General Awareness

BUSINESS AND ECONOMY - February 2017

Feb 2017

Apr 06, 2019

Panel to Oversee Essar Steel's Operations

Essar Steel's committee of creditors (CoC) has set up a monitoring committee to oversee the operations of the steel firm and ensure smooth transition to ArcelorMittal, the successful resolution applicant.
The monitoring committee is headed by resolution professional Satish Gupta and has four members from the lenders and three from ArcelorMittal.
The lenders, SBI, IDBI Bank, ICICI and Edelweiss Asset Reconstruction Company, have their representatives as members of the monitoring committee.
The development comes after the National Company Law Appellate Tribunal (NCLAT) asked the CoC to set up a monitoring committee to oversee the operations of the steel firm and smooth transition to ArcelorMittal.

Lakshmi Vilas and Indiabulls Merger

Lakshmi Vilas Bank (LVB) and Indiabulls Housing Finance (IBHF) boards approved merger of the two entities.
The merger would solve LVB's capital needs as its capital adequacy ratio will go up to 20.6%, post the merger, due to the mortgage lender's strong capital position.
IBHF, which has a loan book three times bigger than LVB, and was unsuccessful in getting a bank licence earlier, will now get access to the low-cost funds of the bank.

Britannia Eyes to Generate Turnover

As per Jayant Kapre, Business Head, Adjacencies and New Business, Britannia Industries Ltd. (BIL) is aiming to generate Rs. 500-crore turnover from three new non-biscuit snack products it launched recently.
The new products are cream-wafers, salted snacks and croissants.
The company is trying to increase the share of non-biscuit segments in its turnover. While biscuits account for about 70% of BIL's turnover, non-biscuit products such as cakes, rusk, bread and dairy have a share of about 23%.

CII Gives Approval for Proposed L&T-Mindtree Deal

The Competition Commission of India (CCI) approved diversified group Larsen & Toubro's (L&T) proposed acquisition of up to 66.15% stake in IT firm Mindtree Ltd. L&T has made an unsolicited offer to acquire a majority stake in Mindtree. CII approved acquisition of up to 66.15% of the total equity shareholding of Mindtree Ltd, on a fully diluted basis, by Larsen and Toubro Ltd.

Government Sells Enemy Shares in Wipro

The Centre sold enemy shares worth Rs. 1,150 crore in IT major Wipro to Life Insurance Corporation, General Insurance Corporation and The New India Assurance Co Ltd. The Custodian of Enemy Property for India offloaded more than 4.43 crore shares of the company at a price of Rs. 258.90 apiece, data available with the BSE showed. The proceeds would add to the government's disinvestment kitty.

Apr 05, 2019

GMR Raises $300 m Bond

GMR Hyderabad International Airport Ltd. has priced a $300 million bond in the international market. The company entered into a purchase agreement to issue and allot $300 million senior secured notes of five-year tenure at a coupon rate of 5.375%. The proceeds would be used to fund the expansion of the Rajiv Gandhi International Airport.

Micromax Co-founder to Make AI-based Electric Motorcycle

Rahul Sharma, one of the co-founders of homegrown mobile handset maker Micromax, introduced an Artificial Intelligence (AI)-based electric motorcycle that will hit the roads in June this year.

Groupe PSA to Export Gear Boxes

French auto major Groupe PSA will start making gear boxes at Hosur from next month onwards for exports.
So far, PSA has selected 120 suppliers for making engines and gear boxes in Hosur. PSA will start making gear boxes, followed by engines. Over 250 suppliers attended India Suppliers Summit hosted by the firm. They would have access to Groupe PSA's business opportunities worldwide.

SEBI Panel for More Players

A panel constituted by the Securities and Exchange Board of India (SEBI) has recommended opening the commodity derivatives segment to all categories of institutional investors in a phased manner, to enhance the depth and liquidity of the commodity market.
The Commodity Derivatives Advisory Committee (CDAC), which has been formed to review the commodity segment and suggest measures to improve the depth and efficiency of the market, has suggested that the capital markets regulator should adopt a 'calibrated approach' before opening up the segment to overseas investors. The panel is of the view that in the next phase, institutional investors like foreign portfolio investors, banks, insurance companies and pension funds should be allowed in the commodity derivatives segment.

