Business & Finance - Current Affairs for March, 2016

Vodafone India has signed a pact to purchase YOU broadband for INR 400 crore and sought approval from FIPB, according to reports. This is part of the company’s effort to increase its cable or fixed line network.

Maharashtra and Gujarat accounted for 46% of exports in FY 2015. Two states namely Maharashtra and Gujarat accounted for a majority of merchandise exports from the country in 2014-2015industry lobby ASSOCHAM said. Next 3 states were TN, Karnataka and Andhra Pradesh.

• Top 5 states claimed 69% of the export earnings of the country in the previous fiscal
• Export earnings in 2014-2015 were pegged at USD 310 billion
• In growth percentage terms, UP topped the list with Haryana coming second
• Indicating importance of SEZ in attaining higher export, report noted 3/4th of operational SEZs are found in the top 5 export states.

Taiwanese firm Foxconn is set to acquire Sharp Corp getting a big discount to the original offer

• Foxconn was formerly known s Hon Hai Precision Industry Co
• The company is likely to cut its initial 489 billion yen offer for 100 billion yen after two third stake has been acquired
• This deal is the largest acquisition of a Japanese tech firm by a foreign company
• The 100 year old company in Japan’s insular tech industry will now come under foreign ownership

The company has partnered Elbit-ISTAR and Alpha Design Technologies with which it has signed a statement of intent to cooperate and work together in the field of UAS in India, aligned to the Prime Minister Narendra Modi’s ‘Make in India’ initiative, Adani Enterprises noted in a statement.

• UAS provides multi functional capability of see and hear to provide information to fighters and net security providers
• Statement of Intent seeks to realise the dream of Make in India
• Adani Aero Defence is a completely owned subsidiary of Adani Enterprises
• Israel based Elbit Systems Ltd is an international high technology company engaged in wide range of homeland security, defence and commercial programmes across the world
• Elbit Systems is an Israel based international technology company
• Alpha Design Technologies specialises in design, development and production of numerous types of defence, electronics and avionics equipments and systems
• Adani is one of India’s leading business houses with revenue of over USD 10 billion

The partnership is to provide joint services to global clients and the market. Part of the collaboration involves joint provision of value to clients by Hitachi and Virtusa through increase in operational and technology efficiency and enhancing functionality

• Hitachi provides IT solutions through combination of various products and services internationally.
• Both firms have been working together since 2015.

After acquiring Corus to become EU’s second largest steel maker, Tata Steel has announced plans to sell the UK business. Board of one of the largest steelmakers in the world met to assess what to do regarding the deteriorating financial position of the company.

• Tata acquired Corus, now Tata Steep Europe in April 2007
• European major was formed by merger of British Steel and Dutch firm Koninklijke Hoogovens in 1999.

ADAG led Reliance Defence Ltd and Rafael Advanced Defence Systems Ltd of Israel have decided to set up a joint venture company in India in the highly specialized areas of air-to-air missiles, air defence systems and large aerostats, that will oversee projects worth USD 10 billion (over INR 65,000 crore) in ten years.

• Project will have outlay of INR 1300 crore
• Strategic partnership will mark the entry of Reliance Defence in the complex field of air-to-air and air defence systems manufacturing in India
• This is one of the biggest JVs between an Indian company with original equipment and an Israeli company in specialised areas of air-to-air missiles, air defence systems and large aerostats
• New venture will be in Indore, MP and generate close to 3000 jobs

Kstart has partnered tech giant IBM to foster the startup ecosystem in India. This is a initiative of venture capital firm Kalaari Capital along with IBM offering training and mentoring sessions to startups.

• According to a Nasscom and Zinnoy 2015 report, India is third in the world in terms of number of startups
• It also has the fastest growing startup base internationally.
• Kalaari Capital has fund value of USD 650 million and has invested in companies like Myntra, Snapdeal and Urban Ladder.

Taking a huge step towards handling air pollution dust from construction activities, centre has notified the first ever Construction and Demolition Waste Management Rules for stipulation of proper disposal and recycling of waste. Rules to be implemented by local civic authorities to reduce pressure on fresh resources and tackle air pollution triggered by dust particles. Littering or obstruction to public drains, water bodies, traffic and direct dumping of construction and demolition waste in landfill sites were prohibited under the rules.

• Local authorities must commission the construction and demolition waste management rules
• Massive generators of C&D waste will pay charges for collection, transportation, processing and disposal by concerned authorities.

Detroit based GM has decided to close in on the Cruise Automation deal which has just won the US antitrust approval. Deal has been reported to be worth USD 1 billion in cash and stock. Deep software talent of Cruise Automation is a asset the company is acquiring.

The aim of the partnership is to deliver energy management services and lower energy and operational costs. Jubilant is India’s largest food company. It is part of the Jubilant Bhartia group. The group operates the famous Domino’s Pizza restaurants across 230 Indian cities. It currently operates in India and Sri Lanka.

Japanese major NTT Data has acquired Dell Services, IT services arm of PC major Dell

The deal is valued at USD 3 billion. Transaction is subject to regulatory approvals.

