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BUSINESS AND ECONOMY - December 2015

Dec 2015

Dec 06, 2019

Saudi Aramco Raises $25.6bn in World's Biggest Share Sale

State-owned oil giant Saudi Aramco raised a record $25.6bn (£19.4bn) in its initial public offering in Riyadh.
The share sale was the biggest ever, surpassing that of China's Alibaba which raised $25bn in 2014 in New York.
Aramco relied on domestic and regional investors to sell a 1.5% stake after lukewarm interest from abroad.
The IPO will value it at $1.7tn when trading begins - short of its $2tn target, but making it the most valuable listed company in the world.
The share sale is at the heart of Crown Prince Mohammed bin Salman's plans to modernise the Saudi economy and wean it off its dependence on oil.
The country urgently needs tens of billions of dollars to fund megaprojects and develop new industries.

CPPIB to Invest $600 mn via NIIF

National Investment and Infrastructure Fund (NIIF) of India and Canada Pension Plan Investment Board (CPPIB) announced an agreement for CPPIB to invest up to US$600 million through the NIIF Master Fund. The agreement includes a commitment of US$150 million in the NIIF Master Fund and co-investment rights of up to US$450 million in future opportunities to invest alongside the NIIF Master Fund.
With CPPIB's investment, NIIF Master Fund now has US$2.1 billion in commitments and has achieved its initially targeted fund size. In addition, NIIF Master Fund investors have co-investment rights of US$3 billion, which will enable the NIIF Master Fund to invest at the scale required for India's large infrastructure requirements. The NIIF Master Fund invests equity capital in core infrastructure sectors in India, with a focus on transportation, energy and urban infrastructure.
CPPIB joins Abu Dhabi Investment Authority, AustralianSuper, Ontario Teachers' Pension Plan, Temasek, Axis Bank, HDFC Group, ICICI Bank and Kotak Mahindra Life Insurance as investors in the NIIF Master Fund, alongside Government of India.
CPPIB will also become a shareholder in National Investment and Infrastructure Fund Limited, NIIF's investment management company.

India's Forex Reserves Cross $450 Billion for the First Time

Reserve Bank governor Shaktikanta Das said that foreign exchange reserves continue the upward journey surging to a new high of $451.7 billion.
Since the beginning of the current financial year, the forex kitty has gained by $38.8 billion as of December 3, the largest in recent year.
The reserves have been surging to new highs every week for the last few months and this is the first time that they have crossed the $450 billion mark.

Flipkart Leads Funding Round in Shadowfax

Walmart-owned e-commerce platform Flipkart has led a $60 million investment in Shadowfax, which offers an on-demand, last-mile logistics network.
The Series D funding round also saw the participation of Eight Roads Ventures, NGP Capital, Qualcomm Ventures, Mirae Asset Naver Fund, and the World Bank-backed International Finance Corp.
According to Flipkart Chief Executive Officer (CEO) Kalyan Krishnamurthy, by leveraging kirana stores and the deep delivery capabilities of Shadowfax and other Flipkart-led innovations, we are building a strong foundation to make inroads into a dynamic hyperlocal consumer market.
Flipkart has an existing partnership with Shadowfax for logistics across various categories for its e-commerce business.

Allcargo Buys Controlling Stake in Gati

Allcargo Logistics Ltd. ventured into the express logistics space by acquiring a controlling stake in Gati Ltd. for Rs. 416 crore.
As part of the deal, Allcargo will buy up to 1,03,85,332 equity shares at Rs. 75 per share from some of the existing members of the Promoter and Promoter Group of Gati – Mahendra Kumar Agarwal, Mahendra Investment Advisors Pvt. Ltd. and TCI Finance Ltd. (TCI) and Gati.
Allcargo provides a range of services like Multimodal Transport Operations (MTO), Container Freight Station Operations/Inland Container Depot Operations (CFS-ICD) and Logistics parks. Allcargo's market leadership in the global less than container load (LCL) consolidation business and Gati's domestic express transportation segment allows the company to offer end-to-end transportation capabilities to customers.

