General Awareness

BUSINESS AND ECONOMY - August 2020

Aug 2020

Sep 28, 2020

Facebook Ties Up with Matrix Partners India to Scale Early-stage SMBs

Facebook tied up with early-stage venture capital fund Matrix Partners to scale small businesses in India by providing them with digital skills.
The tie-up is a part of Facebook's VC Brand Incubator Program that collaborates with venture capital funds to help early-stage small and medium businesses (SMBs) to maximise their digital potential.
With the tie-up with Matrix Partners India, the programme also completes one year during which it has collaborated with six VC Funds - Sauce.VC, Fireside Ventures, SAIF Partners, Sequoia Capital, DSG Ventures, and Matrix Partners India - and skilled, trained, and mentored more than 150 brands at various stages of their growth journey.
The 'Boost with Facebook' program went virtual in May reaching out to 4X more people than in an in-person event. The 'FB Advertiser Vintage' program that focussed on skilling young businesses, pivoted to webinars offering custom solutioning, customer acquisition, and test and learn assistance. This program will skill more than 3,000 businesses this year.
Facebook India Director (SMBs) Archana Vohra said that the company is committed to supporting the growth of small businesses in India.

Vakrangee Gets RBI Nod to Set up BBPS Unit

The Reserve Bank granted in-principle approval to Vakrangee Ltd to set up Bharat Bill Payment Operating Unit (BBPOU) to handle payment services related to bills.
Vakrangee (VL) has received in-principle authorisation to set up and operate BBPOU under the Payment and Settlement Systems Act, 2007 from the Reserve Bank of India (RBI.
The company offers banking, insurance, money transfer services, e-commerce, e-governance and other digital services on behalf of its partner banks, insurers, government agencies, e-commerce players among others through its branches mostly located in rural and semi-urban areas.
With 70 per cent of its Nextgen outlets in tier-5 and 6 towns, Vakrangee will have direct access to operate as a unit under BBPOU and provide the bill payment service to its customers in the most remote and hitherto unserved/ underserved parts of the country.

Hundreds of Chinese Investment Proposals in Limbo

Over a hundred of investment applications, primarily from Chinese origin investors looking to pump capital into the Indian startup ecosystem, are stuck in regulatory quagmire. These proposals, ranging from early to growthstage investments, are on hold or are being moved between various departments and ministries as the government continues to maintain strict curbs on capital inflow from Beijing and Hong Kong.
Lawyers representing investors and startups, as well as government officials said that they did not expect clearances anytime soon, till the geopolitical situation between the two countries improved.
In April, India brought into effect a regulation requiring investments emanating from countries with which the country shares a land border, to be cleared directly by the government rather than the earlier automatic approval route. The people cited above said that there has been a steep increase in the number of follow-up questions and demand for additional information by the Department for Promotion of Industry and Internal Trade (DPIIT).

Sep 27, 2020

U.S. Tightens Exports to China's Chipmaker SMIC

The United States has imposed restrictions on exports to China's biggest chip maker SMIC after concluding there is an unacceptable risk equipment supplied to it could be used for military purposes.
Suppliers of certain equipment to Semiconductor Manufacturing International Corporation will now have to apply for individual export licenses.
The latest move marks a shift in U.S. policy from earlier this year, when applicants seeking "military end user" licenses to sell to SMIC were told by the Commerce Department that the licenses weren't necessary, according to three people familiar with the matter.
SMIC said it had not received any official notice of the restrictions and said it has no ties with the Chinese military.
SMIC is the latest leading Chinese technology company to face U.S. trade restrictions related to national security issues or U.S. foreign policy efforts.

India and Denmark Ink Pact to Increase Cooperation on IPRs

India and Denmark inked a Memorandum of Understanding (MoU) to increase cooperation in the area of intellectual property rights (IPRs) by exchanging best practices and collaborating in training programmes.
The two sides will draw up a biennial work plan to implement the MoU which will include detailed planning for carrying out cooperation activities, including scope of action.
The MoU aims to increase IP cooperation between the two countries by way of exchange of best practices, experiences and knowledge on IP awareness among authorities, businesses and research and educational institutions, and collaboration in training programmes, exchange of experts, technical exchanges and outreach activities.
Both the sides would also exchange information and best practices on processes for disposal of applications for patents, trademarks, industrial designs and Geographical Indications, as also for protection, enforcement and use of IP rights.
Besides, the MoU is aimed at enhancing cooperation in development of automation and implementation of modernisation projects, new documentation and information systems in IP and procedures for management of IP, and understanding ways to protect traditional knowledge.

