1. RCom, Aircel Merge to Form Rs 65,000 Cr Giant
Reliance Communications announced its long-awaited merger with unlisted telecom operator Aircel, marking the first move toward consolidation in the space and creating the country’s fourth-largest phone company in terms of customers and revenue. The combine will be one of the country’s largest private sector companies, with an asset base of Rs 65,000 crore.
Upon completion, the merged entity will also rope in a third partner by diluting about 25 percent equity to raise around Rs 6000 crore, said people aware of plans. Talks have already been initiated with Russia’s Sistema, which already holds 10 percent in RCom, to also invest in the merged company. Once a third partner enters, Reliance and Aircel will dilute stakes on a proportional basis.
“Together with our partners, Maxis Communications Bhd (MCB), we are delighted to have taken the lead in consolidation of the Indian telecom sector,” said Reliance ADAG Chairman Anil Ambani in a press statement.
(Source: The Economic Times)
2. Apple, Google Poised for a Clash with Modi Govt over Phone Encryption
India’s relationship with the global tech industry has become increasingly fraught. This year alone, the government has banned Facebook’s free web service and declined to exempt Apple from local sourcing rules and open its own stores. Now India could force companies to use technology cooked up in a government-funded lab.
The initiative is part of the Aadhaar programme. Millions of Indians use fingerprint and iris-scan authentication to access a range of public and private services that now includes banking.
Failure to join the effort could limit the tech industry’s access to a vast and growing market, but companies like Apple and Google are expected to resist opening up their phones and operating systems to the Aadhaar registration, encryption and security technology.
(Source: The Economic Times)
3. Uber to Divert Large Chunk of China Funds to India
After agreeing to sell its China business to bigger rival Didi Chuxing, the San Francisco-based ride-hailing company has started to divert to India a significant portion of the $1 billion investment it had planned to make in China this year, a top company executive said.
The company plans to increase the team at its Bengaluru engineering centre to 50 from 15 by the end of the year. The San Francisco-based team that catered to Chinese operations will now complement the Bengaluru centre, Uber India president Amit Jain said in an interview.
Uber, the world’s most valuable start-up, in July gave up its costly battle for users in China, and said it would merge its China unit with Didi Chuxing in a deal that valued the merged entity at $35 billion.
(Source: Livemint)
4. SBI Raises a Lower Than Expected $300 Million Through Perpetual Bond Issue
The State Bank of India (SBI) has raised $300 million through its US dollar perpetual bond issue, which was launched earlier on Wednesday, the bank said in a statement on Friday evening. The amount raised was lower than the $500 million initially indicated by the bank.
The funds have been raised at a fixed coupon rate of 5.5 percent payable semi-annually. “We are pleased to set a benchmark for US dollar AT1 bonds by an Indian bank. This successful benchmark size deal opens the USD AT1 market for Indian banks,” SBI chairperson Arundhati Bhattacharya, said in the statement.
An email sent by BloombergQuint to SBI asking why the amount raised was lower than anticipated was not answered. SBI is the first Indian bank to attempt raising additional tier 1 (AT1) bonds in the overseas market.
(Source: BloombergQuint)
5. PNB Housing Finance to Launch IPO in October
PNB Housing Finance Ltd, the housing finance unit of state-run Punjab National Bank (PNB), plans to launch its Rs 2,500 crore initial public offering (IPO) in October, said two people aware of the development.
Once launched, it will be 2016’s second largest IPO after ICICI Prudential Life Insurance Ltd’s Rs 6,000 crore initial share sale.
“The firm has been conducting investor road shows for the last few weeks and expects to wrap them up in a week’s time. It has received good feedback from investors and plans to launch the offer in the month of October,” said one of the two people cited above, requesting anonymity as he is not authorized to speak to the media.
(Source: Livemint)
6. Online Payment Gateway PayU Set To Buy Rival Citrus Pay For $130 Million
PayU, a global online payments service provider owned by the Naspers Group, has entered into an agreement to acquire its competitor in India, Citrus Pay, for a total consideration of $130 million, according to a press statement issued by PayU.
The deal is expected to be concluded by 30 September this year. “The deal will grow PayU India customers to more than 30 million, processing a forecasted 150 million transactions in 2016 worth a combined $4.2 billion, growing at 50 percent plus year-on-year,” PayU said in the statement.
The new entity in India will be led by Amrish Rau, who is currently Citrus Pay’s managing director. Rau will become the chief executive officer of PayU in India and will work with PayU co-founders Shailaz Nag and Jitendra Gupta,.
(Source: BloombergQuint)
7. Sebi Looks into Discrepancies in Yes Bank’s Botched-Up QIP
The aborted equity offer by private lender Yes Bank is turning out to be a regulatory headache for the issue’s managers. The Securities & Exchange Board of India is looking into the lender’s notices to stock exchanges about the planned equity placement, the surge in the Yes Bank scrip in the run-up to the issue date and its intra-day fall before the announcement to call off the issue.
The capital market regulator is questioning why investment bankers failed to take note of the fact that there was no pre-intimation by Yes Bank to stock exchanges that there would be a board meeting.
On 27 April, Yes Bank had told stock exchanges that in a board meeting held on the same day, it approved raising capital by way of issuance of equity up to $1 billion in one or more tranches on such terms and conditions as it may deem fit subject to approval by the shareholders.
(Source: The Economic Times)
8. Monsanto India Shares Jump 10 Percent After Global Merger Deal with Bayer
Bayer AG and Monsanto announced a merger where Bayer will will pay 44 percent higher price to Monsanto shareholders. Both companies are present in India and their Indian arms are listed. Share price of both went up on Wednesday, with Monsanto India surging 9.9 percent while Bayer Crop Science surging 1.1 percent in last session.
However, analyst see limited impact of the merger in India’s seed, agro-chemicals and crop science sector.
Deven Choksey, MD, KR Choksey Investment Managers said: “Globally consolidation is happening as the respective companies don’t have visibility of growth and hence they are cutting down growth.” However in India, according to him, seed and agro chemicals have largely grown in generic segment.
(Source: Business Standard)
9. India Inc Plans Rs 20,000 Crore Blast This Festive Season
India Inc may spend close to Rs 20,000 crore on advertising, marketing and promotion in the four-month festive season that’s under way, a 12 percent increase from levels last year, according to four top media planners in the country.
Consumer durable companies are expected to be among the largest spenders during the festive season, increasing their marketing expenditure by as much as 10 percent.
Consumer sentiment is expected to be buoyant due to a good monsoon and higher salaries and pensions with the implementation of the Seventh Central Pay Commission recommendations. “We expect a good festive season this year with a growth of 12 percent over the last year,” said Ashish Bhasin, Dentsu Aegis Network’s CEO South Asia,.
(Source: The Economic Times)