TUESDAY, 12 NOVEMBER 2019

20 pages in 1 section www.business-standard.com

MUMBAI (CITY)
~8.00
VOLUME XXIV NUMBER 63

THE MARKETS ON MONDAY CCh

hg
g##
Sensex 40,345.1 21.5
Nifty 11,913.5 5.3 COMPANIES P2 BACK PAGE P20
Nifty futures* 11,943.7 30.3
Dollar
Euro
~71.5
~78.8
~71.3**
~78.6** WITH FESTIVAL BOOST, CAR ALIBABA SAYS SINGLES DAY
SALES SNAP 11-MNTH SLIDE SALE HIT $1 BN IN 68 SECS
Brent crude ($/bbl)## 62.9## 63.0**
Gold (10 gm)### ~37,974.0 ~73.0
*(Mar) Premium on Nifty Spot; **Previous close;
# Over previous close; ## At 9 pm IST;
### Market rate exclusive of VAT; Source: IBJA PUBLISHED SIMULTANEOUSLY FROM AHMEDABAD, BENGALURU, BHUBANESWAR, CHANDIGARH, CHENNAI, HYDERABAD, KOCHI, KOLKATA, LUCKNOW, MUMBAI (ALSO PRINTED IN BHOPAL), NEW DELHI AND PUNE

BATTLE FOR MAHA:

SHIV SENA REJECTED,
NCP GETS ITS TURN
Sept IIP shrinks UCB biz size may be capped
4.3%, steepest
Reserve Bank, finance ministry in talks for ~20,000-crore threshold
Inanothertwisttothepoliticaldramaon
Monday,MaharashtraGovernorBhagatSingh
KoshyarirejectedShivSena’srequesttogiveit
RAGHU MOHAN
Mumbai, 11 November
may take the form wherein UCBs are allowed
to raise deposits of a certain size, and in
A NEW LIFE
some ways, linked to the insurable amount | Unbridled growth of urban

in eight years
threedaystofurnishlettersofsupportfrom
potentialallies—theNationalistCongress The new regulatory framework for urban co- (which is speculated to be increased to ~5 co-operative banks (UCBs)
Party(NCP)andCongress.Thethird-largest operative banks (UCBs) is expected to stipu- lakh, from ~1 lakh); this will restrict their to be a thing of the past
party,NCP,laterclaimedKoshyarihadcalled late a threshold business size of ~20,000 crore, ability to grow as in the past.
themtoformthegovernment.Thestatecould beyond which it will not be life as usual for The current deliberations between the | UCBs will come under the
beheadedforcentralruleiftheNCP,too,fails these entities. Curbs are also expected to be central bank and the Ministry of Finance will purview of systemically
tofurnishlettersofsupportfromCongressand placed on UCBs on some of their specific settle, once and for all, the fallout of a conta- important entities as they
Senaby8.30pmonTuesday. 18> SUBHAYAN CHAKRABORTY activities (especially on sensitive sectors like gion from the stress in the UCB sector. While are part of the settlement
New Delhi, 11 November realty), so as to restrain their growth, given financial entities have been classified as system
the less-than-adequate oversight of them. being “systemically important” — whether

I
BACK PAGE P20 | Be it transition to a
ndustrial output contracted by The Reserve Bank of India (RBI) and the they are banks, or non-banking financial
$70-bn deal: KKR talks to 4.3 per cent for the second- Ministry of Finance are in discussions on the companies — no such classification has been commercial bank,
or an SFB, the business size &
straight month in September, regulatory and business topography of UCBs extended to UCBs.
Walgreens for a buyout nosediving to an 8-year low. after the blowout at the Punjab and As on date, some of the bigger UCBs are activities of UCBs will be looked
KKRhasformallyapproachedWalgreensBoots Spurred by a major loss in manufac- Maharashtra Co-operative Bank. “The R active in the foreign exchange, money, at
Allianceaboutadealtotakethefirmprivate, turing output and a deepening slow- Gandhi and Y H Malegam Committee reports and government securities mar- | A few among the UCBs
sourcessaid.Walgreenshasamarketvalueof down in capital goods production, the of 2015 and 2011 on UCBs have given enough kets; have access to the central
may
$56billionand$16.8billionofdebt.Atthat latest contraction was much higher pointers on what needs to be done for the sec- bank’s liquidity adjustment
tor. These can be expected to form the facility; and carry out busi-
not be allowed to
size,abuyoutofthefirmwouldtopthelargest than the 1.4 per cent fall in August. The
leveragedbuyoutinhistory:the2007saleof Index of Industrial Production (IIP) fell bedrock of the new norms,” said a senior reg- nesses similar to scheduled undertake certain
utilityTXUtoKKRandTPGforabout$45billion by the highest margin since October ulatory official. The official also mentioned commercial banks. business
includingdebt,Bloombergreported. 2011, data released on Monday showed. that the “business size and scope of activities “While a UCB may not | Caps can be
Economists said the latest data is of UCBs as they stand today are points for be as large as a commer- expected
worse than what was anticipated. consideration which have been flagged off in cial bank, the reality is that on specific
THE CMIE TRACKER “Cumulative growth in 2019-20 so far at
1.3 per cent as against 5.2 per cent in
discussions by the central bank to the
Ministry of Finance”.
when matters go wrong,
the effect of the contagion is
business lines,
2018-19 is very low and indicates stag- On the issue of minimum net worth no less severe, as these banks especially on the
Consumer Sentiments Index nation,” Madan Sabnavis, chief econo- norms for UCBs, it was explained that given are part of the settlement sys- exposure
(Base: September - December 2015 = 100) Manufacturing output to sensitive sectors
mist at CARE Ratings, said. the capital structure of UCBs, the matter tem,” said another regulatory
Industrial output had turned nega- contracted 3.9% in could be looked at from the liabilities side. It official. Turn to Page 19 > like realty
tive in August, crashing to an 81-month Sept after a 1.6% fall
low, with across-the-board contrac- in Aug
tions reducing output by 1.4 per cent.

ED probe into global leaks stuck

However, economists had warned of a Electricity generation
major fall earlier as well. After a 4.6 per fell by 2.6% in Sept,
cent industrial growth in July, they had against a fall of

over civil versus criminal row

cautioned against interpreting the data 0.9% in Aug
as a revival of industrial production.
Mining activities and electricity Mining output fell
generation also contracted in 8.4% in Sept, against
September. SHRIMI CHOUDHARY
no growth in Aug
New Delhi, 11 November DRIVE AGAINST | Undisclosed assets of
~6,000 cr detected
involving undisclosed
foreign assets worth
Manufacturing turns sick
September saw the slowdown in the
Note: Based on updated base year of 2011-12
Source: Ministry of Statistics & Programme The Enforcement Directorate (ED) has BLACK MONEY under the Black over ~4,100 cr
manufacturing sector — which
accounts for 78 per cent of the index —
Implementation
been unable to act against a large num-
ber of high-profile individuals
HITS THE WALL Money Act this year
| Act came into
were made
| Prosecution launched
deepen at a fast pace. September out- contractions, up from 15 in the previ- named in global leaks such as effect in July 2015 to in certain cases of
put contracted by 3.9 per cent — much ous month. The IIP database showed the HSBC Swiss case, Panama curb undisclosed global leaks under
higher than the 1.6 per cent contraction contraction spread across all segments Papers and others under foreign assets regular I-T Act
in August. of the automobile sector, with motor the Prevention of Money
Of the 23 sub-sectors within manu- vehicle production dipping by 25 per Laundering Act (PMLA). This is | As of October 31, | Enforcement
facturing, 17 recorded year-on-year cent in September. Turn to Page 19 > because no prosecution com- 2018, 34 prosecution Directorate probing
> RESULTS RECKONER plaint has been filed in any of complaints have a few cases of
these cases under the Black been filed global leaks
Quarter ended Sep 30, 2019; common sample Money Act. under forex laws
of 981 companies (results available of 1,106) PHOTO: SANJAY K SHARMA This peculiar situation has
| 648 declarations
SALES
Sep 30, ’18 25.4% ~14.75 trillion
LIFE IN THE TIME prevented the agency from going
after entities named in the global forex contraven- the regular I-T Act which do not qualify

OF FARM FIRES
leaks. The ED had raised the matter in tion and that’s to be a predicate offence for money
Sep 30, ’19 -0.1% ~14.74 trillion an internal communication with the treated as civil in nature. laundering investigations,’’ said an offi-
PROFIT BEFORE TAX Central Board of Direct Taxes (CBDT) a The Black Money Act mandated the cial privy to the development. According
In the first of a two-part fortnight ago, seeking a response on the tax department to probe undisclosed for- to the Income Tax Act, any Indian citi-
Sep 30, ’18 -1.6% ~1.45 trillion series, we take a look at investigation, according to a source in eign assets and stashed funds located in zen who holds money abroad on which
Sep 30, ’19 14.1% ~1.65 trillion how smoke from farm November 3, there were 31,402 cases the know. foreign countries and accordingly initi- tax was owed but not paid becomes
fires is choking lives and of stubble burning in Punjab, There are a few cases which the ED is ate prosecution proceedings. Until this liable to pay tax, interest and penalty.
NET PROFIT
whether there’s any FROMTHE Haryana and western UP, of which, probing in the HSBC Swiss leak case law was introduced in 2015, cases of over- The Black Money Act, on the other
Sep 30, ’18 -5.6% ~98,551 cr alternative to stubble FIELDSOF over 80 per cent was in Punjab under the Foreign Exchange seas illegal assets were probed under the hand, attracts a steep 120 per cent tax
Sep 30, ’19 28.4% ~1.27 trillion burning. According to PUNJAB alone. SANJEEB MUKHERJEE talks to Management Act (FEMA), which regular and civil Income Tax Act of 1961. and penalty on undisclosed foreign
Companies with zero sales excluded; given the change in corporation the Union Ministry of farmers of the area to find how restrained the enforcement agency from “Certain number of prosecution assets and income besides carrying a
tax rates, to give a fair comparison the profit before tax has been Agriculture, between October 1 and they are coping up 4> initiating criminal proceedings against complaints have been filed in the HSBC jail term of up to 10 years, if
considered; Compiled by BS Research Bureau; source: Capitaline the entities concerned. FEMA deals with leak cases by the tax authorities under proven guilty. Turn to Page 19 >

Honda shuts
Manesar plant
indefinitely
ARNAB DUTTA
New Delhi, 11 November

Honda Motorcycle and Scooter India (HMSI) has indef-

initely suspended operations at its plant in Manesar,
Haryana. Alleging misconduct by its permanent work-
ers, labour unions and contract staff, the plant man-
agement informed all stakeholders, through a notice,
that starting Monday “normal operations” at the plant
were being suspended.
The move comes after a round
The move of negotiations on Monday,
comes after between union leaders and the
a round of plant management, failed to yield
negotiations results. In a notice, addressed to
between the heads of labour unions, plant
union leaders head Saibal Maitra wrote, “The
and the plant union repeatedly asked contractu-
management al workers to continue with their
failed to yield illegal strike and instigated them to
results sit inside the company premises.
The management and contrac-
tors persuaded them verbally and
by a written notice to resume normal operations but illegal
activities of the union, company workers and contractual
workers went on.” “Keeping all these points in mind, nor-
mal operations of the plant is not possible. Therefore, all
associates are informed that normal operations of the plant
are being suspended from Monday,” it read.
Without specifying any date for resumption of oper-
ations, the letter said, stakeholders “will be informed
about resumption of operations once the condition in the
plant becomes normal.” HMSI’s move comes after work-
ers’ agitation, which started on November 5, gained
steam with several political parties and unions lending
their support to them. Turn to Page 19 >
2 COMPANIES MUMBAI | TUESDAY, 12 NOVEMBER 2019

STOCKS > Amara Raja Batteries

Q2 profit before tax
> Essel Propack
Q2 Ebitda margin
> HDFC AMC
Included in MSCI
> TeamLease Services
Q2 profit before tax
> La Opala RG
Q2 profit before tax
IN THE NEWS up 25 per cent at increased 270 bps at Global Standard index down 18 per cent at falls 14 per cent at
~232 crore; YoY 20.9 per cent; YoY w.e.f. November 26 ~19 crore; YoY ~29 crore; YoY

~718.30 CLOSE ~128.00 CLOSE ~3,346.35 CLOSE ~2,578.75 CLOSE ~156.80 CLOSE
* OVER PREVIOUS CLOSE 9.83% UP* 9.97% UP* 4.86%% UP* 7.26% DOWN* 5.88% DOWN*
> .

IN BRIEF
Kalanick sells 20% of his stake
APPLE RECLAIMS TOP SPOT; SAMSUNG SLIPS TO MULTI-YR LOW
in Uber worth $547 million Samsung’s shares drops below HIGHLIGHTS
20 per cent after years (% marketshare ) 45.4% Share of online
Travis Kalanick sold about 20 per cent of his stake in Uber
Technologies Inc last week. Kalanick, 43, a director at the ride- Xiaomi channels rose to the
hailing company, sold 20.3 million shares worth about $547 12.7 highest ever, backed by
29.8 27.3 Samsung 27.1
million that were held in a trust, according to a regulatory filing attractive offers
Vivo 11.8
on Friday. The trades came after a 180-day lockup period Jul-Sep Jul-Sep -2.6% Offline channels
restricting insider and early investor sales following May’s 2018 Realme 2019 shrunk for the second
initial public offering. They were among the large stake 6.7 Oppo 14.3 consecutive quarter
disposals last week that pushed the stock down to an all-time 22.6 18.9
low. Uber has underwhelmed investors in the public markets 10.5 Others 15.2 19% Share of the mid-price
so far. Its shares have tumbled 40 per cent since the initial 3.1 segment (~14,000-
public offering (IPO), dropping the San Francisco-based firm’s
Maintaining its reputation of setting records every now and 35,000) gained six
value from almost $76 billion at its listing to about $46 billion again, the local smartphone market reported the highest- Total shipments grow 9.3% to highest ever percentage points from
as of Friday. BLOOMBERG< ever shipment of 46.6 million handsets in the July- Unitsinmillion Jul-Sep‘18 Jul-Sep‘19 (Figuresinbrackets%change) the affordable segment
September quarter. Apple, with 51.3% market share in (8.5) (-8.5) (58.7) (401.3) (92.3) (-53.6) 51.3% Apple’s market share in
~35,000-plus segment, regained the top spot after two 12.6 9.6 12.6 above ~35,000 segment;
L&T’s construction Goldman India 11.7 8.8
7.1 regained the top spot
arm bags contracts co-head to retire years, battering OnePlus and Samsung. Once a market 6.7
5.5 5.9
leader, Samsung’s share slipped to its lowest in several 4.5 -17.5% Feature phones
worth ~2,500 crore after 21 years 1.3
2.9 market shrunk as access
years, with Chinese players like Realme, Oppo, and Vivo to 4G data becomes a
Larsen&Toubro(L&T)on GoldmanSachsGroupInc’s
Mondaysaiditsconstruction co-headforIndiabusiness, giving it serious competition. COMPILED BY ARNAB DUTTA Xiaomi Samsung Vivo Realme Oppo Others crucial factor for buyers
Source: IDC India
armhaswonsignificant VijayKarnani,isretiringfrom
contractsacrossvarious thebankafter21yearswiththe

Automakers snap losing

segments.Accordingtothe company,accordingtoamemo
company'sclassification,
significantcontractsarethose
intherangeof~1,000croreto
seenbyBloombergNews.
KarnanijoinedGoldmanSachs
in1998asanassociateinequity
TataSteelclocks
higher sales in
~2,500crore."Theconstruction capitalmarketsandmovedto

streak; Maruti leads way

armofL&Thassecuredorders theequityderivativesteamin
fromprestigiousclientsacross HongKongin2000,thememo
variousIndianstatesforits shows.Hebecameheadofthe
variedbusinesses,”L&Tsaidin
astatement. PTI<
bank’ssecuritiesbusinessin
Indiain2009andco-chief
executiveofficertwoyears
later. BLOOMBERG<
branded goods
Svasti Microfinance Festiveseason,launcheshelpbuckthe11-monthdecliningtrend JAYAJIT DASH Tata Steel’s market share in this
raises $10 million Paytm to invest
Bhubaneswar, 11 November segment moved up to 64 per
SHALLY SETH MOHILE cent at the end of Q2 in this
for expansion ~500 cr in early Mumbai, 11 November Tata Steel has overcome the financial year. In the down-
Svasti Microfinance (Svasti) has slowdown in the automotive stream segment, wires division
stage start-ups
A
raised a total of $10 million ttractive consumer offers in the sector by clocking higher sales posted 5 per cent YoY growth,
capital from Adar Poonawalla, Paytm on Monday said it plans festive season, coupled with brisk insegmentslikeindustrialproj- whereas tubes division record-
Nordic Microfinance Initiative to invest ~500 crore in early growth in utility vehicles (UVs), ects and branded products. ed 9 per cent YoY growth dur-
and Rajiv Dadlani Group. A stage start-ups that build drove passenger vehicle (PV) sales in DuringtheApril-September ing the April-September peri-
portion of the funds will be complementary technologies India into positive terrain after 11 months period of FY20, Tata Steel’s od.
used to provide full exits two augmenting the digital of persistent decline, Society of Indian sales volumes in industrial Tata Steel admitted that
early investors, the Michael & ecosystem. The company will Automobile Manufacturers (Siam) said products and projects moved realisations were down with
Susan Dell Foundation and focus on artificial intelligence- on Monday. up 8 per cent year-on-
Bamboo Financial Inclusion based technology and big data AutomakersinIndiacountdispatchesto year (YoY). Sales
Fund. Apart from expanding solutions for new innovations dealers as sales. However, dragged down growth in branded
its branch network, Svasti will
use the capital raised to
that can generate large scale
employment. PTI<
by two-wheelers and commercial vehicles,
the overall dispatches (all categories) during
CHANGING GEAR products and retail
were even higher at 10
expand and increase its MSME the month saw a year-on-year (YoY) drop of Domestic sales Oct ‘18 Oct ‘19 % change per cent YoY.
loan portfolio and provide 12.76 per cent. Total passenger vehicles (PVs) 284,223 285,027 0.28 The company’s
other financial services. Amazon top recruiter Siam expects November and December
Passenger cars 185,400 173,649 -6.34 crude steel production
BS REPORTER< at IIM-Kozhikode to show growth over last year. Automakers
Utility vehicles(UVs) 82,413 100,725 22.22
in the period under
in India dispatched 285,027 units of PVs, review was up 13 per
summer placements against 284,223 units a year ago. Vans 16,410 10,653 -35.08 cent YoY, with deliver-
Embassy Office REIT Amazon emerged as the top New model launches in the UV segment ies rising 6 per cent to
logs 16% growth recruiter with 19 offers at the drove volume growth to a seven-month Total commercial vehicles (M&HCVs) 30,752 15,334 -50.14 8.1 million tonnes (mt).
Indian Institute of high. Sales of such vehicles rose to 100,725 Passenger carriers 2,350 2,537 7.96 “Despite the slow-
in net income
Embassy Office REIT, the
Management, Kozhikode
(IIM-K), which concluded the
units, against 82,413 units last year.
A low base of last year also aided overall
Goods carriers 28,402 12,797 -54.94
down, deliveries in the
branded products and SALES VOLUMES
country's first listed real estate summer placement season for growth in the PV segment. However, vol- Total commercial vehicles 87,067 66,773 -23.31 retail segment and the April-September FY19
investment trust, on Monday its 23rd Post Graduate Program umes are not strictly comparable. Unlike industrial products April-September FY20 Growth
announced quarterly batch of 2019-2021. In all, 131 last year, most festivals this year were Light commercial vehicles 56,315 51,439 -8.66 and projects segment (in %)
dividend of ~463 crore or ~6 companies extended offers to bunched up in a single month. Total three-wheelers 69,483 66,985 -3.6 were largely main- Automotive & 1.27 -24.4
per unit for Q2 FY2020. Its 462 students with the highest Growth in the PV segment was prima- tained. Lower volumes special products
revenue from operations grew stipend pegged at ~3.2 lakh rily led by car market leader, Maruti Total two-wheelers 2,053,497 1,757,264 -14.43 to the automotive seg- 0.96
15 per cent to ~520 crore in Q2 for the two-month Suzuki India, which saw its dispatches to Scooter/scooterette 643,382 580,120 -9.83 ment were compen- Branded 2.35
FY20. Its net operating income internship. The median dealers grow 4.4 per cent YoY to 144,277 sated by higher products &
for Q2 FY2020 grew 16 per cent stipend stood at ~2 lakh and units after 10 months of drop. It was driv- Motorcycles 1,327,758 1,116,970 -15.88 exports”, Tata Steel 2.56 8.93
retail
to ~438.4 crore. the average stood at en by new launches, such as the S-Presso, Mopeds 82,357 60,174 -26.94 said in an investor
BS REPORTER< ~1.75 lakh. BS REPORTER< a mini sport UV. presentation. Industrial 2.83
Analysts remain cautious in their out- Quadricycle 75 87 16 Tata Steel could products & 7.42
look. “Even as relative YoY volumes may achieve higher sales in projects 3.04
TOTAL 2,494,345 2,176,136 -12.76
look better in the next few months as the the branded products
RESULTS CORNER base effect catches on, we expect absolute
volumes to remain under pressure after
Source: Siam

