OPINION, P8 COMPANIES, P6 SUNIL JAIN Proper garbage management means less graft XTREME MOVE DENUCLEARISATION BJP's oil-tax hike looks a lot less steep when you take into account the UPA's huge subsidies CHANDRA BHUSHAN INTERNATIONAL, P14 Hero MotoCorp signs up Virat Kohli as brand ambassador N Korea's Kim asks Trump for another meet in 'very warm' letter NEW DELHI, WEDNESDAY, SEPTEMBER 12, 2018 FOLLOW US ON TWITTER & FACEBOOK. APP AVAILABLE ON APP STORE & PLAYSTORE WWW.FINANCIALEXPRESS.COM READ TO LEAD VOL.XLIV NO. 166, 20 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: 37,413.13 ▼ 509.04 NIFTY: 11,287.50 ▼ 150.60 NIKKEI 225: 22,664.69 ▲ 291.60 HANG SENG: 26,422.55 ▼ 190.87 `/$: 72.70 ▼ 0.25 `/€: 84.21 ▼ 0.37 BRENT: $77.76 ▲ $0.39 GOLD: `30,605 ▲ `203 RELIEF TO FIRMS SC halts IBC process under RBI mandate Move may help SBI revive Samadhan scheme for power assets; others too to IN THE NEWS explore alternative I-T dept sells more resolution plans Cairn shares to recover retro tax THE I-T DEPARTMENT has sold more of Cairn Energy's shares in Vedanta to recover a part of the `10,247-crore retrospective tax demand, reports PTI. The taxman, which had in May and June sold a little under 2% Cairn's holding in Vedanta for about $231 million, sold a further 1% last month when an international arbitration tribunal was holding the final hearing against the imposition of retrospective tax. Unlisted cos must issue new shares in demat form AS PART OF its drive against benami entities, the government said unlisted public companies have to compulsorily issue new shares in demat form beginning October 2, reports fe Bureau in New Delhi. The move follows the Sebi's June 8 directive that tightened the norms for listed companies. MAJOR GAINERS `1.75 lakh crore Stressed power projects' exposure to lenders FE BUREAU New Delhi, September 11 ` To get relief from the SC order THE SUPREME COURT on Tuesday asked the Reserve Bank of India (RBI),banks and others to desist from invoking insolvency proceedings against corporate defaulters as per the banking regulator’s mandate till its orders,a move that would enable scores of stressed units in the power, textiles, sugar and shipping industries to avoid being immediately dragged by their lenders to the insolvency arena and look for alternative ways for resolution.The court will hear the matter next in mid-November. As per the RBI’s February 12 circular, lenders had to identify projects with even a day’s default and come out with a resolution plan within 180 days from the reference date of March 1,2018 (that is, by August 27, 2018). The circular had compelled banks to take these firms to the National Company Law Tribunal (NCLT) under the Insolvency and Bankruptcy Code (IBC) right Company ` Plant/ Outstanding capacity (MW) debt (` cr) 1,370 Raikheda 8,173 1,200 Mahan 5,951 1,980 Bara 11,493 3,600 Akaltara 17,194 1,200 Binjkote 4,801 GMR Energy Essar Power JPAssociates KSK Power SKS Power Lead lender Axis Bank ICICI Bank SBI PFC SBI Stressed power assets: 40,130 MW of which already in NCLT: 7,000 MW Resolved: 8,820 MW away; even some serious attempts by large banks like State Bank of India (SBI), which would have helped existing promoters to retain part of their stakes in some stressed but apparently revivable units,were hamstrung by the circular’s stringent time schedule. “The SC orderhas provided a great relief to power-sector stressed assets. This would provide time for bankers to finalise resolution plans for projects with combined capacity of about 13 gigawatts. The resolution plans (outside the IBC purview) were in their final stages and a high-level empowered committee under the chairmanship of Cabinet secretary was to submit its report on corrective actions,” said Ashok Kumar Khurana, director general, Association of Power Producers (APP). Continued on Page 2 ESSAR STEEL BID QuickPicks Arcelor to pay dues only after SC order Yes Bank raises $400 million via syndicated loan facility YES BANK said it has raised $400 million (approx `2,894 crore) through a syndicated loan facility, borrowed out of its IFSC Banking Unit (IBU) in Gujarat International Finance Tec City (GIFT), reports PTI. Yes Bank MD and CEO Rana Kapoor said the $400-million loan syndication reinforces the bank's ability to raise substantial foreign currency resources through various product instruments at a competitive price. PAGE 10 FE BUREAUS Mumbai/New Delhi, September 11 ARCELORMITTAL, ONE OF the bidders for the bankrupt Essar Steel, which was asked by the National Company Law AppellateTribunal (NCLAT) to clear dues of `7,000 crore of firms it was previously associated with by September 11 to be eligible to bid, did not pay up on Tuesday. The companywillwait fora direction from the Supreme Court that it moved on Monday challenging the appellate tribunal’s order. The SC on Tuesday agreed to hear the petition on Wednesday. Challenging the NCLAT order, ArcelorMittal said in its petition that the order fails to explain how this money has to be paid and also fails to recognise that some financial arrangement would have to be made to make these funds available to the debtor companies.The company said