General Awareness

BUSINESS AND ECONOMY - October 2018

Oct 2018

Feb 21, 2020

Axis Looks to Buy Stake in Max Life

Axis Bank Ltd is looking to buy more than 20% in Max Life Insurance Co. Ltd, the life insurance unit of Max Financial Services Ltd,.
Axis Bank, Max Financial Services and its subsidiary Max Life Insurance are in exclusive talks to explore the possibility of Axis Bank entering into a long-term strategic partnership with Max Life. The companies, however, did not disclose any financial details of the proposed transaction.
As per reports, the transaction is likely to involve the sale of 20-30% stake in Max Life, and could happen at a valuation of nearly Rs. 17,000-Rs. 18,000 crore. The eventual deal structure, however, would involve a portion of share swap or warrants, for up to 10% stake, in order to compensate for the bancassurance tie-up.

Suzlon's Debt Revamp Proposal Gets SBI's Nod

State Bank of India (SBI) approved a restructuring plan proposed by Suzlon Energy Ltd as the first step towards saving the stressed wind power firm.
Under the plan, Suzlon's debt of Rs. 12,700 crore will be converted into sustainable and unsustainable debt and will be repaid over 20 years. Sustainable debt, which is 32-35% of the total, will be repaid over the first 10 years, after which unsustainable debt, including non-convertible debentures and compulsorily convertible preference shares (CCPs), will be repaid. This would mean that lenders will have to take a haircut of 65% on the debt.
Lenders, led by SBI, will pick up 10% stake in Suzlon immediately on issue of shares and 49% stake in its unit, Suzlon Global Services Ltd (SGSL), after conversion of CCPs in 20 years.

Rajasthan Budget 2020: No New Taxes, Job Creation and Education Main Focus

Rajasthan Chief Minister Ashok Gehlot presented the state budget for 2020-21 in the legislative assembly. Ashok Gehlot, who also holds the finance portfolio, did not impose new taxes in the budget. He announced concession in stamp duty on lease executed by state government and local authorities, full exemption from stamp duty and concession in registration fees on transfer of sick micro and small enterprises, amnesty schemes to give 100 per cent waiver of interest and penalty payable on stamp duty, existing DLC rates to be reduced by ten per cent to facilitate industries.
Ashok Gehlot announced a DA hike for the state employees besides providing Rs. 100 crore for his flagship scheme "Nirogi Rajasthan" and assuring state's Rs. 2,000 crore share over next four years to set up 15 new medical colleges.
Ashok Gehlot said that job creation is the top priority of his government. "During 2020-21, we will be recruiting 53,181 people more in different departments," Ashok Gehlot said.
In the budget, Rs. 38,524 crore was allocated to education, Rs. 18,530 crore power, Rs. 6,808 crore to PWD and Rs. 8,794 crore to PHED and water resources and Rs. 4,557 crore to CAD.

Indian Bank Eyes Lending to Start-ups

Public sector lender Indian Bank is mulling the option of lending a helping hand to start-ups.
Padmaja Chunduru, Managing Director and Chief Executive Officer, Indian Bank said that Instead of lending Rs. 100 crore to corporates, which carries a higher risk, let us give Rs. 10 crore each to 10 start-ups, where the risk is less and spread out.
The idea to help start-ups, as a new activity, emerged at one of the town hall meetings Ms. Chunduru had with the officials of Allahabad Bank and Indian Bank in the last few months. Allahabad Bank is set to merge with Indian Bank on March 31.

Women Entrepreneurs in India may Help Create up to 170 mn Jobs by 2030

According to a joint report released by Bain and Co. and Google titled Women Entrepreneurship in India—Powering the economy with her, women entrepreneurs in India can generate 150-170 million jobs by 2030, which is more than 25% of the new jobs required for the entire working-age population.
The report identified six dominant segments of women entrepreneurs and said that despite India's economic progress in the last decade, women's participation in the labour force declined and is expected to be under pressure because of labour trends, technological disruption, and constraining social barriers.
The report also pointed out that among other things, women need equal access to finance through broad-based gender responsiveness across the financing sector.

New Polymer £20 Featuring Painter Turner Enters Circulation

You'll soon no longer find Adam Smith in your wallet or purse. The economist has been replaced as the face of the £20 note by artist JMW Turner.
The Bank of England said that the new polymer £20 - which entered circulation and is its most secure ever banknote.
It includes two see-through windows and a two colour foil to help beat forgers.
The new £20 is the third plastic banknote to be issued in the UK after the fiver featuring Winston Churchill - launched in 2016 - and the tenner featuring Jane Austen, which was first issued in 2017.
It replaces the paper-one featuring Adam Smith which has been in circulation since 2007.
But you'll still be able to use the old notes for many months to come. The Bank gave six months' notice ahead of its legal tender status being withdrawn.
The new £20 note is the first to feature the signature of Sarah John, the Bank's chief cashier.

