India

The head of India’s Tata conglomerate has promised to offload weaker companies among its 110 operating businesses, in an effort to tackle widespread underperformance within the sprawling group, the Financial Times reported. In a Financial Times interview one year on from his arrival as chairman of holding company Tata Sons, Natarajan Chandrasekaran said that he was determined to build a clearer structure within a group whose operations range from table salt to armoured vehicles and artificial intelligence. “There are a lot of marginal businesses we are in,” Mr Chandrasekaran said.

Billionaire Kumar Mangalam Birla and an investor group led by Dalmia Bharat Ltd. are emerging as the lead bidders for India’s Binani Cement Ltd., which is being sold under the country’s insolvency process, people with knowledge of the matter said. Birla’s UltraTech Cement Ltd. and the Dalmia Bharat consortium have each made cash offers of around 60 billion rupees ($936 million), the people said, asking not to be identified because the information is private, Bloomberg News reported.

Just when many Indian banks thought the worst of their bad debt woes were behind them, new central bank rules are stoking fears that the worst of the soured-loans buildup is yet to come, the International New York Times reported on a Reuters story. The central bank surprised the financial sector this week by halting all of its existing loan-restructuring mechanisms with immediate effect, and rolling out new rules that will push more debt defaulters into bankruptcy courts.

Capital market regulator Sebi will meet credit rating agencies this week to explore ways to have quicker access to information on loan defaults by corporates, The Economic Times reported. With the Reserve Bank of India (RBI) having so far refused to share the sensitive information beyond the banking industry, Sebi is keen that all rating agencies take membership of credit information companies (CICs) to obtain default data that banks have to report to CICs. Many corporates as well as banks are reluctant to share default information with rating agencies.

India’s central bank late on Monday tightened its rules around bank loan defaults, seeking to push more large loan defaulters toward bankruptcy courts and abolishing half a dozen existing loan-restructuring mechanisms, in its latest bid to accelerate resolution of the bad loans problem at Indian banks, Reuters reported. The new set of rules are aimed at creating a “harmonised and simplified generic framework” for resolution of stressed assets in view of new bankruptcy regulations, the Reserve Bank of India (RBI) said late on Monday.

ArcelorMittal is competing with a consortium led by Russia’s VTB Group as bids come in for Essar Steel India Ltd., the largest distressed steelmaker being sold under the country’s insolvency process, people with knowledge of the matter said, Bloomberg News reported. An Indian unit of ArcelorMittal, the world’s biggest producer of the alloy, submitted an offer, it confirmed in a statement Monday. Essar Steel could fetch a valuation of at least $6 billion in a sale, the people said, asking not to be identified because the information is private.

The norms for fast track insolvency proceedings have been tweaked wherein both fair value and liquidation value need to be assessed for the entity concerned. Under fast track mode, the resolution process is to be completed in 90 days, moneycontrol.com reported. The Insolvency and Bankruptcy Board of India (IBBI) has amended the Fast Track Insolvency Resolution Process for Corporate Persons. The board has already revised the norms pertaining to insolvency resolution process for corporate persons. Under this category, the proceedings have to be completed within a maximum of 270 days.

In another relief for debt-laden Reliance Communications, Mumbai-based Smartphone has withdrawn a petition seeking insolvency of the company filed before the National Company Law Tribunal (NCLT), The Hindu Business Line reported. The petition, filed under Insolvency and Bankruptcy Code (IBC), was withdrawn on Friday. Smartphone is a wholesale dealer of batteries and had supplied to telcos, including RCom. The Mumbai NCLT bench — comprising MK Shrawat and BP Mohan — disposed of Smartphone petition as ‘withdrawn’.

JSW Steel Ltd., India’s biggest producer, is interested in snapping up two struggling rivals, Bhushan Steel Ltd. and Monnet Ispat & Energy Ltd., as part of an industry-wide wave of consolidation sparked by a new bankruptcy law designed to clear-out distressed assets, Bloomberg News reported. The Mumbai-based company will partner with Japan’s JFE Holdings Inc., which holds a 15 percent stake in JSW Steel, and other investors to bid for the assets, Sajjan Jindal, chairman of JSW Group, said in an interview with BloombergQuint at the World Economic Forum’s meeting in Davos.

State Bank of India, the nation’s largest lender, sees provisioning for soured debt as the biggest challenge for the South Asian nation’s banking system even as credit growth is reviving from a three-decade low, Bloomberg News reported. “Whatever process we resort to for the resolution of non-performing assets there will be a gap in the provisioning,” Chairman Rajnish Kumar said in an interview with Bloomberg Television’s Haslinda Amin on the sidelines of the World Economic Forum in Davos on Tuesday. "That is precisely where the support from the government is required.