Mukesh Ambani invests Rs 12,725 cr in gas pipeline firm RGTIL

Billionaire Mukesh Ambani has invested Rs 12,725 crore more in his unlisted gas pipeline company, Reliance Gas and Transportation Infrastructure (RGTIL), by way of share capital and unsecured loans, helping the loss-making firm’s net worth turn positive at Rs 877 crore in 2016-17 from a negative net worth of Rs 2,519 crore in the previous financial year.

The company, which transports gas from the Andhra Pradesh coast to its clients in western India, is making huge losses as gas production from Reliance Industries’ Krishna-Godavari (KG) basin in the Bay of Bengal has declined.

In its regulatory filings, RGTIL said a continued fall in gas production from the KG basin resulted in lower capacity utilisation of pipeline and consequent losses and erosion in net worth. “In order to meet the external debt obligations, promoters have provided funds by way of optionally convertible preference shares and unsecured loans to the tune of Rs 12,725 crore as on March this year, due to which the net worth of the company has become positive,” it said.
While the company is privately held by Mukesh Ambani-controlled firms, its fortunes are tied to production from RIL’s gas fields.

RGTIL said its long-term prospects had improved considering increased exploration activities in the KG basin and expected commissioning of LNG terminals. The company made lower net loss of Rs 391 crore in 2016-17 (FY17), compared to a loss of Rs 1,736 crore reported in the 2015-16 (FY16). The company’s finance costs fell by 31.6% to Rs 1,054 crore from Rs 1,540 crore.

The company’s revenues from operations declined 21.8% from Rs 1,050 crore to Rs 821 crore in the same period. However, its other income tripled from Rs 125 crore in FY16 to Rs 377 crore in FY17.

With fresh infusion of capital, the company’s debt reduced by a fifth to Rs 13,160 crore as on March 2017 as compared to Rs 16,240 crore reported in FY16.

RGTIL’s 1400-km pipeline has the capacity to transport up to 85 million metric standard cubic metre per day (mmscmd) of natural gas. The ramp-up in transportation will depend on the extent of increase in production by RIL and gas production by other discoverers, ratings firm Crisil said last month, while giving it the top rating.

Mukesh Ambani invests Rs 12,725 cr in gas pipeline firm RGTIL

Jio effect: Tata Tele’s net worth erodes by Rs 11,650 cr

The woes of Tata Teleservices continue to mount with its net worth eroding by Rs 11,653 crore at the end of the financial year ended March 2017, on rising losses and interest payments.

The company announced a loss of Rs 4,617 crore for FY17, compared to a loss of Rs 2,023 crore in FY16. This is a bad news for its promoter, Tata Sons, which will have to keep investing in the company’s equity so that it can meet its liabilities, bankers said. But, the company’s debt stood reduced almost five per cent from Rs 30,192 crore in FY16 to Rs 28,766 crore in FY17.

Because of the price war in telecom spurred by the entry of Reliance Jio, the Tata group company’s turnover declined to Rs 9,419 crore in FY17 from Rs 10,588 crore in FY16.
The Tata group company is not the only one which struggled during the year. Aditya Birla Group’s Idea Cellular also reported losses of Rs 400 crore, compared to a profit of Rs 2,728 crore in FY16. Sales and profits of the top two players, Bharti Airtel and Vodafone, also declined during the year (See chart).

Bankers said they were not worried about Tata Teleservices’ debt service coverage ratio of 0.18 as Tata Sons always stepped in with funds to pay bank loans. The Ebitda (earnings before interest, taxes, depreciation and amortisation) fell to Rs 1,341 crore in FY17 from Rs 1,700 crore in FY16.

Jio’s launch, in fact, has triggered a consolidation among the current telecom players. Vodafone India, the country’s No.2 telecom company in terms of revenues, and Idea Cellular have announced a plan to merge their operations in India, thus becoming the country’s No.1 player. Bharti Airtel, India’s No.1 player, has merged smaller player Telenor with itself. Reliance Communications is awaiting the Supreme Court’s approval to merge its wireless telephony business with Aircel, thus reducing its debt by half.

The rising losses of Tata Teleservices may be a dampener for a suitor to buy or merge the company.

“But, for the Viom stake sale and tax credit received from the government of India, things could have been worse for the company,” said an analyst with a ratings firm. The company sold part of its stake in the telecom towers company, Viom Networks, for Rs 2,800 crore, which helped meet part of its liabilities. Tata Sons was expected to invest another Rs 2,000 crore in the current financial year into the company, bankers said.

