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Discoms: Cutting the losses

78%

What is it? The percentage stake the government has in Coal India.

Why is it important? The government is reportedly considering offloading a stake in world’s single-largest producer of coal, after its plans to sell Air India did not attract any prospective buyers. Failure of Air India disinvestment could impact Rs80,000 crore target set for disinvestment in 2018-19. The government recently rejected Niti Aayog’s proposal to reduce the former’s stake in non-strategic public sector units even as it is reportedly confident of breaching its disinvestment target this fiscal.

Tell me more: The government, which was said to be considering the option of listing Air India, has suffered a setback after the markets regulator denied the national carrier exemption from a rule that mandates that the firm reports net profit for the last three years.

Rs 3-4 lakh crore

What is it? The amount in credit that may face refinancing risks if the current challenges in the financing environment remain, according to a report by India Ratings and Research.

Why is it important? The borrowers that have lower ratings may find it difficult to refinance outstanding loans unless liquidity is at least partially improved in financing channels. The sectors that face increased refinancing risks include power, telecom, infrastructure, and metals and mining and are skewed towards smaller businesses that do not have the capacity to withstand such pressures.

Tell me more: The reasons for these risks include the poor health of public sector banks that may lend to better-rated corporates, leaving little for the weaker ones, and the heavy reliance of non-bank financial companies on banks for credit.

5

What is it? The number of years for which Sandeep Bakhshi (the head of ICICI’s life insurance unit) has been appointed as the chief operating officer and whole-time director on ICICI Bank’s board, beginning June 19, subject to regulatory approvals.

Why is it important? The bank said on Monday that its managing director and chief executive officer Chanda Kochhar will go on leave until an independent probe into alleged conflict of interest and charges of impropriety is completed against her. Bakhshi will report to Kochhar and during her absence, to the board.

Tell me more: Former Supreme Court judge BN Srikrishna will conduct an investigation into the loans granted by ICICI Bank to Videocon Group, whose chairman Venugopal Dhoot had business links with Kochhar’s husband, Deepak Kochhar.

Rs17,350 crore 

What is it? The annual losses incurred by power distribution companies in India, according to a report by Deutsche Bank Market Research.

Why is it important? This is 70% reduction in losses in two years’, says the report. Power distribution companies, mostly state-run, incurred loss of Rs70,000 crore per year before the UDAY scheme was introduced. The losses narrowed as the power utilities closed the gap between cost of supply of power and tariff rate to Rs0.24 per kWh, a reduction of 57%.

Tell me more: Under the UDAY scheme – where debt of power utilities was converted as sovereign debt – the transmission and distribution losses has to be capped at 15% by January 2019. There is wide variation among states, with 16 states reporting losses increasing by 20% to 56%.

50% 

What is it? The percentage of audits done by KPMG on firms listed in FTSE 350 that did not meet the auditing standards set by Financial Reporting Council (FRC), United Kingdom.

Why is it important? FRC has mandated that all at least 90% of all audits done by the ‘Big four’ audit firms should meet the watchdog’s standard by 2018-19. PwC scored the highest with 84% of audits meeting the standard. EY and Deloitte scored 82% and 79%. FRC blamed senior management, ‘extent of challenge of management and exercise of professional scepticism’ as reasons for poor audit standards by KPMG.

Tell me more: In India, auditors have resigned from 30 companies in calendar 2018, as compared to seven resignations in 2017, according to data compiled by Prime Database.

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News in numbers, Apr 15, 2016: VC & PE investments in startups, India’s remittances…

$1.15 billion

What is it? Venture capital and private equity investments in Indian startups in the January-March quarter of 2016.

Why is it important? This is the second consecutive fall in startup investments, indicating continued investor caution. The number of startup deals fell by 4% to 116 possibly on concerns over startups’ business models, valuation and economic slowdown.

Tell me more: The data by KPMG and CB Insights show that startups received investments worth $2.9 billion in the July-September quarter of 2015, which declined by 48% to $1.5 billion in the three months to December last year.

$68.9 billion

What is it? The remittances to India in 2015, according to World Bank.

Why is it important? They declined by nearly $1 billion (2.1%) from 2014, the first drop since 2009 during global financial crisis. Last year’s decline came on the back of low oil prices in the Middle Eastern countries, a major remittance-generating source for India. However, India retained its top spot in inward remittances.

Tell me more: After India, China and Philippines topped the list of remittance-receiving countries with $64 billion and $28 billion respectively. Mexico with $25 billion and Nigeria with $21 billion in remittances came in at the fourth and fifth positions respectively.

130

What is it? The number of people who died due to heatwaves this year.

Why is it important? It might get worse, with the weather department warning eight states of facing heatwave conditions in the next two days. Telengana and Andhra Pradesh, which had reported over 2,000 deaths due to heatwave conditions last year, are likely to see maximum temperatures increasing by 1-2 degree celsius in the next 2-3 days.

