OPINION, P8 ECONOMY, P2 INTERNATIONAL, P14 REALTY WOES 007 FAVOURITE All housing projects will eventually come under Rera, says Puri Palmer-led Aston Martin gears up for London stock market float EDITORIAL Govt just trying to confuse the issue of FDI in retail sector UP thieves use a Unique model to steal rations, but they can't beat the Unique ID! NEW DELHI, THURSDAY, AUGUST 30, 2018 FOLLOW US ON TWITTER & FACEBOOK. APP AVAILABLE ON APP STORE & PLAYSTORE WWW.FINANCIALEXPRESS.COM READ TO LEAD VOL.XLIV NO. 155, 22 PAGES, `6.00 (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: 38,722.93 ▼ 173.70 NIFTY: 11,691.90 ▼ 46.60 NIKKEI 225: 22,848.22 ▲ 34.75 HANG SENG: 28,416.44 ▲ 64.82 `/$: 70.59 ▼ 0.49 `/€: 82.32 ▼ 0.31 BRENT: $76.51 ▲ $0.56 GOLD: `30,048.00 ▼ `49.00 RBI ANNUAL REPORT Nearly all junked notes returned IN THE NEWS SC orders house arrest for five rights activists FIVE HUMAN rights activists, arrested in connection with the Bhima-Koregaon violence case on Tuesday, would be kept under house arrest till September 6, the Supreme Court ordered on Wednesday, observing that dissent was the "safety valve" of democracy, reports PTI. The SC also questioned the Maharashtra police's move to arrest them nine months after the incident. SC refuses to stay Delhi HC order on Singal’s release THE SUPREME Court on Wednesday refused to stay the Delhi High Court order that granted interim bail to Bhushan Steel’s erstwhile promoter Neeraj Singal, reports fe Bureau in New Delhi. He was arrested by the Serious Fraud Investigation Office (SFIO) for allegedly siphoning off more than `2,000 crore from loans availed by the company. Opposition slams govt; govt points at low cash-to-GDP ratio, elevated digitisation, check on fake currency Cash-to-GDP ratio FE BUREAUS Mumbai/New Delhi, August 29 `15.31 lakh crore AS MUCH AS 99.3% of the demonetised high-value notes returned to the banking system, the Reserve Bank of India’sannualreportfor201718 said on Wednesday, a longawaited revelation that triggered a political slugfest over the efficacy or lack of it of the unprecedented move, which was aimed primarily at curbing the black money menace. The banned currencynotes are referred to as specified bank notes (SBNs). Junked `500 and `1,000 notesworth `15.31 lakh crore, out of `15.41 lakh crore in circulation as of November 8, 2016, when the government announced that these notes were no longer valid, found theirwaybacktobanks.This means only`10,720crore of the banned notes did not come back into the banking system. Speaking on the report, economic affairs secretary Subhash Chan- (%) 12.1 Mar 2016 8.8 10.9 Mar 2017 Mar 2018 Worth banned `500 and `1,000 notes came back to banks `15.41 lakh crore High-value notes in circulation when note ban was announced `10,720 crore Junked banknotes that didn't return dra Garg, however, asserted that demonetisation substantially achieved its intended objectives, including curbing blackmoneyandterrorfinancing,andpromotingdigitalpayments. The cash-to-GDP ratio is lower than the pre-demonetisationlevel.Hadthegovernment wanted to maintain the same cash-to-GDP ratio,some `3 lakh crore additional cash would have had to be injected intothesystem,headded.Also, due to the introduction of severalsecurityfeatures,theproblem of counterfeit currency has been addressed to a considerable extent, Garg said. Shuttingdownofshellcompanies, expanding the tax base have also been cited by the BJP as the signs of demonetisation’s success, but the opposition pointed out that of the cash that had remained out of the banking system and returned to it due to note ban, how much is black or white could not be known until each case was finally adjudicated. Former finance minister P Chidambaram, however, said the note ban was an exercise in futility and that the economy lost 1.5 percentage points of growth,whichwilltranslateinto a loss of `2.25 lakh crore ayear. The government, he recalled, claimed SBNs worth `3-4 lakh crore would not returnandthiswindfallgainof the RBI would be transferred to it. Continued on Page 2 MUMBAI POWER BIZ Special Feature A new level of experience with Samsung Galaxy Note9 If the Galaxy Note9 is the only device you have, and you don’t have a laptop or a tablet, you’ll be just fine. But you have to get used to this Samsung device’s bigger size ■ Gadgets, P13 QuickPicks Rupee dives 49 paise to end at fresh lifetime low of 70.59 THE RUPEE on Wednesday slipped to a record low of 70.64 against the dollar in intra-currency trade and staged only a limited recovery to end the