1. Tata Steel-Thyssenkrup Joint Venture Approved.
The Tata Steel board gave the green flag to the joint venture with German steel giant Thyssenkrup today. Back in Germany, the Thyssenkrup supervisory board also approved the collaboration with the Indian steel manufacturer. This deal will see both steel majors combine their European businesses to form a 50:50 joint venture.
The resultant entity, which will be called Thyssenkrup Tata Steel BV , will be the second-largest steelmaker in European steel sector after Lakshmi Mittal`s ArcelorMittal. It will have around 48,000 workers and about 15 billion euros in sales. The definitive agreement signed today will be formally executed shortly, Tata Steel said in a BSE filing.
Meanwhile, Thyssenkrup said in a statement that joining forces with Tata Group will help with its transformation into an industrial and service group, and will help to improve its financial standing.
Both parties expect the deal to be completed within 12-18 months from the date of execution of the transaction documents, the statement said, given that they get the required regulatory approval in time.
Tata Steel and Thyssenkrupp had signed a Memorandum of Understanding (MoU) back in September 2017 to this effect after announcing plans to combine their European businesses and form a joint venture. Now that they are together, the steelmaking joint venture aims to produce 35,000 million tonnes of cold rolled grain oriented steel every year from its expanded factory, instead of the earlier capacity of 10,000 tonnes per annum. The company had said the new product line set-up will help in meeting the continuously increasing demand for cold rolled grain oriented in the Indian market.
According to a Reuters report, the German steelmaker is expecting annual synergies of 400 million to 500 million euros from the transaction, having previously communicated a maximum of 600 million. Tata Steel`s Dutch facility will be part of the cash pooling mechanism of the JV, which had been a key demand for German workers concerned that Tata would give its own workers better conditions in the new company.
In case of an initial public offering (IPO) of the joint venture, which is widely expected by investors and has been flagged by both companies, Thyssenkrup would get a bigger share of the proceeds "reflecting an economic ratio of 55-45," the report further said.
The Tata Steel-Thyssenkrup deal comes in the backdrop of heavy tariffs of 25 per cent imposed by the Trump administration on steel imports from both European Union and India.
2. BSE, BME Tie-Up To Develop Commodity Derivatives Markets.
Premier stock exchange BSE has entered into an agreement with the Bombay Metal Exchange (BME) for the growth and systematic development of commodity derivatives markets in the non-ferrous metals complex.
Through this memorandum of understanding (MoU), the BSE and the BME will co-ordinate and work jointly on initiatives to deepen the understanding of commodity market among stakeholders, a release said here today.
The BME, with its domain knowledge and unique stakeholders ranging from importers, traders to corporates, will assist the BSE in designing new and innovative deliverable products in commodities like aluminium, copper, zinc, nickel and lead among, others, it said.
The BSE will soon enter the commodities markets and with relevant industry inputs, members of the BME, post the MoU, can take advantage of the expertise of the stock exchange’s educational programmes, the release said.
The agreement will also help in launching new and innovative products, adding more value to the existing commodities value chain and ecosystem, it said.
“The BSE and the BME fully acknowledge and appreciate their strengths, resources, experience and expertise.
“Therefore, they feel it expedient to join hands for mutual benefits in pursuit of common goals with the objective of developing and strengthening commodity derivatives market,” BSE managing director and CEO Ashishkumar Chauhan said.
3. Vijay Srinivas Appointed Director & GM Of United India Insurance.
City-based United India Insurance Company today announced the appointment of K B Vijay Srinivas as its Director and General Manager with effect from July 1.
Prior to taking up the new role, he was serving National Insurance Company Ltd as its Chief Marketing Officer and General Manager, a press release said.
Srinivas, in his 37 years of service, has also contributed articles in journals of insurance, tax and other subjects. A recipient of many awards, Srinivas is also an associate member of Insurance Institute of India, it added.
4. Government Forms Panel To Upgrade Norms To Upgrade Norms For Computation Of Economic Data.
The government has set up a 13-member committee to upgrade the norms for computation of economic data at state and district level in the backdrop of plans to revise the base year for national accounts or GDP calculation.
The Ministry of Statistics and Programme Implementation (MOSPI) will change the base year to 2017-18 for the calculation of GDP and IIP numbers from the current 2011-12 with an aim to capture changes in the economy.
As per the terms of reference, it will also “suggest state level annual/benchmark surveys keeping in view the needs of the System of National Accounts especially in view of the next base year revision.”
5. Bharti Infratel Gets CCI Nod For Merger With Indus Towers.
The transaction is expected to close before the end of the current financial year.
The Bharti Infratel, a mobile infrastructure company, has got the the approval of competition watchdog Competition Commission of India (CCI) for merging its operations with Indus Towers.
