General Affairs
Defence Minister Sitharaman slams 'dastardly attack of cowardice' in Sunjwan, says Pakistan will pay for JeM's 'misadventure'
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Defence Minister Nirmala Sitharaman called Saturday's terrorist strike on the Sunjwan Army camp in Jammu a "dastardly attack of cowardice," and offered condolences to the families of the five military personnel who were martyred.
Sitharaman confirmed that the terrorists responsible for killing those men, as well as one civilian, were from the Pakistani group Jaish-e-Mohammed, led by Masood Azhar. "Pakistan will pay for this misadventure," she told reporters at a press briefing in Jammu.
Intelligence inputs show that the terrorists were being controlled by handlers across the border, and the evidence was being scrutinised by the National Investigation Agency, she said.
The defence minister said all the evidence would be given to Islamabad. However, she noted that Pakistan hadn't taken any action despite being given "dossiers after dossiers."
The evidence against Pakistan is very clear and solid, and India's response to them will be of its choice of time and place, she said.
Sitharaman said the counter terrorist operation in Sunjuwan was called off today at 10.30 am, but a sanitisation operation was on.
J-K CM BRIEFS DEFENCE MINISTER
Sitharaman earlier received a briefing from Jammu and Kashmir Chief Minister Mehbooba Mufti. Mufti today pitched afresh for a dialogue between India and Pakistan to end the violence in the restive state.
Sitharaman's press briefing came on a day when a CRPF constable was killed in a gunfight with terrorists in downtown Srinagar, after security forces foiled militants attempts to strike a CRPF camp.
The Pakistan-based Lashkar-e-Taiba claimed responsibility for the attack.
Sitharaman confirmed that the terrorists responsible for killing those men, as well as one civilian, were from the Pakistani group Jaish-e-Mohammed, led by Masood Azhar. "Pakistan will pay for this misadventure," she told reporters at a press briefing in Jammu.
Intelligence inputs show that the terrorists were being controlled by handlers across the border, and the evidence was being scrutinised by the National Investigation Agency, she said.
The defence minister said all the evidence would be given to Islamabad. However, she noted that Pakistan hadn't taken any action despite being given "dossiers after dossiers."
The evidence against Pakistan is very clear and solid, and India's response to them will be of its choice of time and place, she said.
Sitharaman said the counter terrorist operation in Sunjuwan was called off today at 10.30 am, but a sanitisation operation was on.
J-K CM BRIEFS DEFENCE MINISTER
Sitharaman earlier received a briefing from Jammu and Kashmir Chief Minister Mehbooba Mufti. Mufti today pitched afresh for a dialogue between India and Pakistan to end the violence in the restive state.
Sitharaman's press briefing came on a day when a CRPF constable was killed in a gunfight with terrorists in downtown Srinagar, after security forces foiled militants attempts to strike a CRPF camp.
The Pakistan-based Lashkar-e-Taiba claimed responsibility for the attack.
Two Lashkar-e-Taiba terrorists die in motorcycle accident, one body recovered
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Two bike-borne Lashkar-e-Taiba terrorists were killed Monday when their bike skidded on a highway and hit a tree, on a day when Kashmir saw fresh snowfall.
The two-critically injured men were rushed to the local hospital. One was identified as a local, Owais Ahmed Mir, a resident of Brath Kalan, Sopore. The other was a Pakistani terrorist, and is yet to be identified.
The impact of the accident killed the Pakistani terrorist. Mir breathed his last in hospital, near the accident site.
Mir, said to be in his twenties, is one among as many as 15 youth who have picked up arms in North Kashmir.
"Owais Ahmad Mir is a resident of Brath Kalan, Sopore. He had joined Lashkar recently. But while the accidental was fatal. We are checking whether the bike borne militants were carrying weapons," said Harmeet Singh, the Sopore SSP.
The incident comes on a day when a CRPF jawan was killed following a failed attempt to attack the paramilitary force's camp in Srinagar's Karan Nagar. The Lashkar-e-Taiba claimed responsibility.
The two-critically injured men were rushed to the local hospital. One was identified as a local, Owais Ahmed Mir, a resident of Brath Kalan, Sopore. The other was a Pakistani terrorist, and is yet to be identified.
The impact of the accident killed the Pakistani terrorist. Mir breathed his last in hospital, near the accident site.
Mir, said to be in his twenties, is one among as many as 15 youth who have picked up arms in North Kashmir.
"Owais Ahmad Mir is a resident of Brath Kalan, Sopore. He had joined Lashkar recently. But while the accidental was fatal. We are checking whether the bike borne militants were carrying weapons," said Harmeet Singh, the Sopore SSP.
The incident comes on a day when a CRPF jawan was killed following a failed attempt to attack the paramilitary force's camp in Srinagar's Karan Nagar. The Lashkar-e-Taiba claimed responsibility.
'This boy has saved lives': CRPF sentry who thwarted Srinagar camp attack hailed as hero
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Constable Raghunath Ghait on sentry post of 23 Battalion has been hailed as a hero by the force after his alertness averted a suicidal attack in Karan Nagar, Srinagar. DG CRPF RR Bhatnagar congratulated the 27-year-old soldier.
"Our alert sentry saw suspicious movement, he fired and made them retreat. We then sent our quick reaction team and engaged the terrorist after house to house search," said Bhatnagar.
Speaking further, he added, "This boy has saved lives. If the terrorist would have managed to enter, there could have been more casualty." The force lost one CRPF personnel in exchange of fire.
"I congratulate alert CRPF sentry for averting suicidal attack in Karan Nagar Srinagar. Fortunately 2 terrorists are in cordon and exchange of fire is going on," said DG SP Vaid.
CRPF sources informed that constable Raghunath Ghait will be suitably rewarded later on as the encounter is still on going.
The 27-year-old is a resident of Nandura, an important town in the Buldhana district, Maharasthra.
