OPINION, P8 M&M, P10 Q2 PERFORMANCE EDITORIAL India Inc Sept quarter earnings dampen festival cheer After the BJP’s MSPplan, the Congress has a mega farm loan waiver to woo farmers INTERNATIONAL, P14 GROWTH ENGINES SPUTTER Bakhshi-led ICICI Bank’s net profit falls 56% y-o-y Bezos-led Amazon, Page-led Alphabet's sales miss estimates NEW DELHI, SATURDAY, OCTOBER 27, 2018 FOLLOW US ON TWITTER & FACEBOOK. APP AVAILABLE ON APP STORE & PLAYSTORE WWW.FINANCIALEXPRESS.COM READ TO LEAD VOL.XLIV NO. 205, 26 PAGES, `10.00 (PATNA `9.00, RAIPUR `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: 33,349.31 ▼ 340.78 NIFTY: 10,030.00 ▼ 94.90 NIKKEI 225: 21,184.60 ▼ 84.13 HANG SENG: 24,717.63 ▼ 276.83 `/$: 73.47 ▼ 0.19 `/€: 83.36 ▲ 0.25 BRENT: $76.20 ▼ $0.69 GOLD: `31,868.00 ▲ `132.00 RBI vs GOI ● IL&FS CRISIS ‘Govt plays T20, RBI plays a test match’ THE SUCCESSFUL allottees of the 19 coal blocks the government is planning to auction this fiscal, for sectors including iron and steel, will be allowed to sell up to 25% of the actual production in the open market at prices fixed by Coal India, reports PTI. "The successful bidder shall utilise a minimum of 75% of the actual production in the specified end use plants and is allowed to sell up to 25% of the actual production in open market," according to the tender document for auction of coal mines. Sebi proposes relaxed norms for start-up listing TO MAKE listing on bourses more attractive for startups, regulator Sebi on Friday came out with new set of proposals that would allow more investor categories, relax shareholding norms and reduce the trading lot amount, reports PTI. FE BUREAU New Delhi, October 26 RBI DEPUTY GOVERNOR Viral Acharya on Friday ripped into the government’s interventions in the central bank’s autonomous regulatoryspace, while iterating that it actually needed more powers to regulate public sectorbanks (PSBs). A government’s horizon of decision-making is rendered short like aT20 match,he said, using a cricketing analogy. In contrast, he said, “a central bank plays aTest match,trying towineachsession,but importantly also survive it so as to have a chance to win the next session,and so on.” Acharya’s remarks came amid simmering tensions between the government and RBI over a government-panel proposal to have a payments regulator outside the central bank and the finance ministry’sattempttogettheRBIto agree to relax its stringent corrective regime forweak banks. Denouncing the Centre’s ■ Board seeks more time to work out a detailed revival road map ‘Steps soon to ease liquidity crunch’ “Governments that don’t respect central bank independence will sooner or later incur wrath of financial markets, ignite economic fire, come to rue the day they undermined an important regulatory institution.” ■ Expedite stuck projects, monetise some assets and shut shell companies, govt tells board FE BUREAU New Delhi, October 26 FE BUREAU New Delhi, October 26 oft-repeated demand for a much highershare of the RBI’s ‘surplus’, he said,“the central bank needs a strong balancesheet to perform its full range of critical functions.” The deputy governor’s remarks,oneofthemostexplicit andtrenchantcriticismsofgovernment’s incursions into the RBI’ turf by an incumbent RBI functionary, exhibited the MintStreet’s growing unease overthe recent developments. FINANCIALSERVICES SECRETARY Rajiv Kumar said on Friday that some steps are being planned to ease the liquidity crunch being faced by nonbanking finance companies (NBFCs), adding that the governmentissensitivetobothliquidity and asset-quality concerns. “Very soon you will be hearing. Something is being workedout,”hesaidonthesidelines of an event organised by SIDBI. Separately,finance minister Arun Jaitleymet seniorbankers on Friday and reviewed the liquiditysituation,whichhasworsened in recent months, especiallyafterthe crisis at IL&FS. Speaking on the central bank’spromptcorrectiveaction (PCA), Kumar said the finance ministry has favoured aligning the PCAframework — aimed at nursingstressedbankstohealth byimposingsometoughconditions on them — with the best practices globally, instead of maintaining a more stringent architecture. Continued on Page 2 Continued on Page 2 — VIRAL ACHARYA RBI DEPUTY GOVERNOR ESSAR STEEL Special Feature Student teams are developing electric car tech Students from various Indian colleges are taking baby steps towards developing the mature EV technology; these aren’t market-ready solutions, but can be developed further ■ Motobahn, P13 QuickPicks Stop Aadhaar-based e-KYC verification: DoT to operators THE DEPARTMENT of telecommunications in a directive on Friday asked telecom operators to stop the verification of mobile numbers using the Aadhaar-based e-KYC process, with instructions to provisionally do verifications using a new digital process, reports fe Bureau in New Delhi. In compliance of a Supreme Court judgment, DoT directed all operators to “discontinue the use ofAadhaar e-KYC services of UIDAI for re-verification of existing subscribers with immediate effect”. In September, the