QBiz: SEBI Nod For RCom-Aircel Merger; Ramdev Eyes China Market

Here’s your daily roundup of important business news.

Patanjali Ayurved’s CEO with Baba Ramdev. (Photo Courtesy: Twitter/@Just_2Read)

1. Baba Ramdev Wants to Take Patanjali Products to China

After giving multinational consumer products makers a run for their money in India, yoga guru Baba Ramdev is taking the fight to overseas markets.

Ramdev’s Patanjali Ayurved Ltd is looking to set up a production unit in Sahibganj, a district in Jharkhand that the central government plans to turn into a multi-modal hub with direct connectivity through roads, waterways and air with neighbouring countries.

A senior central government official on condition of anonymity said:

Patanjali is in talks with the Inland Waterways Authority of India and shipping minister Nitin Gadkari to use the Sahibganj multi-modal terminal for export of its products to East Asian countries like China, Myanmar, Bangladesh and others. By using the inland waterways, the company will save on its logistic costs for exports and the idea is to capture the East Asian market by competing on price and quality.

The planned overseas expansion is in line with the government’s Act East policy, which emphasises ties with India’s immediate neighbourhood and in the Asia-Pacific.

(Source: Livemint)

2. RCom-Aircel Merger Gets SEBI Nod

Reliance Communications Ltd has received approval from the Securities and Exchange Board of India (SEBI), the BSE and the National Stock Exchange of India Ltd (NSE) for the proposed Scheme of Arrangement for demerger of the wireless division of the company into Aircel Ltd and Dishnet Wireless Ltd.

Reliance Communications has filed an application with the National Company Law Tribunal (NCLT), Mumbai Bench. Post closing of the deal, RCom and the present shareholders of Aircel Ltd will hold 50 percent each in Aircel Ltd.

The merger will create the country’s third-largest mobile operator by subscriber base.

Creation of the new entity will first involve RCom demerging its existing cellular business, which has around 100 million subscribers. Other businesses, including tower assets and fixed-line enterprise units, will continue to remain with RCom. The wireless unit will then be merged with Aircel.

(Source: The Hindu Business Line)

3. Shankara Building Products’ IPO Launch on 22 March at Rs 440-460 Per Share

Shankara Building Products Ltd, an organised retailer of home improvement and building products, announced Wednesday it would launch its initial public offering (IPO) on 22 March.

The Bengaluru-based company, which is backed by Fairwinds Private Equity, has fixed a price band of Rs 440-460 per share for the IPO. At the upper end of the price band, the overall size of the offering is about Rs 345 crore.

While Shankara expects to raise about Rs 45 crore by selling new shares, existing investor Fairwinds Trustees of Reliance PE will sell 5.7 million equity shares. Founder and managing director Sukumar Srinivas will sell 8,16,252 shares through the offer for sale (OFS) route.

Shankara is divesting 25 percent of its total equity shares in the IPO which closes on 24 March. Fairwinds, which has 34.78 percent stake in the company, had invested Rs 80 crore in 2011.

(Source: Livemint)

4. Flipkart Looks to Forge $1.5 Billion Deal, With eBay and Tencent, to Take on Amazon and Alibaba

Flipkart is in talks to seal a funding round of up to $1.5 billion. US-based eBay and China’s Tencent are the frontrunners in the transaction that could make the Indian arm of the American online marketplace a part of Flipkart, according to three people aware of the negotiations.

The discussions, if successful, will enable Flipkart to forge an alliance with deep-pocketed strategic investors — who also compete with its two main rivals, Jeff Bezos’ Amazon and Jack Ma’s Alibaba — as it looks to end a funding drought and secure its position as the leader in one of the world’s fastest growing markets for e-commerce.

The company is also exploring further funding from a third investor, sources said. “Talks with eBay are at an advanced stage, and a strategic deal may include Flipkart acquiring or merging their India operations,” said one of the persons cited above.