session at 70.59, reports Tushar Goenka in Mumbai. The local currency has now lost nearly 10% since January, making it Asia's worst-performing currency. Dealers said it was possible exporters may also have sold dollars, allowing the rupee to recover some lost ground. Apart from a strengthening dollar, the rupee has also been impacted by the contagion effect of the steep depreciation of the Turkish lira and the accompanying fall in other EM currencies. PAGE 10 India Post Payments Bank’s spending raised by 80% THE CABINET on Wednesday approved an 80% increase in spending for India Post Payments Bank (IPPB) to `1,435 crore, three days ahead of its slated mega nationwide launch by Prime Minister Narendra Modi, reports PTI. The governmentbacked IPPB is set to go live with 650 branches and 3,250 access points across the country on September 1. It will offer financial services in rural areas including savings and current accounts, money transfer, direct benefit transfer, bill and utility payments and enterprise and merchant payments. PAGE 2 India expects clarity on Iran oil cut after US meeting INDIAWILL not completely halt Iranian oil imports and will finalise its strategy on crude purchases from Tehran after a meeting with top US officials next week, a senior government official told Reuters. US secretary of state Mike Pompeo and defence secretary Jim Mattis will hold high-level talks with foreign minister Sushma Swaraj and defence minister Nirmala Sitharaman on September 6, in what is known as a 2+2 dialogue. "Definitely, we are not going to zero (purchases),” said the official, who has direct knowledge of India's oil purchase policy and did not wish to be identified. PAGE 12 Adani deal slashes R-Infra’s debt load FE BUREAU Mumbai, August 29 RELIANCE INFRASTRUCTURE (R-INFRA) on Wednesday said that it has cut its debt to about a third to just `7,500 crore, following the sale of its Mumbai power distribution business to Adani Transmission in a deal valued at `18,800 crore. The company, which had a gross debt of about `22,000 crore prior to the deal, has reduced its debt by `13,800 crore from the deal proceeds and is now aiming to be debt free in another year, Reliance Group chairman Anil Ambani said.“In addition,we have over `5,000 crore of cash inflows from past regulatory assets which will flow to Reliance Infrastructure and not to Adani. We also have a further cushion of arbitration worth `8,000croreyettobedecided,” Ambanisaid.Headdedthatthe company’s debt-to-equity ratio after the deal now stands at 0.3. At the end of FY18, the company’s gross debt-toequitystood at 0.87,according to Bloomberg data. Reliance Group chairman Anil Ambani AmbaniaddedthatR-Infra’s annual interest cost will also come down from `2,600 crore to `800 crore. The company reported an 18.7% year-onyear(y-o-y) drop in net profit to `272 crore for the quarter ended June 30, 2018. Total income was only marginally highery-o-y,at `7,991 crore. Thecompany’smetrooperations, Mumbai Metro One PrivateLimited(MMOPL)have been a drag on its business as the companyreported a loss of `68 crore in the first quarter this fiscal. Looking up The Cochin International Airport resumed operations on Wednesday, a fortnight after it was shut down due to the floods that ravaged Kerala. Among the busiest, it is estimated to have lost `220-250 crore EXPRESS PHOTO STRESSED POWER ASSETS ● TATA SONS OUSTER Panel to discuss ARC, no fiat to RBI under Section 7 Finance ministry feels RBI Act to be invoked only in ‘extraordinary circumstances’ POWER PLAY ■ Panel open to the proposal of setting up an ARC headed by Cabinet secy to have final say on whether to ask RBI to modify its order ■ Finmin is not ■ A fifth of ■ RBI is BANIKINKAR PATTANAYAK New Delhi, August 29 THE EMPOWERED COMMITTEE on power, in its crucial meeting on Friday, could discussaproposaltosetupanasset reconstruction company (ARC) to take over banks’ stressed power assets, among other options,officialsourcestoldFE. However, the government isunlikelytodirecttheReserve Bank of India (RBI), using power under Section 7 of the RBI Act for the first time, to give special relief to the power sector from the central bank’s February 12 circular that has specified that if a resolution plan was not found by August 27, insolvency proceedings must be invoked against keen to direct RBI to offer special relief to power sector `10.3-lakhcrore gross NPAs in banking belongs to the power sector defaulting companies. One of the sources said the finance ministry is not willing to invoke the RBI Act, as any such step is meant to be taken onlyin“extraordinarycircumstances”.