QBiz: RoC May Classify Tata Sons as ‘Public Co’; Gold Price Slips
Here are the top business stories of the day.
1. RoC May Soon Classify Tata Sons as ‘Public Co’
The Registrar of Companies (RoC) is studying Wednesday’s judgment by the National Company Law Appellate Tribunal (NCLAT) on the Tata-Mistry dispute, and may soon change Tata Sons’ classification to a ‘public company’ from a ‘private company’.
The NCLAT, in its 172-page order reinstating Cyrus Mistry as executive chairman of Tata Sons, had termed the conversion of Tata Sons into a private company ‘illegal’.
It had said that proper procedures — laid out in Section 14 of the Companies Act, 2013 — were not followed, and the permission of the National Company Law Tribunal had not been taken.
(Source: Economic Times)
2. At Pre-Budget Meet, India INC Seeks a Single Corporate Tax Rate of 15% Over 3 Yrs
Corporate India has pitched for “uniformity” in the corporate tax rate, stating that a rate of 22 percent for existing firms and 15 percent for new manufacturing firms creates “inequality”.
All corporate tax rates in the country should be converged to 15 percent – with no exemptions and incentives – over three years from 1 April 2023, Confederation of Indian Industry President Vikram Kirloskar suggested to Finance Minister Nirmala Sitharaman at the pre-Budget meeting convened with prominent industrialists here.
Kirloskar highlighted that convergence of the corporate tax rate (to 15 percent) will lead to greater clarity and prevent any disputes. This will also assure investors on the glide path of the corporate tax regime, he said.
(Source: The Hindu BusinessLine)
3. Bajaj Finance Invokes Karvy Data Shares
Bajaj Finance Ltd has invoked shares of Karvy Data Management Services Ltd (KDMSL), which were pledged by Karvy Stock Broking Ltd to raise funds from the non-bank lender, it said on Thursday.
Bajaj Finance has invoked 2.4 million pledged shares of KDMSL representing a 10% stake in the company, it said in a stock exchange filing.
KDMSL, incorporated in 2008, is a Hyderabad-based step-down subsidiary of Karvy Stock Broking and offers business and knowledge process services. It had started with back-office services and has, over the years, added various other services to its portfolio to cater to the banking, telecom, and e-commerce sectors.
(Source: Livemint)
4. SEBI Reshuffles Portfolios of Executive Directors
Capital and commodity market regulator Securities and Exchange Board of India (SEBI) has reshuffled the portfolios of its executive directors.
Newly-inducted executive director VS Sundaresan has got two portfolios, including the integrated Surveillance Department and Commodity Market Regulation department while Babita Rayudu will take charge from 1 January as executive director of legal affairs, enforcement department and special enforcement cell.
(Source: Moneycontrol)
5. Big Returns for Lightspeed, Sequoia Execs
In one of the largest cash distributions for venture capitalists in India, general partners (GPs) at Lightspeed Venture Partners and Sequoia Capital have collectively earned around $400-500 million as their share of the profits after the two funds part sold their shares in Oyo Hotels & Homes to its founder Ritesh Agarwal.
While GPs at Lightspeed are expected to have mopped up $250 million, Sequoia executives are understood to have taken home around $150 million.
The windfall for the fund executives comes on the back of RA Hospitality, a special purpose vehicle domiciled in the Cayman Islands, recently buying Oyo shares worth $1.3 billion from these two venture firms on behalf of Agarwal. The stock buyback was an unprecedented move by the Indian entrepreneur giving him about 30% ownership in Oyo.
Lightspeed Venture Partners held about 13 percent stake in Oyo and partially sold its stake for roughly $850 million while Sequoia Capital raked in $450 million, overall.
(Source: Economic Times)
6. PSU General Insurers Cede Ground to Private Players
State-run general insurers have ceded market share to their private sector peers, according to data from the Insurance Regulatory and Development Authority of India (IRDAI).
The data reveals that barring Oriental Insurance, the other three state-run general insurers lost market share in 2018-19. The trend seems to be continuing this fiscal year as well.
Public sector general insurers’ business increased by 1.28 percent in 2018-19 as against private insurers, who grew 24.25 percent, according to the IRDAI Annual Report for 2018-19. “In the case of public sector general insurers, two of the four companies expanded their business with increase in respective premium collections over the previous year,” the report noted, adding that the market share of all PSU general insurers, except Oriental Insurance, decreased.
(Source: Hindu BusinessLine)
7. Essar Verdict May Drive More Investments Into Distressed Assets Space
The recent verdict of the Supreme Court on Essar Steel’s insolvency resolution process, which upheld the primacy of secured creditors, will drive global investments into India’s distressed assets market as it will expedite the litigation process, said Rahul Chawla, managing director at Deutsche Bank India.
“It sets the sanctity of the capital structure in place. There is a logic by which a secured creditor is secured and an unsecured creditor is unsecured. So, I think (Essar judgement) puts to rest the fact that its sanctity is preserved and I think the bigger benefit of all of this is that it also puts to rest the debate about the role and responsibility of the committee of creditors (CoC) and thereby the whole Insolvency and Bankruptcy Code (IBC) law,” Chawla said in an interview.
On 15 November, Supreme Court overturned a 5 July judgement by the National Company Law Appellate Tribunal (NCLAT) which gave parity to operational creditors and financial creditors for distribution of resolution proceeds.
(Source: Livemint)
8. Gold Price Slips Rs 83 to Rs 38,029 per 10 Grams, Silver Down 0.51%
Gold prices slipped Rs 83 to Rs 38,029 per 10 gram in Mumbai bullion market after the House of Representatives formally voted to impeach President Trump on charges of abuse of power and obstruction of Congress.
The rate of 10 grams 22-carat gold in Mumbai was Rs 34,835 plus 3 percent GST, while 24-carat 10 gram was Rs 38,029 plus GST. The 18-carat gold quoted at Rs 28,522 plus GST in the retail market.
(Source: Moneycontrol)
9. Piramal Enterprises Raises ₹1,750 Crore
Piramal Enterprises Ltd has raised ₹1,750 crore through a preferential allotment of compulsory convertible debentures (CCDs) to existing investor Canadian pension fund manager Caisse de dépôt et placement du Québec (CDPQ), the company said in a statement on Thursday.
The compulsory conversion of CCDs into equity shares will take place within 18 months from the date of allotment.
CDPQ had participated as the anchor investor during the company’s previous capital issuance, investing $175 million out of the total issue size of $750 million.
Besides, CDPQ’s real estate subsidiary, Ivanhoé Cambridge, has committed $250 million towards a co-investment platform with Piramal to provide long-term equity to residential developers.
(Source: Livemint)
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