Latest weekly business news 31st December 2018 to 5th Jan 2019:
– Ericsson India has moved the Supreme Court seeking initiation of contempt proceedings RCom Chairman, Anil Ambani for allegedly not complying with court order to clear dues of Rs 550 crore.
– RIL has received RBI approval for cross-border merger of Reliance Holding USA with Reliance Energy Generation and Distribution.
– Air India has announced launch of new flights to Prayagraj from Delhi, Ahmedabad and Kolkata five times a week between Jan 13 to March 30 to facilitate the movement of passengers during the Kumbh Mela.
– Supreme Court has lifted a stay on the proceedings of a suit filed by the central government against Nestle. National Consumer Disputes Redressal Commission can now continue proceedings against Nestle India, based on the results of tests of Maggi noodle samples.
– RCom has filed a contempt of court plea in SC against DoT claiming that it failed to furnish a no-objection certificate clearing RCom’s spectrum deal with Reliance Jio even after court’s directions.
– The slowdown in US economy may pose a risk to Indian IT Companies like TCS, Infosys and Wipro. Demand for digital services is still linked to the overall health of the economy.
– MobiKwik has reportedly posted revenue of Rs.86 Crores in 17-18, almost double from the previous fy. However, the losses have widened to Rs.200 Crores from Rs.132 Crores.
– Reliance Jio has started to devour Airtel and Vodafone Idea user base. It added around 10 million users almost every month in 2018. In October, Jio added 10.5 million users while Vodafone Idea lost 7.3 million and Airtel 1.8 million users.
– As per industry analysts, Naresh Goyal may have to give up management control of Jet Airways if they want to raise capital. The airlines needs to immediately raise around $250-300 million to pay off its dues to lenders and other vendors.
– Five asset management companies will make their pitch to manage India’s first exchange traded fund which will hold PSUs debt securities. These are SBI Funds Management, Reliance Nippon, Edelweiss, Aditya Birla Sun Life and UTI Asset Management.
– Sebi has barred Sanraa Media and seven other entities, including Clifford Capital Partners, for around five years from securities market in a GDR manipulation matter. It has also directed Sanraa to recover $27.244 million from Clifford within three months.
– NCLAT disposed off a contempt plea on payment defaults against Reliance Infratel by HSBC Daisy Investments and other minority shareholders on technical grounds. It however gave HSBC Daisy liberty to approach again.
– Union Cabinet has given its approval for the proposed merger of Vijaya Bank and Dena Bank with Bank of Baroda. The merger will be completed by 1st April 2019. Vijaya and Dena shareholders will get 402 & 110 shares respectively for every 1000 shares of BoB.
– Amazon and Flipkart are planning to form a united front to take up discussions with the government on the new e-comm policy. They are reportedly also planning to seek help from industry bodies CII and Ficci and investment giants SoftBank, Sequoia, Naspers and Tiger Global.
– DGCA has issued notice to SpiceJet airlines after a video of on-board New Year celebrations appeared on social media.
– Tata Cleantech Capital has raised Rs 180 crore via a green bond offering from Netherlands Development Finance company for its renewable energy projects.
– Syndicate Bank would raise upto Rs.500 Crores by issuing shares to employees.
– RBI has allowed Paytm Payments Bank to restart opening accounts of new customers. It had restricted Paytm from opening any new accounts on 20th June following issues with KYC norms.
– GST collection in December dropped to Rs.94,726 crore from Rs.97,637 crore collected in November 2018.
– Jet Airways has defaulted on debt payment to a consortium of banks led by SBI, stating the reason being “due to temporary cash flow mismatch”.
– Reliance Industries raised Rs.5,500 crores through private placement of NCDs in December.
– Online sellers’ representative body alleged that Ekart has fired around 300 seasonal workers. However, Flipkart has said that those workers were hired through third-party vendors for a limited duration.
– Uday Kotak has missed the deadline of 31st December set by RBI to cut his holding in the bank to 20%.
– Shapoorji Pallonji has hired ICICI Securities for managing IPO of its solar business.
– The government has turned down the demand of airlines’ for alternative airports including reopening old airports in major cities. Airlines had requested this citing shortage of slots and overnight parking bays at major airports.
– Some leading American industry advocacy groups have said that India’s tightening restrictions on foreign e-comm companies operating in India would have a long-term negative impact on FDI.
– M&M Financial Services has received approval from RoC to raise up to Rs.10,000 crore through NCDs.
– Jet Airways is said to be in discussions with SBI for raising a short-term loan of Rs.1,500 crore to meet its working capital requirements and payment obligations including the overdue employee salaries.
– As part of the revival plan, the government is planning to rope in professionals for top positions in Air India through a global research process.
