General Awareness

BUSINESS AND ECONOMY - December 2015

Dec 2015

Sep 26, 2020

Vodafone Wins Arbitration Case against India

British telco Vodafone Group Plc won a decade-long battle against the Indian tax department's demand of Rs. 20,000 crore, stemming from its entry into the country in 2007. The victory in the Permanent Court of Arbitration in The Hague may finally signal an end to the retrospective tax amendment case that had become a symbol of the country's aggressive tax collection methods. The Vodafone Idea stock rose 13.6% to close at Rs. 10.36 on the BSE.
The government will examine the order and further action will be taken after seeking legal opinion, including whether to appeal against the decision in the appropriate court in Singapore. There was also no question of the government losing Rs. 20,000 crore as Vodafone had not paid the original tax demand or the interest and penalties. The tribunal had not accepted Vodafone's demand for award of damages.

Fino Pyments Bank Launches Contactless Payment for Mass Tranport

Fino Payments Bank along with fintech partners has introduced NFC-based contactless payments solution for mass transit systems, especially state bus transport services in India.
Buses run by state road transport corporations are the most preferred means of travel for majority of people in rural and semi-urban areas where cash is used to purchase tickets.
Fino, which has over 80 per cent of its banking network of 2.75 lakh points in villages, aims to tap the opportunity to digitise cash used in mass transit systems.
Fino's NFC-based prepaid smart card ecosystem facilitates contactless or tap-and-go payments enabling cashless ticketing, it can also be used offline for fare collection.
Fino has already issued over 30 lakh NFC-enabled smart cards that are accepted across 20,000 Maharashtra State Road Transport Corporation buses. It has partnered with fintech firms such as City Cash for developing the contactless payments solution for mass transit systems.

KVIC Appoints Sunil Sethi as Advisor

The Khadi and Village Industries Commission appointed Sunil Sethi,Chairman of the Fashion Design Council of India, as its Advisor.
Sethi will advise the Commission on latest design interventions in the readymade garments segment as well as promotion of Khadi in India and abroad.
Sethi's appointment is for a period of one year. He succeeded fashion designer Ritu Beri whose term expired recently.
Sethi comes with over four decades of experience in global merchandising, where he has contributed significantly to the growth of Indian handicrafts, design and the textile industry, through many innovative and successful initiatives.

LIC, GIC, New India Assurance Systemically Important Insurers: IRDAI

Regulator IRDAI has identified LIC, GIC and New India Assurance as domestic systemically important insurers (D-SIIs) and subsequently decided to subject them to enhanced regulatory supervision.
The three insurers have also been asked to raise the level of corporate governance, identify all relevant risks and promote a sound risk management culture.
D-SIIs will also be subjected to enhanced regulatory supervision.
D-SIIs refer to insurers of such size, market importance and domestic and global inter-connectedness whose distress or failure would cause a significant dislocation in the domestic financial system.
Therefore, the continued functioning of D-SIIs is critical for the uninterrupted availability of insurance services to the national economy.
D-SIIs are perceived as insurers that are 'too big or too important to fail.

Sep 25, 2020

GMR Infra to Sell Stake in Kakinada SEZ to Aurobindo Realty

GMR Infrastructure is selling its entire 51% stake in Kakinada SEZ (KSEZ) to Aurobindo Realty and Infrastructure (ARIPL), in a Rs. 2,610 crore deal.
Definitive agreements for the sale of the equity by wholly-owned subsidiary GMR SEZ and Port Holding (GSPHL) have been signed.
As part of the proposed stake sale in KSEZ, the 100% equity of Kakinada Gateway Port (KGPL) held by KSEZ would also be transferred to Aurobindo Realty.
Total consideration for the sale of equity stake as well as the sub-debt in KSEZ is Rs. 2,610 crore. Of this, Rs. 1,600 crore would be received on the closing date and balance Rs. 1,010 crore in next 2 to 3 years contingent upon certain agreed milestones.

Harley Davidson to Exit India

American cult bike manufacturer Harley Davidson said that it was discontinuing sales and manufacturing operations in India, a decade after it started selling its premium bikes in the country.
As per reports, the company was looking to tie up with a partner to run its business in the country.
The India action will include an associated workforce reduction of approximately 70 employees, Harley-Davidson Inc said in an SEC filing.
The development is part of the company's global "2020 Restructuring Activities". In the second quarter of 2020, Harley-Davidson had initiated restructuring activities like workforce reduction and the termination of certain contracts that would result in the elimination of approximately 700 positions globally, including the termination of approximately 500 employees.
Harley-Davidson planned to close its manufacturing facility in Bawal (Haryana) and significantly reduce the size of its sales office in Gurugram.

