The recent deterioration in corporate earnings has begun to affect India Inc’s balance sheet and leverage ratios. India’s top companies and business groups reported an increase in their debt-equity ratio during 2018-19 (FY19), putting a stop to the process of balance sheet deleveraging seen in the previous three years. Read more
Centre likely to hire public sector bank EDs through lateral entry
The Union government, for the first time, is exploring roping in professionals from the private sector to join as executive director (ED) on the board of public sector banks (PSBs). As a first step in this initiative towards governance reforms, the government has proposed — in the Finance Bill, 2019 — increasing the number of full-time directors from four to five for large PSBs. More details
Sweeteners in build-operate-transfer scheme to attract foreign investors
The Union government, while it readies new norms for build-operate-transfer (BOT) projects, is likely to add a few sweeteners, including an exit clause after two years. According to the proposal in the works, the Union government may allow a construction company to sell its project to another firm after completing it and operating it for two years. Read more
Lenders wary of using IBC for debt resolution over creditors' parity
Company Law Tribunal (NCLAT) order that cleared ArcelorMittal’s bid for Essar Steel and sought to put financial and operational creditors on a par has put bankers in a dilemma: To use or not to use the Insolvency and Bankruptcy Code (IBC) for resolution of debt. Read more
Same strategy for Hindustan Unilever, ITC: Reaping digital dividend
Two of the country’s leading players in the fast-moving consumer goods market (FMCG) — ITC and Hindustan Unilever (HUL) — propose to use digital technology aggressively to get future-ready. Read here
Sitharaman's first Budget gives breather for delay in payments towards GST
Those paying goods and services tax (GST) after the due date have been given relief in the Budget. The Finance Bill, which is yet to be passed by Parliament, has proposed that interest would be charged on the delayed payment on net basis. Gross tax liability includes input tax credit (ITC) available to tax payers, while the next tax liability excludes that portion. More details
Suzuki’s next electric vehicle in India could be based on Ertiga
Suzuki Motor Corp. plans to tap the popular multipurpose vehicle Ertiga to build its second electric vehicle for India, said two people directly aware of the development, as global automakers accelerate efforts to sell more eco-friendly vehicles in a country that is home to some of the world’s most polluted cities. Read more
Brands find a backdoor to stick their ads on WhatsApp
Top consumer companies such as Tinder, McDonald’s, Tide, Reebok and Zomato are finding a backdoor to advertise on WhatsApp, the most-used messaging app, through fun and quirky stickers and GIFs.
These companies hope to make their presence felt through branded GIFs and stickers that will be made available through keyboard applications that people can download, access and add stickers and GIFs to their messages. More details
Why the majority of life insurance policies face early ‘death’
Did you know that half the people who buy life insurance don’t continue with their policies after the fifth year?
The life insurance industry has reported a persistency ratio of 47 per cent in the 61st month (completion of five years) in FY19, implying that less than half of the policies continue into the sixth year. Based on the number of policies renewed, even LIC, the insurance behemoth, doesn’t have a sterling record — its 61st month persistency ratio was 51 per cent.
One reason for the early exit could be that the policyholders were miss-sold the policies, say experts. Given that the chunk of the business for life insurers is from traditional policies (endowment plans) and the costs are front-loaded in these products, early exits mean customers don’t even get their full capital back. Read more