– Sebi has started work to improve its market surveillance system, Business intelligence system as also the data warehousing.
– Online Electronic brands like BPL, TCL, Vu are exploring ways to get past restrictions like exclusive sales through measures like setting up their own online stores and going offline among others.
– Bombay HC has allowed Amul to air its ice-cream ads, but only after deleting content objected by HUL. Amul’s ads asked customers to choose ice-creams over frozen desserts and claimed that frozen desserts were made with vanaspati. HUL filed a lawsuit asking for Amul to be stopped from airing the ads and seeking damage as its Kwality Walls is the largest frozen dessert brand in India.
Policies & Practices:
– The government has exempted innovative medicines developed by foreign companies from price control for five years. This will give Indian patients access to drugs currently available abroad only.
– RBI has set up an expert committee under U.K. Sinha, former Sebi chairman, to suggest long-term solutions for MSME sector’s economic and financial sustainability.
– RBI has permitted a one-time restructuring of existing loans to MSMEs which are in default but ‘standard’ as on 1 January 2019.
– GST Council is likely to consider raising the sales threshold for compulsory GST registration from Rs.20 lakh to between ₹50 lakh and ₹75 lakh in its meeting to be held later this month.
M&As and tie-ups:
– Sun Pharma has completed the acquisition of Japan-based Pola Pharma to strengthen its presence in dermatology segment across the globe.
– Malaysia Airports Holding has terminated its Share Purchasing Agreement with the GMR Group for selling its 11% stake due to non-fulfilment of obligations by GMR as per the agreement.
– Ashok Leyland has acquired 27.25% additional stake in Ashley Aviation. With the acquisition its shareholding is now 76.25%. Ashley Aviation is Hinduja Group’s flagship firm.
– The Cabinet Secretariat has instructed ministries not to engage with US directly on trade issues and go through the Deptt of Commerce only. US is seeking unconditional market access for dairy goods in India, as also incentives and tariff concessions for ICT products.
– RBI has extended enhanced single borrower limit facility for NBFC sector by another three months. This will give NBFCs the much-needed liquidity support.
Start-up world, funds and fundings
– Due to the scalability of AI startups, Google Launchpad’s India accelerator programme will continue to focus on them only. Applications for its second class were opened last week. Google has indicated that in future, Google Launchpad may backup agriculture and healthcare technology too.
– CarDekho raised $110 million in a Series C round of funding from its existing investors at a valuation of $400-500 million.
– Fractal Analytics is said to be in advanced talks to raise around $200 million from Apax Partners. Fractal works as a strategic analytics partner to several Fortune 500 companies with its 1200 consultants across 15 locations.
– Venture capitalists may be eyeing late-stage startup deals in 2019. Startups scaled up faster in 2018, leading to bigger funding rounds.
– Zomato is reportedly looking to raise another round of funding between $500 million to $1billion. It has so far raised $635 million and is valued at $2 billion.
– Qualcomm Ventures aims to back Indian startups in sectors like healthcare, financial services, mobility-tech under its recently-launched AI fund of $100 million AI fund. The firm has backed startups such as Portea, Ninjacart and YourStory.
– Sidbi has said that only Rs.1900 Crore, out of the total Rs.10,000 Crore set aside for Startup India initiative has been committed to VCs by the end of December 2018.
– As per a report by Yostartups, in 2018, Indian startups are estimated to have raised $38.3 billion in funding. These include Flipkart’s $16 billion, Swiggy’s $1.3 billion and around $1 billion by OYO.
– As per the data compiled by Business Standard, listed capital goods, construction and infra companies reportedly won orders of more than Rs.2.67 trillion in 2018. The figure is 30% higher than the Rs.2.05 trillion reported in 2017.
– As per an RBI report, banks recovered Rs.40,400 crores from defaulters through various channels including Insolvency and Bankruptcy Code, Lok Adalats, debt recovery tribunals and SARFAESI Act.
Updates on ongoing cases:
– Essar steel case – NCLAT has told NCLT to speed up the insolvency case of Essar Steel.
– Tamil Nadu state government has moved SC against NGT order to reopen Sterlite plant.
– IL&FS update – NCLT has allowed the government to reopen and recast accounts of IL&FS and its subsidiaries – IL&FS Financial Services and IL&FS Transportation Network. The firm has also put a residential and one commercial property for sale to reduce debt.
– Jindal Steel & Power has appointed Sudhanshu Saraf as steel CEO.
– Shikha Sharma, MD & CEO of Axis Bank, has retired. Amitabh Chaudhry will be taking her place.
– The government has appointed Hemant Bhargava, MD, LIC as interim chairman. He is taking over from recently retired V K Sharma. The process for selection of regular chairman & MD has also been started.