General Awareness

BUSINESS AND ECONOMY - October 2018

Oct 2018

Dec 13, 2019

Future Retail Looks to Raise up to $400 mn

Kishore Biyani-led Future Retail Ltd, which runs the Big Bazaar chain of stores, is looking to raise up to $400 million by selling dollar bonds.
The money will be used to buy retail assets from Future Enterprises Ltd as part of a planned group restructuring exercise.
The company hired investment banks Barclays, Standard Chartered, JPMorgan and UBS to help raise the dollar bonds. The company is expected to hit the markets in January 2020 for the bond issuance.

Paytm Parent Raises Rs. 4,724 cr

One 97 Communications Ltd, which operates digital payments company Paytm, raised Rs. 4,724 crore (around $660 million) from Alipay Singapore E-commerce Pvt. Ltd, SVF Panther (Cayman) Ltd, T Rowe Price Growth Stock Fund Inc. and others.
The board of directors of One 97 Communications recently approved the allotment of 2,592,472 equity shares at $254.58 a share.
Alipay Singapore E-commerce invested Rs. 1,433 crore, SVF Panther (Cayman) invested Rs. 1,430 crore and T Rowe Price Growth Stock Fund invested Rs. 704 crore.
Paytm competes with companies such as Google Pay and PhonePe in the highly competitive digital payments domain in India.

Air India to be Privatised

As per Union Minister Hardeep Singh Puri, the government has decided to sell its entire 100 per cent stake in Air India under the proposed disinvestment process. The national carrier, which has been making a loss for long, has a debt burden of over Rs. 50,000 crore.
The Minister of State for Civil Aviation said that after the formation of the new government, Air India Specific Alternative Mechanism (AISAM) has been reconstituted and the re-initiation of the strategic disinvestment of Air India has been approved.

Industrial Output Shrinks and Inflation Rises

India's industrial output shrank while inflation swelled, highlighting challenges for policymakers battling an economic slowdown amid surging food prices.
Factory output contracted 3.8% in October 2019 after shrinking 4.3% in September, in sharp contrast with an 8.4% expansion in October in 2018. Retail inflation continued to surge in November, fuelled by soaring food prices, as prolonged rains dampened vegetable supplies.
Retail inflation surged 5.54% in November as food price inflation measured by the Consumer Food Price Index rose 10% in November from 7.89% in October.

Dec 12, 2019

Qatar Investment Authority to invest in Adani Electricity Mumbai Ltd

Adani Transmission Ltd (ATL), Adani Electricity Mumbai Ltd (AEML) and a subsidiary of Qatar Investment Authority (QIA) have signed definitive agreements for the sale of a 25.1 per cent stake in AEML to QIA and for a shareholder subordinated debt investment by QIA in AEML.
The total QIA investment in AEML will be about Rs. 3,200 crore. AEML is the licensee for an integrated power distribution, transmission and generation business that currently serves more than 30 lakh consumers across a license area of 400 square kilometres in Mumbai.
AEML`s market share of Mumbai is 87 per cent by license area, 67 per cent by consumers served and 55 per cent by electricity supplied.As part of the transaction, ATL and QIA have agreed definitive plans to ensure that over 30 per cent of the electricity supplied by AEML is sourced from solar and wind power plants by the year 2023.

FB and Google Fall in Rankings

Big tech companies like Facebook Inc. and Alphabet Inc.'s Google, long seen as some of the world's most desirable workplaces offering countless perks and employee benefits, are losing some of their shine.
The Silicon Valley firms dropped out of the top 10 "best places to work" in the US, according to Glassdoor's annual rankings. HubSpot Inc., a cloud-computing software company, grabbed the No. 1 ranking while tech firms DocuSign Inc. and Ultimate Software were 3rd and 8th, respectively.
Facebook, which has been rated as the "best place to work" three times in the past 10 years, was ranked 23rd.
Google, voted "best place to work" in 2015 and a top-10 finisher the previous eight years, was ranked 11th.