"We are pleased to inform you that approval of Competition Commission of India (CCI) has been received for the proposed merger of Bharti Infratel Limited and Indus Towers Limited," said the tower arm of India`s largest telco Bharti Airtel in a regulatory filing to the exchanges.
The proposed merger values Indus Towers at an enterprise valuation of ? 71,500 crore, and will create one of the largest mobile tower entities worldwide with 1.63 lakh towers in all 22 telecom circles.
The combined company will own 100% of Indus Towers.
Bharti Infratel and Vodafone jointly own 42% stake each in Indus Towers. Idea Cellular holds 11.5% stake and the rest held by Providence.
Post the deal, Bharti Airtel and Vodafone will jointly control the combined company. The transaction is expected to close before the end of the current financial year.
Bharti Infratel shares on BSE closed 0. 95% down at ? 298.55 in a weak market on Monday.
6. IndiaFirst Ties Up With Oxigen.
IndiaFirst Life Insurance has partnered payment solutions provider Oxigen to utilise its point of sale (POS) network for distributing insurance policies in a bid to reach the underbanked population.
“We are taking insurance to the last mile, both in rural and urban areas. This is for people who are either not saving or not opting for insurance because of paperwork issues,” said Pramod Saxena, chairman and managing director (MD), Oxigen Services India.
The partnership is aimed at enabling customers to buy IndiaFirst’s insurance product across Oxigen’s 240,000 common service centres (CSCs) within minutes and eliminating paperwork. The life insurance company has designed ‘Khata’, its new product, keeping in mind the needs of customers in underbanked locations. Khata is a non-life, non-participating term assurance with return of premium plan. It provides individuals with the flexibility of paying premiums in parts, as and when possible.
“Khata is primarily targeted towards self-employed customers who do not have regular income. For these people, it is difficult to commit to a certain product that requires regular outflow,” said RM Vishakha, MD and chief executive officer of IndiaFirst Life.
7. Sashakt: 5 Pronged Strategy To Deal With NPAs.
The Sunil Mehta Committee, set up to look into the faster resolution of stressed assets, has recommended the creation of an asset management company for the resolution of stressed loans worth more than Rs500 crore. Finance minister Piyush Goyal announced that government has accepted a report submitted by a committee of bankers led by Punjab National Bank chairman Sunil Mehta.
Sunil Mehta committee on bad loans resolution has recommended a five-pronged strategy Project `SASHAKT` to deal with Non-performing Assets in the country`s banking system. The five-pronged strategy includes:
1. SME resolution approach,
2. Bank-led resolution approach,
3. AMC/AIF led resolution approach,
4. NCLT/IBC approach, and
5. Asset-trading platform.
The Mehta Committee has further proposed a Bank Led Resolution Approach (BLRA) for loans between Rs 50 and Rs 500 crore. Under the BLRA approach, financial institutions will enter into an inter-creditor agreement to authorise the lead bank to implement a resolution plan in 180 days.
8. KVIC Launches E-Marketing System.
The Khadi and Village Industries Commission (KVIC) has launched its in-house developed, single-umbrella e-marketing system named Khadi Institution Management and Information System (KIMIS) in New Delhi. The system can be accessed from anywhere in the country for the sale and purchase of Khadi and Village Industries products.
KVIC Chairman Vinai Kumar Saxena, while inaugurating KIMIS, said that it was the need of the hour to develop an in-house single umbrella billing software for sale and purchase that could be monitored, round-the-clock, from any part of India.
He said that the KVIC IT team has developed a foolproof software, which may have cost millions of rupees if purchased from a third party. This software will give real-time data of sales and will also give the updated status of stocks of Khadi Bhawans and warehouses, allowing better planning and control of inventory of the KVIC.
He added that 480 Khadi institutions and showrooms are linked with this billing software and it will be useful in raising demand and supply of goods in high demand.
9. NABARD Sanctions Over Rs 735 Crore For Bengal For Rural Infra Projects.
National Bank for Agriculture and Rural Development (NABARD) has sanctioned Rs 735.53 crore under Rural Infrastructure Development Fund (RIDF) to West Bengal during the first quarter of 2018-19, according to an official release.
The funding would help execution of 86 projects, which included six solar power projects, works on one medium irrigation, five minor irrigation and 12 flood protection projects, besides 57 projects of widening and strengthening of roads and five rural bridges.
The grid connected solar power projects apart from generating 88.61 MU of solar energy per annum would be beneficial towards preventing emission of million tonnes of climate damaging carbon dioxide gases.
The works on irrigation projects is expected to benefit 11,554 ha of land besides addressing problems of wastage of water at upstream areas, seepage loss, deposition of silt, insufficient height of canal, which has been resulting in short supply of water in the command area.
