The Economic Times 2 April 2018

Battle for Ruias family silver hots up as Vedanta enters the fray

The bidding process for Essar Steel has ended today at 5 pm with three major players entering the fray.ArcelorMittal, which wants to enter the Indian steel market, submitted its bid along with Japan's Nippon Steel and Sumitomo Metal. Anil Agarwal-led Vedanta also submitted the bid, ET Now reported. Speaking to ET Now, Agarwal said that Essar Steel is a great asset and that there's no arrangement to sell it back to Ruias if the bid is successful. The Vedanta boss added that it's unfortunate that Ruias were not allowed to bid for Essar Steel.The Russian VTB Bank-led Numetal along with JSW Steel has also submitted the bid. The Sajjan Jindal-led JSW Steel had expressed its interest in bidding for Essar Steel but was ruled out as it hadn't entered the earlier bidding process at the Expression of Interest stage.ET Now reported earlier that JSW Steel will replace Rewant Ruia in the Numetal-led consortium to enter the bidding process for Essar Steel. 63582987 Numetal's bid was disqualified in the earlier bidding process as Rewant Ruia who holds a share in the consortium is a related party and was seen as an attempt by the Ruias to gain hold of Essar Steel.According to a report by ET Now, the NCLT has asked the Committee of Creditors and the Resolution Professional to not open the bids till the hearing in the petitions filed by both Numetal and ArcelorMittal challenging the rejection of their earlier bids. The next hearing is slated for April 4.

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Chanda Kochhar and Shikha Sharma: Two bank bosses in the eye of the storm

NEW DELHI: ICICI chief executive Chanda Kochhar and Axis Bank chief executive Shikha Sharma have gone from being icons of banking sector to targets of serious allegations and criticism. Soon after both of them were summoned by the Serious Fraud Investigation Office of the Ministry of Corporate Affairs in relation to the probe in Mehul Choksi's Gitanjali Gems fraud, other reasons how now emerged for their distress. Incidentally, both of them built their initial career at ICICI Bank, known as the talent factory of the banking sector. Chanda KochharThe Central Bureau of Investigation has registered a preliminary enquiry to probe alleged nexus between Kochhar's husband Deepak Kocchar and Videocon chairman Venugopal Dhoot. Though she herself is not named in the inquiry. CBI sleuths are ascertaining the veracity of accusations against Dhoot and Deepak Kochhar that Dhoot provided crores of rupees to NuPower Renewables, a firm promoted by Deepak Kochhar six months after Dhoot's group got Rs 3,250 crores as loan from ICICI Bank in 2012. The said amount was a part of a loan of RS 40,000 crores which Videocon received from a consortium of 20 banks led by State Bank of India. ICICI Bank has defended Chanda Kochhar, denying allegations of favouritism, nepotism and quid pro quo in loans given to Videocon group. Dhoot too has denied all allegations. The alleged scam was brought to light by a whistle-blower. Kocchar is no ordinary banker. She is credited with steering ICICI Bank through one of its worst crises during the global financial crisis after the fall of Lehman Brothers when there was a run on the bank. The finance minister and the regulators also had to intervene during that period to assure customers. Kochhar received an honorary Doctor of Laws from Carleton University, Canada in 2014, in recognition of her pioneering work in the financial sector, effective leadership in times of economic crisis and support for engaged business practices.Kochhar, who succeeded KV Kamath after his 13-year tenure as chief executive, tore up the very ICICI structure she grew up with, and laid a new foundation. “There comes a point where you have to say that we have to take action,” Kochhar told ET in an interview. “As I was growing up in the system, I was seeing all the positives of the system. Being a part of the whole system has its advantage of being able to see both the sides.” Kochhar was conferred with the Padma Bhushan in 2011. She has been listed for seven consecutive years in Forbes’ ‘World’s 100 Most Powerful Women’ and for five consecutive years in Fortune India’s ‘Most Powerful Women in Business’. She was also named in TIME magazine’s ‘100 Most Influential People in the world’ in 2015If a quid pro quo between the Kochhar family and Videocon is proved, it will be a permanent stain on Kochhar's reputation. Shikha SharmaIn July last year, Axis Bank reappointed its chief executive and managing director Shikha Sharma for three years from June 2018. It was her fourth three-year term. Now the Reserve Bank of India (RBI) has asked the Axis Bank board to reconsider her new term, according to an ET report today citing unnamed sources. Reasons include the bank’s performance and its deteriorating asset quality. The board is now considering a one-year term for Sharma, during which it will look for a successor says the report..When Sharma was appointed Axis Bank's MD & CEO in 2009, its chairman and CEO PJ Nayak resigned well before the end of his tenure. He was sore at the appointment of an outsider. Sharma was managing director and CEO of ICICI Prudential Life Insurance.But Sharma pushed aggressively for growth, which helped her build the business. After succeeding Nayak, she acquired Enam Group’s investment and broking business, propelling Axis to the top position in equities advisory and mergers and acquisitions.Compared with other major banks, Axis has delivered handsome returns since 2009, the year Sharma took charge. It has delivered 256% returns compared to that of 136% of ICICI Bank and 510% of HDFC Bank. "Sharma changed the bank's hierarchical culture, strengthened the core team by appointing new talent where needed, sought to build its core processes and infrastructure, and filled several gaps in its business portfolio," says a report in the Harvard Business Review.But now Axis Bank has been sliding for quite some time. It has seen a spurt in non-performing assets (NPAs) by 336% in the past three years. The bank, which reported gross NPAs of Rs 1,173 crore at end of December 2009, saw them jump to Rs 25,001 crore at end of December 2017. Gross NPA ratio, which was at 1.08% in 2009, is now at 5.28%.

