QBiz: Govt Cuts Excise On Jet Fuel; AirAsia India Appoints New CEO
Catch the latest business stories of the day here.
1. Government Cuts Excise Duty On Jet Fuel To 11%
In a big relief to airline companies, the Narendra Modi government on Wednesday, 10 October, announced excise duty cut on Aviation Turbine Fuel (ATF) from present 14% to 11% as the aviation industry has been hit hard by higher fuel prices.
The government notification said that the new tax rate will be applicable from 11 October.
On one hand, the government has cut excise duty on jet fuel, on the other hand, it has raised customs duty from 0 to 5 percent — the net effect of which is likely to favour domestic oil companies. Recently, the government raised customs duty on jet fuel as part of its import curb to rein in pressure on the current account deficit (CAD).
This is the second oil related excise duty cut announced by the government this month. To provide relief to petrol and diesel consumers, the government announced an excise duty cut of Rs 1.5 a litre on both, while asking oil marketing companies to absorb a loss of Re 1 per litre.
(Source: The Financial Express)
2. Tata Take Control Of AirAsia India With New CEO, Sunil Bhaskaran
Five months after the position fell vacant, AirAsia India is appointing Sunil Bhaskaran its next chief executive officer (CEO). Bhaskaran, a lifelong employee of the Tata group, is currently working as vice-president (corporate affairs) at Tata Steel.
The airline is also restructuring its board, with AirAsia group CEO Tony Fernandes and deputy group CEO Bo Lingam stepping down. It is learnt that the airline will get Banmali Agrawala, who heads Tata group’s defence and aerospace business, as chairman, replacing S Ramadorai.
Sources have said the restructuring implies the Tatas will manage the AirAsia India operations. This is for the first time that the airline’s top appointments are being done without consulting Fernandes.
Tata Sons and Tony Fernandes-owned AirAsia Bhd hold a 49 percent stake each in the airline, while the remaining 2 percent is held by Tata veterans S Ramadorai and R Venkataramanan.
(Source: Business Standard)
3. Supreme Court Orders Sealing Of 9 Amrapali Properties
The Supreme Court on Wednesday, 10 October, ordered sealing of nine properties of the Amrapali Group which is facing lawsuits by homebuyers — where documents related to the accounts of its 46 companies are admittedly stored.
This includes five properties in Noida, two in Greater Noida and one each in Rajgir and Buxar districts of Bihar.
On 9 October, the court had ordered that three directors of the group — Anil Kumar Sharma, Shiv Priya and Ajay Kumar – be kept in police custody till all documents related to the accounts of all 46 companies were seized and handed over to the two auditors appointed by the court to audit the Group’s accounts.
Ordering the sealing of the premises, the court said it was passing the order “on the premise that the documents required by the Forensic Auditors are kept at the ‘7 plus 2 places’ and not at any other place,” and directed them to file undertakings on the same.
(Source: The Indian Express)
4. SBI Comes To The Aid Of NBFCs Battered By IL&Fs Crisis
State Bank of India (SBI) on Tuesday, 9 October, said it will triple its target of buying standard loans from non-banking financial companies (NBFCs) to up to Rs 45,000 crore in FY19.
The move is expected to give an additional liquidity cushion to NBFCs who will benefit by selling these loans on full-cash basis.
In a statement issued, India’s largest bank also said it is looking for opportunities in both priority and non-priority sectors.
The official added that he expects NBFCs to benefit from these deals at a time they are finding it difficult to raise money from the markets.
NBFCs’ liquidity crisis surfaced after Infrastructure Leasing & Financial Services Ltd (IL&FS), which had funded long-term infrastructure projects through short-term funds, defaulted on payment obligations and was downgraded by credit agencies over the past two months.
5. Zydus Close To Buying Complan, Glucon-D In Deal Worth Rs 4,500 cr
Zydus Wellness has emerged as a dark horse to snap up Kraft Heinz brands Complan, Glucon-D and Nycil in a deal estimated at around Rs 4,500 crore ($610 million), people directly aware of the matter said.
