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BUSINESS AND ECONOMY - February 2017

Feb 2017

Mar 20, 2021

Government Sells Stake to Exit Tata Communications

The government exited Tata Communications after selling 10 per cent stake to Tata Sons' arm Panatone Finvest in an off-market trade.
The Government of India held 26.12 per cent stake while Panatone Finvest had 34.80 per cent, Tata Sons 14.07 per cent and the remaining 25.01 per cent was with the public before the transaction.
The stake is part of the government's disinvestment process. The government has set a target to realise Rs. 32,000 crore in this fiscal.

Bank of Japan Fine-tunes Massive Stimulus in Drive to Boost Prices

The Bank of Japan slightly loosened its grip on long-term interest rates and laid the groundwork to taper its huge asset purchases, as part of steps to make its stimulus sustainable enough to weather a prolonged battle to fire up inflation.
In a review of its policy tools announced after a two-day meeting, the BOJ said it would allow long-term interest rates to move up and down by 0.25% around its 0% target, instead of by the current implicit band of 0.2%.
To give itself more room to wind down its massive stimulus, the central bank also removed an explicit guidance to buy exchange-traded funds (ETF) at an annual pace of roughly 6 trillion yen ($55.21 billion).
Instead of buying at a set pace, the BOJ said it would step in only when markets destabilise under a 12-trillion-yen ceiling set last year when the initial COVID-19 hit jolted stock prices.

Bankers, Financial Institutions to Take around 95% Hair Cut in NOCL

Bankers and other financial institutions will take around 95 per cent hair cut in Nagarjuna Oil Corporation (NOCL). Haldia Petrochemicals (HPL) has agreed to pay Rs. 600 crore to revive NOCL and Liquidator of NOCL inturn has agreed to pay Rs. 560 crore (of the Rs. 600 crore) to Secured Financial Creditors for which the company need to owe Rs. 9,864.16 crore. On the principal the lenders will recover 25 per cent.
Earlier the National Company Law Tribunal (NCLT), Chennai gave its nod for Haldia Petrochemicals (HPL) scheme, submitted through the Liquidator V Mahesh, for the revival of Nagarjuna Oil Corporation Limited (NOCL).

Uttarakhand Govt. to Allow Completion of 7 Hydel Projects

The Centre has decided to allow the completion of seven under-construction hydropower projects in Uttarakhand, a top official in the environment ministry said, indicating the government's desire to push ahead with these projects despite opposition from activists and local residents, which has resurfaced again in recent weeks following the February 7 flash flood on the Rishi Ganga that claimed at least 72 lives and damaged two projects.
The decision has been taken by the ministries of environment, power and Jal Shakti, and will be communicated to the Supreme Court, which is hearing a matter on hydropower projects.

SC Approves SBI MF Plan for Franklin Templeton Schemes

The Supreme Court accepted the standard operating procedure (SOP) prepared by SBI Funds Management (SBI MF) to monetise assets and distribute the proceeds to unit holders of the six debt schemes of Franklin Templeton (FT) Mutual Fund. The SOP was prepared in consultation with FT Mutual Fund and market regulator SEBI.
The six shuttered schemes have already distributed Rs. 9,122 crore to investors and have accrued another Rs. 1,370 crore in cash earlier this month. The six schemes were frozen by the FT Mutual Fund in April 2020.

Mar 19, 2021

NCLT Approves Haldia Petrochemicals Scheme to Revive Nagarjuna Oil Corp

The National Company Law Tribunal (NCLT), Chennai has given its nod for Haldia Petrochemicals (Haldia Petro) scheme, submitted through the Liquidator V Mahesh, for the revival of Nagarjuna Oil Corporation Limited (NOCL).
Haldia Petro is planning to invest around Rs. 50,000 crore to convert this refinery into a petrochemical complex.
Haldia Petro was among the three prospective bidders, the other two were Accord Distillers and Brewers P Limited and Adani Ports and Special Economic Zone Limited. However, Accord Distillers & Brewers P. Ltd., in September 2019 withdrew from the bidding process.

