General Awareness

BUSINESS AND ECONOMY - October 2018

Oct 2018

May 29, 2019

Airtel to List Africa Subsidiary

Bharti Airtel Ltd has sought approval of the UK financial regulator for an initial public offering (IPO) of its African unit in London as it seeks to cut debt and expand its network.
Airtel Africa Ltd, the continent's second-largest mobile operator, is aiming to raise around $1 billion in a June equity offering.
In a filing made to the London Stock Exchange (LSE), Airtel Africa said that it is also considering a listing on the Nigerian Stock Exchange. In London, Airtel Africa is looking to trade on the main market of LSE, using its premium listing segment.
The African unit has already raised $1.25 billion in October from six investors, including Temasek Holdings Pte and Soft Bank Group Corp., Warburg Pincus and Singtel. In January, Qatar Investment Authority invested $200 million in the Africa arm.
As a result of these fundraises, the company's net debt fell to $4 billion in the March quarter from $7.7 billion a year ago.
Airtel Africa is the holding firm for Bharti Airtel's operations in 14 countries, including Nigeria, Kenya, Uganda, Rwanda, Tanzania, Zambia, Niger, Democratic Republic of the Congo and Seychelles. It has 100 million customers across the continent but Nigeria alone accounts for 36% of its total revenue.
Bharti established its presence in Africa in 2010 when it bought Kuwait-based Zain's Africa operations for $10.7 billion.

FDI Inflows Contract

India's foreign direct investment (FDI) equity inflows fell for the first time in six years in the year ended March 31, underscoring the economic policy challenges faced by the government when Narendra Modi starts his second innings as Prime Minister.
Data released by the Department for Promotion of Industry and Internal Trade (DPIIT) showed FDI equity inflows into India declined 1% to $44.4 billion in the year to March 31, signalling a squeeze in long term foreign investment into the country.
The decline in FDI inflows comes at a time when domestic indicators already point towards a slowdown in consumption and investment activity.
India's economy grew at the slowest pace in five quarters at 6.6% in the three months ended December, prompting the statistics department to trim its 2018-19 forecast from the 7.2% previously forecast to 7% in February.

PNB Slips into Red

India's second largest public-sector lender Punjab National Bank (PNB) slipped into the red, incurring net losses of Rs. 4,750 crore in the January March quarter, after posting net profit of Rs. 247 crore in the previous quarter.
The bank posted losses of Rs. 13,417 crore in the year-ago period (2018).
The lender could not garner profit in the quarter-ended March as recovery from stressed assets of Rs. 5,000-6,000 crore were stuck in insolvency courts.

May 28, 2019

SEBI Tightens Disclosure Norms

To safeguard the interest of investors in listed debt securities, the Securities and Exchange Board of India (SEBI) has tightened the disclosure norms for entities that have issued such securities.
In a circular issued, the capital market watchdog made it mandatory for such companies to disclose on their websites the schedule of interest and redemption obligations for the complete financial year.
According to the SEBI, the enhanced disclosure norms have been issued to further secure the interests of investors in listed debt securities, enhance transparency and to enable Debenture Trustees (DTs) to perform their duties effectively and promptly.

GAIL Reports Highest-ever Net Profit

State-owned gas utility GAIL India Ltd. reported its highest-ever net profit, record dividend payout and largest-ever capital expenditure of Rs. 54,000 crore as it builds infrastructure to take clean fuel to the unconnected parts of the country to aid transition to a gas-based economy.
The country's biggest transporter and marketer of natural gas reported that net profit rose 10% in the fourth quarter to Rs. 1,122 crore and by 30% to record Rs. 6,026 crore in the financial year ended March 31.

