General Awareness

BUSINESS AND ECONOMY - October 2018

Oct 2018

Apr 25, 2019

RBI Divests Its Entire Stake

The Reserve Bank of India (RBI) has divested its entire stake held in National Housing Bank (NHB), the regulator for housing finance companies, and National Bank for Agriculture and Rural Development (NABARD) to the government, which now holds 100% in these entities.
RBI had 100% shareholding in NHB, which was divested for Rs. 1,450 crore.
The NABARD stake was divested in two phases, RBI had 72.5% stake in NABARD amounting to Rs. 1,450 crore, out of which 71.5%, worth Rs. 1,430 crore was divested in October 2010 and the residual shareholding was divested on February 26, 2019 for Rs. 20 crore.
Divestment of RBI's stake in NABARD and NHB has its basis in the recommendation of Narasimham Committee II and the Discussion Paper prepared by RBI on Harmonizing the Role and Operations of Development Financial Institutions and Banks.

SoftBank to Invest in Wirecard

Japan's SoftBank Group Corp. will invest around 900 million euros ($1 billion) in Wirecard in a convertible bond deal that will give it a 5.6% stake in the German digital payments company.
The investment by the world's biggest private technology company is a vote of confidence in Wirecard's business as it defends itself against allegations of fraud, and will allow the Munich-based firm to expand its operations in Asia.

UltraTech Net Jumps

UltraTech Cement's consolidated net profit for the fourth quarter has more than doubled to Rs. 1,034.21 crore on higher capacity utilisation due to increasing demand and acquisition synergies.
The company's consolidated revenue from operations rose 17.3% to Rs. 10,905.15 crore in the quarter, compared with Rs. 9,290.29 crore in the same period last year.
The Q4 earnings also include results from cement plants acquired from Jaiprakash Associates Ltd. and Jaypee Cement Corp.

IOB Reduces Loss-incurring Branches

The number of loss-incurring branches (LIB) of Indian Overseas Bank (IOB) has come down in the last four years from 742 to 157.
The objective is to make all the business units as standalone profit centres. This had been achieved by branch rationalisation and containing administrative expenses, among others. The lender had 742 LIBs during March 2015. It was further scaled down to 718 in March 2016 and to 157 in March 2019.

Libor Transition Opens up Avenues

The London Interbank Offered Rate (Libor) transition opens up a sizeable business opportunity for large consulting firms such as PwC, KPMG, EY and Deloitte and also for global IT firms, including leading players in India.
Individual banks, financial institutions and lending houses are expected to spend anything from $50 million to upwards of $100 million a year for the next two years until the migration is completed by the end of 2021. Analysts say that IT will be 50% of this opportunity.
Regulators globally have asked firms to move away from Libor to other alternate, risk-free rates (RFRs). Derivatives, bonds, mortgages, loans, mutual funds, securities, underwriting, deposits, advances, pension funds and contracts, worth $370 trillion, are currently linked to the scam-hit Libor.

Banks Told to Disclose IL&FS NPA Details

The Reserve Bank of India (RBI) has asked banks and financial institutions to disclose the non-performing assets (NPA) stemming from their exposure to troubled infrastructure conglomerate Infrastructure Leasing & Financial Services Limited (IL&FS) and its group entities in their upcoming results announcements.
In a notification, the central bank said the new directions are as per a February 2019 order of the National Company Law Appellate Tribunal (NCLAT), which asked banks not to declare their loans to the company and group as NPAs.

Apr 24, 2019

Tata Arm to Buy Branded Tea Business

Tata Global Beverages Ltd. (TGBL) announced its decision to acquire the branded tea business of city-based Dhunseri Tea & Industries Ltd. for Rs. 101 crore subject to due diligence and necessary approvals.
Dhunseri currently owns the Lalghoda and Kalaghoda brands which are among Rajasthan's local brands. The move is in line with TGBL's ambition to grow its branded tea business in India.

RBI Approves Proposal of HDFC

The Reserve Bank of India (RBI) has given its nod to HDFC Ltd. for acquiring up to 9.9% stake in Bandhan Bank following the Gruh Finance deal. Gruh Finance, the affordable housing finance arm of HDFC Ltd. was taken over by Bandhan Bank in a share-swap deal in January.

RBI's Swap Auction

The second dollar-rupee buy/sell auction also saw healthy demand with the Reserve Bank of India getting 255 bids worth $18.65 billion compared with the notified amount of $5 billion.
High cut-off premium indicated banks mostly stayed away but companies and NBFCs saw it as a good opportunity to lower hedging costs compared with the secondary market.
The cut-off premium was 838 paisa compared with 776 paisa the last time. RBI said that liquidity injected in the first leg was Rs. 34,874 crore. The move would help shore up the country's foreign exchange reserves which are now close to $415 billion.

Huawei Arm and Infosys in Pact

Huawei Cloud and Infosys have entered into strategic cooperation to help enterprise customers transition quickly to the digital cloud.
Under the pact, Infosys would join the Huawei Cloud Partner Network (HCPN) and the two companies would develop new cloud solutions leveraging Huawei Cloud and Infosys's products and services to help customers securely adopt innovative cloud-based systems for their enterprise workloads.
The network has over 6,000 partners and with their cooperation, Huawei Cloud has added 2,800 applications available in 40 availability zones in 23 geographical regions.

