friday revised the outlook on the private sector lender to negative from stable, citing heightened asset-quality stress and weak earnings.Axis BankreporteditsfirsteverquarterlylossinQ4FY18.Theratings agency also downgraded ICICI Bank’ssupportratingto‘3’from ‘2’and revised the support ratingfloorto‘BB+’from‘BBB-’.The outlookonICICIremainsstable. While affirming the long- 1.35 QuickPicks PRESIDENT DONALD TRUMP on Friday announced that the USwillimplementa25%tariff on $50 billion of goods from China related to intellectual property and technology, and vowed to impose further levies iftheAsiannationtakesretaliatory measures.Trump said the tariff list includes goods from China’s “Made in China 2025” plan to dominate high-tech industriesthatwill“drivefuture economicgrowthforChina,but hurt economic growth for the and manyothercountries”. INDIA WILL FROM November not be able to use European banksformakingpaymentsfor crudeoilitbuysfromIranasUS sanctions against the Persian Gulf nation take effect, senior officials said on Friday. StateBankofIndia(SBI),the country’s largest lender, has communicated to oil refiners that the euro payment route will be not available after November 3,Indian Oil Corporation director (finance) AK Sharma said. USPresidentDonaldTrump had last month pulled out of a landmarknucleardealandsaid sanctions will be reimposed on Iranwithin 180 days. However, it is not “doomsday” for Indian refiners and alternative crude oil sources in WestAsia,US and Russia can be tapped should Iranian supplies dry up due to payment problems,Bharat Petroleum Corporation director (finance) R Ramachandran said. “Once the current payment channel is blocked, supplier term issuer default ratings (IDRs) and viability ratings for ICICI Bank and Axis Bank at ‘BBB-’ and ‘bbb-’, respectively, the agencyexpressedconcerns about capital buffers and gaps in risk controls at both banks. “[Axis Bank’s] capital buffers are less comfortable forits current rating despite raising fresh capital. ICICI’s capital buffers are better even though it has experienced similar financial deterioration in the previous fewyears,”it noted. FE BUREAU Mumbai, June 15 7.89 4.89 Lead and other heavy metals quickly amassed in the ice in 1888 and beyond, leaving a record of the industrial revolution. Scientists could learn much by digging into this same ice ■ Science & Tech, P13 Fitch cuts ratings of Axis, ICICI Bank 16.57 Polar ice pollution is liveblogging human history ● TRADE WAR SALVO 67.00 CAPITAL & RISK CONTROL Special Feature PRESS TRUST OF INDIA New Delhi, June 15 REUTERS Washington, June 15 16,000 2013-14 Iran oil payment route to be blocked from November Trump slaps 25% tariff on Chinese technology Closing date May 18, 2017 0.04 INDIA'S MONSOONS, which hit the southern coast late last month, are expected to make slow progress over the next two weeks and delay the onset of crucial rains over northwestern parts of India, private US-based weather forecaster Radiant Solutions, formerly MDA Earthsat, said, reports Reuters. Opening date 6.77 Monsoon seen slowing: US forecaster TCS LAST OFFER 3.4 STATE-OWNED FIRM NBCC plans to invest around `500 crore to acquire majority stake in two loss-making public sector firms, a top company official said, reports PTI. “We are gradually moving towards consolidation in the construction business. As a part of the strategy, we acquired lossmaking HSCL. We will be completing the acquisition of two more PSUs by the second quarter of this fiscal," the firm's CMD director Anoop Kumar Mittal said on on Friday. Proposes to repurchase 7.61 crore shares at `2,100 apiece; comes a year after similar buyback 14.95 NBCC to invest `500 cr to buy 2 loss-making PSUs TCS board okays up to `16k-cr buyback 0.65 WITH CHINA'S buffer stock of cotton coming down to barely a year’s inventory, the country has signed contracts for 5,00,000 bales of cotton from Indian traders for the new season, reports Nanda Kasabe in Pune. The country also announced an additional quota for 48 lakh bales, which it may begin procuring from July1. US SANCTIONS REWARDING SHAREHOLDERS 5.04 2.11 IN THE NEWS China inks pacts for 5 lakh bales of cotton from India Technologyon a $930-million Indian solar energyventure. India has set a target to achieve an operational solar power capacity of 100 GW by 2022,five times current levels, under Prime Minister Narendra Modi’s renewable energy strategy. SoftBank’s Vision Fund has exposure to solar energy through its investment in the world’s largest such project in Saudi Arabia announced in March. GIVING A FURTHER boost to theuptakeofrenewableenergy, the government has raised the minimum quantity of green power that states must procure to 21% of their overall power purchases in FY22 from 14.3% in FY18 (see chart). If the new roadmap for renewable purchase obligation (RPO) is complied with, the country will be consuming 273 billion units of renewables-based electricity in FY22,up 235% from now. India has made rapid stridesinrenewablepowersector in recent years but the potential bidders forsuch projects are concerned about the project costs going up if duties are imposed on solar panels fromabroad.Whilesolartariffs over many rounds of auction have fallen, analysts wonder if such low rates are sustainable. Continued on Page 2
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