OPINION, P6 ECONOMY, P2 EJAZ GHANI Land,capital reforms must for creating 100 m jobs that India needs COMPANIES, P4 EDITORIAL CEA-SPEAK 2021 GOALS India must get real about Covid 2.0, can't lower its guard on testing now Data analytics, AI can help improve quality of assets: Subramanian WeWork aims to be profitable globally by next year: CEO Mathrani NEW DELHI, FRIDAY, OCTOBER 30, 2020 FOLLOW US ON TWITTER & FACEBOOK. APP AVAILABLE ON APP STORE & PLAYSTORE WWW.FINANCIALEXPRESS.COM READ TO LEAD VOL. XLVI NO. 208, 22 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: 39,749.85 ▼ 172.61 NIFTY: 11,670.80 ▼ 58.80 NIKKEI 225: 23,331.94 ▼ 86.57 HANG SENG: 24,586.60 ▼ 122.20 `/$: 74.11 ▼ 0.23 `/€: 86.94 ▼ 0.13 BRENT: $37.20 ▼ $1.92 GOLD: `50,699 ▲ `43 80 bps Net profit (` cr) 1,358 1,372 1 liabilities would be a fair and equitable solution to all stakeholders ■ Largely non-cash settlement would ease pressure on Tata to raise large quantum of debt ■ Minimise any dispute on valuation ■ Tata Sons would continue to have control over the underlying assets rata share of the Tata brand and asked for a neutral thirdparty valuation for the unlisted assets adjusted for net debt. The SP Group’s proposal said as a non-cash settlement, it should get pro rata shares in listed entities of the Tata Group where Tata Sons currently owns stake.“For example, 72% of TCS is owned by Tata Sons and SPGroup’s ownership of 18.37% translates to 13.22% shareholding of TCS (valued at `1,35,000 crore at Continued on Page 2 FE BUREAU New Delhi, October 29 FE BUREAU New Delhi, October 29 TAKING OVER ■ SC to decide IBC provisions against personal guarantors on December 2 CROWDPULLER ■ Relief given by HCs to continue Rashtriya Janata Dal leader Tejashwi Yadav addresses an election rally at Hajipur in Bihar’s Vaishali district on Thursday grantedbytheDelhiHConpersonal bankruptcy proceedings initiated againstAmbani. Continued on Page 2 Cutting back FE BUREAU Budget spend down 26% in September -26 -15 6 -21 (Growth, %, y-o-y) H1FY21 100 46 21 -50 -24.5 Sept July Aug Net tax receipts SELF-RELIANCE US pitches cheaper solar tech to India SUDARSHAN VARADHAN Chennai, October 29 THE UNITED STATES wants India to explore manufacturing a cheaper alternative to silicon solar cells, US energy secretary Dan Brouillette has said, amid high dependence on Chinese technology. Brouillette,who was addressing a virtual press conference at the conclusion of the India energy forum at the IHS CERA Week, said India was “perfectly positioned as a potential manufacturer”of perovskite cells,on whichtheUSwasconductingresearch at its national laboratoryin Colorado. “We have seen recently with this pandemic, supply chain issues have ■ US sees India ■ India plans ■ Perovskite solar 175 GW as potential manufacturer of perovskite cells cells considered potential cheap alternative to silicon cells to increase its renewable energy capacity to by 2022 arisen with countries like China and in certain cases we have become overlydependentupononecountry,” Brouillette said. India has an ambitious plan to 228 FY21BE* 50 0 -100 May 50 40 30 20 10 0 -10 -20 -30 June AHEAD OF starting the next wave of gas production from the KG basin, UK-based supermajor BP has pitched for oil and gas producers sharing their infrastructure to help cut costs and monetise small and marginal discoveries, reports PTI. BP, which in partnership with Reliance Industries is investing $5 billion in developing three sets of discoveries in the Krishna Godavari basin block KG-D6, also wanted sanctity of contracts to be honoured and policy stability. Page 20 Budgetary expenditure (Growth, %, y-o-y) 21 BP for infra-sharing with ONGC; to honour sanctity of contract Stimulus plans are afoot, but the Centre’s expenditure progressively declined since June peak, to contract by a steep 26% on year in September. Only recently has the FM announced `25,000-crore spike in FY21 Budget capex from estimated `4.1 lakh crore. April QuickPicks Vodafone Bharti (Q2FY21) Idea Airtel Usage per Sub (MB) 11,978 16,409 Volume (m MB) 43,40,000 76,39,997 Usage per Sub (mins) 673 1,005 Volume (m mins) 5,55,000 8,60,854 Arpu (`) 119 increase its renewable energycapacity to 175 gigawatts (GW) by 2022, nearly three-fifths of which will be solar power. The energyhungrynation,which imports over 80% of its solar cells and modules from its neighbour, wants to increase domestic manufacturing but has so far had little success. “It is a technology we want to share with India,we think it is better done there than other parts around the world,”Brouillette said. Perovskite solar cells (PSCs) are considered by scientists as a potential cheap alternative to silicon cells. Continued on Page 2 22 18 -55.9 -28.9 1 12 -11.6 Non-tax Non-debt Capex revenue capital receipts Revenue expenditure *Over actuals of FY20 ADDRESSING THE CONCERNS expressed bypotential buyers amid fresh uncertainties caused by Covid-19, the Centre on Thursday changed bidding norms for privatisation of loss-making Air India byallowing bids on the basis of its enterprise value (EV). The buyer won’t need to acceptanypre-determinedlevel of debt, but will require to pay 15% of EVquoted byit in cash. The enterprise value to be quoted (market value of debt and equity) will comprise at least 15% in cash payment to the government and debt takeover by the bidders equivalent to 85% of the value quoted, aviation minister Hardeep Singh Puri said on Thursday. Bidders can even quote to pay100%incashtothegovernment, department of investment and public asset management secretary, Tuhin Kanta Pandey said.A higher cash payment by the buyer will bolster the government disinvestment receipts in FY21, but increase the burden from taking over of full orpart of theAI debt. Under the earlier plan, the buyer was required to take over the airline’s estimated 162 Vodafone Idea Q2FY21 financials Revenue 1.2 Ebitda Net profit/ Ebitda loss margins (%) 1.31 38.5 NA Q1FY21 Q2FY21 (` cr) Chg (%) 38.4 Bids allowed on basis of enterprise value SC transfers all pending pleas in HCs to itself ■ No more petitions to be entertained by the HCs on the issue Key performance indicators AI PRIVATISATION ● PERSONAL BANKRUPTCY THE SUPREME COURTon Friday transferred to itself all the petitionschallengingtheinsolvency and bankruptcy code (IBC) provisions relating to initiation of insolvency proceedings against personal guarantors, including Reliance group chairmanAnilAmbaniandformer Bhushan Power and Steel chairman Sanjay Singal. A Bench led by Justice LN Rao, while transferring the cases pending before the high courts of Delhi, Madhya Pradesh and Telangana, also restrained all HCs from entertainingfreshcasesontheissue. Last month, the apex court had dismissed the SBI’s appeal seeking vacation of the stay present market capitalisation of TCS),”it said in its affidavit. The pro rata share of brand value adjusted for net debt (ie debtless cashand cash equivalents) can be settled in cash and/or in listed securities. For the unlisted companies, an expedited valuation can be done with a valuer selected by both sides, the SP Group has proposed. The Tata brand was valued at $20 billion as per its last valuation. Continued on Page 2 10 bps « THE SHAPOORJI PALLONJI (SP) Group has proposed a non-cash settlement for its 18.4% stake in Tata Sons. It has offered a pro rata division of all the assets of the holding firm as part of the settlement and hasvalued its stake inTata Sons at `1.75 lakh crore. In its filing before the Supreme Court where the matter is pending and hearing is likely to resume from November 3,the SPGroup has sought a direct stake in all the listed companies of the Tata Group, which includes a 13.22% stake in Tata ConsultancyService based on the the formula suggested by it.It has said as per this scheme its stake in other listed firms of the group would be below 10%. It has also sought a pro « Continued on Page 2 ■ Pro rata separation of assets and FE BUREAU New Delhi, October 29 « Bhargava, however, said it was hard to predict whether demand would sustain beyond December after the festive demand had been met and demand for personal vehicles satiated.“Thereisstillnotmuch clarity on urban demand and incomes,” he said. “If demand falls nextyearand if the decline sustains, the government should step in,” he added. BENEFITS -7,203 1,933.6 10.3 9.5 -25,467 (%) ■ For unlisted companies, an expedited valuation can be done with a valuer selected by both sides 4,098 4,152 Ebitda margin ■ Pro rata share of brand value adjusted for net debt can be settled in cash or in listed securities to be given pro rata shares in listed entities of Tata Group VOICE DATA Ebitda (` cr) ■ SP Group VODAFONE IDEA ON Thursdayonceagainpostedabigloss of `7,203 crore in the JulySeptemberquarter,widerthan Bloomberg consensus estimate of `5,193.73 crore.If the losses were narrower than the preceding quarter’s `25,467 crore, it was because this time there was no provisioning for the AGR dues with the company having made it fully by the end of the June quarter. Operating metrics continued to deteriorate as the telco lost 8 million subscribers and its blended churn rate rose to 2.6% against 2% in the preceding quarter. Though