QBiz: Cognizant Misses 2016 Target, Dell’s $50 Mn Startup Fund
Top business stories of the day.
1. Government May Not Scrap 145-Year-Old Pension Act: ET
A last-minute realisation may have saved the Narendra Modi government from blowing away the legal cover available to authorities right from the President and Supreme Court judges to ministers and members of Parliament against any orders of attachment of their pensions from the courts.
The government had almost decided to axe the 145-year-old Pensions Act in its zealousness to heed the Prime Minister’s call to scrap obsolete laws.
But according to the Economic Times report, several ministries have pointed out that no other law protects government authorities from seizure or attachment of pension by process of any court, at the instance of a creditor who raises a demand against the pensioner. The final decision will now be made by Prime Minister Modi, who heads the pensions department of the personnel ministry
2. Cognizant Revenue Drops Sequentially: Livemint
Cognizant Technology Solutions Corp has reported a sequential decline in revenue in the quarter to March marking the Nasdaq-listed firm’s slowest start to a calendar year since 2009, reports Livemint.
Worryingly for investors, Cognizant slightly revised down its forecast for 2016 revenue growth, with the management now expecting full-year revenue to be between $13.65 billion and $14 billion, an increase of 10-13 percent, as against the earlier guidance of 10-14 percent.
The guidance of at-best 13 percent growth means Cognizant expects the slowest growth since its inception in 1996, when the US-based firm started serving outside clients after being separated from Dun and Bradstreet.
This also means that Infosys Ltd, which has guided for at-best 13.8 percent growth, may grow faster than Cognizant, the first time in more than 13 years.
3. Rs 3,500-Cr Fine on Singh Bros, Not Rs 2,562 Cr Says Daiichi: BS
A day after news broke that former Ranbaxy owners Malvinder Singh and Shivinder Mohan Singh had been fined Rs 2,562 crore by an arbitration court in Singapore for concealing facts from Daiichi Sankyo, the Japanese pharma major has put the damages at around Rs 3,500 crore, reports Business Standard.
The amount of 56.2 billion Japanese yen (Rs 3,500 crore) includes interest cost, lawyers’ fee and amount incurred by Daiichi Sankyo in the arbitration process.Daiichi Sankyo Statement
The Rs 2,562 crore figure, presented by the Singh brothers on Thursday, excluded these three costs, the report adds.
The judgement was pronounced by an arbitration court in Singapore on 29 April. Daiichi said former shareholders of Ranbaxy have to pay Rs 851.06 crore as interest, Rs 96.81 crore as lawyers’ fee and Rs 3.98 crore as compensation for arbitration costs.
4. Dell Foundation Earmarks $50 Million for Indian Startups: ET
The Michael and Susan Dell Foundation (MSDF), one the world’s biggest philanthropic organisations, and an active impact investor in India has earmarked an additional $50 million (about Rs 333 crore) towards investments in the country over the next three years according to an Economic Times report.
The amount, which will be primarily used towards making direct investments in early-stage ventures, will be in addition to the impact investor’s existing vehicles, which includes its Delaware-registered, proprietary seed-stage fund – India Educational Investment Fund.
5. Assets With Mutual Funds Cross Rs 14 Lakh Crore at April-End: BS
The mutual funds (MFs) sector has topped Rs 14 lakh-crore in assets under management (AUM), for the first time as highlighted by the Business Standard. April saw an addition of Rs 1.4 lakh crore and the overall AUM at the month’s close was Rs 14.22 lakh crore, shows data from the Association of Mutual Funds in India mentioned in the report.
The total had slipped in March due to a net outflow of Rs 73,000 crore. The bulk of April flows were in liquid and money market schemes, where typically companies and financial institutions park their surplus liquidity. The outflow in March was due to the financial year’s closing and related demand.
Notably, equity schemes again saw investor flows. After the first net outflow in March, after 22 months, these saw a Rs 4,438 crore net inflow in April.
6. ICICI Prudential Life, HDFC Standard Life Plan to Raise Over $1 Billion in Two IPOs: Livemint
Two of India’s leading private-sector insurers are looking to raise over $1 billion this financial year in the sector’s first initial public offerings (IPOs), as insurance companies rush to take advantage of a change in ownership rules as per a Livemint report.
ICICI Prudential Life Insurance and HDFC Standard Life Insurance will likely be followed by SBI Life Insurance in reacting to a relaxation in foreign investment regulation last year that made share sales more feasible, in a country where most life insurers are part-foreign owned.
Asia’s third-largest economy boasts a $50 billion insurance sector, yet is home to relatively few people owning life insurance policies.
7. With RBI Planning Periodic Licences, Companies May Not Rush in With Applications: ET
Diversified non-banking financial companies (NBFCs) such as Edelweiss Financial Services, Shriram Group, microlender SKS Microfinance and brokerage-led lending companies like India Infoline will explore their chances of starting a new bank after the Reserve Bank came out with the draft rules for offering on-tap bank licences on Thursday.
According to an Economic Times report, the banking aspirants that had lost out when the regulator issued one licence each to microlender Bandhan and infra-financier IDFC in 2014, may try again, though none of the NBFCs will be in a hurry as RBI intends to offer licences periodically and not at one go, analysts said.
8. Indian Railways Attracts Rs 42,000-Crore FDI Says Govt
The government has said Indian railways has attracted foreign direct investment (FDI) to the tune of Rs 42,000 crore and will soon float tenders for manufacturing rail coaches in the country.
Indian Railways has been able to attract one of the largest FDIs in terms of placing orders. Two of the top companies, one European and one American, with the contract value as high as Rs 42,000 crore. This is the largest FDI in terms of contract.Suresh Prabhu, Railways Minister
India needs a stable source of investment and FDI is one of those, he said, adding that the government is also planning to build new dedicated freight corridors that will again attract investment.
Read the story here.
9. Govt Depts’ E-Marketplace Gets Finance Ministry’s Clearance: Livemint
The finance ministry has approved the setting up of an online one-stop e-marketplace where government departments can directly purchase common use items from suppliers, in a move that can reduce corruption and cut red tape activities.
At present, most of the requests for office use items including computers, air-conditioners and water coolers go through the Directorate General of Supplies and Disposal as reported by the Livemint.
Now, the directorate will host an online marketplace wherein government departments can make direct purchases from the suppliers. To begin with, purchases through the online marketplace have been made optional for government departments, the report adds.
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