RBI Keeps Key Interest Rate Unchanged

The Reserve Bank of India exercised a temporary pause on its interest rate, as it waits to get more clarity on inflation and government measures in the upcoming Budget in February, before re-engaging with the Centre on the national endeavour of lifting growth.
The six-member monetary policy committee (MPC), headed by RBI Governor Shaktikanta Das, voted unanimously to keep the policy repo rate unchanged at 5.15 per cent. The RBI, however, revised its outlook for growth and inflation. The central bank revised down its 2019-20 growth forecast to 5 per cent from 6.1 per cent in the October policy review. The inflation forecast for the second half of 2019-20 was revised up from 3.5-3.7 per cent to 5.1-4.7 per cent.

GKN Aerospace Opens Wiring Facility

GKN Aerospace officially opened its new facility for Electrical Wiring Interconnection Systems (EWIS) in Pune.
According to the company, GKN Aerospace Leadership together with Maharashtra government officials, as well as investment partners and customers, came together to recognise GKN Aerospace strengthening its footprint in the region and the importance of the fast-growing aerospace market in India.
The site will focus on the assembly of wiring systems for commercial aircraft and aero-engines like the Airbus A320neo, Boeing 737, 777X and Boeing 787. The Pune facility will operate alongside the existing joint venture for wiring systems in Bangalore, which is serving the defence market.

Finance Panel Submits Report to President

The Fifteenth Finance Commission (FFC), chaired by N. K. Singh, submitted its report for FY2020-21 to President Ram Nath Kovind.
The report will now be presented in Parliament by the Ministry of Finance. The Union Cabinet, in November had approved the extension of the term of the FFC. The FFC is to submit two reports — one for 2020-21 and another for 2021-26, the deadline for which is October 30, 2020.

RBI Lays Down Guidelines for Payments Banks' SFB Licence

As per the final guidelines on on-tap licensing for SFBs of the Reserve Bank of India (RBI), the Payments banks willing to convert themselves into small finance banks (SFBs) can apply for such a licence only after five years of operations.
Existing payments banks (PBs), which are controlled by residents and have completed five years of operations, are also eligible for conversion into small finance banks after complying with all legal and regulatory requirements of various authorities and if they conform to these guidelines.
The minimum capital for setting up an SFB has been mandated at Rs. 200 crore, adding for primary (urban) co-operative banks (UCBs), which wish to become SFBs, the initial requirement of net worth will be Rs. 100 crore, which will have to be increased to Rs. 200 crore within five years from the date of commencement of business.

Dec 05, 2019

Coca-Cola to Divest Bottling Operations

Hindustan Coca-Cola Beverages Pvt. Ltd (HCCB), the bottling subsidiary of beverage company Coca-Cola, is divesting operations in north India to its existing bottlers to optimise resources and widen its distribution network, as it adds more products to its portfolio. To be sure, Coca-Cola works with 14 bottlers in India, including HCCB. The move is aimed at creating a regional scale, stimulate investments and growth in the northern part of the country, as the company hopes to sell more beverages to consumers. HCCB will continue to operate in east, west and south India.

First Debt ETF Gets Cabinet Approval

The Union cabinet cleared Bharat Bond ETF, India's first exchange-traded fund housing corporate bonds issued by state-run companies. The ETF is expected to attract retail investors to government debt, with units priced as low as Rs. 1,000.
ETFs invest in a basket of securities representing an index, security or commodity, and are traded on the stock exchange like any listed security. The Bharat Bond ETF will be managed by Edelweiss Mutual Fund.
The ETF will have two maturities—one maturing in three years and the other in 10 years, with yields ranging from 7.10 - 7.85%. Under regulations issued by the Securities and Exchange Board of India, every ETF must have at least eight companies, and no single issuer can have more than 15% weight in the fund.

Bharti Airtel Board Okays Raising $4 bn

Telecom operator Bharti Airtel's board approved raising $4 billion through equity dilution and debt funding.
The board for now gave its go-ahead to raise up to $3 billion and also approved raising an additional $1 billion.
The telecom major desperately needs cash to pay off its statutory dues apart from debts.
Airtel had reported a net loss of Rs. 23,044 crore for the quarter ended September 30, on Rs. 28,450 crore provisions towards adjusted gross revenue (AGR) dues.

