General Awareness

BUSINESS AND ECONOMY - December 2015

Dec 2015

Jul 13, 2020

CCI Approves Kubota's 9.09% Acquisition of Escorts and Escorts's 40% Acquisition by KAI

The Competition Commission of India (CCI) approved the acquisition of 9.09% equity stake in Escorts Limited (Escorts) by Kubota Corporation (Kubota) and of 40% in Kubota Agricultural Machinery India Private Limited (KAI) by Escorts under Section 31(1) of the Competition Act, 2002.
As per the proposed combination, Kubota will subscribe to the 1,22,57,688 equity shares (9.09% of the total issued, subscribed and paid-up share capital) of Escorts on a pre-capital reduction and 10 % on a post-capital reduction basis.
Kubota will acquire 40% shares held by Sumitomo Corporation in KAI, which will be acquired by Escorts. After this, Kubota will hold 60% and Escorts will hold 40% in KAI.

India Second-Largest Foreign Investor in the UK

According to the United Kingdom's government's figures released in July 2020, India became the second largest Forign Direct Investor (FDI) in the United Kingdom (UK) after the United States in 2019, by investing in 120 projects and creating 5,429 new jobs in the UK.
The United States of America remains as the top source of Forign Direct Investment (FDI) of the UK, delivering 462 projects and 20,131 jobs.
The List is followed by India, Germany, France, China and Hong Kong.

US India's Top Trading Partner for Second Consecutive Year

The US remained India's top trading partner for the second consecutive fiscal in 2019-20, which shows increasing economic ties between the two countries.
According to the data of the commerce ministry, in 2019-20, the bilateral trade between the US and India stood at $88.75 billion as against $87.96 billion in 2018-19.
The US is one of the few countries with which India has a trade surplus. The trade gap between the countries has increased to $17.42 billion in 2019-20 from $16.86 billion in 2018-19, the data showed.
In 2018-19, the US first surpassed China to become India's top trading partner.
The bilateral trade between India and China has dipped to $81.87 billion in 2019-20 from $87.08 billion in 2018-19. Trade deficit between the two neighbours have declined to $48.66 billion in 2019-20 from $53.57 billion in the previous fiscal.

Tata Eyes Exit from AirAsia JV

As per reports, Tata Sons Ltd is plotting an exit from loss-making AirAsia India where it holds a majority stake.
Tata Sons, the holding company of the Tata group, has a 51% stake in AirAsia India. Malaysia's AirAsia Bhd owns the remaining 49%. The budget airline had a 7.8% share of the domestic market in May, placing it in the fifth position.
AirAsia Bhd, which is facing headwinds due to airline industry disruptions from covid-19, had in June approached the Tata group to sell its stake, as mandated by the terms of the joint venture (JV) under which Tata Sons has the right of first refusal.
The offer was, however, turned down by Tata Sons, which is not keen to continue investing in the airline and wants to focus on its full-service carrier ,Vistara, which it jointly owns with Singapore Airlines as the minority partner.

Jul 12, 2020

India 2nd-Largest Source of FDI for Britain

According to new UK government figures released in July 2020, India invested in 120 projects and created 5,429 new jobs in the UK to become the second-largest source of foreign direct investment (FDI) after the US in 2019.
The Department for International Trade (DIT) inward investment statistics for 2019-2020 found India moving up from its previous third-largest spot, representing an overall 4% FDI increase for the UK on 2018-2019 with 1,852 new inward investment projects in the 2019/2020 financial year.
The US remains the number one source of FDI for the UK followed by India, Germany, France and China and Hong Kong. Australia and New Zealand were responsible for 72 projects and the Nordic and Baltic region 134.

