OPINION, P8 COMPANIES, P6 SUNIL JAIN CMIE links jobs loss to falling capex — but investment is rising! LEASING DUES FACEBOOK SCANDALS Monsanto wins battle with Nuziveedu but it won’t win the war till Modi govt intercedes TV MOHANDAS PAI & YASH BAID INTERNATIONAL, P14 Over 40% of Jet Airways fleet of 123 aircraft is on ground Zuckerberg says he’ll shift focus to private sharing NEW DELHI, FRIDAY, MARCH 8, 2019 FOLLOW US ON TWITTER & FACEBOOK. APP AVAILABLE ON APP STORE & PLAYSTORE WWW.FINANCIALEXPRESS.COM READ TO LEAD VOL. XLV NO. 6, 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: 36,725.42 ▲ 89.32 NIFTY: 11,058.20 ▲ 5.20 NIKKEI 225: 21,456.01 ▼ 140.80 HANG SENG: 28,779.45 ▼ 258.15 `/$: 70.00 ▲ 0.27 `/€: 79.21 ▲ 0.25 BRENT: $66.90 ▲ $0.91 GOLD: `31,982 ▼ `192 FINAL PUSH ● ’CHEAT DEVICES’ Power, sugar, garment sectors get a leg-up IN THE NEWS Govt to come out with first ever `20 coins THE GOVERNMENTWILL come out with the first ever `20 coin which will be shaped like a 12-edged polygon with design of grains to denote farm dominance in the country, reports PTI. New series of one, two, five and ten rupees coins too would be minted, which will be circular in design and have denominations written in Hindi. Lokpal: SC gives AG 10 days to decide panel meet date THE SUPREME COURT asked attorney general KK Venugopal to inform it within 10 days about a possible date for the meeting of the selection committee to appoint the country’s first anticorruption authority — the Lokpal, reports PTI. Slew of CCEA decisions ahead of poll announcement to prop up economy FE BUREAU New Delhi, March 7 EVEN AS IT is soon to be lameduck with Parliament elections around the corner, the Narendra Modi government onThursdaytook a raft of decisions to give a boost to various sectorsoftheeconomy,including thermal and hydro power, sugar,aviation and metro rail. The Cabinet Committee on Economic Affairs (CCEA) approved a host of recommendations of a group of ministers (GoM) aimed at addressing the woes of stressed power projects — the latest official count of such projects is 34, with a total capacity of 40.13 giga watts (GW) and banks’ exposure of `1.75 lakh crore. Further, to help the states meet their non-solar renewable power purchase obligations (RPO),the Cabinet declared all hydropowerprojects(HPOs)as renewable energy sources, extending it to plants above 25 MW capacity. The Cabinet also provided flexibility to the HPO developers to determine tariff byback- MAJOR DECISIONS ■ Govt to facilitate extra `15,000-cr subsidised loans to sugar mills, others to expand ethanol capacity; cost estimated at `3,355 cr ■ Compensation to garment, made-up exporters for central, state levies hiked; total revenue forgone seen at `6,300 cr a year ■ A `4,500-cr scheme to ‘revive and develop’ un-served and under-served airports ■ Another phase of Mumbai Urban (Rail) Transport Project at a cost of `33,690 cr cleared, Delhi Metro's Phase-4 with investment of `24,949 cr gets nod too ■ Most recommendations of a group of ministers on stressed power projects cleared --- boost to coal linkages, non-cancellation of PPA/FSAs post-NCLT proceedings among major steps; Adani, GVK, GMR, Jaypee and Essar, among others, to benefit loading of tariffs afterincreasing project lives to 40 years, increasing debt repayment period to 18 years and introducing escalating tariff of 2%. Further, it a proposal to extend additional subsidised loansof`12,900croretosugar millsandanother`2,600crore to other ethanol producers to expand their capacity and diversify away from sugar.The decisions to offer an interest subsidy of up to 6% will cost the government `3,355 crore, over and above the `1,339 crore initially approved under the scheme last year. However, as has been pointed out repeatedly, unless the Centre and the states stop fixing cane prices at exorbitantly high levels, no such package can prevent the recurrence of massive cane arrears year afteryear. Continued on Page 2 MISSING IN CABINET QuickPicks India’s trade surplus with US shrinks again in 2018 THE US may have cited the absence of “equitable and reasonable” market access to withdraw the duty benefits on annual exports worth $5.6 billion from India under the generalised system of preferences by May, but latest data showed India’s goods trade surplus with the US actually shrank for a second straight year