PrimeInvestor.in Unveils MF Rating Tool

PrimeInvestor.in, an investment research as a service (RaaS) platform for retail investors, launched its mutual fund rating (MF) tool, Prime Ratings. The tool is an attempt to overcome the limitations of other MF rating systems now available for retail investors. It uses a more diverse combination of risk and return metrics and looks at fund categories based on their characteristics and investment purpose and not just their SEBI-defined category. It also spreads ratings out into a smoother curve which provides better distinction between funds.
PrimeInvestor.in was co-founded by Srikanth Meenakshi, Bhavana Acharya and Vidya Bala.

Dec 04, 2019

Xiaomi Mi Credit app debuted with Rs 1 lakh lending limit on personal loans

Expanding its financial services portfolio, Chinese electronics maker Xiaomi announced the Mi Credit – an app-based credit lending service with a limit of up to Rs 1 lakh on personal loans. Being an online marketplace for lenders, the app debuts with support from five non-banking financial companies (NBFCs) and fintech firms — Aditya Birla Finance Limited, Money View, EarlySalary, Zestmoney and CreditVidya. Apart from lending services, the company also partnered with Experian to provide credit score report free of cost on the Mi Credit app.

Thomas Cook India acquired rights to Thomas Cook brand for India, Sri Lanka and Mauritius

Thomas CookNSE -1.28 % India (TCIL) announced that it has signed an agreement with AlixPartners, Thomas Cook UK's appointed liquidation managers to acquire the rights to the Thomas Cook Brand for India, Sri Lanka & Mauritius markets for a one time payment of about Rs 14 crore.
TCIL was previously contracted to pay an annual brand licence fee of Rs 2 crore to Thomas Cook UK until 2024 for usage of the brand. The brand license agreement also gave TCIL the right of first refusal to acquire the brand in the event of the Thomas Cook UK Group going into liquidation before 2024. TCIL said agreement ensures brand use rights in perpetuity and means that TCIL can use the brand in perpetuity on a royalty-free basis.

Govt Launched Independent Directors' Databank, To Be Maintained By IICA

The government launched a databank of independent directors under the companies law, a move aimed at providing a platform for registration of existing as well as those aspiring to be independent directors.
The databank portal would be maintained by the Indian Institute for Corporate Affairs (IICA), which comes under the corporate affairs ministry.
It provides for a wide array of e-learning courses on various topics including the Companies Act, securities laws, basic accountancy, board practices, board ethics and board effectiveness. A number of value added services are expected to be rolled out through the portal for capacity building of independent directors.

Dec 03, 2019

Uber Opens centre of Excellence in Andhra

U.S. headquartered cab aggregator Uber announced the setting up of its second centre of excellence (CoE) in India, which is expected to create 500 jobs by 2020. The CoE in Visakhapatnam is being set up at a cost of $8 lakh. The company already operates a CoE in Hyderabad with about 1,000 employees.
The CoE provides customer support services to Uber riders as well as drivers. The teams at the centre will respond to any urgent issue or incident that is reported to the company and will operate 24/7.
The Visakhapatnam facility is the 12th such centre globally for the company. Uber has two CoEs in the U.S. in Chicago and Phoenix, and four in the Europe, Middle East and Africa (EMEA) region in Limerick (Ireland), Lisbon (Portugal), Cairo (Egypt), and Krakow (Poland). It has two CoEs each in Latin America (Costa Rica and Sao Paulo), and Philippines (Manila and Pampanga).

Tata Motors Bags Orders To Supply Over 2300 Buses

Tata Motors announced that it has bagged orders to supply over 2300 buses to various state transports like Rajasthan, Karnataka, Uttar Pradesh, Tamil Nadu and Andhra Pradesh and the company is trying to complete this order by February 2020.
Tata Motors offers a comprehensive range of buses from intercity travel options to safe transports which are suitable for public commute needs.
Tata Motors currently designs, develops and manufacturers its buses in Pune, Dharwad, Pantnagar and Lucknow. It has also partnered with body manufacturers in Goa and Brazil where the Marcopolo buses are made. The company also claims that its manufacturing Full Building Vehicles (FBVs) meets government's new norms of safety, fuel efficiency, wider bus gangways and can run on both CNG and diesel.