Sri Lanka Seeks Fresh Currency Swap Facility, Deferment of Debt Payments from India

Sri Lankan Prime Minister Mahinda Rajapaksa sought an additional currency swap facility and deferment of debt payments from India during an online bilateral summit with Prime Minister Narendra Modi.
Sri Lanka owes about $960 million to India and earlier this year India agreed to a $400 million currency swap facility for Sri Lanka until November 2022.
As per the Indian foreign ministry, an additional request for a bilateral currency swap arrangement worth around $1 billion by the Sri Lankan side remains under discussion.
Sri Lanka, located off the southern tip of India, has become an arena of competing influence between India and China, which has built ports, power stations and highways as part of President Xi Jinping's signature "Belt and Road Initiative", designed to boost trade and transport links across Asia.
But the terms of some of these projects have drawn domestic criticism in Sri Lanka and opened the way for countries such as India, the United States and Japan to rebuild ties in the Indian Ocean country that lies near key shipping lanes.

Eight of Top 10 Valued Firms Lose Rs. 1.57 lakh cr in Market Valuation

Eight of the top 10 valued firms witnessed a combined erosion of Rs. 1,57,277.53 crore in market valuation last week, with Reliance Industries Limited emerging as the biggest laggard.
Only Infosys and HCL Technologies emerged as gainers among the most valued firms.
The market valuation of Reliance Industries Limited tumbled Rs. 70,189.95 crore to Rs. 14,88,797.82 crore.
Bharti Airtel's market capitalisation tanked Rs. 31,096.67 crore to Rs. 2,39,880.86 crore and that of ICICI Bank plummeted by Rs. 14,752.95 crore to reach Rs. 2,40,329.93 crore.
The market valuation of HDFC declined by Rs. 12,737.66 crore to Rs. 2,96,339.09 crore and that of Tata Consultancy Services (TCS) dived Rs. 10,675.53 crore to reach Rs. 9,08,940.15 crore.
HDFC Bank witnessed an erosion of Rs. 7,286.42 crore to Rs. 5,74,614.23 crore and Kotak Mahindra Bank Rs. 5,710.01 crore to Rs. 2,47,292.12 crore.
Hindustan Unilever Limited's valuation also dropped by Rs 4,828.34 crore to Rs 4,88,179.05 crore.
In contrast, HCL Technologies Limited, the latest entrant in the coveted list of most valuable companies, added Rs. 4,450.79 crore to Rs. 2,24,555.79 crore in its m-cap.
The valuation of Infosys rose by Rs. 3,622.14 crore to Rs. 4,30,647.81 crore.
In the list of most valuable firms, RIL was at the number one rank followed by TCS, HDFC Bank, HUL, Infosys, HDFC, Kotak Mahindra Bank, ICICI Bank, Airtel and HCL Technologies.

Sep 26, 2020

Vodafone Wins Arbitration Case against India

British telco Vodafone Group Plc won a decade-long battle against the Indian tax department's demand of Rs. 20,000 crore, stemming from its entry into the country in 2007. The victory in the Permanent Court of Arbitration in The Hague may finally signal an end to the retrospective tax amendment case that had become a symbol of the country's aggressive tax collection methods. The Vodafone Idea stock rose 13.6% to close at Rs. 10.36 on the BSE.
The government will examine the order and further action will be taken after seeking legal opinion, including whether to appeal against the decision in the appropriate court in Singapore. There was also no question of the government losing Rs. 20,000 crore as Vodafone had not paid the original tax demand or the interest and penalties. The tribunal had not accepted Vodafone's demand for award of damages.

Fino Pyments Bank Launches Contactless Payment for Mass Tranport

Fino Payments Bank along with fintech partners has introduced NFC-based contactless payments solution for mass transit systems, especially state bus transport services in India.
Buses run by state road transport corporations are the most preferred means of travel for majority of people in rural and semi-urban areas where cash is used to purchase tickets.
Fino, which has over 80 per cent of its banking network of 2.75 lakh points in villages, aims to tap the opportunity to digitise cash used in mass transit systems.
Fino's NFC-based prepaid smart card ecosystem facilitates contactless or tap-and-go payments enabling cashless ticketing, it can also be used offline for fare collection.
Fino has already issued over 30 lakh NFC-enabled smart cards that are accepted across 20,000 Maharashtra State Road Transport Corporation buses. It has partnered with fintech firms such as City Cash for developing the contactless payments solution for mass transit systems.

KVIC Appoints Sunil Sethi as Advisor

The Khadi and Village Industries Commission appointed Sunil Sethi,Chairman of the Fashion Design Council of India, as its Advisor.
Sethi will advise the Commission on latest design interventions in the readymade garments segment as well as promotion of Khadi in India and abroad.
Sethi's appointment is for a period of one year. He succeeded fashion designer Ritu Beri whose term expired recently.
Sethi comes with over four decades of experience in global merchandising, where he has contributed significantly to the growth of Indian handicrafts, design and the textile industry, through many innovative and successful initiatives.

