Monday, 21 May 2018

Cleaning India's bank mess - NPA of Rs 1,00,000 crore may find resolution.


With the debacle of the UPA regime, the people of India were expecting a cleaner, fair and sustainable banking systems. Four years passed, our bank's NPA issues are still haunting us. The Q4 results of all major banks reported a higher NPA growth. Fraudsters like Nirav Modi and Mehul Choksi have fled to Hong Kong duping Punjab National Bank, India's second-largest lender of approx Rs 11,000 crores. India's fight in the courts of Hong Kong, UK and other thug-friendly nations have regularly failed in the past. But, not all is gloomy and scary. The major chunks of NPA by companies operating in steel, cement and infrastructure sector are nearing resolution.

Just days before, Tata Group acquired a controlling stake of 72.65 percent in the debt-ridden Bhushan Steel Ltd for around Rs 36,000 crore will help in cleansing the banking system as well as boost lenders profitability. The consortium of state-run banks had the largest exposure to scam-ridden Bhushan Steel.

Of the total exposure to Bhushan Steel, the Punjab National Bank had set aside Rs 1,542 crore as provisions. “While the bank will recover Rs 3,050 crore of the outstanding amount, it will also be able to write off Rs 807.5 crore from the provision it had held for this NPA,” a PNB official said in an interview published by ET. Also, lenders, including PNB, will continue to own 12% in the acquired entity, giving it the opportunity to cash out later when the valuation of the company goes up, the banker added. The State of Bank is likely to get Rs 6,000 crore along with the shares of the entity. Bank of India reported that it would be able to recover Rs 1993 crore from the first successful NCLT recovery of 12 large NPAs.

Last year in June, RBI's internal advisory committee identified 12 accounts, each having more than Rs 5,000 crore of outstanding loans and accounting for 25 percent of total NPAs of banks. Following the RBI's advisory, banks referred Bhushan Steel Ltd, Bhushan Power & Steel Ltd, Essar Steel Ltd, Jaypee Infratech Ltd, Lanco Infratech Ltd, Monnet Ispat & Energy Ltd, Jyoti Structures Ltd, Electrosteel Steels Ltd, Amtek Auto Ltd, Era Infra Engineering Ltd, Alok Industries Ltd and ABG Shipyard Ltd to NCLT. These accounts together have a total outstanding loan of Rs 1.75 lakh crores.

For the acquisition of Essar Steel with NPA of Rs 49,000 crores, Numetal and Arcelor Mittal are having tough competition in the NCLT courts. Bloomberg reported that VTB backed Numetal has made a bid of Rs 37,000 crores in the second round of bidding. ArcelorMittal is understood to have made an upfront offer of Rs 30,500 crore and pledged another Rs 8,000 crore in the form of capital infusion into Essar Steel. It is expected that NCLT may approve the better deal by mid-June 2018.

Lanco Infratech owes INR 45,000 crore to a group of lenders, including ICICI Bank with the exposure of Rs. 7,380 crore and IDBI Bank at Rs 3,680 crore. Thriveni Earthmovers is said to have offered INR 1,400 crore in cash and liability for INR 38,000 crore of debt at the subsidiary level. The bid failed as the company couldn't get creditors vote. It is understood that Lanco Infratech has filed for liquidation.

With the successful resolution of Bhushan Steel, the finance ministry expects that the NPAs of 12 large companies would be cleared in near future and banks would get minimum Rs 1 lakh crore for further lending. Along with clearing NPAs, India's banks need to implement effective credit control mechanism which would result in greater transparency and sustainable financial modelling.

- Chaitanya Kulkarni.

Monday, 14 May 2018

Dubai's Relam Investment pumps $250- 300 million in India.


Relam Investment LLC, a new international joint venture formed by UAE-based Vault Investment and Vietnamese MIG Holding officially made entry into Indian markets. The company, headquartered in Dubai is set to focus on investments across multiple sectors including real estate, technology, energy, oil & gas, trading, healthcare, F&B, retail and agriculture. The company looks to invest USD 250-300 million in the Indian market with an initial focus on real estate and technology.

The company announced two new technology-led investment projects. The first would serve the real estate sector through the crowdfunding platform and the second, a trade hub platform, which will move small and medium enterprises into a different paradigm. Relam Investment LLC has allocated an investment portfolio of $50million to fund companies innovating in emerging technology like blockchain, AI, Big Data and another $200 million into the real estate sector, where India stands as one of its main hubs.

Relam Investment LLC also signed a cooperation agreement with RRP S4E Innovation Pvt. Ltd in order to set up renewable energy plants using CIGS, one of the most cutting-edge Nanotechnologies in the renewable domain. The partnership will also lead to setting up of a unique Electro-Optics park, as a part of its programme.

“The partnership between the two companies will bring together proven expertise into multiple sectors, which we aim to replicate in the Indian market. Our strategy is aligned with Dubai’s vision for globalized growth via effective investments. India is a developing region and its ‘Made in India’ project has made the country a global hub for investments. Through Relam Investment LLC, we aim to give a boost to the Indian start-up ecosystem.” - Sultan Ali Rashed Lootah, Chairman & MD, Relam Investment LLC.

Apart from India, Relam Investment LLC will focus its operations in the UAE, Vietnam, GCC countries, United Kingdom, Turkey, South East Asia and Egypt in the initial years, before expanding to other countries and regions around the world.

Source - Press Release.

Thursday, 10 May 2018

Walmart - Flipkart deal: India's largest FDI investment

India's largest FDI investment

Walmart-Flipkart deal at $20.8 billion is largest FDI investment in India after Essar Oil stake sale to Rosneft - Trafigura at $12.9 billion.

India's leading e-commerce giant has been sold to America's leading e-commerce giant, Walmart. Walmart had been keen to enter India's booming demand-driven market. Some analyst thank the change in government policy. Just a month back, the cabinet approved 100% FDI in Single brand retail. Walmart has been thinking of India as its next market since then. The Walmart - Flipkart deal of $20.8 billion has surprised many including its rival Amazon.