HSBC in Talks to Sell French Retail Banking to Cerberus

HSBC has entered final negotiations to sell its French retail banking business to private equity firm Cerberus.
The planned disposal is part of HSBC Chief Executive Noel Quinn's strategy to slash costs across the banking group and Reuters previously reported that Cerberus was among two remaining bidders.
The talks are conditional on price and terms and may not necessarily result in a sale.
HSBC is working with Lazard to sell its 270 retail branches in France, but has been struggling to attract interest as bidders fret over restructuring costs and complex talks with local regulators.

HC Restrains Future from Moving Ahead with Reliance Deal

The Delhi High Court upheld the Singapore Emergency Arbitrator's (EA) order restraining Future Retail Ltd (FRL) from going ahead with its Rs. 24,713 crore deal with Reliance Retail to sell its business, which was objected to by US-based e-commerce giant Amazon.
Justice J R Midha directed Kishore Biyani-led FRL not to take further action in relation to the deal with Reliance and held that the Future Group wilfully violated the EA's order.
The high court imposed a cost of Rs. 20 lakh on the Future Group and others associated with it and directed them to deposit the amount in Prime Minister's Relief Fund within two weeks for providing COVID-19 vaccines to senior citizens of Below Poverty Line (BPL) category.
The high court's order came on Amazon's plea seeking direction to order enforcement of the award by Singapore's EA on October 25, 2020, restraining FRL from going ahead with its Rs. 24,713 crore deal with Reliance Retail.

India Signs Contracts to Develop Water Supply and Sewerage Network in Maldives

Contracts to develop Water Supply and Sewerage network across 34 islands of the Maldives were signed in the presence of Minister of Planning, Housing and Infrastructure, Mohamed Aslam, Minister of Finance, Ibrahim Ameer, Secretary (Multilateral) from the Ministry of Foreign Affairs Dr. Hala Hameed and Deputy High Commissioner of India Rohit Rathish.
Development of Water Supply and Sewerage System in 34 islands of the Maldives is the most geographically dispersed of the 9 mega infrastructure projects being undertaken under EXIM Bank of India's Lines of Credit (LoCs) extended to the Maldives.
The 34 islands chosen by the Government of the Maldives for the project span across 16 atolls viz. Haa Alifu, Haa Dhaalu, Shaviyani, Noonu, Lhaviyani, Kaafu Alifalifu, Alif Dhaalu, Vaavu, Meemu, Faafu, Dhaalu, Thaa, Laamu, Gaafu Alifu and Gaafu Dhaalu.

Jio, Airtel, Voda Idea make Upfront Payments for Spectrum

Reliance Jio, Bharti Airtel, and Vodafone Idea made upfront payments for the spectrum bought in the recently concluded auctions. It is learnt that while Reliance Jio has made a payment of Rs. 15,019 crore, Bharti Airtel and Vi paid Rs. 6,323 crore and Rs. 574 crore, respectively.
The telecom department had issued demand notes to the three operators on March 8, and the deadline for making the upfront payment was Thursday. Reliance Jio emerged the highest bidder in the 4G telecom spectrum auction, beating incumbents Bharti Airtel and Vodafone Idea by a wide margin.
The Centre would get Rs. 77,815 crore from the two-day auction — one of the shortest in a decade. While the amount has exceeded the government expectation, the total mop-up is far below the Rs. 3.92 trillion worth of airwaves put up for sale.
The spectrum has been sold across a few preferred bands at the base price.

Hero Sets up Global Headquarters in London

Hero Motors Company (HMC) announced the setting up of its international headquarters Hero International (HIT) in London to strengthen its global presence. HIT is aimed at bringing HMC's European businesses under one umbrella and giving its electric bike business a major boost globally.
The move will unify the HMC-owned European businesses, including HNF GmbH in Germany and Insync Bikes in the UK, by bringing them under one umbrella. The company aims to take up its European revenue up to €300 million by 2021.
HMC's Global R&D is currently centralised in Berlin with HNF which is a premium engineering unit.