trouble. It shadows the economy,” said per cent more. There are efforts to improve
segmentbyenhancing
presence in the foc-
Downstream 0.56
0.57 1.78
reduction in consumer offers and end-of- Wadhera, adding, there is a lot more to the the economy; hopefully it should work,” he used micro-segments All figures in million tonnes
the-festive season,” said Mitul Shah, vice- steep decline than inventory correction. said, alluding to the recent measures and also through Source: Tata Steel analyst presentation
Adani Ports & SEZ IHCL reports president, research at Reliance Securities. International rating agency Moody’s announced by the finance minister for the channel augmenta-
Sales for the rest of the automakers Investors Service changed its outlook for real estate sector. tion. Aashiyana, the company’s lower sponge and long steel
profit rises 72% Q2 profit at remained negative, even as stock pile-up India from ‘stable’ to ‘negative’ last week. Meanwhile,two-wheelerssalesalsocon- first ever multi-brand portal for prices and further impacted by
to ~1,059 crore ~69.3 crore reduced substantially on the back of heavy
discounts. In PVs, the unsold stock at most
The change, it added, “partly reflected the
government and policy ineffectiveness in
tinued to hurtle down as manufacturers
remained cautious of the ballooning inven-
individual homebuilders, with adverse products mix amid
six Tata Steel brands on board sluggish automotive sector.
Adani Ports and Special TataGroupfirmIndian of the companies have reduced to less than addressing economic weakness, which, in tory and curtailed dispatches to dealers. generated ~100-crore revenue However, the company suc-
Economic Zone (APSEZ) on HotelsCompanyonMonday a month, Rajan Wadhera, president, Siam, turn, led to an increase in debt burden from Led by motorcycles, which skidded 16 per in the April-September period ceeded in ramping up market
Monday posted a 72.4 per reportedconsolidatednet told reporters in Delhi on Monday, adding already high levels for its action”. cent over the same month, the overall sales of FY20, compared with ~100 shareinallsegments,including
cent increase in consolid- profitof~69.30croreforthe Siam expects the momentum in the current Sales of trucks with a gross vehicle in the segment dropped 14.43 per cent YoY. crore logged during the entire the besieged automotive sec-
ated profit at ~1,059.20 quarterendedSeptember and following month to continue. “It will be weight of 16 tonne and above fell sharply by Sales of scooters and mopeds, too, dropped FY19. The company is on tor despite fragile demand.
crore for the quarter ended 30.Ithadpostednetlossof on a lower base of last year, measures taken 54.97 per cent to 12,797 units over a year 10 per cent and 27 per cent, respectively. course for ~250 crore revenue Going ahead, the steel mak-
September 30. The ~5.57croreinJuly-Septe- by the government, and new launches,” ago, as reduced economic activity and an Wadhera attributed it to disruptions in rural from Aashiyana by the end of er is focusing on widening cus-
company had posted a mberquarterayear-ago, Wadhera added. idling fleet of trucks forced transporters to India on account of an extended monsoon, FY20. tomer base within automotive
profit of ~614.23 crore in IndianHotelsCompany Heexpressedconcernoverthesalesper- put off purchases. floods,etc.Heexpectsthesegmenttorevive In the LPG segment, the segment and diversifying to
the year-ago period, APSEZ said.Itstotalincomerose formance of the medium and heavy com- Wadhera also attributed the sharp fall to in the current month, as rural households steel manufacturer improved non-auto segments like agri-
said in a filing to the BSE. 4.83percentto~1,028.57 mercialvehiclesinthegoodssegment.“The the “structured interventions”, such as the get cash in their hand after the recent har- its performance quarter-on- culture, railways, and lifting &
Total income in the quarter croreduringthequarter heavy commercial vehicles are in serious new axle norms that allow trucks to load 35 vest. quarter. From 53 per cent in Q1, excavation.
under review increased to underreviewasagainst
~3,326.90 crore from ~981.15croreinthecorresp-
~2,922.32 crore in the year- ondingquarterofthe

OLX invests $400 mn in Berlin firm’s used-car biz

ago period. PTI previousfinancialyear. PTI

India Cements Jindal Stainless RANJU SARKAR of shares held by early investors, car purchase volumes were
subject to a tender offer process. growing 10 per cent month-on-
back in black, posts ~51.92-cr New Delhi, 11 November
In India, it will help OLX month, with over a million users
income down profit in Jul-Sep OLX Group, the classified
business of South African investor
CashMyCar consolidate its offline
presence in the used car market.
being engaged since January
2019. ‘‘The low motorisation rate
IndiaCementshadprofit JindalStainless(JSL)onMon- entity Prosus (earlier called In the past year, OLX CashMyCar and increasing aspiration
beforetaxof~4.4crore dayreportedastandalone Naspers), is investing $400 has grown to 75 stores in 17 cities exhibited by car buyers and sellers
duringthequarterended netprofitof~51.92crorefor million to become the largest here, with plans to expand to 40 will enable us to expand our
September30,ascompared thequarterendedSeptem- shareholder in Berlin- cities with 150 such presence to 150 stories across 40
toalossofnearly~3.9crore ber30,2019.Thecompany based online car stores by 2021. cities by 2021,” he said.
duringthesamequarter hadpostedalossof~36.44 marketplace Frontier In India, OLX OLX, the fastest- Sujay Tyle, co-founder and
lastyear.Totalincome croreintheyear-agoperiod, Car Group (FCG). and FCG have a growing global classifieds chief executive of Frontier Car
declined11.1percentto JSLsaid.Itstotalincome In India, OLX and joint venture group, first invested $89 Group, said: “FCG has nearly
~1,275crore,from~1,435 increasedto~3,177.67crorein FCG have a joint that operates million in FCG during tripled performance across every
croreayearbefore.The thequarterunderreview venture that operates OLX CashMyCar 2018, providing capital key metric since the first OLX
companywasableto from~3,075.24croreinthe OLX CashMyCar stores stores across for the latter to enhance Group investment less than 18
reducecostofpowerand samequarterayearago. across 17 cities. It 17 cities its services and expand to months ago and has expanded to
materials,andimproveits “Despitemoderatebusiness competes with other new regions, such as the four new countries in that time...
realisation.Salesfellin sentiment,JSLwasableto used car entities such acquisition of Together with OLX and Prosus, we
AndhraandTelangana,by maintainasteadyperfor- as Maruti’s True Value, M&M First WeBuyAnyCar in America. Both Bhaskar Bagchi, general and convenient service to the are aiming to revolutionise the
about300,000tonnesin mancethroughconsistent Choice and Cars24. companies currently work together manager for OLX CashMyCar in entire pre-owned car eco-system, pre-owned car market in India.”
thequarter,saidN improvementinoperational The $400 million comprises a in Latin America, Asia and Poland India, said: “Our joint venture comprising car buyers, sellers and Martin Scheepbouwer, chief
Srinivasan,vice-chairman parametersandinternalcost primary injection of capital in — collectively in these places, with FCG in India will enable us to dealers.’’ executive at OLX Group, said:
andmanagingdirector. efficiencies,"JSLMD FCG, the contribution of OLX’s nearly 30 million pre-owned cars grow OLX CashMyCar as the He claimed OLX CashMyCar “Together with FCG, we are
BS REPORTER AbhyudayJindalsaid. PTI joint venture shares in India and are sold annually, more than double leading pre-owned car offline stores had tripled their presence aiming to build the leading global
Poland, as well as the acquisition that of China. marketplace, by offering a reliable across India in the past year and used car marketplace.”
.
MUMBAI | TUESDAY, 12 NOVEMBER 2019 COMPANIES 3 <

Lupin sells Japanese Hindalco’s Q2 pre-tax profit Britannia

Q2 PBT
arm for ~3,700 crore declines31%onone-timeloss rises 8.5%
ADITI DIVEKAR Food and consumer goods
SOHINI DAS Mumbai, 11 November company Britannia on Mon-
Mumbai, 11 November day posted profit before tax
Hindalco Industries, the flag- (PBT) of ~498 crore for the

P
harma major Lupin dive- ship Aditya Birla Group com- second quarter ended Septe-
sted its entire stake in its pany, reported consolidated mber 30, 2019, a rise of 8.5 per
JapanesesubsidiaryKyo- profit before tax of ~1,492 crore cent when compared with
wa Pharmaceutical Industry to in the July-September quarter the corresponding period of
private equity firm Unison (second quarter, or Q2), down the previous financial year.
Capital for an enterprise value 31 per cent from the same peri- The net profit for the peri-
of Yen 57,361 million (~3,702.4 od last year on the back of low- od grew 33 per cent to ~403
crore). Lupin, through this deal, er realisations and one-time crore on year-on-year (YoY)
exits the generic pharmaceuti- exceptional loss of ~256 crore. basis on account of remea-
cals business in Japan. “Aluminium realisations surement of deferred tax in
However, it would continue to
pursue opportunities in the
EXIT REVIEW capital to support organic and
inorganic initiatives for our
(in domestic operations)
declined 14 per cent year-on-
accordance with lower cor-
porate tax rate. “During this
biosimialars and complex gen- Lupin entered Japan focus markets.” year, while copper realisations phase of sluggish demand, we
eric space in Japan through in 2005 Lupin thus exits the generic have fallen 10 per cent, in turn continued to invest in enh-
partnerships. and oral solid business in Japan hurting the revenue stream,” The company’s consolidated net sales stood at ~29,657 crore in the July-September quarter, ancing our brand equity thro-
Lupin claimed it made four Acquires generics firm but remains committed to com- Satish Pai, managing director down 9 per cent from the same period last year ugh focused product cam-
and a half times of the initial Kyowa in 2007 plex generics and biosimilars at Hindalco Industries, told paigns. This is on the belief
investments it made in Japan Forms JV with Yoshindo portfolio globally, including reporters at the earnings con- Germany-based aluminium down. Noting the dull Ebitda was at 2.83x. that the recent measures ann-
through this deal and that it for biosimilars in 2014 leveraging a portfolio in Japan ference in Mumbai. foil (downstream) plant worth demand scenario, the compa- Meanwhile, Hindalco said ounced by the government
enjoyed the ‘golden age of to partnering with Unison as The company’s consoli- ~225 crore and final evacua- ny’s capital expenditure it is working speedily to sell will kick start the economy
generics’. Buys 21 generic brands well as others. dated net sales stood at tion at the alumina plant in (capex) of ~2,600 crore in 2019- the Duffel plant in Belgium and boost consumer demand
Lupin’s subsidiary Nanomi from Shionogi in 2016 Unison Capital was founded ~29,657 crore in the period Muri, Jharkhand, of ~31 crore. 20 has been brought down to (part of Aleris) after it received as we move forward,” said
B V, which holds 99.82 per cent Japanesepharmamarket in 1998 and is an independent under review, down 9 per cent The company’s consoli- ~2,000 crore for India opera- conditional approval from the Varun Berry, managing direc-
stake in Kyowa, will sell its private equity firm with opera- from the same period last dated earnings before inter- tions. This capex will include European Union for the deal. tor, Britannia Industries.
forecasttodrop1.5%
entire stake to Unison’s entity tions in Japan, South Korea, year. Meanwhile, its consoli- est, tax, depreciation, and expansion at Uktal plant (~700 “There are two interested The firm reported a con-
Plutus. The divested business
annuallyoverthenext5yrs and Singapore. Unison is a lead- dated net profit stood at ~974 amortisation (Ebitda) fell to crore), about ~800 crore as European buyers for the solidated revenue growth of
recorded revenues of Yen 14,241 Fromonceintwoyears, ing PE player in Japan with crore in the period under ~3,918 crore in the period maintenance capex, and the Belgium plant. We are hopeful 6 per cent for the quarter at
million in the first half of FY20 Japannowhaspricecuts investments in health care and review, down 33 per cent from under review, down 8 per cent balance for aluminium down- that we will be able to find a ~3,049 crore on YoY basis, in
(and JPY 28,335 in FY19). The everyyr,squeezingmargins pharmaceuticals sector. the same period last year. from last year. stream. buyer soon,” said Pai. line with industry estimates.
transaction will generate a post Lupin believes that the way The company informed Among segment results, Similar to the April-June Pertaining to the US The Good Day biscuits mak-
tax net cash inflow of around to grow in Japan is through dif- that the new lower corporate Novelis earned ~2,629 crore in quarter, Hindalco’s US-based Department of Justice having er said it witnessed moderate
JPY 32,596 million or ~2,103.9 opportunities, especially in In- ferentiated play. The annual tax option cannot be availed the September quarter, subsidiary Novelis held fort filed a lawsuit against Novelis inflation in the prices of key
crore. The company said this dia. The firm is also exploring price cuts made the Japanese for its India operations for at against ~2,485 crore. for consolidated performance where Hindalco has moved raw materials for the bakery
would reduce the net debt of opportunities in China, it said. generics market unattractive. least five-seven years due to Aluminium earnings were at as domestic operations con- into arbitration, Pai said if the business while an inordinate
the firm from ~4,361.8 crore as Lupin’s Chief Executive Off- Lupin had started to build a its existing minimum alter- ~849 crore, down 38 per cent tinued to remain dismal, company loses arbitration, it increase in milk prices
of September, 2019, to ~1,129 icer Vinita Gupta said, “This specialty portfolio in Japan, nate tax credit. from last year, while copper largely due to weak London will be selling the Louis plant affected its dairy business.
crore and the net debt to equi- transaction is aligned with our however, as the company’s According to Bloomberg earnings nearly halved to ~263 Metal Exchange prices. in the US and still go ahead “We, however, accelerated
ty ratio would improve to 0.08 vision to focus on our key mar- Managing Director Nilesh Gu- estimates, the company’s con- crore, compared to last year. On the debt front, the com- with the acquisition. the drive on cost efficiencies
(compared to 0.32 as of kets and strategic priorities to pta said, “I don’t think we ach- solidated top line was seen at Of the total revenue, pany’s consolidated net debt Sale of Duffel and Louis and leveraged fixed costs,
September). The sale was a part achieve sustainable growth in ieved our goals on the specialty ~30,279 crore in Q2, while the Hindalco sold 60 per cent in stood at ~40,710 crore as on plant (if that happens), how- which helped us improve the
of competitive bidding process. the mid to long term. The deal brands. We announced a co- bottom line was expected to the export market and the bal- September 30, 2019, while con- ever, would lower the deal size shape of our business and
With a strengthened bal- proceeds will be utilised to marketing last year, which be at ~1,028 crore. ance in the domestic as solidated gross debt was at of $2.25 billion (Aleris acquisi- deliver highest ever operat-
ance sheet, Lupin said it would strengthen Lupin’s balance actually helped grow that busi- The one-time ~256-crore demand for the products ~54,154 crore. tion), of which $1.5 billion is a ing profits in the quarter,”
be open for inorganic growth sheet as well as provide growth ness, but it is not material.” loss comprised closure of remained weak due to slow- The company’s net debt to bridge loan. said Berry. SAMREEN AHMAD
4 ECONOMY & PUBLIC AFFAIRS MUMBAI | TUESDAY, 12 NOVEMBER 2019

“Unlike today, there was a time when our “120 lives were lost due to #Demonetisation. The “Our focus is to attract global investments
Election Commissioners were impartial, respected, people would certainly hold NDA responsible for into the oil and gas sector, as India would
brave & feared. Shri #TNSeshan was one of them. this short–sighted decision even though the govt invest $100 billion by 2024 in refining,
My condolences to his family on his passing” may try to shun the responsibility for the same” pipelines, and gas terminals”
RAHUL GANDHI ASHOK GEHLOT DHARMENDRA PRADHAN
Congress leader Rajasthan chief minister Union oil minister

> .