Walmart announced it has signed definitive agreements to become the largest shareholder in Flipkart. The press release says that the investment will help accelerate Flipkart’s customer-focused mission to transform commerce in India through technology and underscores Walmart’s commitment to sustained job creation and investment in India, one of the largest and fastest-growing economies in the world.

Walmart had already entered India's retail market by joining hands with Bharti. They operate 21 cash and carry stores in 9 states of India. The joint company Bharti-Walmart failed to make an impact in the grocery mall business which is ruled by Big Bazaar, D-Mart, Reliance, Tata and the Godrej. Whereas, India's e-commerce market had only three major players namely Amazon, Flipkart, and Snapdeal.

Subject to regulatory approval in India, Walmart will pay approximately $16 billion for an initial stake of approximately 77 percent in Flipkart, formally Flipkart Private Limited. The remainder of the business will be held by some of Flipkart’s existing shareholders, including Flipkart co-founder Binny Bansal, Tencent Holdings Limited, Tiger Global Management LLC and Microsoft Corp. While the immediate focus will be on serving customers and growing the business, Walmart supports Flipkart’s ambition to list on financial market's in future. The deal bids a good-bye to Flipkart founder Sachin Bansal.

Founded in 2007, Flipkart has led India’s eCommerce revolution. The company has grown rapidly and earned customer trust, leveraging a powerful technology foundation, including artificial intelligence, and emerging as a leader in electronics, large appliances, mobile and fashion and apparel. In a market where Walmart expects eCommerce to grow at four times the rate of overall retail, and with well-known platforms such as Myntra, Jabong and PhonePe, Flipkart is uniquely positioned to leverage its integrated ecosystem, which is defined by localized service, deep insights into Indian customers and a best-in-class supply chain. Flipkart’s supply chain arm, eKart, serves more than 800 cities, making 500,000 deliveries daily.

In the fiscal year ended March 31, Flipkart recorded GMV of $7.5 billion and net sales of $4.6 billion representing more than 50 percent year-over-year growth in both cases. With the investment, Flipkart will leverage Walmart’s omni-channel retail expertise, grocery and general merchandise supply-chain knowledge and financial strength, while Flipkart’s talent, technology, customer insights and agile and innovative culture will benefit Walmart in India and across the globe.

Walmart’s investment includes $2 billion of new equity funding, which will help Flipkart accelerate growth in the future. The Flipkart investment transforms Walmart’s position in a country with more than 1.3 billion people, strong GDP growth, a growing middle class and significant runway for smartphone, internet and eCommerce penetration. Now, America's rivals will fight in Indian markets, largely benefitting the final consumers and the retailers.

- Chaitanya Kulkarni

Source: Flipkart, Walmart.

Tuesday, 8 May 2018

BHEL bags contract for Nepal’s largest hydroelectric power project

Hydro electric power project

State-run PSU Bharat Heavy Electric Limited has bagged an order to build the largest hydro electric power project in neighbouring Nepal. This prestigious order is a testimony to BHEL’s proven technological prowess in executing power projects of this magnitude. The order will also provide a fillip to the company’s focus on globalization as a driver for growth.

BHEL bag 900 MW hydro electric power project in Sankhuwasaba, Nepal

Amidst stiff international competition, BHEL has secured a prestigious order for executing 900 MW Arun-3 Hydroelectric Project from SJVN Arun-3 Power Development Company (SAPDC), Nepal. Notably, once completed, this will be the largest Hydropower project in Nepal. Located in the Sankhuwasabha district, this project will substantially enhance Nepal’s present installed power capacity and will contribute significantly to Nepal’s vision of utilising its vast Hydro potential for accelerated economic development.

The total contract value of Arun 3 project is pegged at Rs 536 crores. The order envisages design, engineering, manufacturing, supply, erection and commissioning of Electro-Mechanical equipment involving the supply of four Vertical Francis Turbines and Generator sets, each rated 225 MW.

The cumulative installed capacity of power plants overseas with BHEL supplied equipment stands at close to 11 GW. Continuing its focus on globalization, BHEL has achieved consistent growth in its exports.

Recently, BHEL also secured maiden export orders from Benin, Togo, Chile and Estonia, expanding its global footprints to 83 countries across all the six continents. A major highlight of recent past was the receipt of an export order valued at US$1.5 billion for setting up 1320 MW (2x660 MW) Maitree Super Thermal Power Project in Bangladesh. BHEL is currently executing hydro projects of over 2,700 MW capacity in the country and 2,940 MW in Bhutan which are under various stages of implementation, demonstrating our commitment to promote clean and renewable energy in India and in subcontinent around India.

Arun 3 mega hydro power plant has to be constructed within 5 years.

As per the tender contract, the Turbines, Generators, Generator Transformers, Control System, Bus ducts and other associated equipment will be manufactured at BHEL’s manufacturing units in Bhopal, Bangalore, Rudrapur, Jhansi etc. Erection and Commissioning will be undertaken by BHEL’s Power Sector Northern Region and 400 KV GIS will be executed by Transmission Business Group, Noida. The construction period of the project is 60 months from the date of awarding the contract.

BHEL has so far bagged orders for more than 500 hydroelectric generating sets cumulatively of various ratings in India and abroad, with a capacity of more than 30,000 MW. Out of these, equipment for about 6,600 MW generating capacity is for overseas projects. BHEL’s hydro plants are successfully and efficiently performing in India and across the world, including at Afghanistan, Azerbaijan, Bhutan, Malaysia, New Zealand, Nepal, Rwanda, Taiwan, Tajikistan, Thailand and Vietnam.


Hydro power projects like these would help Nepal – the land of rivers become a power surplus state. India and Nepal mutually signed power trade agreements in October 2014. The agreement aims to enhance friendly relations and mutual trust between Nepal and India through increased cooperation in the field of transmission interconnection, grid connectivity and power trade. It facilitates government, public and private enterprises in planning and construction of interconnection facilities and power trade.