RBI Cuts Interest Rate

The Reserve Bank of India (RBI) cut key interest rates by a quarter of a percentage point, its second reduction in two months, seeking to lift economic growth and consumer spending and lower borrowing costs in a move that comes just a week before the start of polling in the seven-phase general election.
RBI's monetary policy committee (MPC) reduced the repo rate at which it lends short-term money to commercial banks, to 6% from 6.25%. The central bank lowered the reverse repo rate, at which it borrows money from commercial lenders, to 5.75% from 6%. It maintained a neutral policy stance, meaning that it's not in favour of either increasing or lowering the interest rates.

Tanishq Eyes Mid-format Stores

Tata group's jewellery brand Tanishq is betting on mid-format stores and region-specific brand ambassadors to sustain growth.
Sandeep Kulhalli, senior V-P, retail and marketing, jewellery division, Titan Company Ltd. Said that they have about 290 stores in 174 cities of which 10 are large-format stores, they are planning to enter B & C towns by setting up mid-sized stores (between 3,500 sq.ft. and 4,000 sq.ft.) as they are economical and offer good returns.

India's Rating at 'BBB-'

Fitch retained India's sovereign rating at 'BBB-', the lowest investment grade, with stable outlook, and said that a weak fiscal position continues to constrain its rating.
This is the 13th year in a row that global rating agency Fitch has rated India at 'BBB-'. It had last upgraded India's sovereign rating from 'BB+' to 'BBB-' with a stable outlook on August 1, 2006.

Neuberg Diagnostics to Foray into Europe and U.S.

Neuberg Diagnostics, founded by healthcare entrepreneur GSK Velu two years ago, is planning to foray into Europe and the U.S. by investing in local pathological labs to access know-how in the area of genetic diagnostics.
In Europe, the company will set up a base in Germany while the location in the U.S. is yet to be finalised. This will be part of the company's Rs. 200 crore expansion plan.

Apr 04, 2019

Volkswagen Plans to Merge Three Indian Entities

German automotive major Volkswagen Group said it plans to merge its three Indian subsidiaries, Volkswagen India Private Ltd, Volkswagen Group Sales India Private Ltd. and Skoda Auto India Private Ltd. to bring about synergy in operations and make the organisation more agile.
The proposed merger is aimed at making more efficient use of the existing synergies in developing India which is an important growth market.

Raymond Forays into Realty

Textile major Raymond Group has decided to foray into the real estate development business by developing its Thane land, and expects revenue to total Rs. 3,500 crore over the next five years.
The company has set up a new division called Raymond Realty for its maiden venture into the real estate sector, which will develop 14 acres of land with five acres of central landscaped greens and amenities.

Tata Projects Bags NPCIL Order

Tata Projects has received an order from the Nuclear Power Corporation of India for the construction of 2 x 700 MW power plants, valued at about $321 million. This is the firm's third contract in the nuclear power sector.

Roadis and NIIF to Invest Jointly

Roadis, a private investor and operator of transport infrastructure worldwide and the National Investment and Infrastructure Fund (NIIF) have jointly set up a platform to invest in road projects in India. The platform would invest up to $2 billion of equity targeting toll-operate-transfer models, acquisitions of existing road concessions and investment opportunities in the road sector with an aim to create a large roads platform in the country.
With 710 km of highways under ownership and management, Roadis is one of the largest European highway concession managers in India and is a wholly owned subsidiary of the Public Sector Pension Investment Board, one of Canada's largest pension funds.

Reliance Jio in Pact with Haptik

Reliance Jio Digital Services Limited (RJDSL), a subsidiary of Reliance Industries Limited (RIL), has entered into a definitive business transfer agreement with Haptik Infotech Pvt. Ltd. one of India's largest conversational AI platforms, for Rs. 700 crore.
On a fully-diluted basis, Reliance would hold about 87% of the business with the rest being held by Haptik founders and employees through stock option grants.
The focus of the investment is on enhancement and expansion of the platform, with an addressable market opportunity of more than one billion users in India.