CRPF says 2 suspected militants carrying backbags and armed with AK 47 were seen approaching towards CRPF camp by Raghunath.
The alert constable immediately then open fired from his LMG at 4:45 in the morning. The camp is situated near residential complex and is stone throw away from SMHS hospital, from where Lashker commander Naveed Jat had fled by help of militants after killing two cops just a week ago.
Security forces are already on high alert after the intelligence warned of possible attack on the account of Afzal Guru and Maqbool Bhat's death anniversaries. Both were hanged in Tihar Jail a few years apart.
Guru, convicted for parliament attack, was hung on 9th February, 2013, while Bhat was hanged on February 11, 1984 in Tihar Jail, New Delhi.
In June 2017, CRPF had foiled a fidayeen attack on its Sumbal camp in North Kashmir, killing four militants in northern Kashmir. The four militants opened fire on the CRPF's 45th battalion at about 3:30 in the morning.
More recently, there has been criticism that Pakistan based suicide squads of JeM have managed to breach the security of several camps of forces. The last being in Sunjwan camp in Jammu.
Earlier, the Lethapora camp of Pulwama of CRPF saw huge casualties as JeM terrorist barged into the campus last year.
"Our alert sentry saw suspicious movement, he fired and made them retreat. We then sent our quick reaction team and engaged the terrorist after house to house search," said Bhatnagar.
Speaking further, he added, "This boy has saved lives. If the terrorist would have managed to enter, there could have been more casualty." The force lost one CRPF personnel in exchange of fire.
"I congratulate alert CRPF sentry for averting suicidal attack in Karan Nagar Srinagar. Fortunately 2 terrorists are in cordon and exchange of fire is going on," said DG SP Vaid.
CRPF sources informed that constable Raghunath Ghait will be suitably rewarded later on as the encounter is still on going.
The 27-year-old is a resident of Nandura, an important town in the Buldhana district, Maharasthra.
CRPF says 2 suspected militants carrying backbags and armed with AK 47 were seen approaching towards CRPF camp by Raghunath.
The alert constable immediately then open fired from his LMG at 4:45 in the morning. The camp is situated near residential complex and is stone throw away from SMHS hospital, from where Lashker commander Naveed Jat had fled by help of militants after killing two cops just a week ago.
Security forces are already on high alert after the intelligence warned of possible attack on the account of Afzal Guru and Maqbool Bhat's death anniversaries. Both were hanged in Tihar Jail a few years apart.
Guru, convicted for parliament attack, was hung on 9th February, 2013, while Bhat was hanged on February 11, 1984 in Tihar Jail, New Delhi.
In June 2017, CRPF had foiled a fidayeen attack on its Sumbal camp in North Kashmir, killing four militants in northern Kashmir. The four militants opened fire on the CRPF's 45th battalion at about 3:30 in the morning.
More recently, there has been criticism that Pakistan based suicide squads of JeM have managed to breach the security of several camps of forces. The last being in Sunjwan camp in Jammu.
Earlier, the Lethapora camp of Pulwama of CRPF saw huge casualties as JeM terrorist barged into the campus last year.
India, UAE condemn state sponsorship of terrorism in joint-statement following PM Modi's visit
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India and the United Arab Emirates (UAE) on Sunday condemned terrorism in all its forms and efforts by states to use religion to justify sponsoring of terrorism, said a joint statement issued following Indian Prime Minister Narendra Modi's two-day visit to the Gulf nation.
Sunday's joint statement comes after Saturday's delegation-level talks between Modi and Crown Prince of Abu Dhabi and Deputy Commander of the United Arab Emirates (UAE) Armed Forces Sheikh Mohammed Bin Zayed Al Nahyan here.
"Both sides underlined that as diverse societies, India and UAE exemplify as credible models against the tendencies of extremism and radicalism.
"While appreciating the existing cooperation in this area, including through exchange of visits and best practices, both sides resolved to deepen cooperation on combating extremism and further strengthen their efforts in countering terrorism," it said.
The joint statement said both Modi and the Crown Prince "agreed that extremism and terrorism cannot be defeated by use of force only, and acknowledged the need for a holistic approach, which includes disrupting the use of web and social media for promotion of extremist and violent ideologies; preventing the use of religious centres to radicalise youth and recruit terrorist cadres; and promoting tolerance".
"The two leaders expressed strong condemnation of extremism and terrorism in all forms and manifestations, irrespective of who the perpetrators are and of their motivations.
"They reiterated their condemnation for efforts, including by states, to use religion to justify, support and sponsor terrorism against other countries, or to use terrorism as instrument of state policy."
The two leaders also expressed satisfaction at ongoing cooperation between India and the UAE in the identified areas of security, defence and space.
"They committed to augment this cooperation further to promote regional security, peace and prosperity and agreed to further deepen collaborations on maritime security, including joint anti-piracy, training and exercises, cyber space and outer space," the statement said.
The two sides also noted the growing defence cooperation "including through regular high-level visits, training programmes, joint exercises, participation in defence exhibitions and ship visits and port calls".
"The two sides renewed their commitment to work closely to strengthen maritime security in the Gulf and the Indian Ocean region, which is vital for the security and prosperity of both countries," the joint statement said..
Sunday's joint statement comes after Saturday's delegation-level talks between Modi and Crown Prince of Abu Dhabi and Deputy Commander of the United Arab Emirates (UAE) Armed Forces Sheikh Mohammed Bin Zayed Al Nahyan here.
"Both sides underlined that as diverse societies, India and UAE exemplify as credible models against the tendencies of extremism and radicalism.
"While appreciating the existing cooperation in this area, including through exchange of visits and best practices, both sides resolved to deepen cooperation on combating extremism and further strengthen their efforts in countering terrorism," it said.
