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Mukesh Ambani richest Indian with net worth of Rs 3,80,700 crore: Hurun rich list

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Reliance Industries’ Chairman Mukesh Ambani has topped the list of richest Indians for the eighth consecutive year, with a net worth of Rs 3,80,700 crore, according to the latest IIFL Wealth Hurun India Rich List.

London-based SP Hinduja & family, with assets worth Rs 1,86,500 crore, retained the second rank in the list, followed by Wipro founder Azim Premji at the third place with a wealth of Rs 1,17,100 crore.

According to the latest IIFL Wealth Hurun India Rich List, the number of Indians having a net worth of more than Rs 1,000 crore has grown to 953 this year from 831 in 2018; while, the number of billionaires in terms of US dollar has reduced to 138 from 141.

“The combined wealth of top 25 in the list equates to 10 per cent of India’s GDP and that of 953 accounts for 27 per cent,” it said.

L N Mittal, chairman and CEO of ArcelorMittal, was the 4th richest with a wealth of Rs 1,07,300 crore and Gautam Adani was placed on the 5th position with a net worth of Rs 94,500 crore.

Others in the top 10 include Uday Kotak at the 6th place with a wealth of Rs 94,100 crore, Cyrus S Poonawalla at 7th position with Rs 88,800 crore assets, Cyrus Pallonji Mistry at 8th spot with a wealth of Rs 76,800 crore, Shapoor Pallonji at 9th position with a net worth of Rs 76,800 crore and Dilip Shanghvi at 10th slot with Rs 71,500-crore wealth.

Interestingly, while the cumulative wealth for this year shows an increase of 2 per cent compared to last year, the average wealth shows a decline of 11 per cent, IFL Wealth Hurun India Rich List said.

As many as 344 individuals or more than a third of this year’s list witnessed wealth reduction and another 112 could not meet the threshold of Rs 1,000 crore, it added.

“Globally, the wealth creators drive the growth and therefore play a vital role in shaping the economy. With Indian Government setting its sight on USD 5 trillion GDP mark – we are confident that the size of the India Rich List will easily triple in the next 5 years,” said Anas Rahman Junaid, MD & Chief Researcher, Hurun Report India.

With 246 individuals or 26 per cent of the list, Mumbai is the absolute capital when it comes to the residence of India’s top entrepreneurs, followed by New Delhi (175) and Bengaluru (77).

There are 82 NRIs on the coveted list of which 76 per cent are self-made. With 31 individuals, USA is the most preferred country for NRIs, followed by the UAE and the UK.

With a net worth of Rs 7,500 crore, Ritesh Agarwal (25) of Oyo Rooms is the youngest selfmade entrepreneur and the wealthiest under 40 years (age) is Divyank Turakhia (37) of Media.net.

The list includes 152 women with an average age of 56 years.

Roshni Nadar (37) of HCL technologies is the richest woman followed by Smita V Crishna (68) of Godrej Group with a net worth of Rs 31,400 crore. With a net worth of Rs 18,500 crore, Kiran Mazumdar-Shaw of Biocon retains the crown of the richest self-made woman in India.

“With the India story gaining momentum, supported by a young and an aspirational demography – the potential of wealth management in the country has merely scratched the surface,” said Yatin Shah, Co-founder & Executive Director, IIFL Wealth Management Ltd.

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India’s fuel demand dips to lowest in over two years

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India’s fuel demand slipped to its lowest in over two years in September after a fall in diesel and industrial fuel consumption negated the rise in petrol and LPG consumption.

Consumption of petroleum products in September dropped to 16.01 million tonnes, its lowest since July 2017, from 16.06 million tonnes in the same month last year, according to data from the Petroleum Planning and Analysis Cell (PPAC).

Diesel, the most used fuel in the country, saw demand drop by 3.2 per cent to 5.8 million tonnes, while naphtha sales were down by a quarter to 844,000 tonnes.

Bitumen, used in road construction, too saw consumption drop by 7.3 per cent to 343,000 tonnes. Fuel oil sales edged 3.8 per cent lower in September to 525,000 tonnes.

These downward trends negated the rise in cooking gas (LPG) and petrol demand.

The sale of petrol rose 6.2 per cent to 2.37 million tonnes, but sale of jet fuel or ATF fell 1.6 per cent to 666,000 tonnes.

LPG consumption surged 6 per cent to 2.18 million tonnes on the back of government’s push for the use of cleaner fuel in household kitchens in rural areas in place of firewood to check pollution and safeguard the health of women.

Kerosene, which is fast being replaced by LPG and natural gas as a cooking medium, saw demand fall almost 38 per cent to 176,000 tonnes.