The flood protection projects are aimed to address the problems of rapid bank erosion caused by rivers which is gradually engulfing valuable homestead and cultivated land. Likely 155 villages will be benefited from irrigation and flood protection works, the release said.
Widening and strengthening of 57 roads would benefit 352.81 kms in 14 districts of the state. The rural bridges would save about 82 km distance, the release said.
10. RBI Licences Bank Of China To Operate In India.
The Reserve Bank of India on Wednesday issued license to Bank of China to operate in India, according to sources. According to reports, the decision was based on the commitment made by Prime Minister Narendra Modi to the Chinese leadership.
Following this, the 106-year-old Bank of China will open a branch in India.
Last month Prime Minister Narendra Modi met Chinese President XiJinping ahead of the Shanghai Cooperation Organization (SCO) Summit in Qingdao, China. During the meeting, they discussed the issues of security, economic cooperation and people-to-people exchanges.
The Bank of China (BoC) opened its first branch in South Asia in Pakistan`s Karachi last year.
11. IFC Invests $100 Million In M&M Arm.
World Bank Group member IFC has invested $100 million in Mahindra & Mahindra Financial Services Ltd. (Mahindra Finance).
This would enable India’s largest tractor financier to augment growth by extending loans to individuals, including farmers, along with financing small and medium enterprises.
The investment in the Mahindra Group company will be through secured non-convertible debentures, Mahindra Finance said in a statement.
Mechanised farming can cut costs by 25% and raise productivity by 20%, helping meet the Centre’s target of doubling farmers’ incomes by2022, it added.
12. Karnataka Budget Announced: Important Highlights.
Ahead of the high-octane electoral battle in Karnataka, Chief Minister Siddaramaiah is presenting his record 13th Budget today. Siddaramaiah also holds the Finance portfolio of Karnataka. Today is his record 13th state budget and 6th in a row, though it will be only a vote-on-account budget in view of the upcoming election.
Siddaramaiah had earlier presented six budgets as Karnataka CM since 2013 and seven as Deputy Chief Minister in the first Congress-Janata Dal coalition government between 2005-2007 and also in the then Janata Dal-United (JD-U) government between 1995-2000. He has presented seven budgets under three chief ministers – H.D Deve Gowda, J.H. Patel and N Dharam Singh. For the record, Siddaramiah is also the second chief minister of Karnataka to have completed a full five-year term as the CM. Between 1972-78, Devaraj Urs was the first CM who had completed the five-year term.
13. YES Bank Gets SEBI Nod To Launch Mutual Fund Business.
Yes Bank today said it has received approval from capital markets regulator SEBI to start mutual fund business.
This approval is subsequent to the Reserve Bank of India’s (RBI) approval granted to Yes Bank to sponsor a mutual fund followed by SEBI’s in-principle approval received subsequently, the bank said in a statement today.
“Yes Asset Management (India) Limited (YAMIL) will leverage YES BANK’s Knowledge Banking expertise and relationship capital across retail, corporate and institutional investors to effectively channelise their assets in equity and debt capital markets,” the bank’s Managing Director and Chief Executive Officer Rana Kapoor said.
This strategic initiative will further complement Yes Bank’s retail liabilities and wealth management strategy, and also allow YAMIL to build on the bank’s distribution network to provide customers a seamless investment and banking experience, Kapoor said.
The lender said it has recruited a team to establish the operations under the guidance of the Board of Directors and trustees.
Yes Asset Management will launch fund offerings across the spectrum of both debt and equity markets over the next 6-12 months.
14. ICICI Bank`s Mortgage Portfolio Crosses Rs1.5-Trillion.
ICICI Bank on Wednesday said its mortgage loan portfolio crossed the Rs 1.5-trillion milestone, making it the largest private player in the segment, and the lender is targeting to grow it to Rs 2 trillion by FY20.
At Rs 1.5 trillion, the mortgage loan-book is half of the bank`s overall retail loan portfolio of around Rs 3 trillion, the bank said.
"We are not only the largest private sector bank but also the largest mortgage player among our peers with a Rs 1.5-trillion loan book. And we hope to grow this to Rs 2 trillion, clipping annually at 15 percent by FY20," said Anup Bagchi, executive director, ICICI Bank.
He further said mortgage book is half of its Rs 3 trillion retail assets, which constitute 52 percent of its total assets of $172.5 billion.
ICICI Bank has been under probe by multiple central agencies since March for alleged wrongdoings in extending loan to now-bankrupt Videocon group by its managing director Chanda Kochhar, who has since been asked to go on leave till a probe is over.Basing his optimism of clocking higher growth on the PM`s Awas Yojna, Bagchi said most of the growth in coming in from tier II and III towns as the average ticket size is only a tad above Rs 30 lakh.
