QBiz: Rajan Flags Corporate Risks, Disney India-Star Wars Deal

Here’s a wrap of the top business news from across the papers.

4 min read
 India’s Finance Minister Arun Jaitley (left) listens to Reserve Bank of India (RBI) Governor Raghuram Rajan during a financial stability development council meeting in Mumbai June 2014. (Photo: Reuters)

1. Weak Corporate Balance Sheets Need Monitoring: RBI Report

Weak balance sheets of large, debt-heavy companies may pose a risk to financial stability despite recent improvements in some profitability indicators, the Reserve Bank of India (RBI) said in a report.

The RBI Financial Stability Report, published on Wednesday, highlighted the fact that nearly a fifth of all listed companies have levels of debt in excess of what is considered prudent.

The risks to the Indian banking sector have risen, the report said, as many of these borrowers are saddled with debt that they are finding difficult to service.

Read more here.

2. Govt Mulls Tax Exemption on ESOPs and VC Funding in Startups: ET

The ministry of communications and information technology has proposed tax exemptions on stock options given to employees by startups, on capital gains that are invested in new ventures and those made from investing in new firms. The moves could have a catalytic effect on such companies in the event the measures are adopted.

The proposals have been sent to the finance ministry as part of suggestions for next year’s Budget and are aimed at promoting the startup ecosystem, in line with the initiative that Prime Minister Narendra Modi announced in his Independence Day speech.

Read more here.

3. US Firm Viteos To be Bought by Wipro for $130 Million: Livemint

Wipro has agreed to buy Viteos Group, a securities processing and fund administration services provider, for $130 million in an effort to expand its portfolio of services to financial companies.

The 12-year-old New Jersey-based Viteos provides services including processing, reconciliation of trade, settlements and customer data across asset classes and currencies for investment banking clients in the US, Europe and Asia.

Wipro plans to use Viteos’s licensing platform to offer services to buy-side companies, a term used by investment bankers to refer to institutions that buy investment services such as mutual funds, pension funds and insurers.

Read more here.

4. Best Year for IPOs Since 2010; Dr Lal Surges 50%, Alkem Gains 31% on Street Debut: ET

Drug maker Alkem Laboratories and diagnostic chain Dr Lal PathLabs made stellar debuts on the exchanges on Wednesday. Alkem listed 31 percent above its issue price, while Dr Lal PathLabs opened at a 50 percent premium — the best listing in 2015 — as investors who failed to get shares in the offerings lapped them up on the opening day. The strong twin listings ensured that the primary market’s winning run through 2015.

Alkem closed at Rs 1,381 on the BSE, up 31.5 per cent over its issue price of Rs 1,050 per share after touching a high of Rs 1,410. Dr Lal closed at Rs 824 over its issue price of Rs 550.

Read more here.

5. Snapdeal-Owned FreeCharge Wants to Use RBI’s Bill Pay System: ET

E-commerce firm, Snapdeal is excited to team up with the Reserve Bank of India’s proposed Bharat Bill Payments Systems (BBPS) through its payment division, FreeCharge. Digital payment is at the forefront of PM Naredra Modi’s ambition for India and the central bank is doing its bit by setting up the integrated bill payment system to bring transactions under a single umbrella, consolidating the plethora of gateways that now exist.

Read more here.

6. HAL Seeks Global Help To Design Small Passenger Planes: BS

State-owned aircraft maker Hindustan Aeronautics Ltd (HAL) is keen on joining hands with global aircraft makers to design and develop small-size passenger planes.

The company is set to float tenders by March so that they can partner with other manufacturers for the design and development of a 50-70 seat passenger plane to serve small cities across India. The estimated to cost of the project is Rs 7,000 crore which will fund three prototypes and their certification.

Read more here.

7. Disney India Inks Brand Deal Worth Rs 80 cr in Star Wars: The Force Awakens: Livemint

The Walt Disney Co. India has signed brand association deals worth Rs 80 crore for Star Wars: The Force Awakens, the seventh instalment in the nearly 40-year-old film franchise that opened to rave reviews across the world last week. The film is slated for release in India on 25 December.

Brands like Hindustan Lever’s Lifebuoy, HP, Duracell, and Maruti Suzuki will spend to the tune of Rs 25-30 crore on the movie’s promotion, according to sources.

Read more here

8. Idea Cellular Launches 4G Ahead of Reliance Jio Rollout: FE

Idea Cellular launched high-speed fourth-generation (4G) mobile phone services across the country’s south on Wednesday, beating rival Reliance Jio.

Idea follows Bharti Airtel and Vodafone in offering high speed services in parts of India, starting with a handful of southern towns. It said all towns and cities in Andhra Pradesh, Karnataka, Kerala, Tamil Nadu and Telangana would be covered by March 2016.

Read more here.

9. Draft Rules Tighten Tax Norms for MNCs: BS

Multinational companies (MNC) will be liable to pay tax in India if those who take key decisions conduct most of their meetings in India, even if the decisions are implemented in another tax jurisdiction, according to the draft guidelines of the finance ministry.

The proposed rules might force MNCs to locate their regional controller offices outside India, say experts.

With a view to tightening loopholes to deter tax evasion by multinational companies — Indian or foreign — the government on Wednesday released guidelines on place of effective management (PoEM). The rules will affect Indian companies that take most decisions about their foreign subsidiaries from India and also foreign multinational companies with shell divisions.

Read more here.

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