Andhra Pradesh Power Finance Corporation defaults in debt servicing

Amid the Amtek Auto controversy, the state-run Andhra Pradesh Power Finance Corporation has defaulted in debt servicing on bonds worth Rs 3,100 crore while the sister states Andhra Pradesh and Telengana are at loggerheads over who will should be responsible for paying bond holders. 

The erstwhile power finance company of the united state government was bifurcated into Andhra Pradesh Power Finance Corporation and Telengana State Power Finance Corporation and both are in constant fight over distribution of assets and liabilities. 

"Despite our continuous effort, the Corporation does not remit the shortfall (in interest payment)," said State Bank of Hyderabad, which was the debenture trustee for the bond, in a letter to investors on September 19. A copy of the letter is in possession of ET. 

Crisil Ratings has downgraded the bonds by five notches to `D' from `A' on September 25, almost three weeks after the company defaulted; raising doubts over rating companies' ability to warn investors on time. It had earlier placed the ratings on "rating watch with developing implications." 

In case of the Amtek Auto imbroglio too, the role of rating companies in predicting crisis in advance was on question. 

"Through our ratings as well as rating rationales over the past year and a half, we have been highlighting to investors consistently about the need to watch the process of bifurcation of assets and liabilities between the corporations of two states, and all this while, the payment was always on time," said Crisil's chief analytical officer Pawan Agrawal. 

"The bonds carried a trustee-administered payment structure and in such cases, the role of a trustee becomes very important. In this case the trustee did not invoke the guarantee as envisaged in the structure. The trustee issued the letter indicating shortfall in debt servicing on September 19 and it reached us on September 22. We downgraded the bonds on September 25," said Agrawal. 

The company under the united Andhra Pradesh government raised a total of Rs 3100 crore in three separate bond issues in 2012. The company was supposed to pay Rs 151 crore of interest on these bonds while it had only paid Rs 87.7 crore, resulting a shortfall of Rs 63.3 crore. 

The bonds were guaranteed by the state government. 

The trustee said in the letter that it was in the process of initiating steps against the company to safeguard bond holders' interest.

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An Infosys veteran is India’s most prolific angel investor

Mohandas Pai first made a name for himself during the 17 years that he spent at Infosys, where he rose to become the Indian information technology giant’s chief financial officer.

Now, the straight-talking chartered accountant is making his mark in India’s booming startup ecosystem.

In 2015, according to data compiled by Singapore-based DealStreetAsia, Pai is India’s most prolific angel investor.

Between January and September this year, Pai invested in nine startups. These include undisclosed funding into companies such as tax information portal Taxsutra, online news portal YourStory and Pune-based restaurant discounts startup Ressy.

Pai is followed by Ratan Tata, the former chairman of the Tata Group, who in his new role as a venture capitalist, invested in eight companies in 2015. The veteran business leader’s list features companies such as online taxi aggregator Ola, YourStory and Jaipur-based car portal CarDekho. Tata had retired as the chairman of the $100-billion Tata Group in December 2012.

Others among the top ten angel investors in the country, according to DealStreetAsia, include the founders of homegrown e-commerce majors, Flipkart and Snapdeal. Sachin Bansal and Binny Bansal, the founders of Flipkart, invested in news app News in Shorts and Tracxn, a startup that’s focussed on compiling data about other startups.

The list also includes Google’s India head Rajan Anandan, who invested in seven companies in 2015. Anandan—who started out as a part-time angel investor in 1991—is estimated to have a portfolio of 40 investments across India, Sri Lanka and the US. This year, he invested in online city and lifestyle guide portal Little Black Book and crowd funding website Wishberry.

Here’s a list of investments made by India’s leading angel investors in 2015, according to DealStreetAsia:

Name	Investments in 2015
Mohandas Pai	CimplyFive, Homelane, Conect Solutions, Tax Sutra, TheBetterIndia, YourStory, OnlineTyari, Ressy, Zimmber
Ratan Tata	CarDekho, KAARYAH, Holachef, YourStory, Infinite Analytics, Ola, Ampere, Lybrate
Kunal Bahl & Rohit Bansal	Bewakoof, Routofy, Urban Clap, belong, ShadowFax, Zenatix, MadRat Games, betaout* (only Bahl)
Rajan Anandan	AppVirality, Wishberry, MapMyGenome, Dazo, Innovaccer, Little Black Book, MyPoolin
Kris Gopalakrishnan	Lookup, Freshworld, Process9, uniphone
Anupam Mittal	Near.in, Truebil, The Porter, rBus, Instalively.com
Sachin Bansal & Binny Bansal	News In Shorts, Tracxn, Roposo, Plabro, trueHb
Zishaan Hayath	SquadRun, Qyk, Orobind, Pickingo, ShadowFax
Vijay Shekhar Sharma	EduKart, betaout, Goqii, Sheroes

In the first six months of 2015, Indian startups received more funding from venture capitalists than during the whole of last year according to VCCEdge, a financial research firm. Until June 2015, investors had pumped in some $2.46 billion (Rs15,700 crore) into the startup ecosystem, compared to $2.34 billion (Rs14,950 crore) in all of 2014.