THE MAKING OF RAM TEMPLE

Private banks score on core NIIFInfraFin,
CBDTfaceoff
operations, bad debt in Q2 onexemption
Whileprofitbeforetaxgrew68.1%,netprofitshowedanincreaseofonly1.4%
DEV CHATTERJEE
ANUP ROY Mumbai, 11 November WHAT’S THE
Mumbai, 11 November
NIIF Infrastructure Finance
DISPUTE

P
Model of the proposed Ram temple at Karsewakpuram in rivate sector banks showed greater that is seeking a tax exemp-
Ayodhya. One of the lead counsels for Muslim parties has resilience in their core operations tion since 2015 is set for a dis-
said the decision on seeking a review of the verdict would and exhibited better control over pute with the income tax
likely be taken in the meeting of the All India Muslim their bad debt. Profit before tax increased (I-T) department, which has
Personal Law Board on Sunday PHOTO: PTI but the new tax regime upset the net prof- notified it as a fund only
it numbers for the sector as lenders decid- since April 1 this year. The | NIIF Infra Finance is
ed to move to the new regime. firm, however, was registered registered as Infra Fund
IN BRIEF While profit before tax grew 68.1 per
cent, net profit for private banks grew only
as an infrastructure debt
fund with the Reserve Bank
with RBI since 2015
| CBDT notifies NBFC as infra
Nearly 70,000 BSNL employees 1.4 per cent because of tax charges and
elevated provisioning.
of India since 2015.
The company was regis- fund from April 1, 2019

have opted for VRS: Chairman

According to analysts, net profit (after tered as an infrastructure debt | Opens NIIF Infra Finance
clearing the deferred taxes) would be bet- fund with the Reserve Bank of to tax dispute for
ter from the next quarter. India (RBI) in 2015 and had preceding years
As many as 70,000 employees of Bharat In terms of net interest income (NII) informed the I-T department
Sanchar Nigam (BSNL) have opted for the and operating profit, the private banks ment. Profit before taxes rose 248 per that its income is exempt from | NIIF Infra asks CBDT to
voluntary retirement scheme (VRS) , which were largely at par with public sector THE BANKING cent to ~4,367 crore. Interestingly, ICICI tax under Section 10 (47) of the notify it as a debt
was launched last week, Chairman and MD of
the state-owned telecom corporation P K
banks. While the net interest income for
public sector banks rose 13.6 per cent (17.7
SECTOR IN Q2 YoY in % Bank’s provisions and contingencies fell
37 per cent.
Income Tax Act as notified by
the Central Board of Direct
fund since 2015
Private Public | Company’s profits may get
Purwar said on Monday. In all, nearly 100,000 per cent in State Bank of India), operating Axis Bank reported a loss of Taxes (CBDT) for infrastruc-
Key parameters sector sector ~112 crore in the quarter, whereas profit impacted if CBDT refuses
BSNL employees are eligible for the VRS out of profit in public sector banks rose 28.2 per ture debt fund.
its total strength of about 150,000. BSNL has cent, year on year. NII 20.6 13.6 before tax rose 108.6 per cent to ~2,433 The Section 10(47) of the
pegged its internal target for VRS at 77,000 In case of private banks, the rise in NII crore. Most analysts were happy with the Act grants tax exemption to the from April 1 this year, which
employees, and the effective date of voluntary retirement under and operating profits were 20.6 per cent
Operating profit 25.2 28.2 results and gave a buy rating on the stock. notified infrastructure debt means the tax exemption will
the present scheme is January 31, 2020. PTI< and 25.2 per cent, respectively. Net interest Provisions and contingencies 1.0 -26.4 RBL Bank’s net profit fell 73 per cent due to fund when the fund is set up as not be available for the pre-
margins for large banks were comfortably Profit before tax 68.1 * a 282 per cent rise in provisioning. Profit per the guidelines and the noti- ceding years between fiscal
above 3 per cent. before tax also fell 66.9 per cent because of fications issued by the govern- 2015 and fiscal 2019. The NBFC
CVC says time over for Govt gives 3 months Gross non-performing assets in pri- Net profit 1.4 * provisioning. ment and the RBI. has asked the CBDT to notify it
sanction to prosecute more for export of vate sector banks rose 2.8 per cent, while
in public sector banks, gross NPAs
Gross NPA 2.8 -12.1 IDBI Bank continued with its huge
losses, and posting net loss of ~3,459
According to a source close
to the development, the com-
as an infrastructure debt fund
since its inception so that it
100 govt officials balance sugar quota declined 12.1 per cent. This indicates the
* There were losses in the year-ago quarter
Source: BS Research Bureau crore, which was ~4,632 crore before tax. pany had filed an application can receive the tax benefits for
Ithasbeenoverfourmonths ThegovernmentonMonday banking system has largely bettered the Newcomer IDFC First Bank reported a with the CBDT for notification the previous years.
sincetheCentralVigilance gavesugarmillsthreemonths asset quality pressure witnessed in the Profit before taxes for the private sector loss of ~680 crore, while before tax, the as an infrastructure debt fund The National Investment
Commission(CVC)hasbeen moretillDecembertoexport past couple of years. banks were up 68.1 per cent, indicating bank had a profit of ~100 crore. The bank since fiscal 2014-15, when it and Infrastructure Fund (NIIF)
awaitingsanctiontoprosecute thelastyear’sbalancequotaof It is perhaps also an acknowledgement they did well in their core operations. But, had reported losses in the year-ago receivedtheNBFClicencefrom holds majority 60 per cent st-
nearly100centralgovernment thesweetener.Millswereable that the recognition part of bad assets was elevated provisioning were done by some quarter, too. the RBI to operate as an NBFC. ake in NIIF IFL. While IDFC
employees,includingIASoffi- toexportabout3.8million done. Most of the bad debts of banks in to address bad assets. HDFC Bank maintained its net profit An email sent to the com- Financial Holding Company
cers,forallegedinvolvementin tonneofsugarduringthe this quarter came from assets rated BB Tax charges dented the profitability of growth performance, rising 26.8 per cent pany did not elicit any holds around 30 per cent in the
corruption.Theseinclude 2018-19marketingyear and below, which were already in the ICICI. The bank saw its net profit dip (17.5 per cent before tax), and Kotak response. The tax exemption NBFC, HDFC holds the rest
officialsattachedtoprobe (October-September)dueto watch of the banks, noted analysts. 28 per cent to ~655 crore in the quarter Mahindra Bank reported a 51.1 per cent is significant as the company 11.11 per cent in the fund. The
agenciesliketheCentralBureau depressedmarketconditions, YES Bank attracted the attention of over previous year quarter due to rise in net profit (20.6 per cent before tax). had reported a net profit of NIIF is in talks to acquire the
ofInvestigationandthe againstthetargetof5million analysts with a 343 per cent rise in bad deferred taxes. Bandhan Bank’s net rose 99.3 per cent ~103 crore in fiscal 2019, as balance 30 per cent equity
EnforcementDirectorate, tonneundertheMinimum debts, making its gross NPA ratio 7.39 per “Excluding the impact of one-time after tax and 55 per cent before tax, indi- against ~83 crore in fiscal 2018 from IDFC.
accordingtoCVC. PTI< IndicativeExportQuota cent in the September quarter, against 1.6 additional charge due to re-measure- cating that these banks had benefited from without making any provi- The company’s loan book
scheme. PTI< per cent in the year-ago quarter. IndusInd ment of accumulated deferred tax, prof- change in tax regime. The provisioning sions for tax. grew to ~4,669 crore as
Bank also showed high stress on its books, it after tax would have been ~3,575 crore and contingencies of these three banks The CBDT, however, of March 31 this year, as
Wheat sowing slips with gross NPAs in absolute terms rising in Q2FY20, as against ~909 crore in rose 48.4 per cent, 15.3 per cent, and notified the company as an against ~4,220 crore as of
37%, acreage under Manmohan Singh 145 per cent. Q2FY19,” ICICI said in its results state- 17.2 per cent, respectively. infrastructure debt fund only March 31, 2018.
oilseeds gains nominated to Parl
Wheatplantingremained panel on finance

ONGC may revise terms of production-boosting plan

lowerby37percentat RajyaSabhaChairmanVenk-
969,000hectarestilllast aiahNaiduhasnominated
weekoftheongoingrabi formerprimeministerand
seasonofthe2019-20crop seniorCongressleaderManm-
year,buttheacreageunder
oilseedswashigherduring
ohanSinghtotheparliam-
entarystandingcommitteeon
SHINE JACOB
New Delhi, 11 November
ed to the baseline production”.
Following this, the Directorate IN NUMBERS 17 Contract areas on offer tors had already raised its con-
cerns regarding the bidding
OnJune28,ONGChadcome
out with a Notice Inviting Offer,
theperiod,accordingtothe financeinplaceofpartycolle- GeneralofHydrocarbons(DGH) 64 Number of marginal process and a final call on revis- for 17 contract areas involving
agricultureministry. PTI< agueDigvijayaSingh. PTI< State-run Oil and Natural Gas and ONGC have decided to nomination oil and gas fields, ing the contract should be taken 64 marginal fields notified by
Corporation (ONGC) is likely revise the contract terms. excluding 2 fields by Oil India by the government. the government. The areas had
to revise the terms of the It was in February this year On October 4, ONGC's an estimated oil and oil-equiva-
SBI plans to raise up to ~3.5K cr much-hyped production
enhancement plan for 64 oil
that the Union Cabinet had
cleared the handing over of 66
300 MMToE In-place volume
of oil and oil equivalent gas
director (onshore), S K Moitra,
had written to DGH on the
lent gas of 300 million tonnes
oil equivalent (MToE).
throughadditionaltier-Ibonds and gas fields, after concerns
raised by prospective bidders
discovered marginal oil and gas
fields by ONGC and Oil India June 28 Notice for offer issued
issues raised by investors in the
pre-bid meeting. Their con-
“Another major issue the
prospective bidders raised was
State Bank of India plans to III-compliant tier-I bonds. over the operating cost and (OIL) to private players. cerns, he'd said, were on non- related to estimates, which was
raise up to ~3,500 crore The letters ‘hyb’ indicate other bidding criteria. Industry sources said the 23 Number of companies inclusion of a compensation decided based on third-party
through additional tier-I this is rated a hybrid subordi- According to multiple revised terms might have to be participated in pre-bid fee for baseline production and evaluation. There were also
bonds to strengthen capital nated instrument with equity- sources,atleast14ofthe23com- again cleared by the Cabinet. A meeting held on September 17 wanted to be recompensed on issues related to revenue and
adequacy and support-build- like loss-absorption features. panies that participated in the government official, however, operating expenses for main- penalty, as these were produc-
ing loan portfolio. These tier-I bonds are expect- pre-bid meeting on September said,“Theprocessdoesnotneed and OIL only.” Hughes, Weatherford taining this level. The existing ing fields and our mandate was
Rating agency ICRA has ed to absorb losses through 17 had asked for “compensation any Cabinet clearance, as the Major companies that par- International, and Halliburton. provisions include only pay- to enhance production,” said an
assigned a rating of AA+ (hyb) write-down mechanism. covering the operating cost to modality of bidding was sup- ticipated in the pre-bid meeting ONGC Chairman Shashi ment of share of incremental official from one firm that eval-
withstableoutlookfortheBasel ABHIJIT LELE be borne by the contractor relat- posed to be finalised by ONGC included Schlumberger, Baker Shankar said the board of direc- revenue to the contractor. uated the bids in the early stage.

‘My family is suffering. But tell me, what can I do?’

The first of a two-part series takes a look at how smoke other farmers from my village will go to Mumbai
to meet the company’s representatives to try and
from farm fires is choking lives and whether there’s an get our money back,” he says. (Media reports
claim Punjab Biomass Power Plant shut down as
alternative to stubble burning it was in the red for the last few years.)
“Even now, I don't burn paddy stubble and
SANJEEB MUKHERJEE cutting paddy — there is no way out,” he says. look for alternatives. But, for how long can I do
Nabha (Punjab), 11 November That view is echoed by most farmers in the region this?” Chankaur Singh asks.
this correspondent spoke to. Though they Punjab has been trying to encourage the
Mahendra Kaur, 75, has a recurring respiratory welcome the Supreme Court’s order to give setting up of biomass power plants, which can put
problem for the past few years. Her trouble interim relief of ~100 per quintal for stubble (Top) Dalbir Kaur, senior medical crop stubble to good use. According to the website
becomes acute in winter, especially in days after management, most feel they cannot stop the officer of Civil Hospital in Nabha, of the Punjab Energy Development Authority,
Diwali. Also the time when her husband Joginder practice of burning unless there is a viable and says there is a 10-15% rise in the 13 biomass-based power projects have been
Singh, 80, burns the crop stubble on his 15 acres of long-term solution to the problem. number of OPD patients allocated, of which five have been commissioned.
farm land in Mohal Gwara village in According to the Union ministry of complaining of chest and lung Some experts say crop stubble has high silica
Nabha Tehsil of Punjab’s Patiala district. agriculture, between October 1 and infection; (left) farm fields where content and biomass power plants need to make
In other words, Kaur lives slap- bang in November 3, there were 31,402 cases of paddy stubble has just been additional investments to get it removed for
the middle of the lethal smoke from farm stubble burning in Punjab, Haryana, and ignited PHOTOS: SANJAY SHARMA processing. One reason why private players have
fires that severely pollutes the National western UP, of which, over 80 per cent was been reluctant to set up biomass units that can
Capital Region at this time of the year. in Punjab alone. However, this is almost 12 process stubble. However, with the state
“My wife’s dependence on
medicines has increased in the past few
per cent less than last year.
Pritam Singh of Nabha’s Kot Khurd
POWER PLANTS SET TO MISS EMISSIONS DEADLINE government now trying to offer a more attractive
power rate for investors, private players have
years and so have her trips to the FROMTHE village says going back to the old Ten coal-fired power plants near Delhi are Power Corp, have yet to order the required again started showing interest in these.
doctor,” rues Singh, who grows wheat FIELDSOF method of manual harvesting of paddy, poised to miss a December deadline to install flue-gas desulfurisation units, according to the There are cheaper options available to deal
and paddy on his farm, alternating PUNJAB which does not leave crop residue, is out pollution control devices that would have curbed Central Electricity Authority. The units can take as with paddy stubble. One way would be to
between the two every year. “But do I of the because labour is scarce. Joginder premature deaths linked to toxic emissions. long as three years to secure and install, and it’s encourage farmers to come out of the long-
have any option? I know it is wrong to PART-1 Singh agrees and adds that even the Eight of the plants, whose operators include unclear if the operators will be penalised by standing paddy-wheat cycle. For that to happen,
burn stubble and my own family is labour needed to run combines nowadays Vedanta, Larsen & Toubro, and Uttar Pradesh authorities if they miss the deadline. BLOOMBERG farmers want income assurances akin to what
suffering, but tell me, what can I do?” is hard to get. they get for paddy and wheat. “We don’t want to
Singh cannot afford to buy or hire the Incidentally, Nabha is known for its farm grow paddy any more but we need viable altern-
machines that would cut out the need to burn machine industry. As many as 200-300 units in patients daily in our OPD, but in the last few days, that are miles away. ative arrangements for the crops that we will grow
farm waste. “In 15 acres, I need to run a tractor the area deal in farm machines. Combine this number has increased by at least 15-20 per On their part, the farmers say they can do little instead, and some sort of assured procurement —
thrice — for cutting the stubble, overhauling it, harvesters from this town are sold across India. cent,” Kaur says. Seated in the clean but crowded unless the authorities provide alternative either by agro-based industries or by the gover-
and then for levelling the land. Assuming a But the use of harvesters and resultant civil hospital premises, she says the ones who solutions which can be implemented efficiently. nment,” says Omkar Singh Khaira, general secre-
tractor consumes 65-70 litres of diesel, look at the burning of stubble continues to take a toll on the suffer most are the old and infirm, as they are the Chamkaur Singh of Ghanurki village tried an tary of the Bhartiya Kisan Union (Rajewal).
cost that I already incur. On top of this, how can I health of people in the region. Dalbir Kaur, senior most vulnerable. alternative route to dispose his stubble but now He says farmers can grow basmati, which
purchase another machine that costs not less medical officer at the Civil Hospital in Nabha, “We advise them to stay indoors and take rues it. Two years ago, he sold his stubble for needs less water than other rice varieties and does
than ~1,50,000?” he exclaims. Singh feels the best says since the past few years she has seen a spurt medicines, but very little can be done as pollution ~11.5 lakh to the Punjab Biomass Power Plant in not give rise to the problem of disposing stubble.
option for farmers like him is using a combine in the number of people coming to the hospital is not under our control,” says Kaur, who feels the Patiala. So far, he has received about ~2.45 lakh. But, if they are to do so, they would need the
harvester and burning the stubble left behind. with chest and eye-related complaints during the farmers are to blame for the sharp rise in pollution Chamkaur Singh is running from pillar to post to assurance of a minimum support price of ~3,000
“We have to rely on combine harvesters for days farm fires rage. “We normally get 800-900 levels, both in their own areas and in the cities recover his dues. “After sowing wheat, I and 40 per quintal, he asserts.
6 ECONOMY & PUBLIC AFFAIRS
>
MUMBAI | TUESDAY, 12 NOVEMBER 2019 1

Cement & steel firms hike prices Who did you meet? Chhattisgarh
cops ask NSO on WhatsApp row
as construction demand picks up NEHA ALAWADHI
New Delhi, 11 November

The Chhattisgarh Police has

written to the Israeli company
was in their team, whom they
met in the state police and
details of the meeting. The
department is also considering
writing to WhatsApp.
Some industry players, however, warn that price recovery is supply-led & not on demand behind the Pegasus spyware
that was used, according to
In May, WhatsApp has said
it became aware of NSO Group
ISHITA AYAN DUTT & from individual home buyers, recent revelations, to snoop on having used a coding glitch in
AVISHEK RAKSHIT backed by a higher disposable around 1,400 individuals, the messaging app that let its
Kolkata, 11 November income as a result of good including 121 Indians, by mis- customers spy on some people.
monsoon, has led to revival in using a WhatsApp vulnerability. ior IPS officers in Raipur dur- WhatsApp fixed the issue, and

P
rices of steel and cement demand. But government buy- In a letter to Shalev Hulio, a ing 2017 (when an earlier gov- worked with Citizen Lab, a dig-
are showing early signs ing still remains muted. co-founder of NSO Group, ernment was in place). People ital and human rights research
of recovery led by low “We believe that after a which developed and sells in the state were allegedly sub- group, to contact all those
inventory level at the user end good harvest and investment Pegasus, the police have asked ject to the snooping enabled by affected, telling them what they
and a pick-up in construction returning to the housing, infra- for information on the Israeli Pegasus through WhatsApp. could do to keep their commu-
activity post-monsoon com- structure sectors and with firm's alleged meeting and pres- In the letter dated nications safe. On October 29,
bined with festive buying. increased government spend- entation to senior police offi- November 5, according to WhatsApp decided to sue NSO
Steel companies have ing in rural housing and roads, cers of the state in 2017. sources, the state police has Group for misusing the mes-
increased prices of flat prod- one will see a distinct pick up According to news reports, the asked NSO Group about partic- saging platform’s code to com-
ucts in November by ~500-750 in the core sector,” said Sandip presentation was made to sen- ulars of their visit to Raipur, who promise user privacy.
a tonne and long steel up to Ghose, chief operating officer
~1,000 a tonne, after a gap of at MP Birla Cement.
more than seven months. H M Bangur, managing
Cement prices, too, moved director at Shree Cement, as CRISIL SME TRACKER
up last month in all regions well as Ghose, are of the view
except South India, which wit-
nessed a decline; in Central
that the price increase will
continue on an uptrend in
Double whammy looms for plastics
India, it stagnated. Prices in
South India have remained
the near term.
“Overall, there has been
and plastic products SMEs

