General Awareness

BUSINESS AND ECONOMY - December 2015

Dec 2015

Jun 12, 2019

NEFT/ RTGS Charges Waived

The Reserve Bank of India (RBI) decided to waive the charges levied on banks for Real Time Gross Settlement System (RTGS) and the National Electronic Funds Transfer (NEFT) transactions from July 1.
Banks were advised to pass on the benefits to their customers. Separately, the RBI formed a committee to review the entire gamut of automated teller machines' (ATMs') charges and fees.

TPG Capital-Manipal Set to Seal Deal with Medanta

As per reports, buyout firm TPG Capital and Manipal Hospitals are set to announce the purchase of Dr. Naresh Trehan's Medanta chain of hospitals, one of the largest acquisitions in the Indian healthcare industry.
The transaction ascribes an enterprise value of Rs. 5,800-6,000 crore to the hospital chain. The two parties are expected to sign definitive agreements soon.
Medanta counts private equity firms Carlyle and Temasek as its investors.
While Carlyle Group acquired a 27% stake in Medanta's parent, Global Health, in 2013, Temasek bought an 18% stake in 2015 from Punj Lloyd Ltd. Trehan, his family, and Medanta co-founder Sunil Sachdeva own the rest.
Medanta's existing investor, Carlyle, is likely to exit the company through the proposed transaction.
The combination of TPG Capital and Manipal Group started exploratory talks with the owners of Medanta in October 2018 to buy a majority stake in the hospital chain after Malaysia's IHH Healthcare Bhd withdrew its non-binding offer.

RIL and BP Project in KG Basin

Reliance Industries Limited (RIL) and BP Plc. have sanctioned the development of MJ project, known as D55, in Block KG D6, offshore east coast of India.
MJ is the third of the three new projects in the Block KG D6 integrated development plan and its approval follows sanctions for the development of 'R-Series' deep-water gas field in June 2017 and for the satellites' cluster in April 2018.
As per Mukesh Ambani, CMD, RIL, the gas will satiate the increasing demand for clean fuel in the country, save foreign exchange and reduce dependency on imported gas.

Salesforce Acquires Tableau

US-based Cloud computing firm Salesforce announced the acquisition of leading analytics platform Tableau Software for $15.7 billion in an all-stock deal.
The coming together of world's top CRM (customer relationship management) platform with leading analytics firm would accelerate Salesforce's opportunity in the $1.8 trillion digital transformation space.
Tableau helps people see and understand data and Salesforce helps people engage and understand customers.
More than 86,000 organisations around the world, such as Charles Schwab, Verizon, Schneider Electric, Southwest and Netflix, rely on Tableau to help them see and understand data.

AAI Cancels Ground Handling Tender

The Airports Authority of India (AAI) cancelled its tender for ground handling services at 76 airports following concerns over some short-listed bidders offering steep royalties.
A decision was taken to cancel the tender. AAI will now have to start a fresh bidding procedure.
The tender procedure was initiated May 2018, but faced several delays.
In January, AAI short-listed bidders and asked other players to match the bids when objections were raised about royalties as high as 226% quoted by some entities and how that would make ground handling business unviable in the country.

RBI to Pump in Liquidity

The RBI said that it will infuse Rs. 15,000 crore into the financial system.
Based on an assessment of prevailing liquidity conditions and also of the durable liquidity needs going forward, RBI decided to conduct purchase of (six) government securities under OMOs for Rs. 150 billion on June 13 through multi-security auction using the multiple price method.

Jun 11, 2019

UltraTech Cement Gets Green Nod for Project in AP

UltraTech Cement got the Environment Ministry's nod for a Rs. 2,500-crore project in Andhra Pradesh.
Under the project, the firm will set up an integrated cement plant at Petnikote in Kurnool district with a clinker capacity of 4 million tonne per annum (MTPA), 6 MTPA of cement, 60 MW of captive power plant and 15 MW of waste heat recovery-based power unit.

Ludhiana Cycle Industry

Ludhiana bicycle industry is upbeat as it's raining tenders for conventional black-coloured "Roadster" cycles from various state governments.
Around half a dozen states have already floated tenders for 23 lakh bicycles in 2019 to be distributed among students free of cost under various social schemes.
Industry expects that few other state governments are in the process of floating tenders which will take the total quantum of government order to 50-60 lakh bicycles.
The state governments which are likely to float tenders are West Bengal, Madhya Pradesh, Chhattisgarh and Rajasthan. According to sources, West Bengal alone may procure 15 lakh more bicycles.
With more than 50,000 cycles manufactured every day, Ludhiana is the hub for bicycle manufacturing in India.
According to Indian Bicycle Manufacturers Association, Ludhiana has been producing over 1.5 crore bicycles per annum with support of small and medium ancillary units.

Socure Inc. to Focus on India

New York-based Socure Inc., a provider of digital identity verification technology on real-time basis, is planning to focus more on India for its business growth.
So far, Source Inc. had deployed $1 million in Chennai centre in staff, infrastructure and training.
By 2021, it plans to double the investment and the number of staff to 60 in India.

