1) Bharti Airtel buys Videocon Telecom for Rs. 4,428 crore.
- India’s largest telecom operator by subscriber base, Bharti Airtel, it has acquired Videocon Telecom for Rs. 4,428 crore.
- With this, Bharti Airtel will get the rights to use 2X5 MHz of spectrum in the 1800 band allocated to Videocon by the government. Idea Cellular had terminated its spectrum deal with Videocon under which it was supposed to buy two circles - Gujarat and Uttar Pradesh (West) - for Rs. 3,310 crore.
- After deal, Bharti’s 4G coverage is likely to go up to 19 circles from the current 15.
- Bharti Airtel has entered into a definitive agreement with Videocon Telecommunications (VTL) to acquire, at an aggregate consideration of Rs. 4,428 crore, rights to use 2 x 5 MHz spectrum in the 1800 MHz Band allotted to VTL by the government.
- Bharti will acquire rights to use Videocon`s spectrum in Bihar, Haryana, Madhya Pradesh, UP (East), UP (West) and Gujarat.
- The closing of the transaction is subject to satisfaction of the standard conditions, including conditions stated in the Spectrum Trading Guidelines.
- The move comes after Idea CellularBSE, a Bharti Airtel rival, terminated its spectrum trading agreement with Videocon Telecom for the latter`s Gujarat and UP West circles, signed for Rs. 3310 crore.
- Bharti`s shares rose 2.6% to Rs. 351.55 just after the announcement BSE.
2) Hitachi to setup ATM making firm in India.
- Hitachi-Omron Terminal Solutions Corp (Hitachi-Omron Terminal Solutions) has established Hitachi Terminal Solutions India Pvt Ltd (Hitachi Terminal Solutions India) to be based in Bengaluru as an ATM manufacturing company.
- The new company has been set up with a capital of Rs. 100 crore and is set a target to produce 1,500 units of ATMs per month at the end of calendar year 2016. The new entity is expected to commence production.
- Aimed at strengthening the ATM business in India, Hitachi Terminal Solutions India will allow Hitachi-Omron Terminal Solutions to promptly accommodate the needs of the market, strengthen cost competitiveness, shorten the production lead time from order entry to shipment and expand the business of cash recycling ATMs.
3) 5600 wilful defaulters owe banks Rs. 60,000 crore.
- More than 5,600 borrowers, who owe banks close to Rs. 60,000 crore, have been declared wilful defaulters by lenders, data from credit information bureau CIBIL shows. These instances of wilful default are those where banks have filed suits.
- Not surprisingly, the country’s largest lender State Bank of India (SBI) is owed Rs. 12,091 crore, followed by another state-run lender Punjab National Bank (PNB) which has receivables of Rs. 9,445 crore lent to 698 borrowers.
- If the non-suit filed accounts are also considered, then close to a third of PNB’s gross non-performing assets (NPAs) of Rs. 34,338 crore have resulted from wilful defaults. Of this amount of Rs. 10,869 crore, the top 10 wilful defaulters together owe the New Delhi-headquartered bank Rs. 3,554 crore.
- Kotak Mahindra Bank has the highest amount of loans stuck with wilful defaulters among private sector banks at Rs. 5,442 crore. Wilful defaults for private sector banks stood at Rs. 10,250 crore and at Rs. 463 crore for foreign banks.
- According to RBI guidelines, a borrower is termed a wilful defaulter if he has defaulted in meeting the repayment obligations to the lender even when it has the capacity to repay, or has not utilized the money from the lender for the specific purposes for which finance was availed and has diverted the funds for other purposes.
4) Aadhaar enabled e-KYC can save Rs. 10,000 crore over next 5 yrs.
- Aadhaar enabled e-KYC process could save over Rs. 10,000 crore for banks and telecom operators over the next five years.
- A development consulting firm, using Aadhaar enabled e-KYC process for customer acquisition, could be highly beneficial for banks and telecom operators in India.
- If e-KYC is adopted for customer on-boarding by banks (for savings bank account opened through branches and alternate channels) and by MNOs (for pre-paid mobility), an estimated Rs 10,000 crore can be saved over the next five years (by 2021).
- Apart from substantial cost savings for banks and financial institutions, Aadhaar enabled e-KYC is significantly more efficient compared to current paper-based KYC.