The Ahmedabad-based Zydus Wellness is the consumer products unit of the Pankaj Patel-led Zydus Cadila group, which counts Cadila Healthcare as its flagship. Patel is close to finalising funding support for the buyout, including Rs 2,000 crore ($270 million) from private equity investors.
Last month it was reported that Coca-Cola and Zydus were in the race to buy the Indian brands of Kraft Heinz. The world’s fifth-largest food and beverages company decided on a “very serious engagement” with Zydus after considering both offers. A potential deal could be sealed within a month, sources said.
A successful acquisition would help Zydus to bulk up its wellness and consumer products unit, which has brands like Nutralite and SugarFree, into a $1-billion business by valuation.
(Source: The Times of India)
6. 3X Spurt On First Day Of Great Indian Festival 2018 Sales For Amazon
US online retail giant Amazon said sales jumped three times during the first 24 hours of the Great Indian Festival for 2018 compared to the same time period last year.
The company said members of its Prime loyalty programme bought three times the number of early access products they did last year in the initial 12-hour period. That trend continued into the first day of Amazon’s festive sale.
“The first day of our open sale has been our biggest shopping day ever,” said Amit Agarwal, country head at Amazon India.
He said that customers availed credit of over Rs 3 billion during the first 24 hours of sale to buy large-ticket items such as television, refrigerators, dishwashers and smartphones. While a large chunk of this was driven by bank credit and debit cards, Amazon’s own cardless credit product saw massive traction.
(Source: Business Standard)
7. IL&FS Needs Rs 100 Crore Every Month To Stay Afloat
Infrastructure Leasing & Financial Services Ltd needs about Rs 100 crore a month to keep functioning, a senior government official said. This excludes the other contractual and repayment obligations of the cash strapped company, the official added.
The infrastructure conglomerate that has turned insolvent had a high leverage ratio of 13 times as the borrowing of about Rs 91,000 crore was on the base of equity and reserves of just Rs 6,950 crore.
As the priority is to remain afloat, measures like cost rationalisation will also have to be taken, the official cited earlier said.
The company needs a ‘temporary reprieve’ from its repayment obligations, the official said, adding that the board will honour its contractual commitments in critical projects, including those of the National Highway Authority of India.
The newly constituted board of the company headed by Uday Kotak has also reached out to NHAI for settlement of pending claims and disputes, the official said. He added that settlement of NHAI’s dues may provide a “template” for settlement of other dues owed by state-owned entities to IL&FS.
8. Bandhan Bank Net Profit Increases 47%
Private-sector lender Bandhan Bank on 9 October reported a net profit of Rs 488 crore in the quarter ended September, up 47 percent from the corresponding figure in the same quarter last year, on the back of a 55.6 percent year-on-year (y-o-y) rise in net interest income (NII) to Rs 1,078 crore.
NII is the difference between interest earned and interest paid by the bank. Net interest margin (NIM) also rose to 10.3 percent from 9.6 percent at the end of June. The bank’s provisions rose 43 percent y-o-y to Rs 124 crore.
Total advances as on 30 September stood at Rs 33,373 crore, up 51 percent from the previous year, while total deposits rose 29.5 percent y-o-y to Rs 32,959 crore. The current accounts savings accounts (CASA) ratio improved to 36.9 percent from 28.2 percent at the end of September 2017.
(Source: The Indian Express)
9. Telecom Operators Propose New e-KYC Process As Alternative To Aadhaar
Telecom operators have approached the Department of Telecom (DoT) seeking approval for new e-KYC process as an alternative to Aadhaar-based verification.
This follows the Supreme Court order restricting use of Aadhaar information by private companies including telcos and banks.
“We are proposing minor modifications to the DoT guidelines…allowing consumer application form (CAF) to be embedded with photograph and scanned images thereby digitise the end to end process for on boarding of new subscribers by making it completely paperless,” the Apex Advisory Council for Telecom in India (ACT) said in a letter to the DoT.
The ACT, which includes industry body COAI and other telecom operators, has suggested an app-based customer enrolment method in which photograph of customer will be clicked by the SIM seller and embedded in the form along with self-attested copy of any identity and address proof.
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