- Chaitanya Kulkarni

Saturday, 5 May 2018

Sindhudurg Airport to be operational by Q3 2018.

Parule Chipi Airport Konkan

The much-awaited Parule Chipi International Airport in Sindhudurg area of Konkan in Maharashtra is expected to be operational by Ganeshotsav festival. The airport is being constructed by IRB Sindhudurg Airport Pvt. Ltd. on a design-build-finance-operate-transfer (DBFOT) basis for the Maharashtra Industrial Development Corporation (MIDC). Sindhudurg airport will have a 2500-meter runway which has provision for future development. The airport will be built at an approximate cost of 520 crores.

Sindhudurg airport will have the capacity to handle 200 departing and 200 passengers arriving during peak hours with expansion facilities to serve up to 400 departing and 400 arriving passengers without additional construction. Although the airport will be serving domestic travellers it will be equipped with facilities to serve International charter flights.

The upcoming Sindhudurg airport is in the vicinity of Tarkarli Beach. Tarkarli beach which also has a Maharashtra Tourism Development Corporation resort is known for its pristine virgin beaches, corals, water sports and dolphin rides. The upcoming airport is expected to boost tourism in the region. But, Sindhudurg airport will face tough competition from India's second largest proposed airport in Mopa in North Goa.

Agreement for construction of the airport has already been signed between Maharashtra Industrial Development Corporation (MIDC) and IRB Sindhudurg airport Pvt. Ltd. in 2009. The Ministry of Civil Aviation has given in-principle approval and environmental clearance has also been granted by the Ministry of Environment and Forest.

Construction of taxi way, apron and isolation bay has been completed and work on the airfield ground lighting in on. Construction of passenger terminal building, ATC tower and technical building is on in full swing. Construction of other ancillary buildings is in progress and will be completed on time.

An airport in Sindhudurg was necessary in order to provide better connectivity to the Konkan region of Maharashtra, parts of Goa, North Karnataka and Western Maharashtra. At present the state of Maharashtra has three functional international and 13 domestic airports. Sindhudurg may have direct connectivity to Mumbai, Pune, Nagpur, Ahmedabad and Delhi. The route was also added in Phase 2 of UDAN scheme.

- Chaitanya Kulkarni.

Thursday, 12 April 2018

Saudi Arabia invests to develop World's largest Oil refinery in Ratnagiri.

RIL's Jamnagar Refinery is currently the world's largest.

An Indian Consortium consisting of IOCL, BPCL and HPCL and Saudi Aramco signed a Memorandum of Understanding (MoU) here today to jointly develop and build an integrated refinery and petrochemicals complex, Ratnagiri Refinery & Petrochemicals Ltd. (RRPCL) in the State of Maharashtra.  Saudi Aramco may also seek to include a strategic oil partner from other Gulf countries to co-invest in the project.  

The strategic partnership brings together crude supply, resources, technologies, experience and expertise of these multiple oil companies with an established commercial presence around the world. A pre-feasibility study for the refinery has been completed, and the parties are now finalising the project’s overall configuration. Following the signing of the MoU, the parties will extend their collaboration to discuss the formation of a joint venture that would provide for joint ownership, control and management of the project.

The Ratnagiri refinery in Konkan region of Maharashtra will be the World's largest Oil refinery with the capacity of processing 1.2 million barrels of crude oil per day (60 million metric tonnes per annum, or MMTPA). Reliance's Jamnagar Refinery, which is currently the world's largest, has a maximum capacity of 34 MMTPA. It will produce a range of refined petroleum products, including petrol and diesel meeting BS-VI fuel efficiency norms. The Refinery will also provide feedstock for the integrated petrochemicals complex, which will be capable of producing approx. 18 million tonnes per annum of petrochemical products.

In addition to the refinery, cracker and downstream petrochemical facilities, the project will include associated facilities such as a logistics, crude oil and product storage terminals, raw water supply, as well as centralized and shared utilities.

Ratnagiri Refinery and Petrochemicals Ltd. (RRPCL) will rank among the largest world refining and petrochemicals projects and will be designed to meet India’s fast-growing fuels and petrochemicals demand. The project cost is estimated at around $44 billion.

This a joint partnership between the consortium from India consisting of IOCL, HPCL and BPCL and Saudi Aramco & an additional strategic partner on a 50:50 basis. This project, with an estimated investment of over Rs. 3 lakh crore, would bring huge benefits to the Region, the State of Maharashtra and the entire country in terms of large-scale employment generation, direct and indirect, as well as the all-round economic development of the Region.  This project is in line with the vision of Hon’ble Prime Minister of India and His Highness the King of Saudi Arabia. - Dharmendra Pradhan, Union Minister of Petroleum and Natural Gas, Govt of India.

Investing in India is a key part of our company’s global downstream strategy, and another milestone in our growing relationship with India. The signing marks a significant development in India’s oil and gas sector, enabling a strategic joint venture and investment partnership that will serve India’s fast-growing demand for transportation fuels and chemical products. Participating in this mega project will allow Saudi Aramco to go beyond our crude oil supplier role to a fully integrated position that may help usher in other areas of collaboration, such as refining, marketing, and petrochemicals for India’s future energy demands. - Amin Nasser, CEO, Saudi Aramco.

The refinery will be situated in two villages namely Nanar and Babulwadi. Activists and local political party are protesting the upcoming project over land acquisition issues and alleged 'destruction of the environment'. A fear among locals is created as the mega refinery and petrochemicals complex is just 14km away from World's largest nuclear power plant at Jaitapur. The project is expected to give 40,000 direct and indirect jobs in the Konkan region. These two projects are important to turn around the financial fortunes of the Konkan region. Among this political slugfest, the Union government and Maharashtra government has clarified that it will go-ahead with Ratnagiri mega refinery project.

- Chaitanya Kulkarni

Source - Saudi Aramco, PIB.

