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BUSINESS AND ECONOMY - December 2015

Dec 2015

Feb 19, 2020

JSW Paints Sets Sights on South and West India

JSW Paints Pvt. Ltd. a part of the $13-billion JSW Group, is planning to put up a new manufacturing plant to meet its growth target.
As per A.S. Sundaresan, CEO, JSW Paints, the company has set a target to achieve 5% market share in south and west in decorative paints in two to three years.
"We started the paint division in April 2019 and it is growing. Right now, we have two plants and are planning to expand our business as it is growing at a healthy rate," said A.S. Sundaresan, CEO, JSW Paints.
The JSW Group set up its first largest and fully-automated industrial coil coatings facility with an annual capacity of 25,000 kilolitre (KL) in Mumbai and decorative paints unit with 100,000 KL annual capacity at Vijayanagar in Karnataka at a cost of Rs. 600 crore.

Kotak Mahindra Bank Gets RBI Nod on Promoters' Stake Dilution Plan

Kotak Mahindra Bank was granted the final approval from the Reserve Bank of India (RBI) to the lender's proposal to dilute promoters' shareholding in the bank.
In January 2020, Kotak Mahindra Bank said that the bank decided to cap the promoters' voting rights to 15% from April 1 onwards. The RBI gave its in-principle acceptance for reducing promoters' shareholding to 26% of the paid-up voting equity share capital of the bank within six months from the date of final approval of the regulator.
The regulator earlier insisted the Kotak Mahindra Bank promoters to cap their voting rights at 20% by March 2020. Challenging the RBI directive, the private sector lender had filed a writ against the central bank on December 10, 2018 in the Bombay High Court. In an interim order, the RBI had fined the Kotak Mahindra Bank Rs. 2 crore for violation of its norms.
Kotak will now sell 4% of his stake worth Rs. 12,500 crore over the next six months.

Yes Bank to Exit Nifty from March 27

Yes Bank will be excluded from the benchmark Nifty index with effect from March 27. According to National Stock Exchange, the domestic lender will be replaced by Shree Cement.
Yes Bank has seen massive erosion in its valuation with its stock price dropping from a high of Rs. 286 in April 2019 to the current Rs. 35.
Incidentally, the banking stock was excluded from the benchmark Sensex in December 2019 when the 30-share index was reconstituted.

Twitter Acquires California-based Chroma Labs

Twitter acquired California-based Chroma Labs that develops tools for short-form video and photo creation and was founded by seven Facebook and Instagram workers in 2018.
The Chroma Stories app lets users fill in stylish layout templates and frames for posting collages and more to Instagram Stories, Snapchat and more.

CCI Approves Acquisition of WABCO Holdings by ZF Friedrichshafen AG

Under Section 31(1) of the Competition Act, 2002, the Competition Commission of India (CCI) approved for the acquisition of WABCO (Westinghouse Air Brake Company) Holdings Inc. by ZF Friedrichshafen AG (Automotive industry in Germany). As per the agreement, ZF will acquire 100% shares of WABCO for USD 136.50 per share under all-cash transaction method for a total equity value of USD 7 billion (approximately Rs. 49,700 crores).
ZF is a global technology company and it develops, design and manufacturing products like gearboxes, steering, axles, clutches, dampers, chassis components and systems, active and passive safety technology system and other automobile components, ZF also distributes products and systems for passenger vehicles, commercial vehicles, off-highway vehicles and Industrial technology
WABCO is a global supplier of pneumatic braking control systems, technologies and services that improve safety, efficiency and connectivity of commercial vehicles including trucks, buses and trailers, it also manufacturing products like Integrated braking systems & stability control, air suspension system, transmission automation control, aerodynamics, telematics and also supplies fleet operators with fleet management solutions, diagnostics tools, training and other services.

