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Govt Seeks Consultation With RBI, India Ranks 77 on 'Ease of Doing Business Index' et al

Professor of Financial Economics and Part-time Value Investor, Transfin.
Oct 31, 2018 1:44 PM 3 min read
Editorial

Good evening reader, 

 

Our recent avoidance of IL&FS has been deliberate.

 

Why?

 

Well...in the beginning we were obsessed by it. But as it kept on building and building to finally implode, the principal of negative marginal utility kicked-in. So we stayed quiet.

 

However, folks at JM Financial Consultants, Arpwood Capital and Alvarez & Marsal - IL&FS's financial and restructuring advisors - have been busy non-stop, most likely burning the midnight oil to prepare the much awaited resolution plan (originally scheduled to be presented today).

 

Sitting on a debt of $12.6bn, spanning 350 plus subsidiaries, a successful deal would be an investment banker's delight. Core and non-core businesses would be identified. Hidden synergies would mysteriously appear. Multiple structures. Multiple transactions. Multiple fees?

 

Anything to make the transaction look 'viable'.

 

Now that will get our attention. More to come as it plays out.

 

After all, you don't serve the fish before frying.

 

Moving on to today’s Top 6 Business Stories in our End Of Day Wrap Up:

 

INDIA

 

Government seeks consultation with RBI, autonomy of regulator in question.

As per a Business Standard report, the government has written letters to the Reserve Bank of India (RBI) seeking discussions under provisions of Section 7 of the RBI Act.

Section 7, if invoked, empowers the government to instruct the Reserve Bank, in a way reducing its independence. RBI Governor Urjit Patel has called for a Board meeting on November 19 to discuss ongoing differences of opinion with regard to Public Sector Banks (PSBs), tightening liquidity in NBFC market etc.

 

L&T Q2 profits exceed estimates, surge c. 23% y-o-y.

Larsen & Toubro reported c. 23% y-o-y growth in profit, amounting to INR2,230cr. Gross revenue stood at INR32,081cr, listing 21% yearly growth, on back of ‘better execution of project businesses, growth in service businesses and recognition of revenue on completed performances’.

 

India ranks 77 out of 190 countries (vs 100 last yr) in World Bank's 'Ease Of Doing Business' Index, jumps 23 spots.

India has improved its rank in 6 out of the 10 indicators and has moved closer to international best practices on 7 out of 10 indicators. The most substantial improvements have been observed in indicators related to 'Construction Permits' and 'Trading Across Borders'. 

 

SEBI not in support of NSE-MCX merger on back of co-location investigation.

Securities and Exchange Board of India (SEBI) is not in favor of the proposed merger between National Stock Exchange (NSE) and Multi Commodity Exchange (MCX) due to the pending investigation of NSE’s co-location matter.

The securities regulator is of the view that the merger could lead to indirect listing of the NSE.

 

US/INTERNATIONAL

 

EU launches probe into Tata-ThyssenKrupp steel merger.

ThyssenKrupp Tata Steel, the venture of Tata and Germany-based ThyssenKrupp, is facing an investigation by the European Union, as the Commission believes that this merger could result in market dominance and would reduce competition in the industry.

The firm would become the second largest steel maker in Europe, after AcelorMittal.

 

Facebook reports revenue of $13.7bn, shares wobble on mixed earnings report.

Facebook beat estimates of its earnings per share at $1.76, but fell short on revenue, daily and monthly active users estimates. The company, as per Mark Zuckerberg, plans to spend more to build new products like Facebook Watch, Instagram TV etc.

 

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