India is currently the world’s third largest startup ecosystem with over 3,000 new companies in 2014. By 2020, this number is expected to more than triple to around 10,500 startups, according to information technology industry body Nasscom.

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2/3 of Mumbai's housing stock priced over Rs 1 cr

More than two-third of the unsold housing inventory in Mumbai is priced above Rs 1 crore, well beyond the reach of most of the city's prospective home buyers. 

Currently, there are about 33,500 residential apartments in this category out of a total 44,032 units. About 83 percent of the housing units launched in the second quarter ended June fall in this price range, showed a JLL India study covering projects within Mumbai's municipal limits. 

Although the proportion has come down from 90 percent at the end of April due to some new launches in suburban locations, it is still overwhelmingly high for a city where only a limited percentage of residents can afford ticket sizes of over Rs 1 crore.

"The need of the hour is to reduce the size of apartments and undertake value engineering of construction cost to ensure more home buyers can afford houses in Mumbai," said Ramesh Nair, COO & International Director, JLL India. 

Over the past few years, developers have been steadily reducing the average unit sizes to suit the budget of a majority of home buyers in the city. The reduction in average unit sizes has been the highest in Mumbai at 26.4 percent in the past five years. The average unit sizes in Mumbai have been the lowest among Indian cities. 

Apart from reducing apartment configurations, developers are also tweaking their strategies to cater to the large segment of consumers. 

"We all know that below Rs 1 crore is where majority of the demand is and would like to capture this attractive segment. But how many of us can do it within city limits, given the current land prices and development premiums that need to be paid upfront? That is why developers are also looking at places beyond Thane and Navi Mumbai where they can offer apartments in the affordable category," said Sunny Bijlani, director, Supreme Universal.

Development charges and premiums to be paid to the civic authorities form 30-35 percent of the project cost and these premiums have increased over 300 percent in the past three years, he said, adding that Supreme Universal is also in talks for land parcels in Badlapur and Ambarnath for affordable housing ventures.

With land prices and development premiums that continue to move higher, proportion of houses priced above this price range are expected to go up marginally in the near term launches. However, experts are of view that even the government needs to review the scenario and consider measures to ease the pressure.

According to Nair, apart from reducing taxes, government needs to improve infrastructure and connectivity. Also creating more growth corridors with economic activity will encourage, and not force, people to reside in suburban locations too. Moreover, during the launches in the second quarter, only 3.21 percent of the apartments under Rs 31-65-lakh bracket are in the size and none under the Rs 30-lakh bracket in Mumbai.

Pitted against pan-India figures, the numbers are highly skewed towards the higher ticket sizes in Mumbai. Very few units in the affordable range were available from all these launches and mostly were in the suburban locations. Even if one looks at the overall inventory, there is very little stock Rs 65 lakh in the affordable range of and below in Mumbai's municipal limits. 

ET View 

Mumbai needs inclusionary housing. We need a strong foundation of proactive policy to boost housing stock. For affordable housing, we need to do away with the most pernicious provisions in the Rent Control Act, which discourage renting out of dwelling units. The floor space Index needs to be done away with and we should instead seek to augment supportive infrastructure. We also need inclusionary public housing in Mumbai. Further, a trans-harbour link would open up vast tracks of land for housing. The Bandra-Worli Sealink has meant access to no new land. 

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FII vs Sensex

Reservations- Worth pondering over this

Breeding inequality through reservation.

