PSUs may remain exempt from public shareholding rule even after privatization
The central government has reserved the right to exempt public sector undertakings from the minimum public shareholding norm after a change in ownership, as it prepares to sell its stake in IDBI Bank. The new owner of IDBI Bank will be exempt from the minimum 25 per cent public float requirement after stake sale by Life Insurance Corporation and the government. The finance ministry has inserted a clause into the public listing norms to exempt public floats for listed PSUs for a specified period as required under the Securities Contracts (Regulation) Rules, 1957.
Why it’s important: While the move to exempt state-owned entities from mandatory public float is aimed at the IDBI Bank divestment, the privatization of other public-sector units may get a boost with it as well.
Company law tribunal stops Hinduja bid for bankrupt Reliance Capital
The National Company Law Tribunal has directed the administrator of bankrupt Reliance Capital not to present the revised offer Hinduja group made after the auction deadline to the lenders until the next hearing date. Torrent Investments, which emerged as the top bidder in the auction with an offer of Rs 8,640 crore, approached the bankruptcy court to restrain lenders from considering Hinduja’s upgraded offer of Rs 9,000 crore.
Why it’s important: The stay provides temporary relief to Torrent Investments, which has argued that accepting late offers violates the norms for the insolvency resolution process.
No government equity in Vodafone Idea till promoters infuse enough cash
The promoters of Vodafone Idea are unwilling to infuse sufficient capital into the firm, making it unviable for the government to convert the accrued interest on deferred adjusted gross revenue dues into equity, a government official has said. Vodafone Plc of the UK and the Aditya Birla Group have indicated they will infuse around Rs 2,000-3,000 crore, which is inadequate to revive the company. The telco needs around Rs 40,000-45,000 crore to sustain itself. Unless the promoters infuse at least 50 per cent of this, it will be difficult for the company to get external investors, the official said.
Why it’s important: Vodafone Idea has been looking for external investors for several months, but talks have stalled as potential investors want the government to hold stake in the company. That does not seem to be happening anytime soon.
Microsoft’s Nadella says India will lead in AI use to solve real issues
Microsoft chairman and CEO Satya Nadella is optimistic about India’s future, especially in the field of technology, with the expanding base of software developers from the country, rising number of artificial intelligence projects, and growing aspiration in Indian youth to upskill themselves. Nadella, who is on a four-day visit to India, has said India would lead in using AI for solving real problems.
Why it’s important: The rapid digitization of Indian economy in the past few years has raised hopes of faster transformation. Nadella’s views are shared by other global tech honchos as well.
Government starts probe on China dumping circuit boards in India
The commerce department has started an investigation into dumping allegations on imports of certain printed circuit boards originating from China and Hong Kong. The Directorate General of Trade Remedies has said in a notification that the Indian Printed Circuit Association has alleged material injury to the domestic industry owing to the dumping of these electronic goods and sought the imposition of anti-dumping duty on such imports from the two jurisdictions.
Why it’s important: This is not the first time that industry associations have accused China of dumping goods in India. Without an anti-dumping duty, the domestic industry may turn unviable due to the cheaper imports from China and Hong Kong.
Reserve Bank asks SBI to amend clauses before approval for support arm
The Reserve Bank of India has asked the State Bank of India to delete or amend more than 10 clauses in its memorandum of association to establish up a subsidiary to provide operational support services to the country’s largest lender before approving the proposal. State Bank Operations Support Services, with an equity investment of up to Rs 10 crore, should not engage in any new activity without prior approval, and any changes to its equity or business structure or nature would also require the regulator’s approval, the Reserve Bank has said.
Why it’s important: The State Bank had earlier said the new subsidiary will help it to better deploy its personnel. It is likely to agree to the central bank’s directive.
CBI widens probe in loans ICICI Bank provided to Videocon Group
The Central Bureau of Investigation has sought details on 10 more loans sanctioned by ICICI Bank to Videocon Group companies allegedly sanctioned between 2013 and 2016. Four of these loans were sanctioned when arrested banker Chanda Kochhar was the bank’s chief. The CBI, which arrested Chanda Kochhar, her husband Deepak and Videocon group chairman VN Dhoot last month, stumbled upon the new loans during its ongoing probe into the six loans amounting to Rs 1,875 crore sanctioned between June 2009 and October 2011.
Why it’s important: Time is running out on the CBI to make its charges stick as the Kochhars have challenged their arrest in court. The matter will be heard on Friday.
Amazon secures India license to sell renewable electricity in power exchanges
Amazon has secured a power trading license in India and is building a portfolio of wind and solar power to sell on local electricity exchanges. The India arm of the US tech giant has signed power purchase agreements totaling 720 MW with Vibrant Energy, ReNew Energy Global, Amp Energy India and Brookfield Renewable, and is seeking to sign more such accords. It has established AEI New Energy Trading for trading clean energy in India.
Why it’s important: Amazon’s cloud computing unit operates several data centers in India that consume a significant amount of electricity. It is investing in wind and solar energy to help offset its carbon footprint.
Spot gold prices in domestic market trading at steep discount to bank rate
Spot gold prices in the domestic market have been trading at a steep discount to the precious metal’s bank rate for an extended period, a departure from the typical premium it trades at, especially during the wedding season. Spot gold was trading at an $ 18-25 per ounce discount, against a typical premium of $ 1, for a record 40 days because of a supply-demand mismatch driven by a sharp jump in price, rise in circulation of recycled gold, a trade pact with the United Arab Emirates that facilitates import of the metal at lower duty, and suspected leakages, traders said.
Why it’s important: This is an unusual anomaly, probably a result of lower demand and ample supply in the spot market. Experts have said the discount will shrink in the second half of January.
India drafting rules to restrict time children can spend on gaming apps
The ministry of electronics and IT is drafting new rules to limit the amount of time children can spend on a gaming app and may also mandate gaming firms to submit anonymized reports on such usage. The government may also introduce provisions requiring gaming companies to install mechanisms that prevent in-game purchases by anyone below the age of 18.The provisions are likely to be a part of the upcoming Digital India Act.
Why it’s important: The intention is to check addiction to gaming, especially among children, and will be in addition to draft rules already released for gaming in general. Whether these will be effective remains to be seen.