Petroleum coke consumption was however 18 per cent higher at 1.73 million tonnes.

Meanwhile, Fitch Solutions revised downward its India oil demand forecast, reflecting a deteriorating macroeconomic backdrop and rising risks to growth.

“We now forecast demand growth to average 3.8 per cent y-o-y over the three years to 2021, down from 4.6 per cent previously,” it said, adding softening of Indian fuel demand adds to an increasingly bearish outlook for fuel demand globally.

“We had previously flagged India as the outperformer, forecast to overtake China as the global engine for growth. While the view still holds in the longer term, the near-term prospects have weakened,” it said.

More diversified demand growth will offer a level of resilience moving forward, but structurally lower demand growth in China and common Asian emerging markets’ exposure to a weaker external environment will drag to the downside.

“We have revised down our India oil demand forecast, reflecting a deteriorating macroeconomic backdrop and rising risks to growth. In part this reflects the downward revision to the country’s GDP growth forecast,” Fitch said.

“Growth has disappointed expectations, dragged down by slowing private consumption, weakened investment and underperformance in the services sector,” it added.

In response, the government has unleashed a raft of stimulus measures, including tax cuts, a liquidity boost for the banking sector and higher spending on autos.

“Our Country Risk analysts are relatively bullish on the prospects for headline economic growth from 2020 onwards, forecasting a rebound from 6.4 per cent in real terms in 2019, to 6.9 per cent and 7.3 per cent in 2020 and 2021, respectively,” it said.

Auto sales growth is also set to recover next year, supported by low base effects and improved policy support, which will, in turn, offer a lift to oil demand, it said.

“That said, we do not expect demand growth to return to its 2018 highs, as a challenging external environment, stresses in the banking and shadow banking sectors and tight fiscal constraints on the government mar performance in several of the more energy-intensive segments of the domestic economy,” it added.

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Oil refiners face dilemma as surging freight costs kill margins

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Oil refiners hoping for some fourth-quarter gravy are facing disappointment as surging freight rates inflate the cost of buying crude.

US sanctions on Chinese shipping companies and Friday’s attack on an Iranian tanker have turbo-charged transport costs, with rates on the Persian Gulf to China route at almost six times this year’s average. That’s slashing the margins of refiners, who had been anticipating a boost in profitability due to cleaner ship-fuel rules set to take effect next year.

Complex refining profits in Singapore tumbled to $2.91 per barrel on Friday from as high as $10.28 on Sept. 17, according to data from Oil Analytics. Margins are near the lowest for this time of year over the past five years, based on assessments against Dubai benchmark crude, after being above the highest level last month.

Crude processors are now faced with a dilemma: to buy and ship crude at much higher prices and risk low or no profits, or to cut operating rates and jeopardize supply of fuels over winter.

“Overall, refinery margins aren’t terrible when considered against oil benchmarks such as Dubai or Brent, but I can see why some refiners may consider run cuts once you add physical oil premiums and freight costs,” said Nevyn Nah, an oil analyst at Energy Aspects Ltd.

Refiners are more likely to tap their existing inventories for feedstock, rather than reduce run rates as we approach the year-end when fuel demand peaks, Nah said. Using up stockpiled oil has the added benefit of lowering taxes that are typically slapped on crude hoards at the turn of the year, he said.

When calculated against Saudi Arabia’s Arab Medium oil, Singapore complex margins fell to a deficit of $1.58 a barrel on Friday, the lowest in data going back to 2008. On a seasonal basis, processing returns are about $1.80 below the lowest level over the last five years.

Returns from breaking down crude into products such as plastics, gasoline and diesel typically peak in the last three months of each year due to consumption over winter, prompting processors to increase operating rates. The cleaner ship-fuel rules, known as IMO 2020, were expected to benefit refiners by causing a shift toward more high-quality fuels that fetch higher prices.

“The second half of this year was supposed to look better for refiners, especially with seasonal demand,” said Will Sungchil Yun, a commodities analyst at HI Investment & Futures Corp. in Seoul. “But the sudden spike in freight rates is definitely a burden” and discussions on potential run-rate reductions may start to take place, he said.

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Government readies next round of measures to boost economy

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The Prime Minister’s Office (PMO) and top officials of the finance ministry are working on administrative measures and incentive packages to boost the sluggish economy as the government is “deeply” concerned about the steep fall in key economic parameters besides dwindling revenue collections, three officials aware of the developments have said.

The PMO and the North Block have been conducting a series of meetings with central and state government officials to boost revenue generation, which is a necessary condition for prospective stimulus packages to create demand and induce consumption to boost the economy, they said.

