News digest: Air India sale, retail NBFCs, shell companies, and more

1. Govt puts off debt-laden Air India stake sale, to revive loan recast plan

The government has indefinitely put off the sale of state-owned airline Air India as it believes there wouldn’t be takers ahead of the 2019 general elections. The attempt will now be to recast the debt burden of the airline by hiving off a portion of the debt into a separate subsidiary.

Sources aware of the development said the call to defer the disinvestment process was taken at a meeting of the group of ministers Monday night. The decision came after the transaction advisor suggested that the political environment was not conducive for a sale of Air India’s magnitude. Read more...

2. Retail NBFCs outdo private banks in profits as lending picks up pace

Non-banking finance companies (NBFCs) have for the first time reported a higher combined net profit than that of private sector banks. With retail lending picking up pace, NBFCs have emerged as the fastest-growing and the most profitable segment for lenders. In the March quarter, retail NBFCs, such as Housing Development Finance Corporation, Indiabulls Housing Finance, Bajaj Finance and Mahindra & Mahindra Financial were more profitable than some of the private sector banks.

Listed retail NBFCs reported a combined net profit of Rs 108 billion during the January-March quarter, compared to private sector banks' net profit of Rs 72.9 billion. Public sector banks reported a combined net loss of Rs 625 billion during the quarter. Read more...

3. Probe into 80,000 shell firms hits dead end as govt fails to trace PANs

The probe into 80,000 shell companies struck off by the Registrar of Companies (RoC) in the first lot has hit a dead end. The government had not been able to trace the Permanent Account Numbers (PANs) of 80,000 companies, which was hampering investigations, officials of the corporate affairs ministry said.

“Banks were asked to furnish the transaction data of these shell companies. But they did not respond despite multiple reminders. Banks have told us that without PAN card details, it was not possible to track these companies,” one of the officials said. Read more...

4. PSBs to focus on credit needs of 'genuine' companies, says Piyush Goyal

Public sector banks (PSBs), in a meeting with Finance Minister Piyush Goyal on Tuesday, have decided to chalk out a road map for supporting the credit needs of “genuine” companies.

The banks would take up the credit needs of “genuine, deserving, well-performing and good companies” in two stages, Goyal said.

In the first stage, the PSBs will conduct a focused study on the credit needs of around 4,500 companies, with borrowings in the range of Rs 2 billion to Rs 20 billion. Read more...

5. Dow Jones slides as Donald Trump ratchets up trade war with China

Alarm bells rang across global markets as trade tensions between the United States and China escalated further.

The yuan also hit a five-month low overnight after US President Donald Trump threatened to impose a 10 per cent tariff on another $200 billion of Chinese goods. Beijing in turn warned about $50 billion of retaliatory penalties on US goods. "If the US loses its senses and publishes such a list, China will have to take comprehensive quantitative and qualitative measures," according to a statement from the Ministry of Commerce. Read more...