Steel deal can pay double dividend for Thyssen 12 Apr 2016 The German engineer may pool its European steel assets with Tata’s Dutch unit. ThyssenKrupp’s share of the synergies could be worth almost 1 bln euros. Halving its conglomerate discount would double the benefits. So far, the market is pricing in only half of the potential.
India can learn from Asian bank turnarounds 7 Apr 2016 Privatising $2 bln lender IDBI would send a good sign about India’s resolve to fix wobbly banks. Previous deals in the region offer a template for success: let an investor take a big stake, complete with real control over decision-making, and then go easy on the regulation.
India’s central bank hits limits to easing 5 Apr 2016 The Reserve Bank of India has trimmed rates again and eased liquidity, yet is constrained from going further by Asia’s highest inflation rate. It’s up to the government to stimulate growth by boosting public investment – and by reforming dysfunctional state lenders.
Blackstone bets Indian IT can weather US election 5 Apr 2016 The buyout firm’s $1.1 billion bid for Indian outsourcer Mphasis looks brave when U.S. presidential candidates are touting restrictions for skilled foreign workers. The low valuation and a long-term contract with seller Hewlett Packard Enterprise at least offers some protection.
ThyssenKrupp could break steel’s first-mover issue 1 Apr 2016 The German engineer and Tata Steel are talking about pooling European steel assets, says a German press report. Closing plants would be politically fraught – look at the row over Tata’s UK operations. But it’s necessary, and Thyssen has shown restructuring mettle before.
Mallya offer too good for Indian banks to ignore 1 Apr 2016 Liquor baron Vijay Mallya is offering to repay lenders, most state-backed, at least 43 cents on the dollar to settle dues worth $1.4 bln. That is almost double the average recovery rate for Indian creditors. They should make a deal, even if the tycoon may be able to pay more.
Pensions not steel are Tata’s big UK headache 31 Mar 2016 The Indian group’s British plants have issues, but could be rendered profitable. The bigger challenge is funding shortfalls in its pension scheme for 130,000 members. If a new acquirer could find a workaround and new investment, British steelmaking could still work.
India cotton seed spat sows bigger trouble 31 Mar 2016 The government’s move to cap the fees Monsanto can charge for licensing its technology for genetically modified seeds looks short-sighted. It rekindles old fears about India’s cavalier attitude to intellectual property and gives big foreign firms another reason to stay away.
Tata Steel is wise to play to its home advantage 30 Mar 2016 The Indian steelmaker may sell all of its UK business. Weak local demand and a flood of cheap Chinese imports make Tata’s European arm much less attractive than its domestic operations. M&A at home may also prove more profitable than the ill-fated 2007 takeover of Corus.
British steel is sad lesson in why price wars fail 29 Mar 2016 The Port Talbot plant probably can’t survive in a world flooded with cheap Chinese steel. Yet it has hung on stubbornly long. Across markets like iron, oil and steel, the idea that price wars drive high-cost suppliers to the wall is proving more complicated than once thought.
Emissions reach encouraging pre-peak peak 16 Mar 2016 Pollution from energy production has levelled out. The IEA says that the U.S. and China burning less coal has helped to win a battle in the global fight against climate change. But to win the war on emissions, India must be persuaded to rein in its use of the dirty fuel.
The bright side of India’s bad-debt witch hunt 16 Mar 2016 Liquor baron Vijay Mallya’s exploits have triggered wider scrutiny of the country’s tycoons and those who enabled their excessive lending. Auditor Grant Thornton is the latest target. Though the sudden frenzy seems arbitrary, the result may be a faster cleanup of balance sheets.
Liquor baron is India’s bad debt poster boy 11 Mar 2016 Lenders are chasing Vijay Mallya’s $75 mln payout from distiller Diageo as they try to recover debt from his defunct airline. India’s new tough stand on errant borrowers comes too late to fix the country’s bad debt problem. But it offers hope that past mistakes won’t be repeated.
India needs its central bank chief a bit longer 8 Mar 2016 Raghuram Rajan’s three-year term as governor of the Reserve Bank of India ends in September. Inflation has almost halved under his watch. Yet Rajan’s campaign to clean up banks’ bad debts is far from complete. Confidence will take a hit if he isn’t around to finish the job.
India lowers capital hurdle for stretched banks 2 Mar 2016 Central bank Governor Raghuram Rajan has stepped in to help lenders neglected by the country’s tight budget. Tweaking the rules on what counts as Tier 1 capital could shrink the sector’s equity shortfall by $8 bln. Though shareholders are pleased, banks have less room for error.
India’s budget maths looks ambitious 1 Mar 2016 To cut the deficit to 3.5 pct of GDP in the next financial year, the government is relying on raising $23 bln from privatizations and selling airwaves. That is almost twice this year’s expected haul. India’s track record of under-delivering leaves plenty of room for doubt.
India’s prudent budget favours poor over big firms 29 Feb 2016 Finance Minister Arun Jaitley is sticking to his fiscal deficit target while promising big outlays for farmers. That means no new money for troubled state banks. Corporate taxes were also disappointing. At least Jaitley’s caution leaves room for another interest rate cut.
Diageo digs deep to divorce Indian liquor baron 26 Feb 2016 The UK distiller is paying Vijay Mallya $75 mln to step down as chairman of Indian subsidiary United Spirits, and the same again to sponsor his F1 team. That increases the costs of Diageo’s big Indian adventure. Bluechips and emerging markets tycoons can make awkward bedfellows.
India can afford to loosen up for a bank recap 25 Feb 2016 That would be the only good reason to ditch a 3.5 pct fiscal deficit target in next week’s budget. An existing $26 bln plan to recapitalise wobbly banks with private help looks unworkable. Bad debts damage India’s status as a bright spot amid emerging market turmoil.
Facebook India row shows limit of tech favouritism 11 Feb 2016 Regulators blocked the social network’s plan to offer free limited internet to the poor. Ill-judged comments from Facebook director Marc Andreessen highlight the gulf between Silicon Valley and the wider world. Big tech groups can no longer expect a free pass for bold plans.