General Awareness

BUSINESS AND ECONOMY - October 2018

Oct 2018

Mar 15, 2019

NTPC Signs Pact with Indian Railways

NTPC has teamed up with the Indian Railways for fly ash transportation, a move that will help enhance ash utilisation at Rihand and Vindhyachal Super Thermal Power plants.
NTPC had signed a memorandum of understanding with Hazipur-based East Central Railway Zone for transportation of fly ash under Indian Railways' Special Freight Train Operator scheme.

RBI Relaxes Norms for Trade Credit

The Reserve Bank of India (RBI) relaxed norms for imports of capital and non-capital goods by raising the trade credit limit to USD 150 million under the automatic route.
Announcing the modified revised framework for 'Trade Credit Policy', the RBI, however, reduced the all-inclusive cost (all-in-cost) for overseas loans to benchmark rate plus 250 basis points from the earlier 350 bps.
Trade credits (TCs) refer to the credits extended by the overseas supplier, bank, financial institution and other permitted recognised lenders for maturity for imports of capital and non-capital goods permissible.
According to the revised framework, TCs up to USD 150 million or equivalent per import transaction for oil and gas refining & marketing, airline and shipping companies can be availed under the automatic route.
For others, the limit is up to USD 50 million or equivalent per import transaction.

Reliance Infra to Sell Delhi-Agra Toll Road

Anil Ambani-led Reliance Infrastructure Ltd. has signed a definitive binding agreement with Singapore-based Cube Highways and Infrastructure III Pte. Ltd. for the sale of its 100% stake in Delhi-Agra (DA) Toll Road Private Limited for an enterprise value of Rs. 3,609 crore.
In addition, DA Toll Road Pvt. Ltd. claims against NHAI worth Rs. 1,200 crore would flow directly into Reliance Infrastructure.
After the completion of the transaction, Reliance Infrastructure's debt would reduce by 25% to less than Rs. 5,000 crore.
The transaction is in line with Reliance Infrastructure's strategic plan of monetising non-core business and focusing on major growth areas like engineering and construction (E&C) business.
The transaction is subject to all requisite permissions and approvals, the statement added.

China Industrial Output Growth Falls

Growth in China`s industrial output fell to a 17-year low in the first two months of the year, pointing to further weakness in the world`s second-biggest economy.
But investment picked up speed as the government fast-tracked more road and rail projects, offering some relief for policymakers as they work to avert a sharper slowdown.
China is ramping up support for the economy this year as growth looks set to plumb 29-year lows.
Premier Li Keqiang announced hundreds of billions of dollars in additional tax cuts and infrastructure spending, even as officials vowed they would not resort to massive stimulus like in the past.

SEBI Orders Religare Entities to Recall Loans

The Securities and Exchange Board of India (SEBI) has directed Religare Enterprises and Religare Finvest to recall loans totalling Rs. 2,315.09 crore from various entities, including Malvinder Singh and Shivinder Singh.
The Singh brothers, among others, have been directed to disassociate themselves from the affairs of the Religare entities and also not to dispose any assets or divert any funds till further directions.
The order follows a SEBI probe that found that funds amounting to Rs. 2,315.09 crore were diverted from the books of Religare Finvest (RFL) for the utilisation of promoters and promoter group entities of Religare Enterprises (REL).

Brookfield to Buy RIL's East West Pipeline

India Infrastructure Trust, an infrastructure investment trust (InvIT) sponsored by Brookfield, will acquire the East West Pipeline for Rs. 13,000 crore.
The pipeline is owned by Reliance Industries Ltd's promoters' family.
As a part of the transaction, the InvIT would acquire 100% equity interest in Pipeline Infrastructure Private Ltd. which currently owns and operates the pipeline.
Following this acquisition by Brookfield, the existing pipeline usage agreement has been reworked.

Mar 14, 2019

Vistara Can Now Fly Overseas

According to Secretary, Ministry of Civil Aviation, Pradeep Singh Kharola, the Tata-Singapore joint venture airline Vistara has been granted permission to fly overseas.
The airline had applied for regulatory approvals early last year, but a nod from the government was delayed over an investigation against AirAsia India for allegedly lobbying and bribing officials to acquire permission to fly overseas.
This led to the government forming an inter-ministerial committee to take a final decision on the matter.

RBI to Inject Liquidity via Forex Swaps

The Reserve Bank of India has decided to inject rupee liquidity into the system through long-term foreign exchange buy/sell swap, a first-of-its-kind instrument used for liquidity management.
The RBI would conduct dollar-rupee buy/sell swap auction of $5 billion for a three-year tenor on March 26.
In order to meet the durable liquidity needs of the system, the Reserve Bank has decided to augment its liquidity management toolkit and inject rupee liquidity for longer duration through long-term foreign exchange buy/sell swap.
The U.S. dollar amount mobilised through this auction would also reflect in RBI's foreign exchange reserves for the tenor of the swap while also reflecting in RBI's forward liabilities.

