QBiz: SpiceJet COO Quits, Volkswagen Posts Loss, Call Drop Woes
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1. World Bank Sees India Growing at 7.5% in FY16:TOI
The World Bank has maintained its growth forecast for the Indian economy for the current fiscal year and expects it to expand by 7.5% in 2015-16. It has backed implementation of three key reforms, including the Goods & Services Tax (GST), to sustain the momentum.
In its development update, a twice a year report on the Indian economy and its prospects, the bank expects growth to accelerate to 7.8% in 2016-2017 and 7.9% in 2017-2018. But it said acceleration in growth is conditional on the growth rate of investment picking up to 8.8% during 2016-2018. The Reserve Bank of India expects the economy to grow by 7.4% in the current fiscal year, while the government pegs it at over 7.5%. The International Monetary Fund expects growth to be 7.5%.
2. SpiceJet COO Sanjiv Kapoor, Man Behind Flash Sales, Quits: TOI
In the biggest management rejig since SpiceJet co-founder Ajay Singh re-acquired the airline this February, the low-cost carrier’s (LCC’s) chief operating officer (COO) Sanjiv Kapoor will no longer be with the airline from Friday. Kapoor - who made SpiceJet synonymous with constant flash sales - was appointed by the LCC’s previous owner, Sun Group, in November 2013 for three years.
The new owner has removed the management team put in place by the Marans. The budget airline’s chief commercial officer Kaneswaran Avili and IT head Sudhakar Kondisetty left in the past few months, and now Kapoor is also out.
3. Deutsche Bank AG Elevates Gunit Chadha to CEO of Asia Pacific Region: ET
Deutsche Bank AG, Germany’s largest lender, elevated former India head Gunit Chadha to CEO of the Asia Pacific region even as it announced that the bank will close operations in 10 countries and cut 15,000 full and part-time jobs across the globe.
“In Asia we also will fine tune our structure. Gunit Chadha have responsibility for the whole market until further notice,” co-CEO Jurgen Fitschen said in reply to a question. The new plan announced by the bank’s co-CEO John Cryan as part of his ‘Strategy 2020’ aims to cut costs, lower risks and improve Deutsche Bank’s capital position after being weighed down by fines linked to the LIBOR fixing scandal earlier this year.
On Thursday, the bank announced a $6.6 billion loss in the third quarter ended September amid continued litigation costs.
4. Volkswagen Posts its First Loss in Years: ET
A remarkable period of growth ended at Volkswagen on Wednesday, when the carmaker reported its first quarterly loss in at least 15 years, and began the costly process of absorbing the expense of fixing millions of cars, designed to cheat on emissions tests. The day also was the end of a defining era of Volkswagen ambition. Matthias Mueller, the new chief executive, signaled that the company would no longer be focused on becoming the world’s largest carmaker.
`The earnings report on Wednesday provided a first taste of the financial cost to Volkswagen of its past behavior. The company said it had a net loss of $1.84 billion in the third quarter as it set aside a huge sum to help cover the expected damage from the company’s emissions-cheating scandal. It was the first quarterly loss in as long as anyone can remember.
5. Maggi Effect: Nestle India Q3 Net Plunges 60%: IE
Hit by the Maggi ban, Nestle India reported a 60.1 per cent decline in standalone profit at Rs 124.2 crore for the third quarter ended September 30. The company had posted a standalone net profit of Rs 311.3 crore in the same period last fiscal. Net sales during the period under review declined 32.1 per cent to Rs 1,736.2 crore, as against Rs 2,557.8 crore in the same period last year.
The results, however, are better than the year-on-year loss registered by the company in the previous quarter ended June 2015. Struck by exceptional item charge of Rs 451.6 crore on account of withdrawal of stocks of Maggi noodles, Nestle India had posted its first quarterly loss in at least 17 years as the company announced a net loss of Rs 64.4 crore for the quarter ended June 2015
6.India Promises $10-bn Line of Credit to Africa:BS
To strengthen ties with African countries and counter the growing influence of China in that region, Prime Minister Narendra Modi on Thursday announced a concessional credit grant of $10 billion to Africa through the next five years.
“To add strength to our partnership, India will offer concessional credit of $10 billion over the next five years. This will be in addition to our ongoing credit programme,” Modi said at the inaugural ceremony of the third India-Africa Forum Summit here.
“We will also offer a grant assistance of $600 million. This will include an India-Africa development fund of $100 million and an India-Africa health fund of $10 million. It will also include 50,000 scholarships in India through the next five years. And, it will support the expansion of the pan-Africa e-network and institutions of training and learning across Africa,” the PM added.
7.Trai to Look Into Call Drop Compensation Concerns: BS
The Telecom Regulatory Authority of India (Trai) has asked mobile operators to upgrade their networks to pay compensation for call drops to mobile users from January 1 next year. The regulator has, however, softened its stance and showed willingness to look into the issues raised by telecom companies.
“It’s a valid regulation. Operators must take steps to prepare themselves to implement this,” Trai Chairman R S Sharma said after meeting chief executives of telecom operators on Thursday. It has also been decided that officials from Trai and telecom companies will meet every two weeks to resolve issues regarding call drops.
A senior executive from a telecom firm said it would be difficult to assess the exact reason behind a call drop. As there could be challenges or disputes, compensation wasn’t a solution, he added.
8. InterGlobe Aviation IPO is Overbooked: FE
The initial public offering (IPO) of InterGlobe Aviation, which operates low-cost airline Indigo, ended on a high note on Thursday with subscriptions of Rs 19,200 crore against the issue size of Rs 3,100 crore, as of 6.30 pm. The issue saw tremendous response from qualified institutional buyers (QIB) and high net-worth individuals (HNIs) but retail investors and employees were less enthusiastic, probably because they felt the scrip was priced expensively.
So far this calendar year, 16 companies have raised close to Rs 7,500 crore from the primary market, the highest in last four years, data from Prime Database showed. The collections from the InterGlobe issue will take the IPO collections past the Rs 10,000 crore mark. However, of the last 17 IPOs, including that of InterGlobe, seven issues failed to see full retail subscription. InterGlobe’s IPO will be the biggest primary market offering since Bharti Infratel’s Rs 4,100-crore-plus public issue in December 2012, statistics compiled by Prime Database showed.
9. Dr Reddy’s Laboratories Q2 Profit at Record Rs722 cr: LiveMint
Drug maker Dr Reddy’s Laboratories Ltd on Thursday said fiscal second-quarter profit rose 26%, beating analyst estimates, on the back of strong sales in North America, Europe and India.
Net profit for India’s second largest drug maker rose to Rs.722 crore in the quarter ended 30 September from Rs.574 crore a year ago. Sales rose 11% to Rs.3,989 crore. This is the first time in Dr Reddy’s Laboratories’ history that its consolidated net profit has crossed Rs.700 crore. A Bloomberg survey of 23 analysts had estimated a profit of Rs.637.40 crore.
Sales of generic drugs in North America rose 32% to Rs.1,856.3 crore, led by sustained performance of the injectable franchise, and market-share gains in key molecules. The region contributes about 60% of total generic drug sales for Dr Reddy’s.
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