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BUSINESS AND ECONOMY - May 2019

May 2019

May 31, 2019

 Amazon Expands Pantry Service

  •   E-commerce giant Amazon.com Inc. said it has expanded its 'Pantry' service to over 110 cities in the country as it bets big on the grocery category to drive growth in business.
  • Amazon Pantry has been aggressively expanding its presence to smaller cities in the country.
  • The service was available in 40 cities in November 2018.

Goldman Sachs Invests in India

  •  New York-based investment and financial services major Goldman Sachs has pumped in $250 million to construct one of its largest global workspaces in Bengaluru.
  • Goldman Sachs' more than 5,000 employees currently work out of six buildings in the city and with the new facility, the company will be able to bring all its staff to a common premises.
  • The firm's Bengaluru operations began as a back office, driven on cost and time zone advantage, back in 2004 with 290 people.
  • It has now transformed itself into a sophisticated engineering and design hub that directly touches all global businesses of the bank.

Budget for Metrolines to Link Greater Noida Approved

  •  The Yamuna Expressway Industrial Development Authority (Yeida) approved a budget of Rs. 6,869 crore for two Metro links to the proposed greenfield airport in Jewar.
  • Both the Metro lines will start at Greater Noida's Knowledge Park-II and terminate at Jewar Airport.
  • One would be an exclusive Airport Express Line, with no stations between Knowledge Park-II and the airport, the other would go through residential, commercial and rural areas along the Yamuna Expressway.
  • The Uttar Pradesh government has started the process to hire a developer for the airport at Jewar in Greater Noida, which is expected to become the national Capital Region's second airport and take the load off Delhi's Indira Gandhi International Airport, once completed.
  • The airport is expected to be operational by 2022-23.
  • Noida International Airport Limited (NIAL) has invited global players to bid for the development of the airport project.
  • The NIAL has also handed over the responsibility of preparing a detailed project report for the airport with six runways to the audit and consulting firm PricewaterhouseCoopers.
  • This project will branch out from the existing Knowledge Park-II station on the Aqua Line, and terminate at Jewar airport.
  • Earlier, this link was planned between Greater Noida's Pari Chowk and Jewar airport.
  • The budget for the Metro links was approved in the 65th board meeting of Yeida.

Tata Steel Takeover of Bhushan Energy

  •  The National Company Law Tribunal (NCLT) approved the resolution plan of Tata Steel to acquire debt-ridden Bhushan Energy Ltd. for about Rs. 800 crore.
  • The principal bench of NCLT - Delhi also rejected objections from Bhushan Energy's former promoter Neeraj Singal opposing Tata Steels' bid.
  • Under the resolution plan, Tata Steel will offer an upfront payment of Rs. 730 crore. It would also pay Rs. 50 crore additionally to operational creditors of the company.

Three PSUs Ink Joint Venture Pact

  • Three public sector units, National Aluminium Company (NALCO), Mineral Exploration Corporation Ltd. and Hindustan Copper Ltd. are set to sign by next month, a joint venture (JV) agreement for making overseas acquisition of reserves of rare metals like lithium and cobalt.
  • The first acquisition is likely to be made within six months NALCO will hold 34% of the proposed Rs. 100 crore equity, with the other two companies holding 33% each. The JV will acquire assets in overseas countries. 

May 30, 2019

Bandhan to Open More Branches

  • City-based Bandhan Bank will open 16 more branches by June following the approval received from the Reserve Bank of India in 2018-19 to open 64 new branches.
  • Chandra Shekhar Ghosh, managing director & chief executive officer, Bandhan Bank, said that while 48 branches were opened by March 2019, the remaining branches would be opened this quarter.

Chola Investment Gets Investment from International Finance Corp.