(Source: Economic Times)

5. Solar Module Maker Waaree Energies Looks to Raise $100 Million

Waaree Energies Ltd, one of India’s largest solar module manufacturers, has appointed consulting firm EY to raise around $100 million.

The fundraising effort comes in the backdrop of falling solar power tariffs because of plunging prices of solar modules. Module prices are expected to extend their drop in 2017 as global supply exceeds demand.

“Waaree Energies has been looking to raise funds. EY is running the process,” said a person aware of the development, requesting anonymity.

(Source: Livemint)

6. Billionaire Agarwal Plans to Buy $2.4 Billion Anglo Stake

Anil Agarwal, an Indian mining billionaire, plans to buy as much as 2 billion pounds ($2.4 billion) of Anglo American Plc shares in the market after a merger proposal failed last year.

The full stake would equate to about 13 percent of Anglo’s stock, making Agarwal the second-largest shareholder after South Africa’s Public Investment Corp. It will give him a strong voice in the company’s strategy as the blue-chip British mining firm cements its recovery from a slump in commodity prices.

While Agarwal said the purchase was a family investment and he won’t make a takeover bid, the brash Indian tycoon offered to merge part his mining empire with Anglo American last year, only to be rebuffed. The London-based mining group, which is currently looking for a new chairman, is seen as a candidate for a potential break-up through splitting its South African assets from the global mining business.

(Source: BloombergQuint)

7. GrabTaxi Starts R&D Centre in Bengaluru to Bolster Payment Platforms

Singapore-based ride-hailing company GrabTaxi Holdings Pte Ltd has opened a research and development (R&D) centre in Bengaluru to bolster payment platforms, especially its mobile wallet GrabPay, a senior company executive said.

The company, however, does not plan to launch consumer-facing operations in India, said Arul Kumaravel, vice-president of engineering at Grab.

The Bengaluru centre is Grab’s sixth engineering outpost after Ho Chi Minh City in Vietnam, Seattle in the US, Beijing in China, Jakarta in Indonesia and Singapore, its home turf.

In the next two years, Grab plans to hire 800 engineers across the six centres to work on payments, maps and ride-sharing features among others. About 200 people will be at the Bengaluru facility.

(Source: Livemint)

8. Government Allows Pricing, Marketing Freedom To CBM Gas Companies

The Cabinet on Wednesday approved pricing and marketing freedom to producers of natural gas from coal seams (CBM) and also allowed them to sell the fuel to affiliates.

The move will help operators like Reliance Industries and Oil and Natural Gas Corp Ltd.(ONGC) to quickly put in to production the coal-bed methane (CBM) blocks they hold and reverse the trend of investors relinquishing coal-seam blocks due to viability issues of current pricing.

“The Cabinet Committee on Economic Affairs, chaired by Prime Minister Narendra Modi, today gave its approval for marketing and pricing freedom to the CBM contractors to sell the CBM at arm’s length price in the domestic market,” an official statement said.

"Royalty and other dues to the government, however, shall be payable on the basis of Petroleum Planning and Analysis Cell (PPAC) notified prices or selling prices, whichever is higher," the statement said.

(Source: BloombergQuint)

9. Krishnapatnam Port Promoters Seek to Buy Out 3i Group’s Stake

Promoters of Krishnapatnam Port Co. Ltd (KPCL) have approached potential investors to raise up to Rs 1,500 crore in structured debt to buy out the stake held by private equity fund 3i Group Plc, two people aware of the development said.

The UK-based fund had invested Rs 800 crore in KPCL for around 10 percent stake in 2009, but relations soured when the promoters allegedly refused to honour an agreement to buy back the stake at a pre-set price at a later date. 3i then moved the Company Law Board.

A successful fundraising could end the acrimony, the people cited above said on condition of anonymity.

“The CVR group (promoters of KPCL) has been in talks with several potential investors but discussions with Piramal Enterprises Ltd (PEL) have progressed well,” said the first of the two persons.

(Source: Livemint)