Russian Fund Shows Interest in Jet Airways

As per reports, Russia's Far East Development Fund has shown interest to bid for Jet Airways (India) Ltd. The development comes on a day when the committee of creditors met to discuss whether the date for the submission of bids should be extended after potential suiters of the airline, including Delhi-based Prudent ARC Ltd and South America's Synergy Group, failed to meet the deadline. After the meeting Jet's lenders led by State Bank of India voted to extend the deadline to March 9. The 270-day deadline for completing the insolvency process ends on March 15.

Feb 18, 2020

AI Buyer must Retain Staff for Lock-in Period

According to Civil Aviation Minister Hardeep Puri, the winning bidder of Air India Ltd will have to retain existing employees of the state-run airline for a negotiated time frame so that they do not face any uncertainty after privatisation.
The government wants Air India to continue to operate under its own brand, the minister said, adding its viability and success would depend on the workforce that would be an asset to the new owner.
A lock-in period to retain the workers at Air India for a particular period would be negotiated with "whoever is the interested player.

India and World Bank Sign Loan Agreement to Improve Groundwater Management

The Government of India and the World Bank today signed a $450 million loan agreement to support the national program to arrest the country's depleting groundwater levels and strengthen groundwater institutions.
The World Bank-supported Atal Bhujal Yojana (ABHY) – National Groundwater Management Improvement Program will be implemented in the states of Gujarat, Maharashtra, Haryana, Karnataka, Rajasthan, Madhya Pradesh, and Uttar Pradesh and cover 78 districts. These states span both the hard rock aquifers of peninsular India and the alluvial aquifers of the Indo-Gangetic plains. They were selected based on several criteria, including degree of groundwater exploitation and degradation, established legal and regulatory instruments, institutional readiness, and experience in implementing initiatives related to groundwater management.

Reliance Industries to Merge Media and Distribution Businesses

Reliance Industries announced consolidation of its all media and distribution businesses under one umbrella brand 'Network18'.
Under the scheme of arrangement, TV18 Broadcast, Hathway Cable & Datacom and Den Networks will merge into Network18 Media & Investments, which will be an integrated media and distribution company with a revenue of Rs. 8,000 crore. The restructuring will create value-chain integration, and render substantial economies of scale. It also simplifies the corporate structure of the group by reducing the number of listed entities, said a statement by TV18 Broadcast Ltd.
This will scale up Network18 "as one of the largest listed players in the sector.

India Becomes 5th Largest Economy, Overtakes UK and France

India emerged as the world's fifth largest economy by overtaking the UK and France in 2019, says a report.
A US-based think tank World Population Review in its report said that India is developing into an open-market economy from its previous autarkic policies.
India's economy is the fifth largest in the world with a GDP of $ 2.94 trillion, overtaking the UK and France in 2019 to take the fifth spot.
The size of the UK economy is $ 2.83 trillion and that of France is $ 2.71 trillion.
The report further said that in purchasing power parity (PPP) terms, India's GDP (PPP) is $ 10.51 trillion, exceeding that of Japan and Germany. Due to India's high population, India's GDP per capita is $ 2,170 (for comparison, the US is $ 62,794).

SP Group Wants Presence in Tata Board

The Shapoorji Pallonji Mistry Group (SP Group), which owns 18.32% in Tata Sons Ltd., has filed a limited cross appeal in the Supreme Court arguing that it deserved a more incisive and relevant relief from the National Company Law Appellate Tribunal (NCLAT) order, including a proportionate representation on the board of Tata Sons.
The appeals seek proportionate representation on the Board of Tata Sons to ensure that its interests and investments, now worth over ₹1 lakh crore, were protected in future. The prime driver of the appeals is to secure deletion of certain specific provisions in the Articles of Association of Tata Sons.