Amara Raja and Johnson Controls End Alliance

The 22-year equity partnership between Amara Raja Batteries Ltd. (ARBL) and the Johnson Controls Group of the U.S. has come to an end. According to an announcement by ARBL to the stock exchange, the shareholders' agreement between the Galla Family, Johnson Controls (Mauritius) Pvt. Ltd. and Johnson Controls Battery Group has been terminated.
Consequent to the termination, which took effect on April 1, a few other agreements, including the technical assistance as well as the power frame and technology collaboration agreements, stand terminated from the same date.

Apr 03, 2019

EU Drags India to WTO

The European Union (EU) has dragged India into WTO's dispute settlement mechanism over imposition of import duties on certain ICT products, including mobiles, alleging breach of global trade norms. The EU is challenging the introduction of import duties on a wide range of ICT products, for instance mobile phones and components, base stations and integrated circuits.

Indonesia to Raise Imports

Indonesia is looking at increasing sugar, rice and bovine imports from India.
According to Consul General of Indonesia, Ade Sukendar, India exported about 50,000 tonnes of rice last year. It is looking at importing more non-basmati rice from India.
Negotiations are on between the two countries to increase imports.
Total exports from Indonesia to India last year were to the tune of $13.72 billion and exports from India were to the tune of $5.01 billion.

RBI to Set Up Regulatory Sandbox

The governor of Reserve Bank of India Shaktikanta Das said that the central bank will set up a regulatory sandbox, for which guidelines will be issued in the next two months.
The objective is to have appropriate regulatory and supervisory frameworks to ensure an orderly development of fintech, to streamline their influence into the financial system, to protect the customers and to safeguard the interest of all the stakeholders.
The central bank's working group on fintech and digital banking suggested the introduction of a 'regulatory sandbox or innovation hub' within a well-defined space and duration to experiment with fintech solutions, where the consequences of failure can be contained and reasons for failure analysed.

Apr 02, 2019

UK's Exports to India Register Fastest Increase

The United Kingdom's exports to India registered the fastest increase among trading partners outside the European Union in 2018.
The exports to India grew 19.3% (amounting to £8 billion), compared to the UK's exports to Japan (7.9%), China (4.6%), and Canada (4.2%).
Of all UK exports to India in the four quarters to the end of Q4 2018, £5.5 billion (69.2%) were goods and £2.5 billion (30.8%) were services, the figures show. In the four quarters to the end of Q4 2018, £7.7 billion (61.9%) of all UK imports from India were goods and £4.8 billion (38.1%) were services.
Material manufacture was the largest contributor to the increase in goods exports to India in 2018, increasing by £1.1 billion to £5.5 billion. Non-ferrous metals were the second largest ontributor, increasing by £556 million to £1.4 billion.
Oil exports were the third largest contributor to the increase in goods exports to India, increasing by £512 million to £1.1 billion.

Citibank Settles Case with SEBI

Citibank N.A. has settled a case with the SEBI regarding the bank's alleged failure to adequately supervise an employee who carried out an unregistered portfolio investment scheme. The case was settled after the bank paid Rs. 4.5 crore towards settlement charges. In April 2015, SEBI had issued a notice to the bank for alleged violation of portfolio manager's norms with respect to one relationship manager.

Elgi to Strengthen Presence in EU

Air compressor manufacturer Elgi Equipments will strengthen its presence in the European Union to tap opportunities in that market. Elgi is identifying key countries in Europe to expand its footprint and is building a team to focus on that market. Initially, the expansion will be through distribution network. The firm is looking at organic and inorganic growth in the EU.

SEBI Mulls SRO for Investment Advisers

The Securities and Exchange Board of India (SEBI) has proposed a self regulatory organisation (SRO) for the growing number of investment advisers to address issues related to the quality of advice given to investors by such entities.
The capital markets regulator released a consultation paper, which, among other things, proposed the strengthening of the existing regulatory framework for SROs by introducing features such as a governing board with public interest directors and a clear policy for arbitration and dispute resolution.

FY19 Saw More Rating Upgrades

Rating agency Crisil said that the credit ratio, or the number of upgrades to downgrades, at 1.81 in the second half of fiscal 2019, was marginally up from 1.68 in the first half.
There were 594 upgrades and 328 downgrades in the second half, a period marked by rebound in exports, and continued government spending.
Notably, the downgrades were driven mostly by firm-specific concerns emanating from deterioration in business profiles or worsening of capital structures or increased liquidity pressures on the rated entities.

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