1) Nestle India ties up with Paytm to promote KitKat Duo.
- Nestle India is beefing up its chocolate portfolio with new products.
- As part of its market strategy to price its ‘premium’ products cheaper, the company introduced a new variant of KitKat, called KitKat Duo.
- To promote KitKat Duo, it has tied up with Paytm for cash back offer, besides a cross-promotion agreement with the yet to be released Kareena Kapoor and Arjun Kapoor starrer Ki & Ka.
Lower price point:
- Most players introducing new brands and variants at the Rs. 20-plus range in this category. Pricing at Rs. 10 for KitKat Duo is an attempt to offer innovations at a lower price point.
- Earlier this year, the company had launched Munch Nuts, which come with peanuts and peanut crème’ as part of its plan to grow the chocolate category.
Target new users:
- Talking about the limited period Paytm collaboration, that the brand’s core consumer is in the age group of 17-21 years, the mobile cash-back along with KitKat packs is a strategy to increase brand penetration among new users, while rewarding the existing users.
Dual treat:
- With R Balki’s Ki & Ka set for release, Since Ki & Ka celebrates the individuality of two people who come together as a couple, it resonated with the thought of KitKat Duo, which has two flavours - brown and white chocolate - in a single product.
- On the growth rate in the chocolate category, it is still at a nascent stage in India in terms of penetration, was witnessing a very healthy growth in the last few years but it saw a bit of a slowdown in 2015 for all the brands.
2) GMR arms divest 51% stake in OSE Hungund highway venture.
- GMR Highways Ltd and GMR Infrastructure Ltd have signed a share purchase agreement with joint venture partners to divest its 51 per cent stake in GMR OSE Hungund Hospet Highways Pvt Ltd.
- The deal will help GMR reduce its debt by Rs. 1077.97 crore and create liquidity of Rs. 85 crore.
- The GOHHHPL special purpose vehicle operates Hungund Hospet section of National Highway No.13, a 99 km project.
- The project was bagged by the GMR OSE consortium under the design, build, finance, operate and transfer basis. The sale is envisaged in two tranches.
- Under Tranche I, joint venture partners have bought 14.99 per cent stake of the project from GMR Group.
- Tranche II will be completed post approvals from NHAI, lenders of GOHHHPL and other closing conditions required for such transactions. While the sale consideration is Rs. 85 crore, it is 1:1 times book value of investment.
- This transaction signifies about the GMR Group’s commitment and ability to successfully implement its Asset-Light-Asset-Right strategy under challenging market conditions.
3) IL&FS Engineering bags Rs. 154 crore deal.
- A joint venture of IL&FS Engineering and Construction Company and Unitech Power Transmission Ltd has received a letter of award from Power Grid Corporation of India Ltd worth Rs. 153.99 crore turnkey contract to execute a 765 kV transmission line in Gujarat.
- In a statement to the BSE, the company has informed that the scope of work includes supply contract for tower package for 765 kV Bhuj-Banaskanta Transmission Line associated with Green Energy Corridor relating to the Inter-State Transmission Scheme.
- The Rs. 153.99 crore project, funded by The KFW Bank, is to be executed in Gujarat within 24 months from the date of the award. IL&FS Engineering has won the contract under International Competitive Bidding process.
- The company has executed transmission lines, sub-stations and distribution works in Andhra Pradesh, Telangana, Uttar Pradesh, West Bengal, Haryana and Karnataka.
- It is currently executing rural electrification works in Uttar Pradesh for Paschim Vidhyut Nigam Ltd worth Rs. 389 crore and for Madhayanchal Vidyut Nigam Ltd worth Rs. 475 crore.
4) NTT Data to Buy Dell’s IT-Services Arm.
- Japan`s NTT Data Corp has agreed to buy Dell Inc`s information technology consulting division for over $3 billion to expand in North America and bolster its services business.
- The move will allow US computer maker Dell to trim some of the $43 billion (Rs. 2.86 lakh crore) in debt it is taking on to fund its pending cash-and-stock acquisition of data storage provider EMC Corp, a deal worth close to $60 billion (Rs. 3.99 lakh crore).
- The sale will also offer NTT Data, one of the world`s largest technology services companies, a bigger foothold in the US, where it is looking to expand in healthcare IT, insurance and financial services consulting.
