Innholdsfortegnelse for 1-Dec-19 i Business Today

Just as Business Today has assiduously chronicled the rise and fall of India Inc year after year, this edition of BT 500 in your hands has a legacy that dates back 27 years. Such a long horizon not only tests robustness of businesses and longevity of firms, but also narrates fascinating tales. For instance, just the 10-year trend of BT 500 reveals that six of the Top 10 firms have managed to retain their position among India’s 10 most valuable companies. Even though their ranks have swung wildly, No.1 Reliance Industries stayed at the top. If HDFC and HDFC Bank have consolidated from ranks 8 and 10 to 5 and 3 today, ITC has stayed at No.6, TCS has climbed from No.4 to 2, Kotak Mahindra Bank has risen from…

A REPORT by Nasscom mentions a robust addition of 1,300 start-ups in the past one year, taking the total tally in India to 8,900-9,300. Interestingly, seven new companies joined the coveted unicorn club, taking the total unicorn tally in the country to 24 from 17 in 2018. While seed stage funding is still facing a crunch, early stage funding (series A and B) saw an uptick of nearly half a billion from $1.1 billion in 2018 to $1.6 billion till September 2019. India remains the world’s third-largest start-up hub after the US and China with nearly 52 start-ups having the potential to become unicorns. While IT industry body Nasscom believes that by 2025, start-ups could provide over 10-12 million direct jobs and nearly 40 million indirect jobs, the bigger problem…

INNOVATION & IP WHAT: Global IP Convention Conference WHEN: January 8-10, Delhi WHAT TO LOOK FOR: The event will give an opportunity to in-house intellectual property (IP) counsels and innovators to interact with IP attorneys from around the world. The discussions will focus on finding out best practices and solutions to maximise the value of innovation and IP. INTELLIGENT TECH WHAT: International Conference on Intelligent Systems and Control WHEN: January 9-10, Coimbatore WHAT TO LOOK FOR: The participants will exchange their knowledge and find suitable solutions in areas such as database management systems, data warehousing, systems and mining, grid computing and high performance computing and networks. PROJECT DEVELOPMENT WHAT: Project Innovation Contest WHEN: January 9-12, Bhubaneswar WHAT TO LOOK FOR: Organised by the International Conference on Distributed Computing and Internet…

Facebook has agreed to pay a fine of $643,000 to Information Commissioner’s Office (ICO), the UK’s information rights regulator, to settle the privacy breach probe involving Cambridge Analytica. However, the social media giant has denied any liability in the case. Once the fine is paid, both Facebook and the ICO will withdraw their respective appeals. This settlement will also allow Facebook to retain the documents that the ICO had disclosed to continue its investigation of Cambridge Analytica. In October 2018, the ICO had asked Facebook to pay a fine which was appealed against last November. TIKTOK SEES DROP IN USER GROWTH THE SHORT VIDEO-SHARING APP TIKTOK THAT HAD BECOME A SENSATION ALL OVER THE GLOBE SAW ITS USER GROWTH DECLINE FOR THE FIRST TIME SINCE IT STARTED TWO YEARS AGO.…

IF INVESTING IS entertaining, if you are having fun, you are probably not making money. Good investment is boring,” said the legendary investor George Soros. The 51 per cent investment by Life Insurance Corporation (LIC) in the struggling IDBI Bank hardly fits into Soros’ “boring” category. It is, in fact, risky – imagine the future of a bank with one-fourth lending book in the non-performing asset category, mounting losses and lending restrictions on account of the “weak bank” tag given by the Reserve Bank of India (RBI). Whichever way you look at it, the entry of LIC in the state-owned bank has given hope to investors. The stock, which was trading near the ₹200 mark in November 2010, came under pressure after the bank faced asset quality pressure and was…

MARUTI SUZUKI INDIA’S second quarter financial performance was its worst in almost five years. The reason for the slump that the company finds itself in is low demand for its vehicles. Sales tumbled by close to a third during the three-month period. The cyclical automobile sector routinely goes through crests and troughs. What set Maruti apart from the other players was its ability to perform better than the industry even in tough times. Not this time, though. The second quarter was not a one-off either. In the first half of this fiscal, Maruti’s sales fell 27 per cent as against the industry average of 23.6 per cent. This resulted in the company losing 2.33 percentage points market share (from 52.1 per cent to 49.77 per cent). This is the most…

