Chandrayaan 2 Update, Air India Likely to Break Even in FY20, India Manufacturing Growth at 15m Low

Chandrayaan 2 performs one of its final manoeuvres, all set to land on the moon. India could become the first country to use AI for tax assessment. Air India likely to break even in FY20 for the first time in over a decade. Mahindra & Mahindra to acquire 55% stake in Meru Cabs. Last month, India’s manufacturing PMI grew at its slowest pace in 15 months. China’s PMI barely moves as trade war drags exports down. Govt planning to sell its entire stake in BPCL worth INR40,000cr. Global oil prices weaken as US and China’s new tariffs come into force.

 

Moving on to the top Business news of the day:

 
 INDIA 

Chandrayaan 2 performs one of its final manoeuvres, all set to land on the moon. India could become the first country to use AI for tax assessment.
 
 
Lunar Update: At 1:15pm today, the Chandrayaan 2 composite (orbiter + lander + rover) separated in one of the final manoeuvres before the mission soft-lands on the South Pole of the moon. The orbiter was separated from the lander and rover and placed in a course around the moon at a distance of 100km from the surface. Meanwhile, the latter two will prepare to perform the landing on September 7.
 
 
When Tax Met Tech: According to government sources, the Finance Ministry will roll out an AI and machine learning apparatus in the tax assessment process to spot discrepancies, the first country to do so. Opinions on the move are divided, however. While some think it will improve accuracy and efficiency of the system, others think its implementation could be hasty and thus counterproductive. More details here.
 
 COMPANIES 
 
 
Air India likely to break even in FY20 for the first time in over a decade. Mahindra & Mahindra to acquire 55% stake in Meru Cabs.
 
 
Air India Rising: It’s a once-in-a-decade occurrence. State-run national carrier Air India is likely to break even in FY20, for the first time in over ten years. If not, it could run with a small loss at the net level. If issues regarding debt and labour are addressed, the airline could also become lucrative for prospective buyers and act as a positive foundation for its disinvestment. This is as per a recent report by CAPA India.
 
 
Make Meru: Mahindra & Mahindra will reportedly be making a primary investment of INR103.5cr in ride hailing company Meru Cabs. This would mean the former would acquire a 55% stake in Meru and its subsidiaries. The deal would be finalised after  making customary closing adjustments. If so, Meru’s largest shareholder True North’s stake will decrease to 35% from 80%.
 
 
 
 MANUFACTURING 

Last month, India’s manufacturing PMI grew at its slowest pace in 15 months. China’s PMI barely moves as trade war drags exports down.
 

Down and Downer: India’s manufacturing PMI didn’t manufacture much expansion in August. The pace of demand and output growth was the slowest in 15 months, the Nikkei Manufacturing Purchasing Managers’ Index showed.
 
 
By declining to 51.4 from July’s 52.5, the Index registered its lowest growth since May 2018.The silver lining is that it remains above the 50-mark line that separates growth and contraction.
 
 
Moving on to the Middle Kingdom: Even as cost pressures hurt India’s PMI, the trade war drags China’s. Two surveys – by Caixin and China Federation of Logistics & Purchasing – reported lacklustre activity. However, while the former survey pointed to “renewed improvement”, the latter showed a declining PMI on account of “relatively weak” market demand. 
 
 
 OIL 

Govt planning to sell its entire stake in BPCL worth INR40,000cr. Global oil prices weaken as US and China’s new tariffs come into force.
 
 
Sell Our Stakes: In a move that could go a long way in meeting its disinvestment target of INR1.05tr, the government is planning to sell its INR40,000cr-worth stake in Bharat Petroleum Corporation (BPCL). BPCL has a market capitalisation above INR77,000cr; the government owns 53.29% of it.
 
 
Two options are being considered. One: privatise BPCL by selling it to a non-PSU. Two: merging BPCL with the Indian Oil Corporation.
 
 

Oil Be Right Here Waiting for Demand to Rise Again: As the new tariffs imposed by the US and China came into force, oil prices slipped as global growth and demand concerns rise. Brent crude slipped 0.4% while US oil fell by 2 cents.
 
 
 
 WORLD 

Vote along Party lines or face expulsion, Boris Johnson warns Conservative MPs. US sanctions have choked Iran’s crude oil exports, but oil product sales remain strong.
 
 
Oh Brexit: The Brexit monster continues to eat into British politics. Following his controversial decision to prorogue Parliament for 23 days so as to give Parliamentarians less time to stop a no-deal Brexit or debate on any deal that could be finalised in coming weeks, PM Boris Johnson has warned Conservative MPs against backing legislation that could put a no-deal exit off the table. Doing so, the PM said, would mean expulsion from the Party.
 
 
The Opposition is mulling over legislation that seeks an extension from the EU beyond the October 31 deadline. This is likely to be voted on tomorrow (Tuesday), after which MPs will be off for over three weeks. At the same time, senior Cabinet ministers have hinted that even if such a law was to be passed, the government would ignore it i.e. Britain would break its ties with Brussels on October 31 come what may.
 
 
From London to Tehran: US sanctions have cut Iran’s crude oil exports by more than 80%, cutting off a major source of income for the OPEC member. At the same time, the Islamic Republic’s oil product sales remain strong, bringing in c. $500mn every month. These products include fuel oil used for power generation and shipping in addition to LPG used as cooking gas and petrochemical feed.
 
 
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