Reliance Capital to Sell Entire Stake in Radio Unit

Reliance Capital and Reliance Land (a part of Reliance Capital Group) have agreed to divest their entire equity stake in Reliance Broadcast Network Limited (RBNL) to Music Broadcast Limited (MBL).
RBNL operates under the brand name BIG FM Radio network with 58 stations across India. MBL will initially acquire a 24% equity stake of RBNL by way of a preferential allotment for a total consideration of Rs. 202 crore and thereafter subject to regulatory approvals, said a company statement.
MBL will acquire the remaining equity stake held by Reliance Capital and Reliance Land in RBNL at a total enterprise value of Rs. 1,050 crore.
In addition, Reliance Capital will receive an estimated Rs. 150 crore from the disposal of other assets of RBNL, which do not form part of the deal with MBL, in accordance with the regulations.

Draft Export Policy

The Commerce Ministry has come out with a comprehensive draft of the export policy which includes product- specific rules with a view to provide a ready reckoner for exporters.
Based on inputs received from various partner government agencies, it is proposed to bring out a comprehensive exports policy for all ITC (HS) tariff codes (including items which are 'free' for export and do not currently exist in the policy), covering conditions/restrictions imposed by partner government agencies on exports.
The draft policy aims at consolidating the export norms for each product as applicable at different government agencies.
ITC-HS Codes are Indian Trade Clarification based on Harmonised System of Coding. It was adopted by India for import-export operations.
Every product has been accorded eight digit HS codes. The compendium will help an exporter know all the applicable norms pertaining to a particular product, helping him/her understand policy conditions for that item.

May 27, 2019

Air India's Bid to Sell Prime Real Estate

State-run Air India Ltd's latest bid to sell its real estate assets found few takers. The national carrier could sell less than 10 of the 56 properties that were put up for sale in April.
The reserve price of these properties, mostly residential units, ranged from Rs. 16 lakh to about Rs. 8 crore and were located in cities such as Mumbai, Delhi, Pune, Bengaluru, Chennai and Kolkata.
The high reserve prices for the properties were not in tune with current market conditions and was the primary reason for the lacklustre response.
The auction oversight committee would meet soon to decide if some of the properties were to be re-auctioned.

May 26, 2019

Seshasayee Paper Goes for Stock Split

The board of directors of Seshasayee Paper and Boards Ltd. recommend a stock split of its equity shares of face value of Rs. 10 each into five equity shares of face value of Rs. 2 each, subject to the approval of shareholders at the annual general meeting to be held in July.
For the fourth quarter ended March 2019, the firm reported a 41.62% increase in its standalone net profit to Rs. 62.26 crore from the Rs. 43.96 crore registered during the corresponding quarter 2018.

Vistara to Diversify Fleet

Vistara, the joint venture airline of Tata Sons and Singapore Airlines, decided to add multi-type aircraft to its fleet, which may lead to higher cost of operations.
The full-service airline, which already has a fleet of 22 Airbus A320 family aircraft, decided to take on lease an additional six aircraft, four Boeing 737-800 NG aircraft and two Airbus A320neos.
These four Boeing aircraft were once part of the Jet Airways fleet. After de-registration, these will be delivered to Vistara by the end of May.
This is for the first time that Vistara is diversifying its fleet, an indication that it could be capitalising on Jet Airways' grounding.

May 25, 2019

HDFC Sells Stake in Subsidiary Gruh

HDFC sold 6.10% stake in its subsidiary Gruh Finance, to comply with the RBI requirement for facilitating the proposed merger of the housing finance arm with Bandhan Bank.
The sale was carried out through stock exchanges at the prevailing market price.
The average price was Rs. 260.07 apiece for shares sold in March and Rs. 310.126 apiece for shares sold in May.

Larsen & Toubro Buys Mindtree shares

Infrastructure major Larsen & Toubro (L&T) acquired over 24.9 lakh shares of Mindtree from the open market, taking its shareholding in the IT services firm to 28.45%.
After the latest transaction, L&T's shareholding in Mindtree stands at 28.45%. The latest stock purchase was made at Rs. 980 apiece.
Earlier in May, L&T purchased around 20% stake of V.G. Siddhartha and Cafe Coffee Day in Mindtree through a block deal for about Rs. 3,210 crore, and has since topped that up with share purchases from the open market.