HOW DOES IT FEEL when real and virtual worlds merge and you become part of The Matrix in real time? In a Stanford University-Microsoft research project on human-computer interaction, researchers substituted a real-world walking experience with a virtual one. The research team presented a virtual reality (VR) system where users could explore and remain immersed in virtual environments. But they had to wear headsets to experience it and got stared at by people roaming the physical world. When a person wearing the headset goes walking, the VR component map sout a similar route from elsewhere in the world, and the backdrop is a pre-scripted VR environment. The system protects the user from colliding with objects and other people. Also, GPS locations have been integrated with the system for ‘inside-out tracking’…

STAY CONNECTED WITH US ON www.facebook.com/BusinessToday@BT_India PERSPECTIVES What If Reliance Jio’s Wish to See Vodafone-Idea, Airtel Fall Comes True? Can the government afford to pull incumbents out of their mess? Bailing out private telcos, experts believe, could set a wrong precedent, as more clarion calls may come from other distressed sectors businesstoday.in/jio-telcomess Investors’ Help May Not Be Enough to Revive Yes Bank’s Shrinking Balance Sheet Yes Bank, with balance sheet size of ₹3.46 lakh crore, is in danger of losing its fourth rank to Kotak Mahindra Bank or IndusInd Bank in the near future businesstoday.in/yesbank-balancesheet The Cyrus Mistry Factor in Tata Trusts’ Income Tax Trouble The trusts are governed under the Maharashtra Public Trust Act and the I-T Act. They are allowed to hold shares in a commercial entity despite…

FINALLY, INDIA has decided not to be part of the Regional Comprehensive Economic Partnership (RCEP) agreement. All other 15 countries that were negotiating this mega trade deal for about seven years will formally seal the deal early next year. The sighs of relief from across sections of domestic industry prove two things. One, the government did the right thing. Two, Indian industry in general is not competitive enough to face the on-slaught of duty-free imports from countries like China, Australia and New Zealand (India has existing trade agreements with others). While the government’s decision needs to be applauded, serious introspection is needed to understand and overcome Indian industry’s handicaps. Free trade agreements or not, Indian manufacturers need to become globally competitive in terms of quality and prices. The government may…

THINGS ARE LOOKING up for the hospitality sector. After years of flat growth, hotel companies can expect higher growth in revenues and net profits in the current financial year. Ratings agency CARE Ratings has predicted 6-8 per cent revenue growth for hotel companies, whereas net profit margins are expected to improve to 6-6.5 per cent, up from 3.5 per cent in the previous financial year. The key drivers of growth are going to be GST rate cuts (particularly for boosting net profits) and higher domestic leisure spending. The GST rates were slashed right before the beginning of the peak season – October to March – and would benefit mid-scale and upscale categories the most. At present, nearly 94 per cent branded hotel rooms in the country – over 1.33 lakh…

THE ASSETS under management (AUM) of microfinance institutions industry grew 47 per cent y-o-y in 2018/19 to reach ₹68,207 crore from ₹46,546 crore, according to a report by Brickwork Ratings. The increase is due to various factors, the main being a wider client base, which went up 34 per cent in the year. Added to this, the average loan ticket size per account went up to ₹25,543 from ₹15,419 in 2015/16. Last year, MFIs also expanded their presence in under-penetrated states such as Rajasthan, Assam, Jharkhand and Gujarat as well as in new districts in states where they were already present. The NBFC liquidity crisis has also pushed some borrowers towards MFIs. But the growth is expected to slow down a bit in the current fiscal, at 40-45 per cent.…