Vodafone Idea has received a relief of sorts from 10,659 10,791 10.4 18,744.5 THE PROPOSAL « MARUTI SUZUKI CHAIRMAN RC Bhargava on Thursday said demand for cars remains reasonably robust on the back of pent-up appetite and good purchasing power in rural India. Consequently, he believes there is no need for a cut in GST rates just yet. Maruti sold 96,700 vehicles during the Navratras and expects sales during Diwali in November to be good. “Typically,adownturnisfollowedby a good year. We have seen about one-and-a-half years of a downturn so there is a demand pull from postponed purchases,” he explained at a press conference. Rural sales in Q2FY21 were stronginthewakeofagoodrabi crop and it now accounts for 41% of total sales from 38.6% ayearago.Thecountry’sbiggest carmaker is now selling more smaller vehicles with the share having risen to 62.8% in the Septemberquarter. In lieu of 18.4% Tata Sons stake, Mistry firms should get 13.22% in TCS; stake in other Tata firms to be below 10%: Affidavit in SC « BUDGET CARRIER IndiGo on Thursday reported a net loss of `1,194 crore for the second quarter ended September 30, reports PTI. It had posted a net loss of `1,062 crore in the September quarter of the previous financial year. In the April-June period this year, the airline had incurred a net loss of `2,884 crore. 16,985.3 20.3 FE BUREAU Mumbai, October 29 % change « IndiGo’s Sept quarter loss at `1,194 crore Q2FY21 Revenue from operations (` cr) « THE GOVERNMENT on Thursday banned exports of onion seeds with immediate effect amid rising prices of the bulb in the domestic markets, reports PTI. Earlier, the export of onion seeds was in the restricted category. Q2FY20 the Supreme Court which has allowed it to pay its remaining nearly `50,000 crore of AGR dues in instalments spread over 10 years, the company is still not out of the woods. Its boardhasapprovedafundraising plan of `25,000 crore, but there has been no update on the timing and the source of funds yet. Indicating that its financial condition continues to remain precarious, the company said its ability to continue as a going concern is essentially dependentonsuccessfulnegotiations with lenders and its ability to generate the cash flow that it needs to settle/ refinance its liabilities and guarantees as they fall due. FE BUREAU Mumbai, October 29 REPORT CARD « Government bans export of onion seeds SPGroup seeks stake Better cash flows must for survival in allTata group firms Maruti sees strong festive season sales The company, however, is not sure whether demand will sustain after December VODAFONE IDEA PARTING PROPOSAL « THE RESERVE Bank of India will conduct the second Open Market Operations (OMOs) purchase of State Developments Loans (SDLs), aggregating `10,000 crore, on November 5, reports PTI. RBI had conducted the firstever auction under OMOs in SDLs on October 22. RURAL BOOST 1,606.3 IN THE NEWS RBI to conduct 2nd OMO purchase of SDLs on Nov 5 Bidding norms sweetened ● TOUGH TIMES Competition for jobs in India spiked 30% since 2019 PRESS TRUST OF INDIA Bengaluru, October 29 Bids allowed at enterprise value; no pre-determined debt allocation to potential buyer Bidders to pay at least 15% in cash and take over debt equivalent to 85% of enterprise value quoted Deadline for EoI extended from October 30 to December 14 AI loss estimated at about `8,000 crore in FY21 residualdebtof`23,286crore. As transaction adviser, EY had earlier among other options suggestedthatthedebtlevelbe brought down to `17,464 crore, without additional changesinbiddingconstruct.It had cited the prevailing situation in the domestic and international aviation industry and worseningofAI’sperformance. Continued on Page 2 HIRING IN INDIA continues to recover at a 12% year-onyear growth rate in August 2020, but competition for jobs is 30% higher than last year, according to professional network LinkedIn’s labour market data. LinkedIn said in a statement its data also show that professionals from recreation & travel, retail, and corporate services are more likely to look for jobs outside their current industry. Professionals in recreation and travel are 3.8 times more likely to make the switch, whereas those in retail are 1.5 times more likely, and those in corporate services are 1.4 times more likely to look for jobs outside their current sectors, it said. In India,Python (programming language) emerged as the fastest growing skill in 2019-2020, followed by machine learning,data structures, digital marketing, and HTML 5, the statement from LinkedIn said.
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