C
muted since the monsoon and around four per cent price RISIL Research expects a
remained so even after the fes- increase on both year-on-year combination of weak demand from
tive season. CEMENTING POSITION All figures in ~ per bag basis as well as on a sequential end-user industries and the ban on SMES DOMINATE DUE TO LOW
Cement prices had
The price rise in other parts
been flattish during
basis after the monsoon and single-use plastics to slash growth of the CAPITAL AND ADEQUATE
of the country, especially in AVERAGE PRICE RANGE the festive season. Prices are plastics and plastic products industry by
Gujarat, Punjab, Haryana,
the monsoon, with
going to be sustained and there 200 basis points, to 5-6 per cent (in value AVAILABILITY OF RAW MATERIAL
August September October construction activities
Uttar Pradesh, East India and is no way prices will go down terms) annually through fiscal year 2021, Large players
North 315-320 320-330 325-335 having stopped and
some pockets in the southern further on an average,” Bangur compared with 8 per cent in the three
belt like Chennai, Bengaluru,
Kochi and others, helped pull
West 315-320 320-325 325-335
government projects
coming to a halt. A
said.
In the eastern part of the
years through fiscal year 2019.
Small and medium enterprises (SMEs)
25-30%
Central 330-335 325-330 325-330 prolonged rainy
up the average prices by country, similar to the North, — which account for nearly 75 per cent of
season further SMEs
around four per cent post- East 300-310 310-320 315-325 prices have been increasing the 30,000-odd registered plastics
worsened the
monsoon.
Sales volume in North, East
South 370-380 350-355 325-335
Source: Sector analysts
demand situation
since September to around
~315-325 a bag while in the
processing units in the country, with
Mumbai and Chennai among the big 70-75%
and West India is much higher West, prices improved since clusters — are expected to be hit
than South India. the last month to go up particularly hard. Note: Share is calculated on revenue basis
(fiscal year 2019)
Recovery in steel prices is rural markets,” he said. price recovery was supply-led ment projects coming to a between ~325 and ~335. In Weak demand from automobiles, Source: CRISIL Research
largely led by low stocks in the Jayant Acharya, director and not demand. But they are halt. A prolonged rainy sea- both these regions, dealers coupled with moderating demand from
trade as well as higher inter- (commercial & marketing), hoping that an increase of son further worsened the expect a further increase by consumer appliance and household
national prices. JSW Steel, also said that prices ~750 a tonne may be possible demand situation. ~10-20 per bag this month. segments, is expected to impact revenue — following objections of industry over
T V Narendran, chief exec- had hit bottom. “International in the next month. However, average prices “The price corrections are growth in the current fiscal year. non-availability of ready alternatives —
utive officer and managing prices have moved up by $25- Acharya said it is too early have been moving up since market-led and according to Realisations are expected to shrink, too, it decided to phase out single-use
director, Tata Steel, said, prof- $30 a tonne. As a result, to say whether prices would be August. In the northern region, the normal trend of demand accompanied by a drop in prices of raw plastics by 2022. However, several public
itability of the industry ensured domestic prices are at a dis- increased next month but prices increased marginally by uptick post monsoons and fes- materials such as polyethylene and and private organisations, as well as
there was not much room to count of 6-7 per cent to expected the situation to be ~5 a bag since August which tival months. The increase is polypropylene. state and central government
drop the prices further. imports. Additionally, inven- much better next quarter. took the average to ~325-335 nominal – so we expect it to Added to this is the sharper focus of departments, have banned single-use
“Scrap prices (ex-US) start- tory in the domestic channel is Narendran said India has although volume has declined sustain,” Ghose added. the central and state governments on plastics already, with some states
ed moving up in early to mid- much lower,” he said. been a price setter in the by 5-7 per cent. While the Industry officials noted moving away from single-use plastics, (Maharashtra, Odisha, Goa and Andhra
October, pushing up rebar and At the retail end, there was South East Asian market. demand is driven largely by the that demand was expected to which is expected to impact the revenues Pradesh) implementing the ban.
sponge prices. Also, stocks of some destocking in auto. Therefore, prices in the individual home buyers, an improve from November of SMEs. Added to all this, intense competition
steel are low in trade and con- “There is also resurfacing of region have gone up. uptick was noticed after Diwali. when largescale construction The Centre had earlier announced a in this highly fragmented industry is
sumer network as well as funding in refinery and road Cement prices had been Industry officials are of the activity will pick up and gov- nationwide ban on single-use plastics expected to put operating margins
import volumes have dropped. projects,” Acharya said. flattish during the monsoon view that prices will not ernment spending, especially effective October 2, 2019. However, later under pressure.
There are some positive signs Some industry sources, with construction activities decrease any further. They are in the rural sector, is expected
from pre-festive buying and however, cautioned that the having stopped and govern- of the opinion that demand to help push demand.
8 ISSUES AND INSIGHTS
>
MUMBAI | TUESDAY, 12 NOVEMBER 2019

> CHINESE WHISPERS

The other side of the story learning and they were paying
for no additional value.
To stem the outflow from
government schools, the head
and there are days when the
actual teaching is limited to just
a couple of hours since no one
is free from other tasks. The day
Poor resource allocation and swankier private competitors are two of the many teacher at this school is of the I visit the Buddi school, the head Ready for the next round
firm view that the government teacher is busy helping parents
reasons government schools are losing students rapidly schools must start admitting fill forms that entitle them to a
children from the age of three as ~300 a month per child scholar-
school, taking their count to four. with parents who are there for the first time ever, the school has no parent is willing to wait till the ship. Since almost all the par-
Not far away in Bhoodpur some purpose, one teacher is a fund of ~5,000 towards sports. child is five plus. Once they have ents are illiterate, the task of
village, a single teacher man- absent and the other two are try- They’re planning to add a bas- admitted the child in a private form filling falls squarely on her.
ages a total of 35 students across ing to manage the 80-odd stu- ketball ring and a net for bad- school and she is settled, they are If it wasn’t for the scholarship
five grades, leading to a chaotic dents present. The school has no minton or volleyball. reluctant to withdraw even if a and the mid-day meal, many of
school day. The days when she sweepers, no peon or any other The other good news for this government option which is free the girls would be withdrawn,
takes a casual leave, the school ancillary staff. Students clean toi- particular school is that while it is available. she explains. So it’s in every-
in Buddi sends one of its teach- lets and sweep under the direc- routinely loses students to the While they admit that many one’s interest to get the job done.
ers to substitute, more as a tion of the teachers. A “bhojan private schools in the vicinity, it government teachers are not This is just one of the endless With less than two and a half years
goodwill gesture than because mata” hired for ~2,000 a month often gets reverse migrations. motivated and take the job for non-teaching related obliga- left for the 2022 Uttar Pradesh
of any directive. In yet another cooks the mid day meal for The private schools have better granted, the Buddi school head tions they are required to fulfill. Assembly elections, the Samajwadi
primary school in the same which the school is reimbursed buildings and infrastructure and teacher and her team argue that As the tasks pile up, often many Party (SP) and the Congress have
OUT OF THE BLUE cluster — it has seven in all — ~4.48 per child per meal. The take students at three years plus. it’s unfair to paint everyone with or sometimes all the teachers upped the ante against the ruling
there are two teachers (a head meal looks rather unappetising Parents often don’t want to wait the same brush. Her teachers are are pulled into administrative dispensation, but the Bharatiya
ANJULI BHARGAVA and an assistant teacher) man- to me — a watery mix of rice and till five years to admit their wards rarely absent. The three teachers and other non-teaching duties. Janata Party (BJP) leadership is
aging a total of 12 students. In yellow dal but I observe the chil- and the Buddi school loses stu- at this school do seem quite This is the single biggest factor drawing succour from the fact that the

T
he government primary many schools that have few stu- dren eating eagerly. dents to the private alternatives. motivated and as I watch two of why the performance of stu- two main opposition parties are trying
school at Buddi village in dents, teachers spend the day Meagre takes on a new per- Moreover, the marginally better them conduct a Class I and dents fails to meet expectations. to hobble each other in their bid to
Uttarakhand is more an sitting in the sun, eating spective when I learn how little infrastructure at the private observe that they are rather As I sit and talk to the head, I position themselves as the "main
aberration than the norm. Run peanuts and playing cards. the school manages with. Till schools attracts parents especial- involved with the students. realise half the battle is won if opposition party". On its own, the
by a highly motivated 56-year- The three primary schools very recently, the budget for ly those with boys as they feel She and her team argue that one has the right attitude. Bahujan Samaj Party (BSP) is in no
old head teacher, the school has highlight a plight faced in almost maintenance and contingencies they will get a better deal. The delivery outcomes of govern- Despite having very little, she position to put up a fight. The SP and
86 Muslim children across five every district in the state — and was ~12,000 a year, an amount head teacher, however, proudly ment schools often suffer as no has no complaints barring one. the BSP, which came together for the
grades. It, however, has only four in many states in India —where that has now increased to introduces me to three boys — one is available to do actual “We don’t need teaching aids, Lok Sabha polls, broke off their
teachers, including the head her- poor resource allocation leaves ~25,000 to their delight. The all cases of reverse migrations, teaching. There are innumer- training workshops or guidance alliance because of an unexpectedly
self, to teach the five grades. Not teachers struggling to manage teachers themselves earn that is, those who soon realised able administrative chores, from NGOs. All we need is to be poor performance. In the recent by-
long ago, the school functioned classes along with all the other upwards of ~50,000 a month the private option wasn’t any bet- forms to be filled, norms to be left free to do what we were polls, the SP bagged three seats while
with three teachers but after the duties they are required to do. On with the head teacher drawing a ter. The parents woke up to the met and guidelines to be fol- hired to do,” she says. In her the BSP logged zero. The Congress,
recent thrust on Urdu, a new the day I am at the schoolin take home of almost ~80,000, a fact that better buildings don’t lowed. All this accounts for a case, it is also what she really though failing to open its account, did
Urdu teacher was allotted to the Buddi, the head teacher is busy mini fortune in the village. For necessarily translate into better large percentage of school day loves to do: Teach better than the BSP. It finished second
in two seats and was a close third in
five. The party ascribed this to the
recent rejig of the party's state unit.

The fight over online prices country immensely," he said.

But Ross’s counterpart Piyush
Goyal, India’s Commerce and
Industry Minister, believes small
retailers require protection from large
The SP has already declared that going
solo in the recent by-polls worked in
its favour and nothing can stop it from
regaining lost ground if it followed
the same formula.
As traders prepare to hold a nationwide INDIAN RETAIL MARKET MARKET SHARE (%) players, flush with capital from global
Segment 2019 2022 investors and multi-national compa-
agitation against Amazon and Flipkart this Year $ trillion nies. Walmart paid $16 billion to Wrong address
2019 0.85 Traditional trade 88 75 acquire Flipkart last year, while Bharatiya Janata Party (BJP) legislator
week, the government weighs its options 2022 1.20 Modern trade 9 18 Amazon has committed $5.5 billion Rahul Narvekar, an MLA from Mumbai's
E-commerce 3 7 for the India market. Colaba Assembly constituency, landed up
Source: Deloitte
VIVEAT SUSAN PINTO “This year’s festive season has been “Around 120 million are dependent briefly at the Yashwantrao Chavan Centre
very bad for small retailers and even on small retail here. There are 50-60 at Nariman Point, where the Nationalist

O
nline and offline retailers in larger stores across the country,” says Khandelwal argues that deep dis- impossible to turn the clock back as million small shops across the coun- Congress Party (NCP) was holding its
India have been at loggerheads Praveen Khandelwal, general secre- counting by e-tailers has happened in far as retail growth goes in India. "Let try. We welcome all e-commerce com- meeting to decide on its strategy relating
with each other for long. But tary, CAIT. violation of the foreign direct invest- market forces decide which part of the panies to work in India as an agnostic to the Maharashtra impasse. Narvekar
the chasm appears to have widened in “While the consumer slowdown has ment (FDI) rules for the sector that were business deserves attention,” says platform. However, they cannot left immediately, telling journalists who
recent months, as the consumer slow- impacted business, what has made implemented earlier this year. The Harish HV, managing partner, Ecube become platforms that engage in had been waiting outside that his driver
down gets worse and purchase matters worse is the lack rules stipulate that marketplace entities Investment Advisors, who has predatory pricing, putting small retail- had mistakenly brought the car there.
baskets shrink. of a level-playing field for cannot buy more than 25 per cent from observed the growth of e-commerce ers out of business,” he said at the Narvekar was formerly with the NCP. He
Market research agency us. Since September-end a single vendor nor can they offer prod- closely in the country, both as a con- WEF summit. had joined the NCP after quitting the Shiv
Nielsen has lowered its growth and into the month of ucts from sellers in which they hold an sultant and investor. Estimates by audit and consultancy Sena. His father was in the Shiv Sena, and
forecast for the consumer October, there were mul- equity stake. They cannot manipulate “Traditional trade is a significant firm Deloitte peg the current size of his father-in-law is in the NCP.
market in the October- tiple online festivals held product prices and offer deep discounts part of the retail market here. the total retail market in India at $850
December period to low-sin- by e-tailers, where prod- or push for exclusive launches. However, consumer preference for e- billion. Of this, traditional trade is
gle digits from mid-single dig- ucts were sold at deep The head of a popular electronics commerce has been growing in India around 88 per cent, while organised or Made-for-TV devotion
its in July-September, saying TAKE discounts to consumers. retail chain that has stores in Mumbai, over the last few years. Convenience modern trade is around 9 per cent and A leading Hindi news channel, in its zeal to
sentiment remains weak.
Traditional traders, espe- TWO Business has suffered as
a result for traders,” says
Delhi and other parts of India says that
festive sales picked up during the five-
has been a key reason besides price.
Also, the cost incurred to set up and
e-commerce is around 3 per cent.
In the next three to four years,
capture the sentiment after the Supreme
Court's Ayodhya verdict, took it upon itself
cially, small retailers, corrob- ANALYSIS BEHIND Khandelwal. day Diwali week only, stretching from maintain a physical store doesn’t exist Deloitte says the total retail market in to "manufacture" the sentiment. A camera
orate the view, saying deep THE HEADLINES According to market October 25-29. as far as an online platform is con- the country will touch $1.2 trillion in person of the channel was seen egging on
discounting, online-only research firm RedSeer, e- “Earlier, people would come out to cerned. These gains are passed on to size, led by growth in e-commerce. the crowd gathered in the media lawns of
launches by manufacturers commerce players shop around a fortnight before Diwali. customers,” he says. From 3 per cent, e-commerce will con- the Supreme Court to follow his cue and
and a growing preference for e-com- including Amazon and Flipkart had This subsequently came down to At the India Summit of the World stitute nearly 7 per cent of the total chant Jai Shri Ram. As many joined in, the
merce in the value chain has further clocked $3 billion in gross merchan- about seven days before Diwali. This Economic Forum last month, US market. Traditional trade will shrink court precincts reverberated with the
vitiated the atmosphere, resulting in dise value (of goods sold) during the year, we saw footfalls during the Diwali Secretary of Commerce Wilbur Ross to 75 per cent, while modern trade will religious chant. Of course, it was not the
a sharp decline in business for them. six-day festive sales it ran at the start week. These were the last-minute admitted during a debate on trade double to 18 per cent. journalists alone — earlier, some sadhus
National traders body of October. By the end of October, both shoppers who had missed out on the partnerships that e-commerce result- Anil Talreja, partner, Deloitte India, had also given a shout out to Ram as they
Confederation of All India Traders firms, RedSeer estimated would have online sales of e-tailers. Though we ed in lower prices for consumers. says online and offline retailers will entered the premises — but their on cue
(CAIT) will begin an agitation this week doubled GMV to $6 billion, given that were able to make the best of this rush, "If a hundred years from now, India have to co-exist. “Both consumers and performance surely made for great prime
against Amazon and Flipkart as they festive sales continued through the this trend is not good,” he says. still has as many small retailers as now, brands are happy. I don’t see what the time television.
harden their stand against e-tailers. month on both platforms. Experts have argued that it is it would hold back the growth of the debate is about,” he says.

ON THE JOB > LETTERS

Warning: Analysis can cause paralysis The real picture

NPAs and banks, especially the bigger
ones, were suddenly grappling with
the rising provisioning cost for such
The paper by Bhandari and Dubey than the projections made by Mehrotra This refers to “Moody’s rating action assets. Thus, intrinsically, the prob-
for the EAC-PM shows an increase in and Parida. and the ~28 trn push” by Soumya lem arose not because of the banks,
employment between 2011-12 and 2017- Nevertheless, it seems to be clear Kanti Ghosh (November 11). The writ- but because of the earlier recognition
18 — from 433 million to 457 million. that while employment as defined by er wrongly sees the asset quality methods.
However, the paper by Mehrotra and principal status has increased, there review of the banks and the imposi- In a scenario where the growth
Parida shows a fall in employment was a massive fall in employment as tion of prompt corrective action (PCA) cycle is continuously weakening, ris-
from 474 million to 465 million in the defined by the subsidiary status norms as a way of penalising the ing provisioning costs of banks help
same period. between 2011-12 and 2017-18. banks for past actions. This is not no one, certainly not the drying credit tion and maintenance of the new tem-
The difference is not small. There is I may conjecture here that employ- true. This was done to know the real cycle. Any banker will vouch for the ple. Secondly, it held the destruction
a difference in both magnitude of ment in the unorganised sectors also quality of the advances of the major, fact that almost all economic activi- of the Babri Masjid in 1992 as illegal
employment and in the direction of declined and this is where all the true level of non-performing assets ties go through different growth — the trial in the case should be put
MAHESH VYAS change. First, employment estimates unpaid family workers were engaged. (NPAs) and temporarily restrict the cycles. With the right intentions and on fast track. Thirdly, it compensated
of Mehrotra and Parida are systemati- GST came into force in July 2017 lending activities etc to conserve cap- robust internal S&Ps, many are able the Muslims by giving them five acres
cally higher than those of Bhandari and and brought grief to small and micro ital, stop reckless lending and to weather such fluctuations success- of land in a prominent area, almost

