Posts tagged 'India'

“I was shocked beyond words at the happenings at the board meeting of October 24, 2016…” – C Mistry

Here’s the full email from Cyrus Mistry to the board of Tata Sons after he was ousted on Monday.

The headline from it is the “1.18 trillion rupees ($18 billion) in writedowns because of five unprofitable businesses he inherited” but there is much more here that sheds light on why this all blew up so suddenly, leaving Ratan Tata back in temporary charge.

Some choice lines before the actual thing, with our emphasis: Read more

Breakups can be messy, Tata edition

You’ll remember Cyrus Mistry was unceremoniously removed from the top job at Tata on Monday.

Well on Tuesday he shot off an email to the holding company’s board…

From Bloomberg: Read more

That was then, this is now, Tata edition

Courtesy of India’s Economic Times from Nov 24 2011:

Screen Shot 2016-10-25 at 14.13.45

And today: Read more

“Mr Ambani, I’d just like to compliment your capex… sorry, I meant, smile”

It has been suggested before that there “are only two Indians for whom Mumbai’s great and good will turn up en masse and on time. One is whoever is the sitting prime minister. The other is Mukesh Ambani.”

And earlier this week at a talk in south Mumbai this blogger was part of an effort to prove that true. Well, the “on time” bit at least, we’re still working on the “great and good” thing.

It was quite the spectacle. Read more

The minutes of your (more dovish) RBI, charted

More dovish, we should add, for reasons already discussed — like the acceptance of a higher inflation threshold, the lowering of the real rate target, and the fact that the cut of 25bps in early October was on the back of a unanimous vote from the newly formed MPC under its new governor, Urjit Patel.

But more on that below the break.

First, that chart from Goldman based on the (now ex-Rajan) Reserve Bank of India’s recently released minutes: Read more

Your new RBI, not quite like the old RBI?

Raghuram Rajan is out. Pushed perhaps by some in the Indian political establishment who were unhappy with his outspoken views on matters non-monpol –“in the land of the blind, the one-eyed man is king” being a prime example — and by some who thought he wasn’t putting enough emphasis on growth when making his interest rate decisions.

Urjit Patel is in. He was supposed to signal policy continuity, more policy continuity and some more policy continuity. The kind of policy continuity only available if Rajan had *cough* just stayed on *cough* After all, Patel was a deputy governor at the RBI under Rajan and the architect of the RBI’s inflation targeting framework.

But is that prophesied continuity actually showing up? Read more

Bank account fiddling as cultural bridge

What does this remind you of?

And by “this” we mean the sudden appearance of millions of Indian bank accounts which only boast balances of one-rupee each.

Any confusion as to why that would happen might be tempered by knowing that those accounts were opened as part of a massive financial inclusion plan undertaken by Modi’s government for which non-operational accounts weren’t a good look… and they were mostly opened at state owned banks.

Incentives are fun. Read more

The RBI wants to disintermediate you!

The Reserve Bank of India announced some fun stuff last night, which you can read about here and here.

The short story is that the central bank (with shiny new governor about to take control) seem to be trying to push large corporate borrowers away from banks — for lots of occasionally crony capitalist reasons — and towards a growing corporate bond market. Read more

Continuity at the RBI

You know, we may be wrong, but there seems to be a consensus building around the appointment of Urjit Patel to replace (the potentially ousted) Raghuram Rajan at the head of the Reserve Bank of India in September…

See if you can spot it.

Spoiler: it’s in bold. Read more

Of elections and inflation in India

Here’s something to consider while we wait (and wait) for India to announce who is going to replace the outgoing, inflation fighting, Raghuram Rajan at the Reserve Bank.

And perhaps something for whoever does that replacing (in September) to keep in mind too, particularly if he or she is met at their desk by a clamour for rate cuts. Read more

The dog ate my account books, Kingfisher edition

Presented without comment, via Mint:

The investigation into an alleged fraud at the now defunct Kingfisher Airlines Ltd has run into an unlikely hurdle: the airline’s books of accounts have vanished.

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Your shorter (but more detailed) Rajan replacement cheat sheet

We promised we’d only return to this when we had a bit more clarity about who might step into Raghuram Rajan’s shoes at the RBI when he leaves in September.

Well, does this from the Times of India yesterday count?

NEW DELHI: The government has narrowed its long list of candidates for the next Reserve Bank of India governor to just four.