Wednesday, 11 April 2018

Choosing an English language test to go abroad? #DefinitelyPTE


The globalised world has shaped the importance of English as a global language. From Los Angeles to Christchurch, English has spread its roots to become the official language of the unions and finance. India and Indians are not an exception here. India has accepted English as an official language of union and diplomatic communication since independence. There are very few countries in the world which are as linguistically diverse as India. Though I am writing this blog in English, my most comfortable language of communication is my mother tongue, Marathi. Millions of students and professionals who aspire to study abroad need to skill up their English language. All you need is practice and guidance.

Lack of expertise in Grammar is a major issue for most aspirational Indians. At large, English is a complicated language. Before applying for universities abroad, a student must groom himself with effective English writing, hearing and speaking skills. Universities generally look for intelligent candidates who are equally good at everything. A good score in Quants and a bad score in English could affect your chances of being selected. English becomes an important choice of communication between the local students and international students. Also, an effective English portrays on employment readiness for students who are willing to work abroad once they finish their studies.

Pearson is a trusted name in the education consultancy. Thousands of students have successfully enrolled in foreign universities with PTE test. The Pearson Test of English or #DefinitelyPTE is a computer-based language test that offers candidates the fastest, fairest and the most flexible way of proving their English language proficiency for immigration and student Visas. Students can enroll for PTE online or can visit Pearson centres which are located in all majors cities in India.


Before the exam, students can prepare from the Pearson handbook provided online. It also contains a sample of 200 questions and gist of the syllabi. The PTE Academic is a single 3-hour English test comprising of these sections namely – Introduction, speaking and writing, reading and finally listening. Students can book an exam 24 hours in advance. The test is scored by the computer and generally takes 5 days to get the result. PTE Academic test is as par as IELTS or TOEFL. The certification is accepted by thousands of institutions and universities abroad. Professionals can attach the PTE Academic certificate to CV, as most jobs require strong communication skills.

#DefinitelyPTE! There are more than 150 centres so can choose from if you are serious about opportunities abroad. Get over rejection as PTE score are accepted by London Business School, University of Pennsylvania, University of Ottawa, Deakin University and more than 6,000 universities.

- Chaitanya Kulkarni.

Disclaimer: I am really happy to work with our sponsor, Pearson, for sharing this information with our readers.

Tuesday, 10 April 2018

Edelweiss Mobile Trader app – Your personal wealth advisory.

EMT share market india app

India’s economy and her bustling stock markets had a phenomenal rise in the last decade. Such is its success that very few would believe that BSE Sensex was trading below 10,000 points just 8 years back. With a reform-based approach, Indian stock markets have improved their index by three-folds. As per the World Bank report, India’s economy is expected to double to $5 trillion by 2025. Most market experts firmly believe that BSE will touch the historic 1,00,000 index points before 2025. It is impossible to miss out on this golden opportunity. Stock market investment, be it equity or mutual funds, are one of the very few investment avenues which can beat real inflation.

The times they are a changin’! From floor trading to desktop and now in a mobile app. Mobile-based trading apps are the choice of today as they are highly efficient. You can manage the products or assets at any time with easy to operational and navigational tools. If you are so serious about stock trading, then it is must for you to keep every piece of information at your fingertips. Yes, nothing else than a mobile app can do this for you. Timely information means greater margin.

With an enormous amount of data and continuous transactions, traders often complain of mobile app downtimes. This is a unique problem of sentimental markets like India. Be it budget, government policy, US fed, SGX Nifty or Trump’s China trade feud, the downtime of trading apps is a major issue where traders may potentially lose hard-earned money. Users on Google Play Store have commended the Edelweiss Mobile Trader (EMT) app for smooth functioning during national and global events. The EMT app is built on the philosophy of speed, stability and simplicity.

Market mein kya chal raha hain?

The Edelweiss mobile trader app offers OTP based login for quick, simple and secure trade. The application is free for all. Users can check quotes from BSE and NSE from the main landing page itself. Users can track and trade across Equity, Equity Derivatives, Commodity, Currency Derivatives, NCDs, Bonds, Debt and e-SIP across NSE, BSE, MCX and NCDEX, all in one place. This is not something you can find being offered by all brokerages, all in one place. Market experts can predict early trends with movements in SGX Nifty of Singapore. Edelweiss Mobile Trader app is an early pioneer to bring SGX Nifty index feature. Drag the bull down when you wake up and you can the sense of movements in Indian markets later in the day.

An investment in knowledge pays the best interest. When it comes to investing, nothing will pay off more than educating yourself. - Benjamin Franklin.

Research is at the core of investing. Important information like live indexes, currency exchange rates, market commentary, sector performances, IPOs, FII DII flow, volume buzzer are easy to find in the EMT app. The left-hand side of the app is dedicated for research and the right-hand side involves trading. Trading advisories and Buy & Sell calls on a short term to long term horizon help in investment decisions. The research calls are thoroughly studied by the team of research analysts at Edelweiss.

Buy low and sell high. The super trend feature in technical studies allows to you to study the historical data of the selected scrip in detail for last 15 years. Along with updates on important events like bonus, splits or dividends, traders can buy when the super trend line indicates green and sell when its red. Prediction analysis and technology truly reflects in Ease of Doing Trading. The Edelweiss Mobile Trader app is one of the finest and advance charting tool on Smart Phone provided by anyone in the country.

Edelweiss Mobile Trader app tops the chart on both Google PlayStore and iOS App Store. With over 3 million minutes of app usage every day, the EMT app has a rating of 4.4 and 4.3 out of 5 on Android and iOS stores respectively. Each query raised on play store or social media by users is reviewed on daily basis. The Edelweiss Mobile Trader app has been awarded for ‘Best use of Mobile Technology in Financial Services’ by ET NOW BFSI Awards & best ‘Consumer Mobile Service’ by BBC Knowledge.

Download the #BestTradingApp from Play Store and iOS app store and try it yourself.

- Chaitanya Kulkarni.