JSW Energy to Buy GMR Odisha Unit

JSW Energy entered into exclusive discussions with GMR Energy Limited (GEL) for potential acquisition of its subsidiary, GMR Kamalanga Energy Limited (GKEL), which owns and operates a 1,050 MW (3x350 MW) thermal power plant in Odisha, for an enterprise value of Rs. 5,321 crore.
Post-acquisition, the total installed power generation capacity of JSW Energy will increase to 5,609 Mw. This will expand the company's presence in the eastern region of the country and further diversify its fuel mix and off take arrangements.
Kamalanga is one the 36 identified stressed power assets that was undergoing debt resolution. The project was commissioned in 2014 and ran into trouble because of lack of coal supply. The coal block allotted to the project was cancelled by a Supreme Court judgment in the same year. It also didn't get any coal supply linkage from the Centre.
Built at a cost of Rs. 6,000 crore, it had a debt of Rs. 4,100 crore. The project has power purchase deal with Haryana, Odisha and Bihar.

DHFL Receives EOIs from at Least 15 Bidders

At least 15 suitors have shown interest in acquiring troubled mortgage financier Dewan Housing Finance Corp. Ltd (DHFL) under the bankruptcy process before the deadline for submission of expressions of interest (EOIs).
According to CNBC-TV18, KKR India Financial Services Ltd, and conglomerates Welspun Group and Adani Group, are among suitors who have expressed interest under 'Option I' to take over the entire business. Global alternative investment management firm Oaktree Capital, ARCIL Asset Reconstruction Co. and Bain & Co. are the other players to have also expressed interest to acquire the firm under 'Option I', CNBC-TV18 reported.
Under Option I, suitors were invited to submit EOIs for the entire business of DHFL as a going concern.
Under Option II, prospective resolution applicants were invited to submit EOIs for one or more groups, or a combination of any asset in isolation across different groups of DHFL.

RBI Gets Rs. 1.94 lakh cr Bids for Maiden Rs. 25,000 cr LTRO

The Reserve Bank successfully kicked off the maiden long-term reverse repo operation (LTROs) by conducting a three-year issue worth Rs. 25,000 crore for which it received bids of more than Rs. 1.944 lakh crore.
Deploying an out-of-the-box tool to ensure permanent and deeper liquidity in the system, which hovers over Rs. 2.5 lakh crore on a daily basis now, the Reserve Bank had earlier this month announced Rs. 1 lakh crore of long-term reverse repo operations beginning this Monday.
The RBI will conduct the second issue for Rs. 25,000 crore on February 24 which will have one-year tenor.
"Today, the Reserve Bank conducted the first long term repo operation (LTRO) for a notified amount of Rs. 25,000 crore with a three-year tenor in pursuance of the LTROs announced on February 7," the monetary authority said in a statement.
The response to the LTRO has been so encouraging that bids crossed Rs. 1,94,414 crore, implying a bid to cover ratio of 7.8. Total amount of bids has, in fact, exceeded the aggregate amount of Rs 1 lakh crore proposed to be offered under the LTRO scheme, it noted.

Godrej Properties Buys Land in Delhi for Luxury Housing Project

In a big-ticket real estate deal, Godrej Properties acquired nearly 27 acre land parcel in the national capital for Rs. 1,359 crore to develop a luxury housing project.
The land parcel belonged to Rail Land Development Authority (RLDA).
Godrej Properties has added a new project in the residential market of Ashok Vihar, Delhi.
As per Godrej Properties, with the land acquisition value at Rs. 1,359 crore, this is one of the largest land transactions in India in recent times. The payment for this land will be made in instalments over several years as stipulated in the tender documents. This is Godrej Properties' second project in Delhi after the launch of Godrej South Estate in Okhla in 2019.

Feb 17, 2020

NCLAT Clears Way for JSW Steel to Acquire Bhushan Power

The National Company Law Appellate Tribunal (NCLAT) rejected pleas challenging the sale of bankrupt steel maker Bhushan Power and Steel Ltd (BPSL) to JSW Steel Ltd, paving the way for the latter to complete the process of its impending acquisition.
A bench headed by Justice SJ Mukhopadhyay in January had reserved its judgement on the purchase of Bhushan Power by the Sajjan Jindal-led steel giant, more than three months after the court ordered freezing the payment by JSW Steel to all lenders of the insolvent firm.
The appellate tribunal had to decide on whether to remove the stay on the Rs. 19,700-crore bid by JSW Steel or if the company could be granted immunity under new amendment of the Insolvency and Bankruptcy Code (IBC). The newly introduced Section 32A of the IBC provides immunity to the new management of a distressed company acquired under the law.

