2 COMPANIES | THURSDAY, 7 NOVEMBER 2019 > > Aurobindo Pharma > DLF > GE T&D India >Bajaj Electricals STOCKS Revised jewellery sales USFDA issues four Finance minister hints Q2 net loss at ~81 crore Q2 operational revenue IN THE NEWS guidance to 11-13% observations for at new measures for against profit of ~51 crore falls 31.5% to ~1,096 crore from 20% for H2FY20 Hyderabad facilities real estate sector in the year-ago quarter

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IN BRIEF N AVIATION UNDER SPOTLIGHT N Cairn gets 10-year extension for Ravva block in Andhra Boeing in talks with DGCA Indian skies Anil Agarwal-led Cairn Oil and Gas, a vertical of Vedanta, has got a 10-year extension for its fall short on production sharing contract (PSC) for Ravva block in Andhra Pradesh from the Directorate General of Hydrocarbons. The extension will enable the for return of 737 MAX joint venture partners to recover 13 million barrels of oil jumbo jets equivalent (mboe). With this extension, the PSC is now valid Regulator demanding simulator training centres for pilots effective 28 October 2019, for the next 10 years. Ravva, the SURAJEET DAS GUPTA The industry needs to add oldest producing asset in India for Cairn, becomes the first New Delhi, 6 November 80 more wide-bodied aircraft large field to get PSC Extension under the “policy for the grant to reach the global average. In of extension to the production sharing contracts signed by The aviation industry is exp- India, in 2018-19, there were 344 government awarding small, medium sized, and discovered anding but the number of million passengers, of which fields to private joint ventures”. Cairn and its partners will wide-bodied aircraft has shr- 68-70 million were outbound, invest ~550 crore ($78 million) to drill seven wells under unk from 63 out of a total air- which is 20 per cent, say es- Revised Field Development Plan (RFDP) targeting additional craft strength of 614 in 2018 to timates. Without a sufficient reserves of 11.7 million barrels of oil equivalent. BS REPORTER< 43 — a development, which number of such planes for the- experts say, is out of sync with se medium- and long-haul flig- the global norm in which wide- hts, Indian carriers are being Sterlite Power TVS Motor Chairman bodied planes make up 20 per displaced by global carriers wh- inks pact to sell cent of an airline’s fleet. ose share of outbound interna- In India, the share of these tional traffic on the medium Arcoverde project bags Deming Prize planes is only 7 per cent, down and long-haul routes is going Sterlite Power on Wednesday from over 10 per cent in the up. It is estimated the US and said it has signed the sale beginning of this year. Without UK together constituted for ov- agreement for its first power these planes, which have more er 7 per cent of outbound inter- transmission asset operating space and can carry more fuel, national traffic and if the whole in Brazil — the Arcoverde airlines cannot offer a comfort- of Europe is added, this share Project. The project is able experience on medium- or goes up to around 15 per cent. responsible for expanding the long-haul flights or carry a larg- The Centre for Asia Pacific flow of renewable energy in The aircraft, which has been grounded since March following two fatal crashes that killed 346 on board, is crucial to Indian er number of passengers. Aviation in a report said in FY 19, the countryside region of low-cost airline SpiceJet’s fortune, which has up to 205 aircraft on order PHOTO: REUTERS The collapse of Jet Airways the total number of seats in Pernambuco, the company has everything to do with the Europe and India grew to 5.1 said. PTI< Venu Srinivasan, chairman of ARINDAM MAJUMDER “Boeing is providing regulators around falling number of wide-bodied million, an increase of 13 per TVS Motor Company and New Delhi, 6 November India will need 2,400 the world, including the DGCA, with aircraft. “You cannot have a cent, primarily led by Jet. After Sundaram Clayton, was detailed information regarding the 737 shrinking wide-bodied market its collapse, analysts say the Nokia partners conferred with the Deming oeing has started negotiations with new aircraft in 20 MAX,” said Salil Gupte, president at in a country where aviation is bulk of the seats went to foreign Flipkart to launch ‘distinguished service award the Directorate General of Civil years, says Boeing Boeing India. growing. We see a large oppor- carriers. GE’s Rai says he is in for dissemination and B Aviation (DGCA) for return of the Unlike normal circumstances, when tunity in this space where now talks with all major carriers to smart TVs in India promotion overseas’, at a grounded 737 MAX to service. Crucial