- Customer enrolment processes followed by banks also takes longer time and it can be two to four weeks before an account is activated. Whereas Aadhaar e-KYC enabled bank accounts can be activated and ready to transact in a few minutes.
- Given that e-KYC provides near instant verification of customers` identity and their address, substantial cost reduction can be achieved through elimination of paper based verification, movement and storage being replaced by digital processes.
- Further, automation of the KYC verification process leads to a more efficient process that takes less time, thereby offering faster customer on boarding.
5) India has signed $35 million loan agreement with The World Bank for MP project.
- India and the World Bank signed a $35 million loan agreement for Madhya Pradesh Citizen Access to Responsive Services Project.
- The project aims to improve access and quality of public services in the state through implementation of the Public Service Delivery Guarantee Act, 2010.
- The project size is $50 million, of which $35 million will be financed by the Bank, and the remaining amount will be funded out of State Budget.
6) GOI allows 49% automatic route FDI in Insurance.
- Seeking to attract more foreign investment, the government has relaxed FDI norms for the insurance sector by permitting overseas companies to buy 49 per cent stake in domestic insurers without prior approval.
- Currently, up to 26 per cent FDI is permitted through the automatic approval route. For FDI up to 49 per cent, the approval of the Foreign Investment Promotion Board is required.
- The foreign investment proposals up to 49 per cent of the total paid up equity of the Indian insurance company shall be allowed on the automatic route subject to verification by the Insurance Regulatory and Development Authority of India.
- There are 52 insurance companies operating in India, of which 24 are in the life insurance business and 28 in general insurance.
- During April-December 2015, FDI into the country grew by 40 per cent to $29.44 billion.
7) Cisco to invest $100 millions in India; to train over 250,000 students.
- Joining the league of global technology giants who are making a beeline to invest into and nurture the booming India startup ecosystem, US networking major Cisco has committed $100 million over the next 18 to 24 months. The series of investments will include $40 million that will be used to fund early-stage and growth-stage companies in the country, and train around 250,000 students by 2020.
- The rest of the funds will go towards opening six new innovation labs and three centres of expertise, apart from collaborating with universities and making other investments for skill development, Cisco announced in the presence of its executive chairman John Chambers.
- Cisco will collaborate closely with state governments on strategic initiatives, "India is well positioned to lead in digitization".
- India may have been slow to adopt technology but it is leapfrogging now as compared to other Asian countries. "The entire economy is burgeoning because of digital economy".
- The company has expertise in areas such as security, cloud, and the Internet of Things which it can lend to emerging companies. "There is a lot of scope for development in IP driven technology software companies in India``.
- The $143 billion firm has over 10,000 people in India. It is also setting up a manufacturing base in Pune to locally make products to "support the Digital India vision" and aims to eventually make it an export hub.
8) Government cancels recognition of Delhi Stock Exchange.
- The government has formally withdrawn the recognition of Delhi Stock Exchange, more than a year after capital market regulator Sebi derecognized the bourse citing "serious irregularities" in its functioning.
- DSE was among the few bourses that were given permanent recognition by the Securities and Exchange Board of India (Sebi), as per information available on the regulator`s website.
- Under certain provisions of the Securities Contracts (Regulation) Act, 1956, the recognition to a recognized stock exchange can be withdrawn if it "has not been corporatized and demutualised within the specified time".
- Sebi had notified DSE Ltd (Corporatization and Demutualization) Scheme. The bourse was to be demutualised.
- Under demutualisation, management and trading at a stock exchange are separated while corporatization refers to running a bourse like a company.
- After finding "serious irregularities" in its functioning, Sebi had earlier decided to withdraw recognition granted to the exchange.
- I note that serious irregularities have been found in the functioning of Delhi Stock Exchange at the time when DSE was taking steps for demutualization.
- It is seen that for completing the demutualization process the erstwhile board of DSE had overlooked the due transfer of shares in demat accounts and receipt of funds by the appointed date.
9) Nasscom warehouse to come up at Sunrise Startup Village.
- National Association of Software and Service Companies (Nasscom) will be allotted space at Sunrise Startup Village at Rushikonda to set up a startup warehouse as part of an agreement signed with the State government.
- Nasscom will provide co-working space with comprehensive environment for incubation of startups with regular community events, mentorship, and venture capital funding.
