Top headlines: Tata group’s legacy issues; tweaks to LIC surplus payouts

Almost a decade has passed since Ratan Tata retired from the Tata Group. Cyrus Mistry’s ouster has also completed almost 5 years. However, the group’s consolidated net loss, if TCS earnings are excluded, shows us India’s largest business conglomerate in the private sector continues to be bogged down with legacy issues. Read more on this and other top headlines for the day.Gradual tweaks to LIC surplus payouts likely; FinMin exploring a glide path
The government is considering gradual tweaks to surplus distribution of Life Insurance Corporation of India (LIC) to policyholders and shareholders as the insurer looks to list on the stock exchanges.

The finance ministry is exploring the adoption of a glide path for changing the existing surplus distribution from 95:5, so that policyholders do not immediately feel the pinch. The gradual change will aim to move towards the regulator-mandated distribution of surplus. Read more

Sebi’s new skin-in-the-game framework for MFs likely to stretch AMCs

The Rs 33-trillion domestic mutual fund (MF) industry will be required to make thousands of crores of investments in its own schemes to meet the Securities and Exchange Board of India’s (Sebi’s) new skin-in-the-game framework approved by its board last month.

Sebi’s expert group had proposed an investment between 0.03 per cent and 0.25 per cent. However, this would have entailed an investment of around Rs 3,953 crore – 5x the total existing investment. Read more
All ministries, departments to review central schemes by July end

The finance ministry has directed all government departments and ministries to re-evaluate and redesign the ongoing centrally sponsored schemes (CSS) and central sector schemes for the next five years, and submit their proposals by July 31. The move includes evaluating the budgetary allocation for each scheme and phasing out various elements of schemes that may have become redundant. Read more
Tata group continues to battle legacy issues; TCS remains prime cash cow

Nearly a decade after the retirement of Ratan Tata from the group and almost five years after the ouster of Cyrus Mistry from Tata Sons, India’s largest business conglomerate in the private sector continues to be bogged down with legacy issues.

If the earnings of Tata Consultancy Services are excluded, the group’s listed companies reported a net loss on a consolidated basis for the third consecutive year in FY21. Ex-TCS, the group listed companies, reported a combined net loss of Rs 3,405 crore in FY21, up from a combined loss of Rs 2,996 crore a year before. Including TCS, the group’s listed companies reported combined net profits of Rs 29,025 crore last financial year, marginally down from the Rs 29,344 crore a year before. Read more
Govt should take control of Vodafone Idea, says Deutsche Bank report

The government should convert Vodafone Idea’s (Vi) debt into equity to avoid a duopoly in the telecom sector, Deutsche Bank Research said in its report on Monday. This, the bank suggested, would be the only viable solution in the backdrop of the Supreme Court dismissing the telecom company’s application for recomputation of adjusted gross revenue (AGR) dues. Read more

Yediyurappa quits as Karnataka CM on day of govt’s 2nd anniversary

BS Yediyurappa stepped down as chief minister of Karnataka on Monday, along with his entire council of ministers, but till late in the evening there was no word on who his successor would be.

Usually, when a chief minister changes, his council of ministers stays in place. That the party high command asked all ministers to step down as well indicated the Bharatiya Janata Party (BJP) wanted no collateral damage from Yediy­urappa’s ‘resignation’, and wanted to give his successor a chance to create his own team. Read more

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