QBiz: Modi Invites Investors in Singapore, Idea-Videocon Deal

Here’s a quick round-up of the top business news on QBiz.

4 min read
Narendra Modi addressing at the India-Singapore Economic Convention in Marina Bay Sands Convention Centre, in Singapore on Tuesday. (Photo: PTI)

1. Modi in Singapore: Big Push to FDI Since NDA Came to Power

Prime Minister Narendra Modi on Tuesday invited investors in Singapore to play a larger role in India’s economic growth, saying his government had delivered on the reforms front and “successfully restored the credibility of India in the eyes of global players”.

Addressing corporate executives from over 300 companies, Modi said India had taken several policy measures to make itself an attractive destination for foreign capital and called upon investors from the city-state to participate in the divestment of blue-chip public sector units. He also sought Singapore’s help to build 20 smart cites, and asked the island state to play a greater role in other infra projects such as upgrading railway stations.

Read the full report here.

2. Idea Cellular, Videocon Ink First Spectrum Deal

Two months after the government approved spectrum trading guidelines, the first such deal took place on Tuesday with India’s third largest operator by revenues and subscribers, Idea Cellular, buying 5 MHz of contiguous spectrum in the 1800 MHz band from Videocon Telecommunications in the Gujarat and UP (West) circles for Rs 3,310 crore.

The development marks the beginning of consolidation in the sector wherein weaker operators with regional footprint sell their spectrum to bigger players.

Read the full report here.

3. With More Bills to Pay, Jaitley May Settle for Token Corporate Tax Cut

Companies will have to wait a while for a significant tax rate reduction as all indications are of Finance Minister Arun Jaitley making only a token one percent cut in fiscal 2016-17.

With payouts looming on account of the Seventh Pay Commission and One Rank One Pension, the muted disinvestment mop-up, and the government deciding not to cut public spending, the Finance Minister will have to make sure that the country’s finances do not get stressed.

Read the full report here.

4. Nippon Life Insurance Hikes Stake in Reliance Life to 49% for Rs 2,265 Crore

Japan’s Nippon Life Insurance will increase its stake in Anil Ambani’s Reliance Life Insurance from 26 percent, to 49 percent for Rs 2,265 crore.

The transaction pegs Reliance Life Insurance’s valuation at about Rs 10,000 crore.

Nippon Life Insurance has so far invested an aggregate of Rs 5,327 crore for acquiring 49 percent of Reliance Life Insurance. In addition, the Japanese company has also committed an investment of Rs 3,303 crore for acquiring 49 percent stake in Reliance Capital Asset Management, taking its total investment to Rs 8,630 crore.

Read the full report here.

5. Experts Caution Retail Investors as Open Offers Flood Dalal Street

Investors and promoters are looking to pick up sizeable stakes in lesser-known companies through open offers. In the last one month, investors in 23 such companies have announced that they intend to buy additional shares from other public shareholders. Analysts and bankers said most of these open offers are merely aimed at propping up share prices and advise retail investors to stay away from these stocks.

Read the full report here.

6. The Bond Market Isn’t Worried About the 7th Pay Commission Impact

The bond market has shrugged off the spectre of a bloated fiscal deficit next fiscal year because of the Seventh Pay Commission recommendations. The yield on the 10-year benchmark government security has gained a measly 3 basis points (bps) since the recommendations were made public.

Read the full report here.

7. EPFO to Review Market Approach After Poor Returns

The Employees’ Provident Fund Organisation’s (EPFO) tryst with equity investments hasn’t got off to a good start: the exchange-traded funds (ETFs) it invested in the stock markets earned an annualized return of just 1.52%.

The pension fund manager is now reviewing its approach.

The EPFO’s experience highlights several things: the volatility of the equity markets in the short-term; the larger issue of a lack of understanding of how the equity markets work, even in seemingly informed circles; and the challenge facing anyone trying to increase the market orientation of entities such as EPFO.

Read the full report here.

8. Airline Stocks Around the World Gain 100-300%; SpiceJet Top Performer

SpiceJet has become the world’s top-performing airline stock, surging more than four-fold over the past year, as the aviation industry benefited from lower crude oil prices and a boom in passenger traffic.

The budget carrier promoted by Ajay Singh outperformed El Al Israel Airlines, Hawaiian Holdings, China Southern Airlines and Qantas Airways, which gained 100-300 per cent over the same period, according to Bloomberg data. Investors are betting that aviation companies including SpiceJet will post healthy December quarter earnings as a fall in crude oil prices reduces fares and attracts more fliers.

Read the full report here.

9. NDA Blows Hot and Cold Over GST Deal With Congress

Two days before the winter session of the Parliament begins, finance minister Arun Jaitley on Tuesday forcefully questioned the rationality of the Congress’s demand for changes in the proposed Goods and Services Tax (GST), but said he was ready to discuss the issue with the opposition.

Jaitley’s remarks seemed to signal a blow hot-blow cold approach by the National Democratic Alliance (NDA) government, which had on Monday indicated that it was considering some of the key demands raised by the Congress.

Read the full report here.

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