Jio effect: Tata Tele’s net worth erodes by Rs 11,650 cr

Amid bandh call over Sabzar Bhat’s death, 800 J&K youth sit for Army exam

Nearly 800 Kashmiri youths on Sunday appeared in the common entrance exam for selection of junior commissioned officers and other ranks in the Army amid unrest in the Valley following the killing of militant Sabzar Bhat.

“Defying bandh call from various inimical factions, 799 candidates appeared in the common entrance examination held at Pattan and Srinagar today,” an army official said.

He said 16 of the 815 candidates, who had passed the physical and medicals tests held earlier, did not turn up for the written exam.
“It is a clear rejection of regressive bandh calls, for choosing a brighter future,” the official said.

Authorities in Kashmir on Sunday imposed curfew-like restrictions in many parts of the valley to maintain law and order in view of the protests following the killing of Bhat, a Hizbul Mujahideen commander, in an encounter with security forces.

Amid bandh call over Sabzar Bhat’s death, 800 J&K youth sit for Army exam

Govt willing to completely exit debt-plagued Air India: FM Jaitley

The government is in favour of exiting Air India totally if a suitable investor is available, says finance and defence minister Arun Jaitley. “When 84 per cent of the aviation market can be run by private airlines there is no reason why it cannot go to 100 per cent”, the minister noted at Dialogue@DDNews, a series of interviews with the ministers of Narendra Modi-led government to mark the completion of its three years in office. The programme is expected to be aired today.

He said Air India has a thin market share but a massive debt overhang of Rs 50,000 crore. According to Directorate General of Civil Aviation, by December 2016, Air India’s domestic market share measured by the total number of passenger seats sold has dropped to 14.1 per cent, making it the third largest behind market leader Indigo at 39.8 and Jet Airways at 15.5 per cent.

“When I briefly worked as the minister for civil aviation in the Atal Bihari Vajpayee government, I had signed on Air India’s file asking for its total disinvestment”, he added. The government has no business to run an airline, according to the finance minister. He said the civil aviation ministry headed by P Ashok Gajapathi Raju will, however, have the right to decide on the future course for Air India and they are considering all options.
Jaitley pointed out to the audience that a loss or profit by the private airlines was not payable for by the tax paid by the citizens of India, but the debt of Air India will have to be made good from government finance. He said the Air India disinvestment along with other strategic ones will free up a lot of government finance to be invested in other more rewarding sectors.

Speaking about the bad debt run up by the state-owned banks of over Rs 6 lakh crore, the minister said their resolution was one of the biggest challenges for this government. He said the government has not only cleared an ordinance that gave the RBI more role to solve the most difficult ones, but more was in the offing. “We also want to bring down the number of public sector banks. One segment of that has already happened with the State Bank of India merging all its associate banks under it. We are also looking to create a few more strong brands instead of a string of weak banks”. According to him in the present banking environment of several types of banks ranging from universal to payments banks, it made no sense to carry the weak state-run banks as independent entities.

While he did not mention it by name, one of those, IDBI Bank has been downgraded by Icra, Crisil and Moody’s last week citing dip in its capital and asset quality. The rating of the bank, despite sovereign support, now stands at BBB- which is just one notch above junk.

The minister said work on the merger of some of these banks could become public within the current financial year. In April, RBI Governor Urjit Patel too has said “It is not clear that we need so many public sector banks. The system could be better off if they are consolidated into fewer but healthier banks,” in his address at the Kotak Family Distinguished Lecture at Columbia University in USA.

Govt willing to completely exit debt-plagued Air India: FM Jaitley

Army chief Rawat dares stone pelters to fire weapons instead of stones

The Indian Army is facing a “dirty war” in Jammu and Kashmir which has to be fought through “innovative” ways, Army Chief Gen Bipin Rawat has said, stoutly defending the use of a Kashmiri as a ‘human shield’ by a young officer.

In an exclusive interaction with PTI, Rawat said the main objective of awarding Major Leetul Gogoi, when a Court of Inquiry was finalising its probe into the incident, was to boost the morale of young officers of the force who are operating in a very difficult environment in the militancy- infested state.

