India’s Sensex Falls, Erasing Weekly Gain, Before RBI Meeting

By Rajhkumar K Shaaw - Oct 26, 2012

Indian stocks fell the most in more than a week, with the benchmark index erasing a weekly advance, on concern corporate earnings are weakening globally and before the Reserve Bank of India reviews monetary policy next week.
The BSE India Sensitive Index (SENSEX), or Sensex, lost 0.7 percent to 18,625.34 at the close in Mumbai. The gauge declined 0.3 percent this week. Reliance Industries Ltd. (RIL), India’s most valuable company, fell to a six-week low. ICICI Bank Ltd. (ICICIBC), the second-largest lender, and Hindustan Unilever Ltd., the local unit of the world’s second-largest consumer-goods maker, dropped after their earnings reports.
The MSCI Asia Pacific Index dropped 1.1 percent as South Korea’s economy grew at the slowest pace in three years and companies such as Canon Inc. and China Unicom (Hong Kong) Ltd. posted earnings that missed estimates. India’s central bank may leave its benchmark interest rate unchanged at 8 percent at a policy review on Oct. 30, according to the median estimate of 28 analysts in a Bloomberg survey.
“The global cues are not encouraging as some of the earnings numbers have disappointed,” said Alex Mathews, head of research at Geojit BNP Paribas Financial Services Ltd. in Kochi. “Some of the local traders are waiting on the sidelines for the RBI policy. If a rate cut happens, that can be a catalyst for the next uptrend.”
The Sensex has surged 21 percent this year, the best performance among major emerging markets, as foreigners bought a net $18.2 billion of domestic shares, the most among 10 Asian markets tracked by Bloomberg, excluding China. Earnings have trailed analyst forecasts at only two of the 15 Sensex companies that have reported results for the quarter ended September, compared with 40 percent in the three months through June, data compiled by Bloomberg show.

Rate Outlook

Finance Minister Palaniappan Chidambaram said Oct. 12 that India needs cheaper credit, following a revamp of economic policy that included fuel-subsidy curbs and helped make the rupee one of Asia’s best-performing currencies in the past three months. The central bank last month left rates unchanged for a third straight meeting to fight price increases.
The authority will reduce the cash reserve ratio by 25 basis points on Oct. 30, according to 11 of 18 economists surveyed by Bloomberg. India’s inflation, measured by the wholesale-price index, rose 7.81 percent last month, the fastest pace in 2012, fueled by higher diesel costs, government data showed on Oct. 15.

Indian Earnings

ICICI Bank’s quarterly profit jumped 30 percent, beating analysts’ estimates, as bad loans fell and lending profit rose. Net income climbed to 19.6 billion rupees ($365 million) for the three months ended Sept. 30, from 15 billion rupees a year earlier. That surpassed the 18.7 billion rupee median of analysts’ estimates compiled by Bloomberg. The shares decreased 0.8 percent to 1,078.35 rupees, after gaining as much as 1.4 percent. The stock has advanced 58 percent this year, the second best performer on the Sensex.
Hindustan Unilever Ltd. (HUVR), the maker of Dove shampoo, slid 2.1 percent to 552.20 rupees after second-quarter sales rose 12 percent to 61.6 billion rupees, missing the 62.6 billion rupee median estimate of 25 analysts.
The S&P CNX Nifty Index (NIFTY) of 50 companies dropped 0.7 percent to 5,664.30 and its November futures settled at 5,699.30. The BSE-200 Index lost 0.9 percent and the BSE Mid-Cap Index declined 0.8 percent. The National Stock Exchange of India and the BSE Ltd. traded 1.1 billion shares yesterday, 17 percent more than the 12-month daily average.
Reliance fell 1.4 percent to 798.95 rupees. Drugmaker Cipla Ltd. retreated 1.9 percent to 354.95 rupees. ITC Ltd. (ITC), the biggest cigarette company, lost 2.1 percent to 285.85 rupees.
Overseas funds were net buyers of Indian shares for a fifth straight day on Oct. 23, purchasing a net $79.6 million of shares, according to data from the nation’s market regulator.
To contact the reporter on this story: Rajhkumar K Shaaw in Mumbai at rshaaw@bloomberg.net
To contact the editor responsible for this story: Darren Boey at dboey@bloomberg.net

®2012 BLOOMBERG L.P. ALL RIGHTS RESERVED.

