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BUSINESS AND ECONOMY - November 2019

Nov 2019

Nov 30, 2019

Planned Aramco-Adnoc Refinery In India To Cost $70bn

  •  A massive refinery complex to be built on the western coast of India by Saudi Aramco and Abu Dhabi National Oil Company is expected to cost as much as $70 billion, nearly twice the amount initially estimated.
  • The 1.2 million barrels-per-day greenfield integrated refinery and petrochemicals complex being planned in the Maharashtra state will be supplied with 600,000 bpd of Saudi crude. The refinery plans were part of several investment pledges made during the visit of Saudi Crown Prince Mohammed bin Salman to the UAE capital.

Reserve Bank sends DHFL to NCLT for debt resolution

  •  The Reserve Bank sent the troubled mortgage lender Dewan Housing Finance (DHFL) for bankruptcy proceedings, making it the first financial services player to go to NCLT for a possible debt resolution.
  • Last week, the central bank had superseded the board of the third-largest pureplay mortgage lender on concerns over its corporate governance and defaults, and appointed an administrator.
  • The Reserve Bank today (Friday) filed an application for initiation of corporate insolvency resolution process (with the NCLT Mumbai) against DHFL under Section 227 of the insolvency and bankruptcy code.

India, ADB Sign $451 Million Loan To Strengthen Power Connectivity In Tamil Nadu

  •  India and Asian Development Bank (ADB) signed a 451 million dollar loan to strengthen power connectivity between southern and northern parts of Chennai-Kanyakumari Industrial Corridor (CKIC). 
  • CKIC is a part of East Coast Economic Corridor (ECEC) in Tamil Nadu and ADB is the lead partner of government for developing ECEC.
  • The signatories to the loan agreement were Sameer Kumar Khare, Additional Secretary (Fund Bank and ADB) at the Department of Economic Affairs, and Kenichi Yokoyama, Country Director of ADB's India Resident Mission.

Hallmarking Mandatory For Gold Jewellery Beginning Jan 2021

  •  Union Minister for Consumer Affairs Ram Vilas Paswan on Friday said that the Centre will make hallmarking compulsory for gold jewellery beginning January 15, 2021.
  • The government will issue a notification on January 15, 2020, to make hallmarking mandatory for gold jewellery and it will come into force one year later, that is from January 15, 2021.
  • After the issue of the notification, it will become mandatory for the jewellers to register with the Bureau of Indian Standards (BIS) and sell only hallmark gold jewellery and artefacts beginning January 15, 2021.

BlackBuck Partners With IDFC Bank, Yes Bank To Offer Free FASTags To Truckers

  •  Online trucking platform BlackBuck has partnered with private lenders IDFC Bank and Yes Bank to provide FASTags to truck owners free of cost.
  • Truck owners can order FASTags on BlackBuck's Boss App, a digital services platform exclusively for truck fleet owners, and it will be delivered at their doorstep free of cost until December 31, 2019.
  • BlackBuck offers free FASTags to truck owners across India. The FASTags on BlackBuck Boss app are provided in partnership with IDFC Bank and Yes Bank. The initiative is expected to help over 3 million trucks in India become FASTag compliant.

Nov 29, 2019

Airtel Offers Rs. 9,500 cr for RCom Assets

  •  Bharti Airtel Ltd offered the highest upfront cash settlement among four bidders for Reliance Communications Ltd's assets, which are under insolvency proceedings.
  • Bharti Airtel offered about Rs. 9,500 crore to acquire the assets that include spectrum, telecom towers, fibre, data centres and real estate. Upfront cash is often a key factor that creditors evaluate while deciding on a winning bidder.
  • Reliance Jio, which had agreed to buy the assets of Reliance Communications in 2018, did not bid for the spectrum and real estate assets this time. Reliance Jio Infocomm offered Rs. 3,600 crore as upfront cash payment, but has not placed a bid on RCom's spectrum assets or the company's real estate.
  • New Delhi-based UV Asset Reconstruction Co. Ltd offered a bid of Rs. 12,760 crore, which will be staggered over several years.

Punjab Launches EMS & Web-GIS to Ease Business

  •  The Punjab Small Industries and Export Corporation (PSIEC), under the visionary leadership of Capt. Amarinder Singh, launched Estate Management System (EMS)&Web-GIS (Geographic Information System) with the aim of ensuring transparency and promoting ease of doing business in the State.
  •  Through EMS, applicants/ allottees will be able to apply for allotment of industrial/ commercial/ residential plots, pay dues online and also availpost-allotment services with respect to their plots. 
  • Web-based GIS will facilitate applicants/allottees to know about land availability, provision of basic amenities, like roads, sewage, electricity etc. and proximity to roads, railways, airports, dry ports etc. 