One of the officials said that liquidity is no longer a major concern and the government has addressed investors’ sentiments by announcing unprecedented cuts in corporate tax rates by sacrificing Rs1.45 lakh crore. The government could now shift its focus to fuelling demand and stoking consumption, he said on condition of anonymity.

On the demand side, discussions are centred around reducing income tax rates sans exemptions, prodding banks to offer attractive EMIs for auto and housing loans, rejigging real estate laws and tax structure and reducing compliance cost for builders on the condition that the same could be passed on to consumers, the official said.

The government is also exploring some incentive to perk up automobile sales, the official added. It is, however, finding it difficult to cut Goods and Services Tax (GST) on automobiles because states are unwilling to take about Rs 60,000-crore revenue hit, he said. Other proposals being discussed include raising public investments in infrastructure, particularly in rural areas, and asking state-run firms to front-load their budgeted expenditure, he added.

The government is expecting demand to pick up because of some recent decisions. The cabinet on October 9 raised dearness allowance (DA) of five million central government employees and 6.5 million retired employees by 5 percentage points, hoping that the Rs 10,600 crore-package will boost consumption in the ongoing festive season. “More such measures are expected, depending on the availability of funds,” another official said, asking not to be named.

According to a third official, intensive meetings on these issues took place at the PMO on Saturday and some of the meetings were also attended by finance minister Nirmala Sitharaman. The PMO met senior officials of various states on Friday, prodding them to share the responsibility of Goods and Services Tax (GST) collection, which dropped alarmingly in September, they said. The GST collection in September was Rs 91,916 crore, lowest in 19 months and below Rs1 lakh crore consecutively for the second month.

The officials said the decline in GST collections also indicates a slowdown in the demand of goods and services, which has a direct bearing on the economic growth. India’s annual GDP growth in the quarter ending June 2019 was 5%, the lowest in 25 quarters. It also marked the fifth consecutive quarter of slowing growth in the Indian economy.

The government is concerned about the declining GDP growth, particularly after the Reserve Bank of India (RBI) cut the country’s growth projection by 80 basis points (one hundredth of a percentage point) to 6.1% for 2019-20 on October 4. As per the latest official data, India’s factory output contracted 1.1% in August, the worst performance in about seven years, signalling a deepening economic downturn. The auto sector, a weathervane of economic sentiment and also industrial health, has been hit hard, with passenger car sales in September falling 24% compared to a year ago. It was the eleventh straight month of decline in the segment.

On the issue of resource generation, the government is relying on efficiency in public expenditure, augmenting tax collection and maximising disinvestment proceeds. The government may also deviate marginally from the fiscal deficit roadmap and borrow resources to boost the economy and make up for it in subsequent financial years, the officials said.

In an interview with Karan Thapar for The Wire on Thursday, Bibek Debroy, the chairperson of the Prime Minister’s Economic Advisory Council, said that the government could miss the fiscal deficit target of 3.3% of GDP set in the budget.

“The government needs resources to offer more stimulus as it is committed to bring the economy again at the higher growth trajectory. A series of announcements in this regard is expected,” the first official said.

The finance minister has already announced five rounds of fiscal, administrative and policy measures to stimulate the economy since August 23 and the biggest one was on September 20, when corporate tax rates were slashed.

“More stimulus means more money, hence the government is making efforts to augment revenue collections,” the second official said, adding that the government may also reduce personal income tax rate to boost consumption. But the move will depend on its implication on the overall revenue, the official added. Hindustan Times had on October 1 reported about the possible move.

In the interview, Debroy said “it (a personal tax rate cut) is inevitable” with elimination of exemptions. “When it will happen, it is for the finance minister to announce,” he said. A similar view was expressed by NITI Aayog vice-chairman Rajiv Kumar, as reported by NDTV on October 4. “I have heard that there are demands of personal income tax rate cuts and I am fully confident that the government is holding consultations and discussions on this matter,” NDTV quoted Kumar as saying.

The Prime Minister’s Office is constantly monitoring the country’s growth revival efforts and, on Friday, it cautioned states to share the responsibility of GST administration failing which they might face troubles after the compensation period is over in 2022, the third official said. It expressed concerns over falling GST revenue at a meeting with senior officials of states on Friday.

“It is also essential that GST revenues stabilise to ensure not only that states do not face fiscal stress when the compensation period is over in 2022, but also provide adequate revenues to finance development expenditure of states and centres,” an office memorandum of the GST Council Secretariat, issued on Thursday, said. Concerned about the fall in GST collection, the government on Thursday appointed a committee of central and state government officials to ascertain the reasons for the decline.

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