Japan's Economy Shrinks at Fastest Rate Since 2014

Japan's economy shrank at the fastest rate in five years at the end of 2019 as it was hit by a sales tax rise, a major typhoon and weak global demand.
Annualised gross domestic product (GDP) fell by a much steeper than expected 6.3% in October-December.
There are also concerns the coronavirus outbreak will mean the slump continues this quarter.
That has raised fears that the world's third-biggest economy may fall into recession.
During the period Japanese consumer spending fell 2.9% after the country's sales tax was raised in October to 10% from 8%. In the same month Typhoon Hagibis hit large parts of the country.

ArcelorMittal- Nippon Steel in Talks to Buy 500 Mw Bhander Power Unit

AM/NS India — a joint venture (JV) between ArcelorMittal and Nippon Steel that acquired Essar Steel — is in advanced stage of discussions with Edelweiss ARC to buy Bhander power plant.
Bhander Power, a 500 megawatts (Mw) natural gas-based plant located in Hazira, Gujarat, is captive to Essar steel plant, and was till recently owned by the Ruias, promoters of the Essar group. The power plant is being sold by Edelweiss under the Securitisation and Reconstruction of Financial Assets and Enforcement of Securities Interest (SARFAESI) Act.

Airtel Pays DoT Rs. 10,000 crore as Part of AGR Dues

Bharti Airtel Limited paid Rs. 10,000 crore to department of telecommunications (DoT) as part payment of its adjusted gross revenue (AGR) dues. The company is currently in the process of determining the total quantum of the money it needs to pay DoT for the dues.
The development comes after Supreme Court castigated Bharti Airtel, Vodafone Idea as well as officials of DoT for delaying the payment of dues, in contravention of its 24 October verdict that upheld the DoT's definition of AGR and found the telecom operators guilty of under-reporting their revenues.
As per DoT calculations, Bharti Airtel has to pay Rs. 35,586 crore to the government and Vodafone Idea Rs. 50,000 crore.

DLF Looks to Raise Rs. 2,000 cr via Asset Sale

Realty firm DLF is looking to raise Rs. 2,000 crore through monetisation of certain commercial land parcels to its existing joint venture partners or new partners. The monetisation of land parcels would help the company in reducing its net debt, which stood at Rs. 4,866 crore at the end of December quarter.

Feb 16, 2020

Vivo to Invest in Local Manufacture, Expansion

Chinese smartphone major Vivo has chalked out a strategy to build a long-term plan in India to be a potent player by investing in local manufacturing and retail expansion.
The company, in addition to embarking on a fresh investment plan of Rs. 7,500 crore in India, is laying a strong retail and servicing presence in the country with an aim to stay ahead in the race.
This year, Vivo India will set up an additional 300 exclusive stores in key markets of the country besides 20 experience centres in metros to showcase, sell and explain the benefits about its differentiated products to customers. In a sector where the stakes are very high, Vivo, in five years of entering India, has emerged as a major player due to its value-for-money products that are technologically superior.

EV Start-up Launches India's Largest EV Charging Station Network

Bengaluru-based EV Start-up FAE Bikes launched Kirana Charzer, a low-cost, smart EV charging station costing just Rs. 10,000 focused on enabling small shops and individuals to install their own charging stations and earn additional income.
The startup launched the charging station at an event in London. Kirana Charzer is a compact, zero-maintenance and IoT enabled charging station which they are providing at a subsidized price of Rs. 10,000. The start-up promises Kirana Charzer to be India's cheapest charging station which allows the owner to earn 100% revenue from EV charging.
Kirana Charzer can be installed anywhere including small kirana shops, paan shops, grocery stores, restaurants and homes with standard power supply. Kirana Charzer is compatible with all 2-wheeler, 3-wheeler and 4-wheeler electric vehicles.

