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Economy Current Affairs
Economy Current Affairs June 1st week 2016
Author : uppy
Category : Economy Current Affairs
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Economy Current Affairs June 1st week 2016

1) India, World Bank sign agreement for efficient bus service.

  • India signed a $9.2 million grant agreement with the World Bank for the ‘Efficient and Sustainable City Bus Service Project’ aimed at improving the efficiency of the transport and reduce greenhouse gas emissions.
  • An agreement for Global Environmental Facility (GEF) grant of $9.20 million with the World Bank for ‘Efficient and Sustainable City Bus Service Project’ was signed.
  • The International Bank for Reconstruction and Development (IBRD) will be the implementing agency of the GEF for the project.
  • The total cost of the programme is $113 million, out of which $9.2 million will come as a grant from the World Bank and $103.07 million will be funded by the Centre, state and city governments for the funding of buses and ancillary infrastructure.
2) RIL sells stake in African oil retailer GAPCO.
  • Reliance Industries has exited its African fuel retail business by selling its entire 76 per cent stake to Total SA of France for an undisclosed sum.
  • Total, which is already a leading retailer of petroleum products in Africa, will acquire Gulf Africa Petroleum Corporation`s (GAPCO) assets in Kenya, Uganda and Tanzania.
  • RIL`s overseas arm Reliance Exploration & Production DMCC owned 76 per cent stake in GAPCO while Fortune Oil Corp, Mauritius held the remaining. Total is acquiring stake of both the firms.
  • Reliance Exploration & Production DMCC, an indirect wholly owned subsidiary of RIL and Total, have executed agreements for the sale of the entire 76 per cent interest held by REPDMCC in the Mauritius-incorporated Gulf Africa Petroleum Corporation (GAPCO).
  • The proposed transaction is subject to regulatory approvals and other closing conditions that are customary for similar transactions.
  • The acquisition will be complementary to Total`s existing operations in Kenya, Uganda and Tanzania and will strengthen its logistics in the region.
3) DLF to sell 32 screens to PVR for Rs. 433 crore.
  • Realty major DLF has entered into an amended agreement to sell its 32 screens of DT cinemas to multiplex operator PVR at a revised consideration of Rs. 433 crore.
  • DLF operates the multiplex arm DT cinemas and exhibition business under its subsidiary DLF Utilities.
  • Competition Commission had approved PVR`s proposed acquisition of DT Cinemas from DLF while directing the companies to exclude certain assets from the deal to address anti-competitive concerns.
  • PVR had announced the acquisition of DT Cinemas for Rs. 500 crore after aborting from a similar deal in February 2010.
  • DLF Utilities Limited (DUL), a subsidiary, has executed an amendment agreement with PVR in connection with sale of the cinema exhibition business (operated under the brand name of `DT Cinemas`) on a slump sale basis for a revised consideration of Rs. 433 crore.
4) Mahindra & Mahindra inks brand licence agreement with Pininfarina.
  • Mahindra & Mahindra has entered into a brand licence agreement with Pininfarina for use of trademarks after closing the deal to acquire 76.06 per cent stake in the Turin-based company.
  • Last year Mahindra group had announced to acquire Pininfarina for an overall outgo of over 50 million Euros (nearly Rs. 370 crore) after months of negotiations.
  • The acquisition was carried out through a Special purpose vehicle (SPV). Tech Mahindra and Mahindra & Mahindra (M&M) will own 60 per cent and 40 per cent respectively in the automotive and industrial design firm.
  • That the transaction has closed, the SPV has acquired 76.06 per cent stake in Pininfarina and as part of the overall transaction, the company has also entered into a brand license agreement with Pininfarina for use of trademarks owned by the Pininfarina group including licensing of brand Pininfarina for automotive products of the company.
5) Salesforce buys Demandware for $2.8 billion.
 
  • US cloud computing giant Salesforce was buying rival Demandware for $2.8 billion in a move that expands its offerings to the retail sector.