Feb 20, 2020

Govt. Makes Crop Insurance Schemes Voluntary for Farmers

The government made its flagship crop insurance schemes voluntary for farmers with existing crop loans or those willing to take new ones, as it seeks to address the concerns raised by farmers' body and states in implementation of these programmes.
The Union Cabinet approved revamping of 'Pradhan Mantri Fasal Bima Yojana (PMFBY)' and 'Restructured Weather Based Crop Insurance Scheme (RWBCIS)' to address the existing challenges in implementation of crop insurance schemes. Under the PMFBY, which was launched in February 2016 by Prime Minister Narendra Modi, it is mandatory for loanee farmers to take insurance cover under this scheme.
The PMFBY provides comprehensive crop insurance from pre-sowing to post-harvest period against non-preventable natural risks at extremely low premium rate of 2 per cent for kharif crops, 1.5 per cent for rabi crops and 5 per cent for horticulture and commercial crops.
The Cabinet approved modification of certain parameters/provisions of ongoing PMFBY and RWBCIS schemes.

DoT Gets Right to Bar Chinese Firms from Govt. Telecom Tenders

According to a government notification, the department of telecommunications (DoT) now has the power to bar Chinese telecom equipment suppliers from participating in tenders floated by state-run companies and central and state governments.
Government projects in India use telecom gear in areas such as railways, smart cities' mission and state government fibre connectivity projects as well as BharatNet, India's mission to provide internet to gram panchayats.
The move is set to hit Chinese companies such as Huawei, ZTE, and UTStarcom that may not be allowed to participate in government projects.

India to Stop Import of Thermal Coal

Union Minister of Coal and Mines Pralhad Joshi said that India will stop importing thermal coal from Financial Year 2023-24,. The Minister also said that various ways and means were discussed with key stakeholders to achieve 1 billion tonnes (BT) coal production target by Coal India Limited (CIL) by Financial Year 2023-24. The Ministry of Coal will coordinate with Indian Railways and Shipping Ministry and enable CIL, Captive and Commercial Miners evacuate more coal by 2030. Stressing upon the diversification in the Indian Coal sector, the Minister said that ideas have also been mooted that CIL could think of coming up with the state of the art pithead thermal power plants to transform it into an integrated energy company. It was also proposed that CIL could generate 5 GW of solar power by FY 2023-24 and could diversify into coal gasification with a target of 50 Million Tonnes by 2030 enabling a sustainable energy mix for the country. All these ideas will be deliberated, studied and examined for their feasibility in detail and based on that, they could be implemented.

Kiran Mazumdar Shaw is EY Entrepreneur of Year 2019

Kiran Mazumdar-Shaw, chairperson and managing director, Biocon, was named the EY Entrepreneur of the Year 2019 at the 21st dition of the awards. She will now represent India at the EY World Entrepreneur of the Year Award (WEOY) in Monte Carlo between June 4 and 6.
Mazumdar-Shaw was named the winner by an eight-member jury panel, led by Kotak Mahindra Bank Managing Director and CEO Uday Kotak. The award ceremony was attended by over 500 business personalities in New Delhi.
Godrej Group Chairman Adi Godrej was conferred the Lifetime Achievement Award, and Tuhin Parikh, senior managing director (Real estate), Blackstone India, was the first recipient of the Transformational Impact Person of the Year award. According to EY, this new category has been launched to recognise individuals who have transformed both the industry and ecosystem in India.

Neuberg Close to Acquiring Labs in Mumbai

Having acquired majority stake in Pune-based AG Diagnostics, Neuberg Diagnostics Ltd. chalked out plans to acquire two or more pathological labs in Mumbai to foray into Maharashtra.
The company plans to invest about Rs. 100 crore for the foray into the State.
This year, the company plans to close with a revenue of Rs. 500 crore which is expected to go up to Rs. 650-Rs. 700 crore next year.

Feb 19, 2020

JSW Paints Sets Sights on South and West India

JSW Paints Pvt. Ltd. a part of the $13-billion JSW Group, is planning to put up a new manufacturing plant to meet its growth target.
As per A.S. Sundaresan, CEO, JSW Paints, the company has set a target to achieve 5% market share in south and west in decorative paints in two to three years.
"We started the paint division in April 2019 and it is growing. Right now, we have two plants and are planning to expand our business as it is growing at a healthy rate," said A.S. Sundaresan, CEO, JSW Paints.
The JSW Group set up its first largest and fully-automated industrial coil coatings facility with an annual capacity of 25,000 kilolitre (KL) in Mumbai and decorative paints unit with 100,000 KL annual capacity at Vijayanagar in Karnataka at a cost of Rs. 600 crore.

