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India Wholesale and Retail Inflation Ease, Flipkart Co-Founder Sachin Bansal Invests in Ola, Etihad Airways May Increase Stake in Jet et al.

Professor of Financial Economics and Part-time Value Investor, Transfin.
Jan 14, 2019 2:46 PM 3 min read
Editorial

India wholesale and retail inflation ease. Flipkart co-founder Sachin Bansal invests $21m in Ola. Etihad Airways may come to Jet's rescue.

 

Now to Today's Top Business News Stories in Our End Of Day Wrap Up:

India Wholesale and Retail Inflation Ease, Flipkart Co-Founder Sachin Bansal Invests in Ola, Etihad Airways May Increase Stake in Jet et al.

 

ECONOMY

India’s wholesale inflation eases to 8-month low and retail inflation falls to an 18-month low in December. 


In Data We Trust: Wholesale prices in India eased to 3.80% in December vs. 4.64% in November and retail inflation fell to an 18-month low of 2.19% in the same month vs. 2.33% in the previous month on back of cheaper food and fuel prices.
 

The Bigger Picture: With wholesale and retail inflation easing, analysts expect the RBI to assume a softer stance in the next monetary policy meeting.
 

View change in India’s Wholesale Price Index and Consumer Inflation Index over the last one year here and here respectively.

 

COMPANIES

New SEBI regulation may restrict family members from occupying Chairman and MD posts simultaneously in a listed firm.
 
No Way: As per a Business Standard report, a new Securities and Exchange Board of India (SEBI) regulation may restrict family members, close relatives or related parties to take up the role of the Chairman and the Managing Director (MD) simultaneously in a listed firm.

 

Hit Refresh: On March 29, 2018, the Uday Kotak Committee had recommended splitting the role of the Chief Executive Officer, Managing Director and Chairperson for the top 500 listed companies from April 2020 onwards to ensure an effective governance structure.

 

Zoom Out: Noted companies which may be affected by this regulation include Bajaj Auto, Godrej Industries, Apollo Enterprises, Adani Enterprises, Jaiprakash Associates, and Jindal Stainless.
 

Read Uday Kotak’s report on corporate governance which started it all here.

VC

Sachin Bansal invests $21m in Ola.
 
Jackpot: As per an Economic Times report, Flipkart co-founder Sachin Bansal has invested c. $21m in SoftBank-backed ride hailing company Ola, valuing the firm at $5.7bn.
 

Up Close: According to the same report, Bansal has purchased 70,588 ‘Series J’ preference shares at a value of INR21,250 per share. The investment is said to be part of a larger $100m investment that Bansal has committed to Ola.

Follow Up: The development comes shortly after Ola raised $74m from existing investor Steadview Capital, making it the second-highest-valued startup in India, after Paytm.
 

Hot Property: As per an Inc42 report, Sachin Bansal has signed deals to buy two residential properties in the upmarket locality of Koramangala in Bengaluru for about $6.39m (INR 45cr).

India Wholesale and Retail Inflation Ease, Flipkart Co-Founder Sachin Bansal Invests in Ola, Etihad Airways May Increase Stake in Jet et al.

AVIATION

Etihad Airways may increase stake in Jet airways to 49%; Jet shares rally.

Jet May Fly: As per a Livemint report, Etihad Airways has reportedly agreed to raise its stake in debt-laden Jet Airways to 49%. An increase in stake by Etihad Airways would mean that promote Naresh Goyal’s stake will drop to as low as 20% from 51%.
 

Jet Airways shares jumped as much as 19% during the day, closing at INR293.40 (+15.67%).
 

However, we wonder why would anyone like to be a shareholder of Jet. Click link to know why.

 

M&A

Newmont Mining to buy Goldcorp in a $10bn deal.

 
It’s Raining Gold: As per a report by Reuters, Colorado-based mining company Newmont Mining is set to buy Canada-based gold production company Goldcrop in a $10bn all-stock deal to create the world’s biggest gold producer by output. The combined company is expected to produce c. 7 million ounces of gold over the next 10 years.
 

Up Close: As per the deal, Newmont will exchange Goldcorp shares at a ratio of 0.3280 and $0.02 for each Goldcrop share (17% premium to companies' 20-day VWAP share price). 
 

Perspective: The announcement comes months after Barrick Gold bought Randgold Resources in a $5.4bn deal. Read a deep dive into what could be the world’s biggest gold company deal here. Click here for the official company press release.
 

Goldcorp shares surged 11% on back of the announcement.

 

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