Market rally loses steam over fears of extended lockdown

The weak opening of the European markets and a sharp deprecation in the rupee against the dollar weighed on stock prices.

The Indian markets posted strong gains in early Wednesday trade, with the benchmark indices adding 4 per cent to previous day’s 9-per cent gain, but the rally lost steam over fears of an extended lockdown amid rising Covid-19 cases in the country.

Also, the weak opening of the European markets and a sharp deprecation in the rupee against the dollar weighed on stock prices.

The Sensex after climbing past 31,200, settled at 29,894 — down 173.25 points, or 0.58 per cent, over the previous day’s close. The Nifty closed at 8,749, down 44 points, or 0.5 per cent, after touching an intra-day high of 9,132.

Index heavyweights, such as Hindustan Unilever, HDFC Bank, and ICICI Bank, came off sharply from their day’s highs. Overseas investors were net-buyers for the second day in a row. On Wednesday, they bought shares worth nearly Rs 1,943 crore, while domestic investors took money off the table, dumping equities worth Rs 1,758 crore. Despite foreign inflows, the rupee ended at a record low of 76.38 against a dollar, down nearly 1 per cent over Tuesday’s close of 75.63.

A day earlier, the Indian markets had logged their biggest daily jump in 11 years on optimism that the spread of the virus was deaccelerating in Europe, which had emerged as the Covid-19 hotspot after Wuhan.

The market breadth was strong for the second day in a row, with nearly two advancing stock for every one declining. The mid- and small-cap indices ended with nearly 2 per cent gain.

“Momentum indicators indicate the possibility of further upside towards 9,300-9,400. Support zone for the index is at seen at 8,500-8,700. The current upmove is broad-based and hence, expect positivity to continue for few more trading sessions,” said Sahaj Agrawal, head of research- derivatives, Kotak Securities.

Vistara takes delivery of its first Boeing B787-9 Dreamliner aircraft

The new aircraft is the first of the six that Vistara has purchased from Boeing.

Vistara took the delivery of its first wide-body Boeing 787-9 Dreamliner plane on Friday, making it the first Indian airline to fly this aircraft.

The plane, which has the registration number VT-TSD, will depart from the Boeing facility here at 2 pm (local time) on Friday and land in Delhi at 2 pm (local time) on Saturday, Vistara officials said here.

The new aircraft is the first of the six that Vistara has purchased from Boeing.

The second Dreamliner aircraft is currently on the production line and will be delivered soon.

Vistara's Boeing 787-9 Dreamliner aircraft comes with 299 seats in a three-class cabin configuration, giving customers a choice of business, premium economy and economy cabins.

The aircraft features lie-flat business class seats in a 1-2-1 configuration that gives a direct aisle access to each business class passenger and a separate premium economy cabin that offers seats in a 2-3-2 configuration.

The aircraft has in-seat televisions in all three cabins with a high-definition (HD) display, powered by Panasonic as well as in-flight WiFi internet connectivity onboard long-haul international flights, officials stated.

It would make Vistara the first airline to offer WiFi service in India.

With 6 airports already in folio, Adani turns to Air India

The Tata group, the Hinduja group, Indigo and a New York-based fund, Interups, are also expected to submit their EoIs. The deadline of submitting the EoI is March 17.

The Adani group, which has already won the bid to manage 6 airports, is now all set to join the race of acquiring the state-run airline - Air India. And for this, the conglomerate is planning to submit an expression of interest (EoI) by next month, disclosed a source close to the development.

However, the final decision depends on the outcome of the due diligence post submission of the EoI. Since, after the EoI process only prospective bidders will get access to airline data.

The Adani group is not the only one interested in this complex deal. The Tata group, the Hinduja group, Indigo and a New York-based fund, Interups, are also expected to submit their EoIs. The deadline of submitting the EoI is 17th March.

This is the second attempt made by the Centre to sell the airline after it failed to receive interest in the first round last year.

As a matter of fact, sale of Air India to a private player is important for the central government as it has had to pump in Rs 30,000 crore of tax payer’s money into the airline since 2012. The airline, however, has not made money since the merger of Air India and Indian Airlines in 2007.

Apart from Air India, the government has also offered to sell Air India Express and its 50 per cent stake in Air India SATS Airport Services.

Therefore, they have come up with changes like relaxation of various norms, including clearing of the balance sheet, transfering of remaining portion to the special purpose vehicles, introduction of minimum shareholding of an investor and much more to ensure success this time.