SC had struck down Section 57 of the Aadhaar Act, which allowed private entities to access Aadhaar data. PAGE 4 ITC’s Q2 net profit increases 12% at `2,955 crore LARGELY IN line with street estimates, cigaretteto-FMCG-to-hotel major ITC on Friday reported close to 12% year-on-year growth in its standalone net profit to `2,954.67 crore for the second quarter ended September 30, with gross revenue soaring 14.7% y-o-y, reports fe Bureau in Kolkata. Revenues from cigarette, non-cigarette FMCG and hotels businesses during the July-September period posted double-digit growths. The diversified conglomerate had posted a net profit of `2,639.84 crore in the second quarter of the last financial year. PAGE 6 E-filing of I-T returns rises 65% in April-September FE BUREAU Mumbai, October 26 A DAYAFTER the promoters of Essar Steel — the Ruias — in theirlast-ditchattempttoretain the company, offered to pay lenders `54,389 crore after the committee of creditors (CoC) hadvotedonthebidbyArcelorMittal, the lenders issued the latter a letter of intent (LoI) declaringthemasthesuccessful applicant. The Lakshmi Mittal-led ArcelorMittal said in a statement on Friday that it has won the bid to acquire the bankrupt Essar Steel for over `42,000 crore. Asisknown,over90%ofthe lenders on the CoC hadvoted in favourofthebidbyArcelorMittal,which has promised at least `39,500 crore by way of cash upfront. TheRuiashadsaidonThursdaythattheyhaveofferedtopay the dues under Section 12A of the Insolvency and Bankruptcy FINE PRINT CJI bench restrains interim chief Nageshwar Rao from taking major decisions, disallows Asthana plea ANANTHAKRISHNAN G New Delhi, October 26 THE SUPREME COURT Friday setatwo-weekdeadlineforthe Central Vigilance Commission (CVC) to complete its probe againstCBIdirectorAlokVerma who,alongwithspecialdirector Rakesh Asthana, was stripped of all responsibilities and sent on leave Tuesday night. Justice AK Patnaik, a retired judge of the Supreme Court,will monitor the CVC probe. A bench of Chief Justice of IndiaRanjanGogoi,JusticesSK WHAT THE COURT SAID Justice AK Patnaik, a retired judge of the Supreme Court, will monitor the CVC probe ■ ■ The bench made it clear that it will look into all decisions that Nageshwar Rao has taken till date Kaul and KM Joseph, while hearing petitions by Verma and NGO Common Cause against the government move, also restrained interim CBI director M Nageshwar Rao from taking any “policy decision(s) or any major decision(s)” and directed that he “will only perform the routine tasks that are essential to keep the CBI functional”. NIIF yet to move into the fast lane gets over 90% nod from lenders; gets letter of intent ■ Plan to be submitted for NCLTnod latest by next week ■ Plan: `42,000 cr upfront BANIKINKAR PATTANAYAK New Delhi, October 26 payment to creditors, ~`2,500-cr working capital, fresh `8,000-cr equity infusion into company ■ Essar Steel promoters make `54,000-cr counteroffer based on their interpretation of Sec 12Aof IBC ■ Ruias' plan: Upfront cash payment of `47,507 cr to all creditors, including `45,559 cr to senior secured financial creditors Code (IBC),introduced in 2018 bywayof an amendment. Continued on Page 2 Continued on Page 2 SC sets two-week deadline for CVC probe against Verma ● INFRA FUNDING ■ ArcelorMittal revised plan Continued on Page 2 CBI BATTLE GOES TO COURT AROUND THREE YEARS after its establishment,the National InvestmentandInfrastructure Fund (NIIF)— India’s ambitious quasi-sovereign wealth fund — is yet to develop an impressive portfolio of its investments across the infrastructure sector. NIIF currently manages capital invested through three funds: NIIF Master Fund (focuses mainly on core infrastructure and operating assets); NIIF Fund of Funds (invests in funds managed by third-party managers in the infrastructure and associated sectors) and NIIF Strategic Fund (a more diversified investmentstrategy,including green-field projects and debt platforms). While it has invested around `1,800 crore through the Fund of Funds, it hasn’trevealedtheexactquantum of investment through its Master Fund in at least two cases. The government has committed `20,000 crore for its planned 49% stake in all NIIF funds, the rest is to be raised by the NIIF from international and domestic institutional investors over time. Global gloom spreads FE BUREAU Sensex, Nifty at 7-month lows Investors on Friday stayed on the back foot amid a rout in global markets and liquidity concerns at home.The Sensex fell 340.78 points to end at a 7-month low of 33,349.31, while the Nifty fell to 10,030, its lowest since March 26 Nifty50 Bank Nifty Intra-day, October 26 24,800 Intra-day, October 26 10,150 24,771.85 24,700 10,120 24,600 10,090 24,500 10,122.35 10,060 24,400 24,300 Previous close 24,817.45 Open Previous close 10,124.90 10,030 24,421.05 Close 10,000 Open 10,030 Close Continued on Page 2 KHARIF 2018 Mandi prices of most crops below MSPs, gap up to 43% PRABHUDATTA MISHRA New Delhi, October 26 MISSING SUPPORT? A MONTH INTO the harvesting season,prices of 12 among