News in numbers, Feb 5, 2016: Reliance-Birla deal, India’s estimated exports in FY16…

 

Rs 4,800 crore

What is it? Amount for which Reliance Infrastructure has agreed to sell its cement assets to Birla Corp.

Why is it important? This would help Reliance Infrastructure reduce some of its debts (total is Rs 16,000 crore). And for Birla Corp., this would mean its capacity would go up to 15 million tonnes from 9.3 tonnes and may be, quicker than it intends to.

Tell me more: Anil Ambani’s Reliance Group is counted among the top 10 indebted groups in India according to a Credit Suisse report, with total debt of Rs 1.14 trillion.

Rs 15,000 crore

What is it? Amount the Petroleum Ministry has sought from the Finance Ministry to shore up India’s second phase of strategic oil reserves.

Why is it important? Crude oil is stored in underground rock caverns that can be used in case external supply is cut off. India imports around 80% of its oil needs and this is expected to go up to 90% in the next 20 years, according to an India Tech-PwC report.

Tell me more: India is spending nearly Rs 5,000 crore “towards crude filling costs” in three storage facilities – Vishakapatnam, Mangalore and Padur – which can hold over 5.1 lakh truck-tanker loads of crude oil. This can power India for about 13 days as against strategic oil reserves of 90 days of net oil imports, the global standard set by the International Energy Association.

$265-270 billion

What is it? India’s estimated exports in 2015-16, according to the Federation of Indian Exports Organization (FIEO). This is 13-15% lower than the exports recorded in 2014-15.

Why is it important? Lower commodity prices account for a large portion of this fall, but export volume too is shrinking. Nearly half of 76 commodities for which volume data is available registered a drop in quantity sold in April – October 2015. These 76 commodities account for 44% of exports.

Tell me more: Job creation fell by a net 43,000 in April-June 2015, of which export-oriented companies reported a decline of 26,000.

10-12%

What is it? Projected growth of India’s IT and software services export revenue to about $121 billion in 2016-17 by industry lobby Nasscom.

Why is it important? Software industry employs 3.7 million people and lower growth rate would mean hiring would stagnate at 200,000 in next financial year. In comparison, nearly 1.6 million engineers graduate each year, and most of them vie to gain employment in the software industry.

Tell me more: The growth forecast of 12-14% in the current fiscal and also, the third consecutive year in which there is a decline in projections. The lower end of the projection for next fiscal is the lowest in five years.

$120 million (over Rs 800 crore)

What is it? Amount 400 food delivery startups in India have raised from venture capital firms and other investors in the last three years.

Why is it important? Despite all the funding, the startups have failed to replace the traditional delivery networks that have been in existence since the 1890s. The famous Mumbai’s ‘dabbawalas’ (colloquial term for those who deliver the meal boxes) provide approximately 200,000 lunch boxes from central kitchens and cooks’ homes every day. The biggest food startups in India including FoodPanda, TinyOwl and Zomato have had to let go of people and scale down operations in the last few months.

Tell me more: Mumbai’s dabbawalas have been popular for their low error rate (of meal boxes going astray) despite being run by a group of semi-literate people who use no technology and charge a nominal amount of Rs 400-1,200 per month depending on the distance and time taken.

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News in numbers, Feb 1, 2016: Sugar prices on the rise, small savers’ money in Aamby Valley…

 

Rs 3,180 / quintal

What is it? Wholesale price of sugar in Delhi as on January 29, an increase of 20% from September 1 prices.

Why is it important? With experts predicting lower annual sugar production in India, sugar prices have seen a steady increase in the last five months, which is likely to prompt sugar manufacturers to step up their sales domestically rather than export. The Indian government had ordered mills to export 40 lakh metric tonnes of sugar in the 2015-16 season and had announced a subsidy on the shipments. But, India’s sugar exports is estimated to be less than half of that ordered by the government, according to ED&F Man Holdings (merchant of agricultural commodities) and Olam International (trader of soft commodities).