Despite this, things are not easy for the Adani group as, according to the bid criteria an airline or a group owning an airline cannot own more than 27 per cent in the six airports that are already with the Adani group.

A similar clause restricting airlines or group owning airlines from owning more than 10 per cent in Delhi airport recently resulted in collapse of the Tata-GIC group’s investment in GMR.

Ratan Tata's legacy threatened as tribunal overturns Cyrus Mistry's ouster

The NCLAT ruling leaves the Tata group rudderless as it faces a string of urgent decisions.

For more than 150 years, the Tata Group has been synonymous with India’s nation-building project, venturing into everything from autos to airlines when its country needed them. And no executive better personified the country’s emergence on the world stage than Ratan Tata, whose string of dazzling takeovers took a largely domestic firm global.

Now at 81, Tata’s legacy is under threat. An internecine war over the conglomerate’s future took a crippling turn Wednesday, highlighting that even the famed Tatas aren’t immune to the corporate governance troubles that often plague the family businesses that still dominate India’s economy.

In a surprise ruling, an appeals court said Tata’s erstwhile successor, Cyrus Mistry, was improperly ousted as chairman of the group’s holding company three years ago, paving the way for his reinstatement. In a further blow to the elderly tycoon, the court found the group’s move to take the holding company private after Mistry’s removal was unlawful and must be reversed.

ALSO READ: Tata vs Mistry: What next in India's biggest corporate thriller

The Tata group can appeal the ruling to India’s Supreme Court. But the turmoil couldn’t have hit at a worse time for a $110 billion conglomerate whose products range from salt to software.

It comes just as the group contends with a crisis at its British unit, Jaguar Land Rover Automotive Plc—one of the crown jewels of Ratan Tata’s buying spree—and a crushing economic slowdown at home that’s dampened demand for wares from steel to Tetley teas.

“It is a battle for honor and prestige,” said Shriram Subramanian, founder of proxy advisory firm InGovern Research Services Pvt. Ltd. “This ruling is a vindication of the position taken by Cyrus Mistry that his removal was illegal.”

Business Standard

Indians are entrepreneurs at heart: Tata Sons Chairman Emeritus Ratan Tata

"... a highly successful entrepreneur will find opportunities are greater in markets outside of India, so that is a judgment call the entrepreneur makes," Tata said.

Business Standard : In a fireside chat at an annual event organised by venture capital firm Chiratae Ventures, Tata Sons Chairman Emeritus Ratan Tata talked about the importance of start-ups in India, their positive rub on bigger companies, and the levers that he looks for when investing in start-ups.

Referring to the growth of the ecosystem of smaller companies, Tata — in a conversation led by Sudhir Sethi, founder of Chiratae Ventures – said: “We are looking at the India of tomorrow and the day after, and the start-up industry is entering the global field in a manner where competition is open.” Himself an investor in a clutch of mostly early online ventures that include Ola, Paytm, Lenskart, and Urban Ladder, Tata began actively investing after he stepped down from Tata Group in December 2012.

So, what made him pursue that route and what did he specifically look for in the companies and the entrepreneurs that he bet on? “It was partly by accident and partly by happenstance but always in my years at Tata Group, I had looked at the sector with excitement. But there was also conflict with the group (businesses) and so when I was free, I made token investments with my own money in what I considered exciting,” Tata said, adding that “contrary to popular belief my pockets aren’t that deep”.

He went on to add that the exercise became a learning process for a few years because of the highly dynamic nature of the sector. “I found in my case that company selection was more by intuition rather than numbers, and by judging on the intent of founders and their seriousness more than any other factor to make (my) decisions, good or bad as the case may have been.”

Does Tata have a formula for what makes the best entrepreneurs? “I would say what drives entrepreneurs is a fire in the belly to do business better than has ever been done before, and an opportunity to make a difference to benefit society, with the tenacity and courage to see it through,” Tata said.

When asked if start-ups that were burning cash over extended periods were sustainable, Tata declined to comment but said the right time to go global for any start-up was ultimately not defined by anything but by the founder. “... a highly successful entrepreneur will find opportunities are greater in markets outside of India, so that is a judgment call the entrepreneur makes,” he said.

