QBiz: Bharti Airtel Acquires Telenor; Walmart’s Plans for Flipkart
1. Nirav Modi Case: Finance Ministry Asks Allahabad Bank CEO, PNB EDs To Be Divested Of All Powers
The Central Bureau of Investigation has named Usha Ananthasubramanian, former chief executive officer of Punjab National Bank, in a charge sheet filed in the Nirav Modi case on Monday. PNB executive directors KV Brahmaji Rao and Sanjiv Sharan have also been named in the charge sheet.
Following the charge sheet, the government directed that these officials be divested of their executive powers. “We have issued a formal letter to our directors in the board, and since this is in the domain of the board to decide, the boards will take an appropriate decision,” Rajiv Kumar, secretary in the government’s Department of Financial Services told reporters.
Ananthasubramanian is currently the CEO of Allahabad Bank. She headed PNB between August 2015 and May 2017 and also served as an executive director at the bank between July 2011 and November 2013. Rao and Sharan are serving EDs at PNB.
2. Bharti Airtel Completes Acquisition Of Telenor India
Telecom major Bharti Airtel Ltd has completed the merger of the Indian arm of Telenor Communications with itself.
As part of the deal, the Sunil Bharti Mittal-led company will also take over the outstanding spectrum payments and other contractual commitments such as tower lease agreements of Telenor India, it said in a statement. Airtel will now begin integrating Telenor India’s operations across seven circles – Andhra Pradesh, Bihar, Maharashtra, Gujarat, UP (East), UP (West) and Assam, the statement added.
The deal will enable Airtel to further bolster its spectrum footprint in these seven circles, with the addition of 43.4 MHz spectrum in the 1800 MHz band – widely known as 2G spectrum, but it is now being used for 4G services as well.
3. RBI Bars Dena Bank From Further Lending
The Reserve Bank of India has barred Dena Bank Ltd from further lending and frozen hiring at the lender, the bank disclosed in a notification to stock exchanges on Friday. The stringent measures come against the backdrop of continued weakening of the bank’s fundamentals. Dena Bank has been under the RBI’s prompt corrective action framework since May 2017.
On Friday, Dena Bank reported a net loss of Rs 1225.42 crore compared to a net loss of Rs 380.07 crore in the same quarter last year. The bank saw its gross non performing assets rise to 22 percent from 19.5 percent in the previous quarter. The bank reported a negative return on assets at 4.07 for the quarter ended March 2018.
4. Walmart Has Long-Term Plans for Flipkart, an IPO Isn’t One of Them
A Flipkart IPO is unlikely to happen for many years to come, as Walmart Inc will have to invest heavily to make its $16-billion acquisition work.
Last week, Walmart agreed to buy a 77 percent stake in Flipkart for $16 billion with the rest being held by minority investors, chiefly Tiger Global Management, Tencent Holdings, Microsoft and co-founder Binny Bansal. It also said it supported Flipkart’s ambition to go public.
Walmart has told Flipkart’s leadership team to not worry about an IPO anytime soon, according to two people familiar with the matter. Walmart is viewing Flipkart as a long-term bet that may take years, or even decades, to yield excellent financial returns, these people said. Both of them requested anonymity.
5. Flipkart's Former Employees Can Sell 30% of Their Esops for $125-129
Online retailer Flipkart will repurchase up to 30 percent of its former employees’ vested Esops (Employee stock ownership plan) at a share price ranging from $125-129, the Bengaluru-headquartered company informed some of its former employees in an email over the last couple of days.
As part of US retail giant Walmart’s $16 billion investment in Flipkart, large number of people associated with the e-commerce company are set to benefit once the deal closes in FY19, including Flipkart’s previous employees.
“30 percent of the vested options can be liquidated on or about the date of the closing of the proposed transaction,” read the email. “The liquidation of options would be at a price reflective of the transaction price, in the range of $125-129 per option.”
(Source: The Economic Times)
6. New Direct Tax Code to Benefit Corporates, Income Tax Payers
Businesses and low-income earners will stand to gain the most from the new direct tax code that the government is working on, two people familiar with the matter said.
The proposed direct tax code, the draft of which will be ready by July, will take forward the government’s agenda of lowering corporate tax rate to 25 percent for all businesses and seek to give further relief to individual income tax payers.
The idea is to moderate tax rates for assessees without squandering the recent gains in revenue growth and tax base. Therefore, the proposed tax rate cuts will be incremental over a period of time as compliance and revenue collections grow. Between fiscal 2014 and fiscal 2018, income tax returns filed have risen over 80 percent to 68.4 million.
7. Reliance Jio’s 2021 Vision Is Looking Increasingly Blurry
In March 2017, Reliance Jio Infocomm Ltd had said that India’s mobile market will be Rs 3 trillion in size by 2020-21, adding it is well-positioned to achieve a market share of more than 50 percent.
But Reliance Jio’s own actions point to a singular focus on market share, with little regard for where the industry ends up in terms of revenues. “Reliance Jio’s tariff actions suggest it is happy to live with a 50 percent share of a market that has shrunk considerably, rather than a lower share in an unshrunk market,” said an analyst at a domestic institutional brokerage, requesting anonymity.
Industry revenues have shrunk almost every passing quarter since Reliance Jio launched operations. To add to the misery of incumbents Bharti Airtel Ltd, Idea Cellular Ltd and Vodafone India Reliance Jio announced new postpaid plans last week that are at about half the level of incumbents’ base plans in the category.
8. Traditional Sectors Hiring Tech Talent to Stay in Game
Indian companies in traditional sectors like agriculture, petroleum, pharma, transportation and legal are aggressively hiring technology talent to stay ahead of the curve in the face of digital disruption.
With artificial intelligence (AI), big data, cloud computing, Internet of Things (IoT) and robotics rapidly changing how society can access services, companies such as Mahindra & Mahindra, Vedanta, RPG Enterprises and Cipla have stepped up hiring of people trained in such cutting-edge technology to ensure they are ready when rivals enlist new technologies to dislodge competition.
According to a LinkedIn research, the pace of hiring digital talent in these sectors is five times higher than that of their overall hiring.
(Source: The Economic Times)
9. Burger King India Evaluating IPO to Fund Growth Plans
Burger King India Pvt Ltd, a quick service restaurant (QSR) chain owned by private equity (PE) firm Everstone Capital, is evaluating a potential initial public offering (IPO) to raise growth capital, two people aware of the company’s plans said.
“Everstone Capital is evaluating options to raise growth capital to fund the expansion of Burger King India. They have recently held discussions with a few select investment bankers on the possibility of taking the company public. These are very preliminary talks,” said one of the persons cited above, requesting anonymity as he is not authorized to speak with the media.
Everstone owns and operates Burger King’s branded restaurants across India and Indonesia as part of its F&B Asia Ventures platform.
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