Adani wins race to buy cement makers Ambuja and ACC
The Adani family has agreed to buy Swiss firm Holcim’s India assets, Ambuja Cements and ACC, for $ 10.5 billion (Rs 800 billion) in one of the largest ever acquisitions by an Indian group. Adani will acquire 63.19 percent of Ambuja and 54.53 percent of ACC through an offshore special purpose vehicle.
Why it’s important: The purchase will make the Adani group the second-largest cement maker in India after Aditya Birla Group’s UltraTech. The acquisition comes at a time when the government is boosting capital expenditure to spur growth.
Overseas investors buy $ 1.06 billion worth of Indian bonds
Global long-term bond investors have invested a net $ 1. 06 billion into Indian bonds so far in May. The investment bucks the trend of sharp foreign fund outflows from other securities and is nearly one-fourth the net inflow for the whole of 2021 at $ 4. 46 billion, data from the National Securities Depository showed.
Why it’s important: A surprise rate hike by the Reserve Bank of India, coupled with the lure of higher yields, has spurred international inflows that are investing in India’s growth potential.
Market regulator to set up FPI panel, single window to address concerns
The Securities and Exchange Board of India will establish an expert committee on foreign portfolio investors to directly deal with their concerns and facilitate capital flows into India. The regulator also plans to set up an advisory committee on fundraising through real estate and infrastructure investment trust to give a fillip to the infrastructure financing in the country.
Why it’s important: The decision to set up the two new advisory committees is part of structural changes put in place by the regulator’s new chief for further market development. The move to set up an expert group comes at a time when domestic markets are seeing an exodus of foreign capital.
Higher input costs drag down corporate margins in India
Input costs have risen by around 24 percent from a year earlier 435 manufacturing companies that have reported their March quarter earnings, a Mint analysis showed. A sizeable number of them have managed to pass the elevated costs on to consumers, reporting higher revenues. Some companies are charging consumers more by reducing the weight of packaged goods.
Why it’s important: Rising input costs are dragging company earnings, although some have managed to pass the costs on to consumers. The impact of high inflation is clearly visible.
Court’s stay on invoking personal guarantees may delay insolvency proceedings
A recent Supreme Court stay on a personal guarantor case is likely to be used across the country in personal guarantee cases pending before various national company law tribunals related to insolvency and bankruptcy. The stay came as a personal guarantor filed a petition before the top court, raising a constitutional challenge to the personal insolvency provision under the Insolvency and Bankruptcy Code.
Why it’s important: The legal challenge will be key for personal guarantors, as it will require the apex court to explore the subject of personal guarantor rights in insolvency proceedings.
Cryptocurrency market in grip of bears after high volatility
Millions of investors have now seen wide swings in the cryptocurrency market. The price of Bitcoin, which had fallen below $ 28,000 last Thursday, has inched up a bit to around $ 30,000. However, the price is expected to be sideways, with a downward bias. The fall has been led by a crash in stablecoin prices. A leading stablecoin has been delisted from trading by many exchanges in India.
Why it’s important: the high volatility in the trading of cryptocurrencies has resulted in bears trying to tighten their grip on the market. Several stablecoins and memecoins are under pressure. Those who failed to book profit in stablecoins or have yet not transferred profit to their account are under stress.
More firms line up to join India’s open network for e-commerce
As many as two dozen companies, such as Flipkart-backed logistics provider Ekart Logistics, hyperlocal quick commerce company Dunzo, and digital payments company PhonePe, are in the process of integrating with the Open Network for Digital Commerce. Real-time transactions in retail and food delivery have started in Delhi, Bengaluru, and Shillong as a pilot initiative.
Why it’s important: It is likely that most e-commerce platforms will eventually adopt the network, which proposes to break the dominant positions of established e-commerce platforms, considering the business proposition ONDC has to offer.
Banks to seek change of wide-ranging definition of fraud
All high-street banks will move the Reserve Bank of India to urge a change in the sweeping definition of fraud. Current rules require all banks to label a borrowing company and all its accounts as fraud accounts when one lender puts a fraud tag. It sets off a process where lenders must file police complaints and take a hit on their bottom lines that is often disproportionately higher than the size of the fraud.
Why it’s important: Bankers argue that a rigid regulation related to fraud cripple businesses, scares away financiers and results in legal tangles. It is not clear whether the central bank will agree to a definition change.
Early warning on corporate bankruptcy on government agenda
Research topics proposed by the corporate affairs ministry show its policy priorities for the future include predicting bankruptcy based on financial statements filed by businesses, integrating its company database with those of other regulators, and extending sustainability reporting to unlisted companies.
Why it’s important: Integrating the database of the regulators can help the authorities quickly detect the extent of defaults and breaches. Experts say that reducing multiple filings will improve ease of compliance, something that should have been introduced earlier.
Etisalat acquires 9.8 percent stake in Vodafone for $ 4.4 billion
Etisalat, the United Arab Emirates’ biggest telecom operator, has bought 9.8 percent stake in British mobile carrier Vodafone Group for $ 4. 4 billion. Emirates Telecomm unication Group, formerly known as Etisalat, has acquired approximately 2,766 million shares in Vodafone.
Why it’s important: Etisalat is seeking to diversify operations globally. The share sale will shore up the finances of Vodafone, which has been under a lot of stress in various markets.
Download your money calendar for 2022-23 here and keep your dates with your moneybox, investments, taxes
