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Business Briefing

  • For a long time now, India has always been at loggerheads with China. Be it from a democracy v/s communist agenda, or from a military standpoint which includes a war in the 1960s, or from a development point of view or even the fact that China is unwilling to approve the permanent membership of India to the UN Security Council. But keeping history aside, recently we seem to be getting the better of our troublesome neighbours on the economic front. The International Monetary Fund upgraded its October forecast and stated that it expects India to grow at a world-beating pace of 7.5% in 2019-20 instead of 7.4%, which it predicted earlier. In further testimony to India’s growing prominence, the IMF said India’s contribution to world growth has risen from 7.6% during 2000 to 2008 to 14.5% in 2018. India’s growth rate is poised to benefit from lower oil prices and a slowdown in interest rate hikes by the RBI going forward. The economy of China, on the other hand, paints a grim picture. China grew at a rate of 6.6% in 2018, its slowest rate in 28 years. The IMF predicts this rate to further deteriorate to 6.2% in 2019 amid rising trade war tensions with the US and regulatory tightening. The IMF has also cut the global growth rate projections from 3.7% to 3.5%.

 

  • For millennials, eating at a restaurant or ordering in, is no longer an occasion or event. With food delivery apps at their fingertips, it is an everyday fact of life. Hectic lifestyles, increase in choices, being better travelled, more experimental with food, being tech-savvy and increase in income are some of the reasons why millennials are contributing heavily to the increase in online ordering from restaurants. According to a report by Deloitte, the “ready to eat” product category has grown exponentially at the rate of 28% per annum over the past 5 years or so. A separate report by FICCI and Technopak estimated that in 2017, 17% of discretionary spending was made on eating in restaurants and ordering food and it projected that it will reach 19% in 2020. However, what millennials might be ignoring is the unconscious overspending and the fact that their food bills are adding up and burning a hole in their pocket. But with food delivery apps such as Zomato, Swiggy, Food Panda, Uber Eats etc. and the convenience they provide, it seems this trend will continue.

 

  • Naresh Goyal, the promoter of troubled airline operator Jet Airways has agreed to step down from the board of directors and relinquish control of his company if he is paid the right price. Jet’s foreign investor, Etihad Airways has agreed to step up its investment from the present 24% that it owns, thereby infusing much-needed capital; but the only point of contention seems to be the valuation at which such a stake can be bought. The Abu Dhabi based airline had told Jet Airways last week that it would buy shares at Rs 150 a piece, which did not sit well with Goyal, nor was it as per SEBI guidelines. At that price, Ethiad has valued Jet Airways at roughly 250 million $ or nearly 1800 crore Rs. The lenders to the airlines, led by SBI which have a total exposure of 8200 crore Rs and they feel a much higher valuation is in order. Let us recall that Jet has seen its share price free fall all the way from 830 Rs to 272 Rs per share at the end of today’s trade.

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