OPINION, P8 COMPANIES, P4 EDITORIAL Jubilant gives up royalty demand, but the demand itself was absurd INTERNATIONAL, P14 S CHINOY & T JAIN AT THE HELM LEGAL ENTRY As output gap closes, rural wages will rise & make food CPI climb to core levels of 5% Vodafone Business’s Brian Humphries to take over as Cognizant CEO US President Trump bats for merit-based immigration NEW DELHI, THURSDAY, FEBRUARY 7, 2019 FOLLOW US ON TWITTER & FACEBOOK. APP AVAILABLE ON APP STORE & PLAYSTORE WWW.FINANCIALEXPRESS.COM READ TO LEAD VOL.XLIV NO. 292, 26 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: 36,975.23 ▲ 358.42 NIFTY: 11,062.45 ▲ 128.10 NIKKEI 225: 20,874.06 ▲ 29.61 HANG SENG: 27,990.21 ▲ 59.47 `/$: 71.56 ▲ 0.01 `/€: 81.50 ▲ 0.22 BRENT: $61.87 ▼ $0.11 GOLD: `33,210.00 ▼ `29.00 Ola gets new COO in Puneet Bhirani NEW ROLE: Puneet Bhirani ANIRUDDHA GHOSH Bengaluru, February 6 CAB AGGREGATOR OLA has appointed Puneet Bhirani as CEO of Ola Fleet Technologies (OFT) and COO forOla,according to sources.The company is witnessing a series of highprofile exits and corporate restructuring,they added. Bhirani joins Ola from IT firm Mphasis where he was the CEO of its subsidiary, Digital Risk,basedinOrlandointheUS. CompanydocumentsseenbyFE show that Bhirani will have a dual role — he will manage all aspectsoftheOFTbusinessand handle supply and sourcing operations forIndia. Sources told FE that Sandeep Divakaran,who’s the head of OFT,will transition the roletoBhiranioverthenexttwo months. Ola founder and CEO Bhavish Aggarwal said in an email to employees that he and Divakaran will “move into a new initiative in the group on whichheandIhavebeenworkingon”.Aggarwaladdedthathe will disclose details of this new initiative in the nearfuture. Bhirani’s entry comes amid some senior level exits in the company. Pallav Singh, who is oneofthefoundingmembersof the company and senior vicepresident and interim COO sinceMarch2018,leftthecompanylast month. Continued on Page 2 FE BUREAU New Delhi, February 6 BRUSHING ASIDE CONCERNS of high extra-budgetary resources (EBR), or borrowings byPSUs to finance the government’s Budget expenditure,financeministerPiyush Goyal told FE on Wednesday that “the economic returns more than justify the borrowings”in areas like railways and roads. On the issue of FCI’s large borrowings (roughly 1.3% of GDP in FY18 and 1% in FY19), he said,“Food security is an important national concern.So,this is justified.” On the charge that the `75,000-crore income top-up for farmers was an admission of inadequate agriculture reforms, Goyal contrasted the `7 lakh crore the government would give farmers over a decade with the `52,000crore farm loan waivers by the UPA in its last five years. He spoke of the sharp hike in MSPs and defended the fact ■ On high-frequency data not matching GDP estimates: Data collection systems have not evolved adequately to capture economic activity fully… with the formalisation of the economy, this will get all right ■ On PSUs lacking flexibility ■ On farm prices being 20-30% The NCLT cases prove that the private sector’s so-called speed resulted in huge losses This is the result of surplus output and low global prices... BJP had procured farm goods several times more than the Congress to do business & losing value relative to private sector: that farm prices are 20-30% lowerthan MSPs bysaying this was the result of surplus output and low global prices. He ANGEL TAX EXEMPTION Funding limit may be hiked to `25 cr BANIKINKAR PATTANAYAK New Delhi, February 6 IN A MOVE aimed at providing succour to start-ups, most of which have been slapped with tax notices, the government is consideringraisingthefunding limitinastart-upthatwouldbe exempted from the so-called angel tax to `25 crore from the current `10 crore. Sources told FE that the department for promotion of industry and internal trade (DPIIT) could also recognise companiesthatareinoperation for up to 10 years as start-ups (instead of the current seven years), if they fulfil other criteriaoninnovationandturnover. The angel tax is typicallyan impost on the extra capital raised by an unlisted firm QuickPicks Greater efforts will be needed to reduce fiscal deficit: IMF THE INTERNATIONAL Monetary Fund (IMF) on Tuesday said greater efforts will be needed to reduce the fiscal deficit as the Interim Budget foresees a slower pace of fiscal consolidation than previously planned, reports PTI. "The Interim Budget envisages a slower pace of fiscal consolidation than planned earlier, delaying the time to reach the medium-term debt target of 40% of GDP," IMF’s India mission chief Ranil Salgado said. Air India CMD PS Kharola named civil aviation secretary AIR INDIA chief Pradeep Singh Kharola has been appointed the civil aviation secretary, a year after he came on board the national carrier, as part of a minor top-level bureaucratic reshuffle effected on Wednesday, according to an official order, reports PTI. Kharola, a 1985-batch IAS officer of the Karnataka cadre, was in November 2017 named the chairman and managing director of Air India. US insurance firm files plaint against Dr Reddy’s arm, others DR REDDY'S Laboratories on Wednesday said United Healthcare Services has filed a complaint against its US-based arm and some other entities, alleging a price-fixing conspiracy to rig bids and allocate customers with respect to 30 drugs, reports PTI. The US-based insurance firm has filed a complaint against Dr Reddy's Laboratories and 42 other defendants, involving a total of 30 