More Pain For Banks, Tiger Global Takes A Break And Other India News

Greater risk: Indian banks are headed for a more painful time as risks to their stability have increased. An RBI report of stress tests on banks shows that a fifth of the total bad loans in the system are from the top 100 borrowers, which means it’s the big companies that are slowly becoming the problem. This also means that banks are soon going to face a cash crunch, which could hinder further borrowing, leading to a vicious cycle. On the positive side, the companies themselves are cleaning up their balance sheets, so the number of “weak companies” is also declining. From what the RBI report shows, there will be more pain before there is gain. Here’s ET’s take in charts.

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Tiger Global is on a break. Once hailed as India’s most active VC investor, it has written barely three cheques this year and is taking a backseat in further funding in companies that are already in its portfolio. Flipkart, Ola Cabs, Delhivery and Zo rooms are among its big investments. ATiger Global’s global hedge fund lost a billion dollars in the first quarter from its investments in Amazon, Netflix and Chinese e-commerce company JD.com. This does mean that its Indian investment valuations will be called to question, and probably explains its inactivity this year.

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Nasscom is unhappy: The IT industry’s lobby has criticized the government’s policy making , especially for technology and startups, a surprising move, considering the government’s focus on Digital India and startup India. Its handling of the taxi-hailing issues, e-commerce issues and even GST have been done without understanding the business of new economy companies, according to its president and its CEO, both of whom are quoted here.

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Tata Communications Prunes:  The Tata group’s telecom unit has sold an African internet service provider for $295 million. This comes on the heels of its sale of three quarters of its data centre business for over $600 million, all of which will be used to repay debt. Investors are cheering and the stock has gained 40 percent in four months.

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DLF’s clean up: The Gurgaon real estate company will be in a position to retire all its debt, if founder KP Singh’s plans bear fruit. The family hopes to sell 40 percent in its Cybercity property and raise more money through a preference share sale to clean up its books. There is many a slip between the cup and the lip, so let’s wait for these deals to close before rejoicing.

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Another Black Money Push: Finance Minister Arun Jaitley has said that declaration of black money under the four month compliance window that ends on Sept. 30 will not be disclosed to the public or other regulators, giving tax evaders a final chance to come clean.

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Cover Image: Cricketer Virat Kohli wants kids to be healthy and has launched a Fitbit-for-kids program.

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