Other Acquisitions

- PC maker Dell acquired Perot Systems in 2009
- Dell bought global major EMC also in the largest deal in the mergers and acquisitions sector in the tech space
- NTT will now have 230 data centres across the world following this acquisition

Tech Mahindra, the IT arm of the Mahindra Group has joined GE’s Digital Alliance Programme

It will use the industrial internet platform to provide solutions for a wide range of industries including oil and gas and transportation.

About GE Digital Alliance Programme

• The digital alliance programme provides members with access to GE Digital tools and technologies
• It also yields domain expertise
• GE opened this platform to users in 2014; TCS has also joined the alliance

RBI asked market participants to subscribe to the special securities under the UDAY scheme through the private placement route to approach it by March 30th. The Ujjwal Discom Assurance Yojana has sought to revive the debt ridden power distribution companies in varying states. Special securities under UDAY are being issued by state governments of the following states:

- Bihar
- Haryana
- J&K
- Jharkhand
- Rajasthan
- Punjab

About UDAY

The scheme allows state governments to take 75% of the debt as on September 30, 2015 in 2 years and pay back lenders through sale of bonds.
For remaining 25 percent duties, discoms have been permitted to issue bonds Scheme is expected to save discos INR 1.8 lakh crore; discoms are struggling with NR 4.37 lakh crore debt

Sachin Tendulkar has invested a non disclosed sum in Internet of Things firm Smartron India and also become its brand ambassador. The company has been operating in stealth mode since August 2014 and will launch a set of IoT appliances this year. Founder and Chairman M. Lingareddy is also the Co-Founder and CEO of Soft Machines Inc., a US-based semiconductor company with operations in US, India, and Russia.

RBI has tweaked liquidity measuring rules for Basel III norms. RBI on Wednesday tweaked the rules on measuring liquidity for Basel III norms, asking banks to eliminate certain loans backed by deposits from liquidity coverage ratio calculations. RBI also changed reporting time periods for some liquidity statements by lenders.

Property consultant JLL India announced a tie up with online marketplace Snapdeal to sell homes to tap the growing e-commerce business of the country. Partnership will be on for the next two years providing end to end service to the customers spanning the complete home search and purchase process.

Panel says equalisation levy of 6-8 percent on digital transactions is for business to business deals for e-commerce companies. Report also suggested introduction of tax based on BEPS or Base Erosion and Profit Sharing earlier endorsed by G20 and OECD. The CBDT committee also suggested equalisation levy be imposed on amount paid to non resident by Indian resident for specified digital services. It also indicates the Levy should not be part of the Income Tax Act.

Shareholders of telecom operator Sistema Shyam Teleservices Ltd which runs the MTS brand approves merger of the company with Reliance Communications in a meeting convened by the Rajasthan HC. Earlier this month, RCom shareholders have also approved the merger scheme. Deal between RCom and SSTL is valued at USD 690 million and is expected to close in second quarter of 2016.

Bang & Olufsen, Danish maker of upmarket sound systems and televisions has entered into a partnership with LG Electronics to outsource production of televisions. The Danish firm which was in talks with a potential buyer will also address key challenges associated with scale and complexity.

Realty portal Magicbricks has acquired property analysis platform Properji for a non disclosed amount and plants to come up with reports for more than 10,000 projects in 6 metros which will help buyers in making the right decision. Magicbricks dot com has acquired Invact Technologies which runs the realty portal. This marks the first acquisition by Magicbricks dot com.

Tata Consultancy Services on 17th March 2016 has announced a three year partnership with Virgin Money London Marathon. The partnership aims to improve digital experience delivered to marathon participants. Under the partnership, the software major will become the official technology partner for the race for the next 3 years. This event is the Guinness world record holder for the largest annual fund raising event in the world.

Reserve Bank of India has revised rules in relation to revival of advances to small businesses and asked lenders to establish district level communities to resolve bad loans to MSMEs or micro, small and medium enterprises. Restricting of loan accounts with exposure of more than INR 25 crore will be governed by CDF or JLF mechanism/ Corporate Debt Restructuring or Joint Lenders’ Forum.

Reserve Bank has provided relief to banks holding bonds of State Electricity Boards that were debt ridden. Banks have been allowed to keep Ujwal Discom Assurance Yojana scheme bonds under held to maturity category. This will lessen pressure on bond yields and debt market. HTM is part of the debt holdings of the bank not subjected to daily price movement which can be held by banks till maturity.

Kris S Gopalkrishnan has invested a non disclosed amount in Avagmah, an educational technology start up associated with higher education along with Aptech co-founder Atul Nishar. The two-year-old startup works with Pondicherry University, Bharathidasan University and Loss-Angles-based UCLA Extension. Its investors include Singapore-based Lionrock Capital, serial entrepreneur Ganesh Krishnan and Mumbai-based investment firm Zodius Capital founder Neeraj Bhargava. NIT Kurukshetra alumni KS Karthik has founded the startup.

Wipro has announced a strategic partnership with Schneider Electric, a global specialist in automated systems and energy management to develop convergent solutions for Indian smart cities. The two companies have formed the partnership to deliver cost effective and efficient citizen services to urban and rural communities.