Tell me more: As many as 100 people have died due to heatwave conditions in Andhra Pradesh and Telengana and 30 in Odisha. Maximum temperatures are expected to increase by 2-4 degree Celsius over the north-western plains, 2-3 degree Celsius over central India and 1-2 degree Celsius over west India.

68%

What is it? The share of companies in which investors got better returns (on the shares allotted to them during the IPO) on the day of the listing rather compared to a year later. This corresponds to 198 companies of 292 analysed.

Why is it important? As many as 71 stocks closed lower on the listing day and declined further in one year from listing. Indicates that promoters tend to price their public issues with little or no room for growth, and might reduce appetite for IPOs.

Tell me more: Over 30% of the companies analysed eroded more than 50% of their offer price within one year of listing. The study included IPOs launched in the last 10 years and have completed at least a year since listing.

3 lakh

What is it? The number of rural habitations, nearly a fifth of the total, that have less than the prescribed norm of 40 litres per capita per day of safe drinking water.

Why is it important? The primary reason for lack of adequate supply of safe water is reportedly due to delay in over 3,000 drinking water schemes, some of them which are over 5-10 years old.

Tell me more: There are 66,093 rural habitations where drinking water is contaminated. According to World Bank estimates, 21% of communicable diseases are related to unsafe water and diarrhoea alone causes over 1,600 deaths everyday.

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News in numbers, Jan 20, 2016: VC-backed startups’ funding falls, ad spending in 2016…

 

Rs 4.34 per unit

What is it? The price at which Finland-based Fortum Finnsurya Energy has bid to build a 70-MW solar plant in Rajasthan under NTPC’s Bhadla Solar Park tender.

Why is it important? This is the lowest solar tariff in India, beating the recent bids by SBG Cleantech and Sun Edison at Rs 4.63 per unit. Though such low tariffs raise concerns about the viability of these projects, the government says this has been possible “through transparent auctions with a ready provision of land, transmission and the like”. Lower crude prices tend to be bad for solar energy firms, but India’s energy push is opening up opportunities for some of them.

Tell me more: State-owned NTPC conducted the reverse bidding for 420 MW solar projects to be set up at Bhadla’s Solar Park – Phase II on Monday.

 

35 seconds

What is it? The minimum time it will take to book a train ticket on IRCTC website.

Why is it important? The railway ticket booking website has deliberately kept the booking time to 35 seconds to prevent automated software from exploiting the system. The 35 second wait time was arrived at after considering that it takes at least 35 seconds to fill in the needed information. This is expected to reduce complaints from individual users who end up not being able to book tickets online.

Tell me more: In 2014-15, 18.3 crore tickets were booked on the IRCTC website and 14.9 crore between April-December 2015.

 

6%

What is it? The rate at which print advertising is estimated to grow in 2016 in India, according to a report by media agency GroupM.

Why is it important? However, print’s share in ad spending is estimated to decrease from 32.4% to 29.7% in 2016. Share of digital and television advertising are expected to increase to 12.7% and 47.1% this year. The growth in print sector is to be driven by auto, banking and finance and the government, besides regional advertising of telecom and consumer product brands in vernacular papers.

Tell me more: Total ad spending is estimated to grow 15.5% in 2016 to Rs 57,486 crore. Digital spending is likely to grow the fastest at 47.5% while growth rates of television and radio advertising are likely to slow down from 2015.

 

$1.5 billion

What is it? Amount venture capital-backed startups raised on 114 deals in the October-December quarter of 2015, according to a report by CB Insights and KPMG.

Why is it important? This is a decline of 46% in funding and 18% in number of deals in the last quarter of 2015 compared to the previous quarter. In Q3 of 2015, VC-backed startups raised $2.8 billion on 139 deals. An indicator that startups may not enjoy the same steady flow of VC money as in the previous quarters. India recently announced setting up a fund of funds with a $1.5 billion corpus to spent over four years.

Tell me more: At a global level too, there was a 30% drop in funding to $27.2 billion invested across 1,742 deals, marking the “lowest quarterly deal activity since Q1 2013”.

 

6.9%

What is it? China’s economic growth rate in 2015.

Why is it important? It is the slowest in 25 years. A slowdown in China, which is the second largest economy and the second largest importer of goods and services, is bound to affect the global economy. Concerns over China’s slowdown and a slump in commodity prices have prompted the International Monetary Fund (IMF) to cut its global economic growth forecast to 3.4% in 2016 from its October projection of 3.6%. It has kept China’s growth projection unchanged at 6.3% this year. China’s release of its weak economic growth prompted speculation that the government might announce some stimulus package, causing global stocks to rise.

Tell me more: China’s economic slowdown in the last two years comes as its government is trying to transition to an economy that is led by consumption and services rather than exports and investments.

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