- As per the arrangement, Nasscom will be provided 8,500 square ft. of area for incubating 50 startups a year (25 every six months).
- Nasscom has already started warehousing at several metropolis and Tier II cities like Kochi and Pune. It has drawn up an action plan to incubate 10,000 startups by 2023 to create a large pool of skilled talent. It is also known as 10K Project.
- Visakhapatnam is all set to become a startup hub due to emphasis being laid to encourage innovative ideas among youngsters.
- An innovation fund with an allocation of Rs. 100 crore was being created as part of IT and Startup Policy to encourage innovation in various fields to create several young entrepreneurs and employment for many.
10) India’s current account deficit narrows to 1.3% of GDP.
- India`s current account deficit (CAD) narrowed to 1.3% of GDP in third quarter of the fiscal as against 1.5% in the same period last year, mainly on account of lower trade deficit.
- India`s CAD at $7.1 billion (1.3% of GDP) in Q3 of 2015-16 was lower than $7.7 billion (1.5% of GDP) in Q3 of 2014-15 and $8.7 billion (1.7% of GDP) in the preceding quarter.
- The contraction in CAD was primarily on account of a lower trade deficit ($34 billion) as against in Q3 of last year ($38.6 billion) and $37.4 billion in the preceding quarter.
- On a cumulative basis, the CAD narrowed to 1.4% of GDP 1.7% in the corresponding period of 2014-15, on the back of the contraction in the trade deficit.Net services receipts moderated on a year-on-year basis largely due to fall in export receipts in transport and financial services, though there has been a marginal improvement over the preceding quarter.
- Private transfer receipts, mainly representing remittances by Indians employed overseas, amounted to $15.8 billion, a decline from their level in the preceding quarter as well as from a year ago.
- Non-resident Indian deposits moderated significantly in Q3 of 2015-16 over their level in Q3 last year as well as the preceding quarter, Foreign exchange reserves (on a BoP basis) increased by $4.1 billion in third quarter of 2015-16.
- There was an accretion of $14.6 billion to foreign exchange reserves (on a BoP basis) compared with $31.3 billion in the corresponding period of 2014-15.
11) Paytm ties up with PVR to sell online movie tickets.
- PVR Ltd, India’s biggest multiplex chain, and mobile payments company Paytm announced a partnership to sell movie tickets on the e-commerce platform.
- This marks Alibaba-backed Paytm’s foray into the online movie ticketing segment, and the firm will now compete with online tickets booking company Bigtree Entertainment, which operates as Bookmyshow.com.
- The size of the movie-ticketing market in India is $2 billion, growing at 10 per cent annually. The share of online movie marketing is just 15 per cent, and Paytm is looking to double it in quick time. It has set aggressive targets, with its base of over 125 million registered users and 90 million orders per month.
12) Edelweiss announces buy of JPMAM India.
- Edelweiss Asset Management (EAML) has announced that it has executed an agreement to acquire the onshore fund schemes managed by JP Morgan Asset Management India (JPMAM), including its India-based onshore mutual fund (MF) business and the international fund of funds for an undisclosed sum.
- The assets under management (AUM) of JPMAM stands at approximately Rs 7,081 crore, while the combined AUMs of both entities amount to approximately Rs 8,757 crore.
- Along with the schemes, EAML is committed to absorbing majority of employees of JPMAM ensuring business continuity as well as a platform for enhanced growth across the Edelweiss Group.
- Given the complementary business advantages and the significant business that JPMAM has built, this acquisition is a natural win for both Edelweiss and JP Morgan.
- There will be planned investments into the business in terms of products, technology, distribution and a clear strategy to compound growth.
- The acquisition will further strengthen Edelweiss Group`s Rs. 31,000 crore global asset management businesses, which include the group`s existing MF business, credit alternative funds, offshore funds and equity funds. The global asset management business spans multiple asset classes, client segments and geographies.
- What makes this transaction attractive is the complementary product suite between the schemes of both the funds thus broadening our entire asset management platform.
- Edelweiss has worked closely with JP Morgan across businesses and the acquisition is subject to regulatory approvals.
13) Infibeam IPO Subscribed 0.21 times On Day 1.
- The Rs. 450 crore initial public offering (IPO) of Infibeam Incorporation has received bids for 1.11 crore shares, or 0.89 times.
