SC Warns Anil Ambani, Sachin Bansal Invests in Ola, RBI Funds the Government – Weekly Digest #77

Monday- 18th February 2019

  • The RBI to pay ₹28,000 crore as interim dividend to the government, which will help the Center meet its revised budget estimates and polish its fiscal credentials ahead of the general elections. With this interim transfer, the government will get a total ₹68,000 crore from the central bank in the current fiscal.
  • US cable major Comcast and Sony Corp have been shortlisted for talks that could lead to the purchase of a substantial stake in Zee Entertainment. Chinese suitors Tencent and Alibaba, thought to be potentially strong contenders initially, have not yet made an offer.
  • Flipkart is creating a layer of B2B entities that will act as intermediaries between its wholesale arm and prominent sellers on its platform to comply with foreign investment rules for e-commerce marketplaces.
  • Beverage maker PepsiCo to divest its bottling franchisee rights in the West and South of the country to Ravi Jaipuria-owned Varun Beverages in a deal estimated at ₹1,850 crore and involving the transfer of 1,900 employees. Varun Beverages board has approved the plan to acquire the rights for bottling, sales and distribution in seven states and five Union Territories from PepsiCo India.
  • Infosys settled a case pertaining to the severance package for former CFO Rajiv Bansal by paying ₹34.35 lakh as consent fees to the market regulator, which had found the compensation was not in accordance with the remuneration policy. In May 2016, Infosys disclosed that it had awarded over ₹17 crore as severance pay to Bansal, who resigned in October 2015.

Tuesday-  19th February 2019

  • Flipkart co-founder Sachin Bansal has invested ₹650 crore in homegrown ride-hailing platform Ola. The capital being infused by Bansal constitutes more than 10% of his personal wealth garnered from the $16-billion Walmart-Flipkart deal, and will give him around 2% stake in Ola.
  • Walmart CEO Doug McMillon said it was disappointing that the Indian government had changed norms for the FDI in e-commerce without consultation. The government tightened norms, prohibiting marketplaces from selling products of affiliates and stipulating that such entities cannot exercise ownership or control over inventory.
  • Sir Dorabji Tata Trust has appealed against the income tax department’s order that stemmed from the salary of outgoing managing trustee R Venkataramanan. The department had withdrawn the exemption given to such philanthropic organisations on account of this in order.
  • Singapore’s GIC and Japan’s Mitsubishi Corp are in talks with GMR Infra for a minority stake in its airport holding company as the Indian airport developer steps up attempts to reduce its debt and get more investors. GMR aims to raise ₹4,000-5,000 crore by selling its stake in the airport business. The money will primarily be used to retire part of ₹20,000 crore of its net debt.

Wednesday-  20th February 2019

  • The Supreme Court held Reliance Communications chairman Anil Ambani in contempt for not paying Ericsson’s dues worth ₹550 crore despite having the money to do so, threatening to send the businessman to jail for three months if he didn’t cough up what was owed in four weeks. The amount due in four weeks is ₹453 crore.
  • The promoters of DHFL, gripped by a liquidity crisis amid allegations of financial irregularities, have mandated Barclays Group Plc and NM Rothschild to run a formal process to find a buyer. Holding company Wadhawan Global Capital has initiated talks with more than a dozen financial and strategic investors in India and abroad to sell a controlling stake.
  • Saudi Aramco, the world’s most profitable company, is in talks with Indian refining giant Reliance Industries and other companies for investing in refineries and petrochemical projects in the country. Top Saudi officials, on a visit to New Delhi along with Crown Prince Mohammed bin Salman, said India was the top priority.
  • Sovereign wealth funds GIC Holdings Pte Ltd of Singapore and Abu Dhabi Investment Authority are investing $550 million of fresh primary capital in Greenko, India’s largest renewable energy firm. This will be the third round of capital infusion by the two, making the Hyderabad-based company the biggest recipient of foreign capital in the clean energy space in the country.
  • Engineering and construction giant L&T has asked the SEBI to reconsider its proposal for its Rs 9,000 crore share buyback. SEBI had shot down L&T’s plan last month on the grounds that the group’s consolidated debt to equity ratio would cross two times the paid-up capital and reserves after the completion of the share buyback programme.

Thursday- 21st February 2019

  • Amid controversy on loans against shares, the RBI has asked the NBFCs to disclose the moratorium or grace period given to borrowers. Besides mutual funds, NBFCs are large lenders against shares, often funding promoters to diversify and raise stake through creeping acquisition.
  • The Adani Group has made a formal offer to buy out the 23.5% stake in the Mumbai Airport, held by two South African firms- Airports Company South Africa (ACSA) and Bidvest at a valuation of ₹9,500 crore.
  • In a significant consolidation move in the sector, Uber Eats, the food delivery arm of the global ride-hailing platform Uber, is in final stages of negotiations to sell its India business to rival Swiggy. The transaction is likely to be a share swap, giving Uber about 10% stake in Swiggy, last valued at $3.3 billion.
  • The Government-owned SBI and PNB have agreed to provide ₹500 crore emergency funding for Jet Airways. This money will allow the airline to continue operations until the lenders determine the best way of restructuring the company’s debt of more than ₹8,000 crore.

Friday- 22nd February 2019

  • The Enforcement Directorate is investigating the IL&FS Employee Welfare Trust (EWT) over possible irregularities, extending its probe into alleged money laundering related to subsidiaries of Infrastructure Leasing & Financial Services (IL&FS).
  • The telecom regulator plans to review the per-port transaction charge and related ancillary levies for mobile number portability (MNP) at a time when monthly porting requests are falling amid sector consolidation.
  • Shares of Kotak Mahindra Bank ended down 3.7% at ₹1,241.05 after ING sold its remaining stake in the lender. ING Mauritius Investment held 3.06% stake or 5.84 crore shares in Kotak Mahindra Bank. Bulk deal data on NSE showed that ING Mauritius sold 5.84 crore shares at ₹1,225.14-1,228.51 per share.

Source: The Economic Times

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