The four short-listed candidates are: Reserve Bank of India deputy governor Urjit Patel, former deputy governors Rakesh Mohan and Subir Gokarn and State Bank of India chief Arundhati Bhattacharya.

Yes. At the least, it’s three less names to deal with than we had last time.  Read more

Your Raghuram Rajan potential successor cheat sheet

Courtesy of Nomura’s Sonal Varma:

 Read more

The Monday morning after the RBI governor before [updated]

It has been a difficult Monday morning for India’s bankers, economists and analysts. Not only has the Rajan-era come to an unexpected close but the monsoon has thumped into the country. Now, where once certainty and clean pants existed, a world of confusion and splashed trouser legs sits soddenly.

The usual notes are coming through into our inbox too, most expressing said confusion and near-term worry, even though markets are shrugging a bit so far. Here’s a one month view of the INR and the Sensex: Read more

Discrepancies and Indian GDP data

Good news once again!

“India’s economic growth accelerated to 7.9 per cent in the first quarter, widening its lead over China and confirming the country’s status as the world’s fastest expanding large economy and the most dynamic emerging market.”

Well, qualified, confusing good news, as Goldman note with our emphasis:

Data from the expenditure side shows that the improvement in GDP growth in Q1 was largely driven by higher private consumption and relatively lower drag from net exports. Fixed investment declined for the first time since March 2014. However, a significant fraction of headline GDP growth is unexplained as ‘discrepancies ‘ amount to 4ppt of GDP vs 2.1ppt in the previous quarter (the discrepancy is the difference with the industry GDP data, which are used as the control).

 Read more

The intended (and unintended) consequences of India’s crackdown on black money

Before we begin, how about a very, very quick quiz?

Question: What percentage of Indians paid income tax in the 2013 fiscal year? Read more

So you want to map India?

Well things just got (more) interesting.

This is only a draft bill — to “regulate the acquisition, dissemination, publication and distribution of geospatial information of India which is likely to affect the security, sovereignty and integrity of India” — and it’s mostly aimed at licensing internet companies like Google, but check out this bit:

15. Penalty for wrong depiction of map of India etc.-Whoever depicts, disseminates, publishes or distributes any wrong or false topographic information of India including international boundaries in contravention of section 6, shall be punished with a fine ranging from Rupees ten lac to Rupees one hundred crore and/or imprisonment for a period up to seven years.

 Read more

Imagining life/ the RBI after Raghuram Rajan

Once you’ve had a luddite at the Reserve Bank of India it’s hard to go back…

Amongst other things Rajan stabilised the rupee, brought inflation under some sort of control (with some outside help) which has allowed him to cut rates, overseen institutional changes at the RBI, has started to get a grip on India’s problem loans, and was a big part of convincing Delhi to crack down on willful defaulters and others who used to have avenues of political appeal when their loans were being questioned.

He also managed to thoroughly woo much of Mumbai’s financial community while doing so.

And now he might be off. As in, when his current term ends. Read more

To protest anti-smoking measures, Indian cigarette companies are… shutting their factories?

It’s an unorthodox move.

It all stems from that fact that India (following the WHO) wants to increase the size of the pictorial warnings on cigarette packets to 85 per cent from a current 20 per cent.

The cigarette companies do not want that to happen, obviously. But it is happening — admittedly in a somewhat confusing fashion — and said companies have noped out of manufacturing anymore cigarettes until, well, hmmm. That’s the tricky bit.

Here’s ITC, the largest cigarette manufacturer by far in India and one which is part owned by British American Tobacco: Read more

Indian gurus want your market share

Patanjali Ayurved ” is disrupting India’s consumer space” according to my inbox.

Patanjali Ayurved is also an ayurvedic health foods and medicine brand that’s fronted by India’s Swami “Baba” Ramdev. He’s a yogi who says that he has no economic stake in what he also says is not a profit-oriented company.

From the FT last week:

Instead, he says, it is part of a mission to boost India’s economic self-reliance, akin to Mahatma Gandhi’s appeals for Indians to renounce foreign wares during the anti-colonial struggle.

“This is not a business,” the yoga guru says, as the heavily armed government commandos serving as his bodyguards look on.