- Infibeam, the first online e-commerce company to hit the capital market, has put 1.25 crore shares on the block in a price band of Rs. 360-432 per equity share.
- Data available on BSE website showed the qualified institutional investor (QIB) quota was subscribed by 0.33 times the quota limit. The quota for non-institutional investors (NIIs) was subscribed by 1.41 times, while retail investors had bid for 0.64 times the quota limit.
- On NSE, the QIB quota was subscribed by 0.47 times, retail by 0.21 times while NII quota was subscribed by 0.05 times.
- The e-commerce company has set the limit for retail quota at 10 per cent. QIBs are allowed to bid for up to 75 per cent on the total issue size of 1.25 crore shares. The quota limit for non-institutional investors (other than retail individual investors) has been kept at 10 per cent.
- Infibeam`s businesses include BuildaBazaar (BaB) e-commerce marketplace (28 per cent revenue) and e-retail website Infibeam.com (72 per cent revenue). While BaB offers cloud-based, modular and customizable digital solutions and other value-added services to enable merchants to set up online storefronts, Infibeam.com is a multi-category e-retailer.
- The key strengths of the company include its strong merchant base in BuildaBazaar and high growth the company recorded in the e-tail business. BuildaBaz provides digital solutions to 48,724 merchants. It helps merchants to set up online storefronts at an average monthly realization of Rs 1,650 per merchant. Infibeam.com, on the other hand, has 5,000 registered merchants. The company has 12 logistics centres across 11 cities.
14) Government hikes dearness allowance by 6%.
- The government hiked dearness allowance (DA) by 6 per cent, benefiting over 1 crore central government employees and pensioners.
- The hike, which will cost the exchequer an additional Rs. 14,724.74 crore annually, will take effect from January 1, 2016.
- The burden on exchequer would be Rs. 6,795.5 core towards central government employees and Rs. 7,929.24 crore towards pensioners during 2016-17.
- The DA, which will benefit, 50 lakh central government employees and 58 lakh pensioners, will go up from the existing 119 per cent to 125 per cent.
- Dearness allowance is paid as a portion of basic pay of employees to neutralize the impact of inflation. Pensioners get dearness relief.
- The central government revises DA twice in a year on the basis of one year average of retail inflation for industrial workers as per a pre-determined formula.
15) Cabinet approves National Capital Goods Policy.
- The Union Cabinet has approved the national capital goods policy. The government believes implementation of the capital goods policy is critical and needed to give a boost to the sector and the `Make in India` initiative.
- The government had unveiled the National Capital Goods Policy. This is the first time such a policy has been framed for the sector.
- The Cabinet has also green flagged the doubling of two rail lines in Bihar and Jharkhand and approved incentives for rural housing.
- The capital goods policy would improve trade and exports and also pave the way for advances in technology. In particular, the policy will make sure the country utilizes the capital goods that already exist and cut down on imports. To give a rough idea, the capacity utilization for the industry as a whole, would be between 45 per cent and 70 per cent, adding, Thermax operated at a capacity level of 50 per cent-60 per cent.
- Unnikrishnan estimates India is importing around USD 35 billion worth of capital goods right now – a figure, which, he is confident, will come down.
- Indian companies will find themselves exporting capital goods into countries where there is a trade deficit. Long-term loans will be made available to these companies through the likes of EXIM bank.
- One can see India offering sops to Indian companies wanting to export more in the manner of countries like China and Japan.
16) RBI revises liquidity measuring rules for Basel III.
- The Reserve Bank has revised certain rules on measuring liquidity for Basel III norms, providing exemption to branches of foreign banks from submitting statement with regard to foreign currency.
- In view of developments since the issue of circulars regarding Liquidity Coverage Ratio (LCR), Liquidity Risk Monitoring Tools and LCR Disclosure Standards, feedback received from the stakeholders and experience gained, it has been decided to amend certain provisions of these guidelines.
- The revision also includes asking banks to exclude certain loans backed by deposits from liquidity coverage ratio calculations.
- As branches of foreign banks do not hold any foreign currency, they are exempted from submitting this statement with effect from the date of this circular.
- All banks in India, including branches of foreign banks are required to report this on a monthly basis, as per the existing norms.
- The revised guidelines comes into effect from February 1, 2016.
17) Bajaj Finance enters life care financing segment.
