The Tata legal case with the Mistry family could be coming to an amicable closure as Cyrus Mistry has already hinted that he was not interested in returning as the Chairman of Tata Sons. That had been the bone of contention, anyways. Cyrus has also made it clear that he was not keen on taking up board positions in any of the three Tata Group companies. However, he has expressed his intent to continue to have a seat on the board of Tata Sons to represent his family’s 18.2% stake in Tata Sons. The Tatas have already filed an appeal in the Supreme Court against the NCLAT order passed earlier.
State governments could be staring at a revenue gap of nearly Rs.100,000 crore for the fiscal year due to the withdrawal of the GST compensation scheme announced in 2017. It was supposed to be valid for a period of 5 years but has now been withdrawn after just half the period. Under the GST compensation scheme, the centre had undertaken to compensate the states for loss of revenues and this was specifically relevant to states like Tamil Nadu which were net producers and not the net consumers. With the finances already fragile, this could push Indian states deeper into trouble.
The government is unlikely to announce any fresh capital infusion for PSU banks. The PSU banks had received infusion to the tune of Rs.70,000 crore in the current fiscal which had been largely front-ended to enable the mergers of PSU banks. The government is of the view that there are substantial recoveries scheduled from NCLT and non-NCLT loans during the current year and hence government support may not be required. The government has also asked banks like SBI and PNB monetizing their holdings in subsidiaries as well as in institutions like NSE and UTI AMC as part of the IPO.
The FIEO has warned that further escalation of tensions between the US and China could negatively impact the Indian exports. India does look to the Middle East and the US as its key trade partners. Tensions in the Middle East have larger implications because India imports nearly 80% of its daily oil needs and that can only worsen if the war situation aggravates. The US had killed a senior military official of Iran in a drone attack last week and Iran has threatened to retaliate. Iran controls the Strait of Hormuz and that moves nearly 30% of the world oil trade and hence becomes critical.
State run oil unions have opposed the sale of BPCL as part of the government divestment. The unions are of the view that the current valuation of BPCL must be closer to Rs.9.75 trillion and the government was selling away the stock at a throwaway price to private parties. Normally, sale deals are struck based on the average price of the last few months and that works against BPCL as it has constantly been under pressure due to the uncertainty over the oil subsidy scheme. BPCL has also been under pressure whenever the crude prices have gone up in the Brent market. BPCL insiders are of the view that if one were to consider the quality of investments made by BPCL in terms of fits replacement value, then the sale price is less than 50% of its potential value. That has been a major hindrance for the sale.
Unlisted firms in India may have to soon file quarterly or half yearly statements to the MCA. Currently, listed companies are mandatorily required to make such quarterly disclosures on account of their obligations under the listing agreement. However, there is no such obligation on the unlisted companies. As a result, the MCA has now hinted that all unlisted companies above a certain threshold of sales or profits will be required to submit quarterly declarations to the statutory authorities. Currently, there are 11 lakh unlisted companies in India with many being very large in size.