U
ntil the Ministry of Statistics and Dubey. Second, Mehrotra and Parida industries. Employment in these units strengthen the concerned banks. The fully and start growing again. As far twice the size of the land they claimed
Programme Implementation imply a 9 million decline in jobs while is predominantly informal and these state of affairs in the banks had less as AQR for NBFCs is concerned, the (2.77 acre).
released the Periodic Labour Bhandari and Dubey suggest an are also the ones that provide the sub- to do with procyclicality and more to RBI has categorically stated that as of The court has done its job and the
Force Survey (PLFS) report in late June increase of nearly 24 million jobs over sidiary employment of the non-agri- do with politically induced reckless now it doesn’t have any such propos- verdict has cast a greater responsibil-
2019, the dominant narrative on the same six year period. cultural sectors. lending to dodgy borrowers. It was to al. But, yes, the NBFC monitoring ity on the people, parties and the gov-
employment from the establishment Mehrotra and Parida have explained The PLFS survey was conducted protect the interests of the depositors mechanism needs to be strengthened, ernment to derive the possible bene-
was one of denial that jobs were being this difference in a separate note. They from July 2017 through June 2018, a of these banks, a fundamental duty which the RBI is working on. Such a fits. The verdict was the victory of
lost or that there was stress in the labour explain that while their estimates are period of substantial distress in the of the Reserve Bank of India. Second, mechanism must include all aspects justice in which no one won or lost.
markets. After the release of the PLFS, based on the usual principal and sub- unorganised sectors. It is also the peri- before liberally allowing NBFCs to of the functioning of NBFCs including We should now rebuild the bond of
such summary dismissal of the problem sidiary status of employment (UPSS), od when the organised sector gained access liquidity, it is imperative that their capital adequacy, stability, their harmony and respect among all com-
has declined. those of Bhandari and Dubey are based market share from the unorganised an AQR of advances portfolio of big cash inflow and outflow. munities, the onus on Hindus being
This is because the PLFS itself has on only the usual principal status sector that was cracking up. Excluding NBFCs/HFCs be carried out to know the most. This should put an end to
shown that the unemployment rate in (UPS). Researchers who use the NSSO subsidiary status employment during the quality of assets they hold and lev- United we stand the strategy of using places of worship
the country in 2017-18 was at a 45-year surveys usually use the UPSS to esti- this period would reveal this increase el of actual NBFCs. For too long, we as an election ploy. The trust should
high. There was only a brief attempt to mate aggregate employment in India. in market share of the organised sec- have treated public tax money and This refers to the edit “Awaiting real comprise those who enjoy reputation
insist that the PLFS was not compara- Laveesh has explained to this author tor but it would not tell us the rest of central bank money as milch cows closure” (November 11). Kudos to the for fair play. The government should
ble to earlier surveys. But, that did not that it is principal status that is impor- the story. that can be milked at will to paper Supreme Court for finally deciding make certain that the logic of faith is
stick and gratefully the argument was tant and subsidiary status is mostly Here is one evidence of the fall in over serious problems in the financial the emotion-laden Ram Janmabho- not exploited to lay claims on other
not pursued aggressively. unpaid family labour and disguised employment in the unorganised sec- system. There must be an end to band omi-Babri Masjid case that was pend- places of worship as insisted by the
In October 2019, two papers pub- employment or under-employment. tors. Mehrotra and Parida’s paper tells aid treatment where serious surgery ing in courts for a long time. It apex court also.
lished by researchers compare the However, unpaid family labour is not us that employment in manufacturing is required. Third, I agree about the deserves credit for a fair and just ver- Y G Chouksey Pune
results of PLFS with the earlier NSSO small. Jajati tells me that 22 million jobs declined from 59.8 million in 2011-12 to suggestion of monetising/privatising dict that allotted the disputed land
Letters can be mailed, faxed or e-mailed to:
surveys. One of them, “Emerging were lost here and another 26 million 56.4 million in 2017-18. Separately, the state assets. for a Ram temple in Ayodhya. It did The Editor, Business Standard
Employment Patterns of 21st Century were lost in casual labour. Annual Survey of Industries tells us Arun Pasricha New Delhi not give the land to the contending Nehru House, 4 Bahadur Shah Zafar Marg
India-I” by Laveesh Bhandari and Using both estimates, we could infer that employment in organised manu- parties thus depriving them of mak- New Delhi 110 002
Amaresh Dubey is at the invitation of that while UPS employment has facturing increased from 13.4 million Soumya Kanti Ghosh responds: No ing religious or political gains. It gave Fax: (011) 23720201 · E-mail: [email protected]
the Economic Advisory Council to the increased smartly (by 24 million) as to 15.6 million in the same period. We one can deny that AQR has nudged it to the government through a trust All letters must have a postal address and telephone
Prime Minister. The second “India’s demonstrated by Bhandari and Dubey, can therefore deduce that the employ- banks to start recognising restruc- to ensure objectivity in the construc- number
Employment Crisis: Rising Education subsidiary employment has declined ment in unorganised manufacturing tured assets as NPAs. Simultaneously,
Levels and Falling Non-Agricultural so sharply that it has caused a decline declined from 46.4 million to 40.8 mil- it has forced banks to start rethinking > HAMBONE
Job Growth” by Santosh Mehrotra and in overall employment as suggested by lion — that is, a fall of 12 per cent. about ways to resolve the ever-grow-
Jajati Parida is published by the Centre Mehrotra and Parida. Neither of the two sets of ing menace of NPAs. But it is also a
for Sustainable Employment at Azim But, Mehrotra and Parida point out researchers have spoken their last fact that prior to this, restructured
Premji University. a second source of the difference word on the subject and, more will dis- assets were seen largely as good assets
Both papers have no hesitation in between the two papers. This is the pro- sect the data. Hopefully, these will not but buffeted with policy issues. And
comparing the PLFS with the EUS jected population in 2017-18 to estimate paralyse us with too many contradic- it is also true banks were restructuring
(Employment-Unemployment Survey). the absolute numbers of employment tory views but will thaw the establish- such assets as per regulatory guide-
The former does not fuss over compa- from the ratios provided by the NSSO. ment out of its paralysis by denial. lines. They were not doing it on their
rability and the latter asserts that the Bhandari and Dubey have used a slight- own or flouting any regulatory pre-
two are comparable. ly higher rate of growth in population The author is the MD & CEO of CMIE scriptions. Post AQR, all of a sudden,
all such restructured assets turned
 >
OPINION 9
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Volume XXIV Number 63 ILLUSTRATION: AJAY MOHANTY

MUMBAI | TUESDAY, 12 NOVEMBER 2019

Seshan’s legacy
Election Commission’s independence must be maintained

T
irunellai Narayana Seshan, the indefatigable crusader for voters’
rights, passed away in Chennai at the age of 86 on Sunday. Seshan, a
lifelong civil servant, rose in the Indian Administrative Service to the all the legal kinks have not yet been worked out.
highest possible position, that of Cabinet Secretary, a post that he More broadly, the question that should be asked
held until Rajiv Gandhi lost power in 1989, when he was moved to the Planning is whether the correct diagnosis has been made of
the problem. The government has said that the
Commission. He spent the V P Singh government’s time in the Planning
investment managers can take a call to replace the
Commission but when Chandra Shekhar came to power with the Congress par- project developers if necessary. But this should, in
ty’s backing, he was appointed Chief Election Commissioner (CEC). It was as fact, be necessary much of the time. Yet if the pro-

Houses for living,

CEC that Seshan came into his own, and became something of a national hero. moters are replaced, who will market and sell the
Prior to Seshan’s tenure, the Election Commission — an independent body completed units? The AIF? The lenders? Or should
according to the Constitution — was in many ways an arm of the government. the government instead also focus on building a
platform that allows such completed units to be auc-
Seshan ensured that it became de facto independent and not just de jure. He tioned so that proper price discovery takes place?

not investment
laid out a lengthy list of electoral malpractices and did not hesitate to pull up The real problem here is that few of these projects
even Union minsters who appeared to be deviating from it. The 1993 elections will approach anything close to the value that has
across much of northern India, conducted under his supervision, were a land- been set on them in the past, not just by developers
mark in the country’s electoral history. Even areas known for rampant mal- but also by lenders. This is a natural consequence
practice and violence saw relatively free and fair elections. He pushed the gov- of the weakened demand in the economy, and the
ernment into ensuring that voter ID cards were handed out, and investigated If you want to fix the housing sector, fix the market for houses — consistent refusal to lower prices over the past
decade. Demand in metro areas is growing at only
elections to the Rajya Sabha that he felt might be contravening rules — even don’t try to bail out projects, developers, banks or homeowners four to five per cent, while supply is growing in dou-
that of then finance minister Manmohan Singh. ble digits and perhaps close to 20 per cent.

I
Seshan’s life and work is a reminder that even institutions with solid con- t is something of a relief that the Union govern- appetite in private capital for stressed assets as long Meanwhile, there are over a million unsold units.
stitutional backing need persons of integrity if they are to carry out their des- ment finally appears to have accepted that the as there is explicit government partnership. Second, When you have this sort of mismatch, there is only
Indian economy is slowing sharply, across sectors the AIF will take an interest in the relatively high- one possible response: To drop prices till supply and
ignated function. However, once one such person invigorates the functioning
and geographies, thanks to a combination of cyclical cost units that are actually blocking the pipeline — demand are once again in balance. But if you drop
of such an institution, it can continue to be effective even after that leader has and structural factors. This means that the govern- up to ~2 crore unit price in Mumbai, and ~1.5 crore in prices, then both promoters and lenders will have
moved on. This was the case with the Election Commission. While Seshan may ment’s famed decisiveness is finally being applied Delhi. The notion here is that this is a cyclical issue to take a haircut — which nobody is willing to do. It
have objected to the Commission becoming a three-person outfit, it added sta- to the Indian economy. The problem is, however, which can be addressed by appropriate counter- is this basic problem that the government will have
bility to the system and ensured that throughout the contested coalition era, that the diagnoses are wrong, and perhaps even the cyclical policy. Revive the projects, the developers, to address. It cannot ginger up demand. But it can
the Commission was far more than a paper tiger. The question is, however, understanding of the problems is a little deficient, and the banks, and recovery will follow. Comparisons certainly incentivise the lenders that it controls to
thanks to the shortage of economics expertise at the are being drawn to the real-estate bailout by the come clean about the extent of the hole they would
whether the fact that Seshan’s tenure came at the beginning of the coalition
highest level. Thus, too many of the decisions move United States following the financial crisis. be in if the market were functioning cleanly, and
era is crucial to the story of the Commission. Unlike in the one-party state that in the wrong direction. Rather than making the min- But the questions that are being asked of the pro- prices were to drop.
India was in many ways — at least at the level of the Union government — imum intervention required to ensure that markets posal need to be addressed. Perhaps the most basic In other words, we have to stop trying to fix things
prior to 1989, in the 1990s and 2000s, an independent Election Commission begin to work properly, they seek is this: Will even ~25,000 crore be for lenders, projects, homeowners and developers
was a crucial arbiter and largely seen as a useful referee. to prop up all stakeholders in the enough? As this newspaper has — and think instead about how to fix the market
India has now, once again, entered a period when coalitions are not essential hope that recovery is just around pointed out editorially, by some for houses. Only then will the sector emerge from
the horizon. estimates this will be able to impact its current crisis.
for government at the central level. It is perhaps no coincidence that Seshan’s
Consider as an example the deci- only 16 per cent of stalled projects. Throughout the economy, a clean-up process
legacy is being lost, as the Election Commission finds itself increasingly under sion by the Union Cabinet on Efforts of this sort, such as the US’ that would require the loss of equity by promoters
siege. Consider the fallout of the 2019 general elections: The member of the November 7 to set up an alternative TARP programme, need to be over- and haircuts for lenders has been postponed, and
commission who dissented against the “clean chit” to the prime minister and investment fund (AIF) worth whelming in size in order to restore so investment and growth has not returned to nat-
current home minister for violations of the electoral code of conduct has found ~25,000 crore to address the stalled confidence in the market. A cash- ural levels. The real estate sector is just one instance
himself under attack by government agencies. Members of his family have projects problem in the real estate strapped government might not be of this problem, if more consequential than most.
sector. Here the issue appears clear. able to commit the resources that The government will have to accept that it needs to
been put under investigation. This intimidation will certainly have an effect
There are over 1,500 stalled projects are actually needed. The hope per- ensure a structural clean-up rather than viewing
on the Commission’s institutional independence going forward. It is to be
hoped that future commissioners will nevertheless be able to summon some
in the sector, affecting nearly half a
million housing units. More than
POLICY RULES haps is that with budgetary support
of ~10,000 crore, further inputs
this as a cyclical problem that can be solved with a
small amount of money.
of Seshan’s indomitable spirit and maintain the Commission’s proud history two-thirds of these are in Greater MIHIR SHARMA from the Life Insurance The real estate sector is crucial to the broader
of fighting for electoral fairness. Mumbai and the National Capital Corporation and nationalised economy not just because of its backward linkages
Region. The developers behind these projects have banks, private capital might be enthused to match — to cement and steel sectors, for example — but
mostly taken out loans to finance their development; government funds. also because it is a big employer of unskilled labour
they cannot complete the projects without more But then the next question that will have to be and an investment asset for the middle class. The
Taxing issue financing, but banks that are already seeing their
bad loans to the sector multiply are reluctant to throw
asked is whether private capital — or even for that
matter the banks — will consider this programme a
problem has traditionally been that the latter func-
tion takes on great political salience, with govern-
good money after bad. The AIF, in this context, is safe enough deployment of their funds. The AIF has ment policy towards the sector biased towards main-
Lower transaction costs alone won’t increase capital market activity simply an infusion of capital into the sector that will been structured to include, for example, projects taining prices rather than deepening the market.
provide the gap financing necessary to unblock the that may have to go through the National Company This bias must end. The Indian middle class will

A
t a recent event marking the 25th anniversary celebrations of the pipeline, complete some projects, get those housing Law Tribunal. But such cases have been demon- have to learn, just as other middle classes in other
National Stock Exchange, its Managing Director and Chief Executive units into the market, and allow the market to resume strated recently to be vulnerable to legal challenges economies have, that house prices can fall. Houses
Officer, Vikram Limaye made a strong pitch for bringing down secu- normal operation. There are some positive aspects of one sort or another. There is a degree of reluctance are not an investment asset for individuals and
rities transaction and compliance costs in the Indian market. Investors to the design. First of all, there is unquestionably an in finance to become exposed to a process in which households. They are something you buy to live in.
not only have to submit margin; they have to compute and pay a plethora of
taxes, including the securities transaction tax (STT), capital gains tax, stamp
duty and the goods and services tax, on every capital market transaction. In
addition, companies must pay a dividend distribution tax if dividend is paid.
Mr Limaye’s point is that all this makes India’s capital markets less com-
petitive compared to its peers, and hence less attractive and less liquid. In turn,
India’s mood = Moody’s India?
L
that means less investment flows into the Indian economy, thereby constricting ast Friday, I provided hard copies of some med- customary hosannas after the famous “victories” vided two criteria while addressing planners. He
ical documents stored on my computer to a lab- were muted. The BJP won a majority in said that without breaking the logjam, the growth
the ability of businesses to raise financing. In comparative terms, investors do oratory. The printout was hazy due to the humid Maharashtra with its truculent ally, the Shiv Sena, rate in the immediate future could fall to 5 per cent.
need to cope with far lower taxes and much less in the way of compliance costs weather. I apologised to the technician and wondered but is not forming the state government, at least He also said that India needed an investment of $1
in other markets. There is certainly a case for streamlining the tax regime, and when our extended monsoon would end. “When achhe for now, due to the Sena’s hard bargain for its pound trillion to get back on the high growth path. His eco-
for cutting rates. There would undoubtedly be more investment in Indian din come,” the young lady said, without cracking a of flesh. In Haryana, a hasty marriage of conve- nomic advisers listed steps needed to revive India’s
financial assets if the overall transaction costs were reduced. This would indeed smile. She looked a solidly conservative Gujarati, not nience with greenhorn Dushyant Chautala saved growth: Policy predictability, quick project clear-
make it easier for investors to enter the capital market, and that would facilitate given to sarcasm, who had almost certainly voted for the day, but only after a hefty dowry of deputy chief ances and payments, encouragement to investment,
Narendra Modi in all elections, regardless of who the ministership. containing inflation, fiscal consolidation. The new
companies in making public offers to raise funds. actual candidate was. Although the BJP was the largest single party in measures are at best pot-shots at the devils that hob-
The government’s case for continuing to impose this basket of taxes is It is not yet six months since the landslide general both the states, the result cannot be termed as any- ble the economy, not in themselves sure-fire means
simple enough. Most of these are levied at source and automatically collected election victory of Mr Modi and the Bharatiya Janata thing but its defeat, with the opposition having noth- of taming them.
whenever there is a transaction. Moreover, during the current economic down- Party (BJP). After the jubilation of that historic tri- ing to do with it. It is tempting to say this was due to Of course, that did not happen. These observa-
turn, where tax collections are running well behind Budget estimates, the gov- umph, other sugar rush events, such the BJP’s complacency or arro- tions are from a 2013 column talking about the eco-
as Howdy Modi in Houston and the gance of power, but the fact of the nomic mess of the second Manmohan Singh gov-
ernment would be reluctant to forego any source of revenue. There would also
Mamallapuram summit with Xi matter is the much quoted James ernment, but they are just as applicable to the
be complications involved in attempting to reduce or simplify several of the Jinping followed, along with the Carville aphorism, “It’s the econ- situation today. Mr Modi only speaks of the $5 trillion
applicable taxes. For example, while the STT and the capital gains tax are much-cheered (within India exclud- omy, stupid!” economy, and not the measures needed to get there.
specific to the capital markets and apply nationally, the stamp duty payable is ing the Kashmir Valley) scrapping of Economic bad news has been He may have turned to domain experts in foreign
specific to the state of residence. Hence, there is a political angle and states Article 370 and reorganisation of the trickling in since the beginning of policy, but has been his own chief economic adviser
would have to be persuaded to forego stamp duty, or to reduce the rates. In the erstwhile state of Jammu and 2019, but was buried under the all along.
Kashmir. One expected that the vic- nationalistic election rhetoric. All this is of little concern to the aam aurat. She
case of GST, the GST Council, which includes states, would have to be convinced
tors would bask in the warm after- After Modi 2.0, the alarm bells is increasingly worried about two things: Berozgari
that it makes economic sense to reduce the applicable rate on capital market glow for some while yet. But my inter- rang louder and more frequently: (unemployment) and mehangai (inflation). Almost
transactions. There is also the point that tinkering with GST rates to offer sec- locutor’s obvious mockery indicates Recession in the automobile everyone knows or has heard of someone being laid
tor-specific relief sets a bad precedent. Such tinkering has already led to a more a deeper discontent prevailing even ET CETERA industry, falling industrial pro- off, or put on short hours, or youngsters not getting
convoluted GST. in Mr Modi’s backyard. duction, tax revenues below jobs. And even if the inflation indices are low,
Gujarat is not the only region to
SHREEKANT SAMBRANI expectations, international and mehangai crops up because in the overall scheme
There is another point. Investments track earnings and the promise of
register such a reaction. Last month’s domestic agencies cutting growth of things of a household, incomes are not growing,
profits. While ease of transaction and low costs are both important factors in
Maharashtra and Haryana Assembly elections forecasts, until the last weekend’s downgrade of or not fast enough, to meet its aspirations. Its young
attracting investments, the ultimate magnet is earnings growth. India has seen showed a wider spread of the dismay. After the tidal Moody’s outlook from stable to negative. now mostly figure only in the denominator of the
five successive quarters of slowing growth and earnings downgrade. Under the wave of popular vote in its favour in the general Finance Minister Nirmala Sitharaman has been family welfare equation and not in the numerator
circumstances, it is no surprise that investors have been cautious and transaction election, every analyst assumed that the BJP jug- trying bravely to turn back the tide of economic as they used to earlier with their incomes, however
volumes have reduced. A streamlining of the tax regime would certainly be gernaut would roll on, decimating what little woes through a slew of measures: Sops to housing, small they may have been.
desirable. Indeed, there is a case for tax reform across the board; not just in the remained of the opposition in these states following medium, small and micro enterprises, shoring up Share markets are often moved by that elusive
en masse defections to the ruling party. The Congress the tottering financial institutions, but there is as factor, “sentiment.” The political scene is also subject
narrow sphere of financial markets. But in itself, lower transaction costs might
leadership was missing in action, while Sharad yet not much cause to cheer. No wonder columnist to similar sentiments. And the 1.3 billion stakehold-
not be enough to trigger higher trading volumes in capital markets. For that, a Pawar ploughed his lonely furrow in an inhospitable Tavleen Singh reported gloomy forebodings from ers in India are not upbeat at all, sharing Moody’s
turnaround in the economic cycle is required. terrain. It appeared that the BJP would sweep the the corridors of corporate power, albeit only sotto negative outlook.
polls by default even before the first vote was cast. voce (The Indian Express, November 9, 2019).
We know that this did not quite happen. The Consider this: The Prime Minister himself pro- The writer is an economist