Kotak Mahindra Bank Gets RBI Nod on Promoters' Stake Dilution Plan

Kotak Mahindra Bank was granted the final approval from the Reserve Bank of India (RBI) to the lender's proposal to dilute promoters' shareholding in the bank.
In January 2020, Kotak Mahindra Bank said that the bank decided to cap the promoters' voting rights to 15% from April 1 onwards. The RBI gave its in-principle acceptance for reducing promoters' shareholding to 26% of the paid-up voting equity share capital of the bank within six months from the date of final approval of the regulator.
The regulator earlier insisted the Kotak Mahindra Bank promoters to cap their voting rights at 20% by March 2020. Challenging the RBI directive, the private sector lender had filed a writ against the central bank on December 10, 2018 in the Bombay High Court. In an interim order, the RBI had fined the Kotak Mahindra Bank Rs. 2 crore for violation of its norms.
Kotak will now sell 4% of his stake worth Rs. 12,500 crore over the next six months.

Yes Bank to Exit Nifty from March 27

Yes Bank will be excluded from the benchmark Nifty index with effect from March 27. According to National Stock Exchange, the domestic lender will be replaced by Shree Cement.
Yes Bank has seen massive erosion in its valuation with its stock price dropping from a high of Rs. 286 in April 2019 to the current Rs. 35.
Incidentally, the banking stock was excluded from the benchmark Sensex in December 2019 when the 30-share index was reconstituted.

Twitter Acquires California-based Chroma Labs

Twitter acquired California-based Chroma Labs that develops tools for short-form video and photo creation and was founded by seven Facebook and Instagram workers in 2018.
The Chroma Stories app lets users fill in stylish layout templates and frames for posting collages and more to Instagram Stories, Snapchat and more.

CCI Approves Acquisition of WABCO Holdings by ZF Friedrichshafen AG

Under Section 31(1) of the Competition Act, 2002, the Competition Commission of India (CCI) approved for the acquisition of WABCO (Westinghouse Air Brake Company) Holdings Inc. by ZF Friedrichshafen AG (Automotive industry in Germany). As per the agreement, ZF will acquire 100% shares of WABCO for USD 136.50 per share under all-cash transaction method for a total equity value of USD 7 billion (approximately Rs. 49,700 crores).
ZF is a global technology company and it develops, design and manufacturing products like gearboxes, steering, axles, clutches, dampers, chassis components and systems, active and passive safety technology system and other automobile components, ZF also distributes products and systems for passenger vehicles, commercial vehicles, off-highway vehicles and Industrial technology
WABCO is a global supplier of pneumatic braking control systems, technologies and services that improve safety, efficiency and connectivity of commercial vehicles including trucks, buses and trailers, it also manufacturing products like Integrated braking systems & stability control, air suspension system, transmission automation control, aerodynamics, telematics and also supplies fleet operators with fleet management solutions, diagnostics tools, training and other services.

Russian Fund Shows Interest in Jet Airways

As per reports, Russia's Far East Development Fund has shown interest to bid for Jet Airways (India) Ltd. The development comes on a day when the committee of creditors met to discuss whether the date for the submission of bids should be extended after potential suiters of the airline, including Delhi-based Prudent ARC Ltd and South America's Synergy Group, failed to meet the deadline. After the meeting Jet's lenders led by State Bank of India voted to extend the deadline to March 9. The 270-day deadline for completing the insolvency process ends on March 15.

Feb 18, 2020

AI Buyer must Retain Staff for Lock-in Period

According to Civil Aviation Minister Hardeep Puri, the winning bidder of Air India Ltd will have to retain existing employees of the state-run airline for a negotiated time frame so that they do not face any uncertainty after privatisation.
The government wants Air India to continue to operate under its own brand, the minister said, adding its viability and success would depend on the workforce that would be an asset to the new owner.
A lock-in period to retain the workers at Air India for a particular period would be negotiated with "whoever is the interested player.

India and World Bank Sign Loan Agreement to Improve Groundwater Management

The Government of India and the World Bank today signed a $450 million loan agreement to support the national program to arrest the country's depleting groundwater levels and strengthen groundwater institutions.
The World Bank-supported Atal Bhujal Yojana (ABHY) – National Groundwater Management Improvement Program will be implemented in the states of Gujarat, Maharashtra, Haryana, Karnataka, Rajasthan, Madhya Pradesh, and Uttar Pradesh and cover 78 districts. These states span both the hard rock aquifers of peninsular India and the alluvial aquifers of the Indo-Gangetic plains. They were selected based on several criteria, including degree of groundwater exploitation and degradation, established legal and regulatory instruments, institutional readiness, and experience in implementing initiatives related to groundwater management.