The joint statement said both Modi and the Crown Prince "agreed that extremism and terrorism cannot be defeated by use of force only, and acknowledged the need for a holistic approach, which includes disrupting the use of web and social media for promotion of extremist and violent ideologies; preventing the use of religious centres to radicalise youth and recruit terrorist cadres; and promoting tolerance".
"The two leaders expressed strong condemnation of extremism and terrorism in all forms and manifestations, irrespective of who the perpetrators are and of their motivations.
"They reiterated their condemnation for efforts, including by states, to use religion to justify, support and sponsor terrorism against other countries, or to use terrorism as instrument of state policy."
The two leaders also expressed satisfaction at ongoing cooperation between India and the UAE in the identified areas of security, defence and space.
"They committed to augment this cooperation further to promote regional security, peace and prosperity and agreed to further deepen collaborations on maritime security, including joint anti-piracy, training and exercises, cyber space and outer space," the statement said.
The two sides also noted the growing defence cooperation "including through regular high-level visits, training programmes, joint exercises, participation in defence exhibitions and ship visits and port calls".
"The two sides renewed their commitment to work closely to strengthen maritime security in the Gulf and the Indian Ocean region, which is vital for the security and prosperity of both countries," the joint statement said..
Govt is working towards making exams less complicated to prevent cheating: Adityanath
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Uttar Pradesh Chief Minister Yogi Adityanath today said that his government will work towards making exams less complicated. Adityanath spoke in reference to the decision by nearly 10 lakh students to boycott exams after his government announced that it will make exams cheating free.
"10 lakh students in Uttar Pradesh refused to take exams after we spoke about making them cheating free. We will work towards making exams less complicated," said Adityanath during the launch of Prime Minister Narendra Modis book Exam Warriors in Delhi.
The Uttar Pradesh Madhyamik Shiksha Parishad (UPMSP) also known as Uttar Pradesh Secondary Education Board (UPSEB), started the Class 10 and Class 12 board exams 2018 on February 6.
However, it was reported that on the first day about 1.8 lakh students did not appear for the exams. The number of absentees rose to 5.05 lakh on the second day.
Officials from the government maintained that the number of absentees was because of the strict measures taken by Yogi Adityanath government to prevent cheating the exams. Incidentally, last year 1,862 students were caught cheating during exams.
UP GOVERNMENTS INITIATIVES AGAINST CHEATING IN EXAMS:
Deputy Chief Minister Dinesh Sharma said that the board will conduct exams under CCTV surveillance.
The board has made arrangements for extensive security in sensitive areas.
The number of exam centres has been reduced to 128 from 133 this year.
Phone numbers of 10 school owners were put under surveillance.
Strict action will be taken under the Uttar Pradesh Public Examination (Prevention of Unfair Means) Act, 1998.
"10 lakh students in Uttar Pradesh refused to take exams after we spoke about making them cheating free. We will work towards making exams less complicated," said Adityanath during the launch of Prime Minister Narendra Modis book Exam Warriors in Delhi.
The Uttar Pradesh Madhyamik Shiksha Parishad (UPMSP) also known as Uttar Pradesh Secondary Education Board (UPSEB), started the Class 10 and Class 12 board exams 2018 on February 6.
However, it was reported that on the first day about 1.8 lakh students did not appear for the exams. The number of absentees rose to 5.05 lakh on the second day.
Officials from the government maintained that the number of absentees was because of the strict measures taken by Yogi Adityanath government to prevent cheating the exams. Incidentally, last year 1,862 students were caught cheating during exams.
UP GOVERNMENTS INITIATIVES AGAINST CHEATING IN EXAMS:
Deputy Chief Minister Dinesh Sharma said that the board will conduct exams under CCTV surveillance.
The board has made arrangements for extensive security in sensitive areas.
The number of exam centres has been reduced to 128 from 133 this year.
Phone numbers of 10 school owners were put under surveillance.
Strict action will be taken under the Uttar Pradesh Public Examination (Prevention of Unfair Means) Act, 1998.
Business Affairs
Petrol price decreases for fifth consecutive day; but still above Rs 80 in Mumbai, Rs 73 in Delhi
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After touching a four-year high on February 6, petrol and diesel prices tumbled down by 37 paise and 60 paise in the past five days - and by 21 paise and 28 paise on Monday alone - as benchmark Brent crude oil price dropped by 63 cents on $63.42 per barrel. Due to an increase in output in the US, crude oil price settled at $59.83 per barrel in the US West Texas Intermediate (WTI).
On Monday, the petrol price in Delhi was Rs 73.01 per litre; Kolkata Rs 75.70; Mumbai Rs 80.87; and Chennai Rs 75.73. In the NCR, it was little higher than the national capital with Rs 73.77 in Faridabad; Rs 73.54 in Gurgram; Rs 74.6 in Noida; and Rs 74.49 in Ghaziabad. The Diesel price in metro cities was Rs 63.62 per litre in Delhi; Rs 66.29 in Kolkata; Rs 67.75 in Mumbai; and Rs 67.09 in Chennai. The diesel price was Rs 64.70 in Faridabad; Rs 64.48 in Gurugram; Rs 64.01 in Noida; and Rs 63.90 in Ghaziabad.
Major factors behind a sharp increase in crude oil price are speculation about the OPEC (Organisation of the Petroleum Exporting Countries) and non-member countries' plan to reduce production and higher output in the US.
The RBI's Monetary Policy Committee on February 7 said domestic pump prices of petrol and diesel rose sharply in January, reflecting lagged pass-through of the past increases in international crude oil prices. The RBI also said oil prices have moved both ways in the recent period and could potentially soften from current inflation levels based on production response.