Telenor Sells Stake in Indian Wireless Unit Ahead of Auctions

By Jonathan Browning and George Smith Alexander - Oct 26, 2012

Telenor ASA (TEL), the Nordic region’s biggest phone operator, agreed to sell a 26 percent stake in its Indian mobile phone operations ahead of an auction of spectrum in the country next month.
Telenor signed the deal with Lakshdeep Investments & Finance Pvt. Ltd, controlled by Sudhir Valia, executive director at Sun Pharmaceutical Industries Ltd. (SUNP), India’s biggest drugmaker by market value, the carrier said in a statement today. Details of the deal were not disclosed. Valia acted on his personal capacity, Telenor said.
The partnership will enable Fornebu, Norway-based Telenor to bid for wireless frequencies in next month’s Indian auction and protect its 140-billion-rupee ($2.61 billion) investment in the country. After the auction, Lakshdeep agreed to contribute equity into the new Indian carrier called Telewings Communications Pvt. Ltd. India limits foreign holdings in a telecommunications company to 74 percent.
Telenor’s venture with former partner Unitech Ltd. (UT), a New Delhi-based real estate developer, was terminated after its spectrum licenses, revoked by India’s highest court over a corruption scandal, became invalid on Sept. 7. Unitech this month agreed to sell its stake in the Uninor venture for a “nominal amount,” according to Telenor.
Citigroup Inc. is advising Telenor on the transaction, the people said.
Telenor shares fell 1 percent to 110.3 kroner at 11:19 a.m. Oslo time, paring this year’s gain to 12 percent.

Spectrum Auction

India will auction about $7 billion in airwaves starting Nov. 12 and Telenor must bid to remain active in the world’s second-largest mobile market. The venture’s services to its more than 45 million customers have been in doubt since the Supreme Court canceled 122 licenses, including Uninor’s, in February because their 2008 sale was manipulated by some bidders.
Piramal Healthcare Ltd. (PIEL) in February agreed to buy an additional stake in Vodafone Group Plc (VOD)’s Indian unit from Essar Group, about six months after making an initial $640 million investment in the division. In August 2011, Piramal Chairman Ajay Piramal said the company expects a return of as much as 20 percent from the investment. Piramal now owns 11 percent of the unit.
To contact the reporters on this story: Jonathan Browning in London at jbrowning9@bloomberg.net; George Smith Alexander in Mumbai at galexander11@bloomberg.net
To contact the editor responsible for this story: Philip Lagerkranser at lagerkranser@bloomberg.net

®2012 BLOOMBERG L.P. ALL RIGHTS RESERVED.

India Rate-Cut Odds Climb as Policy Revamp Aids Rupee By Kartik Goyal - Oct 25, 2012

India’s central bank will consider reducing interest rates for the first time since April after government efforts to pare the budget deficit stemmed a slide in the rupee, boosting scope to stimulate the economy.
Governor Duvvuri Subbarao will cut the repurchase rate to 7.75 percent from 8 percent, 11 of 28 analysts said in a Bloomberg News survey ahead of an Oct. 30 decision. One predicted a reduction to 7.5 percent and the rest no change. A majority of respondents in another poll forecast Subbarao will lower banks’ reserve ratios to spur lending.
Finance Minister Palaniappan Chidambaram said Oct. 12 that India needs cheaper credit, following a revamp of economic policy that included fuel-subsidy curbs and helped make the rupee one of Asia’s best-performing currencies in the past three months. While Subbarao has signaled that a narrower budget gap may provide more room to join nations from Brazil to Thailand in extending rate cuts, he also faces inflation of almost 8 percent.
“There is blatant pressure from the government to ease and it’ll be hard for the central bank to ignore it,” said Rajeev Malik, a Singapore-based senior economist at CLSA Asia-Pacific Markets. “Our case for cutting rates rests on the RBI making a reciprocal gesture to the government following its initiatives in the last one month. But more needs to be done on the fiscal deficit.”
The Reserve Bank of India unexpectedly reduced the amount of deposits lenders must set aside as reserves last month to boost growth, even as it kept interest rates unchanged as expected by the majority of economists in a Bloomberg survey.

Rupee Appreciation

Prime Minister Manmohan Singh’s administration unveiled an increase in diesel prices on Sept. 13 and limited the supply of subsidized cooking gas to cap a budget shortfall that has raised the odds of a credit-rating downgrade to junk status.
The next day, it opened industries such as retail to more foreign investment, snapping months of gridlock over how to bolster a struggling economy.
The rupee has risen about 3.5 percent versus the dollar since Sept. 13, when the first elements of the overhaul were announced, paring its one-year fall to 7.5 percent. It is up 4.9 percent in the past three months, the biggest gainer in a basket of 11 Asian currencies tracked by Bloomberg. The BSE India Sensitive Index of stocks has climbed more than 11 percent in the same period, outperforming the MSCI Asia-Pacific Index.