Mar 18, 2021

USA's Carlyle Offloads Stake in SBI Cards

US-based private equity firm Carlyle Group sold a 4.3 per cent stake (40 million shares) in SBI Cards and Payment Services via block deals.
The shares sold at Rs. 986 a piece, fetching Carlyle Rs. 3,944 crore. The buyers are not known yet.
Shares of SBI Cards fell 5 per cent to finish at Rs. 971.
Following the latest share sale, Carlyle's holding in SBI Cards has dropped to 11.6 per cent.

Former Jet Airways CEO Vinay Dube Plans to Launch a New Airline

Vinay Dube, former chief executive officer of Jet Airways and GoAir, is exploring opportunities to launch an airline.
Dube has teamed up with his airline colleagues Praveen Iyer and Nikhil Ved for the venture and has held talks with aircraft manufacturers Airbus and Boeing. He plans to start operations with five aircraft by year-end.
Dube, who previously worked with Delta Airlines, was appointed as Jet CEO in 2017. He left the airline one month after its closure in May 2019. Dube served as GoAir CEO between February-August last year.

Axis Mutual Fund Launches IT-focused Exchange Traded Fund

Axis Mutual Fund launched an exchange-traded fund focused on technology stocks.
The new fund, Axis Technology ETF, is open. It will track the Nifty IT index, and offer investors an opportunity to invest in the biggest IT companies.

OYO's India Business Ebitda-positive

As per the firm's founder and Group CEO Ritesh Agarwal, hospitality firm OYO's India business is now Ebitda positive and the company is earning the same gross profits globally in dollars since January 2021 as it did in the pre-Covid period.
OYO earned the same money since January 2021 as it did in the pre-Covid period. This is a very big achievement and demonstrates demand recovery and results of a revenue-share-only-network.
India is the second market, after OYO EuropeHomes, that has achieved profitability and with these two largest markets financially sustainable, they are clear examples of the success of our business model at scale.

IOC and Israeli firm form JV

State-owned Indian Oil Corporation (IOC) and Israeli battery developer Phinergy formalised a joint venture to manufacture ultra-lightweight metal-air batteries for electric vehicles (EVs), a venture that got its first customers in Maruti Suzuki and Ashok Leyland.
The equal joint venture will replace lithium with aluminium to make batteries that will charge faster and give a longer run.
This will "help overcome most of the challenges facing EVs including range anxiety," IOC Chairman S M Vaidya said.
Al-Air technology will help us overcome most of the current challenges for e-Vehicles and address most of the potential customers' pain-points, including range anxiety, higher cost of purchase, and safety issues.

SBI, IOCL Ink India's First Libor Alternative Rate Deal

State Bank of India (SBI) and Indian Oil Corporation Limited (IOCL) will be inking the first SOFR (Secured Overnight Financing Rate) linked external commercial borrowing (ECB) deal as the world moves away from London Interbank Offered Rate (LIBOR), the de facto international benchmark reference rate.
SBI said that it will be arranging $100 million for 5 years linked to SOFR.
The LIBOR will no longer remain the benchmark after December this year. Consequently, the Indian banks are also getting prepared to move from Libor to another benchmark. Secured Overnight Financing Rate (SOFR) and Sterling Overnight Interbank Average Rate (SONIA) are the two popular alternatives, but internationally, only a few swap deals are linked to them internationally.
Libor still continues to be used heavily, especially for loans that mature within a year.

PNB Incorporates PNB Cards & Services for Credit Card Business

Public sector lender Punjab National Bank incorporated a wholly-owned subsidiary, PNB Cards & Services Limited, which will deal with the banks' non-financial support services related to its credit card business.
The exchange was informed that a wholly-owned subsidiary of the bank namely PNB Cards & Services Limited has been incorporated on 16.03.2021 by the registrar of companies, Delhi to undertake the non-financial support services related to the credit card the business of the bank.