On February 1, Finance Minister Arun Jaitley cut basic excise duty on petrol and diesel by Rs 2 and additionally abolished another Rs 6 excise duty on fuel. However, the minister then announced a new road cess of Rs 8 per litre, leading to no change in the petrol prices. Analysts suggest another excise cut would have put an additional burden on the fiscal deficit target, which the government couldn't afford considering the Lok Sabha elections scheduled for 2019. FM Jaitley on February 10 tried to settle fears around the rising oil prices, saying there's no need to worry about "fiscal slippage" due to unpredictable trend in crude oil price. Highlighting a decline in fuel prices in the past days, he said an assessment should not be made based on hypothetical situation.
There's been sharp rise in fuel price since October 2017. Though the government introduced Rs 2 per litre excise duty cut then, a production cut by major global oil producer countries led to a reversal in the trend.
Last week, Petroleum Minister Dharmendra Pradhan said in Parliament that though the centre reduced the excise duty on petrol and diesel by Rs 2 on October 3 last year, just four states and a Union Territory cut local sales tax or VAT on petrol and diesel even after the government requested all the states to do so, the minister said.
The states that reduced VAT following the October 3, 2017, cut in excise duty were Maharashtra, Gujarat, Madhya Pradesh and Himachal Pradesh. The BJP-led NDA government has reduced the excise duty only once in over four years of its rule, while it increased the same on nine occasions to take away the benefits of sliding international oil prices between late 2014 and January 2016.
On Monday, the petrol price in Delhi was Rs 73.01 per litre; Kolkata Rs 75.70; Mumbai Rs 80.87; and Chennai Rs 75.73. In the NCR, it was little higher than the national capital with Rs 73.77 in Faridabad; Rs 73.54 in Gurgram; Rs 74.6 in Noida; and Rs 74.49 in Ghaziabad. The Diesel price in metro cities was Rs 63.62 per litre in Delhi; Rs 66.29 in Kolkata; Rs 67.75 in Mumbai; and Rs 67.09 in Chennai. The diesel price was Rs 64.70 in Faridabad; Rs 64.48 in Gurugram; Rs 64.01 in Noida; and Rs 63.90 in Ghaziabad.
Major factors behind a sharp increase in crude oil price are speculation about the OPEC (Organisation of the Petroleum Exporting Countries) and non-member countries' plan to reduce production and higher output in the US.
The RBI's Monetary Policy Committee on February 7 said domestic pump prices of petrol and diesel rose sharply in January, reflecting lagged pass-through of the past increases in international crude oil prices. The RBI also said oil prices have moved both ways in the recent period and could potentially soften from current inflation levels based on production response.
On February 1, Finance Minister Arun Jaitley cut basic excise duty on petrol and diesel by Rs 2 and additionally abolished another Rs 6 excise duty on fuel. However, the minister then announced a new road cess of Rs 8 per litre, leading to no change in the petrol prices. Analysts suggest another excise cut would have put an additional burden on the fiscal deficit target, which the government couldn't afford considering the Lok Sabha elections scheduled for 2019. FM Jaitley on February 10 tried to settle fears around the rising oil prices, saying there's no need to worry about "fiscal slippage" due to unpredictable trend in crude oil price. Highlighting a decline in fuel prices in the past days, he said an assessment should not be made based on hypothetical situation.
There's been sharp rise in fuel price since October 2017. Though the government introduced Rs 2 per litre excise duty cut then, a production cut by major global oil producer countries led to a reversal in the trend.
Last week, Petroleum Minister Dharmendra Pradhan said in Parliament that though the centre reduced the excise duty on petrol and diesel by Rs 2 on October 3 last year, just four states and a Union Territory cut local sales tax or VAT on petrol and diesel even after the government requested all the states to do so, the minister said.
The states that reduced VAT following the October 3, 2017, cut in excise duty were Maharashtra, Gujarat, Madhya Pradesh and Himachal Pradesh. The BJP-led NDA government has reduced the excise duty only once in over four years of its rule, while it increased the same on nine occasions to take away the benefits of sliding international oil prices between late 2014 and January 2016.
Essar Steel insolvency: Ruia family-backed Numetal, ArcelorMittal top bidders
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The deadline for submitting bids for the beleaguered Essar Steel, put up for sale under Insolvency and Bankruptcy Code (IBC), ends today and it's reportedly looking like a tug of war between the Ruias and L.N. Mittal, though Tata Steel is also expected to enter the fray.
Yes, the government has amended the Insolvency and Bankruptcy Code (IBC) to prevent promoters of defaulting companies to bid for stressed assets. Yes, Essar Steel, with over Rs 43,000 crore of debt on its books, was among the initial 12 companies identified by the RBI for insolvency proceedings and was controlled by siblings Shashi and Ravi Ruia. And yes, ArcelorMittal was a shareholder in Uttam Galva, which was taken to the National Company Law Tribunal in April last year after defaulting on Rs 110 crore loans. But the parties involved seem to have found neat solutions to stay eligible to bid.
Last week, according to The Economic Times, L.N. Mittal-led ArcelorMittal cashed out of its investment in Uttam Galva-at a loss-to avoid any last-minute controversy and has joined hands with Japanese giant Nippon for the bid. The Ruia family got a lot more creative and has pinned its hopes on a special purpose vehicle, Numetal Mauritius, in which leading Russian bank VTB is the largest shareholder followed by Russia's Tyazprom Export, a construction engineering and management consulting company that specialises in steelworks. Rewant Ruia, son of Essar cofounder Ravi Ruia, is the minority partner, the shareholding held via a Singapore-based trust. Sources close to Essar told the business daily that since the Ruias are a minority partner, the Numetal bid will not be in violation of the IBC's related party clauses.
Tata Steel, the other potential contender, is widely expected to be less aggressive than these two, while Vedanta and JSW are unlikely to submit binding offers. Satish Kumar Gupta of Alvarez and Marsal (A&M) is the resolution professional (RP) appointed to oversee Essar Steel.