 Read more

India, in search of a suitable bond yield

Competitive federalism in India has had some weird effects. For one it has led to slogans like this becoming apparently acceptable:

Happening Haryana? Really? Not that the drive to get India’s states to compete with each other to attract business is a bad thing and not that Haryana isn’t a nice place but, again, “Happening Haryana”? We’d like to see what focus group got that one over the line. Read more

Paying off the King of Good Times

Who could have seen this coming? From the FT’s Amy Kazmin:

Diageo, the world’s largest spirits company, has agreed to pay $75m to Vijay Mallya to step down as chairman of United Spirits, the Indian drinks business he sold to Diageo in 2012.

Diageo, which paid roughly £1.8bn for a 55 per cent stake in United Spirits, has been locked in a bitter boardroom stand-off with Mr Mallya, the former controlling shareholder, since April, when he refused a request from United Spirits’ board to resign.

It’s not like a clash of cultures between ‘wilful defaulting’, high flying, risqué calendar pioneering, Enrique Iglesias loving, Mallya and the ironically sober Diageo was pretty obvious to anyone who even glanced at the situation now was it?  Read more

When accounting tricks meet Indian public sector bank recaps

India’s more than two dozen state-backed banks (aka PSUs) that make up 65-70 per cent of the overall banking system are still struggling, weighed down by a mountain of bad loans. A mountain of bad loans that they have very probably failed to fully recognise.

The Indian government really wants to help, because fixing that problem would help India’s growth rate, but it’s hamstrung by — amongst other things — awkward fiscal math.

What to do?

Well, put the recap below the line, obviously. Read more

You are here, an EM pain roadmap

Do click to enlarge, any complaints to UBS, where credit also resides:

 Read more

On unicorn imperialism

It may have been a slip of the keyboard, but Marc Andreessen’s pro-colonialism Tweet on Wednesday (later retracted) arguably told us more about the mindset of Silicon Valley insiders than anything ever uttered at a TechCrunch disruptor conference.

Nor should it strike any of us as surprising. The parallels between unicorn imperialist ambition and the British Empire run deep. (And no, we won’t dwell on the shared fondness for unicorn insignia.)

 Read more

Quoth the Zoman: Revenue

The co-founding Zoman* — Deepinder Goyal, that is — took time for a chat with us last week about the change going on in India’s start-up world, a change that has involved hyperbole by many and an utterance of mea culpa by a few. Online food portal Zomato is included in the latter category. Read more

India’s Sensex, now pre-Modi

This is more art than science but we’re going to mark it anyway.

That’s India’s benchmark Sensex index closing below 24,ooo points – at 23,962.21 to be exact — its lowest close since May 15, 2014 according to Reuters.

Funnily enough, May 16 was when one Narendra Modi got his first official nod to go sit on India’s most ministerial seat. The Sensex closed that day at 24,121.74. Read more

Facebook slapped down by Indian regulator over astroturf campaign

We previously wrote about Facebook’s battle with Indian regulators over its “Free Basics” product, which is a stripped down version of the internet designed to ensure Facebook’s global dominance help bring the world’s poor online.

Trai, the Indian telecoms regulator, had launched a consultation in December about differential pricing for data services: effectively whether or not it’s ok to let telecoms companies charge different amounts for different parts of the internet. Readers in the US and Europe may know this debate by the term “net neutrality”. Read more

Zuckerberg’s hypocritical war on net neutrality in India

There’s an old notion that companies exist for one purpose above all else: to make money for their shareholders. It seems to be an uncool idea in Silicon Valley, where startups like to style themselves as charitably-minded enterprises that are simply trying to make everyone’s lives better and more “connected” or some other buzzword.

Which one is Facebook?

Look no further than this opinion piece Mark Zuckerberg wrote for the Times of India just after Christmas. He accuses his Indian critics of lying about “Free Basics”, the emaciated version of the internet that Zuckerberg has been pushing since 2013 to ensure that his social network is the first thing people in emerging markets see when they come online: Read more

Spot the understatement, Indian politics edition

India is a large place. It is made up of many states. Moving goods between those states is a freaking nightmare.

That’s where the loooong awaited GST — India’s promised goods and services tax, which has been debated for ten years — comes in. The idea is to unify all indirect taxes in India, simplifying the system and lubricating domestic trade. Estimates of the boost to GDP a GST could bring differ (more on that at the bottom) but there is little doubt it would be of benefit, even if you restrain yourself to just discussing its impact on the blood pressure of lawyers and anyone moving goods across state borders.

But it just keeps on not getting introduced.

Here’s Cap Econ’s Shilan Shah on why: Read more