Warburg Plans$1.5 bn Fund for Indian Market

  •  Private equity firm Warburg Pincus LLC is looking to raise up to $1.5 billion for its first fund targeting deals in India, betting on a surge in investment opportunities in Asia's third-largest economy. 
  • Warburg plans to finish fundraising on its India-focussed fund, which will target industrial sectors such as financial, manufacturing and consumer, by the first half of 2020. Launches of India-focused private equity funds are rare, and big global buyout firms such as KKR & Co Inc, Bain Capital and Blackstone Group Inc. typically invest in a country mainly from their regional funds. Warburg declined to comment. 
  • The sources did not want to be identified as the firm's plans are not public yet. Private equity investments are expected to pick up in India as some companies look to sell shares to fund growth, while some family-owned firms explore selling controlling stakes to pay off debt.

Foreign Retail Companies Expand Footprint in China: MOC

  •  Foreign retail companies expanded their businesses in China with more storefronts and new brands in 2019.
  • As per said MOC spokesperson Gao Feng, since the beginning of this year, a slew of international companies including Adidas, Nike and Lego have opened new flagship stores in major Chinese cities, while German supermarket chain ALDI entered the Chinese mainland market and Lawson convenience stores swept across third- to fourth-tier cities.
  • China's retail market is marked by openness and rapid growth.

Govt. Seeks Parliament Nod for Rs. 21,246 cr Extra Spend

  • Finance Minister Nirmala Sitharaman sought parliamentary approval for gross additional expenditure of Rs. 21,246 crore, part of which will be used to recapitalise IDBI Bank Ltd and three state-run insurers.
  • The government will use the funds to infuse Rs. 4,557 crore into IDBI Bank and Rs. 2,500 crore into state-run insurance companies through recapitalisation bonds. This will help IDBI Bank, now controlled by state-owned Life Insurance Corporation of India, to come out of the restrictive prompt corrective action framework.
  • The fund infusion into the three state-run general insurers—National Insurance, United India Insurance and Oriental Insurance—ahead of their proposed merger will help them maintain solvency margin and wipe out losses. 

Nov 28, 2019

Three UP Regional Rural Banks to be Amalgamated

  •  Three regional rural public sector banks - Baroda Uttar Pradesh Grameen Bank, Kashi Gomti Samyut Gramin Bank and Purvanchal Bank will be amalgamated on April 1, 2020 into a single regional rural bank which will be called Baroda UP Bank.
  • The headquarters of the Baroda UP Bank will be in Gorakhpur under the sponsorship of Bank of Baroda. Bank of Baroda is the sponsor of Baroda Uttar Pradesh Grameen Bank, Union Bank of India is the sponsor of Kashi Gomti Samyut Gramin Bank while the State Bank of India is the sponsor of Purvanchal Bank.
  • The government had after consultations with the National Bank for Agriculture and Rural Development (NABARD) and the sponsor banks of the concerned regional rural banks decided that it was necessary in public interest and the interest of the three regional rural banks that they be amalgamated. 

ZEEL Comes Under SEBI Scanner

  • Zee Entertainment Enterprises Ltd. (ZEEL) has come under the scanner of the Securities and Exchange Board of India (SEBI) after it emerged that two directors — independent director Neharika Vohra and non-independent director Subodh Kumar — had raised concerns relating to corporate governance and related party transactions in their resignation letters.
  • The capital market regulator is believed to be looking into some of the allegations, including non-implementation of certain board decisions taken in October relating to treasury operations and issues raised regarding build up of related party balances and advances for content acquisition.

India Seeks Review of FTAs with ASEAN and Japan

  • India has sought review of its existing free trade agreements (FTAs) with ASEAN and Japan.
  • Commerce and Industry Minister Piyush Goyal said that eight rounds of negotiations have been held with South Korea for upgrading the existing comprehensive FTA.
  • As per Piyush Goyal, India and the European Union have held eight stock taking level meetings since the resumption of their negotiations in 2016 on a proposed Bilateral Trade and Investment Agreement (BTIA). 

Ujjivan SFB to Reverse-merge Holding Firm

  •  Ujjivan Small Finance Bank, which is coming out with an initial public offer on December 2, 2019 will reverse-merge the listed holding company after two years.
  • As per MD and CEO of the bank, the Reserve Bank of India (RBI) had asked the bank to apply for the reverse merger after it completed five years of operations. The bank started operations in February 2017. The holding company, Ujjivan Financial Services, is also listed.
  • The small finance bank announced its initial public offering to raise Rs. 750 crore. The bank has raised Rs. 250 crore through pre-IPO placement.
  • Ujjivan Financial Services is the promoter of Ujjivan SFB and has 100% stake in the bank. The bank will also have to bring the promoters' holding to 40% by 2022, but may request the regulator to review the norm.