Equally, most entrepreneurs end up failing. So does Tata, who was privy to an arena of new contestants, have a checklist of indicators of failure for new companies? “It’s an insight on the founders and I don’t think there is a single answer, but the issue is of the clarity of the founder, the seriousness committed to building an enterprise with someone else’s money and the reality that not every enterprise will have glory all the way through.”

Vistara to launch international flights in the second half of 2019

A joint venture between Tatas and Singapore Airlines, Vistara might also look at starting medium and long-haul flights, depending on approvals, amid the grounding of Jet Airways.

Business Standard : Full service carrier Vistara, which has been serving the Indian skies for more than four years, plans to launch international services in the second half of this year.

A joint venture between Tatas and Singapore Airlines, Vistara might also look at starting medium and long-haul flights, depending on approvals, amid the grounding of Jet Airways.

"We see India as a growing market. We are here for the long term," Vistara CEO Leslie Thng said on the sidelines of the annual general meeting of airlines' grouping IATA on Sunday.

Without providing specific details, he said the airline plans to start international operations in the second half of 2019.

It had planned to launch overseas flights in the first half of this year.

Currently, Vistara has more than 22 planes and operates around 850 flights every week.

Last month, the carrier announced it would take on lease four Boeing 737-800 NG aircraft and two A320 neo planes.

In 2018, Vistara placed its order for purchased and leased aircraft totalling 50 from the Airbus A320neo family, including A321neos.

These would be for domestic as well as short and medium-haul international operations, with deliveries scheduled between 2019 and 2023.

Further, the carrier has bought six Boeing 787-9 Dreamliner aircraft that are scheduled to be delivered between 2020 and 2021. These would operate long-haul international operations.

Thng said, Vistara can start short-haul flights but would need more time for long-haul ones.

"If we do get the necessary rights, we do have a plan in place on how do we plan to operationalise it but I will not be able to share too much detail...," he said.

According to him, the airline would look at options to deploy the right type of aircraft provided it gets the necessary flying rights.

Have your cake and eat it too: How Tata can save JLR without selling stake

Had holding company Tata Sons Ltd. been a publicly traded firm, it could have raised equity relatively easily to help tide JLR over.

India’s Tata Group should treat the speed bump at Jaguar Land Rover as a timely memo: The $102 billion salt-to-software conglomerate can no longer put off listing its closely held parent.

UK-based Jaguar Land Rover Automotive Plc is burning cash on electric-vehicle technology just as the double whammy of a Chinese auto slowdown and Brexit threatens margins and sales. At average cash burn rates of 670 million pounds ($882 million) a quarter, the British carmaker may struggle to make it through another year, my colleague Anjani Trivedi wrote last month after it took an asset impairment charge of 3.1 billion pounds.

(Business Standard)

Had holding company Tata Sons Ltd. been a publicly traded firm, it could have raised equity relatively easily to help tide JLR over. Instead, Tata Motors Ltd., which acquired JLR in 2008, is exploring strategic options including a sale of a stake in the UK unit, Bloomberg News reported. Although Tata Motors says there’s “no truth to the rumors,” the bond market was a little relieved.

Investors’ concerns haven’t fully dissipated, and that shows the problem with the sprawling Tata Group’s structure. In the current scheme of things, the holding company and its 66-per cent owners — who happen to be charitable trusts — depend on payouts from software services provider Tata Consultancy Services Ltd. as well as Jaguar Land Rover to keep the empire ticking.

The insufficiency of those dividends became a sore point in a 2016 boardroom battle between patriarch Ratan Tata and Chairman Cyrus Mistry, who was abruptly ousted after less than four years. Borrowing on the strength of operating companies’ cash flows has a limit. Next year will see a record $17.5 billion of debt mature, according to bonds and loans data compiled by Bloomberg. The conglomerate must step up investment in order to generate more free cash.

Last year’s $5 billion purchase of bankrupt Bhushan Steel Ltd., which supplies metal to auto and appliance makers, is a step in that direction. The move helps group boss Natarajan Chandrasekaran cut Tata Steel Ltd.’s reliance on a less-than-rewarding construction industry.

Still, it’s Jaguar Land Rover that should worry him. JLR has avoided investing in entry-level crossovers — which account for a quarter of sales at rivals BMW AG and Daimler AG’s Mercedes-Benz — because of its expensive focus on electric vehicles, as Deepesh Rathore, analyst at Emerging Markets Automotive Advisors, said in a Bloomberg Television interview.