.jpeg?auto=format%2Ccompress&fmt=webp&width=720)
1. Virtusa to Buy 53nd in Polaris for Rs1,173 cr
US-based Virtusa Corp. will buy a 53 per cent stake in Polaris Consulting and Services Ltd, a digital transformation and financial technology company, for Rs.1,173 crore. Virtusa will buy Polaris shares at approximately Rs 220.73 each and make an offer to the company’s public shareholders for up to 26 per cent more of its shares, Polaris said in a statement. The promoter entities of Polaris, led by Arun Jain and certain other shareholders, including OrbiTech Pvt. Ltd, will sell their shares.
Virtusa and Polaris will collectively have approximately 18,000 employees, generating $826 million of pro forma revenue for the 12 months ended 30 September 2015.
2. Government Reforms Helped Expand Biz: Nadella
Microsoft Corporation CEO Satya Nadella, who is in Mumbai to participate in its largest ever consumer conference in the country, ‘Future Unleashed’, praised the Modi government’s record on ease of doing business at a time when sections of the domestic industry appear to be getting restless with the speed of change.
Addressing a select gathering of reporters here on Thursday, Nadella said his company wouldn’t have been able to realize dreams of opening data centres and get public sector undertakings to use it in the last 12 months if it wasn’t for the structural reforms ushered in by the new dispensation. “We want more of course, while at the same time I am optimistic about the rate of change and adoption,” he said, adding that he would like to see “less of friction”
3. Tata Steel Q2 Net Jumps 22% to Rs 1,529 cr on Other Income
Boosted by other income from the sale of investments in group companies, Tata Steel on Thursday reported a 22% jump in second quarter (Q2FY16) consolidated net profit to Rs 1,529 crore. The spurt in net profit came despite an 18 per cent decline in sales to Rs 29,069 crore, which was because of a surge in cheap Chinese imports into its key markets, India and Europe.
Revenue from its steel business fell 18 per cent to Rs 28,396 crore and gross profit from this segment declined 68 per cent to Rs 987 crore as global steel prices dropped to its lowest level in six years. Tata Steel’s other income jumped to Rs 2,938 crore during Q2FY16 on account of its sale of stakes in Tata Motors, Titan and Tata Incorporated.
Tata Steel took an impairment charge of Rs 8,015 crore on some of its non-performing business units during Q2FY16. Of this amount, a Rs 7,772 crore charge was on account of its strip operations in Europe, mostly those in the UK, the company said.
4. Rescue Package for Discoms Gets Cabinet Nod
In a major reform for the power sector, the Centre has asked states to take over 75 per cent of the debt of power distribution companies (discoms). This would not only help in cleaning of the debt of Rs 4.3 lakh crore accumulated on state-owned discoms, but would also bring relief to lenders.
For the next two financial years, the central government will not include the debt taken over by the states in calculation of their fiscal deficit, which could have otherwise gone up by Rs 3.2 lakh crore.
The programme, Ujjawal Discoms Assurance Yojana, would be open to all states. Among the states, Rajasthan has the highest debt at Rs 85,000 crore, followed by Tamil Nadu at Rs 70,000 crore and UP at Rs 32,000 crore. States are suggested to take over 75 per cent of discom debt as on September 30, 2015 over two years–50 per cent in 2015-16 and 25 per cent in 2016-17.
5. Blow for Tata Motors’ Defence Ambitions
Because of its size and profits, automotive major Tata Motors has considered itself a frontrunner in the contest to win India’s biggest ‘Make’ category defence project–a Rs 50,000 crore contract to design and build a “future infantry combat vehicle” (FICV) for the army. Now, with the stroke of a pen, the defence ministry has reshaped the formbook.
Last year, thanks to profits from its UK-based subsidiary Jaguar Land Rover (JLR), Tata Motors had a consolidated turnover of Rs 2,63,695 crore and a net profit of Rs 13,986 crore, almost thrice as much as Larsen & Toubro (L&T), its next-biggest rival in the FICV contest. But, JLR’s profitability dressed up a far less impressive domestic performance: Tata Motors’ domestic operations generated a turnover of only Rs 38,176 crore and a net loss of Rs 4,739 crore.
The defence ministry’s decision also throws a spanner into the Tata Group’s plan to bid as a consortium, with group companies–Tata Motors and Tata Power (Strategic Engineering Division)–forming part of the same consortium. Now Tata Power (SED) might be reluctant to compromise its chances by allying with Tata Motors, give the question mark over the latter’s eligibility.
6. Beef Politics Worsens: Rajasthan Ends Subsidy to Beef Processing Units
Blaming fringe elements for whipping up the beef hysteria is all very well, but when state governments get into the fray, it gives it an altogether different spin. According to a report in The Indian Express, the Rajasthan government has gone ahead and amended its investment promotion scheme to end any kind of incentive/subsidy to units that process beef–in this case, since Rajasthan does not allow the sale of cow meat, this refers to buffalo meat.
Since there is no ostensible reason for removing the subsidy–it is not being removed for other products–the only plausible reason is that the state government is trying to placate some interest group that feels strongly against it; possibly, it is of the opinion that cows are being slaughtered and are being consumed/exported under the guise of buffalo meat.
7. Blackstone To Invest Over $2 billion in India Over Next 5-6 years
Private equity company Blackstone could invest over $2 billion in India over the next 5-6 years, a further affirmation of the optimism of most foreign investors about the prospects of Asia’s third-largest economy. The investments will be from its recently raised $23 billion fund, two top officials of the Blackstone Group said in an exclusive interview with the Economic Times. “Our developing markets strategy encompasses India, China and to some extent Australia. IIndia is our largest destination for capital (among emerging markets) and will continue to be so but it may even outweigh relative to what we have invested in the last 5-6 years,” Joseph Baratta, global head of PE at Blackstone Group, said.
However, Baratta cautions that a lot of laws will have to be changed for global investors to get comfortable with investing in debt in India.
8. “Peak demand” Means World May Never See Oil at $100 a Barrel Again
Just as the energy industry has brushed aside concerns that the world could run out of oil, industry executives now say they believe it is demand, rather than supply, that is nearing its apex.
In 1985, Ian Taylor, today the chief executive of the world’s largest oil trader Vitol, was part of a team at Royal Dutch Shell that forecast oil prices would rise five fold to $125 a barrel in 2015 as global reserves were expected to become more scarce. Now he says it is unlikely to ever reach those levels again.
Oil today stands at around $50 a barrel, having more than halved since June 2014 after global supplies dramatically rose due in large part to the US shale oil boom but also due to the unlocking of huge offshore reserves in Brazil, Africa and Asia.
9. Reliance Com Ropes in Flipkart’s HR chief Babu Vittal
Anil Ambani-owned Reliance Communications has roped in Babu Vittal from e-commerce giant Flipkart as its chief human resources officer for consumer business.
Vittal will report into Gurdeep Singh, chief executive of consumer. “Vittal will help in the transformation of RCom into an incumbent data player in the fast-growing data market, focusing on the youth and online communities,” a Reliance Communications (RCom) said an email.
As Flipkart’s HR head, Vittal formed part of its startup team and has seen several mergers and acquisitions, and was part of a key Flipkart team which oversaw the integration of Myntra into Flipkart. This experience could come in handy as RCom is acquiring Sistema Shyam Teleservices’ telecom business and is expected to integrate the teams in a few months.
(At The Quint, we are answerable only to our audience. Play an active role in shaping our journalism by becoming a member. Because the truth is worth it.)