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Why Congress and the BJP are in overdrive on Bharat Bandh by Dalits on SC/ST issue

NEW DELHI: Bharat Bandh, the protest organised by the Dalit community across the country today over a recent Supreme Court order on the SC/ST Prevention of Atrocities Act, is not just another protest that would die down in a few days. It has serious long-term ramifications for Bharatiya Janata Party (BJP) as well as the Congress. That's why both the parties are leaving no chance to criticise each other over the Dalit issue.Why the Dalits are protesting On March 20, the Supreme Court banned automatic arrests and registration of criminal cases under the SC/ST Prevention of Atrocities Act. It said public servants could not be prosecuted without the approval of the appointing authority, and private citizens too should be arrested only after an inquiry under the law. It further diluted the stringent clause of the law by ruling that a preliminary inquiry in a case under the Act would be conducted by a senior official to ensure the allegations are not frivolous. The changes in the law are meant to protect honest public servants from being blackmailed with false cases under the Act.Why it's not a routine protest Bharat Bandh by the Dalit community has spread all over the country. It's not the kind of protest that would fizzle out shortly. It has the potential to galavanise the whole community as the SC/ST Act was considered by the community a potent protection against caste discrimination. The community sees the Supreme Court ruling as a serious dilution of Dalit rights. Taking away a strong protection can create a long-term grievance in the community. The protests may stop after a point but the community will not forget the issue. Why it's a challenge for PM ModiAfter initial reluctance, the government today moved a review petition challenging the recent Supreme Court order. However, it may still have to face the criticism for something which is not of its own doing. The government has filed the petition days after the ruling and sharp criticism from several Dalit leaders, a few of them from the BJP too. After the 2014 Lok Sabha elections, the BJP has come to rely on Dalit votes to win elections. Prime Minister Modi's own backward-class background has helped it change its image of an upper-caste party. A permanent grievance will alienate the Dalits from the party at a time when it faces elections in several states with considerable Dalit votes and the Lok Sabha elections after an year.Why it's a godsend for the CongressWith the Karnataka assembly polls taking place within two weeks, the Dalit protest will give the Congress a huge boost. If the problem is not solved quickly, it will certainly turn the Dalit voters away from the BJP in an assembly election which has become a battle of prestige. The Congress is expected to make big gains from offering minority status to the Lingayat community, which traditionally votes for the BJP. Alienation of Dalit votes will further mar the BJP's chances in this election. That's why the Congress is trying to position itself on the right side of the Dalits on this issue. Congress president Rahul Gandhi tweeted this on Bharat Bandh: "Thousands of my Dalit brothers and sisters have come out on the streets to demand protection of their rights from the (Narendra) Modi government. We (Congress and I) salute them." Rahul also tried to blame the BJP and the RSS for the Supreme Court ruling: "Keeping Dalits at the lowest rung of Indian society is in the DNA of the RSS/BJP. Whoever dares challenge this position is suppressed with violence." The BJP has accused the Congress of playing politics with BR Ambedkar, the father of the Indian Constitution.Resurgence for BSP?Mayawati's Bahujan Samaj Party (BSP), which had faced rout at the hands of the BJP in the Uttar Pradesh assembly elections last year, can find an opportunity to revive itself if it's able to channelise the Dalit anger in its favour. The present issue can help Mayawati brand the BJP as an anti-Dalit party, something she had worked very hard to do but not with much success so far. If the issue lingers on, it can also help Mayawati consolidate her position among the Dalit voters while the BJP becomes less attractive to BSP leaders wanting to cross over to the party after the BSP's alliance with its old rival Samajwadi Party.