through 2018, reports fe Bureau in New Delhi. According to the US data, New Delhi’s trade surplus with Washington eased to $21.3 billion in 2018 from $22.9 billion in 2017. PAGE 2 India wants current level of Iran oil purchase in extended waiver INDIAWANTS to keep buying Iranian oil at its current level of about 300,000 barrels per day (bpd), as it negotiates with Washington about extending a sanctions waiver past early May, two sources in India with knowledge of the matter said, reports Reuters. India has reduced its purchases of Iranian oil but has been in talks on extending its sanctions waiver. India is asking to be allowed to still buy Iranian oil at current levels. PAGE 12 HDFC Bank reduces MCLR by five basis points HDFC BANK reduced the marginal cost-based lending rate (MCLR) for two and three-year tenors by 5 bps to 8.85% and 9%, respectively, reports fe Bureau in Mumbai. MCLR for one-, two- and three-year tenors was raised by 5 bps in January to 8.75%, 8.90% and 9.05%, respectively, while it was hiked by 5 bps for one-, three- and six-month MCLR rates by 5 bps each in December 2018. PAGE 10 Uncertainty looms over Adani getting control of 6 airports ARUN NAYAL New Delhi, March 7 WITH THE FORMAL proposal ofhandingoverthesixairports recently won by Adani Enterprises through an open bid not figuring on the Union Cabinet’s agenda on Thursday, a cloud of uncertainty hangs over the prospects of the group’s foray into airports. The group’s flagship,Adani Enterprises had recently bid aggressively and won the bids for the privatisation of all of the six airports put out by the Airports Authority of India. Accordingtotheconcession agreement,thefacilitieswereto be handed over toAdani Enterprises for a period of 50 years under the public-private partnership model, only after the approval of the Union Cabinet. Since Thursday’s Cabinet meeting was supposed to be thelastoneinwhichmajorpolicy-related decisions could be approved before the dates for NGT slaps `500-crore penalty on Volkswagen FE BUREAU New Delhi, March 7 THE NATIONAL GREEN Tribunal on Thursday slapped a penalty of `500 crore on GermanautomakerVolkswagenfor installing ‘cheat devices’ in its diesel cars in India to deceive emission tests.While directing the company to pay the fine within two months, the tribunal said the apex pollution monitoringbodycanutilisethe money towards improving air quality in the NCR of Delhi and otherhighlypolluted areas. The green panel had earlier on November 16 directed the foreign car manufacturer to deposit an interim amount of `100 crore with the Central Pollution Control Board. The NGT bench led by its chairperson justice Adarsh Kumar Goel said,“Sustainable development is the main guiding factor... We are unable to accept the manufacturer’s objections to the report.” Continued on Page 2 ● LOW SALES FEBRUARY 25 & 26 Adani emerges as highest bidder for all airports award FE BUREAU New Delhi, March 7 HAVING FAILED TO garner meaningful volumes of small hatchbacks, Honda Cars India has decided to stay away from the segment. It has already stopped selling its entry-level hatchback Brio in the country. Rajesh Goel, senior VP & director—salesandmarketing, said HCIL is banking on recent trends which show sedans are the best selling cars in India. “Our entry car for the near futureisgoingtobeAmazeand inthemidtermwedon’tintend to get into entry-level hatchbacks,”Goel said. Continued on Page 2 More women’s equality means 31% GDP rise by 2025 ADVANCING WOMEN'S EQUALITY could boost global GDP by 31% or $28 trillion by 2025, the size of the US and China GDP combined, says a BofA-ML report, forecasting that by 2020 women would hold $72 trillion of the world’s financial assets, double the 2010 level, and accumulate assets 1.5 times faster than men. However, the report cautions that there is still much to do — the economic gendergap is reducing at a snail’s pace and, all being equal, will not closeforcenturies,202yearsto be precise. Despite the increased focus Global gender gap Western Europe A America LatAM Central Asia Eastern Euyrope Global weighted avg East Asia & Pacific South Asia Sub Saharan Africa Middle East & North Africa 76 73 71 71 71 68 68 66 66 60 (in %) Source: Global Gender gap index 2018, World Economic Forum on diversity, the US lags other developed nations in both pay andpolicygaps.Moreover,Corporate America