Business Today 21-Oct-2018

EVERY YEAR, A NUMBER of very respectable organisations – management consultancies, wealth managers, tax advisors, property consultants, and media firms – try to find out the number of super wealthy people worldwide and, of course, in individual countries. The reports broadly agree that the wealth of the super rich and the share of the country’s and as well as global wealth is generally going up. They also agree that in most countries the number of super rich are going up. In China and India, especially the number of billionaires and their total wealth are showing a double-digit growth rate every year. While the reports typically differ on the specifics, their overall conclusions about aggregate wealth of the super rich in India (and globally) are pretty much similar. Of course, every…

STAY CONNECTED WITH US ON www.facebook.com/BusinessToday@BT_India PERSPECTIVES Can Tata Motors Topple Mahindra & Mahindra? Both Tata Motors and M&M are fighting their own battles. Though Mahindra is financially strong now, Tata Motors’ JLR may turn the tide businesstoday.in/tatamotors-mahindra Why Tariff War in Telecom Sector Won’t End Soon Jio’s free voice calls and super-cheap data tariffs have led to significant shift in the telecom sector. Now, even the larger operators are finding it difficult to hold their ground businesstoday.in/telecom-tariff.war NEWS New KYC Process Likely to Eliminate Ghost Directors From the System As only 12 lakh out of 33 lakh directors have completed the KYC process for free by the last date of September 15, the government is planning to deactivate 21 lakh director identification numbers businesstoday.in/kyc-directors Good Distribution Practices for Pharma…

THE SUPREME COURT verdict on petitions that challenged the Constitutional validity of Central government’s 12 digit unique identity number Aadhaar reminds us of the traditional proclamation “The King is dead, long live the King!” In the same breath, the majority verdict of the five-judge bench made Aadhaar enrolment voluntary, while making it mandatory for majority of Indians - both income earning tax payers, and people with low income or no income. Your income tax filings need to be linked to your Aadhaar number. Aadhaar-linked biometric validation is mandatory for the poor who wish to avail the benefits of social welfare programmes supported through the Consolidated Fund of India. Technically, others may opt out of Aadhaar as the SC verdict quashed government directives to link Aadhaar with mobile numbers and bank…

THE ₹22-LAKH CRORE Non Banking Finance Companies (NBFC) space grew robustly though the last few years were very challenging. The tide, however, appears to be turning now. With inflation, rupee and interest rates wobbling, there is concern about growing leverage due to reliance on debentures and Commercial Paper. Higher cost CP will replace these, now that interest cycle has reversed. There may be a liquidity crunch as many mutual funds would prefer not to increase CP exposure; they also fear possible redemption pressure because both equity, and debt instruments, prices are dropping. NBFCs face a concentration risk on the assets side too. Many have increased exposure to micro and small loans; in a climate where retail loans (especially consumer durable financing, credit cards and affordable housing) have grown in the…

SOON AFTER TATA STEEL announced its plan to acquire the one million tonne steel business of Kolkata based Usha Martin for up to ₹4,700 crore, the founder of the wire and specialty steel maker, Basant Jhawar and his son Prashant issued a statement seeking clarity on the end-use of sale proceeds. The father-son duo have about 26 per cent stake in the company, while Prashant’s cousin Rajiv Jhawar’s family holds another 26 per cent. Prashant and Rajiv are at loggerheads over the control and ownership of the business, in which Rajiv is the managing director. In April 2017, the lenders removed Prashant from the role of chairman for alleged mismanagement of the company. Now the question before the father and the son is what their share of income from the…

A SURGE IN CRUDE past $80 a barrel and rupee falling towards the 73 level have suddenly become a headache for policymakers. The stock market has taken note and the Sensex is down 7 per cent this month, the worst September since Lehman. Sino-US trade tensions, upcoming US sanctions on Iran, and a snub by OPEC and Russia to US calls on increasing oil production suggest the two problems are unlikely to vanish anytime soon. When domestic macros were strong, earnings were elusive. Now earnings start to look up, but macros have taken a beating. FPI flows are drying, while mutual funds are seeing a redemption pressure. Defaults at a group, as big as IL&FS, has raised fears of contagion. The bank cleanup process too is delaying things. As such,…