generic drugs, it said in a regulatory firm. Some breather of start-ups who got angel tax notices may benefit if exemption limit raised to `25 cr lower than MSPs: said the BJPhad procured farm goods several times more than what the Congress had. On the charge that there ● REALTY FORAY Morgan Stanley to invest `400 cr BHAVIK NAIR Mumbai, February 6 through the issue of shares over and above their fair market value. MORGAN STANLEY IS set to enter the Indian warehousing space through a `400-crore investment via which it will take 85-90% stake in a platform to be jointly operated with KSH Group,sources close to the deal told FE. The investment is likely to be done from theMorganStanleyRealEstate Fund (MSREF).The deal is in a fairly advanced stage of completionandislikelytobeclosed this week. Rohit Hegde, managing director at KSH Distriparks which is the parent of KSH Logistics, will likely own the remaining 10-15% in the asset. Continued on Page 2 Continued on Page 2 20% 73% 73% of start-ups that raised funds received angel tax notices of recipients of tax notices raised between `50 lakh and `2 crore; only 4% raised beyond `10 cr Source: LocalCircles/IVCA NEXT ROUND Govt mulls merger of PNB, OBC & P&SB BANIKINKAR PATTANAYAK New Delhi, February 6 THE GOVERNMENTIS weighing the possibility of the next phase of consolidation in the public sectorbanking space by amalgamatingthreelenders— Punjab National Bank (PNB), Oriental Bank of Commerce (OBC) and Punjab & Sind Bank (P&SB),sources told FE. “An inter-ministerial group (calledAlternativeMechanism) under Union minister Arun Jaitley will take a final call on thisplan.The(merger)optionis on the table but whether the governmentisgoingtobitethe bullet ahead of polls and announce amalgamation or choosetowaitisyettobeseen,” said one of the sources. While the headquarters of PNB and Punjab & Sind Bank are in Delhi that of OBC is in Gurugram (Haryana). The amalgamation, if approved, will be a part of the government’s efforts to create a few but strong banks with much larger balance sheets to BANKING ON CONSOLIDATION ■ Inter-ministerial group under Arun Jaitley to take final call on merger plan ■ Upon amalgamation, the merged entity will have a combined business of over `16.5 lakh crore ■ It will pip BoB (after merger with Vijaya Bank and Dena Bank) as second biggest PSB support the rising appetite for credit of the fast-growing economyand enable optimum utilisation of resources. Upon amalgamation, the merged entity will have a combined business of over `16.5 lakh crore, deposits of `9.6 lakh crore and advances of close to `7 lakh crore,said the sources. Continued on Page 2 Continued on Page 2 FE BUREAU Mumbai, February 6 VODAFONE IDEA ON Wednesday posted a massive consolidated net loss of `5,005 crore during the October-December quarter, a tad lower than expected by analysts but still signifying the financial stress telecom operators are undergoing due to below-cost tariffs unleashed VOICE (Volume, million mins) Usage/per customer/mins) 580 726 Vodafone Idea Bharti Airtel 794 Blended Arpu (`) Reliance Jio DATA (Volume, million MB) Usage/per customer/MB) 6,324 10,800 10,528 86,40,000 Incumbents continue to be affected due to below-cost tariffs 6,34,060 ● TOP DECK REJIG Says govt needs cooperation from states to expedite payment to farmers was no farm exports policy till now, he said this was because food inflation had to be tamed first. So, did this mean farm exports would always be hostage to local prices? Goyal said “by and large we have larger surpluses and a buffer stock”, so, that is not an issue now. On`20,000-croredisbursement to be made to farmers in FY19,Goyalsaid,“Thelistshave startedcomingin…weneedthe cooperation of the states to be able to transfer the money to validated beneficiaries.” Goyaldismissedconcernsof high-frequency data like auto sales not matching with the official GDP estimates. “Data collection systems have not evolved adequately to capture economic activity fully… but with the formalisation of the economy due to GST etc, this will get all right.” He gave an exampleofhow,withnewtechnology on train arrivals/departures, data in the railways was nowmore accurate. The finance minister wasn’t too worried about the 13 bps rise in bond yields on thedayofthebudgetoronFPIs turning sellers in the bond market after the Budget. Vodafone Idea’s Q3 loss widens to `5,005 crore 7,02,881 Higher EBR justified by the returns, says Goyal TELCOS IN PAIN 7,12,283 ● INTERVIEW: PIYUSH GOYAL, finance minister 27,05,157 32,16,897 Vodafone Idea Bharti Airtel Reliance Jio 89 Vodafone-Idea Bharti Airtel Reliance Jio 104 Telcos: Performance comparison (Q3FY19) by Reliance Jio, which is leading to customers migrating to lower average realisation per user (Arpu) offerings. The company's net loss during the Research by FE BUREAU Consistent outflows 130 quarter widened from `4,974 crore reported in the preceding quarter. Continued on Page 2 SPECIAL FEATURE FPIs take out $335 m in 2 days Foreign portfolio investors (FPIs) have pulled out close to $335 million from the bond market on a net basis on Monday and Tuesday. This follows an outflow of $370 million in January. The benchmark 2028 yield fell 4.7 bps on Wednesday to 7.56%. On February 1, the Budget day, the yields spiked 13 bps to close at 7.61%. 10-year bond yield (%) 7.700 7.566 7.630 7.541 7.560 7.490 7.420 Jan 28 2019 Feb 6 Microsoft India sharpens focus on the North East ■ eFE, P13
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