Tata Motors sets debt target, SC warns about spectrum dues, Future Retail pays interest

The Adani Group is set to acquire a majority stake in the company that manages the Mumbai airport. Technology company Accenture is considering laying off around 25,000 people, or least 5% of its global workforce. India’s central bank said economic activity will take longer to revive. Tata Motors said it has set a target of reducing its consolidated automotive net debt to near zero in the next three years. The Supreme Court said it would ask the government to cancel licences if telecom companies are fail to pay their dues for using spectrum. Here is more on what made news this week.

Business Standard
29th August

  • Tata Motors has set a target of reducing its consolidated automotive net debt to near zero in the next three years, the company’s chairman N Chandrasekaran told shareholders. The group has a net automotive debt of Rs 48,000 crore. At the end of FY20, the firm’s net debt to equity ratio stood at 0.87, the highest in a decade.
  • Technology major Accenture is considering laying off around 25,000 people or least 5% of its global workforce, with job losses expected in India. Accenture employs 200,000 people in India and 500,000 globally. Accenture's CEO told a meeting that despite cutting costs, the company would still have to trim employees, Australian media reported.
  • The contraction in economic activity will take long to mend as states re-impose lockdowns to contain the coronavirus, said the Reserve Bank of India in its annual report. The "shock to consumption is severe" and the government is constrained in its ability to provide more stimulus, said the central bank.
  • The Supreme Court said it would ask the government to cancel licences and take back spectrum if telecom companies are unwilling to pay their dues, making that observation as it reserved its judgment in the adjusted gross revenue (AGR) case. The court’s verdict on the tenure of paying AGR dues is expected to decide the future of Vodafone Idea, and its ruling on spectrum held by telcos under insolvency will be critical for the telecom industry.
  • Kishore Biyani’s flagship company Future Retail said it has paid $14 million (approximately Rs 105 crore) in pending interest on dollar bonds after missing last month’s deadline. Future is in talks with Reliance Industries for a sale and a legal complication due to default would have delayed a deal. Future drew on its internal accruals and borrowed from banks to make the payment.
  • The Adani Group is set to acquire a 74% stake in the company that manages the Mumbai airport, as the current operator settles its disputes with its minority partner to exit the venture. Adani operates six airports already and a deal for Mumbai International Airport will make it the largest private airport operator after the GMR Group.
  • US-based private equity fund Apollo Global Management, Inc. is finalising talks with Piramal Capital & Housing Finance, part of Piramal Enterprises, to extend a loan of $300-500 million (Rs 2,220-3,700 crore), Business Standard reported. This will be the one of the largest debt deals in home finance/non-banking finance this year.

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A few links for further reading

Hard path to growth

The signals for the economy are not positive: overall demand is yet to pick up; the share of total exports in India’s GDP is declining, and industrial output pattern remains worrying.

Small savings scheme

Investors breathed a sigh of relief when the government announced that interest rates on these instruments would not be revised for the fourth quarter of the calendar year.

Invest and emigrate

The great Indian dream of settling abroad is achievable if one has a few crores to invest. Rich nations offer a variety of investment options in a quid pro quo arrangement: immigrants get a better quality of life and revenue from them helps these countries’ finances. Wealthy Indians, troubled by polluted cities and the red tape holding up entrepreneurship, may want a quick ticket out of the country. Sanjay Kumar Singh lists a range of options: from a Canadian province’s investor programme to America’s US EB-5 plan.

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