Though the liquidation value has reportedly been fixed at Rs 20,000 crore, the Numetal bid is expected to be in the range of Rs 35,000-40,000 crore. But that's no shoo-in since the world's largest steelmaker, ArcelorMittal, is widely expected to be as aggressive. Mittal has wanted to build a steel plant in the country since 2005 but has been repeatedly thwarted by regulatory hassles. Essar's 10 million tonne steel plant in Hazira, Gujarat-India's largest single-location flat steel plant-will fit neatly into the company's plan to create a sizable footprint in the Rs 3.15 lakh crore Indian steel market. The Ruias, meanwhile, will not want to let go of their hold at a time when steel prices have shot up 15% in the past seven to eight months. Moreover, according to the World Steel Association, steel production in India is projected to grow at 7.1% in 2018, the highest rate among the top 10 steel-using countries.
One hopes that the bidding war does not see the IBC amendment get creatively thwarted, because that will only open the floodgates for other defaulting promoters to get back in on the action.
Yes, the government has amended the Insolvency and Bankruptcy Code (IBC) to prevent promoters of defaulting companies to bid for stressed assets. Yes, Essar Steel, with over Rs 43,000 crore of debt on its books, was among the initial 12 companies identified by the RBI for insolvency proceedings and was controlled by siblings Shashi and Ravi Ruia. And yes, ArcelorMittal was a shareholder in Uttam Galva, which was taken to the National Company Law Tribunal in April last year after defaulting on Rs 110 crore loans. But the parties involved seem to have found neat solutions to stay eligible to bid.
Last week, according to The Economic Times, L.N. Mittal-led ArcelorMittal cashed out of its investment in Uttam Galva-at a loss-to avoid any last-minute controversy and has joined hands with Japanese giant Nippon for the bid. The Ruia family got a lot more creative and has pinned its hopes on a special purpose vehicle, Numetal Mauritius, in which leading Russian bank VTB is the largest shareholder followed by Russia's Tyazprom Export, a construction engineering and management consulting company that specialises in steelworks. Rewant Ruia, son of Essar cofounder Ravi Ruia, is the minority partner, the shareholding held via a Singapore-based trust. Sources close to Essar told the business daily that since the Ruias are a minority partner, the Numetal bid will not be in violation of the IBC's related party clauses.
Tata Steel, the other potential contender, is widely expected to be less aggressive than these two, while Vedanta and JSW are unlikely to submit binding offers. Satish Kumar Gupta of Alvarez and Marsal (A&M) is the resolution professional (RP) appointed to oversee Essar Steel.
Though the liquidation value has reportedly been fixed at Rs 20,000 crore, the Numetal bid is expected to be in the range of Rs 35,000-40,000 crore. But that's no shoo-in since the world's largest steelmaker, ArcelorMittal, is widely expected to be as aggressive. Mittal has wanted to build a steel plant in the country since 2005 but has been repeatedly thwarted by regulatory hassles. Essar's 10 million tonne steel plant in Hazira, Gujarat-India's largest single-location flat steel plant-will fit neatly into the company's plan to create a sizable footprint in the Rs 3.15 lakh crore Indian steel market. The Ruias, meanwhile, will not want to let go of their hold at a time when steel prices have shot up 15% in the past seven to eight months. Moreover, according to the World Steel Association, steel production in India is projected to grow at 7.1% in 2018, the highest rate among the top 10 steel-using countries.
One hopes that the bidding war does not see the IBC amendment get creatively thwarted, because that will only open the floodgates for other defaulting promoters to get back in on the action.
SBI reports divergence of Rs 23,239 crore, joining likes of HDFC Bank, Axis Bank, Yes Bank
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Last Friday, the State Bank of India, the country's largest bank, reported its first quarterly loss in 17 years, shocking analysts who were busy predicting profits of over Rs 2,000 crore.
"Worse, the bank reported that it had misreported its FY2017 accounts; its net profits should have been lower by 36% and its gross non-performing assets (NPAs) higher by 21%," writes Smartkarma Insight Provider Hemindra Hazari in a recent report.
SBI, which accounts for more than a fifth of India's banking assets, admitted that a RBI audit of its books for the past financial year (2016-17) led to the addition of Rs 23,239 crore in its bad loans. With this, SBI joins the ranks of private banks like Yes Bank and Axis Bank reporting NPA divergence.
To remind you, Indian banks have to disclose such discrepancies should the difference between its reported numbers and the apex bank's risk assessment report findings exceed 15%. The only consolation for India's premier state-run bank is that its gross NPA percentage variance "was the lowest as compared with the other banks who had mis-reported their NPAs," adds Hazari. Yes Bank, last year, had reported divergence or under-reporting of Rs 6,355 crore.
Last year, eyebrows were raised when HDFC Bank, one of the world's most expensive banks in terms of price-to-book-value-and, recently, the first Indian bank to cross the Rs 5-lakh crore market capitalisation-reported NPA divergence of 35% in three accounts amounting to Rs 2,051 crore as on March 2017.
Bad loans have nearly doubled in the past four years as an economic slowdown took its toll on the ability of companies to repay debt, exacerbated in the case of some banks which analysts said had expanded lending too fast. And the bulk of India's Rs 9.46 lakh crore in bad loans at the end of September 2017 were held by 21 state banks.
Of course, divergence is not a new phenomenon, but as RBI Deputy Governor NS Vishwanathan recently pointed out, what's changed is the mandatory disclosure of the gaps. As part of tighter asset classification norms that came into effect from 2016, the regulator has also sought to reclassify loans given by a consortium as non-performing for all the lenders involved if it was considered non-performing on the books of one of them. This could explain the recent spike in divergence figures. But the NPA problem shows no signs of disappearing, going by the Q3 figures posted by banks.