A short guide to GDP

happily published. That way the book exasperatingly exacting as T N Srinivasan norm? Then there is the global supply this means there has been an increase
would have got more of an airing. would have been hard put to find fault chain problem of outsourcing. It over- in the per capita use of capital to keep
As things stand, I don’t think anyone with her discussion of it. These chapters states import bills but understates future consumption steady. This is also
has heard of it in India. Or may be less leave you fully aware that GDP is impor- import volumes. And so on. something the Modi government has
from there. When I get caught they make than 25 have and even fewer read it, tant but not the be all and end all of eco- Higher productivity means you pro- succeeded in doing without realising
me write a review. But often, I manage which is a pity because it is by far the nomic performance. duce the same amount with less inputs. it, of course. Conventional measure-
to avoid writing it by the oldest trick best book I have ever read on this pesky That said, it’s the last chapter that Does the reduced consumption of some ment methods don’t account for this
known to reviewers: Postpone till your and surreal subject. hooked me. It’s called “The Future: things — say, energy — increase or sort of thing.
pursuers give up. But Ms Coyle breathes coherence into Twenty-First Century GDP”. reduce GDP? Finally, there is sustainability. If
Anyway, the other day while looking it. She makes GDP comprehensible. So She says GDP must now keep Higher productivity She cites a telling exam- your current consumption will lead to
for some other book at home I found one even though I have avoided writing about in mind three things: means you produce ple: Musicians can double overall reduced output in the future,
I have no recollection of buying or bor- economics in this space, I think I can be Complexity, productivity and the same amount GDP by doubling the num- how do you account for it? As she asks,
rowing. I had probably stolen it from my allowed a little latitude. sustainability. with less inputs. ber of performances, ren- what’s the balance between “invest-
sister. The date of publication is 2014 so Besides, GDP is the flavour of the day. This not only thickens Does the reduced dering the music at twice ment in new assets and the depletion
I guess it’s safe to write about it in 2019. Even politicians are talking about it. They the soup, it makes targeted consumption of the speed. Apply this to or depreciation of existing assets?
KITABKHANA It’s got a marvellous title: GDP — A
Brief But Affectionate History. The author
(and young journalists) must read it as
an exercise in adult education. It will
intervention impossible. some things — say, health and see what hap-
You have to rely on the two energy — increase pens. And, of course, there’s
This lies at the heart of the sustain-
ability question and no answers are
T C A SRINIVASA-RAGHAVAN is an economist called Diane Coyle. She improve their perspective on what, in the broad-spectrum antibiotics or reduce GDP? information. If the Modi available. The Modi government’s
has a PhD from Harvard and obviously end, is a statistical abstraction that is best — fiscal and monetary poli- government has increased emphasis on solar energy and the

F
or the last 42 years my sister and loves economics. Why else would she feel referred to once, not four times, a year. cy and pray. the number of official web- inability of current methods to account
her friend have grimly and grittily affectionate towards, of all things, GDP? Complexity means, just to mention sites and the consumption of informa- for it — is a case in point.
edited a little journal called The The kids these days would call it a A troublesome thing one thing about it, an increase in the tion by citizens, how does this reflect To sum up, the measurement and
Book Review. Snobbishly, they only “cute” book, just 140 pages. The publish- Ms Coyle has devoted the first five chap- types of one product. How do you in GDP growth? importance of GDP is not captured by
review academic books; and, cloyingly, er is Princeton University Press, which ters to the history of GDP and its vexa- account for 100 different types of soap? Then there is the Nordhaus-Tobin the number of underclothes and cars
children’s books. is surprising considering it’s the sort of tious measurement. She makes it quite Or how do you account for what hap- question about capital widening as sold. It is certainly not something for
I regularly steal books of both types book any trade publisher would have a fun read and I think even someone as pens when driverless cars become the opposed to mere widening. Broadly, amateurs to discuss.
 QUICK TAKE: EARNINGS BOOST FOR AFFLE INDIA “I flew halfway around the world to

The Smart help celebrate the launch of debt ETFs

Investor
Shares of Affle India rose 6% after the mobile with the NSE – a milestone for Indian
advertising firm posted healthy growth in markets. Canadians understand their
profit and margins. Analysts are bullish on potential too – we hold 31% of the
MUMBAI | the stock, as they expect the company to post global AUM''
TUESDAY, 12 NOVEMBER 2019 an annualised revenue increase of 35% until STEVE HAWKINS,
2022, given the growth opportunity President & CEO, Horizons ETF Management
WWW.SMARTINVESTOR.IN FOR INFORMED DECISION MAKING <

‘Employees own more than

PSU trade may be losing steam A ROLLER-COASTER RIDE
6% of Nippon India MF’
SUNDAR SETHURAMAN GAINING PSU stocks that gained the most in 2
increase the paper supply and keep
Mumbai, 11 November stock prices depressed,” said an analyst Nippon India Mutual Fund (NIMF), which recently got re-branded from Reliance Nippon Life MF, has given
FAVOUR months, but dropped a bit recently on the recent softness in PSU stocks. sizeable ownership to employees through employee stock options to ensure continuity, as it looks to
After two months of Two- MTD

I
nvestor interest in the stocks of pub- While the stake sale overhang is regain its market share. In an interaction with Jash Kriplani, SUNDEEP SIKKA, executive director and chief
outperformance, the month* change**
lic sector undertakings (PSUs) — always there for PSUs, expectations of executive officer, shares why he thinks brand change can help future growth. Edited excerpts:
which had reached dizzy heights in rally in PSU stocks is GIC Re 74.2 -9.1 an outright sale or privatisation have
the last two months — seems to be fiz- fizzling out New India Assurance 59.2 -9.2 gathered steam, boosting stock prices. What led to market share loss in the debt
zling out as they reassess the feasibility Nifty PSE Nifty 50 BPCL 48.2 -1.7 A core group of secretaries on segment?
of their expectations. During the two NMDC 35.4 -7.9 September 30 approved disinvestment In the debt segment, we have lost substantial
7.1 6.3
months ending October 31, the Nifty 4.1 HPCL 25.0 -8.2 in five PSUs, including BPCL. money; around ~50,000 crore. This has been
PSE (public sector enterprise) index had 3.5 Subsequent news reports speculated because of two reasons. One is what was
Indian Oil 19.9 -7.6
rallied 14 per cent, outperforming the that many foreign companies, including happening with our former group, which
benchmark Nifty, which rose 7.7 per -3.2 0.3 SAIL 17.3 8.1 Saudi Aramco and Rosneft, are in talks had led corporate treasuries to stop investing
cent. Some individual PSUs, such as ONGC 16.9 -1.8 to bid for the government's stake in in our debt schemes. Also, the debt crisis had
General Insurance Corp of India (GIC Oil India 16.0 -4.7 BPCL. Its share price rose 48 per cent in caught the entire mutual fund industry
RE), New India Assurance, and Bharat Sep Oct Nov* Container Corp 15.7 -1.0 September and October but since unawares. Institutional investors were either
Petroleum Corp (BPCL), had jumped Note: *Sep-Oct period; **As on November 11 Source: Bloomberg November, it fell 1.7 per cent. moving out of the mutual fund industry or
more than 50 per cent each. Despite recent gains, the PSU pack gravitating towards certain fund houses.
Market players say privatisation buzz, looks quite attractive in terms of valu- However, we are confident that with the
hopes of hefty dividends post tax cut, made a small increase of 0.3 per cent. rating downgrade, it means you have fiscal ations, say analysts. The Nifty PSE is change in name, change in brand, and
and buyback arbitrage had kept many “Many PSUs had rallied on expecta- pressure. Therefore, liquidity support trading at trailing 12-month price-to- pedigree of Nippon Life, there will be a lot of
of the PSU counters ticking. Also, his- tions of privatisation. As there has been from the government given to some of earnings ratio of 8.64 times, as against re-aligning of debt portfolios. We are
torically low valuations because of a no material, some of them have correct- the PSUs could be constrained,” said Sofat. 25 times for the Nifty. “As long as their confident that we will be able to get back
sharp correction in the preceding three ed. One can expect another round of buy- Also, market players the rating out- business models are robust, there is no most of the lost asset base. Over the last
months had provided investors buying ing if something concrete happens on look change will now force the govern- leveraging, have reasonable cash month, we have been seeing positive
comfort. However, most PSUs have come that front,” said Abhimanyu Sofat, head ment to be aggressive with the disin- reserves, and are available on the sin- momentum. At the same time, we don’t want
off this month, even as the benchmark of research, IIFL. Market players say vestment. “In the remaining four gle-digit price to equity, stocks in that to just look at getting a higher asset base but
Sensex climbed to record levels. Moody’s decision to lower India’s credit months of this financial year, we could segment have opportunities,” said focus on what is right from a business
PHOTO: JAGADISH D CHALKE
So far this month, the Nifty PSE rating outlook could be weighing on the see disinvestment by the government Chokkalingam G, founder of perspective.
index is down 3.2, whereas the Nifty has PSU pack. “If you face a possibility of a in some of the large PSUs. This will Equinomics Research & Advisory. underlying equity collateral in the case of
After the rebranding and dropping our Essel Group debt exposures. Also, we
‘Reliance’ from the name, how confident are didn’t want to take an equity view (i.e. view
you of regaining market share? on the share price of the collateral) for fixed
SHARE OF DIRECT PLANS STEADY AT 15% FOR EQUITY INVESTMENT Banking The growth of the company happened
because of the Reliance name, especially in
income investment.
The collateral was for the purpose of
The share of direct plans as a percentage of overall equity and debt
assets stood at 15.2 per cent and 62.3 per cent as on September 30, SHARE OF DIRECT ASSETS (in ~crore) stocks keep the retail segment. Along with that, our
ability to execute in small cities and towns
protecting capital, and to that effect, we
exercised our right on the collateral.
2019. The share is up 9 percentage points and 15.6 percentage points,
respectively, over a five-year period, but has not budged much in the 62.26
n Total AAUM
n Direct AAUM
indices up played an important role. We are seeing
institutional investors coming back after the
Similarly, we acted in the case of our
exposure to Morgan Credit, where YES Bank
1,175,171.86

past two years. The bulk of the money in debt assets is from change in brand. Also, feedback from retail shares were placed as collateral. In the case
institutional investors. 15.23 % of direct assets VOLATILE SESSION investors and distributors is positive. of Dewan Housing Finance (DHFL), we have
However, we want to focus on profitable moved court. The situation on DHFL is
Sensex intra-day
774,244.94

The percentage of direct basis points in direct equity plans

731,646.06

growth, rather than market share. Getting evolving with every passing day and with
investments in equity schemes vis-a-vis the regular equity 40,323.6 40,400
46.68 6.04 the right investor mix will be important, and every new development. Part of the Anil
547,534.92

may inch up further, with ones. not just focusing on institutional money for Dhirubhai Ambani Group exposure has been
wealthy investors increasingly The Securities and Exchange 40,300 higher asset size. Institutional investors, secured with Reliance General Insurance
255,600.03

routing their money through Board of India has, time and which account for half the industry assets, shares and we are working on the remaining
165,280.25
117,910.24

registered investment advisers again, expressed concerns over 40,200 are already well-aware of Nippon’s part with other MF co-lenders. From
name. High net-worth investors are our perspective, it’d be important to
9,976.41

and wealth management firms. the muted response to these 40,345.1

also familiar. Independent financial stay agile and nimble-footed when
Direct plans allow investors to plans. In August, the regulator 40,100
Nov 8,’19 Nov 11,’19 advisors catering for the retail dealing with some of these credit
bypass distributors and save on said the difference between segment have received the rebranding exposure to safeguard unitholders’
commission. These have a higher regular and direct plans was not Debt Equity Debt Equity Sensex and Nifty on Monday well. In some pockets of retail interests.
net asset value than regular equivalent to the distribution managed to close in the investors, it could take some time, but we are
plans, the expense ratio is also commission in some schemes. 30-Sep-19 30-Sep-14 green after a choppy session, confident of regaining market share post- There have been concerns among
less. Investors can save 80-100 ASHLEY COUTINHO Source: Value Research with banking stocks saving rebranding. distributors about some equity scheme
the day for the indices which performances . What is the way forward to
were otherwise battered by Any programme to ensure employee improving this aspect?
weak global sentiment. retention after Nippon Life’s takeover? The market breadth has been getting quite
The Indian market was As this transaction took place, 6.2 per cent of narrow over the last few years. Mostly four-
THE COMPASS engulfed by bouts of volatil- the company was given across all levels and five stocks have contributed to the spike in
ity triggered by a sharp fall all function of employees in the form of frontline indices like the Nifty. So, there
in Asian equities, amid esca- employee stock options, which can be vested have been some equity schemes that have

Margin gains key trigger for Motherson Sumi lating political issues in
Hong Kong and uncertainty
over the US-China
over a seven-year period. This has been done
to ensure long-term commitment and
aligning interest of all the stakeholders.
not done well. However, most retail
investors coming through systematic
investment plans (SIPs) are not looking at
trade deal. one or two-year performances, but they are
Company puts RAM PRASAD SAHU SMP, which makes interior
and exterior modules, saw
The company’s India busi-
ness witnessed a drop of 18 per
After swinging 266 points
during the day, the Sensex
Both from your and industry’s perspectives,
what is the road ahead to resolve the
looking at longer periods, where the
majority of our schemes are doing well. We
up a better- The stock of Motherson Sumi growth of 20 per cent over the cent, given the pressure on pas- ended 21.47 points, or 0.05 situation on some of the troubled debt want to focus on consistent performance
was up over 4 per cent on year-ago quarter, with operat- senger vehicles volumes, which per cent, higher at 40,345.08. exposures? and not expose investors to high levels of
than-expected Monday after the company ing profit adjusted for the IND shrank 28 per cent in the quar- The broader NSE Nifty We want to do things that are within our volatility.
showing in reported a better-than-
expected performance for the
AS impact coming in
marginally higher than the
ter. Margins dropped by 50 bps
to 16 per cent. While retail
closed with a gain of mere
5.30 points, or 0.04 per cent,
control, rather than wait for intervention
from the regulator or the government. That
Q2FY20 September quarter (Q2FY20). year-ago quarter. Higher loss- trends are encouraging, the sec- at 11,913.45. PTI is the reason we felt it was prudent to sell the More on business-standard.com
Led by a double-digit growth es at the start-up plants limit- tor continues to grapple with
at its two units — SMP and ed the gains at the operating multiple headwinds related to
PKC — the company reported profit level. On a like-for-like higher cost of vehicles, transi-
6 per cent improvement in basis (excluding greenfield tion to BS VI emission norms,
consolidated revenues as units), margins have improved as well as higher inventory.
compared to estimates, by 50 basis points (bps) to 9.8 While Q2 has been better
which had pegged growth at per cent. Improvement in than what the Street estimat-
3 per cent. profitability will depend on ed, investors will have to watch
The uptick in growth came how quickly it scales up its out for start-up costs at its
in from Finland-based PKC, Alabama plant and keep costs greenfield units and its impact
which makes wiring systems under control. Analysts say on profitability. Any cost esca-
and electronics for automotive that the European auto slow- lation will be a drag on mar-
companies. The unit reported down, coupled with the ramp- gins. Similarly, peak capex is
an uptick of 12 per cent con- up in costs at its greenfield behind the company improve-
tributed by growth across facilities is expected put some ment in debt (at ~8,800 crore),
geographies. The improve- pressure on the company’s and will depend on cash flows,
ment at the operational level bottom line over the next cou- organic revenue growth and
also helped the unit’s Ebidta ple of quarters. Recovery in any inorganic plans. Though
to grow by 37 per cent over the the Euro auto sales, which is the stock trades at a sharp dis-
year-ago quarter.The improve- grappling with emission-relat- count its historic averages, giv-
ment at the operational level ed procedures such as the en the headwinds, investors
also helped the unit’s Ebidta world harmonized light-duty should await further improve-
to grow by 37 per cent over the vehicles test procedure ment, especially in margins,
year-ago quarter. (WLTP) is expected in Q1CY20. before considering it.

Novelis’ steady showing a cushion for Hindalco

Healthy UJJVAL JAUHARI indicator — also remained weak.
The outlook for aluminium and copper
performance by Hindalco’s domestic operations reported sta- prices remains challenging, looking at global
ble volumes during the July-September quar- headwinds and uncertainties related to the
its US arm keeps ter (second quarter, or Q2), but its profitability US-China trade war. However, analysts say
analysts positive was bound to feel the heat of declining base
metal prices. On a consolidated basis though,
strong performance by Novelis in a challeng-
ing environment for aluminium producers
on the stock the steady showing of its US arm, Novelis, and Hindalco’s integrated domestic opera-
saved the day for Hindalco. Novelis’ operating tions will support consolidated earnings.
profit (about two-third of overall) grew by 5.8 Novelis, which is a convertor of raw metal
per cent and provided some cushion to the into value-added aluminium products, contin-
consolidated operating profit, which fell by ues to focus on improving operational efficien-
only 9 per cent year-on-year (YoY) in Q2. The cies, innovations, and is upgrading its automo-
trend may continue in the near term. tive recycling facility in Greensboro, Georgia.
In the domestic aluminium segment, Analysts say the demand for aluminium
Hindalco maintained sales volumes, which, at from the US auto industry remains favourable
328,000 tonnes, was up 1 per cent YoY, even as and there are supply constraints for alumini-
the domestic market contracted by 6 per cent um cans too. The management has been guid-
YoY in Q2. While this is a positive, global alu- ing for a sustainable per tonne profitability
minium prices dropped by 14 per cent YoY, of over $400. Novelis had reported an adjust-
averaging at $1,761 per tonne. Consequently, ed per tonne profit of $448 in Q2 of 2019-20
aluminium premiums (price over benchmark), (FY20), up 2 per cent YoY. Analysts at Motilal
too, remained weak. Hence, this segment’s prof- Oswal, while remaining conservative on
it at ~849 crore was down by 38 per cent YoY. Novelis’ per tonne profitability, still estimate
Total copper metal sales, too, improved 5 it at $442 and $401 in FY20 and 2020-21
per cent YoY, but again, the segment’s profit at (FY21), respectively. Analysts believe the stock
~263 crore was down by about 35 per cent YoY, trades at attractive valuations of 5.7x enter-
primarily because of the monsoon-related prise value/operating profit and 9x price-to-
impact on operations and lower realisations of equity, based on FY21 estimates.
byproducts such as diammonium phosphate Progress on the acquisition of Aleris, which
and sulfuric acid. Treatment charge and refin- Hindalco is positive of closing in the stipulated
ing charge (TC/RC margins) — a profitability time of January 21, 2020, is another trigger.
.
MUMBAI | TUESDAY, 12 NOVEMBER 2019 THE SMART INVESTOR 11 <

