India among world's fastest growing large economies but more needs to be done, reports IMF. Fitch cuts India’s GDP growth forecast for FY20 to 6.8%. Facebook admits it stored passwords unencrypted. Netflix tests mobile subscription service in India.
Moving on to the top Business stories of the week.
Mindtree Board to meet again on 26th March. Culture shock awaits employees.
The Battle Continues: "L&T wants to buy Mindtree after the latter’s largest shareholders reached out to the infrastructure giant. L&T saw value and business logic in the move and so went ahead. If its proposal turns out to be bad and value-destructive, public shareholders and institutions who collectively have around 6.5 times more skin in the company will tear up the bid and throw it in the bin."
Here is a detailed description of the events that have occurred so far.
Not My Culture: Analysts and executives fear that a merger between culturally different L&T and Mindtree would have a significant impact on Mindtree employees.
See You: Mindtree, which is facing a hostile takeover from L&T, would reconvene its board meeting on March 26 to deliberate on the buyback or the open offer.
Too Late: Mindtree founders were considering the share buyback to thwart any hostile takeover of the company. But since L&T has already announced the open offer, SEBI regulations prevent Mindtree from buying back its shares now.
Jet lenders re-initiate talks with Tata Group. SpiceJet to lease grounded Jet planes.
New Boss: Lenders of Jet Airways are looking to re-start talks with the Tatas as a possible new investor in the Indian airline.
Interestingly, talks held with the Tata Group previously have not been successful.
Bye Bye: The development comes after Etihad Airways, which holds a 24% stake in Jet Airways, offered to sell its stake in the airline.
Good Riddance: One of Tata’s earlier demands was for the Chairman, Naresh Goyal to step down from the airline's board. Now with Naresh Goyal set to step down and Etihad willing to exit, it is easier for the Tata Group to acquire a controlling share in Jet.
We’ll Take It: SpiceJet is planning to lease Jet Airways' grounded aircrafts from their lessors. According to reports, as many as 50 aircraft are on offer to SpiceJet.
Strapped for Air: The recent grounding of the controversial Boeing 737 Max 8 aircraft by the DGCA has adversely affected the aviation industry's capacity.
Quick Heal: For SpiceJet, which has cancelled several flights on account of this, leasing Jet's grounded planes will be a quick solution to replenishing capacity.
India among world's fastest growing large economies but more needs to be done, reports IMF. More room for foreign investors to bet on India. Fitch cuts India’s GDP growth forecast for FY20 to 6.8%.
Forerunner: India has been one of the world's fastest growing large economies, with growth averaging about 7% over the past five years, as per IMF Communications Director Gerry Rice. The comment comes ahead of the release of the World Economic Outlook (WEO) survey.
Rice noted that while multiple important reforms have been implemented, more of these are needed to sustain growth, including harnessing the demographic dividend opportunity.
More Room: Veteran market strategist Christopher Wood in his weekly research note for investors 'Greed & Fear' noted that there is more room for foreign investors to increase their bets on India.
Rates Slashed: Fitch Ratings cut India’s economic growth forecast for the next fiscal to 6.8 % vs previous estimate of 7%, on back of weaker than expected momentum in the economy.
The rating agency has also cut growth forecasts for FY20 and FY21 to 7% from 7.3% and 7.1% from 7.3%, respectively.
Pinterest may IPO mid-April, earlier than planned. Levi’s soars in IPO.
Early Riser: Image search platform, Pinterest may now IPO in mid-April, earlier than previously planned. The platform had been planning to go public in June, seeking to raise about $1.bn in an IPO valuing it at least $12bn.
Pinterest could make its IPO filing with the Securities and Exchange Commission later today with the shares listing on the NYSE by the middle of April. It was last valued privately at c. $12bn.
Fly High: Levi Strauss surged more than 30% during its IPO on NYSE on Thursday. Levi’s raised $623m from the stock sale.
Did You Know?: The company was publicly traded in the 1970s and early 1980s, but went private in 1985.
Facebook admits it stored passwords unencrypted. Walmart funds PhonePe. Netflix tests mobile subscription service in India.
Unencrypted: Facebook has admitted to storing millions of passwords in an unencrypted manner on its internal servers, a security slip that left them readable by the social networking giant's employees.
Chilling Facts: According to a report by KerbsOnSecurity as many as 600m users of the social network had account passwords stored in plain text files searchable by more than 20,000 employees.
Big Boost: PhonePe has received INR743.5cr as part of a fresh fund infusion from its Singapore registered parent entity PhonePe Pvt Ltd.
PhonePe Singapore, previously known as Flipkart Payments, has infused the funds in the India entity by subscribing to 2,915,964 shares in the latter at INR2,450 apiece.
Race to The Top: The funding will be a big boost for PhonePe who has been looking to support user growth in a market heated up by the entry of deep-pocketed rivals like Google Pay and Amazon Pay, along with newer players like WhatsApp Payments, Reliance Jio and Xiaomi's Mi Pay.
Phone Pe: Netflix is testing a mobile-only subscription with select users in India, as it looks to expand its user base in the country.
More for Less: The video streaming service is charging INR250 per month for the mobile-only plan, which is half of the INR500 monthly pricing Netflix had launched as its entry-level plan in the country.
This move will help Netflix retain its existing premium subscription offering while attracting a potential set of new subscribers in the country.
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