Morning Scan: All the big stories to get you started for the day


Tata Group, Singapore Airlines agree to merge Air India and Vistara

The Tata group will merge Air India and Vistara, with partner Singapore Airlines holding 25.1 per cent of the merged entity, creating India’s second biggest airline firm. Singapore Airlines, which owns 49 per cent of Vistara, will get a 25.1 per cent stake in the merged carrier for a payment of Rs 2,058.5 crore in cash, according to an exchange filing. The Tata group will own the remaining 74.9 per cent. The merger could take effect by March next year.

Why it’s important: The plan to merge the two airlines to achieve economies of scale has been on the cards for a while. The merged carrier could potentially challenge market leader IndiGo.

Adani Properties wins rights to redevelop Dharavi slum in Mumbai

Adani Properties has won the rights to redevelop the Dharavi slum on 600 acres in Mumbai. The firm made the highest bid of Rs 5,069 crore against the stipulated minimum investment of Rs 1,600 crore that the lead partner of the special purpose vehicle was expected to garner. The Maharashtra government had floated fresh global tenders in October. DLF and Mumbai-based Shree Naman Developers had also made bids, while the pre-bid meeting was attended by eight entities, including overseas entities.

Why it’s important: The project to redevelop Dharavi, touted as Asia’s biggest slum, has been holding fire for over two decades. The redevelopment project involving residential and commercial space on central Mumbai is expected to earn high revenues for the winning bidder.

Budget not right time to restructure capital gains tax, says revenue secretary

India’s new alternative tax regime should be incentivized to encourage more taxpayers to adopt it, revenue secretary Tarun Bajaj said in an interview. This could be done by raising the lower tax slab up to Rs 7-7.5 lakh from the current Rs 2.5 lakh, he said, stressing that restructuring the capital gains tax regime requires detailed consultation and the run-up to the federal budget may not be the right time to do this.

Why it’s important: There is a need to rationalize and simplify the rules to tax capital gains to avoid arbitrage. The sooner it is done, the better.

Atomberg in discussions to raise $ 75 million at an enterprise valuation of $ 425 million

Atomberg Technologies, the maker of energy saving fans, is in talks with investors to raise funds at a nearly $ 425 million valuation. The Mumbai-based startup is seeking to raise around $ 75 million. The fundraising includes a secondary component to provide an exit to some of its early backers. The startup has hired investment bank Avendus Capital to scout for investors. Atomberg is in talks with WestBridge Capital and Steadview Capital, among others.

Why it’s important: Atomberg will use the funds to expand its product line and boost marketing. Domestic consumers are increasingly exploring energy-efficient appliances amid rising electricity costs and Atomberg’s fans and other appliances are well placed to take advantage of that.

Hinduja, Torrent, Piramal and Oaktree submit bids to purchase Reliance Capital

Torrent, Piramal-Cosmea Financial Holdings, American financial services firm Oaktree Capital Management, and the Hinduja group have submitted binding bids for bankrupt Reliance Capital as the deadline for final offers expired on Monday. No separate bid was received for Reliance Capital’s life insurance and general insurance ventures. In the Piramal-Cosmea bid, the Piramal group’s liability is limited to Reliance General Insurance and Reliance Health Insurance, while Cosmea will acquire the rest of the businesses. UV Special Situations Fund, too, made an offer for the entire firm on a fee basis with a rider that it would sell Reliance Capital’s assets and then repay lenders.

Why it’s important: Reliance Capital has been under insolvency proceedings after it defaulted on loans worth Rs 24,000 crore. Lenders want to close the transaction before the December quarter and recover proceeds in the current financial year to March.

Partners Group to invest approximately $ 300 million in Sunsure Energy

Partners Group, a Switzerland-based private equity firm, is planning to invest $ 300 million in rooftop solar engineering, procurement, and construction firm Sunsure Energy for a majority stake. The firm plans to grow Sunsure as a green energy platform, on the lines of how Actis Llp developed renewable energy platforms Sprng Energy and Ostro Energy. Partners Group, which has around $ 131 billion of assets under management globally, is also an investor in logistics firm Ecom Express.

Why it’s important: Many of the clean energy platforms in India are backed by private equity firms as the market is growing rapidly. The rooftop solar sector has been slow to take off but has huge potential.

Government to press ahead with high capex plan to offset global slump

The central is likely to go ahead with its high capital expenditure plan in the upcoming budget to counter a deepening global slowdown that may dent India’s economic recovery. The key infrastructure ministries may see a substantial rise in allocation while others may see modest increases. Revenues in the next financial year are unlikely to be as buoyant and the turbulence in the global economy is expected to have some impact on India. The next general election will be held in April-May 2024.

Why it’s important: A balanced approach will be central to the upcoming budget since it will be the government’s last full budget before the parliamentary elections in 2024.

Tata Group in talks with Wistron Corporation to buy manufacturing factory in Karnakata

The Tata Group has initiated started with Taipei’s Wistron Corporation, one of the three top vendors for Apple in India, to buy its sole manufacturing facility in Karnataka for Rs 4,000-5,000 crore. Starting with Apple, for which Tata Electronics Pvt Ltd is already a components vendor for iPhones, the plan of the Tata Group has been to deal with other large manufacturers from Korea and Japan as part of a larger electronics ecosystem.

Why it’s important: If the transaction is successful, it will help the conglomerate ramp up the manufacturing capabilities of Tata Electronics in precision engineering. The move will also take advantage of the government’s make in India initiative.

Pilot for retail digital rupees starts on December 1 in four cities initially

Following the successful launch of that wholesale pilot for central bank digital currency, the Reserve Bank of India has said it will begin with its retail digital rupee pilot project from December 1. The retail pilot project, which will cover select locations in closed user groups, will be in the form of a digital token that represents legal tender, the central bank said. In its initial stage, the pilot will cover Mumbai, New Delhi, Bengaluru, and Bhubaneswar. It will be then extended to Ahmedabad, Gangtok, Guwahati, Hyderabad, Indore, Kochi, Lucknow, Patna, and Shimla.

Why it’s important: The Reserve Bank sees the use of the digital rupee as a step towards making the inter-bank market more efficient. Being interoperable with other payment systems, it will complement existing technologies like the UPI.

Budget to take steps to support businesses, boost investments

The overarching theme of finance minister Nirmala Sitharaman’s fifth budget scheduled to be presented on February 1 will be to boost investments while helping businesses deal with the current global economic downturn. Ministerial consultations have kicked off on how to increase investments in specific sectors and make government schemes and programs more effective. Discussions are also on between the finance ministry and other departments on how to buffer the impact of high energy costs on businesses, stimulate exports hit by the global slowdown and check a decline in foreign direct investments.

Why it’s important: Although India is expected to remain the world’s highest growing major economy, it will not be completely insulated against the impending slowdown elsewhere. Boosting domestic demand is a way to counter the headwinds.