Indian Railways & More

Good morning, folks! As Ambala gears up to welcome 5 Rafale jets, in our homes we welcome the middle of the week. On a side note, there ain’t no bribe, but would you help spreading the word for the Scribe?

MAIN STORIES

Indian Railways staring at a big hole in the balance sheet

Transportation and travel remains one of the worst hit sectors under the coronavirus. Operating 230 trains, or only 2% of it’s regular 13,000 trains, Indian Railways is expecting a Rs. 35,000 Crore loss from it’s passenger business this fiscal year.

Switching tracks: With only 10-15% earnings coming in from passenger trains, the intent is to increase revenue from freight by around 50%. Considering a good harvest, freight traffic has made it’s presence felt when it mattered. Up till July 27, railways had crossed the freight traffic from all of 2019, delivered at double the average speed of 46.16 kmph as compared to 22.12 kmph last year.

Some good to balance out that familiar now what feeling: With human touch becoming a no-go thanks to Covid, contactless ticketing via QR code (even for tickets booked at counter) is also on the cards, or well tickets. Railways have also tied up with ISRO to fit in trains with GPS so that satellite tracking can help with better real-time information on trains. And the news to make your day if you still get nostalgic for the times of train travel. On 2nd July 2020, history was written when Indian Railways for the first time ever reported 100% punctuality!

Get ready to invest in blockbuster IPO – LIC

Life Insurance Corporation or LIC is moving full steam ahead to come out with it’s IPO and get listed in Indian markets within this year. The story literally writes itself – a global pandemic and an Indian life insurance giant.

Ground work in the works: Yesterday the government appointed Edelweiss Financial Services Ltd. and Deloitte as the two pre-IPO transaction advisors. Not just that, LIC is also weeding out low market cap, barely performing companies from it’s equity portfolio in it’s path to the IPO.

What is the big deal? It is being anticipated that this could well be India’s biggest IPO ever. Just check out the numbers for yourself. In 2018-19, LIC had total assets of Rs. 31.11 Lakh Crores and realised profits of Rs. 23k+ Crores just from their equity investment. In the same year, LIC had 66.24% market share in total first-year premium and 74.71% share in new policies. As part of Budget 2020-21, the plan to list will not only give investors a small piece of this lucrative pie but also infuse the government coffers with some much-needed funds.

Boris Johnson wants Britons to slim down

If this trend continues, UK Prime Minister Boris Johnson is well on his way to being called a turncoat. After an unsuccessful hunt for the elusive herd immunity against coronavirus, he turned on the seriousness of the problem when he himself got afflicted. With a history of rubbishing ideas of nudging people to healthier food choices in 2004 (with a caustic title like Face It: It’s All Your Own Fat Fault), he has now come out with a campaign and measures to trim the British waist line.

I Was Too Fat: Sounding eerily like a late-night tele-selling commercials, in a video released on Twitter, UK Prime Minister laments the fact that he was highly over weight when admitted to the hospital for coronavirus. He goes on to say that post recovery he has lost a stone (or 6 Kg) and now starts his day with a run with his dog. According to official figures, 63% population is above the healthy weight. The campaign aims to encourage them to lose about 2.5 Kg which would save the NHS (National Health Service) a projected 105 Million GBP.

How does it impact business? The food industry might be watching this quite closely. Some of the measures proposed include no junk food ad post 9 pm (including online!), ban on buy-one-get-one deals for sugary fatty foods (bye bye free cupcake), no candy by checkout and calorie labels for food and possibly alcohol for big restaurant chains. Considering the food industry is already reeling under the problem of indoors being inviting again, this move throws yet another spanner in the stuttering path back to normal.

IN SNIPPETS

Employment Tinder shows maximum swipes for Microsoft: You know we are living in tech times when everyone seems to aspire to that industry. As per Randstad Employer Brand Research (REBR) 2020, Microsoft is the “most attractive” employer brand followed by Samsung India and Amazon India. 

Media business looks to consolidate: In the era of OTT and binge watching, Disney Hotstar has been quick to adapt leading to further strengthening of it’s position. Now Sony and Viacom 18 are reportedly in talks to join hands, with Sony owning the lion’s share of 74%. It also gives Reliance, the Indian joint venture partner in Viacom 18, a stronger foothold in the entertainment industry. While the deal may come through by August this year, the merged entity may be able to start operations only by 2021 end.

EPFO savings a means of last resort? In the period between April and third week of June, reportedly 80 Lakh Indians dipped into their Employee Provident Fund savings (ideally meant to be a retirement corpus) with cumulative withdrawals of Rs. 30,000 Crores. Compare this to FY20 where for the whole year EPFO disbursed Rs. 72,000 Crores to 15 million subscribers. While you can make your inferences, pointers like job losses, salary cut and medical expenses might come handy.

Airlines in China go buffet-style: At any other, even marginally more normal times this offer would have sounded too good to be true. Eight of China’s airlines have launched “all you can fly” offers, with the most generous one being from China Southern Airlines whereby for almost five and a half months (Aug 26 to Jan 6) you can take unlimited flights across the country for a $529 pass. Might just be a good investment.

Putting human lives over business: Target joined retailer Walmart in shutting their doors for Thanksgiving. Why? This statement on their website put it pretty well – Let’s face it: Historically, deal hunting and holiday shopping can mean crowded events, and this isn’t a year for crowds. To pace out crowds better, Target will instead start holiday deals much in advance from October itself.

MARKET PULSE

Equity markets were in the green again with Nifty ending beyond 11300. Ultratech Cement led the roost seeing it’s share price go up by 7% on the back of strong quarterly results.

Gold continues it’s golden run while the US dollar remained pretty much flat. One of the stars in the forex market was the Euro which has gained 4.3% so far in July as compared to the USD, on course for it’s best monthly performance in four years. This is mostly a reflection of many parts in the US still scrambling to get handle on the infection spread while Europe is seen as mostly plateaud. Although all eyes are out on the new clusters that seem to be forming in the continent.

WILD CARD

Yesterday, there was some spooky business reported in the US. Hundreds of houses reported receiving strange, unknown seeds in their snail mail boxes, in packages with a return address to China. No kidding! State officials and US Department of Agriculture is investigating the matter while China has raised a red flag of the addresses being forged.

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