QBiz: Banks, Etihad, NIIF to Invest Rs 3,400 Crore in Jet & More
A round-up of top business stories for the day.
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1. Banks, NIIF and Etihad to Restart Jet Engine With Rs 3,400 Crore Infusion
A consortium of banks, along with the National Investment and Infrastructure Fund (NIIF) and Etihad, will invest about Rs 3,400 crore in Jet Airways, leading to a much-reduced holding for Founder Naresh Goyal, a change in management control and lenders with the biggest stake.
Following the infusion, which will be in phases, the consortium of banks, led by State Bank of India, will own 32% of the airline and Abu Dhabi-owned Etihad and the NIIF will hold about 24.9% and 19.5%, respectively, said a person with knowledge of the matter.
(Source: The Economic Times)
2. Stocks at 6-Month High, Rupee Gains Muscle
Indian stocks hit a six-month high on Monday, 11 March, following the announcement of dates for the general election amid market confidence that the Bharatiya Janata Party-led coalition will return to power for another term in office, bolstered by its perceived resolve on national security.
The rupee strengthened past 70 for the first time in more than two months as overseas investors continued to buy Indian equities.
The Sensex advanced 382.7 points, or one percent, to close at 37,054.10 after hitting an intraday high of 37,106.19. The Nifty rose to 11,180.90 before ending at 11,176.30, up 140.90 points, or 1.3 percent, from the previous close.
(Source: The Economic Times)
3. Is Paytm Mall Closing Down its E-Commerce Business?
Alibaba-backed Indian e-commerce firm Paytm Mall seems to be losing steam faster than expected even as the company plans to change its business model.
According to sources, the company has been scaling down its B2C (business to consumer) business, shutting down the fulfilment centres and has almost stopped giving cashbacks.
This has also resulted in a massive drop in traffic to the Paytm Mall’s website. According to SimilarWeb, a New York-based website that provides web analytics for businesses, the traffic to Paytm Mall has come down to 5 million per month in January 2019, a whopping 88 percent decline from 45 million visitors a month in October last year.
(Source: The Hindu Business Line)
4. DoT to Ask Airtel, TTSL to Pay over Rs 15,000 Crore
The telecom department (DoT) will shortly ask Bharti Airtel and Tata Teleservices (TTSL) to collectively pay around Rs 15,000 crore as dues relating to a mix of pending licence fees, spectrum usage charge (SUC) and onetime spectrum charge (OTSC) as a pre-condition for clearing their merger, two people aware of the matter said.
“Airtel and TTSL have to pay around Rs 10,000 crore and Rs 2,800 crore, respectively, as SUC,” said a DoT official, who did not want to be named.
“Then there is another Rs 2,000 crore of OTSC that transferee firm Airtel will have to pay in the form of bank guarantees to the government,” the official added.
(Source: The Economic Times)
5. With Rising NPAs, Banks Take Foot Off Pedal on Mudra Loans
Banks are going slow on Mudra loans this fiscal so far and are unlikely to meet the disbursement target.
As on 1 March 2019, the disbursement under the Mudra scheme was Rs 2.12 lakh crore. The target for financial year 2018-19 is Rs 3 lakh crore. In other words, in less than one month, banks have to disburse almost one-third of the target.
“In the initial two years, the performance of this category of loans was good. But now, there are some concerns, especially in the ‘Sishu’ category of small business loans, which calls for caution though there is pressure to ramp up lending under Mudra,’’ a senior official of a public sector bank told BusinessLine.
The policy of increasing the disbursal target every year ‘unrealistically’ is hurting the banks, he added. The target last year was Rs 2.40 lakh crore.
(Source: The Hindu Business Line)
6. Govt Notifies Phased Import Duty Hike on Electric PV Parts, Lithium-ion Cells
The government has notified phased increase in basic customs duty on parts of electric passenger vehicles to be assembled in India to 15 percent from April 2020 and 10 percent on imported lithium-ion cells by April 2021 to promote domestic manufacturing of EVs.
The notification is part of the road map under the phased manufacturing programme (PMP), and also entails doubling the basic customs duty on completely built units of electric buses and trucks to 50 per cent from April 2020.
Currently, the basic import duty on completely knock-down kits used in electric buses, passenger EVs, electric two-wheelers, three-wheelers and electric trucks is 10 percent, which will be raised to 15 percent from April 2020.
(Source: PTI)
7. Govt to Raise Up to Rs 226 Crore From MSTC Divestment
State owned MSTC Limited's initial public offering (IPO) that hits market on 13 March will raise around Rs 226 crore for the government, based on the highest price band.
The price band for the issue has been fixed at Rs 121-128 for each share of Rs 10.
In this "offer for sale", the government is divesting 1.76 crore of its shares which is equivalent to 25 percent of the paid-up equity share capital.
The divestment would bring down government holding in MSTC to 64.85 percent from the existing 89.85 per cent, the company said.
(Source: PTI)
8. IRDA Rejects Watsa Plan to Buy Sudhir Valia’s ITI Re
The Insurance Regulatory and Development Authority of India (IRDA) has rejected Prem Watsa’s proposal to acquire ITI Reinsurance owned by Sudhir Valia, brother-in-law and business associate of Sun Pharma cofounder Dilip Shanghvi, said people with knowledge of the matter.
The regulator’s stand is that ITI Reinsurance’s licence stipulates a five-year lock-in during which its shares can’t be sold, they said.
Watsa, who has been investing in India’s financial services, may have to apply afresh if he wants to still pursue business in the sector, they said.
(Source: The Economic Times)
9. Ebix Offers to Take Over Yatra at 84% Premium or For $7 Per Share
Robin Raina-promoted Ebix Inc, the US multinational that provides on-demand software and e- commerce services to a host of industries, on Monday, 11 March, announced its interest in buying out the Nasdaq-listed domestic travel portal Yatra Online Inc for $7 per share – an 84 percent premium – on a debt-free basis.
If the deal goes through this will be second deal for Ebix, in seven months, having bought Centrum group's forex and travel business Centrum Direct for a reported Rs 12,000 crore valuation last August. Centrum Direct was the largest travel business and forex dealer in the country before the deal.
Ebix serves insurance, financial, healthcare and e- learning sectors spanning 50 markets across five continents.
(Source: PTI)
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