Oil Regulator Hikes Tariff of Pipeline Transporting

PNGRB has approved a 37% rise in tariff from April 1 for the pipeline that transports Reliance Industries' eastern offshore KG-D6 gas to customers.
In its final tariff order, the Petroleum and Natural Gas Regulatory Board (PNGRB), in its March 12 order, said that transporting natural gas on the east-west pipeline would cost Rs. 71.66 per million British thermal unit (mmBtu) from April 1 compared with Rs. 52.33 per mmBtu charged now.

Framework for Counter Offer Process

Markets regulator SEBI came out with the framework and timeline for the counter offer process.
The counter offer is made in case the price discovered through reverse book building (RBB) is not acceptable to the promoter or the acquirer.
The book value per share of the company shall be disclosed in the public announcement for counter offer.
Additionally, the letter of offer shall contain details of the counter offer, activity schedule, among other details in a prescribed format.
As per SEBI, the promoters or acquirers making public announcement of the offer through stock exchange mechanism shall do so within two days from the date of closure of RBB bidding process.

India Gets First TIR Shipment via Chabahar Port

The first shipment under the United Nations 'Transports Internationaux Routiers' (TIR) convention arrived in India from Afghanistan through Iran's Chabahar Port.
The consignments arrived at port of Nhava Sheva, Mumbai and Mundra.
India had joined the TIR Convention (the United Nations Customs Convention on International Transport of Goods under cover of TIR Carnets) on June 15, 2017.

Mar 13, 2019

Ebix Offers to Acquire Yatra Online

US software firm Ebix has offered to acquire 100 per cent of the outstanding stock of Yatra Online for $7 per share on a debt-free basis.
Yatra Online Inc is the parent company of Yatra Online Pvt. Ltd. which is based in Gurugram, India and is India's leading Corporate Travel services provider with over 800 corporate customers and one of India's leading online travel companies and operates the website Yatra.com.
Ebix intends to merge Yatra Online in its Indian EbixCash subsidiary setup. Ebix's offer is subject to due diligence and customary regulatory and other closing conditions.

Government Defers Bid Deadline for OALP-II

The government deferred by a month, the last date for bidding for the 14 oil and gas exploration blocks offered in the second round of Open Acreage Licensing Policy (OALP).
Bids for the 14 blocks offered in OALP-II bid round, covering an area of 29,333 sq.km. were to close on 12 March.
Bid submission closing date for OALP Bid Round-II stands extended up to April 10, 2019.

Bank of Baroda Launches Creche/daycare Facility

Bank of Baroda has become one of the first public sector banks to launch a crèche/child daycare facility for children of its employees.
After launching such a facility at its Mumbai corporate office in Bandra Kurla Complex which houses some 1500-plus employees, the bank intends to roll out more of them at its head office in Vadodara.
This initiative is designed to help employees save time and reduce stress of finding the right care for children in the age group of 6 months to 6 years.
Bank of Baroda will bear 60% of the cost every month for each employee, while 40% will be taken care by the parents.

SEBI Lifts Cap on Corporate Bonds for FPIs

Markets regulator SEBI withdrew the 20% limit on investments by Foreign Portfolio Investors (FPIs) in corporate bonds of an entity.
The regulator said that the restriction is being withdrawn in accordance with a circular issued by the Reserve Bank of India (RBI).
In June 2018, the Securities and Exchange Board of India had mandated that no FPI shall have an exposure of more than 20% of its corporate bond portfolio to a single corporate.
However, the central bank, in February, lifted the restriction in view of market feedback.
To give effect to the directions of the RBI, the regulator said provisions of its June 2018 circulars with respect to exposure of more than 20% "stands withdrawn with immediate effect".

Government to Raise Fund via CPSE ETF Sale

The government is likely to launch an additional offering of CPSE-Exchange Traded Fund (ETF) in February to raise at least Rs. 3,500 crore.
The ETF sale through follow-on fund offer will come with the option of retaining up to Rs. 5,000 crore via the green shoe option, they said.
During the last offering in November, the Centre mopped up Rs. 17,000 crore, the biggest disinvestment through the ETF.
The proceeds from the ETF sale will help the Centre move towards the Rs. 80,000-crore disinvestment target set for this fiscal.
As on February 28, the Centre had realised Rs. 56,473.32 crore as disinvestment proceeds.

Titan Seals Pact with FTS USA

Titan Company Limited, one of the world's largest watch manufacturers, has entered into a strategic alliance with an American watch manufacturing company FTS USA LLC located at Phoenix, Arizona.
This alliance equips FTS USA by setting up a quartz movement assembly unit in the U.S. to manufacture 'Made in USA' for American watch brands.
Titan would further extend its support by supplying movement kits and setting up of the movement assembly facility, training of U.S. engineers at the Titan facility alongside Titan's engineers visiting the facility.