Stocks Gain

Asian stocks advanced today for the first time in five days after the Federal Reserve said yesterday it will maintain stimulus, while a report showed sales of new U.S. homes rose at the fastest pace in two years.
New Zealand’s new central bank chief kept the official cash rate at 2.5 percent as a stronger housing market offset a fragile global economy. In contrast, the Philippines lowered borrowing costs for the fourth time this year to 3.5 percent.
Other reports showed Singapore’s industrial output unexpectedly fell for a second month in September and Thailand’s production slumped more than economists estimated.
In Europe, Sweden left its key interest rate at 1.25 percent. The U.K. reported 1 percent economic growth in the three months through September from the previous quarter.
U.S. durable goods orders probably rose in September and initial jobless claims may have eased to 370,000 in the week ended Oct. 20 from 388,000 the previous week, a survey showed.

Fastest Inflation

Further rupee appreciation will help to damp India’s inflation, Chidambaram said earlier this month, adding that “if the fiscal policy steps that we are taking encourage the central bank to take monetary policy action which will result in lower interest rates, I think that will be good.”
Inflation quickened to 7.81 percent in September, the fastest in the BRIC group of major emerging nations that also includes Brazil, Russia and China. Food and fuel costs and costlier imports have kept the pace of price gains above the central bank’s comfort level of about 5 percent.
Asia’s No. 3 economy has the widest BRIC budget deficit at 5.8 percent of gross domestic product in the year ended March. Standard & Poor’s predicts the imbalance may widen to about 6 percent in the current fiscal year, compared with the government’s goal of 5.1 percent.
The country’s trade shortfall widened to $18.1 billion in September, the biggest in more than a year, as faltering global growth contributed to a drop in exports.
India’s economy expanded 5.5 percent in the three months through June from a year earlier, holding near the three-year low of 5.3 percent in the previous quarter.

World Outlier

Subbarao has said the combination of elevated inflation and weaker economic expansion makes India “somewhat of an outlier in the world.” The Reserve Bank has refrained from adding to a 50 basis-point repurchase-rate cut in April.
Price pressures may prompt the monetary authority to leave the policy rate unchanged and instead cut the cash reserve ratio for the fourth time this year, according to Madan Sabnavis, chief economist at Credit Analysis & Research Ltd. in Mumbai.
Fifteen of 26 economists in Bloomberg’s survey said the Reserve Bank will lower the ratio to 4.25 percent from 4.5 percent. Two predict 4 percent and the rest expect no change.
Monetary policy will be guided partly by the outlook for the fiscal gap, Subbarao said Oct. 4, adding “the effort will be to rein in inflation but support growth to the extent possible.”
India would join countries including Brazil, Thailand, South Korea and Australia in cutting borrowing costs this month if it lowers the repurchase rate.
“The RBI will ease policy on Oct. 30 as a pat on the back for the government’s recent reforms,” said Robert Prior- Wandesforde, an economist at Credit Suisse Group AG in Singapore.
To contact the reporter on this story: Kartik Goyal in New Delhi at kgoyal@bloomberg.net
To contact the editor responsible for this story: Stephanie Phang at sphang@bloomberg.net

India Rate-Cut Odds Climb as Policy Revamp Aids Rupee: Economy By Kartik Goyal - Oct 24, 2012

India’s central bank will consider reducing interest rates for the first time since April after government efforts to pare the budget deficit stemmed a slide in the rupee, boosting scope to stimulate the economy.
Governor Duvvuri Subbarao will cut the repurchase rate to 7.75 percent from 8 percent, 10 of 26 analysts said in a Bloomberg News survey ahead of an Oct. 30 decision. Two predicted a reduction to 7.5 percent and the rest no change. A majority of respondents in another poll forecast Subbarao will lower banks’ reserve ratios to spur lending.
Finance Minister Palaniappan Chidambaram said Oct. 12 that India needs cheaper credit, following a revamp of economic policy that included fuel-subsidy curbs and helped make the rupee one of Asia’s best-performing currencies in the past three months. While Subbarao has signaled that a narrower budget gap may provide more room to join nations from Brazil to Thailand in extending rate cuts, he also faces inflation of almost 8 percent.
“There is blatant pressure from the government to ease and it’ll be hard for the central bank to ignore it,” said Rajeev Malik, a Singapore-based senior economist at CLSA Asia-Pacific Markets. “Our case for cutting rates rests on the RBI making a reciprocal gesture to the government following its initiatives in the last one month. But more needs to be done on the fiscal deficit.”
The Reserve Bank of India unexpectedly reduced the amount of deposits lenders must set aside as reserves last month to boost growth, even as it kept interest rates unchanged as expected by the majority of economists in a Bloomberg survey.

