OPINION, P6 ECONOMY, P2 SUNIL JAIN Unless IL&FS board penalised, directors will never learn INTERNAL CONSOLIDATION Tax dodges helped Trump inherit millions from dad’s empire TRUMP WINS PNB MD Mehta says acquiring other PSBs not on cards R BUETTNER, S CRAIG & D BARSTOW INTERNATIONAL, P4 After fight that split US, Kavanaugh sworn in as SC judge KOLKATA, MONDAY, OCTOBER 8, 2018 FOLLOW US ON TWITTER & FACEBOOK. APP AVAILABLE ON APP STORE & PLAYSTORE WWW.FINANCIALEXPRESS.COM READ TO LEAD VOLUME XXVII NO. 289, 14 PAGES, `6.00 (NORTH EAST STATES & ANDAMAN `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 TOUGH RIDE New-tech features to drive up scooter and bike prices Honda Activa 5G Bajaj Pulsar 150 Hero Deluxe i3S On road price (`) On road price (`) ce 1,08,954 « « 15% 57,115 « « 67,165 On road price (`) 18% 17% 1,01,954 Apr '20 Aug ‘18 The steep hike in prices will lead to a significant slowdown in the growth of two-wheeler volumes over the next two years HYDERABAD GROWTH STORY ARUN NAYAL New Delhi, October 7 MOTORCYCLESANDSCOOTERS are tipped to become expensiveoverthecourseofthe nextyearwithconsumerslikely to shell out anywhere between 10%and25%moredepending onwhatmodelsthey’rebuying. Of course, it’s already more expensive to drive a bike given how prices of petrol have soared. Unfortunately, the rise in prices of two-wheelers is going to be unusually sharp, especially when one considers that overthe past 10years orso they’ve not gone up by more than 5%.YS Guleria,seniorVP, sales & marketing, HMSI, WHATSDOWN Indian Air Force’s 86th Anniversary IN THE NEWS ‘Growth in India projected to accelerate further’ GROWTH IN INDIA is projected to accelerate to 7.3% in FY19 and 7.5% in the next two years, the World Bank said on Sunday, reports PTI. It said India appears to have recovered from the temporary disruptions. WITH MOBILE OPERATORS providingfreevoicecallsintheir bundled voice and data plans, consumers seem to be bidding goodbye to WhatsApp for makingdomesticlongdistancecalls (STD).Latestdatareleasedbythe Telecom Regulatory Authority of India (Trai) for theApril-June quarter shows that Internet telephony (basically calls made through apps) calls with a total outgoing minutes of 189 millionminutessawasharpdecline of26%bothonasequentialand year-on-yearbasis. Quiteincontrast,themobile voice call volumes for all the major telecom operators — Bharti Airtel, Reliance Jio and Idea Cellular — expanded during the period. While Bharti reported an increase of 62.2% y-o-y and 15.4% q-o-q in voice FE SPECIALS Declining trend of WhatsApp calls Million minutes 350 Hindi movie genre sees growth There has been a rise in ad spends on Hindi movie channels, even as ad spends on Hindi GECs are declining ■ eFE, P8 Cloud brings agility to enterprises Kent RO Systems and Shaadi.com today serve customers better and innovate faster, thanks to Amazon Cloud ■ INVESTOR, P9 Rosy outlook for retail bodes well RIL’s EPS goes up by 1-2%; TP raised to `920; ‘U/P’ retained given likely EPS misses, rising liabilities and rich valuations ■ INFRASTRUCTURE, P11 Thrice as large by 2021 end AAI’s `1,383-crore project to build Lucknow airport’s new terminal is scheduled for completion in 3 years’ time ■ SCIENCE & TECH, P12 New moon Exoplanets should have exomoons. And researchers think they have spotted one--the one orbitting Kepler 1625B expects the sale to slow down after 2020. “It will be a challenge to convince customers to paymore,”Guleria said. Butthechangesthataredriving up costs are necessary.For one, the cost of insuring the vehicleswillgoupsinceitisnow mandatorytobuyinsurancefor a full fiveyears at one go. Continued on Page 2 300 260 free voice call tariff schemes mobile operators also