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Mukesh Ambani’s RIL first domestic firm to cross Rs 11.5 lakh cr m-cap mark

NEW DELHI,July 6: Reliance Industries Limited on Monday added another feather to its cap as its market valuation crossed Rs 11.5 lakh crore mark, the first by any domestic company.

The market heavyweight stock jumped 3.57 per cent to close at Rs 1,851.40 on the BSE. During the day, it rose by 3.94 per cent to a record high of Rs 1,858.

On the NSE, it gained 3.75 per cent to settle at Rs 1,855.

The company’s market valuation rose by Rs 40,508.8 crore to Rs 11,73,677.35 crore at close of trade on the BSE.

In terms of volume, 9.49 lakh shares of the company were traded on the BSE and over 2 crore on the NSE.

Gains in Reliance Industries’ shares were also instrumental in taking the BSE 30-share index higher by 465.86 points, or 1.29 per cent, to close at 36,487.28.

Reliance Industries, the country’s most valued firm, last month became the first Indian company to cross the Rs 11 lakh crore market valuation mark.

Shares of Reliance Industries on Friday rose by nearly 2 per cent after announcement that Intel Capital will buy 0.39 per cent stake in Jio Platforms. The stock has gained over 22 per cent this year so far.

Mukesh Ambani joins club of world’s 10 richest

NEW DELHI, June 21: Asia’s richest man has entered a new league of wealth. The net worth of Mukesh Ambani, chairman of Reliance Industries Ltd., has jumped to $64.5 billion, making him the only Asian tycoon in the exclusive club of the world’s top 10 richest people, according to the Bloomberg Billionaires Index. He overtook Larry Ellison of Oracle Corp. and France’s Francoise Bettencourt Meyers, the wealthiest woman, to reach the No. 9 spot.

Ambani, who owns 42% of Reliance, has benefited from a flurry of investment into the company’s digital unit, Jio Platforms Ltd., that Reliance said has made it net-debt free ahead of a March 2021 target. The shares of the Indian conglomerate have doubled from a low in March, just as other billionaires on the list have been hit by the impact of the coronavirus pandemic.

While the Indian economy “has been nearly decimated” during the lockdown to control the spread of Covid-19, “Ambani’s companies (particularly the telecom giant Jio) have prospered, and his personal wealth has increased substantially,” said Jayati Ghosh, chair of the Centre for Economic Studies and Planning at the Jawaharlal Nehru University.

A media representative for Reliance declined to comment on Ambani’s fortune.

The rise of the 63-year-old as India heads for its worst-ever recession is a reminder of the nation’s deep economic divide, in which the top 10% hold more than three-quarters of the total wealth, and where most new fortune creation stays in the hands of the richest 1%. Ambani lives in a 27-story mansion in Mumbai, known as Antilia, that has three rooftop helipads, parking for 168 cars, a 50-seat movie theater, a grand ballroom with crystal chandeliers, three floors of Babylon-inspired hanging gardens, a yoga studio, and a health spa and fitness center.

While a crash in oil prices caused uncertainty in a stake sale of Reliance’s oil and chemicals division, in just two months Jio managed to attract some $15 billion -- more than half the investment into telecom companies worldwide this year. Facebook Inc., General Atlantic, Silver Lake Partners, KKR & Co. and Saudi Arabia’s sovereign wealth fund are among those trying to get a slice of one of the world’s fastest-growing online commerce markets. A June report by Sanford C. Bernstein predicted that Jio is likely to capture 48% of India’s mobile subscriber market share by 2025.

In the latest potential deal slated to bolster Ambani’s e-commerce ambitions, Reliance is close to acquiring stakes in some units of Future Group, which already has a partnership with Amazon.com Inc., people familiar with the matter have said.

Ambani got his start in the family’s business in the early 1980s, when his father, Dhirubhai Ambani, summoned him back to India to oversee construction of a polyester mill after a year at Stanford Business School. The Ambanis began to buy up suppliers as well as petrochemical plants and oil refineries and eventually built the company into a fabrics, textiles and energy empire. Dhirubhai died of a stroke in 2002 without leaving a will, triggering a feud between Mukesh and his brother, Anil.

In a settlement brokered by their mother, the brothers split the family business. Mukesh retained control over the refining, petrochemicals, oil and gas, and textiles operations, while Anil took the telecommunications, asset-management, entertainment and power-generation businesses. In 2013, the brothers announced a $220 million pact to share a fiber-optic network, their first deal since splitting the Reliance empire. Parts of Anil’s operations have since struggled, with a unit of his Reliance Communications Ltd. filing for bankruptcy last year.