India would need 2,400 aircraft in regulators across the world follow the lead we only have operat- push them to buy wide-bodied After Motorola, Nokia has now ceremony in Tokyo on among them is a demand that the US- the next 20 years and around 85-90 by the regulator of the country where the ing,” says Vikram Rai, country aircraft. But it can take 24-36 partnered e-commerce major Wednesday. Srinivasan is the based plane maker provides simulator per cent of them would be narrow- aircraft is manufactured (in this case US head, GE Aviation in India wh- months for delivery of an air- Flipkart for launching smart first Indian industrialist to get training centre to pilots. body, a senior executive of Boeing aviation regulator Federal Aviation ich has virtual monopoly in the craft even if orders are given TVs in the Indian market, the award for his contrib- Additional but costly simulator training said on Wednesday. Indian airlines Administration (FAA), since Boeing is wide-bodied engine market. now. Most low-cost carriers pre- marking the smartphone utions in the field of Total for pilots may dent the cost benefit of the currently have around 600 aircraft in based out of US), regulators around the GE and CFM, which is a joint fer to use their narrow-bodied maker's foray into consumer Quality Management. aircraft as minimum hours of transition their fleet. While narrow-body world approve the grounded jet to fly at venture with Safran Aircraft En- aircraft to fly overseas. durables space. PTI< BS REPORTER< training (as low as one hour) for pilots was planes are smaller and used for their own pace instead of following the gines, has over 300 narrow-bod- has been the only firm which the main selling point among low-cost car- short-haul routes, wide-body American regulator. ied and 40 wide-bodied engines has ordered six wide-bodied air- riers across the world. aircraft are used to fly on medium DGCA officials had met Boeing and FAA in operation in India. It is a key craft powered by GE engines. “One of the key observations from and long-haul routes. “Based on executives during global aviation confer- player with current orders of As Rai points out, the bigger Indian aviation regulator is the pilots flying economic growth, evolving business ences at Kathmandu and Montreal where 800 narrow-bodied and six planes need not be confined to PAYTM, OLAMONEY IN the 737 MAX will require additional simu- models and the dynamics in the Boeing tried to impress upon DGCA about wide-bodied engines. medium- and long-haul flights, lator training. Ideally, airlines would want marketplace, India will need around the safety of the aircraft. “We will take our Despite the overall slow- they can also be used for dom- TOP 10 OF FINTECH 100 LIST the simulator to be based out of India, but 2,400 new aircraft deliveries in the own time. We want to be absolutely sure,” down, airlines are doing well estic flights. “We are explain- Eight Indian fintech firms were featured in the KPMG if not, SpiceJet will send its pilots to the next 20 years,” said Darren Hulst, said a senior DGCA official. with passenger growth in both ing to airlines where airports deputy vice-president of commercial and H2 Ventures' ‘Fintech100’ list, with Paytm and Singapore-based simulator for training,” The return of the 737 MAX is intricate- the domestic and international suffer from a shortage of slots said a person aware of the development. marketing, Boeing. PTI ly connected to Boeing’s fight of market market. The airlines have man- and where there is huge dem- OlaMoney making it to top 10. “In 2019, we have seen The aircraft, which has been grounded share with Airbus in India as its European aged, within a few months, to and, it makes economic sense. the emergence of India as a fintech force,” the report since March following two fatal crashes rival has left it behind in the race for single- add enough new capacity to Also, someone can have a low- said. The Fintech100 list comprises 27 payments and which killed 346 on board, is crucial to person aware of the development. aisle aircraft market, while Boeing still more than fill the void left by cost carrier of wide-bodied air- transaction firms, 19 wealth companies, 17 insurance Indian low-cost airline SpiceJet’s fortune, A top Boeing executive said the compa- maintains a grip over the wide-body mar- Jet’s extinction in April. craft,” says Rai. companies, 15 lending companies, nine neo banks which has up to 205 aircraft on order. With ny is in discussions with the DGCA about ket winning new customers like Vistara. and 13 companies that operate across multiple the grounding, the airline’s capacity expan- the necessary work required to press the The market