“This is a proxy war and proxy war is a dirty war. It is played in a dirty way. The rules of engagements are there when the adversary comes face-to-face and fights with you. It is a dirty war…. That is where innovation comes in. You fight a dirty war with innovations,” Rawat said.

The Army Chief’s Commendation medal to Gogoi, who had tied a man to an army jeep and used him as a human shield from stone throwers last month was criticised by human rights activists, Kashmiri groups and by a few retired army generals.
A video of the incident had triggered a row with many condemning it.

Gogoi was awarded for his sustained efforts in counter- insurgency operations.

“People are throwing stones at us, people are throwing petrol bombs at us. If my men ask me what do we do, should I say, just wait and die? I will come with a nice coffin with a national flag and I will send your bodies home with honour. Is it what I am supposed to tell them as chief? I have to maintain the morale of my troops who are operating there,” Gen Rawat said.

Talking about the complexity of the security challenge in the state, he suggested it would have been easier for the armed forces if the protesters were firing weapons instead of throwing stones.

“In fact, I wish these people, instead of throwing stones at us, were firing weapons at us. Then I would have been happy. Then I could do what I (want to do),” he said.

Gen Rawat, who had served in Jammu and Kashmir extensively, said if people in any country lose fear of the army, then the country is doomed.

“Adversaries must be afraid of you and at the same time your people must be afraid of you. We are a friendly army, but when we are called to restore law and order, people have to be afraid of us,” he said.

At the same time, he asserted that maximum restraint is being maintained while handling the situation in the Valley.

Gen Rawat said that as the Army chief, it was his duty to lift the morale of the army personnel in Jammu and Kashmir and he did it by awarding Major Gogoi.

“As Army Chief my concern is morale of the Army. That is my job. I am far away from the battle field. I cannot influence the situation there. I can only tell the boys that I am with you. I always tell my people, things will go wrong, but if things have gone wrong and you did not have malafide intent, I am there,” he said.

Gen Rawat said there was a ploy to break the trust between various security forces, and Major Gogoi could not have refused to provide security when polling agents had sought security assistance.

“Tomorrow elections have to be held in Anantnag and similar things may happen. If the army does not respond to call for assistance, then the trust between the people whom we are protecting, police and army will break.

“That is something I cannot allow to happen. This is what the militants want. It can create a divide between the army and other security forces,” he said.
The Army Chief said he had a broad idea about what was going on in the Court of Inquiry into the Gogoi incident, and that is why he went ahead with awarding the Major. “I know what is happening in the COI. It is being finalised. What do we punish him for.”

He said armed forces have the right of self defence and Major Gogoi could have opted for firing at the crowd but he chose not to resort to it.
Farooq Dar, who was tied to the jeep, says he is not a militant or a stone thrower, and was only returning home after casting his vote in the by-election when he was hauled away.

He says he still suffers from physical and mental trauma after being paraded on the jeep’s bonnet with a sign slung around his neck, warning stone pelters of the consequences.

The Army Chief said just four districts of South Kashmir were disturbed and it was incorrect to say that entire Kashmir has gone out of control.

“It will have to be a composite solution. Everybody will have to get involved. Army’s role is to ensure that violence does not take place and the common man who is not indulging in this (violence) is protected,” he said, when asked about the solution to the Kashmir issue.

He also emphasised on the need for taking harsh measures to stop infiltration and counter-terrorism.

The Army Chief also wondered why not much noise was made when young army officer Lt Umar Fayaz was killed by militants when he was on leave.

Asked whether there should be a political initiative to reach out to the Kashmiri people, the Army Chief said it was for the government to decide, adding such initiatives were taken in the past as well.

“Has political initiative not been taken in the past? What was the result, you had Kargil…,” he said.

To a separate question, the Army Chief said he does not anticipate a “limited war” with Pakistan.

Army chief Rawat dares stone pelters to fire weapons instead of stones

ONGC Q4 net falls 6% to Rs 4,340 cr on higher expenses

State run Oil and Natural Gas Corporation Ltd (ONGC)’s standalone net profit fell 6% to Rs 4,340 crore on account of higher expenses and the absence of a one-time gain seen in the corresponding quarter last year.

The company’s standalone profit for the March quarter was at Rs 4,340 crore, 6% lower compared to Rs 4624.3 crore reported in the same period a year back. In the same quarter, the company’s total income rose 29% to Rs 26233.56 crore from Rs 20297.83 crore in the corresponding quarter a year back. Total expenses, however, rose at a higher rate of 48% to Rs. 20696.46 crore from Rs 14022.15 crore a year back.