Mukesh revels in being the biggest. In India, Reliance officially became just that last year, when it surpassed state-owned Indian Oil Corp. to become the country’s largest company by revenue. At Reliance’s annual shareholder meeting in August, which is covered like a national event -- including by its media and entertainment arm, Network18 -- Ambani called it the “golden decade of Reliance.”

He celebrated the group’s growing list of superlatives: the largest telecom enterprise by subscribers, revenues and profit; a retail arm larger than all other major retailers combined; an oil giant that makes India’s largest export.

“We are also incubating newer growth engines,” Ambani said at the time, adding that he hoped the digital-driven expansion could be more inclusive. “No power on earth can stop India from rising higher.”

At least on the global wealth ranking, that seems to be the case.

India’s forex reserves jump USD 8.22 billion; cross half-a-trillion mark for first time

MUMBAI, June 12: The country’s foreign exchange reserves crossed the half-a-trillion mark for the first time after it surged by massive USD 8.22 billion in the week ended June 5, according to the latest data from the RBI.

The reserves rose to USD 501.70 billion in the reporting week helped by a whopping rise in foreign currency assets (FCA).

In the previous week ended May 29, the reserves had increased by USD 3.44 billion to USD 493.48 billion.

In the week ended June 5, FCA, which is a major component of the overall reserves, rose USD 8.42 billion to USD 463.63 billion.

Expressed in dollar terms, the foreign currency assets include the effect of appreciation or depreciation of non-US units like the euro, pound and yen held in the foreign exchange reserves.

The gold reserves declined by USD 329 million to USD 32.352 billion in the reporting week, the Reserve Bank of India (RBI) data showed.

In the reporting week, the special drawing rights with the International Monetary Fund (IMF) were up by USD 10 million to USD 1.44 billion.

The country’s reserve position with the IMF also rose USD 120 million to USD 4.28 billion during the reporting week, the data showed.

Lockdown Flattened Wrong Curve: Rajiv Bajaj In Chat With Rahul Gandhi

NEW DELHI, June 4: A "draconian" but "porous" lockdown to slow the spread of coronavirus ended up "flattening the wrong curve" and left the country with the worst of both worlds, industrialist Rajiv Bajaj said in a video interaction with Congress leader Rahul Gandhi.

"We tried to implement a hard lockdown which was still porous. So, I think we have ended up with the worst of both worlds. On one hand, a porous lockdown makes sure that the virus will still exist and as you said, it is still waiting to hit you when you will unlock. So, you have not solved that problem," Bajaj, Managing Director of Bajaj Auto, said in the online chat aired this morning.

"But you have definitely decimated the economy. You flattened the wrong curve. It is not the infection curve, it is the GDP curve," he said.

Bajaj commented that a hard lockdown implies an airtight, impervious lockdown. "And to the best of my knowledge, this has not happened anywhere in the world. To physically constrain yourself to your home and see absolutely no one," he noted.

The industrialist also commented in his conversation with the Congress leader, "We are not seeing a smooth, concerted, rhythmic movement towards unlocking. Unfortunately, India not only looked west, it went to the wild west. I think we stayed more towards the impervious side."

This is the latest in a series of interactions that Rahul Gandhi has had with economists, experts, industrialists and others since the country went into lockdown in late March. He has earlier held chats with Raghuram Rajan and Abhijit Banerjee.

Bajaj, whose father Rahul Bajaj is one of India's most respected corporate leaders, shared that he had been advised that he would land in trouble for speaking to Gandhi.

"I shared with someone that I am speaking with Rahul and the first reaction was - mat karna (don't do it), this can get you into trouble," he remarked. "Why take the risk, he said."

Asked by Gandhi about a perceived "atmosphere of fear" in the country, Bajaj said in terms of being tolerant and sensitive, India needs to mend a couple of things.

The Congress MP shared, to a question from Bajaj, that a lockdown like this "brings the fear of death in the mind of people" and that is something tough to get rid of.

"It (lockdown) was also imposed suddenly. The bitter-sweet thing you said is shocking to me. See, rich people can deal with it as they have a home, a comfortable atmosphere, but it is completely devastating for the poor people and migrants," said Gandhi.

He also reiterated concerns about the impact of the lockdown on the economy.

"Whoever is going to invest in India is going to invest not because of your image, they are going to invest because of what you are and what you have... So the first logic has to be, defend that economy," Gandhi said.

"If you don't have an economy left, there is nothing."