Etihad and Hindujas May Back Out

Hinduja Group and Etihad Airways PJSC may not proceed with plans to resurrect Jet Airways (India) Ltd, dealing a severe blow to efforts aimed at rescuing the airline that has suspended flights for nearly two months.
London-based Hinduja Group decided to halt negotiations to buy a stake in Jet Airways, while Etihad Airways of Abu Dhabi put on hold a plan to add more investments in the Mumbai based airline.
As far as bidding for Jet Airways is concerned, the Hinduja Group has taken a back seat now.
The promoters of the group feel that it's too risky for them to get involved (with Jet Airways) at the moment, due to ongoing government investigations and the recent insolvency pleas submitted by operational creditors at the National Company Law Tribunal (NCLT).
The board of directors of Etihad Airways is also against investing further in Jet Airways. The Abu Dhabi-based airline was earlier keen to save their investment but now their plan is on the back burner.
Etihad Airways had in May 2019 confirmed its interest to reinvest in a minority stake in Jet Airways, subject to conditions.

Coal India Identifies Assets in Australia

Public sector Coal India Ltd. (CIL) identified assets in Australia, in which it is keen to acquire equity stakes.
Accordingly, it is planning to appoint an internationally reputed merchant or investment banker to carry out the financial due diligence.
CIL had earmarked about Rs. 6,000 crore for the purpose.
The mine acquisition initiative is in line with CIL's plans to set up overseas businesses involving coking coal and high-grade low-ash thermal coal.
Its strategy is to acquire the coal resources, produce them and import the output into India.
The production would either be through opening of new mines or through equity participation in working mines on production-sharing basis.

Cheque Books for No-frills Accounts

The Reserve Bank of India (RBI) allowed banks to offer cheque book facility and other services to the no-frills account holders, but said that they could not ask such account holders to maintain any minimum balance for such services.
The basic savings bank deposit account or no-frills account was designed as a savings account which will offer certain minimum facilities, free of charge, to the holders of such accounts.
As per the norms of no-frills account, account holders are not required to maintain minimum balance and can get certain minimum facilities for free.
These facilities include four withdrawals from ATMs in a month, deposit of cash at bank branch and ATM card or ATM-cum-debit card.

Jun 10, 2019

Unicorns Outpace Traditional Tech Companies

The top unicorns, shorthand for startups with valuations of $1 billion or more, in India are also the most acquisitive. Among other things, it indicates how many of these companies have used mergers and acquisitions (M&As) to scale up rapidly in a short period of time.
In contrast, among traditional technology companies in India, such deals are few and far between.

BoB Puts NPAs on the Block

As resolution through the insolvency courts keep getting delayed inordinately, the state-run Bank of Baroda has put on sale non-performing loans amounting to Rs. 9,060 crore, including two large accounts Bhushan Power & Steel and Alok Industries which are undergoing insolvency process but delayed.
While Bhushan Power & Steel dues are to the tune of Rs. 2,099 crore, Alok Industries dues are Rs. 903 crore.
Both companies are among the 12 largest stressed accounts which the Reserve Bank of India had asked banks to refer to National Company Law Tribunals for resolution in June 2017 and forms the first list put out by the monetary authority in the mid-2016.
The third largest lender had put Bhushan Power & Steel on sale in December 2018 but could not find a buyer.

China Calls in Foreign Tech Companies

China summoned global technology companies for talks following US ban on selling technology to China's Huawei Technologies Co Ltd.
The blacklisting of Huawei, the world's largest maker of telecoms network equipment, bars US companies from supplying it with many goods and services due to what Washington said were national security issues, a potentially crippling blow that sharply escalated US-China trade tensions.
Huawei denies that its equipment poses a security threat.
Soon afterwards, Beijing announced it would release its own list of "unreliable" foreign entities. It also has hinted that it will limit its supply of rare earths to the US.

Jun 09, 2019

Vodafone Idea to Transfer Fibre Assets to Vodafone Towers

Shareholders and creditors of telecom operator Vodafone Idea approved a plan to transfer optical fibre assets to its wholly owned subsidiary Vodafone Towers Limited.
The company proposed to transfer its telecom fibre infrastructure to Vodafone Towers before monetising it and approached the National Company Law Tribunal Ahmedabad in April 2019 for its approval.

Mastercard and W-GDP Team Up

Mastercard and the U.S. government-backed Women's Global Development and Prosperity (W-GDP) Initiative have teamed up to further women's empowerment along the lines of financial inclusion, access to capital and ability to work.
Mastercard and the W-GDP have entered into an agreement to work on three pillars to do with women's empowerment.

India Key Market for Coloured Gemstones

Gemfields Group, a leading coloured gemstones mining and trading company, accorded high importance to India due to growing demand for gemstones and plentiful availability of skilled workforce required for cutting and polishing the gemstones.
As per Sean Gilbertson, CEO, Gemfields Group, India plays a crucial part in Gemfields' operations.