Jul 11, 2020

MCX Launches Gold Mini Options

The Multi Commodity Exchange (MCX) launched Gold Mini options after getting approval from the regulatory body Securities and Exchange Board of India (SEBI). The regulatory body approved the launch of the Gold Mini option with 100 grams of gold bars.
The Commodity Exchange said that the Gold Mini operations August 2020, September 2020 and October 2020 contracts are available for trading from 10th July. A maximum of 100 lots can be ordered in a single order.
It is a financial product whose value is linked with metal. In case of Gold Mini there will be 100 gram rods and the price of derivatives contract will be linked to the price of rods. The expiry date for the Gold Mini options is the same as the Gold Mini Future, i.e. the 5th of every month.
Members can order a maximum of 100 lots for a single order. Gold Mini and Silver Kilo options were launched by the stock exchange BSE on 1st June, while NSE started Gold Mini options on 8th June.

IRDAI Removes Rs. 5 lakh Cap on Sum Insured for Arogya Sanjeevani Policies Amid COVID-19

The Insurance Regulatory and Development Authority of India (IRDAI) allowed all general and health insurance companies to increase the sum insured on the Standard Individual Health Insurance Product namely "Arogya Sanjeevani" beyond Rs. 5 lakh.
This decision has been taken in view of the increasing cost of healthcare in the country amid the covid-19 pandemic.
Arogya Sanjeevani, is a product for which all insurers are mandated to offer had a cap of Rs. 5 lakh on the sum insured and the minimum cover for it was of Rs. 1 lakh. The regulator has now allows insurers to offer sum insured as low as Rs. 50,000 with no upper limit. The sum insured has to be in multiples of Rs. 50,000.

Honda to Invest In China's CATL, to Jointly Develop EV Batteries

Japan's Honda Motor Co Ltd will buy a 1% stake in Chinese electric vehicle (EV) battery maker Contemporary Amperex Technology (CATL) and the two will jointly develop EV batteries.
The move comes at a time when auto manufacturers and EV battery makers are joining forces in pursuit of an electric future. CATL, based in Ningde, said last year that it would develop batteries with Honda and also supply batteries to Tesla, Toyota and Volkswagen AG.
Honda and CATL said in a statement that they would develop battery technologies and research a battery recycling business. Honda will launch its first EV with CATL's battery in China in 2022 and will expand the partnership with stable EV battery supply globally in the future.

People's Bank of China Cuts Stake in HDFC Ltd

As per reports, China's central bank has sold at least some of its stake in India's Housing Development Finance Corp.
The People's Bank of China has dropped off the list of investors holding at least a 1% stake in the company as of end-June. The PBOC held about 17.5 million shares, accounting for a 1.01% shares, at end-March. It cannot be ascertained if the Chinese central bank continues to holds any stake in the mortgage lender or not.
PBOC had increased its stake in India's largest shadow lender in the 12 months ended March. India in April tightened rules on investments in its companies from neighboring nations including China in a bid to reduce the risk of opportunistic takeovers amid coronavirus-led share price drops.
It is mandatory for publicly-traded companies in India to disclose shareholdings of more than 1% at the end of every quarter. HDFC's global institutional holders as of the latest statement include the Government of Singapore as well as funds run by Vanguard and Invesco Oppenheimer.

Jul 10, 2020

CBDT Signs a MoU with SEBI for Data Exchange

The Central Board of Direct Taxes (CBDT) and Securities and Exchange Board of India (SEBI) signed a Memorandum of Understanding (MOU) for the data exchange between the two organisations via video conference.
It facilitates sharing of data and information automatically between the two organisations on a regular basis.
On request and suo moto basis, both organisations exchange information available in the databases for doing their functions under various laws.
The MoU comes into force from the date of signing.
CBDT and SEBI are already collaborating through various existing mechanisms.
A Data Exchange Steering Group is constituted and will meet periodically to review the status of data exchange and improve effectiveness of the data sharing mechanism.
The MoU marks a new era of cooperation and synergy between SEBI and CBDT.