RBI Releases Cyber Security Vision for Urban Cooperative Banks

The Reserve Bank of India released Cyber Security Vision Framework for Urban Cooperative Banks (UCBs). The apex bank has taken four different guiding principles in order to formulate the framework. This is because the heterogeneity of UCBs in India in terms of regions, size, digital depth and financial health is huge. A "one size fits all" approach would not be appropriate while prescribing cyber security in the country.
The framework has been released under the title Technology Vision for Cyber Security' for Urban Co-operative Banks (UCBs) – 2020-2023.
The framework aims to achieve its objective through a five pillared strategic approach which is as follows:
a) Governance Oversight: Under this framework, a RBI board will over view cyber security measures being implemented and will create IT Vision Documents based on the progress and gaps
b) Utile Technology Investment: Under this plan, funds are to be created for cyber security projects. To manage business IT Assets and banking service availability.
c) Appropriate Regulation and supervision: Under this a supervisory reporting framework will be created. Also appropriate guidance will be provided in implementing secure practices.
d) Robust Collaboration: A forum to discuss practical issues and challenges and to share best practices is to be created. Cloud services are to be adopted to implement the framework successfully.
e) Developing IT and Cybersecurity Skills Set: The technical skills are to be provided to the UCBs. This will help them manage their own IT and cyber security infrastructure. Also training and awareness are to be provided to all the UCBs on cyber security.
Today all the UCBs are at some stage of technology adoption. This can be ATMs or mobile banking or internet banking. With technology becoming the key driver of banking sector, it is essential for the UCBs to adopt cyber security measures to safeguard their transactions and also boost their technical skills.

Sep 24, 2020

KKR Picks Up Stake in Reliance Retail

US private equity firm KKR & Co will invest Rs. 5,550 crore to buy a 1.28% stake in Reliance Industries Ltd's retail arm as the Mukesh Ambani-run conglomerate extends fundraising spree that has already netted more than $20 billion.
KKR will invest Rs. 5,550 crore into Reliance Retail Ventures Ltd (RRVL), a subsidiary of Reliance Industries Ltd.
The investment values Reliance Retail, which runs grocery stores and fashion chains, at a pre-money equity value of Rs. 4.21 lakh crore.
KKR's investment will translate into a 1.28% equity stake in RRVL on a fully diluted basis.
This is the second investment by KKR in Reliance Industries (RIL) units. It had previously picked up a 2.32% stake in the digital arm, Jio Platforms for Rs. 11,367 crore.
For Reliance Retail, KKR is the second investor. US private equity firm Silver Lake Partners had earlier this month agreed to buy 1.75% stake in the venture for Rs. 7,500 crore.

Havells Enters the Refrigeration Segment

Havells-owned consumer electronics maker Llyod is entering into refrigerator and dishwasher segments which would complete its portfolio of a complete white goods manufacturer.
The company is venturing into these segments before the festive season which is the biggest shopping period for home appliances in the country.
As per Liyod CEO Shashi Arora, Llyod will have a complete range of products, right from entry-level direct cool refrigerator models to frost-free and side-by-side units priced from Rs. 10,000 to Rs. 85,000. For dishwashers, the company's range will start from Rs. 22,000 onwards.
The refrigerator market in India is worth around Rs 25,000 crore with around 30% penetration level right now. By volume, direct cool refrigerators are 70% of the market while 30% are frost-free. By value contribution, direct cool is 60% and balance is frost-free range.
Llyod will be manufacturing the entire refrigerator range in India through a third-party manufacturer even though the products have been designed in-house. The dishwashers will be imported since there are no local manufacturing capabilities yet.

NSE and SGX Ink Formal Pact on NSE IFSC-SGX Connect

National Stock Exchange (NSE) and Singapore Exchange (SGX) have entered into a formal agreement to cement the key terms for operationalising the NSE IFSC-SGX Connect. The two exchanges will also withdraw arbitration proceedings.
The parties did not elaborate on the terms and structure of the formal agreement, but said that the proposed NSE IFSC- SGX Connect will bring together international and Gujarat International Finance Tec-City (GIFT) participants to create a bigger liquidity pool for Nifty products in GIFT City.
In August 2019, the two exchanges had received a set of approved regulatory dispensations from their statutory regulators obtaining their support on a joint proposal that the two exchanges submitted earlier this year.
As per Loh Boon Chye, Chief Executive Officer of SGX, building connectivity across international platforms in Singapore and India will facilitate unfettered access for global market participants, and in turn enhance investments and capital market flows between India and the world.