Panipat Firms under Lens in GST Scam

As many as 400 big and small firms in Panipat have allegedly used fake bills amounting to Rs. 800 crore to evade tax.
During the investigation, it has been found that the firms in question have registered 19 bogus firms, including 17 in Panipat and two in Uttar Pradesh, to facilitate the tax evasion.
The Superintendent of Police (SP) Sumit Kumar has constituted a special investigation team (SIT) to inquire the matter in detail.

Jun 08, 2019

Nippon Makes Open Offer to Buy Stake in RNAM

Nippon Life Insurance Co. announced an open offer to acquire nearly 22.49 per cent stake in Reliance Nippon Life Asset Management Ltd. under a deal with Anil Ambani's Reliance Capital Ltd. which is exiting the mutual fund business.
Nippon Life would acquire up to 13.82 crore equity shares, or about 22.49 per cent of RNAM at Rs. 230 apiece.
The transaction is to be payable in cash for a total consideration of Rs 3,179.41 crore. Reliance Capital had in May, 2019 announced its plan to exit the mutual fund business by selling its stake in RNAM to its joint venture partner Japan's Nippon Life Insurance.

SEBI and MCA Sign Pact

The Securities and Exchange Board of India (SEBI) and the Ministry of Corporate Affairs (MCA) signed a memorandum of understanding (MoU) to facilitate seamless sharing of data and information for carrying out scrutiny, inspection, investigation and prosecution.
This assumes significance as the MCA has the database of all registered firms while SEBI only regulates listed entities that may have unlisted subsidiaries, with the MCA having access to all the data of such unlisted entities.
The MoU comes in the wake of increasing need for surveillance in the context of corporate frauds affecting important sectors of the economy.

Home Loan Linked to Repo Rate

Home loan shoppers will have a new product to opt for come July 1. The State Bank of India will introduce a product where the interest rate is linked to the repo rate of the Reserve Bank of India.
Repo rates are benchmark rates set by the RBI and those opting for the SBI's new home loan product will see interest rates moving instantly in sync with the repo rate.
Now, the SBI's home loan rates are linked to its marginal cost of funds based lending rate (MCLR) due to which transmission of rate cuts are slower.
All banks link their retail lending rates to their MCLR rates.
The SBI has also cut by 25 basis points (bps) its rates on cash credit and overdraft accounts of over Rs. 1 lakh linked to the repo rate.
Also, Bank of Maharashtra reduced its lending rate by 10 bps to 8.6%. The interest rate will come down for all loans having a residual maturity of more than six months.

RBI Revises Stressed Asset Resolution Norms

After the Supreme Court struck down the controversial 2018 circular of Reserve Bank of India (RBI) on stressed asset resolution, the banking regulator released revised set of norms which are substantially less stringent from the previous one.
In particular, neither there is a mandate to start resolution which results in higher provisioning if there is a single day default nor a mandate for initiating insolvency proceeding if resolution plan is not implemented for large accounts within a time frame.
However, the RBI has sought to nudge banks towards the insolvency courts by introducing a disincentive in the form of additional provisions for delayed resolution.
At the same time, the central bank said that it would issue directions to banks for initiation of insolvency proceedings against borrowers for specific defaults so that the momentum towards effective resolution remains uncompromised.
The new circular asked lenders to undertake a prima facie review of the borrower account within 30 days from a default, which is termed as "review period."
During this review period, lenders may decide on the resolution strategy, including the nature of the resolution plan (RP), the approach for implementation of the RP etc.

Promoters Sell Stake in Indiabulls Real Estate Arm

Indiabulls Real Estate promoters have sold 14% stake in open market transactions to Embassy Group for Rs. 950 crore, as part of the group's strategy to focus on financial services and exit from the realty business.
Promoters have around 39% stake in Indiabulls Real Estate, of which 14%, or over 6.3 crore shares, was offloaded in a bulk deal.
Indiabulls Group is looking to exit the real estate business to get regulatory approvals for the proposed merger of Indiabulls Housing Finance with Lakshmi Vilas Bank.

RBI Slaps Penalty on Kotak Mahindra Bank

The Reserve Bank of India (RBI) has imposed a monetary penalty of Rs. 2 crore on Kotak Mahindra Bank for not complying with its directions on furnishing information about dilution of promoters' shareholding.
The central bank said that the penalty was imposed in exercise of powers vested in it under the provisions of the Banking Regulation Act, 1949.
This action is based on the deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the bank.
As per the statement, Kotak Mahindra Bank was directed to convey its commitment to achieve the dilution as per the timelines stipulated.
However, the bank failed to comply and a show cause notice was issued to the bank as to why penalty should not be imposed for non-compliance with the said directions.

Bharat Forge JV with Refu Electronik

Auto components major Bharat Forge formed a joint venture with Germany's Refu Electronik GmbH for the development and manufacture of electric vehicle (EV) components with an investment of 11.35 million euros (about Rs. 89 crore).
The JV will be into developing, manufacturing and selling of on-board controllers and components.

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