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Tata Steel to pay Rs 35,200 cr cash for Bhushan Steel

Tata Steel has offered Rs 35,200 crore in cash and conversion of the remaining debt of about Rs 27,000 crore into equity to take over Bhushan Steel, the counsel for the Committee of Creditors (CoC) informed NCLT today.The creditors would get 12.27 per cent equity in Bhushan Steel, said senior advocate Ravi Kadam to the Principal bench of the National Company Law Tribunal (NCLT) here."Tata Steel is the highest bidder (H1) offering an upfront payment of Rs 35,200 crore. Remaining debt would be converted into equity," he said.Kadam further said: "Financial creditors would get 12.27 per cent of equity of the corporate debtor (Bhushan Steel) subject to SEBI approval."As of February 1 this year Bhushan Steel had a total debt of Rs 57,160 crore.The company has a financial debt of Rs 56,051 crore and operational debt of Rs 1,050 crore, he added.He further informed that Bhushan Steel has a liquidation value of Rs 14,541 crore.Tata has also offered Rs 1,200 crore to its operational creditors depending on the criticality to run the company.

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Govt rules out excise duty cut to cushion petrol prices

The government today ruled out any immediate reduction in excise duty to cushion relentless rise in international oil prices that have sent retail diesel rates in India to record high and petrol to four-year high.The BJP-led government had raised excise duty nine times between November 2014 and January 2016 to shore up finances as global oil prices fell, but then cut the tax just once in October last year by Rs 2 a litre.Asked if a second round of excise duty cut was in offing, Finance Secretary Hasmukh Adhia said: "Not as of now. Whenever we review it, we will let you know".Earlier in the day, Oil Minister Dharmendra Pradhan said the government is keeping a close eye on international prices but said there is no going back on free market pricing.He said consumers will benefit if petrol and diesel are brought under Goods and Services Tax (GST) regime at the earliest.Petrol price today hit a four-year high of Rs 73.83 a litre, while diesel rates touched an all-time high of Rs 64.69 in the national capital on rising international oil rates."India needs market pricing to provide oil to all," Pradhan said at an event organised to mark the launch of Euro-VI grade petrol and diesel in the national capital.Fuel pricing is based on a transparent mechanism, he said, attributing the spurt in rates to happening in international market. "When crude oil prices rise, naturally consumer feels a pinch," he said."We are concerned (about the impact on consumers). We are keeping a close eye on the developing international oil scenario," he said.He, however, did not offer any hint of a government intervention like cutting excise duty to give relief to consumers."Centre and state bank on tax revenues to meet developmental needs. 42 per cent of collections from excise duty (on petrol and diesel) goes to states and out of the remaining 60 per cent is used to fund centre's share in development schemes in states," he said.Pradhan said the GST Council - the apex decision making body of the new indirect tax regime - should in the "interest of energy security and consumers" include petroleum products in GST.Petrol, diesel, natural gas, crude oil and jet fuel (ATF) are currently not included in GST, which essentially leads to producers not being able to set-off tax paid on inputs from final tax on product.The government, he said, had cut excise duty on petrol and diesel by Rs 2 per litre in October and some states had followed it up with a reduction in VAT (value added tax)."When there is a pricing issue, states should respond and cut VAT," he said.State-owned oil firms, which have been since June last year revising auto fuel prices daily, today raised petrol price by 10 paise per litre and diesel by 11 paise.Petrol in the national capital now costs Rs 73.83 a litre, the highest since September 14, 2014 when rates had hit Rs 76.06. Diesel price at Rs 64.69 is the highest ever, with previous high of Rs 64.22 being on February 7, 2018.India has the highest retail prices of petrol and diesel among South Asian nations as taxes account for half of the pump rates.The government had raised excise duty nine times between November 2014 and January 2016.Subsequent to that excise duty reduction, the Centre had asked states to also lower VAT but just four of them -- Maharashtra, Gujarat, Madhya Pradesh and Himachal Pradesh -- reduced rates while others including BJP-ruled ones ignored the call.The central government had cut excise duty by Rs 2 per litre in October 2017, when petrol price reached Rs 70.88 per litre in Delhi and diesel Rs 59.14. Because of the reduction in excise duty, diesel prices had on October 4, 2017 come down to Rs 56.89 per litre and petrol to Rs 68.38 per litre. However, a global rally in crude prices pushed domestic fuel prices far higher than those levels.The October 2017 excise duty cut cost the government Rs 26,000 crore in annual revenue and about Rs 13,000 crore during the remaining part of the current fiscal year.The government had between November 2014 and January 2016 raised excise duty on petrol and diesel on nine occasions to take away gains arising from plummeting global oil prices. In all, duty on petrol rate was hiked by Rs 11.77 per litre and that on diesel by 13.47 a litre in those 15 months that helped government's excise mop up more than double to Rs 2,42,000 crore in 2016-17 from Rs 99,000 crore in 2014-15.State-owned oil companies -- Indian Oil Corporation, Bharat Petroleum Corporation and Hindustan Petroleum Corporation -- in June last year dumped the 15-year old practice of revising rates on the 1st and 16th of every month . Instead, they adopted a daily price revision system to instantly reflect changes in cost. Since then, prices are revised on a daily basis.