Heinz-Zydus Merger Gets Nod

Consumer healthcare firm Zydus Wellness said that the National Company Law Tribunal (NCLT) approved a scheme of amalgamation between two subsidiaries, Heinz India Pvt. Ltd. with Zydus Nutritions Ltd., post which, Heinz India will cease to exist.
In January, Zydus Wellness had completed its Rs. 4,595-crore acquisition of Heinz India's consumer wellness business.
In October, the company agreed to buy Heinz India's business comprising Complan, Glucon D, Nycil and Sampriti Ghee brands, along with its two large manufacturing facilities.

TPG Growth to Sell CTSI to Varian Medical Systems

TPG Growth, the middle market and growth equity platform of alternative asset firm TPG, signed a definitive agreement to sell Cancer Treatment Services International (CTSI) to Varian Medical Systems for $283 million (approximately Rs. 1,980 crore).
CTSI is part of Asia Healthcare Holdings (AHH), a healthcare operating platform founded by TPG Growth. The transaction is expected to close in June and is subject to customary closing conditions.
CTSI owns and operates a network of cancer treatment facilities across India and south Asia, including several brands.
CTSI is one of the largest and leading providers of high-quality oncology services across the country and broader South Asia.

Facebook Plans to Launch Its Own Cryptocurrency

Facebook has been in contact with U.S. and British financial regulators with a view to launching its own cryptocurrency in 2020.
The cryptocurrency is internally referred to as GlobalCoin. The company would work with a new digital payments system in about a dozen countries, starting in the first quarter of 2020.
As per reports, Facebook had already spoken to Bank of England Governor Mark Carney and to officials at the U.S. Treasury.
Facebook's currency would be ''stablecoin'', a digital unit pegged to the dollar in contrast to more anarchic means of virtual payment such as bitcoin.
With more than two billion users across its platforms, it could have the clout to take a cryptocurrency mainstream and emulate the likes of WeChat in China, where the U.S. site is banned.

RBI to Infuse in June via OMO

The Reserve Bank of India would inject Rs. 15,000 crore into the financial system in June through purchase of government bonds via the auction route.
The government securities will be bought under open market operations (OMO). The decision was taken in view of the evolving liquidity situation.
Based on a review of the evolving liquidity conditions and assessment of the durable liquidity needs going forward, RBI decided to conduct purchase of government securities under OMO for Rs. 150 billion in June 2019.

Ashok Leyland eyes 5-7.5 tonne LCV space

With an eye on strengthening its presence in the light commercial vehicle (LCV) space, Ashok Leyland Ltd., (ALL), the flagship company of the Hinduja Group, is planning a foray into the 5 to 7.5 tonne LCV category under a project codenamed Phoenix.
ALL will be launching products under 'Project Phoenix' by 2020.
Project Phoenix would fill the gap in the 5 to 7.5-tonnes category and help us grow our business better.
Gopal Mahadevan, chief financial officer said that the LCV business is very crucial for the company to explore new markets in Africa and southeast Asian countries.
The LCV is a big market in most countries.

Infosys Completes Acquisition of Stake

Infosys completed the acquisition of 75% shareholding in ABN AMRO Bank's wholly owned Stater NV.
ABN AMRO would continue to hold the remaining 25%.
The Bengaluru-based firm said the deal would enhance its strategy to help clients navigate their digital transformation journeys.

Changes to FPI Rules

As part of its attempts to streamline the regulations to encourage foreign inflows in the Indian market, the Securities and Exchange Board of India (SEBI) proposed fast track on-boarding procedure for such investors, apart from a simplified registration process.
The capital markets regulator released the report of the working group formed under the chairmanship of former RBI deputy governor HR Khan in 2018.
Against this background, the group's primary objectives were consolidation, simplification, rationalisation and liberalisation.
Among other things, the group also recommended pension funds to be considered for Category I FPIs registration, removal of opaque structure and the review of broad-based conditions for appropriately regulated entities.
The committee further proposed a liberalised investment cap under a review of prohibited sectors for foreign investment for FPIs, restriction on Sovereign Wealth Funds (SWFs) for investment in corporate debt securities, and permitting FPIs for off-market transactions.

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