Tell me more: The government had made the exports mandatory in order to help the mills pay their dues to 5 crore sugarcane farmers in the country. Sugar mills owe about Rs 6,500 crore to the cane growers. The Indian Sugar Mills Association has reduced its estimated annual production figures from 2.8 crore metric tonnes predicted in July to 2.6 crore metric tonnes earlier this month.

 

Rs 1,500 crore

What is it? Amount Sahara group has invested in Aamby Valley resort project in Maharashtra from two of its credit cooperatives – Sahara Credit Cooperative Society and Saharayn E-Multipurpose Society.

Why is it important? In effect, Sahara is using money from small savers to fund the project. It could turn out to be risky. The group is embroiled in a fraud case where one of its time-deposit schemes was declared illegal and the Supreme Court had ordered it to repay Rs 36,000 crore to its investors. It still hasn’t done so. If the apex court decides to auction off its properties to refund its investors, then Aamby Valley could be hit, risking the money of the credit cooperatives put in the project. Already, the cooperatives want Sahara to return the deposits that have matured.

Tell me more: Aamby Valley’s net profit dropped to Rs 9 crore in 2012-13 from Rs 69.4 crore in the July 2011-March 2012 period.

 

34%

What is it? Growth in profits of 114 of the BSE 500 companies (representing over 90% of the total market capitalization on the Bombay Stock Exchange) in the quarter ended December 2015 from a year ago. (Banking, technology, oil and gas companies have been excluded from analysis).

Why is it important? This is the highest in at least three years and mainly due to a decline in commodity prices. Paints, tyres, batteries and cement companies got the benefit of the drop in crude oil prices (which they didn’t pass on to customers), according to Ambareesh Baliga, an independent market analyst. However, revenue of these companies have grown only 4.38% in the third quarter of 2015-16 compared to 4.29% in the previous quarter, reflecting poor demand conditions.

Tell me more: External factors including a likely economic slowdown due to China’s poor growth and volatility in global markets along with poor growth in Indian companies’ earnings have caused the BSE Sensex to lose 4.7% in January compared to 5% in 2015.

~30%

What is it? Likely increase in power tariffs in states such as Rajasthan, Haryana, Tamil Nadu, Jharkhand, Madhya Pradesh, Punjab and Uttar Pradesh.

Why is it important? This is a result of the agreement signed by the states, their power utilities and the Union Minister of Power under the Ujwal Discom Assurance Yojana (UDAY) where states would take over the debts of the power utilities. The central government has asked the states to cover a third of the difference between cost of power production and rates charged to consumers by effecting tariff increases. The remaining losses would be covered by introducing efficiency measures such as curtailing theft of electricity.

Tell me more: Reluctance on the part of the power utilities to increase power tariffs among other reasons have resulted in their outstanding loans ballooning to Rs 4 lakh crore, which are being borne by the taxpayers.

 

10

What is it? The number of employees a firm can have before it has to mandatorily provide employees’ provident fund, according to a new proposal.

Why is it important? Under the current rules, firms with 20 workers or more have to mandatorily take up EPFO’s schemes. The Indian government is planning to halve it through amendments to Labour laws, which do not require the Parliament’s approval. It intends to change the limit by a notification and two months’ time for consultations. This would bring in an additional 50 lakh workers under EPFO’s schemes.

Tell me more: The EPFO’s apex decision making body, the Central Board of Trustees, had decided to reduce the threshold from 20 to 10 workers in 2008 but hasn’t been implemented it so far.

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Why has there been a continuous decline in Indian goods exports in the last few months?

This piece originally appeared on Livemint.com

 

The continuing decline in the value of Indian goods exports is partly the result of lower commodity prices. Beyond that, the decline in value terms masks a fundamental problem facing a chunk of Indian goods exports: a drop in demand, which points to a sign of competitive weakness.

