QBiz: Jhunjhunwala Buys Stake in Jet, Flipkart’s Deadline & More
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1. Fairfax to Buy 9% in ICICI Lombard: TOI
ICICI Bank’s board on Friday approved the sale of 9% stake in ICICI Lombard General Insurance to its Canadian partner Fairfax Financial Holdings (promoter of Lombard) for Rs 1,550 crore, valuing the company at Rs 17,225 crore.
Following the stake sale, the shareholding of ICICI Bank and Fairfax will be approximately 64% and 35% respectively. ICICI Lombard is the largest private non-life company in India and the transaction is likely to serve as a benchmark for other valuations.
The gross written premium of ICICI Lombard rose 22% from Rs 1,638 crore in Q2FY15 to Rs 1,999 crore in Q2FY16. The company reported a net profit of Rs 143 crore in the second quarter compared to Rs 158 crore in the corresponding quarter last year and Rs 116 crore in the preceding quarter.
2. Air Travel to Cost More as Govt Plans 2% Cess: TOI
Flying between metros and other big cities and abroad may cost 2% more from next year as the government has decided to impose a levy to enhance regional connectivity by air.
Fares for flights to and between small towns — that can be enabled by reviving almost 400 unused airstrips across India as budget airports — will be restricted at Rs 2,500 per hour. This will be done by keeping airlines’ cost of operation low and giving them direct subsidy from the regional connectivity fund (RCF) that comes from the 2% cess.
Acting on Prime Minister Narendra Modi’s directive to make flying an affordable mode of travel for the common man, the aviation ministry on Friday released a draft aviation policy which aims to ensure that at least one member of India’s 30-crore strong middle class families flies once a year — up from the present 7 crore domestic flyers in a year. The cess will, however, make it a little more expensive for a majority of Indians to fly between big cities.
3. SH Kelkar Rs 500-cr IPO Sees Huge Demand,
Subscribed 27 Times: ET
Riding high on a huge demand from high net worth and institutional investors, the initial public offer (IPO) of Mumbai-based SH Kelkar, one of the largest players in the fragrance and flavour business, got subscribed by about 27 times today as it attracted bids worth about Rs 9,900 crore.
The IPO received bids for 54.75 crore shares against the total issue size of 2.02 crore shares, as per the data available with the BSE & NSE till 7 pm.
This is the second best IPO so far in 2015 in terms of over subscription. In April this year, VRL Logistic was subscribed about 53 times. The company proposes to use the issue proceeds for repayment of loans as well as investment in its subsidiary KV Arochem Private Ltd and for other general corporate purposes.
4. ITC Announces Retirement of Two Top Execs: Sanjiv Puri Front Runner to Succeed YC Deveshwa: ET
ITC Ltd announced the retirement of two top executives on Friday, pitchforking Sanjiv Puri, the cigarettes and FMCG business head, as the front runner to succeed long-serving chairman YC Deveshwar who is scheduled to hang up his boots in 2017.
The cigarette to hotels company informed the stock exchanges that two of its three executive directors— PV Dhobale and Kurush Grant— were retiring as the first had attained the age of superannuation while the second had taken premature retirement for health reasons.
The company has also appointed Puri, President, FMCG business, and Rajiv Tandon, Chief Financial Officer, as additional whole time directors on the board. Nakul Anand, 58, remains the Executive Director for hotel and lifestyle business. While Anand is senior both in hierarchy and age to Puri, 52, the latter is being considered as the favourite to succeed Deveshwar as he spearheads the business that accounts for more than 60% of ITC’s revenues and 80% of its profits.
5. IPL 2015 Contributed Rs 11.5 Bn to GDP: Hindu
The 2015 Indian Premier League (IPL) contributed Rs 11.5 billion ($182 million) to India’s Gross Domestic Product (GDP), the Board of Control for Cricket in India (BCCI) said on Friday.
The BCCI appointed the KPMG Sports Advisory Group to undertake a survey on the economic impact generated by the IPL on the economy of India, which brought forward the figures. IPL 2015 consisted of eight franchises that played 60 matches over 44 days in 13 host venues of 12 cities across the country.
As many as 193 cricketers took part in the tournament that attracted 1.71 million spectators at the venues, the BCCI statement added.
“The total economic output associated with IPL matches in India for 2015 is estimated at INR 26.5 billion (USD 418 million). This is the aggregate value of all transactions that took place as a direct, indirect or induced effect of the economic activity of the 2015 matches. Hosting an IPL match also adds value and revenue to the economy of the state,” BCCI said.
6. Flipkart Sets 3-year Deadline to Make Profits: BS
E-commerce firm Flipkart has, for the first time, indicated a timeline for turning profitable. Co-founder and chief operating officer Binny Bansal, who was in Hyderabad to inaugurate the company’s largest fully-automated fulfillment centre on Friday, said the firm was expected to turn profitable in three years. The e-tailer also announced mega investments of $2.5 billion (Rs 16,250 crore) in a pan-India fulfillment and logistics network over the next four to five years.
The company, which turned eight recently, has been running losses and has maintained that its focus is on growth, rather than targeting profits. Flipkart’s possible initial public offering (IPO) of equity also came up during a media interaction with Bansal, who has rarely made financial statements so far. Chief executive officer and co-founder Sachin Bansal (not related to Binny Bansal) has been the face of Flipkart. The start-up, which has invested $100 million over the past eight years, sells 50 million products, delivering 500,000 orders per day. It is estimated to be valued at about $15 billion.
7. Jhunjhunwala Buys 1.05% in Jet, Shares Rise 11%: BS
Investor Rakesh Jhunjhunwala on Friday picked up 1.05 percent stake in Jet Airways for Rs 50.5 crore through an open market transaction.
According to the bulk deals data available with the National Stock Exchange (NSE), Jhunjhunwala’s Rare Enterprises acquired 1,195,000 shares of the private airline. The shares were bought at an average price of Rs 422.7.
On Thursday, Jhunjhunwala picked up a substantial number of shares in the Initial Public Offering of InterGlobe Aviation, which runs low-cost airline IndiGo.
Last year, he had purchased shares in aviation company SpiceJet.
8. Sanjiv Kapoor to be Vistara Chief Commercial Officer: TOI
The man who made an Indian carrier register the highest aircraft occupancy for months in a row is now going to join a startup airline that is facing the problem of 40% empty cabins.
SpiceJet’s former chief operating officer Sanjiv Kapoor will join Tata-Singapore Airlines’ JV full service carrier Vistara as chief strategy and commercial officer from next February. The announcement came a day after Kapoor quit the low-cost carrier. He will succeed Giam Ming Toh, who will return to SIA after completing his term.
Kapoor’s aggressive discount-based marketing practice saw SpiceJet record the highest load factors for many months in a row this year.
9. L&T Q2 Net Profit Rises 16%: Hindu
Engineering and construction major Larsen & Toubro (L&T) reported that the consolidated net profit for the second quarter ended September 30, 2015, has gone up by 16 percent to Rs 996 crore compared to Rs 840 crore in the same period last year.
“The growth in profit was primarily on account of exceptional gains of Rs 309 crore due to the disinvestment of L&T’s 5 percent stake in L&T Finance Holdings and sale of stake in one of its vendor’s firms,” R Shankar Raman, Chief Financial Officer (CFO) L&T said.
He said though the domestic macro-economic parameters showed some early indications of recovery due to various initiatives of the government including reforms and increased public expenditure, the financial markets remained volatile and the overall investment climate stayed subdued.
Considering that the economic recovery is taking more time than expected due to various procedural delays, L&T has scaled down its earlier revenue guidance from 15 percent to around 12 percent.
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