QBiz: PMEAC Prioritises Job Creation; Ola Raises Fresh Funds
Here is The Quint’s compilation of top business stories from the previous day.
1. PMEAC Rejects Fiscal Stimulus, Prioritises Job Creation
The Prime Minister’s Economic Advisory Council (PMEAC) has rejected the idea of mid-year fiscal stimulus to spur a revival in economic growth.
Instead, at the council’s first meeting on Wednesday, members listed 10 policy priorities for the government in the run-up to the presentation of 2018-19 budget.
Not only has the PMEAC revived the debate on fiscal stimulus, but also implicitly identified the likely priorities for next year’s Union budget.
Briefing reporters after the meeting, chairperson Bibek Debroy said the PMEAC would assist in monitoring public spending and had recommended job creation as the biggest priority.
2. Ola Raises $1.1 Billion From Tencent and SoftBank, Says $1 Billion More Coming
India’s largest cab-hailing service Ola (ANI Technologies Pvt Ltd) has raised $1.1 billion in fresh funding from China’s Tencent Holdings Ltd and existing investor SoftBank Group Corp of Japan, giving it enough ammunition to keep arch-rival Uber Technologies Inc at bay, even as the biggest investors in India’s consumer internet ecosystem begin to close ranks.
On Wednesday, Ola said it was in advanced talks to raise another $1 billion from existing and new investors, thus rounding off what may turn out to be a $2 billion funding round.
The Ola funding is the latest in a series of billion-dollar investment rounds in the Indian start-up ecosystem this year, with both Flipkart and Paytm having raised massive amounts of capital this year. Flipkart leads the charts, having raised at least $2.8 billion in two separate tranches from SoftBank, Tencent, eBay Inc and Microsoft Corp, while Paytm raised $1.4 billion from SoftBank earlier this year.
3. Indian Energy Exchange IPO Faces Foreign Investor Outage
Midway through its initial public offering, India’s largest power trading platform Indian Energy Exchange Ltd. found out that overseas investors couldn’t participate in its share sale. That prompted it to cancel share allocation to a clutch of prominent foreign portfolio investors, according to an exchange filing by the company.
IEX’s decision stemmed from the interpretation that foreign direct investment norms don’t allow FPIs to invest in power exchange IPOs, said the company’s managing director SN Goel. The FDI policy says foreign investors can invest in power exchanges only via secondary market transactions.
Last week, soon after these FPIs were confirmed as ‘anchor’ investors, custodians such as Citigroup, Deutsche Bank, HSBC and Standard Chartered raised the issue—that an IPO is technically a primary market transaction and FPIs couldn’t participate in this one.
4. Jet Air to Buy 100 Single-Aisle Jets as India Demand Surges
Jet Airways India Ltd will place an order for as many as 100 narrow-body aircraft by the end of March, becoming the latest South Asian carrier to unveil aggressive expansion plans in the world’s fastest growing major aviation market. Shares fell.
The carrier is in talks with planemakers to buy 75 to 100 single-aisle jets in the current fiscal year, Chief Executive Officer Vinay Dube said at a briefing in the southern Indian city of Chennai, declining to give more details. Jet Airways was in talks to buy 50 single-aisle jets – either the biggest version of Boeing Co’s 737 Max or Airbus SE’s A321neo – a person with direct knowledge of the plan said earlier this year.
The order would be valued at as much as $12.5 billion based on list prices for 100 Boeing 737 Max 10 jets, before discounts that are customary for large aircraft purchases.
5. RBI Allows Interoperability Among Mobile Wallets, but Conditions Apply
The Reserve Bank of India on Wednesday said that banks and non-banking financial companies should make their wallets interoperable through the Unified Payments Interface within six months, in an attempt to make electronic payments seamless.
Interoperability will, however, only be allowed for wallets which are compliant with Know Your Customer norms, the regulator said as part of its revised master directions for prepaid payments instruments. KYC is a process through which banks and other financial institutions obtain and verify information about customers’ identity and address to ensure services are not misused.
Mobile wallets with up to Rs 10,000 will need to have minimum KYC compared to the earlier limit Rs 20,000, RBI said. Mobile wallets with balance beyond the RBI’s prescribed limit would need full KYC. The regulator has also raised the minimum net worth for a mobile wallet issuer to Rs 15 crore from Rs 5 crore earlier.
6. Airtel Takes on JioPhone With Rs 1,399 4G Smartphone: All You Need to Know
Bharti Airtel has collaborated with home-grown Karbonn Mobiles to offer a 4G smartphone at an effective price of Rs 1,399. Dubbed ‘Mera Pehla 4G smartphone’ by the telecom major, the initiative is aimed at providing affordable 4G smartphone to people seeking to move from feature phones to smartphones and experience high-speed internet on the go.
Under the partnership, the Karbonn A40 Indian smartphone, which has a retail price of Rs 3,499, will be offered at an effective price of Rs 1,399. The smartphone comes bundled with a monthly pack of Rs 169 from Airtel, which offers generous data and calling benefits.
Source: Business Standard
7. Weak Banks and Corporates Leave Indian Economy Vulnerable: IMF
The International Monetary Fund (IMF) on Wednesday said a combination of weak banks and corporates leave India vulnerable to a tightening of the global financial conditions, as it pressed for more steps to ensure good capitalisation in public sector banks.
A recent study, according to International Monetary Fund Financial Counsellor Tobias Adrian, showed that the Indian banking sector was vulnerable, given that large segments have low profitability and have large problem loans.
Gross non-performing assets (NPA) of the public sector banks rose to Rs 6.41 lakh crore at the end of March 2017 as against Rs 5.02 lakh crore a year ago, according to Finance Ministry data.
Source: Business Standard
8. Tata Steel Buys Rio Tinto's Smelter Technology to Cut Costs, Emissions
Tata Steel has acquired new smelter technology and its intellectual property rights from Rio Tinto, one of the leading global iron ore mining companies, for an undisclosed amount.
The newly acquired technology along with Tata Steel's existing innovative HIsarna technology has the potential to reduce use of energy and carbon emissions by at least 20 percent and bring down steel-making costs through the use of lower priced raw materials, including steel scrap.
Tata Steel has tested the HIsarna technology at its IJmuiden steelworks in the Netherlands. HIsarna consists of a reactor into which iron ore is inserted from the top. The ore is liquefied in a high-temperature cyclone and drips to the bottom of the reactor. When powdered coal is injected into the reactor, it combines with the molten ore to produce pure liquid iron and CO2 (carbon dioxide).
Source: The Hindu Business Line
9. L&T to Sell Subsidiary to ESAB Holdings for Rs 522 Cr
Larsen & Toubro on Wednesday said it has entered into a definitive agreement with ESAB Holdings Ltd for selling its entire stake in wholly-owned arm EWAS Alloys Ltd for Rs 522 crore.
The engineering giant in a filing to BSE said that it has “entered into a definitive agreement with ESAB Holdings Ltd, a company registered in the United Kingdom, on October 11, 2017 for the divestment of its entire stake in EWAS Alloys Ltd”. EWAC Alloys is a wholly-owned subsidiary of Larsen & Toubro Ltd. The share purchase agreement was executed on Wednesday, the company said, adding that the completion of the sale is subject to customary closing conditions.
Source: Financial Express
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