Half of goods categories shipped lower quantities

 

g-charticle-(goods-exports)-web1

 

Granular volume data, on a selective basis, was available for the six-month period from April to October 2015, during which Indian exports declined 12.3% in value terms over the 2014 corresponding period. Of the 76 commodities for which volume data was available and which accounted for 44% of Indian exports during this period, nearly half registered a drop in quantity sold in 2015.

Those in decline include both small contributors…

 

g-charticle-(goods-exports)-web2

 

Of the top 25 commodities by volume in our list of 76, as many as 12 registered a drop in quantity sold. Their value share was 22%. These cover both industries dominated by large companies (like petroleum) and those populated by medium and small enterprises (like leather, ayush products and milled produce).

…and big contributors to the Indian export basket

 

g-charticle-(goods-exports)-web3

 

There’s pain being felt on the top also. Of the top 20 commodities by value, which accounted for 61% of all Indian exports, volume data was available for only eight. Five of these showed a drop in volumes. Of the remaining 12, for which volume data was not available, five showed a drop in value terms.

Note: All volume change for April-October 2015 over April-October 2014

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News in numbers, Jan 27, 2016: Lower forecasts for commodities, hotlines at Indian airports…

 

37

What is it? The number of commodities of 46 monitored by the World Bank are whose prices are projected to fall in 2016.

Why is it important? This is good news for major commodity importers like India, as it could boost economic growth. India consumed 3,846 thousand barrels a day of crude oil in 2014, but domestic production was only 895.

Tell me more: Crude oil prices are projected to recover from current lows (below $ 30 a barrel) to $ 37 a barrel.

 

42%

What is it? The percentage of tenders floated in the construction sector in the last 12 months that are yet to be awarded, according to State Bank of India. The composite index compiled by the bank fell to its lowest level in last one year to 47.3.

Why is it important? India’s largest bank has identified three sectors – construction, steel, and textile – that are facing headwinds, and need help. Higher non-award of tenders indicate implementation delays are still continuing.

Tell me more: Rs 509,478 crore worth of tenders were floated in 2015, but only Rs 293,073 crore were awarded.

 

1.5 acres

What is it? Proposed change in land required to set up engineering college in mega and metro cities, as compared to current norm of 2.5 acres. In rural areas, the All India Council for Technical Education recommended 7.5 acres as against 10 acres.  Other proposals include meeting 20% of faculty requirement as adjunct teachers or industry veterans.

Why is it important? The proposal, if implemented, will reduce cost of setting-up colleges in urban areas as land cost have spiralled in the last 16 years. Allowing a fifth of faculty from industry will help tide over shortages.

Tell me more: There are 3,384 engineering colleges with an annual capacity of 1.63 million students as on March 2014.

 

13

What is it? The number of airports that will have hotlines – two dedicated lines with video conferencing facilities – installed to improve security.

Why is it important? These hotlines are expected to help in hijack situations by making communication more efficient. The lines will connect crisis management room in aviation ministry and the office of cabinet secretary. Six planes have been hijacked in India since 1947.

Tell me more: Delhi, Mumbai, Kolkata, Chennai, Hyderabad, Bengaluru, Trivandrum, Nagpur, Ahmedabad, Chandigarh, Jaipur, Lucknow and Guwahati are the airports that will have this facility.

 

74.77 million

What is it? The number of iPhones sold by Apple in quarter ended December 26, 2015

Why is it important? This is essentially flat from 74.5 million iPhones it sold during the same period last year, underlining concerns that iPhone sales might have plateaued. iPhones account for 68% of revenues for the company. It’s important for Apple because it hasn’t yet launched a product that’s as successful as iPhone. While iWatch and Apple TV saw record sales last quarter, they come nowhere close to iPhones. Apple car, whose launch could be years away, is facing roadblocks.

Tell me more: Apple has projected a revenue of $50 billion to $53 billion in the current quarter ending March 2016, from $58 billion a year ago. This will be the first time its revenue declined in the last 13 years.

 

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