  • Salesforce, known for computing platforms that help manage marketing and other business services, will integrate with Demandware, which works with retail groups such as Design Within Reach, Lands` End, L`Oreal and Marks & Spencer.
  • Demandware is an amazing company the global cloud leader in the multibillion dollar digital commerce market.
  • With Demandware, Salesforce will be well positioned to deliver the future of commerce as part of our Customer Success Platform and create yet another billion dollar cloud.
  • San Francisco-based Salesforce would acquire Massachusetts-based Demandware.
6) Johnson & Johnson to buy Vogue International for about $3.3 billion.
  • Johnson & Johnson would acquire Vogue International for $3.3 billion, adding brands such as OGX shampoos and FX hair styling products to its consumer portfolio that includes Neutrogena and Clean & Clear.
  • Vogue`s hair care products have gained popularity, helped by colorful packaging that makes them stand out in drugstore aisles.
  • The privately held company has focused on increasing its presence in drug stores and is spending more on buying shelf space then on the consumer advertising.
  • Buyout firm Carlyle Group LP acquired a 49 per cent stake in the company in 2014.
  • Vogue`s products are sold in the United States and in 38 other countries.
7) Cabinet approves Rs. 3,770 crore Chennai Metro rail project.
  • The Union Cabinet gave its approval to the proposal for Chennai Metro Rail Phase-I Project from Washermanpet to Wimconagar, which covers a length of 9.051 km, at a total cost of Rs. 3,770 crore.
  • The project will be executed by Chennai Metro Rail Ltd, the existing special purpose vehicle of the Centre and Tamil Nadu having 50:50 equity each. The project is scheduled to be completed by March 2018.
  • This extension will provide improved access to public transport for dense population comprising predominantly industrial workers to move toward the central business district of the city for work.
  • In the total project cost, Centre’s share will be Rs. 713 crore and Tamil Nadu’s share will be Rs. 916 crore. The balance of Rs. 2,141 crore will be met from loans from multilateral/ bilateral/ domestics funding agency. The estimated ridership will be 1.6 lakh passengers a day in the first year of operation.
8) Reliance Ind to invest $16 million in US start-up NetraDyne.
  • Reliance Industries Ltd (RIL) will invest $16 million (about Rs. 108 crore) in San Diego-headquartered NetraDyne Inc, a tech start-up that is yet to commence commercial operations.
  • NetraDyne is into technology-driven product development of deep learning solutions and vision-based analytics for the fleet management, automotive, security and surveillance industries. The company is in advanced stages of product development.
  • The investments are through its subsidiary Reliance Industrial Investments and Holdings Ltd (RIIHL), by way of Compulsorily Convertible Preferred Shares. On conversion of the investment, RIIHL will get 1.5 crore shares at $1.0613 per share, translating into 40 per cent of the fully diluted share capital.

9) Cabinet Committee on Economic Affairs approves Mau-Tarighat Railway line project.

  • The Cabinet Committee on Economic Affairs (CCEA) on gave its approval for a new 51 km broad gauge line from Mau to Tarighat, aiming to provide an alternative and convenient route between New Delhi and Howrah.
  • The CCEA chaired by Prime Minister Narendra Modi cleared the rail project to be underatken at an estimated cost of Rs. 1,765.92 crore. With 5% escalation per year, the project may finally cost Rs. 2,109.07 crore.
  • The new line would cross Ganga at the downstream of existing Road Bridge for NH 97 and is located almost parallel to it and joins the existing broad-gauge line from Tarighat to Dildar Nagar.
10) Asian Development Bank (ADB) and Government of India Sign $200 Million Loan Agreement to Help Upgrade 176 Km of State Roads in State of Jharkhand.
  • The Asian Development Bank (ADB) and the Government of India signed in the national capital an agreement for $200 million new loan to upgrade 176 Kilometers of State roads in State of Jharkhand.
  • The financing for the Jharkhand State roads II Project will upgrade existing sections of four State roads to two lane standard and will also support improvements in the design, safety and maintenance of the network.