India Plans to Enhance Trade with Bangladesh

India is adopting a multi-pronged strategy to enhance trade and business partnership with Bangladesh amid Beijing's recent efforts to woo Dhaka with duty-free access to its products.
While Chinese trade concessions can push Bangladesh into a "dual deficit and debt trap", India is activating various connectivity initiatives for seamless movement of Bangladeshi products to the landlocked north-eastern states and other parts of India.
According to experts who focus on cross-border trade and connectivity issues, there is a major push to connectivity initiatives via sea ports, inland water transport, rail and highways that will enable Bangladesh to connect with Bhutan and Nepal markets too along with India. Both India and Bangladesh are undertaking various measures to restore the pre-1965 rail and other connectivity links.
Bangladesh is India's biggest trade partner in South Asia. Bilateral trade between India and Bangladesh has grown steadily over the last decade. India's exports to Bangladesh in FY 2018-19 stood at $9.21 billion and imports during the same period stood at $1.04 billion.

Either Sell or Advise, Investment Advisors cannot do Both

As per market regulator SEBI, investment advisers can either distribute financial products or advise on them to investors, but cannot do both.
The move will be applicable from October 1. The Securities and Exchange Board of India has amended the Investment Advisers Regulations and covers any person who advises clients on purchase, sale, investment or portfolio management in securities for these entities who is called an investment adviser.
SEBI has stipulated segregation of services. At present, advisers carry out both advisory and distribution services and there is no segregation.
Individual investment advisers can no longer advise and distribute investment products simultaneously. They will have to chose between one of them and seek a registration with SEBI for that.
The segregation isn't limited to individuals alone. Non-individual advisers, including companies and limited liability partnerships, must segregate clients at a group level for investment and advisory services.

CCI Approves Proposed Combination Involving Eros Plc, STX and Marco

The Competition Commission of India (CCI) approved the proposed combination which involves Eros International Plc (Eros Plc), STX Filmworks Inc (STX) and Marco Alliance Limited (Marco).
The proposed combination is a 2 step transaction.
Step-1– The indirectly wholly owned subsidiary of Eros Plc will merge into STX, where STX will continue to be the surviving entity.
Step-2 – The Hony Group will subscribe some shares of the merged entity through Marco, an existing investor in STX.
After this transaction is completed, Eros, STX and Marco are expected to acquire an economic and voting interest in the combined company, directly or indirectly, with certain other rights.

RIL-BP Launch Fuel and Mobility Joint Venture under 'Jio-bp' Brand

BP and Reliance Industries (RIL) announced the commencement of their new fuel retailing and mobility joint venture (JV). The JV will now begin rebranding RIL fuel retail outlets to Jio-BP.
The newly launched JV company is named Reliance BP Mobility (RBML). The new entity will also look to provide electric vehicle charging and other low-carbon solutions over time.
RIL and BP had signed a definitive agreement for the JV in December last year (2019) and had then said that the retail operations would be run under the Jio-BP branding.
The agreement also stated that RIL would transfer ownership of its existing fuel retail network, along with access to its aviation fuel business, to the new entity.
BP has paid RIL $1 billion for a 49 per cent stake in the joint venture, while RIL will hold the remaining 51 per cent.

Tamil Nadu Tops Market Borrowings among States in India

According to data from the Reserve Bank of India (RBI), Tamil Nadu (TN) topped market borrowings among States in India with a collection of Rs. 30,500 crore in the fiscal 2020-21(FY 21).
Tamil Nadu which accounted for 17% of the borrowings done through the issue of bonds (known as state development loans), is followed by Maharashtra Rs. 25,500 crore (14%), Andhra Pradesh Rs. 17,000 crore (9%), Rajasthan Rs. 17,000 crore (9%).

Jul 09, 2020

Cabinet Gives Nod to Setting up Agriculture Infrastructure Fund

The Union Cabinet gave its approval to a new pan India Central Sector Scheme- Agriculture Infrastructure Fund. The scheme will provide a medium and long term debt financing facility for investment in viable projects for post-harvest management Infrastructure and community farming assets through interest subvention and financial support. Under the scheme, one lakh crore rupees will be provided by banks and financial institutions as loans to Primary Agricultural Credit Societies, Marketing Cooperative Societies, Farmer Producers Organisations, Self Help Group, Farmers, Startups and Centre and State agency among others.
The duration of the Scheme is for ten years from fiscal year 2020 to 2029. Under it, loans will be disbursed in four years starting with sanction of 10 thousand crore rupees in the current year and 30 thousand crore rupees each crore in next three financial years.