Bombardier Exits Commercial Aviation

Bombardier exited commercial aviation, selling a loss-making plane programme that ended its high-stakes gamble on a new jet that once drove it to the brink of bankruptcy.
The Canadian plane and train maker sold its minority stake in the A220 jet, formerly known as the CSeries, to Airbus SE for $600 million, and said that it would take a $1.6 billion charge on the programme.
The latest deal gives Airbus a 75% stake in the A220 programme and the Canadian province of Quebec will own 25%. It also allows Bombardier to avoid future capital investments of about $700 million.
Quebec, which agreed to invest $1 billion in the programme in 2015, said it would not spend further on the venture.

Indian Companies See Silver Lining in China's Virus Crisis

Indian businesses see potential benefits over the longer term from the coronavirus epidemic as companies focus more on local sourcing to offset supply disruptions in the future.
India along with countries such as Malaysia, Indonesia and Vietnam could also emerge as alternative supply destinations for multinational companies.
In India, the coronavirus outbreak has disrupted the supply chain network with China being a supplier of critical inputs to various industries such as pharmaceuticals, information technology and automotive.

Feb 15, 2020

Adani Enterprises Signs Agreement with AAI

Adani Enterprises Ltd (AEL) signed a 50 years concession agreement with Airports Authority of India (AAI) for developing and operating three airports including Ahmedabad, Lucknow and Mangaluru.
The agreement was signed between AAI and AEL's wholly owned subsidiaries Adani Ahmedabad International Airport Ltd, Adani Lucknow International Airport Ltd and Adani Mangaluru International Airport Ltd.
Under the current agreement, AEL would stand to hold a management control for 50-year lease period as well as on a per-passenger fee model. While AEL would pay Rs. 3600 crore to AAI as part of the lease, it would spend Rs. 6000 crore on the airports for the next seven years post takeover.

PW Won't Provide Other Services to its Audit Clients

Price Waterhouse, an affiliate of one of the Big Four accounting firms, will no longer provide non-audit services to companies it audits in India, a week after the government floated a discussion paper to end the practice.
The decision, which sacrifices a big chunk of tax consulting and business advisory fees, will apply to audit clients governed by the National Financial Reporting Authority (NFRA), Price Waterhouse Network of Firms in India. The PW India network houses 10 firms, including Price Waterhouse, Price Waterhouse Coopers, Dalal & Shah and Lovelock & Lewes.

Motorola Wins $764.6 million in Copyright Damages against Rival Hytera

Motorola Solutions Inc won a trade secret theft and copyright infringement case against Chinese rival Hytera Communications Corp and was awarded $764.6 million (£586.6 million) in damages.
A US jury in Chicago found that Hytera stole Motorola's trade secrets and infringed its copyrights.
Following the verdict, the communications device maker is planning to seek a global injunction preventing Hytera from further misappropriating the stolen trade secrets and infringing its copyrights.

Shell and RIL Win against Centre in U.K. Court

In a big win for Shell and its partner Reliance Industries, the English High Court rejected Indian government's challenge to the recovery of certain costs in the western offshore Panna-Mukta and Tapti oil and gas fields they operated.
The government had sought $3.5 billion in dues from Reliance and Shell-owned BG Exploration & Production India Ltd based on an October 2016 partial award of an international arbitration tribunal over the recovery of certain costs from the sale of oil and gas produced from the Panna-Mukta and Tapti fields.
The two firms had gone to the English High Court against the 2016 partial award.

SpiceJet Gets Interim Offer from Boeing

Low-cost carrier SpiceJet received an interim offer of compensation from Boeing for the grounding of its 13 Boeing 737 MAX planes following a global ban on the aircraft.
The airline had drawn up a claim of Rs. 537 crore since the grounding of the aircraft in March 2019. The claim is for expenses incurred on lease rentals and 'other identified expenses relating to the Boeing 737 MAX aircraft'. The update on the status of compensation was part of the airline's financial results for the quarter ended December 31, 2019.

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