LIC, GIC, New India Assurance Systemically Important Insurers: IRDAI

Regulator IRDAI has identified LIC, GIC and New India Assurance as domestic systemically important insurers (D-SIIs) and subsequently decided to subject them to enhanced regulatory supervision.
The three insurers have also been asked to raise the level of corporate governance, identify all relevant risks and promote a sound risk management culture.
D-SIIs will also be subjected to enhanced regulatory supervision.
D-SIIs refer to insurers of such size, market importance and domestic and global inter-connectedness whose distress or failure would cause a significant dislocation in the domestic financial system.
Therefore, the continued functioning of D-SIIs is critical for the uninterrupted availability of insurance services to the national economy.
D-SIIs are perceived as insurers that are 'too big or too important to fail.

Sep 25, 2020

GMR Infra to Sell Stake in Kakinada SEZ to Aurobindo Realty

GMR Infrastructure is selling its entire 51% stake in Kakinada SEZ (KSEZ) to Aurobindo Realty and Infrastructure (ARIPL), in a Rs. 2,610 crore deal.
Definitive agreements for the sale of the equity by wholly-owned subsidiary GMR SEZ and Port Holding (GSPHL) have been signed.
As part of the proposed stake sale in KSEZ, the 100% equity of Kakinada Gateway Port (KGPL) held by KSEZ would also be transferred to Aurobindo Realty.
Total consideration for the sale of equity stake as well as the sub-debt in KSEZ is Rs. 2,610 crore. Of this, Rs. 1,600 crore would be received on the closing date and balance Rs. 1,010 crore in next 2 to 3 years contingent upon certain agreed milestones.

Harley Davidson to Exit India

American cult bike manufacturer Harley Davidson said that it was discontinuing sales and manufacturing operations in India, a decade after it started selling its premium bikes in the country.
As per reports, the company was looking to tie up with a partner to run its business in the country.
The India action will include an associated workforce reduction of approximately 70 employees, Harley-Davidson Inc said in an SEC filing.
The development is part of the company's global "2020 Restructuring Activities". In the second quarter of 2020, Harley-Davidson had initiated restructuring activities like workforce reduction and the termination of certain contracts that would result in the elimination of approximately 700 positions globally, including the termination of approximately 500 employees.
Harley-Davidson planned to close its manufacturing facility in Bawal (Haryana) and significantly reduce the size of its sales office in Gurugram.

RBI Releases Cyber Security Vision for Urban Cooperative Banks

The Reserve Bank of India released Cyber Security Vision Framework for Urban Cooperative Banks (UCBs). The apex bank has taken four different guiding principles in order to formulate the framework. This is because the heterogeneity of UCBs in India in terms of regions, size, digital depth and financial health is huge. A "one size fits all" approach would not be appropriate while prescribing cyber security in the country.
The framework has been released under the title Technology Vision for Cyber Security' for Urban Co-operative Banks (UCBs) – 2020-2023.
The framework aims to achieve its objective through a five pillared strategic approach which is as follows:
a) Governance Oversight: Under this framework, a RBI board will over view cyber security measures being implemented and will create IT Vision Documents based on the progress and gaps
b) Utile Technology Investment: Under this plan, funds are to be created for cyber security projects. To manage business IT Assets and banking service availability.
c) Appropriate Regulation and supervision: Under this a supervisory reporting framework will be created. Also appropriate guidance will be provided in implementing secure practices.
d) Robust Collaboration: A forum to discuss practical issues and challenges and to share best practices is to be created. Cloud services are to be adopted to implement the framework successfully.
e) Developing IT and Cybersecurity Skills Set: The technical skills are to be provided to the UCBs. This will help them manage their own IT and cyber security infrastructure. Also training and awareness are to be provided to all the UCBs on cyber security.
Today all the UCBs are at some stage of technology adoption. This can be ATMs or mobile banking or internet banking. With technology becoming the key driver of banking sector, it is essential for the UCBs to adopt cyber security measures to safeguard their transactions and also boost their technical skills.