Wipro has made a strategic investment and signed a partnership with Emailage Corporation which is a rapidly growing risk and fraud prevention company in the US. This is in line with its aim to improve its offerings across innovative and strategic sectors. Wipro has made an investment less than 5% of Emailage’s equity.

Top domestic corporate leaders have assembled under the aegis of UN to formally adopt Sustainable Development Goals of the world body and discuss the way forward for implementation. SDGs are a continuum of the 8 MDGs under implementation from January 2000 to December 2015. 17 SDGs are being implemented from January 2016 to December 2020. UN Global Compact is the implementation agency for SDGs and the Mumbai meeting becomes important because this marks the first time UN is formally involving corporates to push forward its development agenda. Companies attending the meeting include TATAs, Reliance Industries,Essar Group, Adani Group and the Birlas. Numerous MNCs like Mercedes will also be attending the session. India Inc will be the first country in the world to adopt SDGs and implement them in companies.

Pharma major Dr. Reddy’s Laboratories Ltd and TR Pharm of Turkey have announced a strategic agreement involving three biosimiliar products which will be commercialised as part of the agreement.

Tata Power Renewable Energy Limited, a completely owned subsidiary of TATA Power on 9th March 2016 signed the share purchase agreement with Indo Rama Renewables Lmt to acquire its 100% subsidiary IRRJL which owns a wind farm in Sangli Maharashtra. Tata power’s total generation capacity will now increase to 9130 MW following the acquisition.

CG has agreed to sell its transmission and distribution business outside India to First Reserve International Limited for INR 847 crore. Sales proceeds will be used for lessening company debt and the offer is subject to shareholder approval.

State owned telecom operator BSNL has partnered with DTH major TATA Sky to offer video on demand services to broadband users. BSNL will waive off broadband rental for the first month while Tata Sky will offer its VoD service free for the first month to download content worth up to INR 500. BSNL has launched free Wi Fi hotspots in Chennai.

Through this partnership, customers can get hotel bookings in Oyo Rooms and make payments through PayPal. Oyo Rooms was in news recently for acquiring rival Zo Rooms. It has recently forayed into SE Asia.

The company has entered into a strategic agreement with GDLC and Bharat Forge Limited for bidding for the FICV or Future Infantry Combat Vehicle. Others in the race include M&M and L&T. Winning consortium will supply advanced combat vehicles over a period of 25 years.

Digital payments platform FreeCharge has partnered with Mexico based chain of movie theatres called Cinepolis. This partnership seeks to provide easy to use and secure means of ticket payment for customers. This marks the first time Cinepolis which is the 4th largest chain of theatres will partner with a digital wallet company. Transactions will be completed within seconds using the “On-The-Go-Pin.”

Japanese telecom and internet company SoftBank has said it will be splitting into 2 100% owned subsidiaries. Basically, the global business is being separated from domestic operations. Transfers are expected to be complete by December and the move is aimed at making these key business areas future growth drivers. Company’s stakes in US telecom Sprint and China’s Alibaba Group will go to the global subsidiary while domestic operations like Yahoo Japan will go to the other subsidiary.

Government will identify 6 to 10 public sector banks driving the consolidation process among state owned banks. These anchor banks will be identified by October 31, 2016. Large banks like PNB and SBI could become anchor banks. Recently constituted Bank Board Bureau will also help in the process of consolidation.

The private sector lender has purchased over 5 percent stake in the investor advisory firm, acquiring 5,00,750 shares of the firm from BSE which equals 5.006 percent of the paid up capital of the country. IiAS is a proxy advisory firm and an independent think tank on corporate governance.

Hotel group Oberoi has inked a pact with Maldives government for designing and managing a luxury resort in partnership with Subramanya Construction and Development Company. Pact was signed to bring the hospitality of the group to the Maldives. Oberoi is a chain of 30 hotels, two cruisers and a motor vessel under the luxury “Oberoi” brand.

The list has 190 women billionaires which constitutes around 10 percent of the total count. Savitri Jindal and her family was ranked at 453rd place in the list. Jindal has a net worth of USD 3.5 billion. Indu Jain who chairs media major Bennett, Coleman & Co, was placed at the 549 rank globally with a net worth stood at USD3.1 billion. Others on the list included Smita Crishna Godrej (rank 810 with net worth of USD 2.2 billion), Leena Tiwari (1067th position with net wealth of USD 1.7 billion) and Vinod Gupta (1577 with assets of around USD 1.1 billion). Gupta owns Havells while Tiwari chairs generic maker USV.

Aided by a 10 percent rally, ITC has surpassed Infosys and HDFC Bank to become the third most valuable company in terms of market valuation. With a steep rally, ITC stock emerged as a top gainer on several indices. TCS retained its number one position.

US based subsidiary of Piramal Enterprises has acquired Adaptive Software for total potential consideration of INR 165 crore. Decision Resources Group, the completely owned subsidiary has made the announcement for the acquisition of assets of Adaptive Software LLC and control and ownership of its subsidiary AdaptiveRx LLC. Amount of USD 7.4 million was paid on closing date. Through this acquisition, DRG will enter healthcare payer ecosystem.