India

Essar deal dilemma sums up investing in India

10 October 2018

To buy the steelmaker out of bankruptcy, suitors first must pay off any debt of defaulters in their orbit, a court has ruled. For ArcelorMittal, that’s a $1 bln auction entry fee. India’s unpredictable business and legal environment makes such a decision especially difficult.

India holds back a currency bazooka

5 October 2018

The rupee is the worst performer in Asia this year, and doubts about the integrity of local shadow lenders are weighing it down further. A decision to keep rates steady acknowledges monetary policy won’t help much. Still, the central bank has a bigger weapon: diaspora bonds.

India stems liquidity crisis with IL&FS rescue

2 October 2018

New Delhi’s decisive move to take charge of an infrastructure lender that started to default on a $13 bln debt pile brings short-term relief to the money market. Yet rising interest rates will bring more pain: the country’s shadow banks are still highly vulnerable.

India’s private lenders face a fiercer watchdog

1 October 2018

The RBI has put Bandhan in the sin bin for flouting ownership rules, sending its shares down 20 pct or some $2 bln. A central bank clampdown on these overvalued lenders, and their backers, provides welcome clarity. But the timing adds to turmoil in the country’s financial sector.

Breakdown: Pouring liquidity onto India’s fires

28 September 2018

Loans from shadow banks have grown far faster than at traditional lenders. Strains are now showing, amid rising interest rates, a weak rupee and $150 bln of bad bank debt. Multiple flare-ups will call the RBI to duty again, including to douse the financial system with more money.

Unicorns spawn new fantastical tech beasts

27 September 2018

Just a few years ago, a mythology sprang up around startups with a $1 bln paper valuation. India’s Oyo Hotels just became the latest to raise at least that much cash in one go. For the unbridled chaos these investment creatures represent, they might best be labelled centaurs.

India’s financial turmoil augurs a reckoning

25 September 2018

Infrastructure lender IL&FS has helped trigger market mayhem, prompting regulators to step in to try to calm investors. The boss of India’s largest bank says this isn’t a “Lehman moment”. Maybe, but the amount of bad debt and short-term funding are worrisome.

Indian bank deal offers welcome glimmer of reform

18 September 2018

A surprise plan to merge three state lenders leans on Bank of Baroda to form a group with $200 bln of assets. With an election coming next year, it’s a good sign that an overdue restructuring of the sector is back on the agenda. The details, though, are less inspiring.

Consumer giants have bigger problems than Turkey

28 August 2018

Unilever and Nestlé can resist a crisis in Turkey, which accounts for little of their revenue. But both will suffer if troubles spread across emerging markets, which account for about half of group sales. All the more so since Western shoppers are unlikely to take up the slack.

India’s Jet can redeem some air miles to ease pain

28 August 2018

After a quarterly net loss of $190 million, the country’s second-largest airline badly needs cash. It has laid out a list of planned fixes, including somehow tapping its loyalty programme. That won't solve its engine trouble, but may help smooth out some of the turbulence.

Berkshire’s India deal is so wrong it’s right

27 August 2018

Warren Buffett’s company is taking a small stake in digital-payments firm Paytm. Indian tech doesn’t fit the Omaha sage’s playbook, but his outfit has $110 bln in cash and holdings like Kraft Heinz are flatlining. Letting his lieutenants place some bets on the future makes sense.

Going local would take KKR Indian loans up a notch

14 August 2018

A listing of the U.S. firm's lending unit would help fund long-term growth in a market where companies have been starved of credit. Healthy valuations for non-bank financial services firms, plus signs a new bankruptcy code is working, make it a good time to bed down.

Jet’s poor piloting exacerbates Indian turbulence

10 August 2018

Naresh Goyal’s airline says it is not short of cash or in talks to sell a stake. Yet the failure to get its earnings signed off on time suggests profound problems. The industry is suffering from high costs and low fares, but the carrier's mixed messages test investor patience.

Standard Life Aberdeen needs more activist touch

7 August 2018

The asset manager formed from last year’s merger of Standard Life and Aberdeen keeps losing funds. Cutting costs and returning capital have failed to close the discount at which the company trades to peers. Selling the India business and ditching a twin-CEO structure might help.

India central bank doubles down on inflation fight

1 August 2018

The Reserve Bank of India raised rates by a quarter of a percentage point even though manufacturing activity slowed in July. The hike may hamper economic growth but removes doubts about policymakers’ commitment to a relatively new inflation mandate. The trade-off is worthwhile.

India’s top airline can evade a turbulent patch

31 July 2018

Shares in InterGlobe Aviation, which owns IndiGo, fell sharply after first-quarter earnings plunged 97 pct. A fare war at home is to blame, as are rising fuel prices. But rivals are suffering too, and high costs will encourage the carrier to pause a planned long-haul splurge.

Indian tycoon winner of Trump-China metals scrap

26 July 2018

Hindalco is snagging aluminium producer Aleris for $2.6 bln after CFIUS concerns torpedoed a previous bid from a Chinese buyer. Hindalco’s U.S. arm Novelis is paying more, but the numbers stack up. Mogul Kumar Mangalam Birla is smartly taking advantage of the trade war for now.

Indian buyer sows better outbound M&A seeds

23 July 2018

In the country’s biggest overseas deal in years, UPL will double in size acquiring Platform Specialty’s agrochemicals unit for $4.2 bln. Backing from TPG and ADIA help, and there’s no risky bridge loan. The Shroff family may outdo other local tycoons who have ventured abroad.

India Insight: Mukesh Ambani goes after Jeff Bezos

16 July 2018

The energy billionaire built an upstart telecoms data network into the world’s biggest. Now Ambani wants to redefine how Indians shop, pitting him against Amazon and Walmart. India’s e-commerce market is young enough – and his pockets deep enough – for him to be a real threat.

India’s Cairn Energy fire sale is short-sighted

9 July 2018

Tax authorities have sold part of a stake in Vedanta Limited seized from the UK company in a $1.3 bln tax dispute, weeks before the pair go to arbitration. India only pockets $216 mln, half what the shares were worth at the start of the year. The timing and the logic look flawed.