“Such a step will create a bad precedent and spur similardemand forrelief from other sectors reeling under stressed assets (such as steel, textiles and other infrastructure sectors),”he added. Nevertheless, the panel, headed by the Cabinet secretary,will take a final call on this issue. The finance ministry, however,feelstheregulatorwill take a pragmatic approach in addressing the power sector crisis. According to its assessment,lessthanadozencompaniescouldgetimpacted,halfof which can be revived, and the rest might be dragged to insolvency courts,said the source. Continued on Page 2 Ahead of the pack BLOOMBERG Racing to the 40,000-point mark Rallying 80-fold in a little more than three decades, the Sensex has blown past other major equity benchmarks to close in on the round-number milestone. 40,000 Hang Seng 30,000 Nikkei 225 Stock Average Sensex 38,896.63 28,351.62 26,064.02 22,813.47 20,000 20,000 Dow Jones Industrial Average 0 1979 1990 2000 2010 Aug 28, 2018 Source: Bloomberg Continued on Page 2 NCLAT admits Mistry’s plea SURYA SARATHI RAY New Delhi, August 29 THE NATIONAL COMPANY LawAppellateTribunal(NCLAT) on Wednesday admitted a petition moved byoustedTata Sons chairman Cyrus Mistry, in his personalcapacity,seekingtoset aside an order of the Mumbai benchoftheNationalCompany LawTribunal (NCLT) upholding his removal.In the July 9 order, the NCLT bench had dismissed Mistry’s plea challenging his removalasTataSonschairman. The appellate tribunal also issued notices to Tata Sons and otherrespondents,askingthem to reply in 10 days.The matter willnowbeheardonSeptember 24 along with the original plea filed by Cyrus Investments (Mistry’sfamilyfirm)challenging Mistry’s ouster. During the course of the hearing, Tatas’ counsel stated that they would wish to raise objectionsonthemaintainabilityof the petition.However,the two-member NCLAT bench, headedbyjusticeSJMukhopadhaya,refused.“Howcantherebe anobjectiontoanappeal?Don’t argue on maintainability, file yourreply,”the bench said. In his plea, Mistry also sought expunging of remarks and some words used in the July 9 order. On August 24, the NCLAT had passed an order over the petitions filed by the investments firm of the Mistry family and directed Tata Sons not to force the companies to sell theirsharesintheTata holding firm, but it refused to stay the conversion of the holding firm into a private company from a public limited one. Continued on Page 2 4G COVERAGE The new C-suite: Jio’s C category circles put it in a sweet AGR spot FE BUREAU New Delhi, August 29 RELIANCE JIO’S SURGING adjusted gross revenue (AGR) is on the back of its 4G coverage, which touches the country’s C-category circles where the legacy players have not been able to launch similar services yet on a similar scale. This is, of course, aided by its cheap JioPhone, which is a 4G feature phone, again something its rival incumbents have not been able to effectively counter. The April-June industry adjusted gross revenue data brings out this trend clearly.As reported by FE earlier, during the quarter Jio came on top, beating Bharti Airtel in access serviceAGRat`7,125.69crore compared with Bharti’s `6,723.54 crore.After adding the national long distance revenue,though,Bharticontinues to remain on top with an AGR of `10,192.12 crore, against Jio’s `7,200.40 crore. However,what’s interesting AGR (including NLD) market share 40 35 (%) 35 31.7 30 25 20 15 23.4 19.5 22.4 19.3 15.4 10 5 0 -5 -2.7 Q1FY18 Q2FY18 Source: Trai, company data Q3FY18 Q4FY18 Q1FY19 NLD: National long distance is that the bulk of Jio’s AGR has comefromCcircleswhichcomprise Himachal Pradesh, Bihar, Odisha,Assam, Northeast, and Jammu and Kashmir. On a sequential basis, the industry’s AGR in these circles during the quarter rose 17.2%,contributing 17% to Jio’s AGR, versus industrycontributionof12.8%. In fact, Jio’s AGR is metro circles dipped by 0.9% on a sequential basiswhere incumbents like Bharti offer strong 4G services. Analysts explain Jio’s better performance in the C circles compared with incumbents because the latter have not yet launched 4G services in them whereas they have launched them in metro and A category circles. “Jio has freewayin C-circles due to lower4G network penetration by Bharti,” a report by ICICI Securities noted, adding “Whether Jio can sustain performance in B&C circleswhere incumbents are fast expanding network is key to watch.” Continued on Page 2
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