US, CHINA GET CLOSER TO TRADE DEAL After trading tariff blows for months, the US and China are finally discussing how to lower some taxes on each other’s goods and may even remove some of the trade taxes. But this is likely to happen in stages – the first of which is due to be signed in December. Tariff rollbacks will make goods cheaper and should encourage spending by governments and companies alike, thus boosting earnings and economic growth. US stocks reached all-time highs after Beijing announced that both countries had agreed to gradually eliminate all existing tariffs as part of a ‘Phase I’ trade deal. They will also work together on a probe into a fentanyl smuggling operation based in China, potentially paving the way for further progress in…

THE AVERAGE MARKET capitalisation of BT 500 companies has fallen for the first time since 2012 reflecting the economic slowdown, a decline in corporate earnings and the liquidity crisis that have taken the sheen off Dalal Street. BT 500 is a list of top 500 companies by average market cap. For the October 2018 to September 2019 period, the average market cap was ₹137.5 lakh crore, down 1.5 per cent over the previous year. “Broadly, lack of earnings is the major reason behind the decline,” says Siddharth Sedani, Vice President-Equity Advisory, Anand Rathi Shares and Stock Brokers. Corporate earnings grew only 6 per cent in 2018/19 and declined 8.9 per cent in the first quarter of this fiscal, excluding banks, non-banking finance companies and oil firms. When corporate earnings growth…

Retail investors have been flocking to mutual funds, especially equity funds, over the past two-three years. This is thanks partly to campaigns such as Mutual Fund Sahi Hai by the Association of Mutual Funds in India or AMFI. Their preferred route has been systematic investment plans or SIPs. “Between April 2016 – when AMFI started disclosing monthly SIP contributions – and June 2019, the route helped rake in a whopping ₹2.3 lakh crore. That is nearly 19 percent of the ₹11.9 lakh crore increase in assets under management (AUM) of the industry,” says a Crisil-AMFI report. “The surge has come on the back of scores of new retail investors joining the ranks, too, as reflected in the almost 3x growth in the number of SIP accounts to 27.3 million from…

THE NATIONAL HIGHWAYS Authority of India (NHAI) has drawn up an ambitious and aggressive plan to raise over ₹85,000 crore by fiscal 2025 by monetising assets under toll operate transfer and infrastructure investment trusts (InvITs). However, after tasting initial success in the first round, where it raised ₹9,681 crore against a target of ₹6,258 crore for 680 km of highways, it has found the going tough. The banking system is reluctant to lend and with the economic slowdown, investor appetite for such long gestation projects is low. The NHAI’s second round of auctions in February had to be cancelled due to tepid response from developers. At the same time, pressure continues on the NHAI to raise its own funds. Even as the third round for 566 km is yet to close…

THE GST collection of ₹95,450 crore in September has dashed all hopes of the government getting anywhere near its tax collection targets for the current year. While there have been talks of the government falling short of tax revenue in the current financial year by ₹2 lakh crore, the September GST collections reiterate this. The September collection this year was lower than a year ago by 5.3 per cent. This is the second month in a row when collections were lower than last year. Now, with the collections way off the target of over ₹1.20 lakh crore every month, the required rate for the rest of the year is as high as ₹1.34 lakh crore a month. At the current rate of ₹98,000 crore average monthly collection, the central government…

CONSUMER DURABLES retailers such as Croma saw a 20 per cent rise in sales during the festival season (September and October). Though this is close to 10 percentage points lower than the festival season last year, retailers are happy as the period this year saw more footfalls compared to July-August when both footfalls and sales had shrunk. According to Ritesh Ghosal, Chief Marketing Officer, Croma Infiniti Retail, bulk of the sales came from premium categories such as high-end smartphones, refrigerators and 55-inch smart TVs, while sales of entry-level products in such categories were not encouraging. Even in the premium category, it was aggressive pricing that wooed consumers. Apple, for instance, dropped prices of its new launches this year by close to ₹25,000, while 55-inch smart televisions, which earlier cost upwards…

THERE WILL not be any more extensions given to CEOs of private banks after they turn 70. This means that CEOs of two private banks – Aditya Puri of HDFC Bank and Romesh Sobti of IndusInd Bank – will retire in the next 12 months. IndusInd Bank has submitted the name of a new MD and CEO to the RBI for approval. Five years ago, the central bank had allowed private bank CEOs to continue till 70 years. So, this time, too, the banking industry was expecting a relaxation in rules as the corporate sector is allowed to fix a higher retirement age under the Companies Act by passing a special resolution. The HDFC Bank CEO Aditya Puri is set to retire in October next year. The bank has also…