  • Several safety and environmentally friendly features included in the project design, include over 60 bus stop shelters, 50 km of raised sidewalks in urban areas, 4 km of dedicated bicycle lanes; and solar-powered street lights.
  • The project will also generate employment opportunities for residents of the adjoining areas, including for women, who will get a share of a least 20% of jobs for afforestation work alongside the upgraded roads.
  • The total cost of the project, due to be completed by 2019, is $306.25 million. In addition to ADB’s loan, the State Government of Jharkhand will provide counterpart assistance equivalent to $106.25 million.
11) SEBI begins auction process of Sahara lands.
  • The Securities and Exchange Board of India began the process of selling properties owned by the Sahara Group, in accordance with a Supreme Court ruling. Ten properties owned by the company have been identified to be sold for a combined reserve price of Rs. 1,193 crore.
  • SBI has engaged HDFC Realty and SBI Capital Markets to auction the properties. While HDFC Realty will sell five land parcels, SBI Caps will undertake the sale. The combined area of the land parcels is estimated to be over 1,100 acres.
  • The apex court had earlier asked SEBI to devise a suitable mechanism for sale of the lands so that the bail amount of Rs. 10,000 crore can be generated.
12) Beauty and wellness service provider Zapluk acquires Pamperazi.
  • Hyderabad-based Zapluk, which provides on-demand beauty and wellness service, has bought Chennai-based Pamperazi, which offers on-demand home beauty services, in an equity and cash deal.
  • Zap force Technologies Pvt Ltd, which owns the merged business, is in discussions to raise funds. It will use the money to start its services in the National Capital Region, Bengaluru, Mumbai and Kolkata.
13) Mahindra rolls out eVerito at Rs. 9.50 lakh.
  • Mahindra Electric, a part of the Mahindra Group launched eVerito the electric version of its Verito sedan priced between Rs. 9.50 lakh and Rs. 10 lakh (ex-showroom, Delhi).
  • The eVerito will be available in key cities, such as New Delhi, Mumbai, Bengaluru, Pune, Kolkata, Chandigarh, Hyderabad, Jaipur and Nagpur.
  • Powered by the latest electric drive-train technology from Mahindra Electric, the direct drive single speed transmission eVerito can be charged at home in one hour and 45 minutes through fast charging technology.
  • The car can run up to 110 km in a full charge and has a maximum speed of 86 km/hr. The eVerito has features such as Revive.
14) HDFC ERGO acquires L&T General Insurance.
  • HDFC Ergo, a joint venture between home loan major HDFC and German insurer Ergo International, has agreed to buy L&T General Insurance for Rs. 551 crore in the first buyout in the country`s general insurance industry.
  • This transaction marks the beginning of this consolidation phase.
  • The combined size and expertise will result in improved cost efficiencies in the merged entity and benefit policy holders and other stakeholders.
  • The deal is valued at 1.1 times the gross premium, which is 3.9 times the book value of L&T General Insurance Company.
  • HDFC Ergo will now apply to sector regulator Irda and fair trade authority Competition Commission of India (CCI) for getting regulatory approvals to acquire 100% share of L&T General Insurance.
  • The acquisition will help HDFC Ergo become the third-largest private general insurer, behind ICICI Lombard and Bajaj Allianz General Insurance, overtaking Iffco Tokio.
  • The industry is dominated by state-owned insurers New India Assurance, United India, National India and Oriental Insurance Company.
15) Tata Trusts, MP government join hands to work in healthcare.
  • Tata Trusts has entered into a partnership with the Madhya Pradesh government to work together in areas of healthcare, nutrition, mental health and cancer care in the state.
  • Through this collaboration, the state government will be able to achieve convergence of their programmes and improve efficiencies as well. Tata Trusts will play a role in setting up of these initiatives along with strategic and technical advisory support.
  • As part of a Memorandum of Understanding (MoU) signed with the state, Tata Trusts will also work together with the government in overseeing successful execution of the identified programme.
