Business & Finance
Business Today
14-Jun-20A leading business magazine read by the business leaders for staying ahead and managing challenges that comes right away in the ever changing world of business.
in this issue
break from reforms stasis
Reforms cannot have start and end dates. They are a continuum. But often, depending on what’s keeping the government at the Centre busy, that continuum tends to slow or stall. This regime has also had its moments of excitable bursts such as IBC, RERA, a hurried GST, and long stretches of distraction. India needs dream reforms to crack open the ossified corners of the economy. In financial services, to realise the ₹100-lakh crore infrastructure spend, there is need for development financial institutions and a robust debt market. Overdependence on banks, who borrow short term to fund 25-30-year-long infrastructure projects, causes massive asset-liability mismatch and is fraught with danger. This is evident from banks’ NPA pile in areas such as power, telecom and real estate. If India has to fulfil its dream of…
manufacturing pmi at record low
The Purchasing Managers' Index (PMI) for manufacturing fell to 27.4 in April, pointing to an unprecedented slowdown It was 51.8 in March; a reading above 50 means expansion The trend points to a sharp deterioration in business conditions 8.6% Food inflation in April, mainly due to supply disruptions in the wake of the lockdown; the number was 7.8 per cent in March 3.5% Rise in the country’s farm output in Q3 of FY20, compared to 3.1 per cent in Q2; Q4 numbers are expected to be lower due to the lockdown…
in a tight corner
The road to fiscal consolidation is never easy. It is, in fact, fraught with serious economic consequences. For instance, the Centre’s fiscal deficit was 2.5 per cent of gross domestic product (GDP) just before the global financial crisis hit the world in 2008. Government stimulus pushed it to a high of 6.5 per cent in FY10. It took almost a decade to bring it to sub-4 per cent – it was 3.33 per cent of GDP in FY20, far higher than the 2.5 per cent in FY08. And there is no likelihood of it coming down to 3 per cent any time soon. Similarly, the Uday bonds scheme for the power sector — state governments took over 75 per cent of discoms’ debt and pay back lenders by selling bonds — actually…
cancelled hopes
In the last two months, $25 billion worth of export orders cancelled 50-60% cancellations seen across sectors Apparel, leather, handicraft and carpets worst affected No immediate revival signs as global demand is at its worst In his 42-year career, Gurugram-based Raj Kumar Malhotra, owner of a star export house specialising in handcrafts, has never seen a more severe business disruption. His company, Asian Handicrafts Pvt Ltd, which makes thousands of customised textile-based handicraft gift items – boxes, photo frames, ornaments, home accessories – targeting festival sales in US and European markets has seen its production and delivery plans go awry. “Fifty per cent orders have been cancelled outright. Another 25 per cent are on hold without confirmed delivery dates. A third set of 20 per cent say they will buy, but when and where,…
new gen reliance
If you thought Mukesh Ambani and Mark Zuckerberg sat across a table, assisted by a battery of experts, to frame the Facebook-Jio deal, you are mistaken. Ambani’s twin children Isha and Akash led talks for sale of a stake in Jio Platforms (JPL), flying down multiple times to Facebook headquarters in Menlo Park, California, for negotiations. The senior Ambani was given the minutes of the negotiations by the children. The details were shared often at dinner time in Antilla. The stake sale is a step towards transforming the business empire founded by late Dhirubhai Ambani as a yarn trading company in Mumbai’s Masjid Bunder about 63 years ago. One aim is to rid Reliance Industries (RIL) of a bulk of the massive ₹3.36 lakh crore gross debt accumulated to fund growth…
less clutter
OIL & GAS Reliance O2C Ltd (Saudi Aramco is looking to pick a 20% stake for ₹1,14,000 crore) The petroleum refining & marketing business (Jamnagar refinery) and petrochemicals manufacturing Upstream oil and gas exploration and production blocks in India (this includes the KG-D6 basin. BP Plc owns 30% for ₹7,000 crore) Jio-BP fuel stations (BP Plc. 49%, Reliance O2C 51%) Shale gas assets in US: Marcellus-Pioneer 46.4% and Eagle Ford-Chevron Upstream 60% MEDIA & ENTERTAINMENT Network18 Media & Investments TV18 Broadcast and other media businesses Hathway Cable & Datacom and Den Networks DIGITAL AND TELECOM Jio Platforms Ltd (RIL recently sold 17.12% stake for ₹78,562 crore) Facebook: ₹43,574 crore (9.99%); Silver Lake: ₹5,656 crore (1.15%); Vista Equity Partners: ₹11,367 crore (2.32%); General Atlantic: ₹6,598 crore (1.34%); KKR: ₹11,367 crore (2.32%) Reliance Jio Infocomm: Wireless, Home and Enterprise Broadband Cloud (with Microsoft), IoT, Blockchain, Big Data,…
