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BUSINESS AND ECONOMY - December 2015

Dec 2015

Jan 25, 2020

Temasek, EQT in $500 m Green Energy Venture

European alternative asset manager EQT and Singapore's state investment firm Temasek Holdings Pte announced that they have jointly set up O2 Power, a $500-million renewable energy platform in India. O2 Power will target more than four gigawatts of installed capacity across solar and wind projects, comprising both greenfield projects, as well as mergers and acquisitions. This would be EQT Infrastructure's first investment in India. EQT is investing in the platform through its EQT Infrastructure IV fund. With this transaction, EQT Infrastructure IV is expected to be 60-65% invested.

OIL Files Plea in Apex Court after Rs. 48,000-cr. Demand from DoT

State-owned Oil India Ltd (OIL) filed a clarificatory/modificatory petition in the Supreme Court against a Rs. 48,000 crore demand raised by the telecom department on cumulative revenue of Rs. 1.47 crore it had earned on an NLD telecom licence.
Following the October 24, 2019 Supreme Court ruling that non-telecom revenues of telecom firms such as Bharti Airtel and Vodafone Idea should be included for considering payments of government dues, the telecom department asked OIL to pay Rs. 48,000 crore in principal dues together with interest and penalty. The dues sought are double the net worth of OIL.

Shriram Capital Halts 3-way Merger

Shriram Capital Ltd. held off a plan to merge with its shadow lending arms after the Reserve Bank of India requested the group to cut its stake in its insurance business.
The unlisted Shriram Capital, which counts billionaire Ajay Piramal and private equity firm TPG Capital as investors, was planning to combine with its publicly traded units Shriram Transport Finance Co. and Shriram City Union Finance Ltd. The proposal would have effectively turned the merged entity into a shadow lender along with a 77% stake in life and general ventures.
The central bank was concerned because insurance business isn't typically the remit of a non-bank financier. The banking regulator recommended non-bank financiers including Shriram to lower their holdings in insurance business to 50% or below.
The RBI's direction is part of heightened scrutiny over the country's troubled shadow lending sector after a major infrastructure financier defaulted on series of debt repayments, leading to severe cash crunch and sharp jump in bad loans.

Jan 24, 2020

Vadilal in Talks to Sell Stake

The feuding promoters of Vadilal Industries Ltd are in advanced talks to sell their entire stake in the ice cream maker and its domestic distribution business to a combine of Arpwood Partners and PAG.
It will be an all-cash deal that would involve Vadilal's promoters exiting both their companies completely. The transaction is likely to value the business at around Rs. 1,000 crore. Investment bank Lincoln International is advising Vadilal on the transaction.

Bank of Baroda, Bank of India and Canara Bank Get New MD and CEOs

The government appointed heads of three large public sector banks - Bank of Baroda, Bank of India and Canara bank for a period of three years.
The Appointments Committee of the Cabinet (ACC) appointed Sanjiv Chadha as the Managing Director and Chief Executive of Bank of Baroda, Lingam Venkat Prabhakar as MD & CEO of Canara Bank and Atanu Kumar Das as MD & CEO of Bank of India.
Chadha was the deputy managing director at State Bank of India in charge of SBI Capital Markets. He replaced P.S. Jayakumar whose term came to end after his one-year extension ended in October 2019.
Prabhakar was the executive director of Punjab National Bank and he will be replacing R. A. Sankara Narayanan who will retire end of this month.
Das was the ED at Bank of India who will be promoted to the post of MD& CEO in the same bank following its vacancy since July 2019.

Offer Enable and Disable Options in Cards

The Reserve Bank of India (RBI) has asked issuers of credit and debit cards as well as those of non-bank prepaid payment instrument to provide the option of disabling and enabling cards, a move aimed at customer convenience.
According to the banking regulator, for existing cards, the issuers may take a decision, based on their risk perception, whether to disable the card not present (domestic and international) transactions, card present (international) transactions and contactless transaction rights.
Furthermore, the RBI said that customers should have the facility to switch on or off and set or modify transaction limits for all types of transactions.

New Demat Accounts Climb to 10-year High

Retail investors piled into the Indian stock market in a year that saw soaring equities and a slowing economy, driving the number of new dematerialized accounts opened in 2019 to a 10-year high.
According to data from the Securities and Exchange Board of India (SEBI), both new demat accounts, and the total number of such accounts hit a 10-year high in 2019. While new demat account openings rose 12.5% from the previous year to touch 4.5 million, total demat accounts at the end of 2019 stood at 39.3 million, up from 34.8 million in 2018.
A demat account is opened by an investor with a depository participant to invest in securities such as stocks and bonds. The securities are held in digital format.