JSPL Delivers 97,400 Tonnes of Rails

Jindal Steel and Power Limited (JSPL) has completed the delivery of its first-ever order from Indian Railways to supply 97,400 tonnes of rails valued at Rs. 500 crore.
The company had bagged the contract from the public transporter in July 2018, through a global tender, which saw participation from seven leading global rail manufacturers.
JSPL started dispatching the first consignments of rails on August 15, 2018 from its Raigarh plant and completed delivery of total quantities on April 22 this year, almost four months ahead of schedule.

Apr 23, 2019

Blackstone to Buy Stake in Essel Propack

Leading investment firm Blackstone has entered into a definitive agreement with Ashok Goel Trust to purchase a majority stake in Essel Propack Limited (EPL), a speciality packaging company and one of the largest global manufacturers of laminated tubes, for up to $462 million.
Ashok Goel Trust and its affiliates currently hold about 57% of EPL and Blackstone would pay a purchase price of Rs. 134 per share to acquire a 51% shareholding from the trust.
The trust would retain a minority stake in EPL. The deal is expected to be completed in the coming months, subject to customary closing conditions and approvals.

Pawan Hans' Strategic Sale on Hold

The government has decided to keep the sale process of Pawan Hans on hold till elections as only one investor has put in financial bids for buying the helicopter service provider.
The government holds 51% stake in helicopter service provider Pawan Hans, and the remaining 49% is with ONGC.
Investors had time till March 6 to put in their financial bids for up to 100% stake in Pawan Hans.

Highest Bidder for IL&FS Wind Assets' Portfolio

State-run GAIL (India) Ltd. has emerged as the highest bidder for seven wind power projects of the debt-ridden Infrastructure Leasing and Financial Services (IL&FS), after it made an offer of Rs. 4,800 crore.
The process to sell the assets was initiated in November. The seven operating wind power plants have a total generation capacity of 874 MW.
The deal is expected to close in three weeks.

China Manufacturers Deploy every Weapon

Manufacturers in China facing trade barriers are deploying an array of moves to try to keep foreign customers - giving discounts, tapping tax breaks, trimming workforces and, occasionally, shifting production overseas to skirt tariffs.
Tit-for-tat tariffs from the China-United States trade war have been costly for many.
The strains on Chinese manufacturers have been European Union duties on Chinese products ranging from electric bikes to solar panels.

U.S. Ends Waiver for India

U.S. Secretary of State Mike Pompeo announced that the U.S. will not renew exemptions from its sanctions for importing oil from Iran.
The exemptions were granted in November 2018 for a 180-day period for India and seven other countries, and are due to expire in May.

Apr 22, 2019

Tata May Revive Bid to Buy Jet Airways

The Tata group may revive an attempt to buy Jet Airways (India) Ltd. if lenders to the grounded airline fail to find a buyer and are forced to drag the carrier to a bankruptcy court.
Last year, the Tata Group had withdrawn from talks to buy the ailing airline once it became clear that Jet Airways founder Naresh Goyal was unwilling to cede control and had opened parallel negotiations with existing investor Etihad Airways PJSC of Abu Dhabi for a potential equity infusion. As part of its initial interest, the Tata Group had inspected the books and assets of Jet Airways last November.

Brookfield Looks to Acquire Mytrah Energy

Canada's Brookfield Asset Management Inc. is in talks to buy a majority stake in Hyderabad-based Mytrah Energy as the alternative assets manager looks to make its first renewable investment of more than $1 billion in India.
The stake sale could be valued at more than $1 billion, reaching up to nearly $1.5 billion given the size of Mytrah's portfolio. Mytrah has a portfolio of around 1.6 megawatts (GW).
If successful, the BrookfieldMytrah deal will also be the largest transaction in the Indian renewable space in terms of size of the portfolio.

SpiceJet and Emirates Sign MoU

Budget carrier Spicejet announced signing of an initial pact for code share partnership with Gulf carrier Emirates.
The reciprocal partnership will allow opening of new routes and destinations for passengers of the two airlines.
SpiceJet passengers from 51 domestic destinations would be able to access Emirates' network across the US, Europe, Africa and Middle East.
Code-sharing allows an airline to book its passengers on its partner carriers and provide seamless travel to destinations where it has no presence.

Apr 21, 2019

Adani Enterprises Arm Acquires Alpha Design Technologies

Adani Enterprises said that its subsidiary Adani Defence Systems and Technologies has acquired Alpha Design Technologies Pvt Ltd.
Alpha Design Technologies Pvt Ltd provides Adani Defence and Aerospace a strong tier-1 capability for building a base for graduating to platform capabilities.
Alpha Design Technologies Pvt Ltd was established in 2003 for the design, development and manufacture of defence electronics and avionics. Its key business areas includes, defence electronics, avionics, aero-structure assemblies, space and satellite systems and simulators among others.

Honda Opens First Exclusive Outlet at Gurugram

Honda Motorcycle & Scooter India (HMSI) has announced its foray into premium big bike retailing with the first exclusive outlet at Gurugram. Branded Honda BigWing, these outlets will provide personalised sales and after-sales service experience to Honda big bike models customers. HMSI' big bikes portfolio ranges from the 300-cc CB300R to the 1800-cc Goldwing super bikes.

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