1.Gehlaut to Up Stake in Indiabulls – TOI
In one of the largest promoter-led fund infusion in the real estate sector in recent times, Sameer Gehlaut, the founder and promoter of Indiabulls Real Estate (IBREL), is investing Rs 538 crore to increase his stake in the company from 27% to 37% through preferential allotment. Gehlaut is picking up the stake through a combination of equity shares and convertible warrants at Rs 67 per share, compared to IBREL’s Friday closing price of Rs 42 on the BSE -a premium of nearly 60%.
The promoter fund infusion comes at a time when most industry leaders are struggling with stagnant to dipping prices, huge pile-up of debt as well as inventory of real estate space.
2.Banks Fear Bad Loans will Spike in Telecom – TOI
After the power sector, bankers fear that bad loans could rise in the telecom sector following an expected disruption caused by the entry of Reliance Jio later this year. Several bankers feel that the telecom industry, which has over Rs 2,50,000 crore of outstanding loans, does not have the revenues to support timely repayment and the entry of Reliance Jio could bring down their realizations even further and this might trigger consolidation.
3.Carlyle Joins Ex-Cairn Oil Man Mike Watts to Recreate Magic
The man who hit a jackpot under the sands of Rajasthan’s Thar desert by finding over a billion barrels of oil, when nobody believed there could be any, is back-to hunt for more. Mike Watts, the maverick oil explorer credited as the geological brains behind Cairn Energy’s drilling success in India, is teaming up with Carlyle. Carlyle International Energy Partners (CIEP), a specialist fund for hydrocarbon and oil & gas sector investments, will be backing Magna with a $500-million (Rs. 3,174 crore) commitment.
4.Rana Kapoor will Go to Any Extent to Deny Our Rights – ET
Last week’s Bombay High Court verdict in the Yes Bank versus Madhu Kapur dispute is being interpreted differently. The bank’s chief executive Rana Kapoor believes his stance has been vindicated on the board seat for his late partner Ashok Kapur’s legal heirs. Shagun Gogia, daughter of late Ashok Kapur in an interview with the Economic Times, says she believes that her uncle Rana Kapoor has been proved wrong.
Is this organisation so professional that you don’t pay homage to your late partner who tragically died in the terror attacks? Is the organisation so professional that you ring fence the co-promoter family from the bank in totality? Is the organisation so professional that you blatantly hide facts from the family court Sebi RBI? Is it a one professional’s organisation?
– Shagun Gogia
5.Compliance Window for Black Money in July – BS
From early next month, those with undisclosed income and assets abroad are likely to get a window to declare these without facing prosecution. The proposed compliance window under the Undisclosed Foreign Assets and Income Act, popularly called the black money Act, is likely to be in place for three-five months.
Government sources said Finance Minister Arun Jaitley would take a decision on the commencement date and the duration of the compliance window, once he returned from his nine-day trip to the US. “While a final decision is yet to be taken by the finance minister, the window will likely be in force from the first two weeks of July. The duration of the window may be three-five months,” said a senior government official.
6.MNCs Earn More Dividend than Indian Promoters – BS
Are MNCs better at generating cash from their companies than their domestic counterparts? Data on dividend seem to suggest so - for FY15, there were four MNCs among the top 10 companies with dividend-earning promoters. While the Tatas topped the list with total promoter dividend earnings of Rs 12,018 crore, American tech giant Oracle was the second (Rs 4,193.4 crore), followed by Unilever (Rs 2,181.8 crore).
By contrast, many of India’s prominent business houses earn low amounts as dividend from their companies, with the exception of tech majors. Azim Premji of Wipro was India’s fourth-highest dividend earner in FY15, with dividend income of Rs 2,174 crore. He was followed by Mukesh Ambani, who earned Rs 1,464 crore as dividend from Reliance Industries. The analysis is based on the equity dividend (interim and final) paid or announced by BSE 500 companies for 2014-15.
7.India Slips to 61st Place on Swiss money List; Pak at 73rd – PTI
India has moved down to 61st place in terms of foreigners’ money in Swiss banks and it now accounts for a meager 0.123 per cent of the total global wealth worth $1.6 trillion in Switzerland’s banking system. While the UK and the US have retained their top two positions with the largest shares of the foreign clients’ money with Swiss banks, Pakistan has inched up to 73rd place. Interestingly, just two big banks — UBS and Credit Suisse — account for nearly two-third of the total money kept by foreigners in Swiss banks, while their share in case of Indians is even higher at about 82 per cent.
According to the latest data released by Switzerland’s central banking authority SNB (Swiss National Bank), Indians’ money in Swiss banks declined by over 10 per cent to about 1.8 billion Swiss francs ($1.98 billion or Rs 12,615 crore) in 2014.
8.Indian Stocks Have Become Attractive After the Recent Correction: Benjamin Yeo (BS)
Indian markets have corrected nearly 10 per cent from their peak levels led by a host of global and domestic reasons. Singapore-based Benjamin Yeo, managing director & chief investment officer (Asia & Middle-East) for Wealth & Investment Management, Barclays, tells Business Standard that he expects volatility to rise, especially closer to the US Fed’s monetary deliberation meetings. One should not be surprised to see some slowdown in the pace of foreign institutional investor (FII) flows into India in the second half of 2015. After the initial euphoria, dust has settled down and investors are beginning to expect any concrete measures and improvements to be made by the Modi government.
Undoubtedly, there will be disappointments and markets will correct. However, as long as investors perceive that the ruling party is still on the right economic direction and track, Indian equity will remain attractive in the medium term to investors.
9.Food Price Surge puts RBI Governor Rajan on the Back Foot – Reuters
Prices of many foodstuffs are surging in the country, despite a good start to monsoon rains - an unexpected boon for wholesalers, but a major headache for the central bank and a government hoping for its help to reboot the economy.
Reserve Bank of India (RBI) governor Raghuram Rajan has cut interest rates three times this year to boost growth, but he has since warned he will not cut again if poor rains drive up prices and threaten his inflation target. Bond and stock traders in Mumbai have been left compulsively checking weather forecasts.
But in a bustling market in Aurangabad, wholesaler Shaikh Sharif does not need to track the monsoon: he says prices will stay high no matter what the rains do.
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