1. Tata Motors Logs ₹27K Cr Loss in Q3 on JLR Impairment
Tata Motors, India’s largest automaker by revenue, posted its highest quarterly loss of ₹26,961 crore due to a one-time impairment charge of £3.1billion (₹27,838 crore) on account of its dominant UK-based Jaguar Land Rover unit, which has been hit by a sales slump in China and faces headwinds such as Brexit.
While the company said it’s on track to meet a £2.5-billion savings target under the Project Charge turnaround plan for the struggling JLR unit that was put in place a few months ago, break-even Ebit (earnings before interest and taxes) guidance for FY19 won’t be met. It’s expecting a marginally negative Ebit margin for FY19. Tata Motors has also revised its Ebit guidance for JLR to 3-6% from 4-7% for FY20-22.
The one-time exceptional non-cash charge taken for asset impairment will lower depreciation and amortisation by an annual £300 million, the company said.
(Source: The Economic Times)
2. RBI Cuts Repo Rate by 25 bps, Softer Rate Regime on the Horizon
The Reserve Bank of India on Thursday cut the key interest rate by 25 basis points to 6.25% and shifted the policy stance to ‘neutral’ terming it a ‘decisive’ act to promote investment and consumption in an economy facing weak demand. The move may open the doors to a lower interest rate cycle based on receding inflation, though it could only be for a short term going by past trends.
After claiming success in tackling price pressures since inflation targeting was adopted about two years ago, the Monetary Policy Committee voted unanimously on Thursday for a shift in stance to ‘neutral’ from ‘calibrated tightening’ and lowered inflation forecast.
The central bank also brought nonbanking finance companies (NBFCs) on a par with manufacturing companies with regard to capital requirements for banks that lend to them. The credit rating of an NBFC will now determine how much capital the bank has to set aside, making thousands of crores of rupees available for lending to a sector buffeted by concerns over liquidity.
(Source: The Economic Times)
3. India’s First Marketing Festival Is Here
India’s most celebrated marketers and global gurus will come together in the country’s first marketing festival, Star FLOW — The Change Festival, to be held in New Delhi on 14-15 March.
Renowned American theoretical physicist, screenwriter and author Leonard Mlodinow, communications expert Roger Fisk (widely credited with playing a key behind-the-scenes role in the back-to-back electoral victories of Barack Obama in 2008 and 2012), globally acclaimed neuroscientist Beau Lotto and other international luminaries will be speaking at the star-studded event.
The first edition of FLOW – The Change Festival, a Times of India initiative, will feature an energy-packed idea exchange. The event comes at a time when the world is undergoing major political, social, cultural and economic transformations that are impacting global marketing strategies, leading to a rapid turnover in accepted practices and a quest for new methods to inhabit the consumer mindspace.
(Source: The Economic Times)
4. SoftBank’s Son Transforms $5.5 Bn to $17 Bn Overnight With Stock Buy-back Plan
Call it the Masayoshi Son mathematical distortion field. The founder of SoftBank Group Corp added about 1.94 trillion yen ($17.6 billion) to the market value of his company on Thursday by unveiling a plan to buy back shares worth less than a third of that amount. Based on his own stake, Son’s net-worth rose by about $5 billion.
The billionaire is no stranger to funny math. Yesterday, he opened his earnings presentation with a riddle: “25 - 4 = 9?” The formula is the 25 trillion yen value of SoftBank’s assets minus 4 trillion yen in debt, far from being equal to its market capitalisation of 9 trillion yen. It was designed to capture Son’s long-standing argument that SoftBank’s share price doesn’t reflect the value of its business and investments, a gap he’s been trying to close for years.
Even after today’s boost, SoftBank’s total value is a long way from Son’s goal.
5. Aided by Discounts, Passenger Vehicle Sales Rebound in January
Retail sales of passenger vehicles in India rebounded sharply in January as auto-makers offered a range of discounts to clear unsold stocks while slowing dispatches of new vehicles to dealers to help trim inventory.
Sales of trucks and buses as well as two-wheelers, however, remained subdued last month, showed data issued on Thursday by lobby group Federation of Automobile Dealers Associations (FADA).
Registrations of cars, sport-utility vehicles (SUVs) and mini-vans surged 34% in January, when compared with the preceding month, to 271,395 units, indicating an uptick in consumer sentiment in the domestic market.
Retail sales of passenger vehicles had fallen 3% to 202,585 units in December despite a host of year-end discounts by companies.
6. RIL Announces Plan to Invest More Than ₹10,000 Cr in Bengal
Reliance Industries Ltd (RIL) will invest more than ₹10,000 crore in West Bengal to expand operations of its telecom arm, Reliance Jio Infocomm, said Mukesh Ambani, chairman, RIL.
“RIL has invested ₹28,000 crore in West Bengal, which is one-tenth of the company’s total investments across India, and (telecom arm) Jio will invest a further ₹10,000 crore-plus to make the state a land of digital revolution,” Ambani said at the fifth Bengal Global Business Summit in Kolkata on Thursday.
This would make Jio the “single largest” investor in the digital space in the state, Ambani said. In 2016, when he first attended the summit, RIL’s investment in the state was ₹4,500 crore, he said.
(Source: Live Mint)
7. RBI Permits IBC Bidders to Raise Funds via ECBs to Repay Existing Lenders
The Reserve Bank of India on Thursday permitted bidders for insolvent companies to raise funds through external commercial borrowings (ECBs) to repay existing lenders. The access to relatively cheap foreign capital would aid early resolutions and also make the process cost efficient, bankers and legal experts said. According to existing norms, the proceeds of ECBs, in either foreign currency or Indian rupee denominations, are not permitted to be utilised for repayment or for on-lending for repayment of domestic rupee loans.
The resolution applicants under Corporate Insolvency Resolution Process (CIRP), under the Insolvency and Bankruptcy Code (IBC), may find it attractive to borrow abroad to repay lenders.
"It is proposed to relax the end-use restrictions under the approval route of the ECB framework for resolution applicants under CIRP and allow them to utilise the ECB proceeds for repayment of rupee term loans of the target company," the RBI said.
(Source: Business Standard)
8. Steel Companies Plan Price Hike
Steel prices may go up as major players are planning upward price revision, industry sources said.
JSW Steel has already hiked the prices by Rs 750 a tonne.
"Hot Rolled Coil (HRC) was hovering in the range of Rs 42,000 to 44,000 till end of January. The hike made last week was in line with international prices. The rates have gone up in the international market," a company source said.
Another steel company JSPL will also hike the prices "if others will do", a company official who did not wish to be quoted said.
9. RBI Slaps Fine of Rs 1 Crore on SBI
State Bank of India on Thursday said, the Reserve Bank of India has slapped Rs 1 crore penalty on the country's largest lender for violating norms.
RBI "in exercise of powers conferred under Section 47 A of the Banking Regulation Act, 1949 has levied a penalty of one crore rupees on the bank for not monitoring the end use of funds in respect of one of its borrowers," SBI said in a regulatory filing.
SBI, however, did not share details of the borrower and the loan amount given to the borrower.
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