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MC Insider: Cabinet reshuffle buzz, an aviation reform raises eyebrows, disinvestment rumours, coding blues, NPA tricks and more

Last Updated: January 25, 2021 / 08:16 AM IST

BIG-BANG CABINET REJIG… OR NOT!

BIG-BANG CABINET REJIG… OR NOT!

It is that time of the Modi government's second term when the Delhi media and bureaucratic circles are buzzing with rumours of an imminent cabinet reshuffle. Rumours of a rejig surface every one and a half years in every government's term. But the Modi regime has bucked that trend. This time, if our sources are to be believed, the reshuffle will take place when the Parliament takes a short break from the upcoming budget session. While the session will be from January 29 to April 8, there will be a break from February 15 to March 8. Our sarkari sleuths tell us that none of the major portfolios are expected to be changed, and the Raisina Hill Ministers (Home, Defence, Finance, External Affairs) are expected to retain their posts.

TAILWINDS FOR A SPECIAL SOMEONE?

TAILWINDS FOR A SPECIAL SOMEONE?

The timing of the RBI’s decision to tweak FEMA guidelines by allowing export of leased aircraft in complete or knocked down condition has raised a few eyebrows in aviation circles. Of course, there are many positives for the industry as a whole because of the change in norms. But this also comes at a time when one bankrupt airline is in the process of being resuscitated. There has been speculation about the close ties of the successful bidder with a murky South African businessman of Indian origin, and the possibility that the bidder may just be a front. But now chatter is that the murky businessman may not be the one pulling the strings in the background. Rather the actual beneficiary may be no stranger to the bankrupt airline. A couple of years back, before the RBI tweak to the FEMA guidelines, some of the leased aircraft of this airline had their key parts dismantled and sold, ostensibly to keep the rest of fleet in the air, according to media reports. The revival plan means that the new owner will have to enter into a one-time settlement with the lenders, to regain ownership of the aircraft and get the business running, or flying, again. And the other chatter doing the rounds is that--to use a common phrase relating to valuation of businesses—the sum of the parts may be greater than the whole, now that it is legally allowed!

OF MANDATES AND CONFLICTS

OF MANDATES AND CONFLICTS

There is a growing buzz is that a leading consultancy firm may be side-lined from the disinvestment process related to a leading PSU​. Reason? The age-old conflict of interest scenario. In this case, we hear the so-called conflict of interest is related to one of the executives of the said firm. Apparently, the same executive is engaged in the PSU divestment process as well as the ongoing insolvency process of a private company. So what’s the problem here? Chatter in the corridors of power suggests that the conflict of interest arises as the PSU and the private company fall in the same sector. The matter has been raised at a very senior level and was also discussed during an inter-ministerial meeting. It remains to be seen who is side-lined eventually, the firm or the executive.

GOING GLOBAL

GOING GLOBAL

The list of new-age companies in the fintech and edtech segment (which includes the country’s most valuable startup) exploring options to list overseas is growing with every passing day. After all, listing in foreign jurisdictions has its own advantages in terms of attractive valuations, greater acceptance among retail investors and tapping a deeper pool of liquidity. Many of the startup leaders are eagerly awaiting definitive guidelines from the government and we hear Budget 2021 may unravel the much-needed clarity on the tax front for these global aspirants and announce relaxations under the Income Tax Act. Though options would be limited to a list of “permissible jurisdictions”, Indian companies with significant overseas exposure, in terms of customers and employees, would be a happy lot indeed.

LEG BEFORE CAMERA

LEG BEFORE CAMERA

Who hasn’t had their share of embarrassing moments during Zoom calls since the onset of the lockdown? The founder of a Mumbai-based leading consumer goods firm took to social media to get his 8 lakh plus followers to answer the following query – “What’s the funniest thing that has happened in any of your zoom calls this past year?” Pat came the following reply from the head honcho of a diversified conglomerate that had recently nudged rising cricket star Shubman Gill to sign an endorsement deal with his tyre company following the historic win at Gabba: “Your camera was focused on your bare legs during a board meeting!!!”. The FMCG veteran did not take this lying down and shot back: “Isn’t that the dress code for your board meeting?” Lol! We love such good-spirited banter among India Inc veterans!

DECODING A NIGHTMARE

DECODING A NIGHTMARE

This controversial edtech startup has seen its revenues plunge sharply in the past six months. It was once the talk of town and celebrated for its ambitions of making coding accessible to kids. A lucrative exit for investors was on the cards. Alas, things have gone downhill in recent months. The backlash against the company mount by the day. It has been accused of taking users for a ride, spawning misleading advertisements, shutting down online dissent and suing its critics for crores. If the drop in revenue continues, it could well be one of the biggest upsets in the promising edtech ecosystem and its founder may be shown the door.

WHERE IS THE MAHARAJA’S SUITOR?

WHERE IS THE MAHARAJA’S SUITOR?

It's pin drop silence for now when it comes to the big-bang divestment of Air India, with the government tweaking guidelines to do away with deadlines. Otherwise, January 5 was when the government was slated to notify the shortlisted bidders. Does this mean that the government doesn't have a credible bidder? While that has been one of the rumours making the rounds, there is one more. That the circumstances are being made 'favourable' for the 'favourite son.' Hmmm… Only the next communication from the government, whenever it comes, can clear the air.

TACKLING BAD LOANS THE GOVT WAY

TACKLING BAD LOANS THE GOVT WAY

No one likes NPAs (non-performing assets, or bad loans). It shows the management in poor light and puts them in the club of weak banks. As the government owns a majority of the banking sector, rising NPAs in PSBs is no good news for it as well. But here's the problem. COVID-19 has been an unexpected jolt. Underlying stress is shooting up on the books of every single bank. So what’s the way out? Here's a simple trick! Ask the weaker PSBs (where NPAs are likely to escalate) to instruct their lower cadre officers to go for massive loan restructuring on every possible account. In recent weeks, bankers have been told to press ahead with the recast drive even in cases where documentation is pending. There are no formal orders but the message is communicated via phone calls. We hear this exercise on in full swing. The PSUs are happy because they can report a lower NPA number and the government is relieved as it helps to score a political point. And how can we forget, the borrower is super happy as he gets more time to repay!

AS YOU PROTEST, SO SHALL YOU REAP

AS YOU PROTEST, SO SHALL YOU REAP

Post the storming of the United States Capitol by former US President Donald Trump's supporters on January 6th, higher education institutes across the US are taking a tough stand against young protestors who could be joining them this year. We hear higher-education aspirants who have used Facebook, Instagram and Twitter to publish posts/pictures showing their presence in the Capitol during the attack could very well be denied a seat in these institutes in 2021. And this lot could include students of Indian origin as well after Indian presence was spotted on location. Tech experts are also being tapped to identify current students who may have been a part of these protests.

TIME TO GET BULLISH ON TINSELTOWN?

TIME TO GET BULLISH ON TINSELTOWN?

Bollywood is eagerly waiting for capacity expansion in theatres to release big ventures like Akshay Kumar's Sooryavanshi or Ranveer Singh's 83. And it looks like theatres will be able to operate at 75 percent capacity in February. Currently, cinemas are operating at 50 percent capacity. The news comes after a few industry people including actor Sunny Deol met I&B minister Prakash Javadekar seeking relief for the film and exhibition industry. Along with higher capacity, we hear the government is likely to do away with the checkered seating. That’s good news for all the cinema stocks for sure. So, if all goes well, from February onwards, you may be able to catch a flick in theatres sitting next to your family or friends without leaving a gap of one seat.

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