tilted more in favour of Airbus. THE REQUIREMENT fintech sectors. SUBRATA PANDA sion plan is suffering. plane into service. Boeing has tested over Recently, IndiGo placed a massive 300 air- Based on projection of 2,000 The primary reason behind the crashes 800 test flights on this aircraft and the com- craft order with Airbus. in 20 years. Global average of INDIAN FINTECHS IN TOP 50 Rank has been found to be faults with the anti- pany is working on improving the training SpiceJet boss Ajay Singh recently said wide-bodied planes is 20% stall system called Maneuvering Chara- process, said Darren Hulst, director-prod- that delay of return of the 737 MAX may Paytm cteristics Augmentation System (MCAS), uct, forecast, and current market, Boeing force him to open negotiations with Immediate need 80 which the company said it is trying to Commercial Airplanes. “We are working Airbus for an order. “Airbus has pushed us In 5 years 100 Notable investors: redesign. The aviation regulator has said closely with regulators around the world to hard since the day we started flying 1n 10 years 200 Category: 5 Alibaba Group, Ant Financials, Berkshire pilots would need additional training on bring the aircraft back to service,” Hulst Boeing aircraft, and of course with the In 20 years 400 Hathaway, SoftBank, SAIF Partners Payments the new design. “Simulated training for said, adding the eventual return to service current problems, they’ve pushed us GE Aviation estimates Ola Money pilots in the new MCAS is a must,” said a will depend on regulators around the world. harder,” Singh recently said. Notable investors: Softbank, Tencent, Hyundai Motors, Category: 8 Kia Motors, SailingCapital Payments Setback to Adani: HC doesn’t block Bidvest-GVK stake sale ANEESH PHADNIS chase agreement it signed with acquire Bidvest shares earlier held by Bidvest and Airports which sought to restrain GVK stake in its airport business to PolicyBazar Mumbai, 6 November Bidvest and restrain it from in the year, but failed to con- Company South Africa. from selling stake in its airport three investors to pare debt Notable investors: selling stake in the airport to a clude the deal. The matter is On Tuesday, Adani Group holding company. and stave off Adani Group’s SoftBank Vision Fund, Info Edge, Temasek Category: 21 In a setback for Adani Group, third party. On Wednesday, now under arbitration and will had informed court it would In its plea, Adani Group had proposed acquisition in Holdings,Wellington Management, Insurance the Bombay High Court has Justice A K Menon declined be heard on November 24. deposit ~1,248 crore required argued that stake sale in air- Mumbai airport. Tiger Global Management refused to restrain South Afri- interim relief to Adani Group. Separately, Bidvest entered for stake purchase and sought a ports holding company level The group announced can company Bidvest from sell- The order gives a fillip to GVK into a share purchase pact with three-month extension to the amounted to an indirect trans- signing off a definitive agree- ing its 13.5 per cent stake in Group, which recently anno- the Adanis to sell them 13.5 per long stop date (deadline) to fer of ownership in Mumbai ment with Abu Dhabi Lendingkart Mumbai International Airport unced fundraising of ~7,600 cent stake for ~1,248 crore. Ad- conclude its deal with Bidvest. airport and thus, Bidvest Investment Authority, PSP Notable investors: (MIAL) to a third party, includ- crore to block Adani Group ani Group, which won rights to The deadline lapses on Thurs- should be given the opportuni- Investments of Canada, and Fullerton Financial Holdings, Darrin Category: 23 ing the GVK Group. from entering Mumbai airport. develop five Airports Authority day. However, the South Afri- ty to acquire the stake. the National Investment and Capital Management,Saama Capital, Lending Adani Group, had in GVK, which owns 50.5 per of India airports earlier this can company opposed the plea. On October 27, GVK anno- Infrastructure Fund for selling Bertelsmann India Investments September, moved court seek- cent in the airport, had exer- year, has been eyeing 23.5 per Justice Menon also unced it would raise ~7,614 stake in its airport business ing execution of a share pur- cised its right of first refusal to cent stake in Mumbai airport declined relief to Adani Group, crore by selling 79.1 per cent holding company. Change in brandname, quality upgrade spur Binani Cement turnaround The last part of the series on the Insolvency and WHAT ULTRATECH GAINED Debt overhang? With a series of acquisitions, the net debt Bankruptcy Code takes a look at how UltraTech’s Net debt Net sales Interest Reported net WHAT IT DID of UltraTech, however, is