Business Today 5-May-19

The banks have been spared the blushes, at least temporarily, in the case of Jet Airways. After extending the deadline for submission of Expression of Interest (EoI), they have managed to attract several potential suitors. This reportedly includes several private equity firms as well as Abu Dhabi based Etihad Airways, which had 24 per cent stake but refused overtures from banks earlier to put in additional money. Naresh Goyal, the founder of the airline, who had been ejected last week by the lenders as a condition for lending emergency funds to the airline, submitted his last minute EoI for the stake on sale. Whether it is with a partner or on his own is not clear. The government, too, must be heaving a big sigh of relief. It did not…

STAY CONNECTED WITH US ON www.facebook.com/BusinessToday@BT_India PERSPECTIVES How Data Science Enables Life-long Learning Just the college degree is not enough. The future of work is about up-skilling every few years businesstoday.in/degreed-datascience Aadhaar Authentication Rate Improves, But Fertiliser DBT Performance Is Poor The authentication process is turning digital, but farmers and retailers still prefer cash transactions businesstoday.in/aadhaar-fertiliser.retailers IBC Delivering Results; A Reform Modi, Jaitley Should Be Proud of Despite its flaws and constraints, the insolvency law looks promising in the long term businesstoday.in/ibc-reform.modi Supreme Court Strikes Down RBI’s Feb 12 Circular; What Should Banks Do? The circular had mandated that banks consider as stressed all companies with loan exposure above ₹2,000 crore even if they default by a day businesstoday.in/sc-rbi.circular PM Modi Biopic: How BJP Exploits Grey Areas in Regulations Can…

DEBT MUTUAL FUNDS have traditionally been a safe haven for risk-averse investors, but that seems to be changing now. In April, Kotak Mahindra Asset Management delayed the redemption of six of its fixed maturity plans (FMPs) while HDFC Mutual Fund also announced rolling over one of its FMPs because of exposure to the highly leveraged Essel group. With this, the financial stress in debt-laden companies seems to be spilling over to debt mutual funds. Just like Essel, which owns Zee, there could be other instances brewing as many promoters, starved of bank credit, have pledged their shareholding with mutual funds to raise money. With corporate profits contracting at an annualised rate of 1.8 per cent between FY14 and FY18, the leverage levels in companies have gone up. In case of…

THE SUPREME Court has given relief to stressed companies, including those in power and infrastructure, by blocking the Reserve Bank of India’s (RBI’s) controversial circular of February 12 last year. The circular, issued under Section 35AA, had asked banks to follow a six-month deadline to resolve a stressed company where there has been even a single day default. But the RBI’s power under the said Section stays in respect of specific defaults by specific debtors. The earlier circular was a blanket rule for all companies with over ₹2,000 crore exposure. The RBI will now likely issue a new circular or direction that can be used to restructure a loan. Banks need to be careful and act on time in case they see stress in a company. So, what happens to…

A BIOPIC ON Prime Minister Narendra Modi, a digital series on him on Eros Now to characters of leading television shows talking about the various initiatives taken by the current government, the BJP has used all means to promote their leader. The Election Commission did stop the release of the biopic till the end of the elections. But, is this blatant publicity in accordance with the Election Commission’s moral code of conduct? The BJP would have surely found a grey area. But the bigger question is whether it will help the current government come back to power. One reason why the Vajpayee government’s India Shinning campaign failed was because it was overdone. TV, print and radio platforms were blasted with 52 different ads boasting about the then PM Atal Bihari…

ON MARCH 29, the government postponed, for the third time, implementation of higher tariffs on goods like automobiles and some agriculture products imported from the United States to May 2. The tariff hike was proposed as a retaliatory measure against the US after it announced protectionist measures to discourage steel and aluminum exports to the US. India’s hesitation to act may be a conciliatory attempt to improve trade relations with the US by negotiating a trade package. However, there is no evidence to suggest that the plan is working, as the US is withdrawing trade concessions granted to India under the Generalised System of Preferences. The just released 2019 National Trade Estimate Report on foreign trade barriers of the US Trade Representative has a long list of demands, making such…