Buyers line up to acquire Metro India’s wholesale business
Reliance Retail, Charoen Pokphand group and Swiggy are competing with PremjiInvest to buy the Indian cash and carry operations of German retailer Metro AG. The Tata Group and private equity fund Bain Capital are evaluating the $ 1-1. 5 billion buyout opportunity but are yet to firm up any plans. The submission of non-binding offers is scheduled for this week.
Why it’s important: Metro’s decision to exit India has opened up opportunities for local firms to strengthen and consolidate wholesale, retail, and e-commerce segments in the country.
IPL media rights winners in talks with lenders for bank guarantees
HDFC Bank, ICICI Bank and State Bank of India are among the lenders that are likely to help Reliance-owned Viacom18 to furnish bank guarantees for the recently won digital media rights of the Indian Premier League. BNP Paribas and Deutsche Bank are among the foreign lenders offering the same facility to Disney-Star that won the TV broadcasting rights.
Why it’s important: Disney will spend Rs 235.75 billion and Viacom18 Rs 205 billion for the media rights. Both companies need to submit bank guarantees to fulfil their obligations to the cricket control board, which can encash them if there are any issues.
Reliance Industries to raise $ 8 billion to buy drugstore chain Boots
Reliance Industries is in talks with a consortium of foreign lenders comprising Barclays Bank Plc, Deutsche Bank AG, HSBC, and Standard Chartered Bank to raise $ 8 billion for its planned leveraged buyout of British pharma chain Boots.
Why it’s important: The buyout would be the biggest cross-border acquisition for the Indian conglomerate and will significantly expand its presence in the healthcare segment. Over the past year, Reliance has been on an acquisition spree to strengthen its foothold across sectors and markets.
GST Council to equate fantasy games with gambling and tax them at 28 percent
The GST Council in its meeting on June 28-29 in Chandigarh is likely to consider a proposal for imposing a flat 28 percent tax on online skill gaming, bringing it on a par with betting and gambling. It may also consider bringing stringent enforcement measures under the GST regime to plug revenue leakage.
Why it’s important: A ministerial panel has recommended that tax on casinos, racecourses, online gaming, and lottery should be uniform in terms of both rates and valuation. Online gaming platforms currently pay 18 percent GST.
Maruti Suzuki to seek Bharat NCAP safety ratings only if customers prefer it
Maruti Suzuki will opt for the Bharat NCAP star rating for its vehicles only if customers show a preference for the mechanism proposed under the Bharat New Car Assessment Programme, the draft of which was recently approved by the transport ministry, company chairman R C Bhargava said.
Why it’s important: Cars made in India currently follow the regulatory crash test speed of up to 56 kmph. The BNCAP ratings require cars to be crash-tested at 64 kmph. Automakers will have to add to the structural strength of their models and make a slew of other changes to ensure a good rating.
Government to monetize rail assets through infrastructure investment trusts
The central government is planning to use infrastructure investment trusts for asset monetization in the railways, seeking to attract private investment in several operating areas such as goods sheds, track signaling and overhead equipment, and rail tracks of the Dedicated Freight Corridor Corporation.
Why it’s important: The government has tasted success at monetizing power and roads assets through infrastructure investment trusts and wants to replicate in selling rail assets as well. These units fetch a regular income stream, in addition to dividend payments, which might be attractive to private investors.
Bankruptcies in India open up opportunities for specialized business units
Several consulting firms and insolvency professionals are exploring plans to set up units that specialize in running bankrupt businesses after the Insolvency and Bankruptcy Board of India proposed changes to allow entities to run insolvent companies.
Why it’s important: Insolvency professional entities would likely have an edge over individual resolution professionals. The new rules need more clarity as this is a highly litigation-prone process with competing interests of different stakeholders.
Payments council wants KYC-compliant wallets to be treated at par with bank accounts
The Payments Council of India and several fintech firms have urged the government to step in to resolve the fallout from a recent directive by the Reserve Bank of India that bars payment companies from loading credit lines onto wallets and prepaid payment instruments.
Why it’s important: The industry body for digital payments operators maintain that wallets that comply with KYC norms should be treated on par with bank accounts and that they be allowed to disburse credit.
Adani group firm Kutch Copper raises Rs 60 billion for new refinery project
Kutch Copper, a subsidiary of Adani Enterprises, is setting up a greenfield copper refinery project to produce one million tons per annum in two phases. The firm has achieved financial closure of Rs 60.71 billion for the first phase. It has signed the financing documents with a consortium led by the State Bank of India.
Why it’s important: The rapid business expansion by the Adani group continues to rely on bank borrowings, making it the largest conglomerate in India to do so in such a scale.
Regional rural banks may be allowed to tap credit depositories to prune bad loans
The central government is in talks with the Reserve Bank of India to let regional rural banks tap its Central Repository of Information of Large Credit. At present, banks and financial institutions give credit information about their borrowers with an aggregate exposure of Rs 50 million and above to CRILC, but RRBs do not come under the fold of CRILC.
Why it’s important: The move could help regional rural banks to reduce their non-performing assets by accessing details on borrowers.
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