QBiz: Airtel Takes 4G Reins, StanChart to Shed Big India Loans
Realty firms have failed to meet their targets for 2015-16. (Photo: iStock)
Realty firms have failed to meet their targets for 2015-16. (Photo: iStock)

QBiz: Airtel Takes 4G Reins, StanChart to Shed Big India Loans

1. Bharti Airtel Ends Reliance Jio’s Advantage with Spectrum Deals: ET

Bharti Airtel’s acquisition of Aircel’s 4G airwaves has ended the monopoly of Reliance Jio Infocomm’s first-mover advantage in the fast mobile broadband turf. The telco has become a pan-India 4G player even before the Mukesh Ambani-owned firm launched Jio commercially.

According to Economic Times, the acquisition of 4G airwaves from Aircel will significantly reduce Bharti Airtel’s need to bid aggressively at airwave auction to occur in July 2016.

The acquisition in eight of available 22 circles in India would also propel Bharti Airtel’s overall spectrum market share to 21 percent, racing past Bharat Sanchar Nigam’s 18 percent and Reliance Jio Infocomm’s 13 percent.

2. L&T Infotech Withdraws Draft Prospectus for IPO: Livemint

Larsen and Toubro Infotech, the information technology services arm of engineering conglomerate Larsen and Toubro (L&T), has withdrawn its draft prospectus for an initial public offering (IPO) to raise Rs 2,000 crore, about four-and-a-half months after it got approval from the capital market regulator Securities and Exchange Board of India (SEBI).

According to Livemint, the parent firm L&T, in a stock exchange announcement, cited “change in the offer structure and other considerations” as the reason for the move.

One of the reasons for withdrawing the DRHP (draft red herring prospectus) was that market conditions were not right for the issue. It is possible that we may file a fresh DRHP at some future date, but we cannot offer a specific comment on the matter at this stage
L&T Spokesperson

3. FinMin to Replace Interest Subvention with Back-Ended Subsidies: BS

Concerned at the slow transmission of policy rate changes by banks, the Centre plans to replace interest subvention schemes with interest subsidies that do not interfere with lenders’ marginal lending rates, reports Business Standard.

In addition to that, the government has also asked states to coordinate with one another in market borrowings so that there is no liquidity crunch.

We need to revisit our interest subventions schemes and replace them with back-ended interest subsidies that do not interfere with the marginal lending rates, and yet have the same effect on the loan repayments as the interest subventions have. While the focus is on setting policy rates, equally important is the monetary policy transmission.
Ratan Watal, Finance Secretary

4. StanChart Looks to Shed $1.4-billion Loans in India: BS

Standard Chartered is looking to shed stressed loans worth $1.4 billion (Rs 9,284 crore) made to Indian firms, including the GMR group, to revamp its asset book.

According to Business Standard, the bank is seeking to sell at least $4.4 billion of assets in Asia as it pares its balance sheet after booking record impairments. Assets that are on the block include loans, proprietary bond and equity investments in China, Indonesia and Malaysia.

The report states that the bank is selling stressed Indian loan portfolio including loans to around 10 companies which are primarily from the infrastructure and power industries. The bank has already made provisions for these. The bank may sell just a part of the portfolio, depending on demand.

The decision came after Standard Charted decided against a planned sale of at least $1.5 billion in non-stressed loans extended to mid-market Indian companies after testing buyer interest.

5. Tata Steel UK to Sell Long Products to Greybull for Nominal £1: FE

Tata Steel has initiated the sale of its cash-deficient UK arm on Monday with divestment of Long Products Europe business to investment firm Greybull Capital for a nominal amount of 1 pound.

The transaction will be concluded by June 2016.

According to Financial Express, the struggling steelmaker has appointed KPMG as advisor for the “thorough, but expedited” sale process of its entire shareholding in its subsidiary Tata Steel UK, which includes Britain’s largest steel plant at Port Talbot.

Tata Steel UK has announced “signing of an agreement to sell its Long Products Europe business to family investment office, Greybull Capital.

The deal also includes clauses that workers will accept a one year pay cut of 3 percent and certain changes in the pension scheme. Britain’s largest trade union, Unite, has found the conditions acceptable in order to save 4,400 jobs, but “warned” UK government that it should ‘initiate measures to protect the steel sector.’

6. Ricoh India Under SEBI Lens for Irregularities: ET

Ricoh India is reportedly under regulatory glare amid allegations of financial irregularities that recently led to its top officials stepping down.

The Securities and Exchange Board of India ( Sebi) is looking into complaints including the ‘lag in announcement of results by the company and the reasons that caused the delay, an official was quoted saying by the Economic Times.

Earlier this month, the company asked its top executives including managing director Manoj Kumar, chief financial officer Arvind Singhal and Anil Saini, its chief operating officer, to go on leave amid an ongoing audit by a committee including an independent law firm and accountants.

PwC is said to have been hired by parent Ricoh Japan to conduct a forensic audit on the company.

7. Realty Firms Miss Residential Sales Guidance for 2015-16: Livemint

Real estate developers have struggled to meet their residential sales guidance for the year 2015-16 due to tepid consumer sentiment and delays in securing project approvals, reports Livemint,

Unable to launch projects and sell in line with expectations, a few realty firms even revised or downsized their sales targets in the March quarter.

While real estate developers in Mumbai and Bengaluru selectively launched projects in the last fiscal year, most in India’s largest property market—the National Capital Region centered on Delhi—refrained from bringing more new supply into the market—causing sales to shrink.

8. Banks Must Have Flexibility to Rejig Bad Loans, says Arun Jaitley: ET

Finance Minister Arun Jaitley, has backed the creation of a “political and economic” environment that will enable public sector banks to go after bad loans.

This will help in creating a structure that will encourage the banks to hammer out settlements without fearing the investigation of such deals later on.

According to Economic Times, Jaitley also said two key laws would be amended to further empower banks to recover their outstanding dues.

Business losses caused the twin balance sheet problem. So you have to address the sectors and reverse the cycle. I think that’s more important and banks must have the flexibility to settle  
Arun Jaitley, Finance Minister

Gross non-performing assets (NPAs) of state-run banks doubled to 6.78 percent of total loans at the end of December 2015 from 3.22 percent at the end of FY13. Jaitley said India is undergoing a burst of reforms comparable with those unveiled a quarter of a century ago.

9. Calcutta HC Stays Entry Tax on West Bengal E-Shipments: ET

After getting a stay from the Uttarakhand High Court over the issue of entry tax, Flipkart has sued the government of West Bengal over a similar issue, according to Economic Times.

The e-commerce firm has also managed to get a favourable judgement from the Calcutta High Court, which could act as a deterrent for other states that are in the process of imposing entry taxes on goods bought online.

The petition has been filed by Instakart Services that runs the logistics arm of Flipkart, EKart. The petition, as highlighted in the report, alleges that the West Bengal government is imposing an entry tax of 1 percent on the value of each consignment which is being delivered by eKart in the state.

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