Mar 17, 2021

Reserve Bank imposes Rs 2 cr penalty on SBI

Reserve Bank of India imposed a penalty of Rs 2 crore on State Bank of India (SBI) for contravention of norms, including specific directions to the lender on remuneration to its employees in the form of commission.
The penalty has been imposed for contravention of certain sections of Banking Regulation Act and its specific directions of RBI issued to the bank on payment of remuneration to employees in the form of commission, according to a release.
- It said the action is based on deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers.

Inflation-stricken Venezuela Rolls out New, Larger-denomination Banknotes

Venezuela is rolling out larger-denomination banknotes as hyperinflation batters the crisis-stricken South American country's bolivar currency.
Bills worth 2,00,000 and 5,00,000 bolivars — worth just 10 and 27 U.S. cents, respectively, at the current exchange rate — began to circulate on March 15.
Venezuela's central bank said this month it also planned to roll a bill worth 1 million bolivars, just 50 U.S. cents.
The highest-denomination bill had previously been 50,000 bolivars. Annual inflation in the once-prosperous OPEC nation was running at 2,665% in January, contributing to chronic shortages of cash.

Google Halves Play Billing Fee to 15% for Developers on First $1 mn Revenue

Google Play will from July 1 slash by half its 30 per cent billing fee for developers globally when they make the first $1 million of their annual revenue, said the company on Tuesday.
Apps that sell digital goods in the Play Store have to use the platform's billing system, which allows the tech giant to collect a percentage of in-app purchases as a fee. The developers are required to use the Play billing system – and therefore pay a service fee – if they implement in-app sales of digital goods. With this change, 99 per cent of developers globally that sell digital goods and services with Play will see a 50 per cent reduction in fees.

Mar 16, 2021

FM Introduces Bill to Raise FDI Limit in Insurance

Finance Minister Nirmala Sitharaman introduced a Bill in Rajya Sabha that seek to amend the Insurance Act to pave the way for 74 per cent foreign direct investment (FDI) in the sector.
The Union Cabinet had given its nod for amendments to the Insurance Amendment Bill 2021.
Finance Minister Sitharaman introduced the Bill for amendments to the Insurance Act, 1938.
Currently, the permissible FDI limit in the life and general insurance stands at 49 per cent with ownership and management control with Indian.

Finance Ministry Releases Entire Estimated FY'21 GST Shortfall to States

The finance ministry released the full Rs. 1.10 lakh crore estimated GST compensation shortfall to the states with the release of final weekly instalment of Rs. 4,104 crore.
With the release of the 20th instalment, 100 per cent of the total estimated GST compensation shortfall of Rs. 1.10 lakh crore for the year 2020-21 has now been released to the states and UTs with Legislative Assembly. Out of this, an amount of Rs. 1,01,329 crore has been released to the states and an amount of Rs. 8,879 crore has been released to the three UTs with Legislative Assembly.

Bitcoin Crosses $60K Mark for First Time

With a sign of acceptance among the mainstream investors, the world's largest cryptocurrency Bitcoin surpassed a record high of $60,000.
According to the website CoinMarketCap, the cryptocurrency hit $60,197 and continued to hover around $60,000.
Bitcoin has tripled in value over the last three months—it was worth $20,000 in December—bolstered by increasing backing from corporate heavyweights.
This year, Bitcoin rose around 72 per cent after tech billionaire Elon Musk's electric vehicle company Tesla invested $1.5 billion in it.

Tech Mahindra to Buy Stake in Perigord Asset Holdings

Tech Mahindra will acquire a 70 per cent stake in Ireland-based Perigord Asset Holdings Ltd for around Rs. 182 crore and plans to buy the remaining 30 per cent shareholding over a period of four years.
Tech Mahindra said that the acquisition will help in augmenting its expertise in the global pharmaceutical, healthcare and life science sectors.
For the financial year ended December 31, 2020, Perigord had reported revenues of around Rs. 170 crore.
The acquisition is a part of Tech Mahindra's long-term growth plan to build presence across key markets in Ireland, Germany, USA, and India with enhanced global delivery.

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