Rupee impact: ‘Non-essential imports’ under govt lens THE RUPEE plunge has prompted the government to step up its scrutiny of “high-value and relatively non-essential imports” such as those of gold to gauge their debilitating impact on trade and current account balance, reports Banikinkar Pattanayak in New Delhi. Aweak rupee has dashed any hope of a cut in the import duty on gold from the current 10% despite demand from several quarters, a senior official said. PAGE 2 SBI puts eight NPA accounts worth `4,000 crore on sale STATE BANK of India on Tuesday put on sale eight non-performing accounts worth `3,948 crore on sale, reports Shritama Bose in Mumbai. All eight assets, including Jai Balaji Industries and Ballarpur Industries, are being offered on a 100% cash basis, with haircuts ranging between 36% and 67% for seven of them. For one account — Modern India Comcast — SBI has set a reserve price 27% higher than its outstanding. PAGE 15 CASE FILE ■ Arcelor had agreed to clear dues worth `7,000 cr dues of Uttam Galva and KSS Petron only if allowed to take control of Essar ■ It increased its bid for Essar Steel to `42,000 cr, Numetal has offered `37,000 cr ■ Numetal's second bid for Essar considered eligible by the NCLAT ■ Essar owes `49,000 cr to its lenders, including lead bank SBI that currently it is not even a shareholder of these companies and so far as one of them, KSS Petron,is concerned,at no point of time was it even a related firm. Continued on Page 2 LITTLE FESTIVE GLITTER Weak retail sales begin to worry auto makers %change » 84,668 2.9 Commercialvehicles 65,310 » Two-wheelers 1,946,811 287,186 -2.4 » August '18 Passengervehicles 1,891,062 August ‘17 » WITH INVENTORY LEVELS of passenger vehicles with dealers crossing the 4-6-week mark,manufacturersarekeeping their fingers crossed regarding sales prospects duringtheOctober-Novemberfestival season.Manufacturers FE spoke to said that sales inventory of 4-6 weeks with dealers is normal but once it goes past that, it means that retail sales areweak,whichiscurrentlythe case. For the first time in the current calendar year, manu- Domestic auto sales in Aug 2018 294,335 FE BUREAUS New Delhi/Mumbai, September 11 29.5 Source: SIAM facturers seem worried. Sales during August slid because of floods in Kerala and a few other states, and manu- facturers were unable to shift demandtootherregions.Since the period of shraadh is observed in September in much of the country during which new purchases are considered inauspicious, manufacturers are not very hopeful of sales picking up during the current month. “Ifretailsalesdonotpickup, dealers may not be ready to accept fresh despatches for the festival season,in which case it will be a big dampener. However,we are hoping that nothing untoward happens and festival season sales are back to normal,” an industry executive said.“However,at this stage it is abitearlytoforecast,”headded. Continued on Page 2 FUEL TAXES States get a third more than Centre Taxes collected for every litre of fuel sold When you buy petrol at `81/litre, `24 goes to states’ kitty and Centre gets `15 (`) States SAURABH KUMAR New Delhi, September 11 IF EX-REFINERYTAXES themselves are about half the retail price of every litre of petrol sold in the country, the larger share of these go to the state governments. To illustrate, when a consumer in Delhi paid `80.87 for a litre of petrol on Tuesday, she ` Petrol Diesel Centre 23.89 15.50 14.66 12.25 Retail prices in Delhi on Sept 11: `80.87/litre (petrol), `72.97/litre (diesel) enriched the coffers of state governments, including Delhi’s own,by`24.She,however, added just `15 to the Centre’s kitty, which takes most of the political heat over the rising prices of fuels. In the case of diesel too,the states take the larger tax pie — `15.50 per litre against a little Trade war jitters FE BUREAU over `12 for the Centre. What makes it incumbent on states to give consumers somereliefmorethantheCentreisthattheirkittyswellswith increasing prices of fuelswhile the Centre’s doesn’t. As reported byFE earlier,while oil companies now sell petrol to dealers at prices 12% higher than five months ago, major state governments’ gains in the form of extra tax mop-ups are over `1 crore per day; `5.5 crore in the case of Maharashtra,for instance. Continued on Page 2 Petrol, diesel prices hit fresh highs, Page 12 eFE P15 Sensex tanks, ` at new lifetime low, bonds rise The Sensex crashed 509 points to close at its lowest in more than a month. The rupee hit a new lifetime low of 72.73 in intra-day trade before recovering to close at 72.69, while benchmark bond yield rose to 8.18%, its highest level since November 2014. S&P BSE SENSEX 39,000 `/$ 37,413.13 68.00 68.43 10-year bond yield (%) (inverted scale) 8.065 69.50 38,500 37,521.62 8.184 8.220 72.70 38,000 71.00 7.910 37,500 72.50 7.755 37,000 Aug 1, ‘18 Sep 11, ‘18 74.00 Aug 1, ‘18 Sep 11, ‘18 7.600 7.701 Aug 1, ‘18 Sep 11, ‘18 More funds for research Jay Nadler and Arvind Pachhapur of Clarivate Analytics on how the pace of innovation is picking up in India with funding for research improving ■ eFE, P13
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