provide free STD calls and no roaming charges, where earlier consumers tended to prefer WhatsApp because of lowercharges. AADHAAR IS NOT mandatory to avail benefits for the first time under the recentlylaunched Ayushman BharatPradhan Mantri Jan Arogya Yojana (AB-PMJAY) but will be compulsory for those seeking treatment under the scheme for the second time,according to a top official. In case the Aadhaar number is not available, beneficiaries have to at least provide documents to prove that they have enrolled for the 12digit unique identity number, said Indu Bhushan,chief executive officer of the National Health Agency, which is responsible forimplementing the PMJAY. Continued on Page 2 Detailed report on Page 3 283 250 258 189 200 150 100 June ‘17 Sept ‘17 Dec ‘17 Quarter ended minutes, the same for Jio increased by 97.2% y-o-y and 20.6% q-o-q, and Idea by 39.4%y-o-yand 5.8% q-o-q. Analysts said that the dip in WhatsAppcallsistakingplace— thedecliningtrendstartedsince January-March—becauseinthe Mar ‘18 Jun ‘18 Source: Trai ● NCLT NOD New IL&FS board gets legal immunity to function freely THE MUMBAI BENCH of the National Company Law Tribunal (NCLT) has accepted the ministry of corporate affairs’ plea,whichwas filed lastweek, seeking immunity for the newly appointed board of IL&FS from anypotential legal action against them by numerous creditors and Aadhaar must to avail health scheme benefits for second time PRESS TRUST OF INDIA New Delhi, October 7 322 ROUHAN SHARMA Mumbai, October 7 ■ BRANDWAGON, P10 Apr '19 Apr '20 Source: Jefferies, KIE ● AYUSHMAN BHARAT Sharp cut in phone rates sends WhatsApp calls tumbling RISHI RANJAN KALA New Delhi, October 7 Sep '18 investors of the company. Accepting the petition, the NCLT said since the appointment of the newdirectors have been made in the larger public interest, “sufficient ground exists to provide certain immunities to the newly appointed directors, so that they can discharge their functions independently”. Continued on Page 2 Investor promotion Prime Minister Narendra Modi visits an exhibition at the 'Destination Uttarakhand: Investors Summit 2018', in Dehradun on Sunday Report on Page 3 DEAL FLOW PEs,VCs continue to bet big on Internet ventures ANUSHREE BHATTACHARYYA New Delhi, October 7 Top funded companies (in $ bn) INDIA’S ONLINE ENVIRONMENT is thriving. Private equityfirms andventure capitalists invested a chunky $7 billion into online ventures between January and September, data sourced from research agency Tracxn showed. That may be a little lessthanthe$8billiontheybet during this time last year but it’s nonetheless impressive. PrivateInternetcompanies have done well for themselves picking up over$6 billion,estimates by Jefferies say. Of this, over a third of the investments or$2.4billionflowedinduring the September quarter alone. As many as 13 companies have attracted over $100 million this year — including Bigbasket, Oyo, Swiggy, Zomato, Paytm, Policybazaar and Byjus. SoftBank and Chinese companies such as Alibaba, Tencent and Meituan continue to lead the investments. The event of the year, of 2018 mid-year investment Jan-Oct 2017 Jan-Oct 2018 (till date) Total fund raised 8 ($ bn) Companies funded 884 598 7 Jan-Oct Jan-Oct 2017 2018 Source: Tracxn Apr '19 1 Aug ‘18 Sep '18 Apr '19 Apr '20 Aug ‘18 Sep '18 *CBS already installed 97,954 0.45 0.31 0.3 0.3 93,486 2.9 51,615 1.4 1.5 49,050 52,115 0.2 0.26 59,600 62,165* 62,165 course, was the $16-billion acquisition of home-grown player Flipkart by US-based retail giant Walmart. That seems to have triggered a fresh wave of investments. Sreedhar Prasad, partner, KPMG,says there’s continued interest in Indian online busi- Air India nesseswith consumer-centric