Monday, 9 April 2018

India to have 50 crore mobile internet users in 2018

RailTel wifi

478 million mobile internet users in India by June 2018: IAMAI

Like food, garments, and shelter, the internet connectivity for e-governance and information has been the 21st century’s basic human need. Cut-throat competition between telcos like Jio, Airtel and Idea has benefitted mobile internet penetration at large. Some telcos going ahead announcing that India’s 99% villages will get 4G internet connectivity by Diwali 2018. This isn’t a mere announcement as Open Signal report suggests that India’s mobile internet penetration may be far ahead than the US and developed countries in Europe. Although India ranks amazingly good (much better than its competitors) at last-mile internet connectivity, but we still suffer from low and inconsistent speeds.

The Internet and Mobile Association of India and Kantar-IMRB report points that India may have 478 million mobile internet users by June 2018. According to the report, the number of mobile internet users increased by 17.22% from December 2016 to reach 456 million users by December 2017. Urban India witnessed an estimated 18.64% Y-o-Y rise, while Rural India witnessed an estimated growth of 15.03% during the same period. With 59% penetration, Urban India is expected to show a slowdown, while Rural India with only 18% mobile internet penetration is clearly the next area of growth.

Young students are the most prolific users of most services. Middle-aged and older men show the greater propensity of using social networking and browsing; with old men having lower habits of audio/video streaming. Working women have the highest propensity for social networking and browsing, while non-working women have the highest propensity for text chatting. The report further finds that Mobile Internet is predominantly used by youngsters, with 46% of Urban users and 57% of Rural users being under the age of 25. Urban India has around twice the proportion of users over the age of 45, while the age range of 25 to 44 has almost equal distribution of users in Urban and Rural Areas.

Data is the new oil.

Since the launch of Jio, the affordability aspect of mobile internet services has been benefitting consumers at large. 4G internet can be obtained at just Rs 5 per day if chosen for a three-month plan. Expenditure on Voice has been steadily decreasing from 2013; and with the popularity of VOIP and video chatting, the expenditure on voice services has decreased drastically in recent times. This in turn means that there is a rise in proportion of Data expenditure in comparison to Voice expenditures for most users. In just 5 years from 2013 to 2017, the ratio of Data:Voice went from 45:55 to 84:16.

Telecom companies now not just offer data. They have also ventured into video content, music streaming and online news portals. The latest example of business diversification is JioMusic, which merged into Saavn to create $1 billion dollar entity.

Going forward, NTP 2018 with focus on new technologies like 5G is expected to promote better quality data services at more affordable prices and can be expected to help address the digital divides and promote internet penetration in the rural areas via mobile internet.

– Chaitanya Kulkarni

Source – IAMAI

Friday, 30 March 2018

Ministry of Civil Aviation invites EOI tender for Air India sale

Air India divestment
Source - Airplane Pictures

Air India Expression of Interest has been released by the government. The government hopes to announce EOI winner on May 28. Then, the government would proceed with RFP and RFQ. Aviation experts suggest that the complete sell-off will be done before December 2018.

The government has decided to retain a 24 percent stake in Air India and Air India Express, as part of its divestment in the state-owned airline. The government is also proposing divesting 50 percent of its stake in Air India Sats Airport Services. The divestment is to be carried out through an open competitive bidding process.

Air India is the national flag carrier of our country with a significant market position in the domestic and international aviation market. Air India along with Air India Express has 42.8% share of international traffic to and from India among Indian carriers and 16.9% share amongst international carriers. With the competition increasing from new players in India's domestic aviation market, Air India's domestic market share has been reduced to 12.3% recently. 

Air India, being the oldest commercial airplane, has extensive reach at smaller airports. Air India, a prestigious star alliance member operates to/from 54 domestic locations and 39 international destinations. The world's longest direct flight, from Indira Gandhi International Airport in Delhi to San Francisco is operated by Air India. Air India has an operated fleet of 115 aircraft as on December 2017, comprising of Airbus and Boeing. The Air India Express, the low-cost carrier operates from 16 domestic and 13 international locations.

Air India SATS is a 50:50 joint venture between Air India Limited, and SATS Limited. As part of the Indian Government's initiative to upgrade its airports to world-class facilities and attract more airlines to fly into India, AISATS was formed with the vision to provide world-class airport services in ground and cargo handling that exceed customers’ expectations. Since the start of its operations in 2008, AISATS has provided hassle-free and comprehensive solutions to its customer airlines in international airports at Bengaluru, Delhi, Hyderabad, Mangalore, and Trivandrum. AISATS has more than 7000 employees.

The government is proposing a strategic divestment of the airline by transferring management control and sale of 76 percent of its equity share capital in Air India. Ernst and Young is the transaction advisor to the government on the divestment process.

The bidder should have a minimum net worth of 5,000 crore rupees and the requirement is subject to certain conditions depending on the class of entities. Among others, the Civil Aviation Ministry has said that each consortium member should have a positive profit after tax in at least three of the immediately preceding five financial years from the EoI deadline. The bidder will have to keep the name 'Air India' for a specified number of years mentioned in RFP proposal. The last date for submission of EoI is May 14 and intimation to the qualified interest bidders will be made on May 28. Bidding can be done as a single player or as part of a consortium.

CAPA, an aviation think-tank has said that Air India may get 6 to 8 bidders.

- Chaitanya Kulkarni

Source - Ministry of Civil Aviation.

Saturday, 24 March 2018

EESL subsidiary acquires UK based Edina for Rs 493 crore

EESL India Edina UK

Energy Efficiency Services Limited (EESL), a joint venture of four National Public Sector Enterprises under administrative control of Ministry of Power, Government of India, today announced its acquisition of Edina, a leading supplier, installer and maintenance provider for combined heat and power (CHP), gas, and diesel power generation solutions in the United Kingdom (UK). The £55 million (INR 493 crore) acquisition is the first-of-its-kind venture by an entity under the Ministry of Power, Government of India and is effected through its UK subsidiary, EnergyPro Assets Limited (EPAL).