Jan 23, 2020

Bharti Airtel Gets DoT Nod to Raise FDI Limit

Bharti Airtel Ltd has received approval from the telecom department to increase foreign direct investment in the company to 100%, allowing the telecom operator to raise more capital if it so requires.
The Reserve Bank of India has already permitted overseas portfolio investors to invest as much as 74% in Bharti Airtel.
The Indian government's approval will allow Singapore Telecommunications Ltd or Singtel, which owns a 35% stake in Bharti Airtel, to increase its stake in the Indian company.
It would also permit the Indian telecom operator to raise more funds from other foreign investors.

Big Rural Push Likely in Budget

As per reports, Union Budget 2020-21 is expected to focus on the transformation of rural India with a nearly 15% jump in fund allocation to boost the village economy and raise incomes, particularly of small and marginal farmers.
Transformation of the rural economy is a must for two reasons; to reverse the current economic slowdown, which is hit mainly due to weak demand, and to make India a $5 trillion economy by 2025. Both the objectives require special focus on agriculture and rural economy, hence greater fund allocation.
India's gross domestic product (GDP) grew 4.5% in the second quarter of the current financial year, the lowest since March 2013. According to the government's first advanced estimates, India's GDP is expected to grow 5% in 2019-20.

Danfoss Invests in Pune Unit

Denmark-headquartered Danfoss has invested 15 million euros to set up a facility in Pune for manufacturing mobile hydraulics for the construction, agriculture and other off-highway vehicle markets.
The company's Indian subsidiary Danfoss Power Solutions will be manufacturing products like electronic controls, pumps and valves, motors, sensors and transmitters, among others in this facility.
The company aims to invest on increasing its product offerings in India within the next 24 months and remains firm on its mission to ensure a minimum of 50 per cent localisation level for sourcing and manufacturing in their future product lines as well.

Red Ridge Invites Global Brands to shift Base to India

With the cost of manufacturing going up in China and many international brands looking out for cost-efficient destinations, Red Ridge Global is sensing opportunity in India.
The Chinese firm, started by Indian-origin founder Vickram Rana in 1998, is seeking to induce clients to shift their manufacturing base to India by offering to buy the entire production output and distribute the products across India and global markets.
With global revenues of $500 million, Red Ridge Global is one of China's largest arts, craft and learning kit suppliers having showrooms in the U.S., India, Canada, Malaysia and China. It has manufacturing and packing units in the U.S., Canada, Hong Kong, India and in Shanghai, Ningbo and Guangzhou.
In India, it operates via its 100% subsidiary Stone Sapphire India, which has established a distribution network across the country, besides manufacturing and distributing its own Sk'oodle brand of stationery products and art materials.

Jan 22, 2020

Adani Capital Buys Essel Finance's MSME Lending Bisuness

Adani Capital Pvt. Ltd, the non-banking financial company (NBFC) arm of Adani Group focused on and micro-entrepreneurs, has acquired Essel Finance's micro, small and medium enterprises (MSME) loan business.
Through the acquisition, Adani Capital has secured a loan book of around Rs. 145 crore, operating out of 10 cities, comprising approximately 1,100 customers and 40 employees.
This is the second asset of debt-laden Subash Chandra group that Adani has acquired.

Vodafone m-pesa Surrenders PPI Licence

The Reserve Bank of India (RBI) has cancelled the Certificate of Authorisation (CoA) of payment system operator (PSO) Vodafone m-pesa after the prepaid payment instrument player decided to surrender is licence. Following the cancellation of the CoA, the company cannot transact the business of issuance and operation of Prepaid Payment Instruments.
Customers or merchants having a valid claim on the firm as a PSO, can approach the company for settlement of their claims within three years from the date of cancellation, that is, by September 30, 2022.

FM May Raise Divestment Goal for FY21

Finance Minister Nirmala Sitharaman is likely to set an even more ambitious disinvestment target of Rs. 1.5 lakh crore for the year starting April 1, 2020 mostly because many of the strategic sales planned for the current year, including that of Air India, have been delayed.
The strategic disinvestments that are now expected to be completed in the next fiscal include Air India, Bharat Petroleum Corp. Ltd (BPCL), Container Corporation of India Ltd (Concor) and Shipping Corporation of India Ltd (SCI).
The stiffer target for 2020-21 comes after government officials acknowledged that the disinvestment target of Rs. 1.05 lakh crore for 2019-20 will fall short by around Rs. 50,000 crore due to delays.