Moody’s downgrades India’s sovereign rating

NEW DELHI, June 1: Moody’s Investors Service on Monday downgraded India’s sovereign rating to ‘Baa3’ from ‘Baa2’, saying there will be challenges in implementation of policies to mitigate risks of a sustained period of low growth and deteriorating fiscal position.

“Moody’s has today downgraded the Government of India’s foreign-currency and local-currency long-term issuer ratings to Baa3 from Baa2. “Moody’s has also downgraded India’s local-currency senior unsecured rating to Baa3 from Baa2, and its short-term local-currency rating to P-3 from P-2. The outlook remains negative,” the agency said in a statement.

The negative outlook reflects dominant, mutually-reinforcing, downside risks from deeper stresses in the economy and financial system that could lead to a more severe and prolonged erosion in fiscal strength than Moody’s currently projects, it added.

“The decision to downgrade India’s ratings reflects Moody’s view that the country’s policy-making institutions will be challenged in enacting and implementing policies which effectively mitigate the risks of a sustained period of relatively low growth, significant further deterioration in the general government fiscal position and stress in the financial sector,” the statement said.

‘Baa3’ is the lowest investment grade - just a notch above junk status.

Moody’s had in November 2017, after a gap of 13 years, upgraded India’s sovereign credit rating by a notch to Baa2 from Baa3.

Summer crop prices hiked 50-80% for Indian farmers

NEW DELHI, June 1: The Union Cabinet on Monday approved federally fixed minimum support prices (MSP) for 14 kharif or summer-sown crops, which will offer 50-83% profit over cultivation cost, agriculture minister Narendra Singh Tomar said.

The announcement came as the June-to-September monsoon for 2020, predicted by the India Meteorological Bureau to be normal, made its onset over Kerala, its first port of call in the Indian mainland, on June 1, as predicted.

A normal monsoon will likely lessen the strain on the agriculture economy from widespread disruptions caused by the Covid-19 pandemic. The summer rains are critical because nearly 60% of India’s net arable land lacks irrigation and nearly half the population depends on a farm-based livelihood.

The MSP for paddy, the main summer staple, has been raised by Rs 53 to Rs 1,868 per quintal for the 2020-21 crop year, which will give a return of 50% over cost of cultivation, according to an official statement.

“(The) government has increased the MSP of Kharif crops for marketing season 2020-21, to ensure remunerative prices to the growers for their produce,” a Cabinet statement said.

The highest increases in MSP are for nigerseed (Rs 755 per quintal) followed by sesamum (Rs 370 per quintal), urad (Rs 300 per quintal) and cotton (Rs 275 per quintal). “The differential remuneration is aimed at encouraging crop diversification,” the official statement said.

For cotton, the MSP has been increased by Rs 260 to Rs 5,515 per quintal, Tomar said. The support prices of arhar or tur, a type of lentil, has been fixed at Rs 6,000, which represents a 58% return over cost of cultivation.

The increase in MSP for kharif crops is in line with the Union Budget 2018-19 announcement of fixing the MSPs at a level of at least 1.5 times of the countrywide weighted average cost of production, which aims to give at least 50% returns for each crop.

According to official calculations, the returns to farmers over cost of production are estimated to be highest in case of the coarse cereal, bajra (83%), followed by urad (64%), tur (58%) and maize (53%).

“To correct demand-supply imbalances, the government has realigned the MSPs more in favour of oilseeds, pulses and coarse cereals to encourage farmers to shift to these crops,” said Abhishek Agrawal, an analyst with Comtrade, a commodities trading firm.

Fresh indicators show the country’s farm sector, which employs nearly half the population, has coped well with the Covid-19 crisis, with a larger summer crop area than last year, higher sales of fertilisers and seeds, and better prices, leading Reserve Bank Governor Shaktikanta Das to last month call it a “beacon of hope”.

The farm sector is poised to grow at least 3% in 2020-21, despite disruption in the economy due to the coronavirus pandemic. According to government think tank Niti Aayog’s assessment in April, agriculture will aid overall growth.

There are other indicators too, ranging from sowing to input sales, which show the agriculture economy is heading into the summer-sown or kharif operations in decent shape.

Farmers have planted rice in about 3.48 million hectares (1 hectare equals 2.4 acre) compared to 2.52 million hectares during the corresponding period of last year, an increase of nearly 37%, official data as on May 21 show.

The area under pulses -- a major summer crop with up to 70% share in farm incomes in some states – stands at nearly 1.28 million hectares against 0.96 million hectares during the same period of last year, which is higher by one-third (33%).

 

 

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