QBiz: Reliance to Shut 2G; SC Rejects Yamuna Expressway Sale Bid
The Quint’s roundup of the top business news of the day.
1. Reliance Communications To Shut 2G Business, Lose 4 Crore Users
Debt-laden Reliance Communications Ltd will shut down its unsustainable second-generation wireless operations, losing nearly half of its 8 crore subscribers, weeks after the telecom operator called off merger with Aircel Ltd.
About 3.7 crore 3G and 4G users (voice, consumer broadband and 4G postpaid dongle) will be shifted to its enterprise business as part of the restructuring, an RCom official said requesting anonymity. 2G spectrum is mostly used to offer voice services.
Reliance Communications will be “optimising” its 2G and 3G footprint along with “related infrastructure and human resources” from 30 November 2017, it said in an emailed media statement.
2. Supreme Court Refuses Nod To JP Associates For Yamuna Expressway Sale
The Supreme Court 25 October declined to allow Jaiprakash Associates Ltd to hive off the Yamuna Expressway project, but gave it more time to deposit the stipulated Rs 2,000 crore to cover liabilities of Jaypee Infratech Ltd’s homebuyers.
The apex court’s order comes on a plea filed by Jaiprakash Associates, the parent company of Jaypee Infratech, proposing the sale of the 165-kilometre expressway.
3. New India Assurance Sets Price Band For Rs 9,600 Crore IPO
India’s century-old general insurer, New India Assurance Company Ltd. today set a price band of Rs 770 to Rs 800 per equity share for its Rs 9,600 crore initial public offering which opens on 1 November.
The insurer will sell 12 crore shares through the initial share sale, the second largest this year after General Insurance Corp. of India Ltd.’s Rs 11,372 crore offer.
The IPO includes a fresh issue of Rs 1,920 crore while the rest will be an offer for sale by the government. New India Assurance plans to use the proceeds from the fresh issue for augmenting its capital base to support growth and expansion of business, improving solvency margin and solvency ratio.
4. Inefficiencies To Stay, But PSU Banks Can Now Compete Better, Says Credit Suisse
The Centre’s record bank recapitalisation plan won’t do anything to address inefficiencies at state-owned lenders, but will help dig them out of financial troubles and boost competitiveness, according to brokerage Credit Suisse.
“The fundamental problems of PSU banks’ inefficient lending practices, an ageing workforce and slow technology transition, do not get affected by this recapitalisation,” Credit Suisse analysts Neelkanth Mishra and Prateek Singh, wrote in a research note. However, “with adequate growth capital, PSU banks can now compete,” with their private sector peers, they added.
5. Adani Group to Begin Work on Rail Link to Carmichael Coal Mine in Australia
The Adani Group is ready to start work on a 388-km rail link – a key part of its proposed $16.5-billion Carmichael coal mine in Australia – even as the protesting green groups mount fresh offensive to block the project after their earlier “doomsday prophecies” failed to scare off authorities and the private firm, a top official has said.
Adani Australia CEO Jeyakumar Janakaraj said the group was moving swiftly ahead with the project with milestones being achieved every day, including on financing.
“We will break ground in the next few days to mark the official start of work on the rail line that will help carry coal to the Abbot Point port for export. We remain confident and committed to deliver first coal in March 2020,” Janakraj told BusinessLine over phone from Australia.
Source: The Hindu BusinessLine
6. Railways Floats Global Tender for Rails to Improve Track Safety
Indian Railways has floated a global tender for procuring 7 lakh metric tonnes of rails for track renewal, railway minister Piyush Goyal said while unveiling an employees’ charter for the country’s largest employer.
Track renewal and safety is one of the most important measures being implemented by the railway ministry in the backdrop of several train derailments that the national carrier has witnessed. “So, seven lakh metric tonne of additional rail (track) is sought to be procured for which a global tender is already been out on 12 October,” Goyal said.
7. Stung by India’s GM Regulation, Mahyco Looks to Other Countries
One of India’s largest seed company Maharashtra Hybrid Seeds Company (Mahyco) said that it is planning to take its new technology including genetically modified (GM) seeds to other South Asian and African countries as stringent regulations and nonclarity in India regarding trial and commercialisation of GM crops has derailed its India plans.
Mahyco said it has reduced its research in GM crops in India and its research team which has been working on various solutions of insect and and drought resistance to crops like cotton and rice, among others is looking to move to countries like Vietnam, Tanzania and Zimbabwe to introduce its new seeds.
8. IGST Relief Likely for Foreign Banks, MNCs
The government may be looking to give some respite to foreign banks and multinationals which are saddled with the additional cost of paying 18 percent integrated goods and services tax (IGST) on the services provided to their international offices, said two people close to the development. An advisory to this effect may be issued by the tax department in the coming weeks, one of the persons cited earlier said, requesting not to be named.
“The tax officials realise that this (tax on multinationals) is an unintended consequence, and this could get resolved in the coming weeks,” the other person said.
9. Infosys Board Unlikely to Disclose Details of Internal Probe
Infosys founder NR Narayana Murthy’s public expression of disappointment with the board may have discomfited non-executive chairman Nandan Nilekani, but that is unlikely to lead to any disclosure of probe reports on the Panaya acquisition or the payout to ex-CFO Rajiv Bansal, multiple sources in the know told ET.
On the current board, except Nilekani other members were part of the previous board, and hence would not take a stand different from what they did a few months before, these sources said.
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