Reliance Industries to Merge Media and Distribution Businesses

Reliance Industries announced consolidation of its all media and distribution businesses under one umbrella brand 'Network18'.
Under the scheme of arrangement, TV18 Broadcast, Hathway Cable & Datacom and Den Networks will merge into Network18 Media & Investments, which will be an integrated media and distribution company with a revenue of Rs. 8,000 crore. The restructuring will create value-chain integration, and render substantial economies of scale. It also simplifies the corporate structure of the group by reducing the number of listed entities, said a statement by TV18 Broadcast Ltd.
This will scale up Network18 "as one of the largest listed players in the sector.

India Becomes 5th Largest Economy, Overtakes UK and France

India emerged as the world's fifth largest economy by overtaking the UK and France in 2019, says a report.
A US-based think tank World Population Review in its report said that India is developing into an open-market economy from its previous autarkic policies.
India's economy is the fifth largest in the world with a GDP of $ 2.94 trillion, overtaking the UK and France in 2019 to take the fifth spot.
The size of the UK economy is $ 2.83 trillion and that of France is $ 2.71 trillion.
The report further said that in purchasing power parity (PPP) terms, India's GDP (PPP) is $ 10.51 trillion, exceeding that of Japan and Germany. Due to India's high population, India's GDP per capita is $ 2,170 (for comparison, the US is $ 62,794).

SP Group Wants Presence in Tata Board

The Shapoorji Pallonji Mistry Group (SP Group), which owns 18.32% in Tata Sons Ltd., has filed a limited cross appeal in the Supreme Court arguing that it deserved a more incisive and relevant relief from the National Company Law Appellate Tribunal (NCLAT) order, including a proportionate representation on the board of Tata Sons.
The appeals seek proportionate representation on the Board of Tata Sons to ensure that its interests and investments, now worth over ₹1 lakh crore, were protected in future. The prime driver of the appeals is to secure deletion of certain specific provisions in the Articles of Association of Tata Sons.

JSW Energy to Buy GMR Odisha Unit

JSW Energy entered into exclusive discussions with GMR Energy Limited (GEL) for potential acquisition of its subsidiary, GMR Kamalanga Energy Limited (GKEL), which owns and operates a 1,050 MW (3x350 MW) thermal power plant in Odisha, for an enterprise value of Rs. 5,321 crore.
Post-acquisition, the total installed power generation capacity of JSW Energy will increase to 5,609 Mw. This will expand the company's presence in the eastern region of the country and further diversify its fuel mix and off take arrangements.
Kamalanga is one the 36 identified stressed power assets that was undergoing debt resolution. The project was commissioned in 2014 and ran into trouble because of lack of coal supply. The coal block allotted to the project was cancelled by a Supreme Court judgment in the same year. It also didn't get any coal supply linkage from the Centre.
Built at a cost of Rs. 6,000 crore, it had a debt of Rs. 4,100 crore. The project has power purchase deal with Haryana, Odisha and Bihar.

DHFL Receives EOIs from at Least 15 Bidders

At least 15 suitors have shown interest in acquiring troubled mortgage financier Dewan Housing Finance Corp. Ltd (DHFL) under the bankruptcy process before the deadline for submission of expressions of interest (EOIs).
According to CNBC-TV18, KKR India Financial Services Ltd, and conglomerates Welspun Group and Adani Group, are among suitors who have expressed interest under 'Option I' to take over the entire business. Global alternative investment management firm Oaktree Capital, ARCIL Asset Reconstruction Co. and Bain & Co. are the other players to have also expressed interest to acquire the firm under 'Option I', CNBC-TV18 reported.
Under Option I, suitors were invited to submit EOIs for the entire business of DHFL as a going concern.
Under Option II, prospective resolution applicants were invited to submit EOIs for one or more groups, or a combination of any asset in isolation across different groups of DHFL.