When asked about the assets quality, he said there is nothing to worry on this front, and without quantifying claimed it to be one of the lowest in the industry.
15. Finance Ministry Keeps SSS` Interest Rates Unchanged For July-September Quarter.
Ahead of monetary policy review, the government today kept unchanged the interest rates on small savings schemes like PPF, Kisan Vikas Patra and Sukanya Samriddhi for October-December quarter.
“The rates of interest on various small savings scheme for the third quarter of the financial year 2017-18 starting October 1 shall remain unchanged from those notified for the second quarter of 2017-18,” the Finance Ministry said in a release.
Since April last year, interest rates of all small saving schemes have been recalibrated on a quarterly basis.
The Reserve Bank of India is scheduled to undertake monetary policy review on October 4.
Investments in the public provident fund (PPF) scheme will fetch annual rate of 7.8 per cent while Kisan Vikas Patra (KVP) investments will yield 7.5 per cent and mature in 115 months.
The one for girl child savings, Sukanya Samriddhi Account Scheme will offer 8.3 per cent annually. Similarly, the investment on 5-year Senior Citizens Savings Scheme will yield 8.3 per cent. The interest rate on the senior citizens scheme is paid quarterly.
16. 25 Countries In Global Banks’ ‘High Risk’ List.
China, UAE, Cyprus and significantly, Mauritius, along with 21other countries have been tagged as “high-risk jurisdictions” by global banks acting as custodians for foreign funds which comprise the largest group of investors in the Indian stock market.
Large investors and beneficial owners of these funds entering India through these high-risk jurisdictions will face close scrutiny while non-resident Indians and persons of Indian origin will run into new hurdles in participating in funds set up in these countries for trading on Indian exchanges.
A week ago, the main custodian banks shared a list of 25 countries with the capital markets regulator Securities and Exchange Board of India (Sebi), two persons aware of the development told ET. HSBC, Deutsche Bank, Citi, Standard Chartered and JP Morgan are among the banks that compiled the list.
“The impact of treating a particular jurisdiction as high risk will be significant. Firstly, even regulated and low-risk (category 2) funds investing from such jurisdictions will have to undertake full KYC as applicable to a category 3 FPI (like hedge funds). This will mean providing financial information of the fund and identity proof of ultimate beneficial owners (UBOs) and authorised signatories which some investors might not be uncomfortable with,” said Rajesh H Gandhi, Partner, Deloitte Haskins & Sells.
17. RIL Becomes India`s Largest Tax Payer In Private Sector.
Reliance Industries Chairman Mukesh Ambani on Thursday said that Reliance is India`s largest payer of Goods and Services Tax (GST), Excise and Customs Duty, and Income Tax in the private sector.
Speaking at the Reliance Industries` 41st Annual General Meeting, Mukesh Ambani highlighted that Jio`s subscribers grew from 124 million at the end of last year to 210 million at the end of FY18.
"Jio and retail`s share in overall EBITDA from 2 percent to 13 percent," he said while adding that Jio is now India`s most widespread mobile network that has a larger reach than even the 2G players.
Talking about the unprecedented growth, Ambani said that Jio is committed to making India one of the top 5 fixed broadband countries in the world.
Calling Jio as India`s only mobile video network, Mukesh Ambani announced that there are more than 25 million JioPhone users in India.
RIL`s consolidated net profit for the fourth-quarter (January-March) of fiscal 2017-18 stood at Rs 9,435 crore, up by 17.3 percent on a year-on-year basis.
However, the company had posted a net profit of Rs 8,046 crore for the corresponding quarter of fiscal 2016-17. The company`s consolidated revenue stood at Rs 1,29,120 crore, up 39 percent during Q4 FY 18, compared to the Rs 92,889 crore posted in the corresponding quarter a year ago.
"Reliance has become the first Indian company to record PBDIT (Profit Before Depreciation Interest and Taxes) of over $10 billion with each of our key businesses - refining, petrochemicals, retail and digital services achieving record earnings performance," Mukesh Ambani said in April.
18. HDFC Bank Most Valuable Bank In Emerging Market Outside China.
HDFC Bank has gone past Russia`s Sberbank to become the most valuable bank in the emerging market outside China. HDFC Bank’s current market capitalisation is $78.4 billion against Sberbank`s $74.4 billion. Chinese banks are leading the pecking order in the emerging market, with Industrial & Commercial Bank of China topping the list with a market cap of $273.4 billion.
Globally, America`s JPMorgan Chase is the most valuable with a market cap of $353 billion, followed by Bank of America at $282 billion. There are four lenders from India that now rank among the world`s 500 most valuable companies. HDFC Bank is followed by its housing finance cousin Housing Development Finance Corporation (HDFC), Kotak Mahindra Bank and State Bank of India.