Nike Expects Permanent Shift to Online Sales

Sportswear firm Nike has seen a huge rise in online sales as it bounces back from a coronavirus slump.
The US company saw digital sales rocket 82% during the June to August quarter, offsetting falling revenue in its stores.
Nike posted revenue of $10.6bn (£8.3bn) as many of its key markets recovered including China.
For its previous quarter revenues were down by more than a third as it tackled store closures and lockdowns globally.
Nike chief executive John Donahoe said that the shift to online sales could be a permanent trend.
"We know that digital is the new normal. The consumer today is digitally grounded and simply will not revert back," Mr Donahoe said.
Nike has been using its website and shopping apps to release limited edition footwear.
The sportswear giant has been transforming itself to sell directly to customers over the past few years, reducing its store presence and retail partners.

CCI Approves Acquisition of 100 Equity Shares of Midlife by API Holdings

The Competition Commission of India (CCI) approved the acquisition of 100 per cent equity shares of Medlife International Private Limited (Medlife) by API Holdings Private Limited (API Holdings) and of up to 19.59 per cent equity share capital of API Holdings by Medlife's shareholders.
The proposed combination relates to the acquisition of 100 per cent of equity shares of Medlife by API and as consideration, the acquisition of up to 19.59 per cent of the equity share capital of API Holdings (on a fully diluted basis), by the Medlife Promoter Shareholders and other shareholders of Medlife. (Prashant Singh, Tushar Kumar and the Prasid Uno Family Trust (Trust) are collectively referred to as Medlife Promoter Shareholders).
API is a private company, incorporated in 2019. API directly or through its subsidiaries carries out various business activities including wholesale sale and distribution of drugs; transportation and delivery services primarily focused on pharmaceutical sector; owning technology and intellectual property for developing e-commerce platforms; and provision of manpower supply, support, business function support for group companies of API Holdings.
Medlife, incorporated in 2014 is primarily a healthcare company engaged in the wholesale sale and distribution of drugs. It also engages in the retail sale of such pharmaceutical products, medical devices and OTC drugs, though pharmacies and an online marketplace. Medlife also healthcare services such as medicines and wellness products, digital doctor consultation and online diagnostic tests services.

Sep 23, 2020

Shapoorji Pallonji Group Says 'Time to Separate from Tata'

Shapoorji Pallonji (SP) Group, the largest minority shareholder with 18.37 per cent stake in Tata Sons, said that it is "time to separate from Tata" to end a relationship that has spanned over 70 years.
Tata Sons is the holding company of Tata Group.
In a press statement, the SP Group said: "It stated before the Supreme Court that a separation from the Tata Group is necessary due to the potential impact this continuing litigation could have on livelihoods and the economy".
They stated that it was crucial that an early resolution is reached to arrive at a fair and equitable solution reflecting the value of the underlying tangible and intangible assets.
The SP Group and Tatas have been engaged in a bitter legal battle ever since Cyrus Mistry was sacked as Chairman of Tata Sons in October 2016.
Tata Sons has amplified its institutional efforts to suppress and inflict irreparable harm on the SP Group, in the midst of a global crisis triggered by the COVID pandemic.

TRAI Recommends Forming Multi-stakeholder Body to assist DoT in Monitoring Net Neutrality Rules

Sector regulator TRAI suggested that the Telecom Department should establish a multi-stakeholder body to ensure that internet providers adhere to the provisions of net neutrality, as it spelt out the broad contours of the proposed panel.
The role of the multi-stakeholder body would be to provide advice and support to Department of Telecom (DoT) in monitoring and enforcement of net neutrality principles.
Releasing its detailed recommendations on 'Traffic management practices and multi-stakeholder body for net neutrality', the two aspects enshrined in the net neutrality principles, TRAI said that the proposed panel should comprise all telecom service providers and internet providers and other stakeholders such as content providers, researcher, academic and technical community, civil society organisations, consumers, and the government.
The DoT may establish a multi-stakeholder body (MSB) to ensure that Internet Access Providers adhere to the provisions of net neutrality in their license.
The proposed body would be responsible for providing support to DoT in creating and maintaining repository of traffic management practices, investigate complaints regarding violation of net neutrality, submitting reports based on monitoring of internet services, probe of incidents, and review of reports submitted by its members.
It can also help in recommending suitable technical standards and methodologies on matters pertaining to best practices to be adopted for internet traffic management.

