News in numbers, Apr 25, 2016: Mixed signs of economic recovery, judge-population ratio…

13.8%

What is it? The year-on-year net profit growth of 60 companies in the January-March 2016.

Why is it important? This is the lowest in four quarters, though it is better than the 10.6% growth a year ago. The analysis of companies that have declared their fourth quarter results so far indicates mixed signs of economic recovery. The net profit growth numbers disappointed observers, but the combined revenue growth at 0.6% the highest in seven quarters provided some cheer.

Tell me more: A better picture would emerge after key manufacturing and infrastructure companies declare their results. This sample of companies analysed includes some of the biggest companies in India – Reliance Industries, Infosys, HDFC Bank, Wipro – which account for a majority of the combined net profit and revenues in the three months to March 2016.

15

What is it? The number of judges for every 10 lakh population in India.

Why is it important? Lack of judges is one of the main factors for India’s slow justice system. It has serious economic costs too. A survey by Bengaluru-based NGO Daksh estimated that the loss of wages and business for litigants attending lower court hearings, in addition to legal fees and other costs works out to be over Rs 80,000 crore a year, 0.7% of India’s GDP in 2015-16.

Tell me more: The Supreme Court has six vacancies while as of February 29, the High Courts had 464 vacancies of judges. This has resulted in high pendency of cases – as of February 19, 59,468 cases were pending before the apex court; around 45 lakh cases pending before all 24 high courts and 2.75 crore cases before the trial courts as reported in early January.

750

What is it? The number of complaints against private universities received by the Indian government and University Grants Commission (UGC) in the last three years.

Why is it important? The government and UGC have stepped up their scrutiny of private universities, which are loosely regulated and enjoy a great amount of freedom in their operations. The challenge for India is to improve the quality of higher education even as it aims to increase gross enrolment ratio to 30% by 2020 from 23.6% in 2014-15.

Tell me more: The complaints – including on fake degrees and irregularities in finance – have seen a threefold increase in the last couple of years.

~ $1 billion

What is it? The value of offshore loans, which SSG Capital Management, a Hong Kong-based distressed-asset investor, is reportedly interested in buying from Standard Chartered’s India portfolio. It’s the only firm that has shown interest so far.

Why is it important? Indicates tepid response to the sale of distressed assets in India as banks scramble to clean their balance sheets before the March 2017 deadline set by the central bank.

Tell me more: Standard Chartered’s sale of India loans was reported about a fortnight ago. The Hong Kong-based firm is also seeking a 30% discount on the value of the assets.

2

What is it? The number of people killed in a gun battle between two rival groups at Aligarh Muslim University (AMU) during the weekend.

Why is it important? AMU is ranked among the top 10 universities in India, and it comes on the back of unrest at Jawharlal Nehru University and Hyderabad University. The AMU incident was said to be due to groupism, which also resulted in the destruction of 28,000 students records in fire.

Tell me more: Reports say that trouble began when a hostel student was assaulted and an attempt was made to set his room afire. Following the student’s complaint to the proctor against this, a rival gang arrived with weapons and both the groups resorted to firing at each other.

Read More

How PNB is feeling the pinch from wilful defaulters at both ends

This piece originally appeared on Livemint.com

 

At Rs.11,432 crore, Punjab National Bank (PNB) had the second largest portfolio of wilful defaulters: borrowers who have defaulted on meeting their loan commitments despite having the ability to make payments or who are in violation of some part of the loan agreement. PNB is also perhaps the only bank that has been making public, at three-month intervals, a list of these borrowers. An analysis of PNB’s lists for December 2014 and February 2016, during which its number of wilful defaulters multiplied 2.6 times, shows how truant borrowers are biting the bank at both ends.

At the top, the bulge is due to loan size…

The number of wilful defaulters grew at a faster clip than their amount at default. As a result, the average amount per wilful defaulter fell. However, what this masks is the rising distress among big borrowers. The top 10% and 25% of PNB’s wilful defaulters now account for 75% and 90% of the amount at risk, respectively—an increase over the corresponding 2014 figures.

 

g-charticle-(PNB-bank)-web1

… and half of the top 15 were not there in 2014

Of the top 15 wilful defaulters by loan size, eight were not there in 2014. And three of these eight are units of Ramsarup Industries.

 

g-charticle-(PNB-bank)-web2

 

At the bottom, the bulge is due to growing number of wilful defaulters

Along with an increase in large defaulters, PNB has also seen smaller defaulters grow at a faster pace than the portfolio average—an indication of the widening of the bad-loans problem.

 

g-charticle-(PNB-bank)-web3

 

They are now spread across twice as many cities

New Delhi (148 cases), Mumbai (90 cases) and Chandigarh (62 cases) still lead PNB’s city-wise list of wilful defaulters. But the number of cities has nearly doubled, another indication of the widening of the bad-loans problem.

 

g-charticle-(PNB-bank)-web4

 

Read More