In addition, to higher expenses, the company’s standalone profit for the March 2016 quarter was also helped due to a one-time exceptional gain of Rs 389.82 crore.

ONGC chairman and managing director D K Sarraf said the company was able to report a good profit despite Rs 2,444 crore arrears that it took on its books for on account of royalty and Rs 1,944 crore on pay revision, primarily due to higher crude oil price. The net realisation was $54.91 per tonne in the quarter ending March 2017 as against $34.88 in the same quarter in 2015-16.

He said the company also gained from the first ever dividend from its subsidiary MRPL since 2011-12. Besides, there was impairment reversal of Rs 1,300 crore in 2016-17 out of Rs 3,200 crore write-off in 2015-16.
In a Bloomberg poll, 23 analysts estimated standalone revenue of Rs. 22827.1 crore and a standalone profit of Rs.5074 crore.

Segment-wise, the company’s offshore operations reported a profit of Rs 6413.87 crore. Losses for its onshore segment widened to Rs 1494.85 crore from Rs.119.22 crore reported in the same period a year back.

For the full year 2016-2017, the company’s consolidated net profit attributable to the owners of the company was 59.2 per cent higher at Rs 20,497.86 crore against Rs 12,875.21 crore in the same period a year back.

At its board meeting held on Friday, the company also recommended a Final dividend at Rs 0.80 per equity share of Rs 5 each, for the Financial Year 2016-17, subject to necessary approval of members at its annual general meeting.

GST impact: Sarraf said all oil companies were concerned on the implementation of goods and service tax. Crude oil, natural gas and certain downstream products were out of the purview of GST. “So while we will pay GST on inputs, we do not get credit on our output,” he said. The ministry of petroleum and natural gas has written on the issue to the ministry of finance. “But the issue is beyond the ministry of finance and is with GST council,” he said.

ONGC Q4 net falls 6% to Rs 4,340 cr on higher expenses

Govt wants to reduce PF contribution to increase take-home salary

The labour ministry has proposed to reduce the employer’s contribution to the Employee Provident Fund (EPF) from 12% to 10%.
The proposal, which will be opposed by trade unions, will come up for approval in the meeting of the Central Board of Trustees (CBT) on Saturday.

Around five million employees in the country receive PF.
The move, according to the labour ministry, will increase the take-home salary of employees. But trade unions opposing the move termed it an attack on social security.

According to the agenda paper of the meeting, the Employee Provident Fund Organisation’s (EPFO’s) CBT will consider a proposal to lower “the rate of contribution to be paid by employer and equal contribution by employees from the present 12% to 10% by issue of appropriate order by the Central Government”.

The Employees’ Provident Fund and Miscellaneous Provisions Act, 1952, empowers the Central government to lower the contribution rate and the government intends to issue a notification to effect the change.

The ministry has also said that the main grounds on which it has requested the EPFO to place the proposal in the agenda is that there were “demands from various quarters on many occasions to review the present rate of EPF contribution and placing it at par with other social security schemes, such as the National Pension System (NPS)”.

“There have been demands from various quarters on many occasions to review the present rate of EPF contribution and place it at par with other social security schemes such as the NPS, etc,” the letter from the labour ministry said.

The Economic Survey had called for giving a greater choice to workers to decide if they wanted to make their contribution to the EPF.

Advocating labour reforms, the Survey said low-wage employees (people earning less than ~20,000 salary per month) received just 55% of their salary because 45% was deducted under heads such as the EPF, Employee Pension Scheme (EPS), Labour Welfare Fund (LWF), and Employee State Insurance (ESI).

It said low-wage employees might prefer receiving these contributions now than benefitting from them later.

“Given the difficulty of reforming labour laws per se, the thrust could be to move towards affording greater choice to workers which would foster competition amongst service providers,” the report said.

Trade union leaders said this would be an attack on employees’ social protection. “We will definitely oppose this move; this is being done for employers’ interests and will weaken workers’ interests,” said DL Sachdeva, secretary, All India Trade Union Congress.

Ramen Pandey, president, Indian National Trade Union Congress (INTUC), said: “We from the INTUC have no hesitation to say that the proposal in Item No10 of the said meeting agenda appears to be the most retrograde policy proposal brought before the CBT.”

Govt wants to reduce PF contribution to increase take-home salary