1) Founders Amit Sharma and Kapil Chadha. Before starting their venture, the duo had worked across several industries and had decades of experience in healthcare and health insurance. 2) The Trigger “In healthcare, the clinical and business sides have always thrived. But little has been done to improve customer experience. Even now, most people do not know how to access quality and affordable solutions. Medical tourism is a good option, but you need to know everything about treatments, procedures, facilitators and costs to make it work. Since India is emerging as the go-to hub for healthcare, we wanted to push this advantage and launch a platform to connect all stakeholders, with focus on technology and transparency,” says Sharma. 3) The Business eExpedise Healthcare is one of the few NABH-accredited operators…

UNTIL A DECADE BACK, when Indian conglomerates were shopping around the globe to ride on the economic boom, Mukesh Ambani, Chairman and MD of Reliance Industries (RIL), had been reclusive. He was criticised for an inward-looking business approach and not scaling up RIL as a global player in petroleum. In the domestic market, after building the second refinery in Jamnagar and investing in hydrocarbon exploration and retailing in 2010, he took a second plunge into telecom. Then it was silence again until 2014. But that was soon to change. Reliance Jio tied up with original equipment manufacturers (OEMs), original design manufacturers (ODMs) and chipset vendors for end-to-end device design and engineering in late-2014 and started rolling out physical infrastructure across India. Within two years, in September 2016, it launched the…

FOR YEARS I THOUGHT what was good for our country was good for General Motors, and vice versa.” This is how Charles Erwin Wilson, the legendary former CEO of General Motors and US Defence Secretary after World War II, reacted to a question how he would handle a decision involving a conflict between his former company and the country. India of 2019 could do well to be mindful of Wilson’s reply as it grapples with an automobile slowdown that is so severe that it can bring its growth story to a sorry end. With overall revenues of $119 billion that account for 7.1 per cent of the country’s gross domestic product, 49 per cent of its manufacturing GDP and 37 million directly and indirect jobs, the sector has a direct…

BUSINESS TODAY has been ranking India’s largest companies – BT 500 – since 1993 based on their market capitalisation. In the early days we based it on the market cap of companies as on March 31. Like in everything else, there is change. In 1997, we took a close look at the methodology to make the first change. We then started ranking companies based on their marketcap during the fiscal – April 1 to March 31. In 2002, we began using average market cap between April 1 and September 30. In 2016, we reverted to the 12-month ranking, taking the period from October 1 to September 30. This gives you the advantage of looking at not just the 12 months’ numbers but also the most recent numbers from the stock…

ONCE UPON A TIME, there was Moore’s Law, an observation by Intel Co-founder Gordon Moore, who said computing power (or rather, the number of transistors per square inch on integrated circuits) doubled every two years. The law held for decades. But for a while now, we have seen a hectic race to achieve significant breakthroughs in quantum computing. It is quite different from standard computing – an ecosystem that stores information in bits and bytes and uses 0’s and 1’s, or the classical binary system, to operate. In contrast, data in quantum computing can simultaneously exist in multiple states, and it is stored in quantum bits or qubits where all possibilities exist at the same time. Qubits are programmable, though, and can potentially solve problems at unthinkable speed. Classical computers…

A WATER PURIFIER is an essential kitchen appliance, but not many companies have thought of making it smart and sleek. Xiaomi is an exception, though. It has come up with a connected gadget that works smart and looks flaunt-worthy in matte white. But given the oil-based cooking done in most Indian kitchens, it is likely to get dirty very quickly. As for efficiency, it is quite thorough in its job and follows a multilevel purification process. To start with, the PPC (polypropylene cotton and activated carbon) filter intercepts all large particles such as residual chlorine. The second one is the reverse osmosis (RO) filter, taking out heavy metals and nanoparticles such as bacteria and viruses. The third one, a post-activated carbon (PAC) filter, absorbs odour and other organic substances. The…