Reserved V/S Deserved

38 % of Doctors in US are Indians. 36% of NASA Scientists are Indians. 34% of Microsoft employees are Indians. 28% of IBM employees are Indians. 27% of Intel employees are Indians. 37% of Total scientists in US are Indians. Still India is backward and that is because of our selfish politicians who encourage Reserved more than Deserved!   1. We have a lot of quantity but what we want is quality.. Give a chance to the deserved rather than the reserved.   2. Really talented people don't get what they deserve...because they are not 'reserved'.   3. Reservation should be abolished or soon INDIA will get abolished    4. To prove the word equality in the constitution.   5. As abroad India should offer free quality education and should sponsor scholarships for unprivileged poor student, reservation is just opposite to it..   6. So that the quality people and real talent can get opportunity.   7. Due to reservations we’re feeling guilty, because undeserved people are getting seats and thus we are failing to show equality even if we want.   8. Reservation system is affecting education system.   9. Reservation system should be abolished because it is associated with the castes rather than the economically backward.   10. It was meant to end, not to increase with time...   11. Because the reserved are preferred over the deserved and that reserved is undeserving.   12. Because if this system continues.... India was developing country... India is developing country... and India will be a developing country for ever...   13. If reservation policy continues it will lead to the “murder of merit".   14. Because generalist are also human beings and they are neither born with extra ordinary brains, they’ve a silver spoon in their mouth.   15. Because the demon of Casteism is growing on account of reservation. People make fake caste certificates and taking the seats and scholarships of the talented ones. If the deserved people had got reservation, India could have become a developed country. Poverty and backwardness does not recognise any caste.   16. For the accomplishment of equal opportunity to deserving candidates...   17. Because it breaks the unity of the country.   18. So that all people may feel that they are being treated equally...!   19. Even after 60 years of reservation system, they still need reservation. It means, they just don't deserve it!   And these are the bad bone of RESERVATION...

Ola founders youngest on super rich Indians list

The debutants include Ola founders Ankit Bhati, 28, and Bhavish Aggarwal, 29, who are also the youngest on the list. 

The new-age entrepreneurship boom in India is being reflected in the ranks of the wealthiest Indians, with several first-timers entering the super rich list. The debutants include Ola founders Ankit Bhati, 28, and Bhavish Aggarwal, 29, who are also the youngest on the list. With their personal fortunes estimated at Rs 2,385 crore each, the duo are jointly ranked 238th. 

While the top spots are occupied by familiar faces, with Reliance Industries chairman Mukesh Ambani ranked numero uno with a net worth of Rs 1.6 lakh crore, the list also throws up some surprises. 

For example, the Indian who posted the biggest gain in wealth over the past year is reported to be Dhiraj Rajaram, the 40-year-old founder of Bengaluru-based analytics firm Mu Sigma. Rajaram saw his personal fortune rise six-fold, to Rs 17,800 crore. His ranking has risen 127 positions to No. 38, according to the Hurun India Rich List for 2015. 

There are 76 new faces among the 296 who made it to the list this year, with the cut-off level being personal wealth of Rs 1,600 crore. Apart from Ola's Bhati and Aggarwal, other prominent tech entrepreneurs on the list include Flipkart's Sachin Bansal, 34, and Binny Bansal, 34, whose estimated wealth of Rs 9,010 crore each puts them at the 85th spot, a rise of 58 positions. Snapdeal's Kunal Bahl, 32, is a new entrant, jumping straight to the 243rd spot with a wealth of Rs 2,314 crore. 

Vijay Shekhar Sharma, 38, of mobile wallet and e-commerce firm Paytm, and Naveen Tewari, 39, of the mobile ad network InMobi are also new entrants. 

Most of these technology and internet companies have raised significant amounts of private equity capital at substantial valuations over the past year. Flipkart's latest fund raise valued the firm at $15 billion, and Snapdeal's valued it close to $5 billion. Most of the new-age startup founders are also exceptional in that they are self-made; 85% of those in the list are part of family businesses.

 

"Despite the weakening of the stock market and the rupee, the Hurun India Rich List expanded by 76 entrepreneurs, showing the resilience and dynamism of the Indian private sector," said Anas Rahman Junaid, India head, Hurun Report. The Hurun Report was started by researcher Rupert Hoogewerf. The first report, in 1999, was on the rich in China, and Hoogewerf has since been regularly bringing out a China rich list. The India initiative began two years ago. 

Among the biggest gainers this year are also Sameer Gehlaut of the diversified conglomerate Indiabulls (445% increase in wealth to Rs 9,800 crore) and B K Goenka of steel and textile company Welspun (308% increase to Rs 9,820 crore). 

At the top, Mukesh Ambani was followed by Dilip Sanghvi of Sun Pharma, S P Hinduja & family of the Hinduja Group, Shiv Nadar of HCL, and Pallonji Mistry of the Shapoorji Pallonji Group. 

For the first time, Wipro chairman Azim Premji fell off the top 5 rankings. He's now at the seventh spot, with his net worth plummeting 59% to Rs 51,900 crore, on account of his philanthropic donations. Premji has been steadily transferring significant amounts of his shareholding to his philanthropic trust, and is committed to eventually transferring at least 50% of his shareholding to such causes. 

The number of dollar billionaires this year has jumped to 124 individuals, up by 15 from last year. While Mumbai dominated the rich list with 29% of the individuals living in the city, Delhi came in second with 19%, followed by Bengaluru with 8%. 

The newest non-family run businesses are tending to create more millionaires per company. This year's list has five individuals from Infosys, four from Micromax, and four from Lava International.