Nippon Express Gets Nod to Acquire Stake in Future Supply

The country's competition watchdog Competition Commission of India (CCI) approved Nippon Express's proposed acquisition of 22 per cent stake in Kishore-Biyani-led Future Supply Chain for Rs. 641 crore.
This is the second time in two weeks that the CCI has given its nod to a foreign investment in a Future Group company.
In November 2019, the CCI had approved Amazon's proposed Rs. 1,500-crore deal to acquire 49 per cent stake in Future Coupons, a Future Retail promoter entity. The transaction will give Amazon a 3.5 per cent stake in Future Retail.

Alstom to Double Manufacturing Capacity in India

French train set and related systems manufacturer Alstom is planning to double its manufacturing capacity in Sri City, in Andhra Pradesh, to 480 train sets per annum in near future. The company will be increasing its headcount from current 5,000 people to 8,000 by March 2023.
However, the company is unhappy as it is being restricted from participating in certain tenders based on conditions put forth by funding agencies, and that it is not being considered as an Indian company.

Dec 11, 2019

Reliance Ties up with ADNOC for Chemical Unit

Reliance Industries and Abu Dhabi National Oil Company (ADNOC) signed an agreement to explore setting up of a facility in UAE to produce ethylene dichloride, which goes into making of PVC that is commonly used in pipes, tubes and cable.
Under the terms of the agreement, ADNOC and RIL will evaluate the potential creation of a facility that manufactures ethylene dichloride or EDC adjacent to ADNOC's integrated refining and petrochemical site in Ruwais, Abu Dhabi and strengthen the companies' existing relationship supporting future collaboration in petrochemicals.

Oil India Keen on Acquiring Full Control of Numaligarh Refinery

State-run Oil India Ltd may pitch for full control of Numaligarh Refinery Ltd (NRL. NRL is a subsidiary of state-run Bharat Petroleum Corp. Ltd (BPCL).
As part of its strategy to divest stake in BPCL, the government in November decided to carve out NRL from BPCL. BPCL holds 61.65% stake in NRL, while Oil India holds 26% and the government of Assam 12.35%.
NRL was set up at Numaligarh in Assam's Golaghat district, in accordance with provisions of the Assam Accord signed on August 15, 1985, and has been associated with the industrial and the economic development of the region.
The capacity of NRL is being expanded from the present 3 million metric tonnes per annum (MMTPA) to 9 MMTPA at an investment of Rs. 22,594 crore.
The expansion project is targeted to be completed in four years and expected to meet the refining requirements of the North-East region.

World's First Fully-electric Commercial Flight

An all-electric powered seaplane has taken flight in Vancouver, Canada, in what the operators describe as a world first for the aviation industry.
The short test flight by Harbour Air and magniX involved a six-passenger aircraft fitted with an electric motor.
The companies said that it was a first step to building the world's first all-electric commercial fleet.
The push to electric could help slash carbon emissions in the high-polluting aviation sector.
This historic flight signifies the start of the third era in aviation - the electric age.

State Bank Under-reports Bad Loans

India's largest lender, the State Bank of India (SBI), underreported bad loans and their provisioning by Rs. 11,932 crore and Rs. 12,036 crore, respectively, in 2018-19, the Reserve Bank of India (RBI) found, the highest such figures reported by any bank so far.
In a stock exchange filing disclosing the central bank's risk assessment report, SBI said that had it taken into account the provisions based on RBI's findings, the bank would have reported a net loss of Rs. 6,968 crore in 2018-19 instead of its reported profit of Rs. 862 crore.
However, SBI's remaining impact on the gross non-performing assets (NPAs) in the third quarter of 2019-20 is Rs. 3,143 crore, since some of it has already been recognised in the first two quarters of FY20.

Yes Bank Weighs Citax's $500 mn Lifeline

Yes Bank is considering a $500 million investment offer from London-based Citax Holdings and Citax Investment Group, in what would be a vital financial lifeline for the cash-starved lender.
A final decision on the investment, which is proposed to be made through a preferential allotment, will be taken at the bank's next board meeting.
Yes Bank said that several investors had shown interest in buying its shares worth a total $2 billion through a preferential allotment. The potential investors included the family office of Canada-based Erwin Singh Braich and Hong Kong-based SPGP Holdings (as part of the $1.2 billion binding offer) as well as the $500 million offer from Citax Holdings, through non-binding agreements.