Rupee Appreciation

Prime Minister Manmohan Singh’s administration unveiled an increase in diesel prices on Sept. 13 and limited the supply of subsidized cooking gas to cap a budget shortfall that has raised the odds of a credit-rating downgrade to junk status.
The next day, it opened industries such as retail to more foreign investment, snapping months of gridlock over how to bolster a struggling economy.
The rupee has risen 3.1 percent versus the dollar since Sept. 13, when the first elements of the overhaul were announced, paring its one-year fall to 6.9 percent. It is up 3 percent in the past three months, the biggest gainer after the Korean won and Malaysian ringgit among 18 Asia-Pacific currencies. The BSE India Sensitive Index of stocks has climbed more than 9 percent in the same period, outperforming the MSCI Asia-Pacific Index.

Stocks Gain

Asian stocks advanced today for the first time in five days after the Federal Reserve said yesterday it will maintain stimulus, while a report showed sales of new U.S. homes rose at the fastest pace in two years. New Zealand’s new central bank chief kept the official cash rate at 2.5 percent as a stronger housing market offset a fragile global economy, boosting the currency as traders pared bets on interest-rate cuts.
The Philippine central bank may cut its benchmark rate for a fourth time this year to protect growth as the peso’s gains threaten exports, with 14 of 21 economists surveyed by Bloomberg News expecting a quarter-point reduction to 3.5 percent. Singapore and Thailand will release production data, and Hong Kong’s trade report is due today.
Sweden will probably hold its key rate at 1.25 percent, a Bloomberg survey showed. The U.K. economy probably rebounded in the third quarter after one-time disruptions, economists said ahead of a report. Gross domestic product rose 0.6 percent from the previous three months, when an extra public holiday led to a 0.4 percent drop, according to the median in a Bloomberg survey. U.S. durable goods orders probably rose in September and initial jobless claims may have eased to 370,000 in the week ended Oct. 20 from 388,000 the previous week, a survey showed.

Fastest Inflation

Further rupee appreciation will help to damp India’s inflation, Chidambaram said earlier this month, adding that “if the fiscal policy steps that we are taking encourage the central bank to take monetary policy action which will result in lower interest rates, I think that will be good.”
Inflation quickened to 7.81 percent in September, the fastest in the BRIC group of major emerging nations that also includes Brazil, Russia and China. Food and fuel costs and costlier imports have kept the pace of price gains above the central bank’s comfort level of about 5 percent.
Asia’s No. 3 economy has the widest BRIC budget deficit at 5.8 percent of gross domestic product in the year ended March. Standard & Poor’s predicts the imbalance may widen to about 6 percent in the current fiscal year, compared with the government’s goal of 5.1 percent.
The country’s trade shortfall widened to $18.1 billion in September, the biggest in more than a year, as faltering global growth contributed to a drop in exports.
India’s economy expanded 5.5 percent in the three months through June from a year earlier, holding near the three-year low of 5.3 percent in the previous quarter.

World Outlier

Subbarao has said the combination of elevated inflation and weaker economic expansion makes India “somewhat of an outlier in the world.” The Reserve Bank has refrained from adding to a 50 basis-point repurchase-rate cut in April.
Price pressures may prompt the monetary authority to leave the policy rate unchanged and instead cut the cash reserve ratio for the fourth time this year, according to Madan Sabnavis, chief economist at Credit Analysis & Research Ltd. in Mumbai.
Fifteen of 26 economists in Bloomberg’s survey said the Reserve Bank will lower the ratio to 4.25 percent from 4.5 percent. Two predict 4 percent and the rest expect no change.
Monetary policy will be guided partly by the outlook for the fiscal gap, Subbarao said Oct. 4, adding “the effort will be to rein in inflation but support growth to the extent possible.”
India would join countries including Brazil, Thailand, South Korea and Australia in cutting borrowing costs this month if it lowers the repurchase rate.
“The RBI will ease policy on Oct. 30 as a pat on the back for the government’s recent reforms,” said Robert Prior- Wandesforde, an economist at Credit Suisse Group AG in Singapore.
To contact the reporter on this story: Kartik Goyal in New Delhi at kgoyal@bloomberg.net
To contact the editor responsible for this story: Stephanie Phang at sphang@bloomberg.net