16) Six Hindustan Unilever brands cross Rs. 2,000 crore sales milestone.
  • Six brands of Hindustan Unilever (HUL) have notched up annual sales in excess of Rs. 2,000 crore. These include Surf Excel, Brooke Bond, Wheel, Lifebuoy, Rin and Fair and Lovely.
  • The cumulative sales of these brands constitute about half the consumer giant’s total India revenue of Rs. 32,000 crore.
  • The fast moving consumer goods (FMCG) sector has over 11 brands that have crossed the Rs. 1,000 crore mark in annual sales in FY16. There are over 3,000 listed companies on Indian stock exchanges that have a turnover less than Rs. 2,000 crore.
17) Centre to give Rs. 400 crore bonus to top 10 towns for urban reforms.
  • It is not just appraisal season across corporate offices, but in the Ministry of Urban Development as well.
  • The Ministry is looking to reward top performers in urban reforms with a special bonus.
  • It will choose 10 best performers from 497 towns under the Atal Mission for Rejuvenation and Urban Transformation (AMRUT) based on their performance in 2015-16. It has set aside a kitty of Rs. 400 crore to disburse as bonus among these top 10 achievers.
  • The parameters for choosing the winners include e-governance, urban planning and city development plans, review of building byelaws, credit rating of urban local bodies, energy and water audit, devolution of funds and functions, augmenting double entry accounting, among others.
18) Sterlite Power plans Rs. 2,500 crore mop up via infra investment trusts.
  • Sterlite Power Transmission (SPTL), a company that was demerged from Sterlite Technologies, has initiated a process to raise Rs. 2,500-3,000 crore through Infrastructure Investment Trusts (InvITs).
  • The company has mandated Morgan Stanley and Edelweiss Financial Services as merchant bankers for the process.
  • The company would use the proceeds to pare debt and for funding existing projects in the power transmission business.
  • The process has begun, but it’s in the early stages. At present, the company is looking at rising about Rs. 2,500-3,000 crore, but that number is yet to be finalized.

 

19) IMF approves $1.5 Billlion Loan for Sri Lanka.

  • The International Monetary Fund has approved a $1.5 billion loan to Sri Lanka, with $168 million being disbursed as the first tranche with immediate effect to support the country`s economy, which is showing "signs of strain".
  • The Executive Board of the IMF approved a 36-month extended arrangement under its Extended Fund Facility (EFF) with Sri Lanka for an amount equivalent to 1.1 billion special drawing rights (about $1.5 billion).
  • The IMF arrangement aims to meet balance of payments needs arising from a deteriorating external environment and pressures that may persist until macroeconomic policies can be adjusted.
  • The approval enables an immediate disbursement of about $168.1 million while the remainder will be available in six installments subject to quarterly reviews.
  • The IMF is also expected to catalyse an additional $650 million in other multilateral and bilateral loans, bringing total support to about $2.2 billion (over and above existing financing arrangements).
20) Telemedicine market may rise to $32 million by 2020.
  • The telemedicine market in India is expected to rise to $32 million (around ?210 crore) by 2020 from the current $15 million.
  • The growth of the sector depends on "development of national e-health policies, trained human resource and regular funding".
  • Telemedicine refers to the use of IT services in providing healthcare facilities.
21) Fashion marketplace Voonik acquires 3 startups.
  • Sequoia Capital-backed fashion marketplace Voonik has acquired three startups to build its premium fashion product Vilara. The company has now acquired five startups in the past six months.
  • Voonik, which is focused on curated fashion, is attempting to strengthen its leadership in the unbranded fashion segment largely via acqui-hires or team acquisitions of startups in niche fashion offerings.
  • The three companies are online marketplace for designers and boutiques Zohraa, which has a 12-person team, the eight-person team at online silk store Picksilk.com and the nine person team at Styl, which connects stylists and salons with consumers.
