QBiz: Telcos to Hike Tariffs From Dec; Govt Says No Economic Slump
Catch the latest business news for the day.
1. Vodafone Idea, Airtel To Hike Tariffs From December Amid Sector Stress
Vodafone Idea and Bharti Airtel on Monday said that they will increase tariffs of their mobile offerings starting 1 December. The development comes days after both the companies posted record losses in September quarter. "The telecom sector is highly capital intensive with fast changing technology cycles that require continuing investments. It is, therefore, extremely important that the industry remains viable to support the vision of Digital India. Accordingly, Airtel will appropriately increase price offerings in the month beginning December," Bharti Airtel said in a press release.
"While continuing to provide affordable tariffs to customers, it would balance the needs of the company to remain viable and thereby continue to invest in the much needed digital infrastructure and maintain the quality standards required by our customers," Bharti Airtel added.
2. ICICI Bank Plans ₹20,000 Cr Capital Boost via QIP
ICICI Bank Ltd plans to raise at least ₹20,000 crore by selling shares to institutional investors, in the biggest such capital raising in India, as the nation’s largest private lender looks to expand lending and compete with rivals to fill in the void left by shadow lenders after a crisis engulfed the sector.
The Mumbai-based bank has approached at least 10 investment banks on the proposed capital raising, and it may soon give a formal mandate to some of them, two people familiar with the bank’s plans said on condition of anonymity.
3. Tata Steel Plans to Scrap up to 3,000 Jobs in Europe
Tata Steel plans to cut up to 3,000 jobs across its European operations, the company said on Monday, as the sector wrestles with excess supply, weak demand and high costs.
Earlier, a source close to the discussions told Reuters around 3,000 people would be affected after the group's European chief executive Henrik Adam said Tata was planning to announce job cuts across the European business without giving figures.
4. IT Companies May Shed up to 40,000 Mid-Level Employees: Mohandas Pai
India's information technology services companies may shed 30,000 to 40,000 middle-level employees this year as growth slows down, IT industry veteran T V Mohandas Pai said Monday.
The former Chief Financial Officer of IT major Infosys Ltd termed these job losses as once-in-five-years normal phenomenon with maturing of the industry.
"As in all sectors in the West, in India too when a sector matures so many people will be there in the middle level who will not be adding value to the salary they get," Pai told PTI.
5. ArcelorMittal Hopes to Complete Essar Acquisition by December End
ArcelorMittal is expecting to complete the transaction for Essar Steel before the end of December.
ArcelorMittal India Private Limited’s (AMIPL) resolution plan for Essar Steel India Limited (ESIL) has been unconditionally approved by the Indian Supreme Court, the company announced.
"Supreme Court approval of AMIPL’s resolution plan is the final procedural step in ESIL’s corporate insolvency process. Completion of the transaction is now expected before the end of the year," it said.
(Source: Business Standard)
6. Growth Decelerated, but There Is No Slump: Govt Tells Lawmakers
The finance ministry said on Monday that India is on track to reach the $5 trillion target by 2025, and although the economy has slowed down, it is still projected to grow at the fastest pace among G-20 nations this year.
In a written response to a question in the Lok Sabha, finance minister Nirmala Sitharaman said that despite some recent deceleration in growth, India’s economy is still projected by the International Monetary Fund’s World Economic Outlook of October 2019 to grow at the fastest rate in 2019-20 among G-20 countries.
7. RBI Has Cut Rates by 110 Bps Since April, but Average Lending Rates Goes up 8 Bps: Report
Despite the Reserve Bank making credit cheaper, lending rates are rising for borrowers after accounting for inflation and falling economic growth, a foreign brokerage said on Monday.
The weighted average lending rate in the system is up 0.08 percent since April, economists at Bank of America Merrill Lynch said in a report.
Economic growth has fallen to a six-year-low of 5 percent in the June quarter and is widely expected to slip further with almost all key components of the economy contracting or falling since the first three months. The RBI has responded by cutting rates by 110 basis to a nine-year-low of 5.40 percent since April courtesy low inflation.
8. Amid Slowdown, Steel Companies Reduce Prices for Automakers by 14%
For the automobile sector reeling from slowdown, there could be some breather from steelmakers lowering contract prices by 11-14 per cent for the second half (H2) of the financial year (2019-20 or FY20).
Some have already sealed half-yearly contracts for the auto segment; others are in the process of finishing them.
“The auto industry is an important stakeholder for the steel industry. It is important for us to support them when they are facing challenges,” said a leading steel producer that has already closed negotiations. It added, “It’s in the nation’s interests that both survive and grow. Hence, we support each other.”
(Source: Business Standard)
9. PE Firm Advent International Acquires Controlling Stake in Bharat Serums
US private equity (PE) firm Advent International Corp. on Monday said it has acquired a controlling stake in Bharat Serums and Vaccines Ltd, a leading maker of injectable biological and pharmaceutical products. The company operates in women’s healthcare, assisted reproductive treatment, critical care and emergency medicine in India and emerging markets.
While financial details of the deal were not disclosed, Mint had reported first on 9 April that promoters of Bharat Serums were in initial talks with PE firms to sell a controlling stake for around $500 million, and had approached Advent for the same.
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