Retail, telecom help RIL beat Indian Oil to be number one player by revenue

Fortune India list shows RIL as India's top firm in FY19.

Reliance Industries (RIL) has emerged as the number one company in terms of revenue in the Fortune India 500 list for 2019, pipping Indian Oil Corporation (IOC). RIL revenues crossed Rs 5.81 trillion in FY19 against IOC’s Rs 5.36 trillion.

Since it was first published in 2010, IOC has been topping the list.

RIL’s race to the top was powered by consumer-facing businesses like organised retail and telecom.

In terms of profits too, Mukesh Ambani-led RIL’s FY19 net profit was ahead at Rs 39,588 crore against IOC’s Rs 17,377 crore.

Over the past 10 years, RIL’s profit has been an average 3.01 times higher than that of IOC. The highest this went was up to 4.8 times in FY15.

Another interesting aspect of the 2019 list is the divergence in the fortunes of the public and private sector banks as 14 of the 22 public sector banks reported cumulative losses of Rs 74,253 crore, while the cumulative profit of 24 of the total private sector banks (including foreign banks and cooperative banks) touched Rs 60,747 crore — 6.16 per cent higher than FY18.

Just two private sector banks posted losses with IDFC First Bank reporting a loss of Rs 1,908 crore and Lakshmi Vilas Bank at Rs 894 crore.

The public sector banks made huge losses after several companies in the roads, power and steel sector failed to repay their loans. Many of these companies are now facing bankruptcy proceedings in courts across the country.

The top 500 list also showed that the combined revenue and profit of the companies in 2019 grew by 9.53 per cent and 11.8 per cent, respectively, even as 57 companies dropped off for reasons, including consolidation within the public sector banks and public sector undertakings space. The top 500 companies reported profit of Rs 4.55 trillion and revenues of Rs 91.7 trillion in the FY19 (see chart).

A total of 65 companies posted a cumulative loss of Rs 1.67 trillion, as compared to last year’s Rs 2 trillion racked up by 79 firms.

The list does not take into account subsidiaries of companies, hence many of the takeovers resulted in the acquired companies being excluded such as Hindustan Petroleum Corporation, which was acquired by Oil and Natural Gas Corporation, Rural Electrification Corporation acquired by Power Finance Corporation, Vijaya Bank and Dena Bank (merged into Bank of Baroda).Keep Reading : Stock Market News

Employee union opposes merger of Lakshmi Vilas Bank with Indiabulls

The union further alleged it (the merger) is obviously a short-circuit method by Indiabulls Housing Finance Ltd and manage to become a bank through this method.

Business Standard : All India Bank Employees Association (AIBEA) has opposed the proposed merger of Lakshmi Vilas Bank with Indiabulls Housing Finance Ltd. The association urged the Reserve Bank of India (RBI) not to give nod for the merger.

Lakshmi Vilas Bank had earlier said that it has received approval from the board to merge the bank with Indiabulls Housing Finance Ltd.

While RBI clarified that the Board has unanimously approved the resolution, the RBI nominee directors, as is the practice at the bank, did not have to participate in the voting or express any views. But the union said that the two nominee directors of RBI on the board of the bank were also present in the board meeting and the board's decision has been taken unanimously thereby implying that the proposal has the tacit approval of the RBI.

LVB may be a private Bank but the deposits in Bank (around Rs 30,000 crore) belongs to the people at large and is public money, said C H Venkatachalam, general Secretary, AIBEA.

RBI is aware of the financial health of Lakshmi Vilas Bank Ltd which has not been go0d at all, he added.

During the quarter ended December 2018, the bank has booked a net loss of Rs 373.49 crore. In 2017-18, the loss was Rs 584.87 crore.

The Bank is also suffering from Gross NPA of Rs. 3400 crore that is 14 per cent of the total advances.

"In this background, it is surprising that the Board of the Bank has taken the decision to merge with Indiabulls Housing Finance Ltd.

As it is already known that Indiabulls Housing Finance Ltd had applied for banking licence to start a bank on its own but the same was not sanctioned by the RBI, ostensibly for the reason that the company does not come under the fit and proper category to be granted a banking licence," said AIBEA in it's letter to RBI.

Having failed to get a banking licence, it is now found that IBH is trying to become a Bank by merging LVB with itself, alleged AIBEA.

The union further alleged it (the merger) is obviously a short-circuit method by Indiabulls Housing Finance Ltd and manage to become a bank through this method.

Taking into account the fragile health of Lakshmi Vilas Bank Ltd, it is necessary for RBI to take a holistic view and merge it with one of the public sector Banks in public interest instead of allowing LVB to merge with IBH, said the union.