QBiz: Karnataka Suspends Ola Permit; Lenders Mull Taking Over Jet
A round-up of top business stories for the day.
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1. Karnataka Suspends Ola Permit for Six Months Over Bike Taxis
Karnataka suspended Ola’s licence to operate in the state for six months after the homegrown cab aggregator failed to comply with an order to suspend “illegal” two-wheeler taxi services in the state’s capital Bengaluru. Ola said it would work with officials to resolve the matter.
A letter sent to Ola parent ANI Technologies Pvt Ltd on 18 March by the state transport department ordered the company to suspend all operations, including four-wheeler cabs, within the next three days.
“As ANI Technologies Pvt Ltd, which operates Ola, has violated the Karnataka On-Demand Transportation Technology Aggregators Rules 2016, their aggregator licence – which was issued for a period up to June 2021 – remains suspended,” the letter said.
(Source: The Economic Times)
2. Lenders Mulling Plan to Take Over Jet, Sell it After Revival
Indian lenders may consider plans to buy a controlling stake in Jet Airways and sell it later to an interested party as the promoters of the ailing airline have failed to agree on a deal.
“Lenders will acquire a substantial stake in Jet, and then sell the airline after a couple of months,” said a government source who did not want to be identified.
As part of the plan, State Bank of India – the lead bank in the lenders’ consortium – has asked Naresh Goyal, his wife Anita Goyal and two other members on Jet board to step down. The Economic Times had reported this on Thursday.
“Need a clean transaction for a new buyer,” the person added, explaining the reason for seeking the promoters’ exit under the deal thrashed out over past few days.
(Source: The Economic Times)
3. EU Gives Theresa May Two-week Brexit Reprieve
Brexit is to be delayed till 12 April at the earliest, after European leaders agreed to a modified version of British Prime Minister Theresa May’s request that they delay Brexit.
Now, if May’s withdrawal deal is passed by MPs next week, then Brexit will be delayed till 22 May – the day before European Parliamentary elections are set to take place.
If it fails, the UK will be given time till 12 April, two weeks after the date the UK had been set to leave the EU, to come up with a plan forward, the European Council said following a meeting in Brussels late on Thursday.
(Source: The Hindu Business Line)
4. Govt Crosses Divestment Target for 2nd Year in a Row; Rakes in Rs 85,000 Cr
Finance Minister Arun Jaitley said in a tweet on Friday that the government had exceeded its disinvestment target of Rs 80,000 crore for 2018-19 by Rs 5,000 crore, taking the proceeds to Rs 85,000 crore.
The Department of Investment and Public Asset Management (DIPAM) has crossed the disinvestment target for the second year in a row.
On Friday, Power Finance Corp completed the acquisition of the government’s 52.63 percent stake in Rural Electrification Corp for Rs 14,500 crore.
The fifth tranche of the Central Public Sector Enterprise Exchange Traded Fund (CPSE ETF) also closed on Friday, clocking in Rs 9,500 crore.
(Source: Business Standard)
5. Voda Idea’s Promoter Stake may Cross Limit
Vodafone Idea (VIL) may need to go for a qualified institutional placement (QIP), or a preferential equity issuance, within a year to bring promoter holding at 75 percent or below, if its minority shareholders contribute less than Rs 5,400 crore in the telco’s upcoming Rs 25,000 crore rights issue, analysts said.
The pro-rata contribution requirement of VIL’s minority investors based on the 28.67 percent free float is roughly Rs 7,170 crore.
The promoters have said they will take up the unsubscribed portion, if any, which may take their holding well over the permitted 75 percent limit, which needs to be brought down in a year’s time.
(Source: The Economic Times)
6. Amazon Builds up War Chest to Take on Grofers, Flipkart in Grocery Space
Amazon is building up its war chest to pump in additional cash into the unit that handles the grocery business in India, with plans for aggressive expansion in the segment.
The Seattle-headquartered firm has increased the authorised share capital of Amazon Retail India (ARIPL) – one of the sellers of grocery items on its platform.
According to a regulatory filing sourced through data and business intelligence platform Paper.vc, ARIPL raised its authorised share capital to Rs 355.5 crore from the present Rs 165.5 crore.
(Source: Business Standard)
7. Monetary Policy Committee to Meet Six Times During 2019-20, Says RBI
The Monetary Policy Committee (MPC), which decides on key interest rates, will meet six times during the next financial year, the Reserve Bank of India (RBI) said on Friday.
The first meeting of the six-member MPC to decide on the first bi-monthly monetary policy statement for 2019-20 will be held from 2 to 4 April.
The policy will be announced on 4 April. Headed by RBI Governor Shaktikanta Das, the committee also includes two representatives from the central bank and three external members.
(Source: PTI)
8. Fitch Cuts India’s FY20 GDP Growth Forecast to 6.8%
Global credit ratings firm Fitch has trimmed India’s growth forecast for the financial year beginning 1 April to 6.8 percent, citing slow momentum in the manufacturing and agriculture sectors.
The assessment differs from that of its peer S&P, which expects growth to pick up in the quarters ahead.
“While we have cut our growth forecasts for the next fiscal year (FY20, ending in March 2020) on weaker-than-expected momentum, we still see Indian GDP growth to hold up reasonably well, at 6.8 percent, followed by 7.1 percent in FY21,” Fitch said in its global economic outlook issued on Friday.
(Source: The Economic Times)
9. China’s VC Investments in Indian Start-ups Hit $5.6 Billion in 2018
The inflow of Chinese venture capital (VC) funds into India continues to grow exponentially despite the geopolitical tensions between the two countries. The Chinese VC funds surpassed those coming from the US and Japan in 2018.
According to data collated by research and analytics platform Tracxn, the China’s VC investment into the Indian start-up ecosystem has increased five-fold at $5.6 billion in 2018 compared to a mere $668 million in 2016 and around $3 billion in 2017.
The increased inflow to Asia’s third largest economy came in at a time when Prime Minister Narendra Modi launched an ambitious Startup India programme that led to a spurt in the number of tech start-ups in the country.
(Source: The Hindu Business Line)