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Dalit protests: Jet Airways waives penalty charges

In the wake of the Bharat bandh and reports of unrest, Jet Airways today said it was waiving off penalties for change of dates and providing refunds on all confirmed tickets booked today for flights operating to and out of Chandigarh, Patna and Amritsar.Violent protests erupted across the country during a nationwide bandh called by Dalit outfits against the alleged dilution of the SC/ST (Prevention of Atrocities) Act."Due to unrest in Chandigarh, Patna & Amritsar, we are waiving off penalties for date/ flight change, refund, no-show & fare difference (if any) on all confirmed tickets for flights to/out of these cities for travel on April 02," the airline tweeted.The Supreme Court had on March 20 diluted certain provisions of the SC/ST Prevention of Atrocities Act, in a bid to protect honest public servants discharging bona fide duties from being blackmailed with false cases under the Act.

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F&O: Nifty50’s trading range shifts to 10,050-10,350 band

By Chandan TapariaThe Nifty50 index managed to open in the positive and witnessed sustain buying interest throughout Monday. It managed to hold above 10,141 and headed towards the 10,220 level.The index managed to hold above previous week’s close and formed a bullish candle on the daily scale. Now, it has to continue to hold above 10,222 to extend its move towards 10,276 and then 10,333 levels, while supports are seen at 10,141 and then 10,050 levels.The index has been making lower tops and lower bottoms on a weekly scale, so it needs to surpass its 61.80% retracement of 10,276 to negate the short-term negative trend.On the options front, maximum Put open interest stood at strike price 10,000 followed by 9,800, while maximum Call OI was at 11,000 followed by 10,500. Put writing was seen at strike prices 10,000 and 10,100 while Call writing was seen at 10,300 and 10,200.Options data suggests immediate trading range in between 10,050 and 10,350 levels. India VIX fell 2.62 per cent to 15.35.Bank Nifty formed a Hammer candle as it managed to hold above 24,000 and recovered towards the 24,350 level. Now, it has to hold above 24,350 to extend its move towards 24,500 and then 24,750 levels, while on the downside, supports are seen at 24,100 and then 24,000 levels.Nifty April futures closed with a gain of 1.16 per cent at 10,270. Long buildup was seen in Hexaware, OFSS, ACC, NIIT Tech, Just Dial, Voltas, Bharat Forge, TVS Motors, Ashok Leyland, KPIT, Havell’s and Tata Elxsi while shorts were seen in Jet Airways, ICICI Bank, IDBI, PC Jeweller, Hindalco, BPCL, IOC and Axis Bank.(Chandan Taparia is Technical & Derivative Analyst at Motilal Oswal Securities. Investors are advised to consult financial advisers before taking an investment calls based on these observations)

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RBI to wait & watch but this MPC member may call for 25 bps hike