Wal-Mart Entry Spurs TCI Spending on Logistics: Corporate India

By Karthikeyan Sundaram - Oct 23, 2012

Transport Corp. of India, the nation’s third-largest logistics company, plans its biggest investment in five years to prepare for a jump in freight demand as retailers such as Wal-Mart Stores Inc. (WMT) open stores.
The company will spend 1.5 billion rupees ($28 million) in the year to March 31 to add more trucks and build warehouses, Joint Managing Director Vineet Agarwal said in an interview. The spending may help Transport Corp.’s supply chain division, which offers warehousing and packaging, to expand more than 20 percent annually through 2017, he said.
The operator plans to add 1,000 more trucks in five years, Agarwal said, as India’s decision to allow foreign investment in retail stores will help create more supermarkets and boost transportation of farm and factory products. Deutsche Post AG (DPW)’s DHL Supply Chain last week said it would invest 100 million euros ($131 million) to strengthen operations in the country.
“Once overseas investments start coming into retail sector, it’ll help Transport Corp.,” said Rajni Ghildiyal, an analyst with Asit C. Mehta Investment Interrmediates Ltd. “The strategy to place itself as a supply chain solutions provider will help it exploit the potential.”
Transport Corp. fell as much as 1.7 percent to 63.2 rupees in Mumbai trading today. The stock declined 15 percent in the past year, making it the worst performer on the 29-company Bloomberg Industries Express & Courier Services index after Hanjin Transportation Co.
Sales at Transport Corp.’s supply chain division rose 21 percent to 5.8 billion rupees in the year ended March 31, data compiled by Bloomberg show. The business contributed about 30 percent of total sales, up from 14 percent four years ago.

‘Cold Reefers’

“There’ll be investments in farmgate infrastructure once foreign supermarkets set up shop,” Agarwal said in New Delhi. “At that point, certain amount of logistics, including cold reefers and dry goods movement, will be required. We’re prepared to handle that.”
Last month, Prime Minister Manmohan Singh’s government allowed overseas retailers such as Wal-Mart and Carrefour SA (CA) to own as much as 51 percent in supermarket ventures. Singh also cut energy subsidies, allowed foreign airlines to own as much as 49 percent in local carriers and permitted overseas investment of up to 49 percent in power exchanges, ending two years of policy gridlock.
Singh’s policy drive prompted ally Trinamool Congress to quit the alliance. Last year Singh put the plan to ease investment rules for overseas retailers on hold after opposition parties as well as Trinamool Congress chief Mamata Banerjee protested.
Wal-Mart may take about 12-18 months to open retail stores in India, Scott Price, its head of Asia operations, said Sept. 21. The world’s biggest retailer has been building a supply chain and logistics network in the country after forming a venture with billionaire Sunil Mittal’s Bharti Enterprises to operate wholesale outlets.

Computer Systems

Entry of foreign supermarket chains will spur investments in warehousing, inventory management and computer systems, according to Zenith International Research & Academic Foundation in India. This will help reduce cost for retailers and boost consumer spending, according to Zenith.
The size of logistics industry in the country is about $90 billion to $125 billion, according to a study by Deloitte in India and the Indian Chamber of Commerce. Investments in logistics infrastructure may drive economic growth this decade, according to the study. Logistics accounts for 13 percent of the nation’s gross domestic product.
DHL Supply Chain said Oct. 16 that it will add 5 million square feet of warehousing space in eight cities including Mumbai, Bangalore and Chennai. The company also plans to upgrade its fleet of vehicles, it said in a statement.

Congested Highways

Transport Corp.’s profit may rise as much as 15 percent this fiscal year, Agarwal said. That’ll be the slowest pace of growth in four years, according to Bloomberg data.
The company’s operating margin increased to 6.1 percent in the year ended March 31 from 5.8 percent a year earlier, according to data compiled by Bloomberg. Sales in the period expanded at 5.5 percent, slower than the 22 percent expansion in the year earlier period, the data shows.
Transporters have to contend with congested highways in India, where infrastructure is ranked worse than Guatemala’s by the World Economic Forum. Traffic snarls cost Asia’s third- biggest economy $5.5 billion annually, according to the Indian Institute of Management in Kolkata and Transport Corp. Trucks take 65 hours to travel the 1,374 kilometers (854 miles) between Mumbai and New Delhi because of traffic and stoppages at toll plazas and state borders.