- Bajaj Finance has ventured into lifecare lending, a segment through which it will finance expenses for elective medical procedures such as stem cell storage, eye care, dental treatment, maternity care and cosmetic-based hair and skin treatment.
- The NBFC plans to launch this product in 40 cities across India, including tier-1 markets like Delhi, Mumbai, Kolkata, Chennai, Bengaluru, Ahmedabad, Hyderabad and Pune, and hopes to garner around Rs. 1,000 crore from it over the next five years.
- The company is the first lender in India to make a foray into the lifecare lending segment. The idea behind the move is to tap into a market which is untouched in India but is a booming business in many western countries. A formal launch in the six top metros is expected.
18) Union Cabinet Has Approved Rs. 9000 crore for Swachh Bharat Mission.
- The Union Cabinet, chaired by the Prime Minister Shri Narendra Modi, has given its approval to the US $1,500 million project of World Bank Support to Swachh Bharat Mission (Gramin) [(SBM (G)].
- The Project basically provides for incentivizing States on the basis of their performance in the existing SBM-G. Incentivisation of States was approved by the Cabinet while approving the Swachh Bharat Mission (Gramin). The current approval provides for the mechanism of such incentivisation through World Bank credit.
- Under the approved project, the performance of the States will be gauged through certain performance indicators, called the Disbursement-Linked Indicators (DLIs). Following are three DLIs.
- Reduction in the prevalence of open defecation: The funds under this result area shall be released to the States on the basis of reduction in prevalence of open defecation amongst rural households in the State, compared to the previous year,
- Sustaining Open Defecation Free (ODF) status in Villages: The funds under this result area, shall be released on the basis of estimated population residing in ODF villages,
- Increase in percentage of rural population served by improved Solid and Liquid Waste Management (SLWM): The funds under this DL1 will be based on the population served with acceptable level of SLWM services.
- The States will pass on a substantial portion (more than 95 per cent) of the Performance Incentive Grant Funds received from the MOWS, to the appropriate implementing levels of districts, Blocks, GPs etc. The end-use of the incentive grants will be limited to activities pertaining to the sanitation sector.
19) ITC acquires Technico Agri Sciences for Rs. 121 crore.
- FMCG major ITC Ltd had acquired Technico Agri Sciences Ltd India (Technico India), the company announced.
- The company has acquired the entire equity share capital of Technico Agri Sciences Limited, India, from Technico Pty Limited, Australia.
- The cost of the acquisition was Rs. 121 crore.
- The acquisition of Technico India is expected to improve business and operational synergies.
- Prior to the acquisition, Technico India was a wholly owned subsidiary of Technico Pty Limited, which in turn is a wholly owned subsidiary of ITC Limited.
- The company acquired by ITC is in the biotechnology business that grows and sells "Technituber" and field generated seed potatoes. ITC added that Technico India has become a direct subsidiary of the company.
20) Hero Cycles Acquires 60% In Sri Lanka`s BSH Ventures.
- Hero Cycles announced picking up of 60 per cent stake in Sri Lankan bicycle manufacturer BSH Ventures, its third major acquisition within six months, for an undisclosed sum.
- The acquisition comes in line with the company`s aggressive intent to strengthen its global presence and to spruce up its manufacturing proficiency to feed a rapidly rising global demand.
- Hero Cycles will further invest into ramping up the plant capacity in Sri Lanka to half a million units per year with clear plans laid out to fuel the domestic as well as ever growing global demand.
- BSH Ventures is an export-oriented bicycle manufacturing company located in the Biyagama Export Zone in Sri Lanka.
- Earlier, the company had acquired UK-based Avocet Sports and Firefox Bikes.
- Avocet Sports was Hero Cycles` first overseas acquisition and marked its entry into mass segment of European bicycle market. On the other hand, the acquisition of Firefox Bikes helped it cement its position in the fast-growing premium bicycling segment in India.
- The acquisition of BSH Ventures has enabled Hero Cycles to actively build this facility as a key hub for manufacturing its premium bicycles to meet the global demand, and double up exports to Avocet.
- Simultaneously, it will also feed the ever growing demand for premium bicycles to the South Indian market, given its geographical proximity to Sri Lanka.
- At pre sent, Hero Cycles has a manufacturing capacity of 7.5 million bicycles per year, with its units in Ludhiana (Punjab), Bihta (Bihar) and Ghaziabad (UP).