- Dell has also made progress in syndicating $10 billion (Rs. 66,527.5 crore) of its financing package for the EMC acquisition dubbed `term loan A`. This is expected to be increased in size by $500 million (Rs. 3,326.4 crore) to $750 million (Rs. 4,989.6 crore) due to strong demand, with the extra money to be used to downsize some of the more expensive tranches of the remaining $33 billion (Rs. 2.19 lakh crore) in financing.
- The group of banks participating in the term loan A has been expanded from the original eight underwriters to 25, with more expected to join before the syndication is completed.
- Dell declined to comment, while NTT Data did not immediately respond to a request for comment. Reuters had reported first that NTT Data was in exclusive talks to buy Dell`s IT services unit.
- Dell has also been speaking to private equity firms about selling Quest Software, which helps with information technology management, as well as SonicWall, an e-mail encryption and data security provider, Reuters has previously reported. Together, Quest and SonicWall could be worth up to $4 billion (Rs. 26,611 crore).
5) Government to infuse Rs. 5,050 crore in PSU banks soon.
- The government is likely to infuse additional capital of about Rs. 5,050 crore in some public sector banks this week.
- Parliament has already approved Rs. 5,050 crore for meeting additional expenditure on recapitalization of public sector banks. The capital infusion by the Finance Ministry in the identified banks would be done soon.
- Likely contenders for the fresh round of infusion include Central Bank of India, Indian Bank, UCO Bank, Oriental Bank of Commerce, Vijaya Bank and United Bank of India.
- It will be part of the Rs. 25,000 crore capital infusion plan earmarked for the current fiscal.
- In the first tranche, as many as 13 public sectors banks were given fund support of Rs. 19,950 crore. Of this, SBI got the highest amount of Rs. 5,393 crore followed by Bank of India Rs. 2,455 crore.
- Besides, government infused Rs. 2,229 crore in IDBI Bank, Indian Overseas Bank Rs. 2,009 crore and Punjab National Bank Rs. 1,732 crore.
- In 2015, the government announced a revamp plan ‘Indradhanush’ to infuse Rs. 70,000 crore in stateowned banks over four years, while they will have to raise a further Rs. 1.1 lakh crore from the markets to meet their capital requirements in line with global risk norms BaselIII.
- In line with the blueprint, PSU banks will get Rs. 25,000 crore this fiscal and also in the next fiscal. Besides, Rs. 10,000 crore each would be infused in 201718 and 201819.
6) GVK sells stake in Bangalore International Airport to Fairfax.
- GVK Power and Infrastructure will sell 33 per cent of total stake in Bangalore International Airport Ltd to Fairfax India for Rs. 2,149 crore, a deal that will trim the group`s debt burden by more than Rs. 2,000 crore.
- The transaction, expected to be completed by mid-2016, would also help the diversified entity save around Rs. 300 crore annually on interest costs.
- Bangalore International Airport Ltd (BIAL) owns and operates the Kempegowda International Airport Bengaluru. The airport started operations in 2008.
- In BIAL, GVK Group holds 43 per cent stake, Siemens Project Ventures GmbH 26 per cent and Flughafen Zurich AG Ltd 5 per cent while state-owned entities Airport Authority of India and Karnataka State Industrial Investment & Development Corporation Limited hold 13 per cent each.
- GVK Power & Infrastructure would divest 33 per cent stake in BIAL to Fairfax India Holdings Corp through their wholly-owned subsidiaries in Mauritius for an aggregate investment of Rs. 2,149 crore.
- Grappling with substantial debt burden, GVK Power has been exploring avenues, including possible IPO of its airport business, to raise funds.
- GVK Airport Developers, a wholly-owned subsidiary of GVK Power, had initiated a financing process last year to reduce its debt obligations. The deal is an important and successful milestone in deleveraging the balance sheet.
- All proceeds from this stake sale shall be used to bring down our debt obligations to our lenders.
7) 100% FDI allowed in e-commerce marketplace model.
- Government has given the green light to 100% FDI in the marketplace format of e-commerce retailing with a view to attract more foreign investments.
- As per the guidelines issued by the Department of Industrial Policy and Promotion (DIPP) on FDI in e-commerce, foreign direct investment (FDI) has not been allowed in inventory-based model of e-commerce.
- At present, global e-tail giants like Amazon and eBay are operating online marketplaces in India, while homegrown players like Flipkart and Snapdeal have foreign investments even as there were no clear FDI guidelines on various online retail models.