the 14 kharif crops are ruling belowtheirminimum support prices (MSPs), indicating that procurement by the designatedagencieshasn’tyetgathered momentum, despite PMAASHA, a stronger price supportschemeannouncedby the government recently. Areviewof mandi prices by FE showed that prices of 12 monsoon-sown crops including paddy, maize, moong and soyabean were 7-43% below their MSPs between October 1 Paddy (Burdwan,W Bengal) Market price against MSP (%) Average mandi price (Oct 1-23) `/quintal Jowar (Kekri, Ajmer, Rajasthan) Bajra (Dausa, Rajasthan) Maize (Davangere, Karnataka) Urad (Kota, Rajasthan) Moong (Gadag, Karnataka) Soybean (Manasa, Neemuch, MP) Sunflower (Yadgir, Gulbarga, Karnataka) Sesamum (Botad, Bhavnagar, Gujarat) Cotton (Suratgarh, Rajasthan) 1,559 -10.91 1,805 -25.72 1,491 -23.54 -23.35 1,303 -42.55 3,217 -34.77 4,550 -10.86 3,030 3,607 -33.05 12,922 5,197 106.79 « « EVEN AFTER the deadline for filing income-tax returns ended on August 31, the growth in taxpayers filing e-returns continued to grow robustly, and for April-September, a 65% growth was witnessed over the year-ago period, data from the Central Board of Direct Taxes showed, reports Sumit Jha in New Delhi. The growth in the April-August period was 70%. Moreover, the average tax paid by an individual filer came in at close to `35,000 in H1, up from a little over `27,000 in April-August. Experts said that the rise in the average tax paid was attributable to the second tranche of advance tax paid by larger assessees. PAGE 2 Lenders approve ArcelorMittal bid The bench made it clear that it will look into all decisions that Nageshwar Rao has taken till date, including “transfer of investigations, change of Investigating Officer(s) etc.” Verma was represented by senioradvocate Fali S Nariman while senior advocate Dushyant appeared for Common Cause. Afterhearingthelawyersof the petitioners, the bench directed that notices be issued in both the writ petitions and the matter be “listed immediately after the Diwali holidays i.e.on 12th November,2018”. The bench declined to take up for hearing a petition filed byAsthana,saying“youmissed the bus”. Senior advocate Mukul Rohatgi,appearingforAsthana, said he had filed a writ petition and it should be heard. THE NEW BOARD of Infrastructure Leasing & Financial Services (IL&FS) will submit only a preliminary revival plan for the debt-laden company next week. It’s learnt to have informed the government that it is not feasible to finalise a detailed, comprehensive resolution road map so early for the conglomerate that has as many as 348 entities. The board will submit the initial plan with the National Company Law Tribunal in Mumbai on October 31, an official source said. For its part, the government wants the board under Kotak Mahindra Bank vicechairman Uday Kotak to take concrete steps to resolve the crisis in the next six months, said the source. It has called for a multipronged approach to tackle the crisis, which includes expediting stuck projects, monetising certain assets and shutting suspected shell companies. The government has also conveyed to the board that it prefers minimum haircut on asset monetisation. The board could seek to monetise road assets first, before putting power projects on sale. Bids are expected to be invited by December. Congress president Rahul Gandhi and other leaders stage a protest demanding reinstatement of CBI director Alok Verma, outside the agency’s headquarters in New Delhi on Friday EXPRESS PHOTO: PREM NATH PANDEY « « « « « « « « IN THE NEWS Sale of output from captive coal mines Viral Acharya takes on govt for trying to get RBI to relax PCA, getting RBI to give up more of its surplus and to appoint a separate payments regulator Only initial revival plan next week 0.91 Source: Agmarknet portal and 23. Only cotton and sesamum are now costlier to wholesalers than their MSPs (see chart). For the 14 kharif 2018 crops, the government had earlier announced MSP hikes in the range of 4-52% in sync with the policyto keep MSPs at 1.5 times the cost. “Unlessdemandfactorstoo are given weightage while fixing the MSPs (rather than only cost),thepricesupportscheme will fail to ensure the benchmark prices,” former CACP chairman Ashok Gulati said at a conference on October 25. Continued on Page 2 Maharashtra begins kharif procurement NANDA KASABE Pune, October 26 PROCUREMENT OF MOONG (green gram) and urad (black gram)hascommencedinsome pockets of Maharashtra,as the state is busy rolling out the price-deficiency support scheme PM-AASHA, under which support prices are at least 1.5 times the cost of production. According to the state agriculture department, some 40,575 farmers have registered for selling urad at MSP, 26,990 formoong and 45,504 for soyabean. Moong is currently trading at `4,800-5,500/quintal in Latur,one of the keypulse producing regions in the state, while its MSP is `6,975/quintal. Urad is trading in the `4,000-4,700/quintal range while its MSP is `5,600/quintal. Continued on Page 2
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