Cash bet could make or break Modi 14 Nov 2016 The Indian prime minister's huge banknote recall is causing confusion and a backlash. It may slow the economy, too. Beyond the pain of implementation, though, demonetisation could help cut the fiscal deficit and give Narendra Modi funds for big-ticket policies. It's a big gamble.
Ratan Tata lowers the tone for fights to come 11 Nov 2016 A rambling press release from India's top conglomerate attempts to justify Tata Sons' recent sacking of its chairman. The personal and defensive style raises questions about the role of the firm's star-studded board and foreshadows messy struggles over the group's listed units.
Ratan Tata’s old partner is a $12 bln problem 9 Nov 2016 A bust-up at India's Tata Sons has set the patriarch against Cyrus Mistry, whose family has a decades-old 18 pct stake. A minority bet on a private group beset by governance issues won't appeal to activists or sovereign funds. Ratan Tata needs to dig deep if he wants Mistry out.
Modi puts paper money where mouth is on corruption 9 Nov 2016 The Indian prime minister is boldly cancelling 86 pct of banknotes by value. That will force people to open bank accounts and boost tax revenue. It won't stop illicit flows, but tough new laws and technology advances mean the demonetisation effort could make a positive mark.
Unblocking DoCoMo’s Tata exit is New Delhi’s job 4 Nov 2016 Turmoil at the Indian group was fueled by Ratan Tata's wish to pay the Japanese telco $1.2 bln it is owed for its stake in a JV. But retroactive regulations make honoring the payment illegal. A wily workaround would add to governance concerns. Policymakers need to fix the rules.
Shenanigans at Tata taint India’s governance wins 1 Nov 2016 Corporate oversight is improving despite a messy spat at a conglomerate people thought represented the highest standards in the country. There is a long way to go, but investors are becoming more vocal, proxy firms are on the rise, and tycoons are on shorter leashes.
Tata ex-chairman turns rebel without a clear cause 27 Oct 2016 The ousted Cyrus Mistry has penned an activist-worthy letter outlining problems at the Indian conglomerate, including over-priced deals and poor governance. Long term, the family-controlled holding apparatus might reform itself. Short term, it may only create more mess.
Tata’s head hunt calls for clarity on governance 26 Oct 2016 A search is on for a leader of the $100 bln Indian conglomerate after the sacking of its chairman. Big names like Indra Nooyi and Arun Sarin are doing the rounds. But to attract top talent, Tata needs to address governance. A commitment to limit meddling would be a good start.
Tata’s Cyrus Mistry changed too little, too late 24 Oct 2016 India's $110 bln conglomerate has sacked its chairman of four years. Mistry was slow to tackle problems at Tata Motors and Tata Steel; growth has also ground to a halt at cash cow Tata Consultancy. Fresh blood could put the nation's most prominent group back on a positive track.
Demise of India’s IT firms is greatly exaggerated 21 Oct 2016 Growth has slowed at local giants Tata Consultancy Services and Infosys. But the global economy will recover and the outsourcers can thrive as new technologies are rolled out. In the meantime, returning more cash would help dispel the impression of complacency.
Indian online-travel M&A could use a roadmap 19 Oct 2016 Shares in U.S. listed MakeMyTrip jumped 50 pct on the back of a $1.5 bln merger with ibibo, a private rival backed by Naspers. That is despite the pair offering almost no details. It shows how desperate investors are to see a reduction in competition and a path to profitability.
Essar sale points to no taboos in bad-debt fight 14 Oct 2016 A $12 bln-plus sale of Essar Oil to the U.S. sanctioned-Rosneft and others would be a milestone in India's effort to clean up balance sheets. Not long ago it was hard to imagine banks could turn the screws on tycoons like the Ruia brothers. Lenders have a rare reason to cheer.
Review: India’s flashier tycoons are best avoided 14 Oct 2016 In a country full of colourful businessmen, shareholders gain most from backing introverts. Saurabh Mukherjea’s "The Unusual Billionaires" singles out those behind the 1 pct of Indian firms that generate superior returns. It's a reminder that crony capitalism no longer pays.
Rajan’s successor signals new pace at RBI 4 Oct 2016 The Indian central bank’s monetary policy committee, led by new Governor Urjit Patel, has cut rates. There are decent reasons for the unanimous decision. Nonetheless, it will do little to calm those who fear the departure of Raghuram Rajan has made the RBI less independent.
India illustrates fraught tax amnesty economics 3 Oct 2016 Citizens have declared cash and assets worth $10 bln. A high penalty means New Delhi will pocket almost as much revenue as Indonesia, where locals have just declared $250 bln in a similar scheme. In the long term, using more carrot and less stick is probably more valuable.
Powerful owners hobble Asia’s governance reform 29 Sep 2016 Asian corporate governance is improving despite frequent scandals, according to a review, which goes on to call on institutional investors to speak up more. Fair enough, but majority owners can still bully outsiders so long as the latter lack say over independent directors.
India’s lenders deserve to be rich global outliers 27 Sep 2016 Lenders like HDFC are among the world's priciest, trading on price-to-book ratios up to 7 times higher than Citigroup or BNP Paribas. They are well-capitalised, earn high returns, and are growing fast. The secret is lending to people, not companies. Headwinds look limited too.
Vodafone tops up for a fight in India 23 Sep 2016 Injecting $7 bln of cash will help the mobile giant's Indian unit compete in a mega spectrum auction and in a price war against new entrant Jio. It also suggests an IPO of the wholly owned business is off the table for now. India may become a big drag on its London-listed parent.
Scarcity value in finance fuels bumper Indian IPO 21 Sep 2016 Indian bank ICICI is selling up to $905 mln of shares in its insurance unit. It is the country's biggest listing since 2010. A punchy valuation underscores how investors are willing to pay a premium for the handful of healthy stocks available in India's financial sector.
Asian investment banking is a money pit 20 Sep 2016 Fees from underwriting and deals are up 8 pct this year after a poor start. But only a few big foreign houses are profitable. Fierce competition, global and regional, keeps fees down. Meanwhile, big-ticket Chinese business goes to Chinese firms. It creates the conditions for more banks to retreat.