- To bring clarity, the DIPP has also come out with the definition of `e-commerce`, `inventory-based model` and `marketplace model`.
- Marketplace model of e-commerce means providing of an IT platform by an e-commerce entity on a digital and electronic network to act as a facilitator between buyer and seller.
- The inventory-based model of e-commerce means an e-commerce activity where inventory of goods and services is owned by e-commerce entity and is sold to consumers directly.
- A marketplace entity will be permitted to enter into transactions with sellers registered on its platform on business-to-business basis.
- An e-commerce firm, however, will not be permitted to sell more than 25% of the sales affected through its marketplace from one vendor or their group companies.
- In order to provide clarity to the extant policy, guidelines for FDI on e-commerce sector have been formulated.
- The government has already allowed 100% FDI in business-to-business (B2B) e-commerce.
8) LIC increases stake in IDBI Bank to 14.37%.
- State-owned lender IDBI Bank informed stock exchanges that Life Insurance Corp. (LIC) of India now owns 14.37% stake in the bank, after a preferential issue of shares.
- The life insurance behemoth previously owned 7.21% in the bank, which transferred 7.16% equity stake or 15.87 crore shares to LIC.
- With this transaction, IDBI Bank is now the second largest bank holding for LIC. The insurance provider owned 21.22% stake in Corporation Bank, the highest equity it holds in any lender.
- Apart from these two, LIC owns 14.36% stake in UCO Bank and 13.75% stake in Canara Bank, at the end of the third quarter. The government directly owned an 80.16% stake in IDBI Bank.
- IDBI Bank’s board had approved the bank’s plan for a preferential issue of capital to LIC, aggregating up to Rs. 1,500 crores.
- Earlier this month, the state-owned lender had stated that it plans to raise Rs. 19,000-20,000 crore worth of equity capital, through all available options such as qualified institutional placements (QIPs) and preferential allotment to large strategic investors.
- Apart from this, the bank will also try to raise debt capital worth Rs. 4,000 crores by issuing Tier-I bonds and Rs. 8,000-9,000 crore through tier-II bonds during the next three years.
- Mint had reported that the International Finance Corp. (IFC), US-based private equity firm TPG Capital and UK’s development finance institution CDC Group are all in talks with the government to buy stake in IDBI Bank.
- Banks have to maintain a minimum CAR of 9.625%, according to the guidelines on the implementation of Basel III norms issued by the Reserve Bank of India (RBI).
- An asset quality review of RBI had recently asked banks to recognize weaker assets as bad loans and make provision for it. This took a toll on the profitability of public sector banks in the quarter ended.
9) CBDT signed 11 unilateral Advance Pricing Agreements.
- The Tax Department has signed 11 more Advance Pricing Agreements (APAs) with taxpayers covering overseas transactions within group entities so as to reduce litigations.
- Central Board of Direct Taxes (CBDT) has signed 11 unilateral APAs. With this signing, India has entered into 59 bilateral and/or unilateral APAs. 50 of these agreements have been signed in the current financial year.
- Unilateral APAs refer to the signing of agreement with the Indian tax authorities and an MNC, while bilateral APAs also involve the government of the country where an overseas company is located.
- APA, introduced in the Income Tax Act in 2012, provides for pact between taxpayers and the IT department on an appropriate transfer pricing methodology for determining the value of assets and ensuing taxes on intra-group overseas transactions.
- The agreements cover a range of international transactions including corporate guarantees, royalty, software development services, IT enabled services and trading. The agreements pertain to different industrial sectors like telecom, media, automobiles, IT services, etc.
- Some of the agreements have rollback provisions and provide certainty to the taxpayers for nine years with regard to the covered international transactions.
- Rollback provisions in APAs were introduced in 2014 Budget to provide certainty on the pricing of international transactions for four years (rollback years) preceding the first year from which APA becomes applicable.
- The number of applications is indicative of the wide international and national appreciation of the India`s APA programme`s ability to address complex transfer pricing issues in a fair and transparent manner.
10) Jaitley launches `Make in India` conference in Sydney.
Finance Minister Arun Jaitley launched ‘Make in India’ conference in Sydney and asked Australian businesses to be the part of India’s growth story.
India becomes the key focus of the world and ‘Make in India’ is one of the key focuses of the government.
India could manage to become a very low cost service provider but failed to transform into a low cost manufacturing.