One issue that sell-side analysts seem to be ignoring is the possibility of future NPAs coming from retail loans, which the entire banking industry is aggressively growing to outrun their corporate NPAs. "The issue is that India's prolonged economic stagnation coupled with the twin blows of demonetisation and GST has impacted the informal sector. In addition, there are job losses on account of automation in the IT and ITES sector and problems in the telecom sector have also added to the retrenchment of labour," says Hazari, adding that "In such a climate retail loans are also likely to become NPAs and presently, gross NPAs in retail are low. Asset quality issues will, therefore, continue to haunt the sector."
The elephant in the sector-SBI-likewise is likely to remain in distress in the near future. Its share price reportedly fell 2% over the weekend to Rs 289.70 currently, extending this year's drop to over 6%.
Siddharth Purohit, a sector analyst at SMC Institutional Equities, says that "at least the next two quarters will remain challenging" not just for SBI but for most other banks "of the provisions for the bankruptcy cases"
"Worse, the bank reported that it had misreported its FY2017 accounts; its net profits should have been lower by 36% and its gross non-performing assets (NPAs) higher by 21%," writes Smartkarma Insight Provider Hemindra Hazari in a recent report.
SBI, which accounts for more than a fifth of India's banking assets, admitted that a RBI audit of its books for the past financial year (2016-17) led to the addition of Rs 23,239 crore in its bad loans. With this, SBI joins the ranks of private banks like Yes Bank and Axis Bank reporting NPA divergence.
To remind you, Indian banks have to disclose such discrepancies should the difference between its reported numbers and the apex bank's risk assessment report findings exceed 15%. The only consolation for India's premier state-run bank is that its gross NPA percentage variance "was the lowest as compared with the other banks who had mis-reported their NPAs," adds Hazari. Yes Bank, last year, had reported divergence or under-reporting of Rs 6,355 crore.
Last year, eyebrows were raised when HDFC Bank, one of the world's most expensive banks in terms of price-to-book-value-and, recently, the first Indian bank to cross the Rs 5-lakh crore market capitalisation-reported NPA divergence of 35% in three accounts amounting to Rs 2,051 crore as on March 2017.
Bad loans have nearly doubled in the past four years as an economic slowdown took its toll on the ability of companies to repay debt, exacerbated in the case of some banks which analysts said had expanded lending too fast. And the bulk of India's Rs 9.46 lakh crore in bad loans at the end of September 2017 were held by 21 state banks.
Of course, divergence is not a new phenomenon, but as RBI Deputy Governor NS Vishwanathan recently pointed out, what's changed is the mandatory disclosure of the gaps. As part of tighter asset classification norms that came into effect from 2016, the regulator has also sought to reclassify loans given by a consortium as non-performing for all the lenders involved if it was considered non-performing on the books of one of them. This could explain the recent spike in divergence figures. But the NPA problem shows no signs of disappearing, going by the Q3 figures posted by banks.
One issue that sell-side analysts seem to be ignoring is the possibility of future NPAs coming from retail loans, which the entire banking industry is aggressively growing to outrun their corporate NPAs. "The issue is that India's prolonged economic stagnation coupled with the twin blows of demonetisation and GST has impacted the informal sector. In addition, there are job losses on account of automation in the IT and ITES sector and problems in the telecom sector have also added to the retrenchment of labour," says Hazari, adding that "In such a climate retail loans are also likely to become NPAs and presently, gross NPAs in retail are low. Asset quality issues will, therefore, continue to haunt the sector."
The elephant in the sector-SBI-likewise is likely to remain in distress in the near future. Its share price reportedly fell 2% over the weekend to Rs 289.70 currently, extending this year's drop to over 6%.
Siddharth Purohit, a sector analyst at SMC Institutional Equities, says that "at least the next two quarters will remain challenging" not just for SBI but for most other banks "of the provisions for the bankruptcy cases"
IIP shrinks to 7.1% in December 2017 after hitting 25-month high in November
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The Index of Industrial Production (IIP) data released by the CSO (Central Statistics Office) for December 2017 says the industrial production grew 3.7 per cent in April-December 2017, which is down from 5.1 per cent in the corresponding period a year ago. The General Index for December 2017 stands at 130.3, which is 7.1 per cent higher as compared to the level in December 2016. The manufacturing of 'transport equipment' recorded highest growth as compared to the corresponding previous year period, while the tobacco production showed the highest negative growth. The IIP data for November, which was released in January, had registered the industrial production growth to 25-month high of 8.4 per cent.
The IIP for the mining, manufacturing and electricity sectors for December stand at 115.5, 131.6 and 143.9, respectively, with the corresponding growth rates of 1.2 per cent, 8.4 per cent and 4.4 per cent as compared to December 2016. The cumulative growth in these three sectors during April-December 2017 over the corresponding period of 2016 has been 2.8 per cent, 3.8 per cent and 5.1 per cent, respectively.
In terms of industries, 16 out of the 23 industry groups in the manufacturing sector have shown positive growth in December 2017 as compared to the corresponding month of the previous year.
The industry group 'Manufacture of other transport equipment' showed the highest positive growth of 38.3 per cent followed by 33.6 per cent in 'Manufacture of pharmaceuticals, medicinal chemical and botanical products' and 29.8 per cent in 'Manufacture of computer, electronic and optical products'.
The industry group 'Manufacture of tobacco products' has shown the highest negative growth of (-) 28.2 per cent followed by (-) 22.3 per cent in 'Other manufacturing' and (-) 14.9 per cent in 'Manufacture of electrical equipment'.
Apart from releasing the quick estimates of the IIP for December 2017, the CSO also released the first revised estimates for the indices for November 2017 and September 2017.
The IIP for the mining, manufacturing and electricity sectors for December stand at 115.5, 131.6 and 143.9, respectively, with the corresponding growth rates of 1.2 per cent, 8.4 per cent and 4.4 per cent as compared to December 2016. The cumulative growth in these three sectors during April-December 2017 over the corresponding period of 2016 has been 2.8 per cent, 3.8 per cent and 5.1 per cent, respectively.