NSDC Collaborates with Microsoft India to Provide Digital Skills

The National Skill Development Corporation (NSDC), a not-for-profit public limited company joined hands with tech giant company Microsoft India Private Limited, a subsidiary of American software company Microsoft Corporation, to enhance the digital skills of the country's youth. Under this, more than 1 lakh youth will be digitally enabled in the country in the next one year.
As part of the tie-up, Microsoft's learning resource center, Microsoft Learn, will be integrated with NSDC's eSkill India portal to provide access to personalised learning paths and critical technology from entry level to advanced level like AI (Artificial Intelligence), machine learning (ML) and cloud computing so that the youth can be exposed to the nuances of today's digital economy.
Through the portal, e-skilling events, webinars and virtual sessions will be conducted across the country to support students, training partners and higher-education trainees enrolled under NSDC's skill training programs.
The partnership with NSDC is an extension of Microsoft's Global Skilling Initiative. Under this, the company is teaching new digital skills to 25 million people all over the world, which is needed in the coronavirus (Covid-19) economy.

NASSCOM Launchpad to Promote Partnership between India and the US

The National Association of Software and Services Companies (NASSCOM) virtually launched the Nasscom Launchpad in New Jersey, USA, as part of its ongoing efforts to promote cross border trade through technology partnerships.
The apex body representing India's $191 billion IT-BPM industry tied up with a start-up hub VentureLink@NJIT and Choose New Jersey, a non-profit, to facilitate partnerships between New Jersey and India, promote technology-based foreign direct investment (FDI) between the two regions and provide a platform for its member companies to use as a home base while exploring opportunities to do business in New Jersey and the greater New York area.
NASSCOM member companies will gain a hand-on understanding of market opportunities within the New Jersey tech ecosystem, assistance with site selection, government regulations, incentives, and tax planning to establish permanent operations in the region while operating out of their home location in India. This initiative would also support collaborative research and development in areas of common interest between the organisations of these regions.
The partnership will also facilitate business partner match making and assistance with introductions with prospective clients.
The initial companies participating in the Launchpad are Batoi Systems Pvt Ltd, Eminenture Pvt Ltd, Mucheo, NeenOpal Inc, ITSYS Solutions. It is expected that during the course of a year around 20 companies will utilize the platform.

AIIB Releases 1st Tranche to L&T Infrastructure Finance for Renewable Energy

Asian Infrastructure Investment Bank (AIIB) released USD 50 million in the first tranche of assistance to L&T Infrastructure Finance Ltd (LTIF), to fund renewable Energy Projects in the country. The released amount is part of a sanctioned USD 100 million External Commercial Borrowing(ECB) loan.
This is the 1st loan of AIIB to a non-banking financial company (NBFC) in India.
The objective of the project is to enhance the supply of renewable energy in India by mobilising private capital.
On completion, the project will increase private capital investment in renewable energy projects in India, which will increase the provision of affordable, clean energy and reduce the level of greenhouse gas emissions.
The loan proceeds will be used to finance large and mid-scale wind and solar power infrastructure projects in India.

Govt. Approves Capital Infusion in 3 State-run General Insurers

The Union Cabinet approved capital infusion of Rs. 12,450 crore in three state-owned general insurance companies to strengthen their capital base and make them more stable.
The 3 general insurance companies are the National Insurance Company, Oriental Insurance Company and United Insurance Company.
The government had in the budget for FY19 announced its decision to merge three general insurance companies – Oriental Insurance Company Limited (OlCL), National Insurance Company Limited (NICL) and United India Insurance Company Limited (UIICL).

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