The Minister pinpointed that with People in agri sector moving out, there was a need to achieve the target of manufacturing sector to occupy the 25 per cent of India’s GDP. Now is the time when ‘Make in India’ campaign can translate into actual activities.
India has to invest in its infrastructure in a bid to prepare a base for an economy of this huge size. Manufacturing must occupy a space.
The conference was launched in the presence of Australia’s Special Envoy for trade Andrew Robb, Indian High Commissioner Navdeep Suri, CII Director-General Chandrajit Banerjee, CII President Sumit Mazumder and NEW Parliament Secretary for Major Events and Tourism Jonathan O’Dea.
Mr. Jaitley indicated that India has been given a second chance to transform itself into manufacturing hub with ‘Make in India’ campaign launch.
Indian economy was doing well despite global downturns and if the global tailwinds become more supportive, India could perform even better.
Global investors must seriously look at in terms of investing in India.
The constituency that supports economic reforms in India are far more bigger than the one which obstructs it. India becoming an aspirational society has significantly increased.
Mr. Jaitley also cited the size of the market that India offered.
Any market that occupies 1/6 of the global population, 35-40 per cent of them in middle class. Its purchasing power increasing by the day.
The Minister further assured the investors that tax system in India was also being gradually brought to global standards.
11) Piramal Enterprises to invest Rs. 900 crore in Essel Green Energy.
- After real estate, Ajay Piramal has turned his focus on to renewable energy. Piramal Enterprises Ltd (PEL) will, in collaboration with Netherlands-based APG Asset Management, invest Rs. 900 crore ($132 million) in Subhash Chandra’s Essel Green Energy Private Ltd.
- Essel Green Energy currently owns 160 MW of independent solar power projects in four States, of which 110 MW is operational and 50 MW is currently under execution. The company plans to ramp up its solar power capacity to 1,000 MW in the next 2-3 years.
- Essel Green had recently installed a 50-MW solar project in Uttar Pradesh. The Centre has set a target of installing 100 gigawatts (GW) of solar power capacity and 60 GW of wind power capacity by 2022.
- APG represents over 30 per cent of all collective pension schemes in the Netherlands and managed pension assets of more than €400 billion.
- Over the last one year a number of national and international firms have announced investments in the renewable energy sector, including, SunEdison, SoftBank and Enel.
12) Japan to lend Rs. 14,000 crore for Indian projects.
- The Government of Japan has committed a loan of JPY 242.2 billion (around Rs. 14, 251 crore) for various projects across India, including Jharkhand, Odisha, Madhya Pradesh and the North East. The Official Development Assistance is to be deployed for a transmission system strengthening project in Madhya Pradesh, an integrated sanitation improvement project in Odisha, a dedicated freight corridor project, a road network connectivity improvement project in the North East, and a micro drip irrigation project in Jharkhand, according to a government release.
- The Government of Japan has committed a total of JPY 390 billion in the current financial year which is the highest amount committed in a year. India and Japan have had mutually beneficial economic development cooperation since 1958.
- In the last few years, economic cooperation between India and Japan has strengthened and grown into a strategic partnership.
13) Mallya offers to repay Rs. 4,000 crore to banks.
- After being pursued for years by a consortium of banks, former liquor baron Vijay Mallya has offered to pay Rs. 4,000 crore of the Rs. 9,091 crore he and his now-defunct Kingfisher Airlines owe the lenders.
- According to a proposal submitted to the Supreme Court, Mallya has agreed to pay Rs. 2,000 crore up front and an additional Rs. 2,000 crore. The proposal was put forward after Mallya had two rounds of discussions with the lenders through video conferences.
- The proposal was submitted to the court by Mallya’s counsel CS Vaidyanathan. The Supreme Court asked the consortium of banks to respond to the proposal within a week, and posted the matter for hearing on April 7.
- Asked by the SBI counsel where Mallya is residing right now, Vaidyanathan said he is still abroad. Mallya has been summoned to appear before the Enforcement Directorate under the provisions of the Prevention of Money Laundering Act, but it is not clear if he will do so now.
- The lenders are examining the proposal, but disclosed no details. Apart from Rs. 4,000 crore, Mallya has agreed to pay an additional Rs. 2,000 crore if he wins a case against GE Corp.
- SBI is keen to ensure that the interests of all the banks are sufficiently protected before it takes a decision. If the proposal is accepted, Mallya will be forced to disclose the source of the Rs. 4,000 crore he has agreed to pay.