For Nestlé, continued pressure

IN BRIEF
SAT lifts market
ban on former
Gammon Infra CMD
The Securities Appellate
Tribunal (SAT) has set aside a
Securities and Exchange
Board of India (Sebi) order
that banned Abhijit Rajan,
on margins may hurt investors
former chairman of Near 10% growth in top line in Q3 fails to cheer the Street as PBT growth hits a 10-quarter low of 4.2%
Gammon Infrastructure
Projects, from the capital SHREEPAD S AUTE materials as a percentage of net
markets for alleged insider Mumbai, 11 November INPUT COSTS CONTINUE TO RISE A BIT DOWN sales shot up by 214 basis point
trading. In July 2014, Sebi „ Ebitda margin (%) Raw material cost as % of net sales YoY in the quarter (see chart).
had barred Rajan after
finding him guilty of trading
in shares on the basis of R
ich valuations usually
indicate strong investor
sentiment towards a
Thus, Nestlé’s Ebitda (earnings
before interest, tax, deprecia-
tion and amortisation) margin
Asian Paints
unpublished price sensitive
information. It had also
directed to disgorge an
stock, but it also means that
there is little room for such com-
panies to disappoint the Street.
contracted by 131 basis point
YoY to 23.4 per cent in Q3, the
fourth consecutive quarter of
highest valued,
amount of ~1.09 crore,
which was already
deposited by him in an
This was the case with Nestlé
India, the maker of popular con-
sumer brands such as Maggi, Kit
margin compression for the
consumer products major.
Even in the near term, Nestlé
still investors
escrow account. PTI< Kat, Munch, and Nescafe.
Despite the company having out-
performed its peers so far, in
expects milk and related input
costs to remain high. Analysts at
ICICI Securities have thus cut
pouring cash
terms of volume and sales their earnings estimates for the
Sebi to auction growth in the September 2019 Ebitda: earnings before interest, tax, depreciation and company by 3-4 per cent over BLOOMBERG
assets of Citrus, quarter amidst a weak con-
amortisation Source: Company and BS Research
2018-2020 amid higher-than- Mumbai, 11 November
Royal Twinkle sumption environment, the expected inflation in input
stock of Nestlé shed 2.54 per cent lower than analysts’ expecta- was led by volumes and a Expect healthy traction in costs. However, as observed in Surrounded by all the doom and gloom around the
The Securities and Exchange to trade at ~14,107.50 on Monday. tions of ~760 crore. In fact, 4.2 favourable product mix. Lower revenues ahead, say analysts. the third quarter, cost efficiency Indian consumer sector, a paint producer got so
Board of India (Sebi) will Continued input cost pres- per cent YoY growth in PBT was dependence on rural areas, “Focus on innovation, launch- measures resulting in better much love from investors that it is now the most
auction assets of Royal sure, which hurt overall its the lowest for Nestlé in 10 quar- which are facing es, market share, operating leverage and faster expensive stock in the country’s benchmark index.
Twinkle Star Club and Citrus September quarter (Q3) earn- ters. Its net profit grew by 33.5 relatively more Nestlé’s operating and premiumisa- growth of high-margin premi- Asian Paints’ price-to-earnings ratio of 80.1
Check Inns next month in ings growth, weighed on per cent YoY, driven by lower demand head- revenue grew tion is likely to um products could help partly makes it the highest valued on the S&P BSE Sensex
order to recover funds worth investor sentiments in a flat tax rates. The effective tax rate winds than urban 9.4 per cent YoY to boost volume-led confine the input cost pressure Index. The paint manufacturer has climbed 29 per
thousands of crores raised market (the Sensex was up 21 of Nestlé in Q3 was about 15 per regions, helped ~3,216 crore in Q3, growth,” say ana- at the Ebitda level. cent in the last six months — when the broader
by the companies in the points or 0.05 per cent). Nestlé, cent versus around 34 per cent Nestlé fare better in-line with lysts at Edelweiss Overall, while the company’s gauge has gained 6.5 per cent — and has hit a record
garb of sham 'timeshare' which follows the January- in the past, thus not comparable some of its peers. Bloomberg Consensus Research who have long-term growth and earnings high in the past month.
holiday plans. The move December accounting period, with the year-ago numbers. The company estimate; its PBT ‘hold’ rating on the potential remain intact, investors Investors value its ability to churn out a record
comes following the declared its Q3 result on Friday, Nestlé’s top-line growth was earns 75 per cent of ~699.9 crore was stock. are recommended to wait for a profit at a time when management at other con-
directions of the Supreme post market hours. entirely driven by domestic of its revenues way lower than The worry, decent correction before entering sumer-oriented companies have warned of the
Court, Sebi said in a notice While the company’s oper- sales (93-94 per cent of the over- from big analysts’ expectations however, is elevat- the stock given near-term margin impact from an economic slowdown. Of the 39
on Monday. The properties ating revenue grew by 9.4 per all sales), which rose 10.5 per cities/towns. of ~760 crore ed input cost. challenges and pricey valuation. analysts who cover the stock, just four have the
at Alappuzha in Kerala will cent year-on-year (YoY) to cent over the corresponding While Nestlé’s key According to The stock currently trades at 60 equivalent of a sell call. India’s paint industry,
be auctioned on December 4 ~3,216 crore in Q3, in-line with period last year to ~3,039 crore. brands performed strongly in Nestlé, its Q3 witnessed higher times its 2019 estimated earnings, which Asian Paints dominates with around 40
at a total reserve price of a Bloomberg Consensus estimate, Exports were down by 7 per cent Q3, according to the company’s commodity prices, especially in a 15-25 per cent premium to its per cent market
little over ~19 crore, it the reported profit before tax amid lower coffee sales to release, its focus on premium milk and its derivatives. This peers, such as Hindustan share, has been ON THE TOP
added. PTI< (PBT) of ~699.9 crore was way Turkey. Domestic sales growth portfolio helped. spoiled the show. Cost of raw Unilever and Britannia. viewed as a haven. Base = 100
“Asian Paints is
likely to keep rising” Asian Paints 1,100
thanks in large part to Sensex 987.5

Revive old policy or buy new one? Weigh pros and cons double-digit growth
in its volume of paint
sales, said Abhijeet
Kundu, an analyst at
900
700
500
Term plan premium rates have fallen. So, a new online policy PERSISTENCY IMPROVING, BUT STILL LOW higher premium because his
age would have gone up.
Antique
Broking, who esti-
Stock 100 231.0
300
can be cheaper. But poor health can lead to loading Average persistency (%) There is a catch. “Online
term plans have much
mated the increase to
be 15-17 per cent in the 100
13M 25M 37M 49M 61M
SANJAY KUMAR SINGH two years. says Naval Goel, chief execu- lower premiums than their last quarter. “There 0
The grace period ranges tive officer and founder, 2013-14 57.70 53.46 43.84 38.13 28.55 offline versions. Also, online are very few compa- Dec 31,’09 Nov 11,’19
Many policyholders allow between 15 and 30 days in PolicyX.com. Insurers offer 2014-15 58.55 47.68 42.94 37.05 22.44 term plans tend to offer a nies that are growing
their life insurance policies policies after which they concessions on the penalty 2015-16 60.68 50.47 42.28 38.89 28.74 higher minimum sum at that kind of rate.”
to lapse. According to the lapse. According to the during special drives. assured,” says Navin Asian Paints’s stellar performance is a contrast to
data from the revised rules, non- Traditional policies will 2016-17 64.70 53.15 45.59 38.78 33.58 Chandani, chief business its consumer peers. Titan, the country’s biggest jew-
Insurance linked life policies now acquire a guaranteed 2017-18 68.68 56.86 48.15 43.11 35.19 officer, BankBazaar. The eler, plunged 10 per cent last week after nearly halv-
Regulatory and can be revived with- surrender value after two M stands for month. Persistency measures the percentage of customers who stay with their total cost of a new online ing its growth guidance for the second half of the
Development in five years (up from years (down from three policies after a particular period. Source: Handbook on Indian Insurance Statistics, 2017-18 term plan may work out to be year. Srinivas Phatak, chief financial officer at
Authority of India, two years earlier) earlier). A policyholder will less than the cost of reviving Hindustan Unilever, India’s biggest consumer goods
only 35 per cent of from the date of the not lose his money if he after paying the first premi- pays the second-year an old offline policy (for the company, said “the demand outlook is definitely
policies remained first unpaid premi- stops premium payment um of a traditional policy premium, his outgo will remaining period), especially challenging” in an earnings call last month.
active after five um, and unit-linked after two years. Different that he does not want to con- be ~1 lakh more. But the if the sum assured is high. Consumer businesses are suffering in India as the
years.
Insurers occasion-
YOUR insurance policies
(ULIPs) within three
rules apply to ULIPs.
Suppose a policyholder pays
tinue with it. “Bear the loss
of the first premium and let
surrender value he gets will
be only 30 per cent of
One risk in opting for a
new cover, says Raghaw, aris-
economic expansion has slowed to a six-year low,
exacerbated by a credit crunch amid a shadow bank-
ally launch special MONEY years. The policy- one or two premiums and the policy lapse,” advises premiums paid until es if a person has acquired a ing crisis. Consumers have also tightened their belt
drives to revive holder needs to pay a then stops. His fund Deepesh Raghaw, founder, then, or ~60,000. disease in the interim. He as the unemployment rate hit the highest in 45 years.
lapsed policies. Currently, penalty along with the value is moved to a discon- PersonalFinancePlan, a In a term plan, too, the may not get a policy at all, or Even the recently concluded festival season doesn’t
Life Insurance Corporation unpaid premiums. tinuance fund where it earns Securities and Exchange decision to revive an old poli- it may come with a heavy seem to have lifted spending by much, with shop-
of India has launched one “Depending on the insurer’s 4 per cent return. The accu- Board of India-registered cy or buy a new one needs to loading of premium. Even keepers reporting a poor show.
wherein it is allowing cus- policy, you will have to pay 8- mulated value is paid out investment advisor. The be thought through. If a per- when reviving old policies, Defying weakening consumer confidence, Asian
tomers to revive policies that 9 per cent penalty on unpaid after the policy completes rationale is as follows. son lets his old term policy insurers reserve the right to Paints’ net income has risen for two straight quarters
have remained lapsed for premiums for a plan that will five years. Suppose the first-year lapse and goes to buy a new ask the policyholder to to a record 8.3 billion rupees ($117 million) in the July-
more than yield 5-6 per cent return,” Suppose a person realises premium was ~1 lakh. If he one, he will have to pay a undergo a health check-up. September period.

COMMODITIES1
>

Vegetable prices jump in

DeBeers says no to returns Mumbai as supply falls
In the first seven months According to Mehta, since the last four
months, DeBeers has been selling 30-40 per DILIP KUMAR JHA
of 2019, gross exports of cent less. The scenario has now changed, Mumbai, 11 November
whereby supply of rough diamonds and con-
gems and jewellery fell sumption of polished diamonds has more or Vegetable prices have jumped between 25 per cent and 60 per cent over the
6.25 per cent to $22.42 bn less aligned. “So you don’t see polished
diamond prices under pressure any more
past month across Maharashtra because of a sharp decline in their supply after
unseasonal rainfall resulted in crop damage and also delayed harvesting.
and sales in the US also seem to be good. The wholesale price of onions in Mumbai on Monday was ~60 a kg, a 94
> PRICE CARD VINAY UMARJI This is also helping.” Mehta added. per cent jump from ~31 a kg on October 15. Similarly, cabbage became cost-
Ahmedabad, 11 November An email sent to De Beers remained lier by 44 per cent to trade ~23 a kg; it was ~16 a kg four weeks ago.
unanswered. Cauliflower reported a 64

A
fter changing its policy by letting According to provisional data from the per cent jump in its wholesale
As on Nov 11 International
------------------------------------------------------------------------------
Domestic
------------------------------------------------------------------------------ authorised buyers or sightholders Gems & Jewellery Export Promotion Council price in nearly one month to
Price %Chg# Price %Chg# (as they are called) return 2 to 30 per Exports went down 24.86% to $1.64 bn in (GJEPC), overall gross exports of gems and cost ~23 a kg on Monday, as
METALS ($/tonne) cent of rough diamonds sold to them in August and 17.8% in September to $1.94 bn jewellery shows a decline of only 2.05 per against ~14 a kg on October 15.
October-November, DeBeers is likely to cent to $3.46 billion during October 2019 In the retail market, green
Aluminium 1,827.5 4.7 1,916.9 -3.1 revert to its original policy of no return dur- understood to have offered the facility to compared to $3.5 billion in October 2018. In vegetable prices have jumped
Copper 5,951.5 3.6 6,184.4 -1.8 ing the December 2019-January 2020 sale. take back sold goods. September, the decline was 6.24 per cent up to 100 per cent in the past
There was an oversupply situation in “Last month, when DeBeers gave and in August the fall was 14.4 per cent. four weeks. “The availability of
Nickel 16,190.0 3.6 16,930.2 8.5 the roughs variety, given the challenging sightholders a parcel of rough diamonds, Even in the first seven months of this vegetables has gone down due
Zinc 2,507.0 10.8 2,770.4 5.4 cut and polished diamond demand and it also offered the flexibility of returning year, gross exports of gems and jewellery to fewer arrivals in wholesale
sales in the festival season. This prompted 30 per cent of the goods after sorting. This fell by 6.25 per cent to $22.42 billion and it mandis. Their supply was dis- COOKING HOT
Gold ($/ounce) 1,464.2* -1.9 1,652.6 1.1 the 130-year-old company to relax the was to help the manufacturers since the was 7.6 per cent in the first six months. rupted because of low yields Vegetable price movementin Mumbai
Silver($/ounce) 16.9* -0.5 19.3 1.8 return policy for its sightholders. market has been tough for the last one More importantly, fall in exports of cut and high spoilage. Consumers Wholesale (~ Qtl) Retail (~ Kg)
With festive season in the West boosting and a half years. and polished diamonds seems to have will have to bear high prices for Nov11 %Chg* Nov11 %Chg*
ENERGY
cut and polished diamond exports from This month, it adjusted prices and said been arrested to an extent. Exports went some time,” said Shyam Bittergourd 2000 0 60 20
Crude Oil ($/bbl) 62.1* 7.0 61.5 6.9 India, the oversupply scenario is set to ease, it will buy back only 20 per cent. But hope- down 24.86 per cent to $1.64 billion in Bhimraoji Karlekar, chairman, Brinjal round 2350 -22 60 0
allowing DeBeers to go back to its original fully by December and January, when August and 17.8 per cent in September to APMC Wardha, one of the Cabbage 2300 44 40 0
Natural Gas ($/mmBtu) 2.7* 26.4 2.7 27.3
policy of zero return. This is barring certain prices become realistic, it will go back to its $1.94 billion. It down 15.4 per cent to $1.95 largest sellers of vegetables in
AGRI COMMODITIES ($/tonne) Cauliflower 2300 64 50 -17
limited categories of rough diamonds. old policy of sightholders picking up 100 billion in October, showing marginal the state.
Wheat 184.2 5.0 296.2 2.4 For the last few months, the Indian per cent except for certain bigger sized box- recovery taking place month-on-month. Meanwhile, the Income Garlic 7000 8 200 67
diamond processing industry was grap- es where one could return 10 per cent rejec- But this is not enough to fill the gap creat- Tax Department surveyed Chillies 2150 5 60 50
Sugar 333.2* 4.6 487.2 -0.3 pling with high inventory of polished dia- tions,” said Anoop Mehta, director of Mohit ed since the previous two quarters. Onion traders in Maharashtra, Okra 2600 -13 60 20
Palm oil 625.0 15.7 1,007.4 19.4 monds while facing working capital Diamonds and president of Bharat Delhi and Madhya Pradesh, Onion 6000 94 80 100
squeeze. To address the issue, De Beers is Diamond Bourse (BDB). More on business-standard.com following reports of alleged Peas 7000 -22 100 -17
Rubber 1,486.8* -18.7 1,791.0 -13.2 hoarding of the commodity,
Potato fresh 1650 27 25 25
Cotton 1,413.8 8.6 1,570.4 -6.8 officials said.
*Change over Oct 15 Source: National Horticulture Board
Sowing of vegetable seeds
* As on Nov 11, 19 1800 hrs IST, # Change Over 3 Months
Conversion rate 1 USD = 71.5& 1 Ounce = 31.1032316 grams.
Notes
1) International metals, Indian basket crude, Malaysia Palm oil, Wheat LIFFE and
India to lead global iron ore output for 10 years: Fitch report was affected because of floods
in several agrarian parts of Maharashtra. Later, farmers used available
Coffee Karnataka robusta pertains to previous days price. ADITI DIVEKAR during 2019-2028 — a signifi- higher end of the iron ore cost which is likely to help stream- vegetables as fodder for their animals in the wake of the deluge.
2) International metal are LME Spot prices and domestic metal are Mumbai local
spot prices except for Steel. Mumbai, 11 November cant slowdown from average curve, will be forced to cut out- line licensing and reopening of Besides, fresh vegetables currently have even less shelf life because fields
3) International Crude oil is Brent crude and Domestic Crude oil is Indian basket. growth of 2.9 per cent during put due to falling ore grades, said closed mines. are still muddy.
4) International Natural gas is Nymex near month future & domestic natural gas is
MCX near month futures. Global iron ore production will 2009-2018, it said. the report released on Monday. Even as the MMDR Act will In contrast, prices of most vegetable declined in Delhi because of aggres-
5) International Wheat, White sugar & Coffee Robusta are LIFF E future prices of near
month contract. grow modestly to 3,119 million Supply growth would be pri- India's iron ore output support ore output growth, the sive selling by stockists, which according to local traders, was because of was
6) International Maize is MATIF near month future, Rubber is Tokyo-TOCOM near
month future and Palm oil is Malaysia FOB spot price.
tonne (mt) by 2028, from 2,850 marily driven by India and Brazil growth will be supported by the royalties included in the Act little outward movement of vegetables from the city in the wake of massive
7) Domestic Wheat & Maize are NCDEX future prices of near month contract, Palm oil mt in 2019, Fitch Solutions where major miner Vale is set to removal of export taxes for low- will limit the sector's overall air pollution in the national capital.
& Rubber are NCDEX spot prices.
8) Domestic Coffee is Karnataka robusta and Sugar is M30 Mumbai local spot price. Macro Research said in a expand output with its new grade ores, and the Mines & growth potential. Cauliflower, for example, reported a 57 per cent price decline in the last
9) International cotton is Cotton no.2-NYBOT near month future & domestic cotton
is MCX Future prices near month futures.
report. This represents average mine. On the other hand, miners Minerals (Development & two weeks to trade currently at ~10.75 a kg. Cabbage, chillies, and peas also
Source: Bloomberg Compiled by BS Research Bureau annual growth of 0.5 per cent in China, which operate at the Regulation) (MMDR) Act, More on business-standard.com reported a massive decline in their prices.
18 ECONOMY & PUBLIC AFFAIRS
>
MUMBAI | TUESDAY, 12 NOVEMBER 2019 1

MAHARASHTRA IMPASSE

NCP gets invite as Shiv Sena runs out of time

SHARADPAWAR’SPARTYGETSTIMETILL CONGRESSNON-COMMITTALINITS AFTEROPTINGOUTOFGOVTRACE, The governor had given the Sena time
till 7.30 pm to “express willingness and

8.30PMTOSHOWINTERESTINFORMINGGOVT SUPPORTTOAGOVERNMENTLEDBYSENA BJPADOPTS‘WAIT&WATCH’POLICY ability to form the government”.

Even though Sena leaders Aaditya
Thackeray, Eknath Shinde, and others met
ARCHIS MOHAN & AGENCIES partner. We have assured him we will get the governor before 7.30 pm, they did not
New Delhi/Mumbai, 11 November back to him as early as possible,” Patil said. have letters of support from the Congress
The Sena could not furnish the letters as and the NCP.

I
nanothertwisttothepoliticaldramaon the Congress top leadership remained non- Before Koshyari called the NCP, Aaditya
Monday,MaharashtraGovernorBhagat committal in its support to a government Thackeray told reporters outside Raj
Singh Koshyari rejected Shiv Sena’s led by Sena. However, there were indica- Bhavan that his party’s claim on formation
requesttogiveitthreedaystofurnishletters tions from the Congress by evening that of a government still stands, as the two par-
of support from potential allies — they would go along with the NCP. ties have agreed “in-principle” to support
the Nationalist Congress Party (NCP) The state could be headed for central the Sena-led government. He didn’t take
and Congress. rule if the NCP, too, fails to furnish letters of names of the Congress and the NCP. “We
The third-largest party, NCP, later support from Congress and Sena. sought time from the governor but he
claimed the Governor had called them to The Congress on Monday held refused to grant it,” he said. During the
form the government. After meeting the marathon discussions and a meeting of the course of the day, Shiv Sena chief Uddhav
governor, state unit NCP President Congress Working Committee, but Thackeray also spoke over the phone with
JayantPatilsaidthepartywoulddiscussthe remained indecisive on whether to sup- Congress president Sonia Gandhi, while
issue with its ally, the Congress, and get port a Shiv Sena-led government in she spoke with NCP chief Sharad Pawar.
back to the governor by or before 8.30 pm Maharashtra. The Opposition came pri- (Left) Shiv Sena leader Aaditya Thackeray along with party leaders after meeting After opting out of race for government
on Tuesday. marily from the Congress party’s Kerala Maharashtra Governor B S Koshyari in Mumbai, Monday. (Top) NCP leaders Ajit formation, the BJP has adopted a ‘wait and
“According to the procedure, the gover- unit, which argued that it was likely to suf- Pawar, Dhananjay Munde, and others meet the governor at Raj Bhavan PHOTOS: PTI watch’ policy in the state. Speaking to
nor has given us a letter being the third fer politically in the southern state if the reporters late Monday after the meeting,
largest party in the state of Maharashtra Congress were to join a government led by ment, sources said. Sources said top leaders am on Tuesday to discuss the issue. Ministers,HeavyIndustriesMinisterArvind BJP leader Sudhir Mungantiwar said: “We
and therefore, we have suggested to him the Sena. Majority of the 44 Congress leg- oftheparty’scoregroupwillmeetattheres- Earlier in the day, the Sena’s lone minis- Sawant, quit the Cabinet to formalise the have decided to adopt a wait and watch
that we will have to talk to our alliance islators supported joining such a govern- idence of party chief Sonia Gandhi at 10 ter in the Narendra Modi-led Council of severingoftiesbetweenalliesSenaandBJP. policy on the current political situation.”