  • Voonik, which raised $5 million last year, from Sequoia Capital and SeedFund, claims to have achieved a $100 million run rate and is aiming to grow four-fold in GMV by the end of this fiscal.
22) Sumitomo to acquire 45% stake in Excel Crop Care.
  • Sumitomo Chemical Company or SCC will purchase 45% stake from both Shroff family, the promoters of Excel Crop Care Limited or ECCL and public shareholders of the company including Ratnabali group pegging the equity value of the agro chemical maker at Rs. 1386 crore.
  • SCC will also make a public offer to buy additional 30% stake of the company at Rs 1259 a share and take over the majority control of the 13 year old company which The transaction is subject to certain conditions to close, including regulatory approvals. ET was the first to report about the impending deal.
  • The sale will help the Shroff family to focus on speciality chemicals, pharma intermediates, pharma actives, performance chemicals and environment and biotech products.
23) Government, ADB sign $120 million loan agreement for Odisha.
  • Government of India and the Asian Development Bank (ADB) signed a $120 million loan agreement to improve irrigation and water management infrastructure in Odisha.
  • The loan is the second tranche of a $157.5 million financing facility under the Orissa Integrated Irrigated Agriculture and Water Management Investment Program.
  • The financing will be used for modernizing seven irrigation subprojects resulting in improved irrigation in over 100,000 hectares, and strengthening of Water User Associations (WUAs) and the institutional capacity of Odisha’s Department of Water Resources.
  • The selected areas for the investment program are the Baitarani, Brahmani, Budhabalanga, and Subernarekha river basins and part of the Mahanadi delta.
24) JV of L&T wins contract to develop Qatar stadium.
  • Larsen and Toubro (L&T) has signed a contract along with its joint venture (JV) partner in Qatar to build a 40,000-seater stadium for $360 million.
  • This is part of the sports infrastructure being readied by the Emirate in preparation for the 2022 FIFA World Cup. The contract was announced by Qatar`s Supreme Committee for Delivery and Legacy.
  • L&T`s JV partner is Al Balagh Trading and Contracting.
  • The contract for the project is for a combined value of $360 million for both JV partners and is slated to be completed by 2019. The scope for the stadium includes main works and construction of the site, following completion of the enabling works.
  • Inspired by local patterns, the Al Rayyan stadium and its precinct design will resemble the sand dunes that surround the traditional desert tents.
25) Avanse eyes disbursal of Rs. 800 crore education loans this fiscal.
  • Avanse, an education finance company, is looking to disburse loans worth Rs. 800 crore this fiscal.
  • This will be a significant increase over the Rs. 343 crore loans disbursed in 2015-16.
  • Almost 2.5 lakh Indian students go abroad every year for higher education, Saxena pointed out.
  • Indian students annually spend an estimated Rs. 1 lakh crore for their higher education in India and abroad. This segment is growing at 15 per cent. The total education loan disbursement from the organized segment is only about Rs. 10,000 crore, indicating the potential for growth of private players like Avanse.
26) DBS India returns to black, posts Rs. 8.6 crore profit for FY16.
  • Singapore-headquartered DBS Bank’s India operations reported a turnaround in performance, posting a net profit of Rs. 8.55 crore in the financial year ended 2016 against a loss of Rs. 274.63 crore in the year-ago period.
  • Deferred tax credit of Rs. 32.70 crore helped prop up the bank’s profitability.
  • In FY2016, DBS Bank India’s net interest income (interest earned less interest expended) declined 6 per cent to Rs. 753 crore (Rs. 804 crore in FY2015). However, other income, comprising commission, exchange and brokerage and profit on sale of investments, rose 23 per cent to Rs. 280 crore (Rs. 227 crore).
  • Provision towards bad loans jumped to Rs. 240 crore (Rs. 55 crore). The provision coverage ratio improved to 62.28 per cent from 59.35.
  • Net non-performing assets edged up a tad to 4.34 per cent as on 2016 compared to 4.15 per cent on 2015.
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