Edina has around a quarter of UK gas engine market share and turns over around £100m. EESL plans to use its acquisition both to grow the CHP market in India via ‘as-a-service’ models, and simultaneously tap into the UK energy services market. With a business experience of over 30 years, Edina services over 400 customers, providing bespoke containerized solutions that reduce customers’ energy costs and carbon emissions, while also providing a continuous and reliable power supply, from sites in the UK, Ireland, and Australia. Edina is the sole distributor of MWM gas engines in the UK and Ireland, and of Perkins diesel engines in Ireland.

“We are excited about this new venture and about harnessing the capabilities of a company that has a long history of successfully implementing combined heat and power technology. Leveraging Edina’s unique bespoke approach with our proven, innovative business models for scaling energy efficiency solutions across international borders, we are confident in the potential of this partnership to scale trigeneration technology adoption and to transform CHP market in India. The acquisition is therefore also an important strategic step in our continued efforts towards facilitating India’s energy security and sustainable energy supply.” - Saurabh Kumar, Managing Director, EESL.

EESL aims to tap into UK’s £6 billion (INR 53,782 crore) energy efficiency market, expanding the offering in the energy service contract model for CHP technology. On the other, EESL intends to bring CHP technology to India, providing an integrated service offering to industries that would enable them to receive equipment maintenance, electricity, heat and power at no upfront costs for technology installation.

EESL is implementing a global strategy and commitment to invest £150 million (INR 1,343 crore) through EPAL into energy services business opportunities in the UK, EU and North America between 2017 and 2019. EESL’s investment plan takes forward the commitment made by PM Modi and UK's May for an enhanced ‘Energy for Growth’ Partnership between the two countries.

Source - Press Release

Tuesday, 13 March 2018

NPCIL and EDF sign agreement for World's largest Nuclear Power Plant.


Jaitapur Nuclear Plant in Konkan, Maharashtra will have 6 European Pressurised Reactors (EPR). The agreements were signed between Nuclear Power Corporation of India Limited and France's Electricite De France. Once completed, the plant will produce 9.6 GigaWatt clean electricity.

In presence of PM Modi and France's Macron, Nuclear Power Corporation of India Limited (NPCIL), the government-owned Indian energy company, signed an Industrial Way Forward Agreement for the implementation of six EPR reactors at the Jaitapur site in India. Jaitapur is set to be the biggest nuclear project in the world, with a total power capacity of around 10 GW.

The agreement defines the project’s industrial framework, the roles and responsibilities of the partners, as well as a planned timetable for the next steps. Despite having 80% land acquisition done, the locals in Jaitapur in Konkan area are protesting the project over misinformation spread by regional political parties and NGOs. Some fear that the technology is unused in the world. It is partially untrue as 2 EPR is under construction in France, 1 in the UK and another 1 in Taishan, China. Also, nuclear power technology is not new to India. As of today, there 22 nuclear reactors operating in India.

Under the terms of the agreement, EDF will act as a supplier of the EPR technology. EDF will undertake all engineering studies and all component procurement activities for the first two reactors. For the other four units, the responsibility for some purchasing activities and studies may be assigned to local companies. EDF will also provide NPCIL with its valuable experience from the construction of EPR reactors.

EPR reactor at Taishan, China



In its capacity as owner and future operator of the Jaitapur Nuclear Power Plant, NPCIL shall be responsible for obtaining all authorizations and certifications required in India, and for constructing all six reactors and site infrastructures. EDF and its industrial partners will assist NPCIL during the construction phase.

This industrial framework has already been approved in India and will be bolstered by the complementary skills and experience of the partners involved. In this manner, the knowledge and expertise required to operate the plant can be readily shared. It will also pave the way for the industrial involvement of Indian companies in the project, opening up possibilities for partnerships within the French nuclear power sector. In this way, the project will be developed in line with Indian policies “Make in India” and “Skill India”, with the ever-increasing participation of local companies, reaching a potential 60% for last two of the six reactors.

NPCIL and EDF have signed agreements with French and Indian players for setting out operation foundation for the Jaitapur project. The first such agreement, signed with Assystem, Egis, Reliance and Bouygues, covers the installation of an engineering platform for studies that fall within the scope of the Jaitapur project. EDF will hold 51% of the joint-venture and will be responsible for engineering integration. The second agreement, signed with Larsen&Toubro, AFCEN* and Bureau Veritas, covers the creation of a training centre compliant with standards for the design and construction of equipment for the nuclear industry (RCC codes). The objective is to train local companies on the technical standards applicable to the manufacture of equipment for the Jaitapur project.

Acting as head of the French nuclear power sector, EDF entered into exclusive negotiations with NPCIL in 2016 and in the same year it issued its first technical-commercial proposal for the development and construction of six EPRs. Jaitapur is in Maharashtra state and will be the largest nuclear power site in the world. EPR reactors - with a generating capacity of 1600 MW per unit - are particularly suitable for a country undergoing rapid growth and equipped with a mature electricity system such as in India.

- Chaitanya Kulkarni

Source - Electricite De France, Press Release

Monday, 12 March 2018

Shadow Banking's continuous Rise is risk to Global Stability

Chongquing, China
Skyline of Chongqing city in China

Shadow Banking has become an unstoppable force

A decade later after 2008 Financial Crisis, the global economy is now waiting for a turnaround. The average world GDP has picked up some momentum. Although, economists from independent rating agencies believe that the double-digit growth for developing economies is yet a few years away. As the economy looks to improves, shadow banking funding seems to the next big threat to the global stability. In a simple language, shadow banking is when you have someone that does banking without being a bank.  Someone takes deposits from people and then lends it out. The concept is similar to a Ponzi scheme. Individuals or group of individuals fund corporates without the jurisdiction of the regulator or the government. When loans from registered lending channels like banks turn to NPAs within a few months, can we imagine the risk which shadow banks take?

Growth in global bond, real estate and money market funds continued to swell the world’s shadow banking sector, a watchdog that coordinates financial regulation for the G20 big economies said in its report. The value of the global shadow banking market increased by 7.6% in 2016 to $45.2 trillion, according to the Financial Stability Board (FSB) Global Shadow Banking Monitoring Report 2017.