India Exploring to Utilise Arab World's FTAs with US & EU for Exports

India has pitched for elevating India-Arab economic partnership commensurate with the strategic partnership between the two sides and exploring opportunities to utilise Arab World's FTA with US and EU for Indian businesses.
"India-Arab relations are founded on strong traditional ties and deepening political understanding. Our economic relations have to be stepped up to a higher level to match the strategic partnership and strong momentum in bilateral understanding at the political level. There is huge potential in the growing Arab economies while many Arab countries have FTAs with EU and USA. Arab countries and Indian businesses can both benefit by participation in economic growth and development," Secretary (CPV&OIA) MEA Sanjay Bhattacharyya told FICCI in an address titled 'India's engagement with Arab World'.

Sep 22, 2020

India Launches First Cargo Ferry to Maldives

The first ever Cargo Ferry Service between India and the Maldives was jointly launched opening a new chapter in connectivity initiatives in the Indian Ocean Region.
The Cargo Ferry Vessel MCP Linz operated by the Shipping Corporation of India (SCI) will connect Tuticorin and Cochin Ports in India with Kulhudhuhfushi and Male Ports in the Maldives.
The vessel is expected to arrive in Kulhudhuhfushi on September 26 and Male on September 28. The MCP Linz is a combination vessel which can carry 380 TEUs and 3000 MT on bulk cargo, and will have a turnaround time of 10-12 days for its voyages, officials said.
This vessel provides direct cargo connectivity between India and the Maldives on a predictable and affordable basis for the first time, and will lower costs and times for traders in both countries.

SBI Life Inks Pact with Yes Bank

SBI Life Insurance signed bancassurance agreement with Yes Bank to offer a comprehensive bouquet of life insurance solutions to the bank's customers across the country.
As part of the partnership, SBI Life's diverse range of individual and group insurance solutions will be offered to the customers of Yes Bank through the bank's branches spread throughout the country.
SBI Life's extensive product portfolio coupled with the bank's digital capabilities and widespread presence will ensure easy accessibility of life insurance to the customers.
The agreement was signed by Rajan Pental, Global Head - Retail Banking, Yes Bank and AVS Sivaramakrishna, Regional Director-Mumbai region, SBI Life Insurance.

Privatise Select PSU Banks, Dilute Role of DFS: Raghuram Rajan

Former RBI governor Raghuram Rajan suggested the government to privatise select public sector banks, set up a bad bank to deal with NPAs and dilute the role of Department of Financial Services.
The reforms are necessary to ensure growth of the banking government without the periodic boom-bust cycles, said a paper titled 'Indian Banks: A Time to Reform?' co-authored by Rajan and former Reserve Bank Deputy Governor Viral Acharya.
In the paper it is said that re-privatisation of select PSBs can then be undertaken as part of a carefully calibrated strategy, bringing in private investors who have both financial expertise as well as technological expertise; corporate houses must be kept from acquiring significant stakes, given their natural conflicts of interest.
Noting that the government obtains enormous power from directing bank lending, it said sometimes this power is exercised to advance public goals such as financial inclusion or infrastructure finance, sometimes it is used to offer patronage to, or exercise control over, industrialists.
According to the paper, private asset management and national asset management 'bad banks' should be encouraged in parallel to the online platform for distressed loan sales.

GE: Industrial Giant To Stop Building Coal-fired Power Plants

In a dramatic reversal, one of the world's biggest makers of coal-fired power plants is to exit the market and focus on greener alternatives.
US industrial giant General Electric said that it would shut or sell sites as it prioritised its renewable energy and power generation businesses.
It comes ahead of a US Presidential election in which the candidates hold starkly different views on coal.
GE has said in the past that it would focus less on fossil fuels, reflecting the growing acceptance of cleaner energy sources in US power grids.
But just five years ago, it struck its biggest ever deal - paying almost £10bn for a business that produced coal-fuelled turbines.
In a statement, the firm suggested the decision had been motivated by economics.

Shell Launches Major Cost-cutting Drive

Royal Dutch Shell is looking to slash up to 40% off the cost of producing oil and gas in a major drive to save cash so it can overhaul its business and focus more on renewable energy and power markets.
Shell's new cost-cutting review, known internally as Project Reshape and expected to be completed this year, will affect its three main divisions and any savings will come on top of a $4 billion target set in the wake of the COVID-19 crisis.
Reducing costs is vital for Shell's plans to move into the power sector and renewables where margins are relatively low.
Competition is also likely to intensify with utilities and rival oil firms including BP and Total all battling for market share as economies around the world go green.
Last year, Shell's overall operating costs came to $38 billion and capital spending totalled $24 billion.
Shell is exploring ways to reduce spending on oil and gas production, its largest division known as upstream, by 30% to 40% through cuts in operating costs and capital spending on new projects.

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