Dec 10, 2019

RBI May Soon Have Greater Control over Co-op Banks

The Centre is considering introducing an ordinance to amend the Banking Regulation Act, 1949, in order to give more power to the Reserve Bank of India (RBI) to regulate co-operative banks in the wake of the alleged fraud at Punjab and Maharashtra Co-operative (PMC) Bank Ltd.
The proposed amendments in the law could get the Cabinet's approval as early as this week.
In September 2019, the RBI had superseded the scam-hit PMC Bank's board for six months after finding under-reporting of loans. Currently, co-operative banks are governed by dual regulations—state cooperative bodies and the RBI.

Sanofi to Buy Synthorx

France's Sanofi agreed to buy California-headquartered biotechnology firm Synthorx in a cash deal worth about $2.5 billion as it steps up a push in the lucrative field of cancer drugs under its new Chief Executive Officer (CEO).
Sanofi offered to buy all the outstanding shares of Synthorx common stock for $68 per share in cash, or a 172% premium to Synthorx's.

Yes Bank Stalls Blackstone Deal

Coffee Day Group's proposed sale of its Global Village Technology Park to private equity firm Blackstone Group Lp hit a hurdle, with the debt-laden group's largest creditor, Yes Bank, signalling its reluctance to give approval to the Rs. 2,800 crore deal.
The sale of the 90-acre tech park on the outskirts of Bengaluru is to be used for repaying the debts of Cafe Coffee Day's (CCD) associate firms and their promoters. Founder VG Siddhartha committed suicide in July, 2019.
Coffee Day Group firms and their promoters have total debts of at least $1 billion and Yes Bank is the single-largest lender to the group and its promoters, with an exposure of at least Rs. 1,500 crore.
Yes Bank put a condition that it will give its "no objection" to the Blackstone deal only if Coffee Day agrees to repay the entire loan taken by the group from Yes Bank or at least the loans taken by Coffee Day's subsidiaries Tanglin Developments Ltd (which owns the tech park) and Sical Logistics.

State Bank Cuts Lending Rate

The State Bank of India (SBI) announced the reduction in its marginal cost of fund based lending rate (MCLR) by 10 basis points across all one-year products with immediate effect.
This is the eighth consecutive cut in MCLR by the lender this fiscal. The new one-year MCLR has been cut to 7.9% from 8%.
The reduction comes as the Reserve Bank of India, in a surprise move earlier this month, left the key policy rates unchanged at 5.15%.

Dec 09, 2019

Tesco Considers Sale of Thai and Malaysian Stores

The UK's biggest retailer, Tesco, is considering the sale of its stores in Thailand and Malaysia.
Tesco has about 2,000 stores in the two countries under the Tesco Lotus brand and employs some 60,000 people.
If a deal is agreed it would mean an almost complete retreat from international markets for the supermarket giant.
The company's only other overseas stores, other than Ireland, are in its loss-making European unit.

RIL Eyes Tie-ups to Enter Diagnostics Biz

Mukesh Ambani, India's richest man, now wants a share of your diagnostics budget, in a move that can potentially shake up the sector similar to the disruption in telecom market after the entry of Reliance Jio.
Reliance Life Sciences or RLS, the biotechnology subsidiary of RIL, plans to start pathology labs across India through partnerships with local entrepreneurs. RLS is controlled by the Ambani family, the promoter group of RIL.

Bharti Telecom Seeks Approval for Rs. 4,900 cr FDI

Bharti Telecom Ltd has sought government approval for a Rs. 4,900 crore investment from Singapore-based Singtel and other foreign entities. Bharti Telecom is the promoter company of Bharti Airtel Ltd, the oldest private telecom operator in India.
Bharti Telecom applied for infusion of Rs. 4,900 crore in the company, which includes investments from Singtel and some other foreign investors. With this, Bharti Telecom will become a foreign entity, as majority stake will be held by overseas investors. DoT (department of telecommunications) is expected to approve this investment this month.
Sunil Bharti Mittal and his family currently own around 52% stake in Bharti Telecom. The fund infusion, if approved, will raise the foreign stake in Bharti Telecom beyond 50%.

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