does not look like Main St. America: The average S&P 500 board seats fourmenforeverywoman;just 5% of companies have a woman at the helm, and the S&P 600 small cap index, which reflects more recently establishedcorporations,looks even worse on these statistics. On the brighter side, the Women in Asia 50 45 40 35 30 25 20 15 10 5 0 Share of GDP (%) Asia Pacific avg = 36% China Singapore Australia Philippines Indonesia Thailand New Zealand S Korea Japan India Source: ILO, McKinsey, World Factbook, BofA Merrill Lynch Global Research report points out,incentives to close the gender gap are evident: Companies focused on gender diversity at a board, Csuite and firm level have consistently achieved higher ROE and lowerearnings risk in sub- Current stake (%) 39.5 Singtel 27 Bharti family Total promoter stake: FE BUREAU New Delhi, March 7 67% Post-issue (%) Singtel 35 Bharti family THE PROMOTER GROUP'S stake in Bharti Airtel will come down to around 62% from the current 67% afterthe completion of the `25,000-crore rights issue which the telecom firm has announced. This is because the promoter group has renounced its right for shares worth `5,000 crore (around 5%) in favour of the Singapore government’s investingarmGICwhichwillbe investing this amount. The promoter group comprising, Bharti Group, Bharti Telecom and Singapore Telecommunications (Singtel) will subscribe to `11,785.7 crore.Ofthis,Singtelwillinvest `3,750 crore, the company said in a separate statement, representing its rights entitlement for its direct stake of Women are becoming a big catchment for lenders with over eight million of them borrowing for the first time every year; of these 66% are from Tamil Nadu, Kerala, Andhra Pradesh, Maharashtra and Karnataka. Indeed, loans to women whether for business or for two-wheelers — have jumped 48% between 2015-2018 against a slower 35% rise to males, who are in fact, a larger consumer base. Detailed report on Page 10 FAIR DEAL FE BUREAU New Delhi, March 7 Singapore’s GIC to invest `5,000 crore in the company 27 Total promoter stake: 62% New entrant (%) GIC's stake 5 15%. Bharti Telecom will renounce its right for shares worth `5,000 crore in favour of GIC, Singtel added. This renunciation is from the stake held bySingtel.As a result,post the issue, Singtel’s effective stake in BhartiAirtelwill come down to be 35.2%, from the current 39%, but it will still remain the single-largest shareholder in Bharti Airtel. Bharti Airtel said in a statement that its promoter and promoter group also reserved FE BUREAU the right to subscribe either itself or through investors for additional shares in the issue, includingintheeventofunder subscription by the public, in line with the current laws. Bharti Telecom holds a 51% stake in Bharti Airtel. Within BhartiTelecom,51% is held by the Bharti family and 49% by Singtel. The effective interest of Bharti family in Bharti Airtel is around 27% while that of Singtel is 39%. This 39% will come down to 35% after the completion of the rights issue. The company’s rights issue price has been set at `220 per fully-paid equity share. Meanwhile, GIC’s investment in Bharti will mark its third largest investment in an Indian companyafterit struck deals with mortgage lender HDFC and real estate developer DLF. GIC last year invested around $800 million in HDFC and pumped in $1.4 billion in the rental arm of DLF a year before that. Continued on Page 2 SPECIAL FEATURE TN women lead 48% jump No more hatchbacks from Honda Continued on Page 2 Kerala businesses flay state govt's stance, Page 6 Promoters’ stake in Bharti to come down post rights issue Borrowing FEBRUARY 16 AAI gets 32 bids for six airports from 10 bidders, including GMR group and Adani Enterprises the general elections are announced and a model of conductprohibitsgovernment from giving such approvals, speculation is rife that Adani group may have to wait till after the elections to get the control of the airports. FUNDRAISING sequentyears.Moreover,companies focused on diversity have generally traded at premia to more homogenous counterparts. Continued on Page 2 Kerala Tamil Nadu 27 13 Share (%) Others 34 10 9 7 Andhra Pradesh Maharashtra Karnataka Women loan borrowers by state (2018) Source: TransUnion CIBIL ‘We don’t control pricing of properties’ ■ BrandWagon, P13
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