NEW DELHI: The RBI Governor Urjit Patel-led monetary policy committee (MPC) may leave repo -- the short-term lending rate -- unchanged at 6 per cent in its first bimonthly policy review for this financial year on Thursday. The policymakers are meeting on April 4-5.All except Michael Debabrata Patra of the six-member panel are expected to go for status quo.The central bank is seen to maintain its neutral stance even as it may suggest upside risks to inflation in the near future. Likely announcements on bond market liberalisation, RBI's view on fiscal conditions and the government's borrowing plan will be tracked keenly.Data on inflation have been comforting of late. Consumer price index (CPI) inflation that the RBI considers for its policy decision trended down to 4.44 per cent in February. Similarly, wholesale price index-based inflation (WPI) eased to a seven-month low of 2.48 per cent. Bank of America Merrill Lynch (BofAML) sees the March CPI print at 4.2 per cent and believes that inflation risks are proving to be overdone. But not all agree. "We think RBI Executive Director Michael Patra will reiterate his 25 bps rate hike call. In the last MPC minutes, he indicated that in the near-term (up to mid-2018), inflation is likely to drift well above the target," UBS said. The brokerage is expecting a 5-1 vote in favour of status quo and an adoption of wait-and-watch approach by the RBI. Patra is the only MPC member who called for a 25-basis point hike in the December policy review. One percentage point is 100 basis points. 63579321 In the December policy meet, he talked of inflation staying well above the target up to mid-2018 due to elevated global crude prices, substantial increase in MSP, fiscal slippage and higher Customs duty. He also made the point that an expected decline in inflation between July 2018 and March 2019 is largely statistical as the HRA effect wanes. "The target is in the danger of getting out of reach and over the next few months, the upper tolerance band is under threat. This could seriously dent the credibility of the Committee’s commitment to the target," he had noted.MPC member Ravindra Dholakia had said in his December statement that while base effect was going to be favorable over the next 3-4 months, oil price movements can create uncertainties and pose serious upside risks.Earlier this week, brent crude had hit the $70 a barrel. Minimum support prices (MSP) remain another source of concern. This year's Budget had pegged the procurement price for summer (kharif) crop at 1.5 times production costs. UBS expects a higher MSP to add 40-60 bps to the headline CPI inflation. Global crude oil prices hardening further and the risk of populist spending in the run-up to the 2019 general election could undermine India's macro fundamentals, it cautioned.The foreign brokerage expects the MPC to take the line that economic growth is gathering momentum but that the nascent recovery needs to be carefully nurtured and growth put on a sustainably higher path. It pegged an average CPI inflation of 4.7 per cent for FY19 as against 3.6 per cent anticipated for FY18.BofA-ML, on the other hand, expects the RBI to acknowledge that the on-going peak off in inflation -- it sees March quarter inflation average at 4.6 per cent, 50 bps below its 5.1 per cent Q4FY18 estimate. Meanwhile, the market will look for MPC’s reaction to the recent cut in the government borrowing programme, and its view on the fisc thereof, said Lakshmi Iyer, CIO- Debt & Head of Products at Kotak Mutual Fund. "Though our view is that of status quo, it would be interesting to see MPC’s accompanying stance in the light of moderation in CPI and its reaction to the recent global developments,” she said. "The RBI will likely announce further details on the bond market liberalisation. In October 2015, it had announced a 10-quarter plan to allow a linear increase in foreign holdings of Indian debt (at Rs 2 50 crore per quarter). With the plan maturing on March 31, markets will await guidance for the next phase of liberalisation. A Rs 300-400 crore/quarter increase could cause a further softening in bond yields, and lessen trade deficit deterioration concerns for the rupee," UBS note said.

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Debjani Ghosh assumes charge as Nasscom President

Nasscom today said former Intel executive Debjani Ghosh has taken over as the President of the IT industry association.She succeeds R Chandrashekhar, who is leaving office upon the completion of his term."We are amidst exponential shifts that require exponential change - across businesses, skilling, building innovative solutions with disruptive technologies, connecting the ecosystem of start-ups with that of enterprises, and leveraging technology for social impact," Ghosh said.She further said: "I look forward to partnering with all stakeholders for more milestones for the industry, which reigns as a frontrunner in today's era of digital globalisation".Ghosh takes office at a time when the Indian IT-BPM industry, currently a USD 167 billion sector, is playing a leading role in digital transformation of various industries across countries.

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IIT Delhi students bag 102 offers; average salary of Rs 16.5 lakh per year

New Delhi: The Department of Management Studies of IIT Delhi has completed its final placements for the 2016-18 batch with an average salary of Rs 16.54 lakh per year.This year, the institute received 56 recruiters- the highest it has seen, claimed a release issued by the institute.A total of 102 offers were made to 91 students. Of the total students in the batch, around 25% were offered pre-placement offers (PPOs). The number of first-time recruits stood at 29 this year. Among the recruiters were Deloitte, Amazon, Shell, Google, GE, Accenture Strategy, Rockwell Automation, Maersk Line, Shell and KPMG, among others. Sales and marketing roles accounted for the highest number of profiles at 30%, followed by IT & consulting at 29% and finance and general management at 21%. The remaining 20% pertained to the operations domain.Of the total offers made, 27% were for leadership roles. "Successful completion of the placement season is the outcome of the meticulously crafted curriculum, the grooming of the students by business leaders, the industry-oriented teaching and last, but not the least, alumni support," said M P Gupta, Head of the Department of Management Studies, IIT Delhi.

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