‘Not Enough’

Road construction is lagging behind an August 2009 target of 20 kilometers a day as slowing economic growth and high interest rates discourage builders from bidding for projects.
Prime Minister Singh’s government has targeted a spending of $1 trillion on roads, ports and railways in the five years through 2017. Authorities are also planning to award $2.3 billion of state-funded highway contracts this year.
“Whatever we’re doing is not enough,” Agarwal said. “Work on everything from roads, ports to railways is going very slowly.”
To contact the reporter on this story: Karthikeyan Sundaram in New Delhi at kmeenakshisu@bloomberg.net
To contact the editor responsible for this story: Neil Denslow at ndenslow@bloomberg.net

®2012 BLOOMBERG L.P. ALL RIGHTS RESERVED.

India Suspends Kingfisher Airlines’ License Amid Strike By Karthikeyan Sundaram and Malavika Sharma - Oct 21, 2012

India suspended Kingfisher Airlines Ltd. (KAIR)’s operating license after the cash-strapped carrier failed to resume flights because of a strike by engineers and pilots demanding seven months of unpaid salaries.
The suspension will remain in effect until the airline submits a “concrete and reliable” revival plan to the Director General of Civil Aviation, the industry regulator, the Civil Aviation Ministry said in an Oct. 20 statement. Bangalore-based Kingfisher said in response that it’s halting all reservations until it can restore flights.
The move adds further pressure on Kingfisher’s billionaire Chairman Vijay Mallya as he seeks investments for an airline struggling with 86 billion rupees ($1.6 billion) of debt after five consecutive years of losses. The carrier hasn’t flown since a staff walkout began Oct. 1.
“They brought this situation on themselves after they ran out of cash,” said Harsh Vardhan, chairman of Starair Consulting, a New Delhi-based company that advises airlines. “Unless the promoter comes up with more equity, I don’t think there will be any institutional or airline investor willing to put their money” into Kingfisher, he said.
Kingfisher failed to address any of the issues raised by the regulator in an Oct. 2 notice, the ministry said. The carrier hasn’t indicated when it will submit a detailed operational-preparedness plan, and the regulator couldn’t grant a request for more time to file a reply, it said. Prakash Mirpuri, a Kingfisher spokesman, didn’t respond to two calls to his mobile phone Oct. 20.
Shares of Kingfisher fell 4.6 percent to 11.40 rupees at the Oct. 19 close of trading in Mumbai. The stock has dropped 46 percent this year, after plunging 68 percent in 2011.

Investment Talks

Kingfisher is in talks with foreign airlines for a stake sale, Mallya said last month. Prime Minister Manmohan Singh’s government last month allowed airlines from outside India to own as much as 49 percent of carriers based in the country as part of a push to attract investment and boost growth.
The license suspension “will allow Kingfisher time to rethink about complete revival or assess damages due to possible closure rather than restarting a five-aircraft operation,” Kapil Kaul, head of the CAPA Centre for Aviation consulting company in India, said in an e-mail. A revival will be dependent on the founders raising a minimum of $600 million, which is highly unlikely, he said.

Loan Defaults

The airline defaulted on loans and interest payments on several occasions in the year ended March 31, the carrier’s auditor said in the company’s annual report. Mallya gave personal guarantees totaling 59 billion rupees for Kingfisher loans, according to the report.
On Oct. 12, a court in Hyderabad, southern India issued warrants against Mallya and four other Kingfisher officials for failing to appear at a hearing about the carrier bouncing checks issued to the city’s airport operator. The warrants and lawsuit were subsequently withdrawn after the carrier settled the payments.
Kingfisher has an operational fleet of seven Airbus SAS A320 jetliners and three Avions de Transport Regional turboprop aircraft. It has enough staff for 60 planes, according to Arun Mishra, the aviation regulator.
To contact the reporters on this story: Karthikeyan Sundaram in New Delhi at kmeenakshisu@bloomberg.net; Malavika Sharma in New Delhi at msharma52@bloomberg.net
To contact the editors responsible for this story: Jim McDonald at jmcdonald8@bloomberg.net; Dick Schumacher at dschumacher@bloomberg.net