companies and deep technology outfits attracting a fair amount of money. The confidence of investors in Internet businesses stems from several factors. Continued on Page 2 FE BUREAU `30,000 cr of loans to be in SPV; to be serviced by more loans `48,447 cr PRASANTA SAHU & ARUN NAYAL New Delhi, October 7 THE CENTRE WILL soon announce a fresh turnaround plan (TAP) for Air India that will include transfer of the carrier's working capital debt of `30,000 crore or 62% of the total debt and non-core assets to a special purpose Total working capital and aircraft-related debt of AI as on March 31, 2017 `2,056 cr `30,000 cr or 62% of the total debt to be transferred to an SPV owned by the Centre `2,700 cr Annual interest cost of the debt on the Centre from FY20 onwards, which will be met via EBRs, monetisation of non-core AI assets,etc ■ The new TAP will include improving operational efficiency, reduction in staff cost, etc AI REVIVAL Additional capital infusion by the Centre this year to help AI meet operational costs, no more budgetary support from FY20 2-3 years Time likely to be given to AI as per a new turn around plan (TAP) before privatising the national carrier ■ Besides the debt, the non-core assets of AI will be transferred to the SPV vehicle as well as an additional `2,056-crore capital support in FY19. Given that AI had borrowed `48,447 crore with an average interest cost of nearly 9%, the debt transfer from its books would give nearly `2,700-crore annual relief to the loss-making carrier from the next financial year. Continued on Page 2 BEAR HUG Small caps, mid caps, even large caps, almost all lost out this year FE BUREAU Mumbai, October 7 WITH THE HEAVYWEIGHTS coming off their peaks, the Indian stock markets are now well and truly down in the dumps. More than 82% of all stocks with a market capitalisation of `1,000 crore and morehavebeenintheredsince January this year; while 72 % of these 725 stocks have lost more than 10%, a good 60% have given up more than 20% of theirvalue. Whiletheindiceswerescaling newpeaks everydaydriven by a bunch of six or seven stocks, most investors have S&P BSE SENSEX 40,000 38,000 34,376.99 33,812.75 36,000 34,000 32,000 Jan 1, 2018 Oct 5, 2018 Nifty Midcap Nifty Smallcap YTD performance Stocks in the red Stocks that have lost >10% Stocks that have lost >20% Tata Motors 9,800 9,178.40 23,000 21,109.80 Cos with `1,000-cr M-cap (725) BPCL 5,911.65 500 425.40 21,000 16,299.75 8,600 19,000 7,400 350 17,000 6,200 275 15,000 Jan 1, ‘18 Oct 5, ‘18 beensittingonhugelossesand equity mutual fund schemes have under-performed their 5,000 Jan 1, ‘18 Oct 5, ‘18 category averages. “The re-rating of a small quality corner of the market 425 200 % of the universe 82.3 71.9 450 59.7 300 Share price on BSE (`) 216.55 Jan 1, ‘18 500 511.10 Oct 5, ‘18 has to be finite and cannot holduptheindexindefinitely,” strategists at Bank of Merrill Share price on BSE (`) 265.35 400 350 Jan 1, ‘18 Bharti Airtel 540 528.15 480 Oct 5, ‘18 Share price on BSE (`) 296.75 420 360 300 Jan 1, ‘18 Oct 5, ‘18 Lynch had cautioned in June. Last month, Goldman Sachs lowered its investment view from overweight to market weight. “We believe the risk/ reward for Indian equities is less favourable at current levels,” the investment banking firm wrote. While there are those who believe the correction in stock values could be a buying opportunitythe fact is that the macro-economic environment has turned adverse with the sharp depreciation in the currencyand some shortage in liquiditythat has driven up the cost of money. Under the circumstances, the growth in corporate earnings could be lower than anticipated.
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