In terms of industries, 16 out of the 23 industry groups in the manufacturing sector have shown positive growth in December 2017 as compared to the corresponding month of the previous year.
The industry group 'Manufacture of other transport equipment' showed the highest positive growth of 38.3 per cent followed by 33.6 per cent in 'Manufacture of pharmaceuticals, medicinal chemical and botanical products' and 29.8 per cent in 'Manufacture of computer, electronic and optical products'.
The industry group 'Manufacture of tobacco products' has shown the highest negative growth of (-) 28.2 per cent followed by (-) 22.3 per cent in 'Other manufacturing' and (-) 14.9 per cent in 'Manufacture of electrical equipment'.
Apart from releasing the quick estimates of the IIP for December 2017, the CSO also released the first revised estimates for the indices for November 2017 and September 2017.
Sensex closes 294 points higher at 34,300, Nifty above 10,500 level; Tata Steel, YES Bank, PowerGrid top gainers
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The Sensex and Nifty closed higher today with European markets trading in the green after Asian stocks ended in positive territory. The week-long rout in global stocks seems to have ended after US markets closed higher on Friday. While Dow Jones ended 1.38% or 330 points higher, Nasdaq rose 1.44% to 97.332 level. The Sensex, which fell 407 points on Friday, rose as much as 346 points intra day to 34,351 level today. The Nifty closed above the key 10,500 mark.
Also read: SBI stock closes 2.67% lower as bad loans rise in Q3
Sensex and Nifty had fallen nearly 3 percent last week, hit by a global market rout. Worries about a new 10 percent long-term capital gains tax and fears of a central bank rate hike added to the woes.
Sentiment is expected to remain wobbly, analysts said, though sectors seen as "undervalued" are likely to attract demand.
Data for index of industrial production (IIP) for December and consumer price inflation for January are due to be released today. The figures may impact the course of market when it reopens on Wednesday. Market will remain closed on account of Mahashivratri on Tuesday.
On Monday, the Sensex rebounded by 294 points to close at 34,300 level. The Nifty too closed 84 points higher at 10,539 level.
While the midcap index closed 217 points higher at 16,852 level, the small cap index rose 290 points to 18,463 points.
Tata Steel (4.22%) , YES Bank (2.89%) and PowerGrid (2.51%) were the top gainers on Sensex.
SBI which reported its Q3 earnings on Friday was the top Sensex loser. The lender posted a massive Rs 2,416.37-crore net loss for the December quarter of current fiscal as its bad loans and provisions spiked. The lender, in contrast, reported net profit of Rs 2,610 crore for the October-December quarter of the last fiscal, 2016-17. The stock closed 2.67% lower at 288 level.
Shares of Oil and Natural Gas Corp Ltd jumped as much as 3.8 pct to Rs 194.5, after a consortium led by ONGC won a stake in Abu Dhabi National Oil Co's (ADNOC) 40-year offshore oil concession. The stock closed 1.65% lower at 190 level on BSE.
On the sectoral front, top gainers were BSE capital goods (317 points or 1.65%) and auto stocks (266 points or 1.06%).
The BSE healthcare index too recovered 169 points or 1.18% to 14,517 level.
"Pharma was one of the oversold and underowned sector," said Gaurang Shah, head investment strategist, Geojit Financial Services, noting that the earnings outlook for the sector is expected to improve.
"Attraction is back into pharma stocks," he added.
Market breadth was positive with 2033 stocks closing higher against 770 ending lower on BSE.
Global markets
European shares rebounded from six-month lows on Monday as jitters over a sudden spike in volatility that wiped off $1 trillion in market capitalization last week appeared to ease.
Gains in all sectors helped the pan-European STOXX 600 index rise 1.2 percent by 0812 GMT, after ending at its lowest level since August on Friday. The UK's FTSE and Germany's DAX also rose more than 1 percent.
A higher Friday close for New York stocks following a week of "vol" induced selling, lifted markets in Asia and Europe, helping MSCI's all-country index 0.5 percent while European shares were 1.5 percent higher.
Wall Street's equity volatility gauge, the VIX - the spike in which had kicked off the ructions - was at 25.5 percent shortly after opening, versus Friday's 29 percent close.
Also read: SBI stock closes 2.67% lower as bad loans rise in Q3
Sensex and Nifty had fallen nearly 3 percent last week, hit by a global market rout. Worries about a new 10 percent long-term capital gains tax and fears of a central bank rate hike added to the woes.
Sentiment is expected to remain wobbly, analysts said, though sectors seen as "undervalued" are likely to attract demand.
Data for index of industrial production (IIP) for December and consumer price inflation for January are due to be released today. The figures may impact the course of market when it reopens on Wednesday. Market will remain closed on account of Mahashivratri on Tuesday.
On Monday, the Sensex rebounded by 294 points to close at 34,300 level. The Nifty too closed 84 points higher at 10,539 level.
While the midcap index closed 217 points higher at 16,852 level, the small cap index rose 290 points to 18,463 points.
Tata Steel (4.22%) , YES Bank (2.89%) and PowerGrid (2.51%) were the top gainers on Sensex.
SBI which reported its Q3 earnings on Friday was the top Sensex loser. The lender posted a massive Rs 2,416.37-crore net loss for the December quarter of current fiscal as its bad loans and provisions spiked. The lender, in contrast, reported net profit of Rs 2,610 crore for the October-December quarter of the last fiscal, 2016-17. The stock closed 2.67% lower at 288 level.
Shares of Oil and Natural Gas Corp Ltd jumped as much as 3.8 pct to Rs 194.5, after a consortium led by ONGC won a stake in Abu Dhabi National Oil Co's (ADNOC) 40-year offshore oil concession. The stock closed 1.65% lower at 190 level on BSE.