Food Fight Heats Up after Zomato-Uber Deal

Zomato Media Pvt. Ltd has acquired the Indian business of Uber Eats, the food delivery business of the ride-sharing giant, in an all-stock deal, adding a powerful new investor to its shareholder roster in its battle against arch-rival Swiggy for supremacy in India.
Uber will get a 10% stake in Zomato in a deal that values Uber Eats at $300-350 million. In January, Zomato raised $150 million in fresh capital at a valuation of $3 billion from existing investor Ant Financial.
The Uber Eats app has been shut in India and the app now directs food delivery customers to sign up for Zomato. Delivery workers working with Uber Eats will also move to Zomato.

Bangladesh Factories Ordered to Shut to Save Key River

Bangladesh's High Court ordered the shutdown of 231 factories that have contributed to Dhaka's main river becoming one of the world's most polluted. The court ordered the authorities to take immediate action against the 231 factories including dyeing and rubber plants and tanneries dumping effluent into the Buriganga. The Buriganga connects the capital with the southern coastal districts through a network of rivers.

Dish TV's Merger Talks with Airtel Digital Stall

Dish TV India Ltd.'s talks to merge with Airtel Digital TV have stalled on differences over the deal's structure.
Essel Group's Dish TV has opted to explore a sale of the business for cash instead of an all-stock merger. The direct-to-home arm of Bharti Airtel Ltd. remained committed to offering shares, contributing to the stalemate.

Jan 21, 2020

186 agri products testing laboratories set up by APEDA: Government

The Agricultural and Processed Food Products Export Development Authority (APEDA) has added 135 laboratories to existing 51 recognized laboratories to enable exporters have an easy access to the laboratories for testing of exports.
With this initiative APEDA recognition of laboratories has reached 186 laboratories across the country.
The number of laboratories have increased in states. This includes 35 in Maharashtra, 23 in Gujarat, 10 in Andhra Pradesh & Telangana, 23 in Tamil Nadu and 17 in Karnataka. Laboratory testing requirements are crucial in agri export supply chain.
For increasing the laboratory network further, the authority has taken a policy decision to simplify the recognition of labs.

PIA awards Rs700m contract to dubious company

In a scandalous deal, the Pakistan International Airlines (PIA) have awarded a contract of Rs700 million for the up-gradation of In Flight Entertainment (IFE) in eight Boeing 777 aircraft to a local company which was registered only two months before the tender was floated.
A retired Pakistan Air Force officer, Group Captain (R) Khawaja Moizuddin, is the owner of that company, M/s Avionic Solutions Private Limited. It was incorporated with a capital share of Rs100,000. He is said to be a close friend of PIA CEO, Air Marshal Arshad Malik. The PIA spokesman termed the allegation "highly unfair and absurd." Malik is presently under suspension on the order of the Sindh High Court after a petitioner challenged his appointment.

India attracted $49 billion FDI in 2019, among top 10 recipients of overseas investment: UNCTAD

India was among the top 10 recipients of Foreign Direct Investment (FDI) in 2019, attracting $49 billion in inflows, a 16% increase from the previous year, driving the FDI growth in South Asia. The majority went into services industries, including information technology.
The global foreign direct investment remained flat in 2019 at $1.39 trillion, a 1% decline from a revised $1.41 trillion in 2018.

Samsung says may invest $500 mn to set up display factory in India

South Korean flat screen maker Samsung Display plans to set up a factory in India with a $500 million investment as parent Samsung Electronics Co Ltd seeks to expand smartphone production there, a regulatory filing showed.
The move would be a boon for India which is vying with nearby rivals such as Vietnam to attract global smartphone firms under the government's "Make in India" drive.
Under the plan, Samsung Electronics will provide 35 billion rupees ($492.31 million) in loans and transfer a parcel of land in Noida for 920 million rupees to its display unit.

Vodafone Idea, Bharti move Supreme Court to modify AGR order

Telecom majors Vodafone Idea and Bharti Airtel moved the Supreme Court for modification of its October 24, 2019 order for payment of dues to the government within three months, saying the direction would have huge ramifications on the telecom industry and "severely hamper" programmes like Digital India, Make in India and Skill India.
The pleas come after a three-judge bench of the Supreme Court led by Justice Arun Mishra, on January 16 dismissed petitions filed by Bharti Airtel and Vodafone Idea, among others, for a review of its October 2019 judgment, upholding the recovery of past dues amounting to ₹1.47 lakh crore from them. The recovery by the government was based on adjusted gross revenue (AGR) of about ₹92,000 crore.
Vodafone urged the court to alter its order and permit it to submit an application before the Department of Telecom (DoT) for drawing up a schedule for payment of the dues.

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