Amazon files new legal challenges in Future Group fight
Amazon has filed a legal challenge at the National Company Law Appellate Tribunal against the Competition Commission of India’s suspension of its 2019 deal with Future Retail. Separately, Amazon’s India arm has moved the Supreme Court against the halt in an arbitration case against Future Retail’s asset sales to Reliance Industries.
Why it’s important: The fight for India’s retail spaces has intensified. In December, India’s antitrust regulator had suspended Amazon’s 2019 deal worth Rs 15 billion with Future Retail. In August 2020, the Future Group struck a $ 3.4 billion deal with Reliance Industries to sell its retail assets. Amazon is fighting to scupper the deal, citing contractual violations.
Yes Bank in talks to sell Dish TV stake to Airtel and Tata
Yes Bank is planning to sell its stake in Dish TV to Tata Sky and Bharti Airtel. Other institutional investors, who jointly own 45 per cent in the satellite TV broadcaster, are also keen to sell their stake. Talks with Tata Sky and Airtel are underway, and a final decision is expected soon.
Why it’s important: Yes Bank, which owns 25.6 percent stake of Dish TV India, is engaged in a legal battle with the broadcaster over the control of the firm. The promoters of Dish TV, the Subhash Chandra family, own 6 percent in the company but are running its day-to-day affairs. That might change soon.
New income tax regime finds few takers
The old system of calculating personal income tax, which allows for the deduction of certain expenses from taxable earnings, remains popular among taxpayers. Comparatively few taxpayers have opted for for the new and alternative tax regime introduced in the Finance Act of 2020.
Why it’s important: The new income tax regime was part of the government’s tax reforms to use a simplified system that has more graded slabs offering benefits to those not choosing exemptions and deductions. Besides simplification, the idea was to ensure that the shift in tax slabs were gradual rather than abrupt.
Many Indian startups may turn unicorn in 2022
India’s robust startup ecosystem is expected to give rise to as many as 22 unicorns in 2022, according to an analysis by VCCircle. The startups on the verge of turning unicorns managed to raise funding in 2021 at a valuation of above $ 500 million but less than $ 1 billion. Among the top five are logistics startups ShipRocket and Porter.
Why it’s important: By some estimates, India is already home to more than 100 unicorns. These new enterprises are together valued at over $ 240 billion till March 2021, according to Swiss brokerage Credit Suisse. They are not just from the technology sector but also from pharma and consumer goods.
Shell joins race to buy renewables firm Sprng Energy
Royal Dutch Shell had bid to acquire Sprng Energy, an Indian renewable platform. Shell will be competing with Australian infrastructure fund Macquarie, US private equity firm Blackrock, India’s Adani Group and Canadian pension fund CPP Investment Board. All three were shortlisted last week, after an initial round of screening from a list of close to 20 potential candidates.
Why it’s important: The billion dollars plus buyout may rank among India’s largest green energy deals. Sprng Energy operates 1.75 GW of renewable energy projects and has another 5GW under construction. The sale comes in the backdrop of a growing focus on investing in environmental, social and governance projects that has seen increased investor interest.
Competition Commission to seek details on Google’s payments policy
The Competition Commission of India will seek a detailed report from app developers that explain the impact of Google’s payments policies on their balance sheets and suggest an alternative payment mechanism.
Why it’s important: The Competition Commission is investigating the US tech giant for suspected unfair business practices with respect to Google Pay as well as Google Play’s payment system. The regulator is expected to rule in this matter by the end of February.
Malls and restaurants stay capex plans, stagger supplies
As the third pandemic wave sweeps through India and authorities impose fresh curbs on mobility and business hours, restaurant chains and shopping malls are halting capital expenditure plans and staggering daily supplies. Some are switching to variable pay for frontline staff.
Why it’s important: Restaurants and malls are back in survival mode after a brief hiatus that saw a nascent business revival. There has been a constant decline in consumer footfalls in the typically busy year-end festive season. While some of the big players may weather the travails, many small businesses will find it harder to recover.
Hospitality sector in trouble as Omicron wave spurs cancellations
Hotels are seeing a flood of cancellations as the new Omicron variant of coronavirus has sparked fear among consumers and forced authorities to impose fresh restrictions on mobility and operating business hours.
Why it’s important: After being buoyed up by pent-up demand for travel after the second wave of the Covid-19 pandemic, the hospitality industry is anticipating another blow from the surging third wave.
Reliance joins top league of private equity firms
Reliance Industries has in the past four years spent $ 5.7 billion on acquisitions and investments, the latest being its buyout last week of a majority stake in New York’s luxury hotel Mandarin Oriental for $ 98.2 million and a 25.8 percent stake in Dunzo, an Indian delivery platform, for $ 200 million. The investments by the group would have hit $ 9 billion if its deal to acquire Future Group’s retail business had been cleared.
Why it’s important: Despite the delay over Future Retail, Reliance is now among the largest global private equity companies that have invested in India. These include SoftBank, which has invested $ 14 billion in India over a decade, and Prosus, the digital arm of Naspers, which has invested $ 6 billion since 2005. However, Reliance is not looking at exits or selling its holdings, unlike other private equity firms.
Adani Power settles 2010 dispute with Gujarat Urja
Adani Power Mundra and Gujarat Urja Vikas Nigam, locked in a legal tussle since 2010, have reached an out-of-court settlement. Adani Mundra has agreed to relinquish compensation from Gujarat Urja and will not terminate the power purchase agreement. The compensation amount is estimated to run into thousands of crores.
Why it’s important: Adani Power signed a power purchase agreement in 2007 with Gujarat Urja for supply of 1,000 MW at Rs 2.35 per unit from its power project at Korba in Chhattisgarh. In 2007, Adani told Gujarat Urja it will supply power from its Mundra project in Kutch instead of from Chhattisgarh. However, Adani Power claimed that coal supply did not start despite repeated reminders.
Disclaimer: Moneycontrol is a part of the Network18 group. Network18 is controlled by Independent Media Trust, of which Reliance Industries is the sole beneficiary.