showing signs (~ cr) (~ cr) (~ cr) profit (~ cr) of going up. As a result, in the first half of acquisition of Binani helped it become North | Changed FY14 2,143 21,652 361 2,206 the current financial year, its finance India’s biggest cement firm by capacity brandname cost was up 27 per cent and revenue grew FY15 4,980 24,340 587 2,098 12 per cent compared to the same period FY16 3,275 25,153 566 2,478 | Upgraded cement quality last financial year. DEV CHATTERJEE Binani is one of the few cases where FY17 Nil 25,375 640 2,715 Earnings, before depreciation, Mumbai, 6 November banks have not taken a haircut as FY18 13,849 30,979 1,238 2,222 | Hiked capacity interest, depreciation, tax and compared to other IBC cases. FY19 19,233 37,379 1,549 2,435 utilisation amortisation (Ebitda) was up 55 per cent The acquisition of Binani Cement by The Birla group was pitted against Compiled by BS research Bureau Source: Capitaline | Reduced debt in the first half of the current financial Aditya Birla group company UltraTech is ’s stressed asset fund which year compared to the same period last one of the few success stories post had tied up with another CEMENTING TIES financial year. the Insolvency and Bankruptcy formidable player Dalmia According to JP Morgan’s analysts, Code (IBC) regime. Bharat to bid for Binani. Binani Cement’s Huge Significant market All-India market net debt of the company increased to The acquisition helped A last minute higher bid by 11.25 mtpa global limestone share of 26% in share to go up to ~20,600 crore as on September quarter. It UltraTech become North India’s UltraTech, which tied up with cement capacity reserves North India 25% from 20% was up by ~2,000 crore mainly due to biggest cement company by former promoters of the addition of ~3,000 crore after Century capacity with a 26 per cent market company, Braj Binani, saw “At JP, we took about 52 days (to “The fastest integration of these we will realise cash, which will help Cement arm’s acquisition. share post-acquisition. IBC UltraTech winning the race. On change the brand) and in Binani, we took assets is one of the finest examples of reduce the overall cost of acquisition. “Adjusted for that, UltraTech seems to UltraTech expanded its A NEWLEASE November 18, 2018, the about 40-odd days for changing the UltraTech’s capability of turning And when North India is right for have generated ~1,000 crore of free cash cement capacity to 120 million Supreme Court finally cleared brand because we have to produce around and integrating the acquisition expansion, we will expand at flows even in a seasonally weak quarter tonnes by buying Century the takeover after Dalmia, cement of a particular quality and with UltraTech standards. Nathdwara Nathdwara,” he said. and Ebitda to cash generation has been Textiles, Binani Cement and Jaiprakash which made an offer of ~6,932 crore, strength and test it. If I have to test for 28 Cement remained PAT (profit after tax) He added, “The cost of expansion will healthy. According to the company, (JP) Associates in the last two years. It objected to the late bid by UltraTech. days, then I have to wait for 28 days,” a accretive in this otherwise weak be ridiculously low. Liquidation of non- leverage ratios (net debt to Ebitda of two plans to add another 34 million tonnes of Since then, the UltraTech company official told investors recently. quarter,” said Atul Daga, whole-time core assets and expansion by way of times) are near comfortable levels. It is set capacity by March 2021. management’s top priority was to UltraTech also increased Binani’s director and chief financial officer at brownfield capacity growth would bring to divest non-core assets worth ~1,000 The acquisition of Binani Cement in consolidate Binani’s operations with capacity utilisation to about 60 per cent, Ultratech, in an investor call. our overall acquisition cost down.” crore,” it said. As UltraTech adds capacity 2018 was not easy for the Birla group, itself. In December 2018, the Birla said insiders. With the change in brand “When a question was asked why we As the loans of Binani Cement was via acquisition, it will have to take care of which had to battle its rival bidder in the group changed Binani Cement’s name name, the company also plans to paid such a high price (for the acquis- transferred to UltraTech, the interest the rising debt, said analysts. Supreme Court after making an offer of to Nathdwara Cement and upgraded increase the price of cement produced ition), I said we have a longer-term cost also came down as UltraTech enjoys ~7,950 crore to banks. the quality. from the subsidiary. plan. By disposing of non-core assets, better credit rating, officials said. Series concludes