According to the report, the $45.2 trillion figure represents 13 percent of the total financial system assets of the 29 covered jurisdictions, which represent 80 percent of the world’s GDP. The report now includes Luxembourg for the first time, bringing the total number of jurisdictions to 29.

Shadow Banking is China's magic wand to prosperity. But, what are the risks?

Also for the first time, the FSB report assesses the involvement of non-bank financial entities in China in credit intermediation that may pose financial stability risks from shadow banking. The reason that shadow banking is popular in China is that the regulated state-owned banks pay lousy interest rates and they only loan to large state-owned companies.  If someone can pay better interest rates and make loans to people that can't get loans through the normal banking system, they can make a lot of money. But, funding comes with risks too. A major default could trigger a domino effect panicking local investors which may, in turn, result in a major financial crisis in China.

China and Luxembourg contributed $7 trillion and $3.2 trillion, respectively, to the $45.2 trillion figure. Public lending may not trigger systemic risk in high capita countries like Luxembourg, Cayman Islands, Netherlands etc. Rich individuals can take risks to multiply their wealth by funding newly incorporated companies. The same system cannot be implemented countries in China, India or Thailand where per capita income is low.

With Chinese economy slowing down, Xi Jinping has tightened the regulation on shadow banking individuals and groups. Chinese daily South China Morning Post reported that the companies that had committed to buying overseas assets are now finding it hard to complete the deals amid China’s financial clean-up of its shadow banking activities and banks’ reluctance to extend loans. China, being a $10 trillion dollar economy may not face not any systemic risk. But, a range of defaults by investors abroad may destroy individual investors and medium-sized corporates.

- Chaitanya Kulkarni

Source - Financial Stability Board

Friday, 9 March 2018

RBI fines three banks for holes in the banking system

Nirav Modi Vijay Mallya Jatin Mehta

Rs 29,000 crores... India's top 3 'Bhagodas' namely Nirav Modi, Vijay Mallya and Jatin Mehta duped India's state-owned and private banks and escaped India. These fraudsters have sought a safe stay in fugitive-friendly colonies of the UK. Former RBI deputy governor Subir Gokarn compared bank's bad loans to cancer. If not treated, the patient would die.
As of September 2017, nine of India’s 21 state-owned banks have more than 15% gross bad assets. IDBI Bank Ltd continues to top the list with almost one-fourth of its loans turning bad (24.98%). Followed by IDBI, the Indian Overseas Bank has 22.73% bad loans, then followed by UCO Bank (18.74%), United Bank of India (18.8%), Bank of Maharashtra (18.54%), Central Bank of India (17.27%), Dena Bank (17.23%), Oriental Bank of Commerce (16.3%) and Corporation Bank (15.28%). India's largest lender, the State Bank of India has 9.83% bad loans.

The holes in India's banking system calls for tougher laws and fixed accounting standards. Recently, the cabinet approved the establishment of National Financial Reporting Authority. The decision aims at the establishment of NFRA as an independent regulator for the auditing profession which is one of the key changes brought in by the Companies Act, 2013. The need for establishing NFRA has arisen on account of the need felt across various jurisdictions in the world, in the wake of accounting scams, to establish independent regulators, independent from those it regulates, for enforcement of auditing standards and ensuring the quality of audits to strengthen the independence of audit firms, quality of audits and, therefore,  enhance investor and  public confidence in financial disclosures of companies. 

The Modi government also plans to pass The Fugitive Economic Offenders Bill 2018 in the budget session. The Bill makes provisions for a Court ('Special Court' under the Prevention of Money-laundering Act, 2002) to declare a person as a Fugitive Economic Offender. A Fugitive Economic Offender is a person against whom an arrest warrant has been issued in respect of a scheduled offence and who has left India so as to avoid criminal prosecution, or being abroad, refuses to return to India to face criminal prosecution. only those cases where the total value involved in such offences is 100 crore rupees or more, is within the purview of this Bill.

RBI fines 3 banks for holes in the banking system

The Reserve Bank of India has stepped in the detailed scrutiny of banks processes after the PNB disclosure of Nirav Modi scam.

The RBI has imposed a monetary penalty of ₹ 30 million on Axis Bank for non-compliance with the directions issued by RBI on Income Recognition and Asset Classification (IRAC) norms. The penalty was imposed for not following RBI directions in assessment regarding Non Performing Assets as per Banking Regulation Act 1969.

State Bank of India, India's largest lender has imposed a monetary penalty in reference to currency chest inspection by RBI in 2 of its branches where counterfeit notes were found. The State Bank of India has been imposed a fine of ₹ 4 million by RBI for non-compliance with the directions issued by RBI on Detection and Impounding of Counterfeit Notes.

State-owned India Oversea Banks was fined ₹ 20 million for flouting Know Your Customers norms. A fraud was reported it one of its branches and bank officials failed to explain the regulator on why it should not be fined.

The scams are here to stay, at least for a few years. Banking think tanks need to make process design that prohibits anybody taking advantage of the system. Technologies like Blockchain, Big Data, FinTech and government regulation like Aadhaar linking and NFRA may be a ray of hope.

- Chaitanya Kulkarni

Wednesday, 28 February 2018

Dream big, set life goals and invest wisely!


With the changing times, priorities of today’s aspirational India have changed. Let’s start with the most amazing question. WHAT DO YOU REALLY WANT TO DO? A 23-year-old me would want to do an epic road trip from Mumbai to Tawang before I turn 25. A 30-year-old would plan to spend a week on privately owned island luxury resort in Seychelles.

Life is full of surprises and adventure. People inspired by the idea of new adventure may be interested in bungee jumping, surfing or rock climbing. With an advent of globalisation, people are looking for satisfaction beyond settling down in life.

Life coach experts believe that one should plan strategically and focus on realistic goals. Activities like adventure tourism, world travel, international executive educational degrees, destination wedding have become equally important when compared with a steady job or family-run business. As life has evolved, so have the life goals.