RBI Gets Rs. 1.94 lakh cr Bids for Maiden Rs. 25,000 cr LTRO

The Reserve Bank successfully kicked off the maiden long-term reverse repo operation (LTROs) by conducting a three-year issue worth Rs. 25,000 crore for which it received bids of more than Rs. 1.944 lakh crore.
Deploying an out-of-the-box tool to ensure permanent and deeper liquidity in the system, which hovers over Rs. 2.5 lakh crore on a daily basis now, the Reserve Bank had earlier this month announced Rs. 1 lakh crore of long-term reverse repo operations beginning this Monday.
The RBI will conduct the second issue for Rs. 25,000 crore on February 24 which will have one-year tenor.
"Today, the Reserve Bank conducted the first long term repo operation (LTRO) for a notified amount of Rs. 25,000 crore with a three-year tenor in pursuance of the LTROs announced on February 7," the monetary authority said in a statement.
The response to the LTRO has been so encouraging that bids crossed Rs. 1,94,414 crore, implying a bid to cover ratio of 7.8. Total amount of bids has, in fact, exceeded the aggregate amount of Rs 1 lakh crore proposed to be offered under the LTRO scheme, it noted.

Godrej Properties Buys Land in Delhi for Luxury Housing Project

In a big-ticket real estate deal, Godrej Properties acquired nearly 27 acre land parcel in the national capital for Rs. 1,359 crore to develop a luxury housing project.
The land parcel belonged to Rail Land Development Authority (RLDA).
Godrej Properties has added a new project in the residential market of Ashok Vihar, Delhi.
As per Godrej Properties, with the land acquisition value at Rs. 1,359 crore, this is one of the largest land transactions in India in recent times. The payment for this land will be made in instalments over several years as stipulated in the tender documents. This is Godrej Properties' second project in Delhi after the launch of Godrej South Estate in Okhla in 2019.

Feb 17, 2020

NCLAT Clears Way for JSW Steel to Acquire Bhushan Power

The National Company Law Appellate Tribunal (NCLAT) rejected pleas challenging the sale of bankrupt steel maker Bhushan Power and Steel Ltd (BPSL) to JSW Steel Ltd, paving the way for the latter to complete the process of its impending acquisition.
A bench headed by Justice SJ Mukhopadhyay in January had reserved its judgement on the purchase of Bhushan Power by the Sajjan Jindal-led steel giant, more than three months after the court ordered freezing the payment by JSW Steel to all lenders of the insolvent firm.
The appellate tribunal had to decide on whether to remove the stay on the Rs. 19,700-crore bid by JSW Steel or if the company could be granted immunity under new amendment of the Insolvency and Bankruptcy Code (IBC). The newly introduced Section 32A of the IBC provides immunity to the new management of a distressed company acquired under the law.

Japan's Economy Shrinks at Fastest Rate Since 2014

Japan's economy shrank at the fastest rate in five years at the end of 2019 as it was hit by a sales tax rise, a major typhoon and weak global demand.
Annualised gross domestic product (GDP) fell by a much steeper than expected 6.3% in October-December.
There are also concerns the coronavirus outbreak will mean the slump continues this quarter.
That has raised fears that the world's third-biggest economy may fall into recession.
During the period Japanese consumer spending fell 2.9% after the country's sales tax was raised in October to 10% from 8%. In the same month Typhoon Hagibis hit large parts of the country.

ArcelorMittal- Nippon Steel in Talks to Buy 500 Mw Bhander Power Unit

AM/NS India — a joint venture (JV) between ArcelorMittal and Nippon Steel that acquired Essar Steel — is in advanced stage of discussions with Edelweiss ARC to buy Bhander power plant.
Bhander Power, a 500 megawatts (Mw) natural gas-based plant located in Hazira, Gujarat, is captive to Essar steel plant, and was till recently owned by the Ruias, promoters of the Essar group. The power plant is being sold by Edelweiss under the Securitisation and Reconstruction of Financial Assets and Enforcement of Securities Interest (SARFAESI) Act.

Airtel Pays DoT Rs. 10,000 crore as Part of AGR Dues

Bharti Airtel Limited paid Rs. 10,000 crore to department of telecommunications (DoT) as part payment of its adjusted gross revenue (AGR) dues. The company is currently in the process of determining the total quantum of the money it needs to pay DoT for the dues.
The development comes after Supreme Court castigated Bharti Airtel, Vodafone Idea as well as officials of DoT for delaying the payment of dues, in contravention of its 24 October verdict that upheld the DoT's definition of AGR and found the telecom operators guilty of under-reporting their revenues.
As per DoT calculations, Bharti Airtel has to pay Rs. 35,586 crore to the government and Vodafone Idea Rs. 50,000 crore.

DLF Looks to Raise Rs. 2,000 cr via Asset Sale

Realty firm DLF is looking to raise Rs. 2,000 crore through monetisation of certain commercial land parcels to its existing joint venture partners or new partners. The monetisation of land parcels would help the company in reducing its net debt, which stood at Rs. 4,866 crore at the end of December quarter.

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