Jet Airways ownership diluted, Yes Bank comes clean, Economic measures against Pak- Weekly Digest #76

Monday- 11th February 2019

  • The parliamentary standing committee on IT refused to meet representatives of Twitter India, insisting that CEO Jack Dorsey would have to appear before it in 15 days. The committee has insisted on meeting someone who can be held accountable for Twitter’s actions in India.
  • The government is aiming to raise ₹5,316 crore by selling its 3% stake, owned through the SUUTI, in private sector lender Axis Bank. The stake sale is aimed at helping the North Block meet its budgeted disinvestment target. The offer for sale is at ₹689.52 apiece.
  • GR Gopinath, the founder of Deccan Aviation Ltd, is under the scanner of investigative agencies for his alleged role in the debt default by fugitive economic offender Vijay Mallyafounded Kingfisher Airlines. Gopinath was a Kingfisher Airlines director when the said loans were disbursed.
  • General Atlantic Partners and Varde Partners have emerged the frontrunners to pick up a 22% stake in PNB Housing Finance from Punjab National Bank for around ₹3,500 crore. PNB has decided to stay invested with a 10.7% stake and choose two buyers instead of selling the entire block to one suitor.

 

Tuesday-  12th February 2019

  • The TRAI has extended the deadline by which consumers should select the television channels they want to pay for to March 31. Trai said 65% of cable subscribers and 35% of DTH users have adopted the new tariff system.
  • The retail inflation, measured by the Consumer Price Index, eased to an 18-month low at 2.05%. The previous low for consumer inflation was 1.46% in June 2017.
  • The parliamentary standing committee on finance has asked the government to set up a high-level inquiry commission to identify the reasons behind the IL&FS default crisis.
  • The Directorate of Revenue Intelligence has issued a notice to technology major IBM, asking it to pay ₹620 crore in unpaid customs duties for equipment imported into the country.
  • The Centre’s sale of Axis Bank shares, held through the SUUTI, was subscribed 1.4 times on the first day of the issue. The sale offer received institutional bids for 103.4 million shares against the total size of 43.1 million shares.

 

Wednesday-  13th February 2019

  • R Venkataraman, amidst tax row over his remuneration and under the scanner of the investigating agencies, stepped down as managing trustee of the Tata Trusts. Noel Tata has been inducted as a trustee of the Sir Ratan Tata Trust.
  • Chinese ride-hailing giant Didi Chuxing has invested $100 million in hospitality chain Oyo Hotels & Homes. This values OYO at $5 billion. This brings to a close Oyo’s $1 billion financing round led by existing backer SoftBank Vision Fund, which has pumped $800 million into the company.
  • 7-Eleven, the world’s largest convenience store chain, is in advanced talks with India’s Future Group to enter the Indian market. The Kishore Biyani-owned retail company to open and operate small format 7-Eleven stores in India as a master franchisee.

 

Thursday- 14th February 2019

  • Jet Airways founder-promoter Naresh Goyal to lose control of his airline after the board approved a proposal allowing a consortium of banks, led by SBI to convert a portion of their debt into equity, making them the largest shareholders. The stake of Goyal could drop to as low as 20% from 51%.
  • US private equity firm KKR is in advanced negotiations to invest as much as .₹2,000 crore in the Emami Group through a structured credit deal. The amount is to be utilised to repay some of its high-cost debt and raise funds for working capital requirements.
  • The shares of Yes Bank surged to a three-month high after the lender said the RBI hadn’t found any deviation in its reporting of bad loans and as brokerages upgraded the stock. The shares climbed 31% to ₹221 at the close of the day.
  • Sundaram MF has cancelled the dividend in its Small Cap Fund citing “non-availability of distributable surplus” to pay its unitholders. The scheme had proposed a dividend of 35p p.u., but the sharp drop in mid- and smallcap stocks have crimped its ability to make the payout.

 

Friday- 15th February 2019

  • Prime Minister Narendra Modi’s warning that those behind Pulwama terror attack which killed over 40 CRPF soldiers would pay a “very heavy price” came after the Cabinet Committee on Security agreed that strong retaliatory action must be taken. The CCS also gave its go-ahead to a strategy to isolate Pakistan diplomatically.
  • A consortium of banks, along with the National Investment and Infrastructure Fund (NIIF) and Etihad, will invest about ₹3,400 crore in Jet Airways, diluting the control of founder-promoter Naresh Goyal.  Following the infusion, the banks will own 32% stake and Etihad and the NIIF will hold about 24.9% and 19.5%, respectively.
  • India revoked Pakistan’s most-favoured-nation status following the Pulwama terrorist attack that killed over 40 CRPF personnel and is exploring the possibility of further economic measures to tighten the screws on its neighbour. The Customs Duty on import from Pakistan has also been enhanced to 200%.
  • One97 Communications, which owns digital payments major Paytm, has pledged all its current assets and mutual fund investments to ICICI Bank in order to be able to borrow up to ₹1,400 crore for working capital.
  • The RBI has warned Yes Bank with regulatory action for making public its observation of the bank’s risk assessment report, which had said there was no divergence between what the bank reported as non-performing assets and that identified by the regulator.

 

Source: The Economic Times
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