  • Cholamandalam Investment and Finance Co. Ltd. (CIFCL), a Murugappa Group company, received an investment of $222 million from a foreign investor anchored by the IFC.
  • This is the company's first U.S. dollar-syndicated deal since January 2019, when RBI permitted NBFCs to tap into offshore credit market. CIFCL would use the funds to help small road transport operators (SRTOs) and micro, small and medium (MSMEs) borrowers, especially in the rural and semi-urban areas.
  • The present round of funding was anchored by IFC, a member of the World Bank Group.

Bid for Jaypee Infra

  • Adani Group made an unsolicited and non-binding bid to acquire Jaypee Infratech and is ready to infuse up to Rs. 1,700 crore to expedite the construction of stuck housing projects of the debt-laden realty firm and deliver flats to home buyers.
  • Adani promised to infuse another Rs. 1,000 crore in two equal tranches to settle the claims of workmen as well as secured and unsecured financial creditors, besides meeting the cost of insolvency proceedings. It will also transfer 1,000 acre land to bankers.

Rajapalayam Mills to Merge A.P. Unit

  • As per reports, Rajapalayam Mills Ltd. (RML), a Ramco Group company, decided to merge its spinning mill in Andhra Pradesh (A.P.) with its mother plant in Rajapalayam in Tamil Nadu.
  • RML has a total installed capacity of about 1.38 lakh spindles and 5,480 rotors, of which 4,800 spindles and 1,800 rotors are in A.P.
  • As of March 31, 2019, the AP unit generated a revenue of Rs. 38.43 crore and this constituted 9% of RML's total revenue.

India Moves Up in Competitiveness

  • India has moved up one place to rank 43rd in competitive economy in the world on the back of its robust economic growth, a large labour force and its huge market size, while Singapore has toppled the US to grab the top position.
  • Singapore has moved up to the top, from the third position in 2018, while the US has slipped to the third place in the 2019 edition of the IMD World Competitiveness Rankings. Hong Kong SAR has held onto its second place.
  • The IMD World Competitiveness Rankings, established in 1989, incorporate 235 indicators from each of the 63 ranked economies to evaluate their ability to foster an environment where enterprises can achieve sustainable growth, generate jobs and increase welfare for its citizens.

Texmaco Infrastructure Acquires Real Estate Firm

  • Texmaco Infrastructure & Holdings Ltd. (TI&HL), an 80-year-old company, has acquired Valley View Landholdings Pvt Ltd., a real estate company.
  • TI&HL said that the acquired company is engaged in the real estate business and is planning to develop a large retail project in Goa. It has now become a wholly owned subsidiary of TI&HL.
  • TI&HL, founded in 1939 as Texmaco Limited, continued as a part of the K.K. Birla Group.

Maharashtra Cabinet Extends Power Duty Relief

  • The Maharashtra cabinet cleared a proposal to extend the exemption from electricity duty for industries in Vidarbha and Marathwada till 2024. The exemption is expected to boost industries and create employment in the regio. Ahead of the Assembly polls slated in October, this is also one of the first sops for these backward regions.
  • The exemption was first introduced on March 21, 2013 by the erstwhile Congress-Nationalist Congress Party (NCP) government for five years, which ended on March 20, 2019.
  • Currently, for industries where electricity duty is levied, industrial units pay 9.30% of the consumption charges as electricity duty. Industries including micro, small, medium in C, D and D+ category industrial areas and Maoist-affected areas will benefit from the decision. The exemption is expected to add a burden of Rs. 600 crore annually on the state government.

India Removed from Currency Monitoring List

  • The U.S. removed India from its currency monitoring list of major trading partners, citing steps being taken by New Delhi that addressed some of the Donald Trump administration's major concerns.
  • Switzerland is the other nation that was removed from the list.

RBI Forms Task Force

  • The Reserve Bank of India (RBI) constituted a task force to suggest policy and regulatory interventions required for development of secondary market in corporate loans, including loan transaction platform for stressed assets.
  • The six-member body, headed by Canara Bank chairman T. N. Manoharan, has been set up to review the existing state of the market for loan sale/transfer in India as well as international experience in loan trading.

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.
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