On the sectoral front, top gainers were BSE capital goods (317 points or 1.65%) and auto stocks (266 points or 1.06%).
The BSE healthcare index too recovered 169 points or 1.18% to 14,517 level.
"Pharma was one of the oversold and underowned sector," said Gaurang Shah, head investment strategist, Geojit Financial Services, noting that the earnings outlook for the sector is expected to improve.
"Attraction is back into pharma stocks," he added.
Market breadth was positive with 2033 stocks closing higher against 770 ending lower on BSE.
Global markets
European shares rebounded from six-month lows on Monday as jitters over a sudden spike in volatility that wiped off $1 trillion in market capitalization last week appeared to ease.
Gains in all sectors helped the pan-European STOXX 600 index rise 1.2 percent by 0812 GMT, after ending at its lowest level since August on Friday. The UK's FTSE and Germany's DAX also rose more than 1 percent.
A higher Friday close for New York stocks following a week of "vol" induced selling, lifted markets in Asia and Europe, helping MSCI's all-country index 0.5 percent while European shares were 1.5 percent higher.
Wall Street's equity volatility gauge, the VIX - the spike in which had kicked off the ructions - was at 25.5 percent shortly after opening, versus Friday's 29 percent close.
General Awareness
Separation of powers between various organs dispute redressal mechanisms and institutions.
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Context: The Supreme Court has paved the way for appointment of chairpersons, judicial and others members of all 19 tribunals including CAT and NGT that were stalled due to pendency of pleas challenging the 2017 Finance Act and the rules governing the panels.
Background:
The Finance Act and the Tribunal, Appellate and other Authorities (Qualifications, Experience and other conditions of Service of Members) Rules, which govern appointments, tenure, removal and other service conditions of chairpersons and members of tribunals, had been challenged on grounds including that they gave more powers to the executive and interfered with the judicial independence of the panels.
Interim arrangement:
The court has asked the government to form an interim search-cum-selection committee during the pendency of the petitions to appoint judicial and administrative members in tribunals. The search panel would be headed by the CJI or his nominee. The chairpersons of tribunals to which appointments will be made and two secretaries, nominated by the central government, would be the members of the committee.
Appointment to the post of chairman (of tribunals) will be made by nomination by the CJI. All appointments to be made pursuant to the selection made by the interim search-cum-selection committee shall abide by the conditions of service as per the old Acts and the Rules.
What’s the main concern now?
Tribunals, Appellate Tribunals and Other Authorities (qualifications, experience and other conditions of service of members) Rules, 2017’, framed under the Finance Act, provides that the search-cum-selection committee to select its administrative members will be headed by a nominee of the central government. Earlier, the Chief Justice of India (CJI) or his nominee had a role in the selection of administrative members of CAT.
It is argued that the new law would destroy independent functioning of tribunals as they give primacy to the executive in deciding the constitution, qualifications of members, their appointments and removal.
Facts for Prelims: About CAT:
The Central Administrative Tribunal was established by an Act of Parliament namely Administrative Tribunals Act, 1985 as sequel to the 42nd amendment of the Constitution of India inserting Article 323 A. The Principal seat of Central Administrative Tribunal is at New Delhi and it has 16 Outlying Benches scattered all over the Country.
The tribunal adjudicates disputes and complaints with respect to Recruitment and Conditions of Service of the persons appointed to the Public Services and Posts in connection with the affairs of the Union or any State or of any other Local Authorities within the territory of India or under the control of the Government of India.
The Tribunal is headed by the Chairman and 65 Members, 33 from Judicial (including Chairman) and 33 from the Administrative stream. The Chairman is normally a retired Chief Justice of a High Court.
Background:
The Finance Act and the Tribunal, Appellate and other Authorities (Qualifications, Experience and other conditions of Service of Members) Rules, which govern appointments, tenure, removal and other service conditions of chairpersons and members of tribunals, had been challenged on grounds including that they gave more powers to the executive and interfered with the judicial independence of the panels.
Interim arrangement:
The court has asked the government to form an interim search-cum-selection committee during the pendency of the petitions to appoint judicial and administrative members in tribunals. The search panel would be headed by the CJI or his nominee. The chairpersons of tribunals to which appointments will be made and two secretaries, nominated by the central government, would be the members of the committee.
Appointment to the post of chairman (of tribunals) will be made by nomination by the CJI. All appointments to be made pursuant to the selection made by the interim search-cum-selection committee shall abide by the conditions of service as per the old Acts and the Rules.
What’s the main concern now?
Tribunals, Appellate Tribunals and Other Authorities (qualifications, experience and other conditions of service of members) Rules, 2017’, framed under the Finance Act, provides that the search-cum-selection committee to select its administrative members will be headed by a nominee of the central government. Earlier, the Chief Justice of India (CJI) or his nominee had a role in the selection of administrative members of CAT.
It is argued that the new law would destroy independent functioning of tribunals as they give primacy to the executive in deciding the constitution, qualifications of members, their appointments and removal.
Facts for Prelims: About CAT:
The Central Administrative Tribunal was established by an Act of Parliament namely Administrative Tribunals Act, 1985 as sequel to the 42nd amendment of the Constitution of India inserting Article 323 A. The Principal seat of Central Administrative Tribunal is at New Delhi and it has 16 Outlying Benches scattered all over the Country.
The tribunal adjudicates disputes and complaints with respect to Recruitment and Conditions of Service of the persons appointed to the Public Services and Posts in connection with the affairs of the Union or any State or of any other Local Authorities within the territory of India or under the control of the Government of India.
The Tribunal is headed by the Chairman and 65 Members, 33 from Judicial (including Chairman) and 33 from the Administrative stream. The Chairman is normally a retired Chief Justice of a High Court.
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