Exchanges Suspend Karvy

The National Stock Exchange (NSE) and BSE have suspended the membership of Karvy Stock Broking (KSB) with immediate effect for non-compliance with exchange regulations. This comes close on the heels of the regulator barring the Hyderabad-based entity from signing new clients for alleged misuse of client funds.
While NSE has suspended Karvy Stock Broking from all segments, BSE said that the trading terminals of KSB have been deactivated in the equity and debt segment, while it had been put on risk reduction mode (RRM) in the derivatives segment.

DHFL Admitted for Bankruptcy

The Mumbai bench of the National Company Law Tribunal admitted the crippled mortgage player DHFL for bankruptcy proceedings.
The move came in after the Reserve Bank last week made an application for bankruptcy proceedings to resolve the credit and liquidity crisis at the company, which became the first financial sector player being sent for bankruptcy.
The third largest pure-play mortgage player has been in liquidity crisis for long and in November the RBI had superseded its board and placed under an administrator.
Following this, the RBI had issued a statement that it would be sent to NCLT for debt resolution.

Dec 02, 2019

Hyundai Venue Set to Enter S. Africa

Hyundai Motor India Ltd's (HMIL) Venue is all set to enter South Africa, propelled by strong demand for its first connected mobility in the Sport Utility Vehicle segment from the overseas market.
The first shipment of 1,400 Hyundai Venue vehicles left from Chennai Port to South Africa market.
The popularity and demand for the made-in-India Venue is evident in the overseas market as well. Venue is already being exported to Nepal, Bhutan, Mauritius and Seychelles.

Arcelor, Thriveni in Bidding War for OSPIL

Arcelor Mittal is facing stiff competition in its bid for Odisha Slurry Pipeline Infrastructure Ltd (OSPIL), an insolvent company whose single asset could cut the cost of production at Essar Steel by a fifth. Thriveni Earthmovers Pvt. Ltd, one of the country's largest iron ore mine developers and operators, has offered to pay back creditors in full —principal and interest— but over a five-year period.
Arcelor Mittal made an upfront cash offer of Rs. 2,200 crore for OSPIL, while Thriveni placed a bid of Rs. 3,300 crore, with Rs. 8 crore of upfront cash and the rest in staggered payments, two people aware of the bid details said on condition of anonymity. OSPIL has Rs. 2,352 crore of principal outstanding to various classes of creditors. With accumulated interest, the outstanding liabilities are Rs. 3,300 crore.

Axis Bank More than Doubles Loan Provisions for Troubled Sectors

The third largest private sector lender Axis Bank is setting aside more capital, more than twice over the regulatory requirements, for loans in sectors it has identified as stressed.
The bank is maintaining a standard asset provisioning of 1 percentage point for bad loans in such sectors, as against the regulatory provision of 0.40 per cent.
The move, which is being followed at least since April, comes amid continuing concerns on high quantum of non-performing assets in its book. The high level of NPAs and the ensuing provisioning have impacted the profits of a majority of lenders, including Axis Bank, over the past four years.

Temasek in Talks to Invest up to $100 mn in Cure.fit

Cure.fit is seeking a valuation of about $800 million post the fundraise, up from its $575 million valuation less than six months ago.
Temasek is in talks to invest up to $100 million in health and fitness start-up Cure.fit as the Singapore state investor looks to diversify its strategy and back more tech start-ups.
Temasek is actively scouting for late-stage technology investments in India and wants to cut cheques of at least $75 million. Cure.fit needs the capital to grow its food and diagnostics plays, and the deal is expected to close in 6-8 weeks.
Cure.fit was founded in 2016 by Mukesh Bansal, co-founder of fashion retailer Myntra, and Ankit Nagori, ex-chief business officer at Flipkart.

AAI Recommends Privatising Airports in Amritsar, Indore, Four Other Cities

The Airports Authority of India (AAI) recommended the Centre to privatise airports at Amritsar, Varanasi, Bhubaneswar, Indore, Raipur and Trichy.
The recommendation came as the central government has already privatised airports at Lucknow, Ahmedabad, Jaipur, Mangaluru, Thiruvananthapuram, and Guwahati for operation, management and development through public-private partnership (PPP) model in February this year. As six airports have already been privatised in February this year, the AAI in its board meeting September decided to privatise six more airports: Amritsar, Varanasi, Bhubaneswar, Indore, Raipur and Trichy.

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