To achieve all of your #LifeGoals, one needs to systemically plan his/her financial investments. That way, you will always get what you want. With sound financial planning and sound financial investments, life maximisers can get maximised benefit from their investment.

To achieve life goals which you will cherish for the rest of your life, one needs to think beyond the regular savings approach. The mix of security and long-term return investments could easily beat inflation and help you maximise your savings. This is where ULIPs stand apart as the perfect investment product.

ULIPs or Unit Linked Insurance Plan is a long-term investment plan that offers the combined benefit of investment and insurance. These plans invest a portion of your premium in capital markets and allow you to invest in debt, equity or balanced funds depending upon market conditions or your risk appetite. To mobilise the best of your hard-earned money, capital market investments under ULIPs are managed by experts who can maximise your investments according to the market conditions. ULIPs bring a modern-day approach towards insurance investing.

Bajaj Allianz, one of India’s leading private insurer has launched value-packed goal-based ULIP. Bajaj Allianz Life Goal Assure, a one-of-its-kind ULIP, has been designed to provide investment benefits and life cover to life maximisers, the new generation of investors in India.

Bajaj Allianz Life Goal Assure has two unique benefits that are one-of-theirs-kind for ULIPs in India. One of the key features is Return of life cover. This feature of Bajaj Allianz Life Goal Assure guarantees that the policyholder will get back the cost of life cover when the policy matures, thus enhancing the value of their corpus on maturity. Furthermore, for those who do not opt for one-time lump-sum maturity benefits, the Return Enhancer feature of this plan offers 0.5% additional returns on periodic instalments over the period of five years. During this period, the customer's fund value will continue to participate in funds of his or her choice.

In addition to these features, Bajaj Allianz Life Goal Assure offer value-packed benefits like Fund Booster, wherein an additional fund-value amount is added on the date of maturity. For long-term investments above Rs 5 lakh annually for more than 10 years, loyalty additions are added to the fund value as a reward for paying premiums regularly and staying invested in the policy. There are also options to decrease sum assured, change Premium payment terms and unlimited free switches between funds for return maximization. Investors should also note that investments in ULIPs enjoy tax benefits under Section 80C and 10(10D).

Finally, one must also look at the legacy of Bajaj Allianz Life’s fund performance. The company has a reliable company portfolio which has consistently delivered one of the best CAGR returns, breaking benchmark indices over a long-term horizon of three, five and ten years. Most of the ULIP funds from Bajaj Allianz Life Insurance enjoy high performance rating from the coveted Morning Star ratings agency.

People who constantly on-the-go can visit Bajaj Allianz Life Insurance official website. The revamped website is designed to guide customers through every step of their Life-goal planning and purchase. Dream big, stay invested and achieve your #LifeGoals.


- Chaitanya Kulkarni

Tuesday, 27 February 2018

Expats ❤️ India


Working in India is in demand as expats here earn more than double salary than the global average.

With the world opening up its markets for business, multi-national companies have established their business presence all over the world. Due to regional and religious disturbances, the global economy is going through turbulent times. Countries like India, China and ASEAN economies have cushioned the damages with its high growth markets. In the words of PM Modi, India has 3Ds to offer to the world - Democracy, Demography and demand. India is the youngest democracy in the world. Doing business all over the world is made possible by the personal and professional commitment of expats. Expats, despite being having political and cultural difference make key decision making roles for the organisation. HSBC Expat Survey is an online survey taken in 46 countries with the input from lakhs of expats working globally. The report sheds some unique insight on expats living in India and Indians working abroad.

Key Findings - HSBC Expat Survey

- Singapore is the world's best overall destination for expats.
- New Zealand is the best destination for an experience. 58% of expat respondents felt an improvement in the quality of life.
- The Netherlands is the best destination for family. Expats feel it has one of the best education and healthcare systems.
- Switzerland is the best destination for economics. It is the highest rank country for confidence in the local economy and political stability.
- 41% of expats feel that the move has given them a positive outlook on life.
- 62% of expats own property somewhere in the world, with 9% both at home and abroad.
- USD 99,990 is the average income of an expat.
- 47% of expats retired abroad did so for a better climate and 44% for an appealing lifestyle.

Expats ❤️ India

India draws many expats for work and financial opportunities, but new arrivals often find an improvement in family ties. Family forms an essential part of the Indian culture, thus reflecting in family-friendly labour laws. Pregnant women here enjoy one of the highest paid leaves. India enjoys a higher work-life balance than other European or American countries.

India is always on the move. India has earned its fastest growing economy tag due to consistent large-scale economic reforms. Expats living in India are confident in the local economy. Despite having many regional and national political parties, India enjoys political stability due to its democratic style of functioning.

India has recently taken a giant leap in Ease of Doing Business. More than half of expats living in India feel that it is easy to start and do business in India. Expats in India also enjoy one of the highest salaries in the world. An average expat working in India draws an annual salary of USD 1,76,000.

India has a long way to go. Mumbai, the financial capital of India currently lacks world-class infrastructure. Morning and evening rush hours are deadly with more than 10 deaths in the super jam-packed Suburban railway system. Mumbai is investing heavily in developing metro systems and expressways, but higher domestic demand and limited supply may not be enough. Despite this, real estate prices in Mumbai rival to Manhatten.

Despite being looted and tortured by white skins for several hundred years, Indians strongly believe in Athihi Devo Bhava (Guests are equivalent to God) and Vasudhaiva Kutumbakam (The World is one family). Expats working in India feel that their family life is improved significantly. Expat children easily make good friendship with Indian kids. The role of common language - English also plays a significant role in nurturing cordial relations.

In contrast, the HSBC expat survey reports that Indians working abroad draw lower salary than the global average. Expats working in India's largest city, Mumbai can typically expect to bring home a sizable $217,165 salary whereas Indians expats working abroad draw an average salary of USD 86,000.

- Chaitanya Kulkarni