RIL Becomes First Indian Company to Hit Rs. 10 lakh crore Market Cap

  •  Mukesh Ambani-led Reliance Industries hit Rs. 10 lakh crore mark in market capitalisation as the bulls pushed the stock to new highs. It became the first India company to reach the coveted milestone.
  • Tata Consultancy Services, the second most valued firm on the bourses, has a market cap of Rs 7.81 lakh crore.
  • RIL was also the first company to reach Rs 8 lakh crore mark in August last year. It was also the first company to hit the $100 billion mark in market-cap in 2007.

Government Extends 15th Finance Commission's Term

  •  The Union Cabinet extended the term of 15th Finance Commission to submit its final report covering its suggestions for financial years 2021-22 to 2025-26 by Oct. 30, 2020. 
  • The commission would submit an interim report soon covering its suggestions for 2020-21 so that these can be used for the next year's budget. Headed by NK Singh, the 15th Finance Commission had to submit its suggestions for the five-year period commencing April 2020.
  • But it could not complete its recommendations as Jammu & Kashmir was split into two union territories, and the J&K Reorganisation Bill stated that distribution of taxes to the state to be apportioned to union territories of J&K and Ladakh, making the panel's job complex.
  • As per the government, the extension of the term will enable the commission to examine various comparable estimates for financial projections in view of reforms and the new realities to finalise its recommendations for the period 2020-2026.

Saudi Will Work on Raigarh Refinery Once Land is Allocated

  •  Saudi Arabia reiterated its willingness to begin work on a $60 billion oil refinery to be built in Maharashtra by Saudi Aramco and UAE's Abu Dhabi National Oil Co. (Adnoc) as soon as the Indian government allocates land for the project.
  • The refinery, to be built with the participation of state-run Indian Oil Corp. Ltd, Hindustan Petroleum Corp. Ltd and Bharat Petroleum Corp. Ltd, figured in talks between Prime Minister Narendra Modi and the top Saudi leadership.
  • As per Saudi ambassador Saud bin Mohammed Al Sati, Saudi is committed and ready to start working immediately after things are finalised (for acquiring land) and is also looking to work with other states in India in the energy and petro-chemical sectors.
  • The refinery, originally to be located at Ratnagiri in Maharashtra, was held up after the region's mango farmers refused to part with their land. Raigarh was later chosen as the new site for what will be the world's largest greenfield refinery.

Nov 27, 2019

Infra Spending by States Must Rise

  • According to rating agency Crisil, states need to scale up investments to Rs 110 lakh crore over the next decade to achieve India's massive infrastructure targets. While releasing its Infrastructure Yearbook 2019, the agency said that States already account for 41 per cent of the overall infrastructure spending of Rs. 77 lakh crore this decade.
  • As per Crisil, infrastructure investments by states need to rise to Rs. 110 lakh crore over the next decade (fiscal 2021-2030) - or 3.5 times an estimated Rs 32 lakh crore in the current decade - if India is to achieve its mammoth infrastructure buildout targets.
  • The agency said that for the country-wide infrastructure, required spending will be Rs. 235 lakh crore over the next decade, and called for average GDP growth of 7.5 per cent and infrastructure spending of above 6 per cent of GDP to help achieve this.
  • Five sectors - transport, irrigation, energy, urban & housing, and water & sanitation - accounted for two-thirds of states' spending.

Marriott International to Open 54 Hotels in India

  • Marriott International, one of the world's largest hotel chains that hosts over a million guests per night around the globe, is betting high on India.
  • The hospitality major, which currently manages 120 hotels under 17 brands across the country, will open 54 new hotels by 2025, to add 15,000 fresh rooms to its existing bunch of 24,000 keys.

CUB in Pact With Fizwizard Tech For MF Investments

  •  City Union Bank Ltd. (CUB) tied up with Finwizard Technology Pvt. Ltd. to help its customers invest in mutual funds (MFs) through its 'all-in-one' mobile application. A senior bank official said that with the new app, the bank's customers can invest in MFs through simple, guided interaction. CUB tied up with Finwizard Technology to provide the mutual fund [investment] facility which is integrated with mobile banking.
  • The new app comes with multi-lingual interactive chatbot and will be available on Google Playstore.
  • This app has important features such as optimised user interface, e-wallet, unified payments interface, conversational bot, m-passbook, set card limit and cardless withdrawals among others.