Sun Pharma bullish on Japan as peers lose interest PMC Bank case:
SOHINI DAS
Mumbai, 11 November
Pharmaceutical Industry to private
equity firm Unison Capital for an
paratively lower than in other devel-
oped ones.
strengthen its presence in the der-
matology segment. Pola makes and
Two auditors held
enterprise value of Japanese Yen A senior official at a pharma firm distributes branded and generic Two auditors were arrested on Monday in connection with
India’s largest drugmaker, Sun Phar- 57,361 million (~37,02.4 crore). Lupin, that had exited its Japan business products in Japan, the portfolio pri- the alleged ~4,355-crore PMC Bank scam by the Economic
maceutical Industries, is expanding through this deal, exits the generic some years before recently marily of dermatology products. Offences Wing (EOW) of the Mumbai Police, an official said.
in the Japanese market when most pharmaceuticals business in Japan, described to Business Standard how Sun forayed into the Japanese The arrested duo, Jayesh Sanghani and Ketan Lakdawala,
of its peers have indicated they are but would continue to pursue the regulatory landscape in Japan prescription market in 2016 with the had served as statutory auditors when the scam was com-
not bullish on it. opportunities in the biosimialars has been changing. The govern- acquisition of 14 established pre- mitted and suspected to have played a key role in covering
Mumbai-based Lupin is and complex generic space ment there wants nearly 80 per cent scription brands from Novartis. up the irregularities involving some top officials of the bank,
Japan’s sixth-largest drug Most Indian through partnerships. of the pharma market to be of gener- Why is it bullish on Japan, when the official said. Police had earlier called the two for ques-
generics player but it players have Most Indian players have ic drugs by 2020. others are wary of the price cuts tioning. "They failed to give convincing replies regarding
recently said the annual exited Japan exited Japan over the past there? their role as the statutory auditors of the PMC Bank. They
price cuts imposed there over the past decade. Ranbaxy was one of Sunnier Dilip Shanghvi, managing direc- were arrested on Monday evening and booked under rele-
had made the market unat- decade the early entrants. It exited a For Sun Pharma, however, its rest- tor, said during a recent earnings vant sections of the Indian Penal Code," he said. Meanwhile,
tractive. It would continue joint venture with Nippon of-the-world markets grew 49.1 per call: “For long-listed brands, there a Mumbai sessions court rejected the pre-arrest bail pleas
to grow there but only in Chemiphar in December cent during the second quarter. would be a decline in pricing. The filed by two directors of the PMC Bank. The court turned
single digit (in value terms). 2009. Dr Reddy’s Laboratories, Orc- They found it did not make Analysts said this was due to con- Pola portfolio is a mix of branded down the applications of Parmeet Sodhi and Surjit Singh
Lupin on Monday announced hid Chemicals and Cadila Health- enough strategic sense to stay solidation of Pola Pharma in Japan. product and long-listed products Narang after noting that their custodial interrogation was
divestement of its entire stake in care wound up their Japan business invested in a highly regulated mar- Sun had completed its acquisition of but the majority are of our branded required. PTI
Japanese subsidiary Kyowa in the following years. ket, one where margins were com- Japan-based Pola last January, to products.”

New letter blaming

Infosys CEO surfaces
DEBASIS MOHAPATRA Remuneration Committee
Bengaluru, 11 November (NRC). The whistle-blower,
who claimed to be part of
Days after a whistle-blower Infosys' finance team, also
letter accused Infosys CEO alleged that Parekh was not
Salil Parekh of “unethical able to control cost and lead-
practices”, another com- ing the company towards a
plaint has surfaced against low margin regime.
him, alleging he mostly In the three-page letter,
remains absent from the which has been seen by
headquarters in Bengaluru Business Standard, the
and prefers to stay in whistle-blower has
Mumbai to look after his per- launched personal attacks
sonal investments in small on Parekh and used expres-
companies. sions like “slimy individual”
The new letter is and “smart cookie” for him.
addressed to independent However, the authenticity
directors on the company’s of the letter could not be
board and the chairman of verified and the company
the Nomination and has refused to comment.
.
MUMBAI | TUESDAY, 12 NOVEMBER 2019 BRAND WORLD 19 <

GSK pushes Crocin over

the pain threshold
The British multinational adds a fresh extension to its 40-year-old flagship,
hopes to leverage the brand’s recall to expand its remedial reach
SOHINI DAS
Mumbai, 11 November

H
ow does a brand with a
near-generic associa-
tion with one purpose
or product expand its metier
and, at the same time, stay rel-
evant for its core audience?
That is a question that
GlaxoSmithKline Consumer
Healthcare (GSKCH) has pon-
dered over often, given its port-
folio of legacy brands in the
country. And for Crocin, a
brand under GSK Consumer
since 1996 (for 33 out of the 40
years of its existence in India),
the answer it appears, is to keep
reinventing itself.
In its most recent effort, that many legacy brands face.
GSK Consumer has launched a AN EXPANDING PILL BOX Xerox, the copier machine
new variant for headaches, over Crocin began life as an anti-flu tablet, but now has and Kodak, the camera mak-
and above the Crocin for cold, variants for cold, headache, body ache and so on. The er, for example. Such brands
pain and fever that are already company has launched several extensions and brand have to keep mutating to keep
part of its over-the-counter refreshes over the years customers hooked.
(OTC) play in the country. This 2003: Crocin Pain Relief launched GSKCH saw an opportuni-
is not a full-fledged brand ty in the headache category
2007: Crocin Cold & Flu launched
extension, but a repositioning and a chance to take the fight
of its anti-pain medicine. The 2017: Crocin 650 relaunched to Saridon. The expectation is
slew of extensions and reposi- 2019: Crocin Pain Relief relaunched with special that the trust in the brand and
tioning attempts under Crocin promise of curing headaches recall (as fever medicine) will
are aimed at not just refreshing rub off on other OTC cate-
the brand’s promise to con- gories. Ahmed says that of the
sumers, but also at expanding every second. che cure) and has grown at a ~2,200 crore analgesics OTC
its footprint. And by doing that, Extensions are the secret to faster clip than Crocin's Pain category (that is split across
the company hopes to take the longevity and relevance. Or so Relief. fever, pain and headaches),
brand beyond the ambit of the company asserts. “Every Saridon saw sales grow around 50-60 per cent are for-
being a pill that chases down time we have added an exten- from ~39.4 crore in FY17 to mulations for aches and pains.
fever and body-ache. sion, it is typically talking to a ~74.5 crore in FY19. In contrast, So, why did GSK not
GSK Consumer acquired consumer who is currently not Crocin (including suspensions launch a fresh extension
Crocin from Dupharm in 1996. interested in the brand,” said and tablets of various dosages) under Crocin, for headache?
A familiar household name Naveed Ahmed, area market- saw sales slip from ~31.5 crore Ahmed explains, “Crocin Pain
even then, GSK Consumer has ing director, Wellness, GSKCH. in FY18 to ~29.3 crore in FY19, Relief, the formulation is
been actively promoting the Extensions are also a way to according to data from mar- known for safety credentials,
brand. It has been an aggres- the take the brand beyond its ket research firm AIOCD trusted over the years and
sive advertiser in print and on comfort zone. While Crocin is AWACS. This does not include consumer feedback is very
TV and increasingly now, on what chemists recommend for the Pain Relief and the Cold positive. No reason to launch
digital media too. Its efforts, the fever, it is not always the first and Flu sales, but sales for a new product in the segment.
company said, have managed choice for related ailments. these drugs have also been The idea is to educate con-
to keep the brand relevant even Rival brand Saridon, which is mostly stagnant. sumers that they can use the
among new users and today, sold as a headache slaying pill, In fact, Crocin, point out same drug for headaches.
around 25 Crocin tablets sell dominates the category (head- experts, was caught in a trap That is why the re-launch.”

to remain in the doldrums. September, the ers, the federal agency is unable to make a
> FROM PAGE 1 month before the festive season kicked in, breakthrough due to lack of information
saw production of consumer durables con- from HSBC and Panama's competent
Sept IIP shrinks... tract for the fourth-straight month.
Production contracted by 10 per cent, up
authority. Officials said the information
provided by foreign authorities were typi-
Auto components, commercial vehicles from 9 per cent in the previous month. The callybasicinnatureandwereinsufficientto
and two-wheelers were flagged by the gov- negative growth baffled economists who trace and prove a case. For instance, foreign
ernment as sectors pulling the overall IIP said e-commerce sales in October was very authorities have pointed to their Indian
growth down. Machinery production high and should have been on the back of counterparts that the offshore entities have
reducedby18.2percentandtheproduction positive growth in this segment. beenstruckoffandthelegalperiodofreten-
of electronic goods remained contrac- Crucially, the consumer non-durables tion of documents has expired.
tionary, going down by 10.6 per cent in category slipped into contraction for the Sources also claimed the tax depart-
September. This came after the govern- first time in FY20, with production thin- ment has ordered fresh assessment and
ment pushed manufacturing in the sector ning by 0.4 per cent. "The sequential wors- also re-assessment of the income of these
in a sustained manner over the past one ening in the performance of consumer entities and will soon launch criminal pros-
year through a series of benefits and a durables and non-durables in September ecution against all of them. These entities
phased manufacturing programme aimed belies any hopes of a pre-festive restock- had allegedly not disclosed their offshore
at reducing imports of electronics goods. ing of inventories," Aditi Nayar, principal properties to Indian tax and banking
Thecapitalgoodssegment,thatsignifies economist at ICRA, said. The late with- authorities in the past.
investment, contracted 20 per cent in drawal of the monsoon also dampened Another argument is that the anti-black
September after a 21 per cent fall in August. construction activity, contributing to the money laws can be initiated only against
Machinery production reduced by 18.2 contraction in the output of infrastructure undisclosed foreign assets coming to the
per cent and the production of electronic goods in September 2019, she said. notice of the assessing officer after July 1,
goods remained contractionary, going "The economy is presently facing a 2015. HSBC Swiss leaks were made public
down by 10.6 per cent in September. This structural growth slowdown originating by a group of international journalists in
came after the government pushed manu- from declining household savings rate, and early 2015. Many of these accounts, post
facturing in the sector in a sustained man- low agricultural growth. Low agricultural the leaks, were either found closed or had
ner over the past one year through a series growth is feeding into low agricultural and zero balance. In 2017, CBDT had said the
of benefits and a phased manufacturing non-agriculturalwagegrowthinruralareas, investigations in the Panama Papers leak
programme aimed at reducing imports of which is impacting rural demand adverse- cases had resulted in the I-T Department
electronics goods. The capital goods seg- ly," Devendra Kumar Pant, chief economist detecting undisclosed wealth of Rs 792
ment, that signifies investment, contracted at India Ratings & Research, said. crore till then, and that the probe in the
20 per cent in September after a 21 per cent With the output of the core sectors cases was on in full swing.
fall in August. Production in the category falling by a record 5.2 per cent in September

Honda plant...
remained in the red for the eighth-straight to a 14-year low, and production by seven of
month despite government efforts to open the eight industries declining, slow eco-
upevenmoresectorstoeasierforeigndirect nomic growth is expected by economists in
investment (FDI) flows earlier this year. the second quarter of this fiscal year. The tug-of-war between the HMSI man-
Experts predicted that GDP growth is like- agement and workers reached a tipping
Consumerdemandfizzles ly to slip in the second quarter of FY20 from point last week, when the two-wheeler
September's industrial production also the already multi-year low in the first quar- maker unilaterally announced retrench-
showed that consumer demand continues ter. As a result, the likelihood of another ment of over 200 workers. Poor offtake of
rate cut in December has intensi- two-wheelers led Honda towards produc-
fied, despite elevated CPI infla- tion cut in the Manesar plant for the past
tion, they said. few months.
> BS SUDOKU # 2893 According to Ramesh Pradhan, secre-

UCB biz size...

tary general of the plant’s labour union,
from6,000aday,thenumberoftwo-wheel-
ersproducedattheplantwascutto3,500by
The new UCB norms may also November. “They kept retrenching the
look to enable a transition of some number of contractual workers – nearly
of the larger players into com- 1,000 in total since early-2019,” he said.
mercial banks (if they so desire) Furthermore, permanent workers at the
and the specific issues involved if plant have been demanding pay hikes due
some of them were to aspire to a since mid-2018. According to the rules, the
small finance bank (SFB) licence, pay scale is revised every three years.
which is in the works. However, the last revision is due since
While a transition path to a August 2018. Following last week’s notice,
commercial bank may or may not through which another set of contractual
form part of the revised guide- workers were shown the door, the remain-
lines, in the case of SFB licences to ing contractual and permanent workers at
UCBs,thebankingregulatorhasto the Manesar plant sat on a dharna inside
deal with the fact that some of the premises. Also, over 500 contractual
them are doing businesses, which workers, who have already been told to go,
SFBs are not allowed to dabble in. gathered outside the premises.
This can lead to a situation where Several political leaders like legislative
SOLUTION TO #2892 Medium:
many UCBs may have to exit from assembly member from Rewari Chiranjeev
them to be eligible for an SFB YadavandleadersfromtheCentreofIndian
Solution licence. Trade Unions (CITU) and Democratic
tomorrow Youth Federation of India (DYFI) lent their

ED probe...
support to the agitating workers.
HOW TO PLAY Former Jannanayak Janta Party (JJP)
Fill in the grid so leader and BSF jawan Tej Bahadur Yadav
that every row, Since this law came into being, a met the workers on Sunday.
every column fewdozenchargesheetshavebeen The Manesar plant, set up in 1999, is
and every 3x3 filed,butthat’snotthecaseinrela- HMSI’s oldest manufacturing facility in the
box contains tion to global leaks, a source said. country with an installed capacity of 1.65
the digits 1 to 9 Besides,undertheFEMApow- million units a year.
20
>
MUMBAI | TUESDAY, 12 NOVEMBER 2019 1

AROUND THE WORLDN

KKR may buy Walgreens

in record $70-billion deal
AGENCIES Walgreens Boots shares rose 6.3 per
New York, 11 November cent to $63.02 at 10.09 am in New York
trading. Its bonds in Europe fell.

W
algreens Boots Alliance, the $70- WalgreensBoots,ledbyChiefExecutive
billion drugstore chain, has OfficerStefanoPessina,hasbeenreviewing
received a buyout proposal from a potential deal with a financial adviser to
the private equity group KKR, a deal that take the company private amid buyout
would be the biggest private equity trans- interest, Bloomberg News reported last
action on record. The New York-based pri- week.Somebuyoutfirmslookedbutdecid-
vate equity firm has been preparing a pro- ed against pursuing such a big deal, people
posaltopotentiallybuyoutshareholdersof with knowledge of the matter said at the
Walgreens Boots, said the people, who time. There’s no certainty the deliberations
asked not to be identified because discus- will lead to a definitive takeover offer, the

JNU STUDENTS PROTEST 3,000% sions are private. It’s unclear how feasible
the transaction would be, given the need
for large amounts of financing, and
Walgreens Boots and KKR could decide
against pursuing a deal, the people said.
people said. A representative for KKR
couldn’t comment, while a representative
for Walgreens Boots declined to comment.

FEE HIKE, CLASH WITH POLICE

Thousands of Jawaharlal Several blockades put up Theclashforced Alibaba Singles Day sales HK protests:
Nehru University (JNU) by the police were broken by HRDMinister
Man shot
make a record at $30 billion
students clashed with protesters, who were RameshPokhriyal
police on Monday as their
protest over 3,000% hostel
marching towards the AICTE,
where Vice President
‘Nishank’tostay
insidetheAICTE at by police
fee hike escalated on the M Venkaiah Naidu was premisesfor REUTERS Amazon.com’s online store Sales hit $1 billion after one
varsity’s convocation day addressing the convocation over6hours Hangzhou (China), 11 November sales in the latest quarter and minute and eight seconds and AHongKongprotesterhas
matches takings across reached 158.31 billion yuan beenshotbyapolicelive
rroom
The rent for a single-seate Chinese retailer Alibaba Alibaba's e-commerce plat- ($22.6 billion) in the first nine round,withtheincident
sed from Group said on Monday that forms on Singles' Day last year. hours, up 25 per cent from the streamedliveonFacebook,
has been increa sales for its annual Singles’ Sales growth for the full 24-hour same point last year, Alibaba asdemonstratorsdisrupted
nth,
~20/ month to ~600/ mo Day shopping blitz crossed event, however, is likely to fall said. Alibaba turned China's theMondaymorning
while rent for a do ub le-seater the $30 billion mark at 4.31 short of the year earlier, ana- informal Singles' Day into a commuteleadingtochaotic
increa sed to pm (0831 GMT), putting the lysts said, held back by a slow- shopping event in 2009 and scenesacrossthecity.
room has been event on track to set a record ing overall e-commerce indus- built it into the world's biggest Elsewhere,amanwasset
m ~10 /m on th
~300/month fro in its 11th year. try in China at a time when the online sales fest, dwarfing onfirefollowingan
The figure is equivalent to country’s economic expansion Cyber Monday in the US which apparentdisputeover
“The administration’s policies are against “600 personnel deployed at over 80 per cent of US rival is heading toward a historic low. took in $7.9 billion last year. nationalidentity. AGENCIES
studentswho are frommarginalised JNU protest but students not
sectionsofthesociety” —Oneofthestudents baton-charged” — Police

Lata hospitalised after breathing trouble

PRESS TRUST OF INDIA turned 90 on September observation. She is doing
Mumbai, 11 November 28, is in a critical condi- absolutely well and is sta-
tion, they said. “She was ble. She will be dis-
Legendary singer Lata brought to hospital at charged by tomorrow.
Mangeshkar (pictured) about 2 am. She is critical “We thought it's better
was admitted to Breach and in the ICU,” a hospital to treat her at a hospital
Candy Hospital’s insider said. because of the viral infec-
Intensive Care Unit in the Mangeshkar’s younger tion so she is there for
early hours of Monday sister Usha said the singer today,” Usha Mangeshkar
after she complained of had a viral infection and said amid reports that the
breathing problems, hos- should be discharged by musical icon had already
pital sources said. Tuesday. “Lata didi is still been discharged and was
The singer, who in hospital. She is under recuperating at home.