Sep 24, 2020

KKR Picks Up Stake in Reliance Retail

US private equity firm KKR & Co will invest Rs. 5,550 crore to buy a 1.28% stake in Reliance Industries Ltd's retail arm as the Mukesh Ambani-run conglomerate extends fundraising spree that has already netted more than $20 billion.
KKR will invest Rs. 5,550 crore into Reliance Retail Ventures Ltd (RRVL), a subsidiary of Reliance Industries Ltd.
The investment values Reliance Retail, which runs grocery stores and fashion chains, at a pre-money equity value of Rs. 4.21 lakh crore.
KKR's investment will translate into a 1.28% equity stake in RRVL on a fully diluted basis.
This is the second investment by KKR in Reliance Industries (RIL) units. It had previously picked up a 2.32% stake in the digital arm, Jio Platforms for Rs. 11,367 crore.
For Reliance Retail, KKR is the second investor. US private equity firm Silver Lake Partners had earlier this month agreed to buy 1.75% stake in the venture for Rs. 7,500 crore.

Havells Enters the Refrigeration Segment

Havells-owned consumer electronics maker Llyod is entering into refrigerator and dishwasher segments which would complete its portfolio of a complete white goods manufacturer.
The company is venturing into these segments before the festive season which is the biggest shopping period for home appliances in the country.
As per Liyod CEO Shashi Arora, Llyod will have a complete range of products, right from entry-level direct cool refrigerator models to frost-free and side-by-side units priced from Rs. 10,000 to Rs. 85,000. For dishwashers, the company's range will start from Rs. 22,000 onwards.
The refrigerator market in India is worth around Rs 25,000 crore with around 30% penetration level right now. By volume, direct cool refrigerators are 70% of the market while 30% are frost-free. By value contribution, direct cool is 60% and balance is frost-free range.
Llyod will be manufacturing the entire refrigerator range in India through a third-party manufacturer even though the products have been designed in-house. The dishwashers will be imported since there are no local manufacturing capabilities yet.

NSE and SGX Ink Formal Pact on NSE IFSC-SGX Connect

National Stock Exchange (NSE) and Singapore Exchange (SGX) have entered into a formal agreement to cement the key terms for operationalising the NSE IFSC-SGX Connect. The two exchanges will also withdraw arbitration proceedings.
The parties did not elaborate on the terms and structure of the formal agreement, but said that the proposed NSE IFSC- SGX Connect will bring together international and Gujarat International Finance Tec-City (GIFT) participants to create a bigger liquidity pool for Nifty products in GIFT City.
In August 2019, the two exchanges had received a set of approved regulatory dispensations from their statutory regulators obtaining their support on a joint proposal that the two exchanges submitted earlier this year.
As per Loh Boon Chye, Chief Executive Officer of SGX, building connectivity across international platforms in Singapore and India will facilitate unfettered access for global market participants, and in turn enhance investments and capital market flows between India and the world.

Nike Expects Permanent Shift to Online Sales

Sportswear firm Nike has seen a huge rise in online sales as it bounces back from a coronavirus slump.
The US company saw digital sales rocket 82% during the June to August quarter, offsetting falling revenue in its stores.
Nike posted revenue of $10.6bn (£8.3bn) as many of its key markets recovered including China.
For its previous quarter revenues were down by more than a third as it tackled store closures and lockdowns globally.
Nike chief executive John Donahoe said that the shift to online sales could be a permanent trend.
"We know that digital is the new normal. The consumer today is digitally grounded and simply will not revert back," Mr Donahoe said.
Nike has been using its website and shopping apps to release limited edition footwear.
The sportswear giant has been transforming itself to sell directly to customers over the past few years, reducing its store presence and retail partners.

CCI Approves Acquisition of 100 Equity Shares of Midlife by API Holdings

The Competition Commission of India (CCI) approved the acquisition of 100 per cent equity shares of Medlife International Private Limited (Medlife) by API Holdings Private Limited (API Holdings) and of up to 19.59 per cent equity share capital of API Holdings by Medlife's shareholders.
The proposed combination relates to the acquisition of 100 per cent of equity shares of Medlife by API and as consideration, the acquisition of up to 19.59 per cent of the equity share capital of API Holdings (on a fully diluted basis), by the Medlife Promoter Shareholders and other shareholders of Medlife. (Prashant Singh, Tushar Kumar and the Prasid Uno Family Trust (Trust) are collectively referred to as Medlife Promoter Shareholders).
API is a private company, incorporated in 2019. API directly or through its subsidiaries carries out various business activities including wholesale sale and distribution of drugs; transportation and delivery services primarily focused on pharmaceutical sector; owning technology and intellectual property for developing e-commerce platforms; and provision of manpower supply, support, business function support for group companies of API Holdings.
Medlife, incorporated in 2014 is primarily a healthcare company engaged in the wholesale sale and distribution of drugs. It also engages in the retail sale of such pharmaceutical products, medical devices and OTC drugs, though pharmacies and an online marketplace. Medlife also healthcare services such as medicines and wellness products, digital doctor consultation and online diagnostic tests services.

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