Vistara Joins Hands with SBI Card to Launch Premium Credit Cards

  •  Vistara Airlines tied up with SBI Card to launch two variants of cards, including Club Vistara SBI Card PRIME and Club Vistara SBI Card, to offer a rewarding travel experience to cardholders, who will avail multiple benefits and value proposition on domestic as well as international travel spends.
  • The card benefits include one-way Premium Economy tickets on joining and achieving spends-based milestone (s), complimentary Club Vistara Silver tier membership, up to six free cancellation of flight tickets booked on Vistara channels viz. website, app and helpline, and also complimentary lounge access- up to four international and eight domestic, among host of other facilities.

RBI Deputy Governor Red-flags Rising Stress in Mudra Loans

  •  Reserve Bank of India deputy governor M. K. Jain raised red flags over rising non-performing assets (NPAs) in loans disbursed under the government's Mudra Loan Scheme and urged banks to monitor the repayment capacity of borrowers before disbursement.
  • The Pradhan Mantri Mudra Yojana is a central government scheme under which small businesses can avail collateral-free working capital loan up to Rs. 10 lakh. The scheme was flagged off in 2015 by PM Modi to ease the credit flow to India's MSME sector.
  • The Mudra is a case in point while such a massive push would have lifted many beneficiaries out of poverty, there has been some concern at the growing level of non-performing assets among these borrowers. Interestingly, this is the second such warning by a senior central banker this year to banks over rising delinquencies in these loan accounts. 

Nov 26, 2019

WhatsApp to Offer Start-ups in India with $250,000 Worth of Facebook ad Credits

  •  Messaging giant WhatsApp will provide 500 DPIIT-approved start-ups with USD 500 (around Rs. 35,840) each of Facebook ad credits, a move aimed at helping Indian entrepreneurs connect with customers and grow their businesses.
  • With the ad credits, the start-ups can create ads that invite customers to click to open a chat on WhatsApp so they can deepen connections and increase sales.
  • The announcement comes after the Start-up India-WhatsApp Grand Challenge under which facebook-owned company had awarded a grant worth USD 50,000 (about Rs. 35 lakh) each to five entrepreneurs who have developed India-specific solutions with socio-economic impact.

WhatsApp to Offer Start-ups in India with $250,000 Worth of Facebook ad Credits

  •  Messaging giant WhatsApp will provide 500 DPIIT-approved start-ups with USD 500 (around Rs. 35,840) each of Facebook ad credits, a move aimed at helping Indian entrepreneurs connect with customers and grow their businesses.
  • With the ad credits, the start-ups can create ads that invite customers to click to open a chat on WhatsApp so they can deepen connections and increase sales.
  • The announcement comes after the Start-up India-WhatsApp Grand Challenge under which facebook-owned company had awarded a grant worth USD 50,000 (about Rs. 35 lakh) each to five entrepreneurs who have developed India-specific solutions with socio-economic impact.

Jio, Airtel Submit Bids for RCom's Assets

  • Reliance Jio Infocomm Ltd and Bharti Airtel Ltd submitted bids for assets of bankrupt Reliance Communications Ltd (RCom) and its two units.
  • Airtel and Bharti Infratel, which had earlier bid together for RCom, are likely to have bid jointly again. That bid was withdrawn in protest against the deadline extension made on the request of Reliance Jio.
  • China Development Bank, Life Insurance Corp. of India, State Bank of India, Exim Bank of China and Bank of Baroda are among the 41 creditors to the beleaguered Anil Ambani group company. According to information available on the company's website, it owed financial creditors Rs. 49,193.46 crore at the time of being taken to bankruptcy court in May 2018.
  • The company's subsidiaries are Reliance Telecom Ltd and Reliance Infratel Ltd. They owe financial creditors Rs. 24,306.27 crore and Rs. 12,687.65 crore, respectively. Reliance Communications thus owes debtors Rs. 86,187.58 crore at a consolidated level. This is besides Rs. 28,837 crore it owes to the department of telecommunications (DoT) in spectrum dues and other charges as well as the amounts it has to pay its operational creditors.

Louis Vuitton acquires US Jeweller Tiffany

  •  Louis Vuitton SE, also known as LVMH, and US jewellers Tiffany announced a $16.2-billion tie-up that is the French luxury group's biggest-ever acquisition and will bolster its presence in the US. The deal comes after LVMH spent more than a month wooing Tiffany, the most iconic of US luxury brand known for its wedding rings and diamonds.
  • The companies have entered into a definitive agreement whereby LVMH will acquire Tiffany for $135 per share in cash, in a transaction with an equity value of approximately 14.7 billion euros or $16.2 billion. The deal adds Tiffany to LVMH's extensive stable of luxury brands that include Louis Vuitton, Dior and Moet & Chandon and will strengthen its position in the jewellery sector.
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