Mahindra CIE buys Aurangabad Electricals

The board of auto component firm Mahindra CIE Automotive approved to buy Aurangabad Electricals Ltd (AEL) for Rs. 875.6 crore.
The company's Board has resolved to acquire the business of AEL through acquisition of 100% of equity shares for an enterprise value of Rs. 875.6 crore, which includes a future deferred payment estimated up to Rs. 62.2 crore.
The acquisition is proposed to be completed on or before April 10.
This acquisition allows MCIE to enter the aluminum die casting technology.

Bidders Seek Extension for Bids

The Ministry of Civil Aviation has received a request from bidders seeking an extension of the last date for submission of financial bids for the disinvestment of Pawan Hans Helicopters Limited.
12 March was the last date for submission of financial bids as well as the date for opening of bids.
The transaction adviser had sought an extension on the request of shortlisted bidders, adding that the Ministry is yet to take a decision on this plea.

McLeod Russel to Sell Assam Tea Estate

McLeod Russel India Ltd. (MRIL), a bulk tea producer in the B.M. Khaitan Group has decided to sell its Boroi Tea Estate in Assam to the city-based Jatinga Agro Tech Private Ltd.
The firm decided to sell the estates and bearer plants and other assets of the Assam estate.
With a turnover of Rs. 23.2 crore, this tea estate contributed 1.5% to MRIL's turnover in 2017-18. The deal consideration is Rs. 28.2 crore.
Among the biggest bulk tea producers in India, MRIL's crop (118 million kg in 2017-18) came from its own gardens, from small tea growers and its overseas subsidiaries in Africa and Vietnam.

Mar 12, 2019

Nvidia Nears Deal to Acquire Mellanox Technologies

As per reports, Chipmaker Nvidia Corp is nearing a deal to acquire peer Mellanox Technologies Ltd for more than $7 billion in cash.
The deal would be Nvidia's biggest-ever acquisition and boost its business of making chips for data centres, allowing it to reduce its reliance on the video game industry, for which it is best known as a major technology vendor.
Nvidia has outbid Intel Corp in the auction for Mellanox.
Mellanox's chips power high-speed networks connecting servers. The company, which is based in Israel and the United States, had a market capitalisation at the end of trading of about $5.9 billion.

Tata Motors Bags Orders for CV Units

Tata Motors has bagged a total order of over 2,500 units of commercial vehicles (CVs) from institutional customers.
These include an order of 1,045 buses from Gujarat State Roadways Transport Corporation (GSRTC) and 1,000 Winger ambulances from National Health Mission (NRHM), Uttar Pradesh, Gujarat, Himachal Pradesh and Haryana.
Besides, there is an order for 400 CNG BRTS buses from Pune Mahagagar Parivahan Mahamandal Ltd.

Goyal Seeks Funding from Etihad

Jet Airways chairman Naresh Goyal has sought an urgent funding of Rs. 750 crore from its equity partner Etihad, following the lingering cash flow issues which got amplified after the forced grounding of over 50 of its planes.
Mr. Goyal said that the airline had also secured the go-ahead from the Civil Aviation Ministry to pledge its shares in JetPrivilege for securing the interim funding.
The airline holds 49.9% stake in the loyalty programme while the majority is with Etihad.

Mar 11, 2019

India Eyes Saudi Funds

India is seeking investment from Saudi Arabia to build emergency crude reserves that will act as a buffer against volatility in oil prices and supply disruptions for the third-largest oil consumer.
Saudi's participation in the Indian Strategic Petroleum Reserve program was discussed at a meeting between the kingdom's energy minister Khalid Al-Falih and his Indian counterpart Dharmendra Pradhan in New Delhi. They also discussed expediting a proposed $44-billion oil refinery project on India's west coast with investment from Saudi Arabian National Oil Co.
India is expanding its strategic reserves to shield from perennial political risk in the Middle East and Africa that account for the bulk of its purchases.
Prime Minister Narendra Modi has opened some of the underground caverns for commercial storage to lessen the strain on state finances.
It has already leased out tanks to Abu Dhabi National Oil Co. India has already built 5.33 million tons of underground reserves in three locations, which can meet 9.5 days of the country's oil needs.

PNB Offers Lifeline to Jet Airways

Jet Airways (India) Ltd has secured fresh credit facilities of Rs. 2,050 crore from state-run Punjab National Bank (PNB) that could provide a temporary lifeline to the cash-strapped airline.
The Mumbai-based airline has raised foreign currency term loans worth Rs. 1,100 crore and a non-fund based credit facility of Rs. 950 crore from PNB.
If the loan proceeds are used to pay dues to lessors and pare the company's debts, this may improve Jet Airways' credit rating and also help it resume flights it had discontinued after at least 49 leased planes were grounded since February 8 because of non-payment of rents.

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