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SBI Receives Two Unsolicited Bids for Jet Airways, L&T Acquires 26% Stake in Mindtree, Getting Them a Board Seat, US Increases Tariffs on $200bn of Chinese Goods to 25%, Uber Prices IPO at $45 per share et al.

Professor of Financial Economics and Part-time Value Investor, Transfin.
May 10, 2019 1:57 PM 5 min read

SBI receives two unsolicited bids for Jet Airways. L&T acquires 26% stake in Mindtree, getting them a Board seat. US increases tariffs on $200bn of Chinese goods to 25%. Uber prices IPO at $45 per share, raises $8.1bn.


Moving on to the top Business news of the day.


McDonald’s buys out Indian partner Vikram Bakshi in an INR600cr deal. SBI receives two unsolicited bids for Jet Airways. L&T acquires 26% stake in Mindtree, getting them a Board seat. 

Best Food Forward: US-based fast food chain, McDonald’s has bought out the stake of its Indian partner Vikram Bakshi in Connaught Plaza Restaurants Pvt Ltd (CPRL) that operated 160 McDonald’s-branded restaurants in the northern and eastern region of the country.


While the financial details of the out-of-the-court settlement were not revealed, the deal is said to be worth INR600cr. 


Out of Stock: McDonald’s has temporarily closed restaurants in North and East India to comprehensively assess operational protocols and employee training.


Good Old Days: Bakshi signed the JV as an equal equity partner with McDonald’s Corporation in 1995 and established the first McDonald’s restaurant in India in 1996.


Meanwhile, the company said it is still looking for a new Developmental Licensee for the North and East regions.


The World Lives on Hope: State Bank of India has reported that it has received two unsolicited bids for the grounded Jet Airways. The deadline for submitting bids for the beleaguered airline under the stake sale ended today at 6:00 pm. 


Jet Airways' lenders have taken a controlling stake in the airline, and are currently in the process of selling a stake to recover their dues.


Stepping Stones: Larsen and Toubro Ltd (L&T) has acquiredmore than 33 lakh shares of Mindtree through the open market, taking its total shareholding in the IT firm to 25.93%


This development becomes rather crucial considering that crossing the 25% mark ensures that L&T gets a Board seat and the power to propose or block special resolutions.


The firm is also set to commence an open offer on May 14 in which it will be looking to acquire 31% of the firm at INR980 per share.



SBI reports net profit of INR838cr in Q4. HCL overtakes Wipro to become third-largest IT services firm in India.
Missing Expectations: State Bank of India reported net profit of INR838cr in Q4, missing expectations of INR4,840cr, on back of higher provisioning for its bad debt.
SBI has last year, in the same quarter, posted a loss of INR7,718.17cr.
Because We Love Data: Gross NPAs declined to 7.53% against 8.7l% in the previous quarter and 10.91% cent in the corresponding quarter of the previous fiscal. Net NPAs during the period came in at 3.01% against 3.95% in the previous quarter and 5.73% in the year-ago quarter.
Changing Order: HCL Technologies (HCL) on Thursday overtook Wipro to become the third-largest IT services firm in India in 2018-19, making the first change in the pecking order of the country’s $170bn IT outsourcing industry in the last seven years.
HCL clocked a revenue of $8.63bn in FY19, a 10% YoY growth, beating Wipro's $8.12bn revenue, which registered a 3.8% growth over the previous year. Last year, HCL's revenue was $7.84bn, $220m short of Wipro's $8.06bn.
Plugging data gaps won’t be easy as most enterprise and corporate databases used in India are flawed, warn economists. 
Too Big To Fill: Plugging data gaps in estimating business and economic activity won’t be easy as most enterprise and corporate databases used in India are flawed, warn economists.
This comes soon after the Ministry of Statistics and Programme Implementation said that it was examining the findings of the NSSO report which revealed that 21% of companies included in a database underlying India’s GDP numbers were “out of coverage”, implying they were no longer operating. Another 12% could not be traced, and that it would take “remedial steps" based on the findings to improve the GDP series when the next base change revision takes place. 
The Ministry also said it would be launching the 7th economic census in June and use its results to create a national business register, which would be updated periodically. A deep dive into the matter here.
Good Reads: “Given the key role that GDP estimates play in external investor perception of the country and the business plans of both the government and private sectors, it is imperative that the Centre refrains from politicisation of economic data and lays off interference in the workings of its statistical arms. The CSO not only needs to assert its autonomy in its interactions with the government, but must also be seen to doing so, for the public to repose confidence in its professionalism.” Read more here.
US increases tariffs on $200bn of Chinese goods to 25%.
No End: The US increased tariffs on $200bn of Chinese goods to 25%, up from 10%, as President Donald Trump intensified pressure on Beijing and threatened to impose additional levies on virtually all Chinese exports to the US.
After the new tariffs took effect, China's Commerce Ministry said it "deeply regrets" the move and promised to take "necessary countermeasures." It did not specify what those might be. But it sounded hopeful that the two sides could reach a compromise.
Mainland Chinese stocks bounced following an earlier slip. The Shanghai composite rose 3.1% to about 2,939.21 and the Shenzhen component soared 4.03% to 9,235.39. The Shenzhen composite also jumped 3.833% to close at around 1,568.62.

Uber prices IPO at $45 per share, raises $8.1bn.
Aiming Low: Uber has set its IPO at $45 per share, raising $8.1bn in the process.
The price, which falls at the low end of Uber’s planned range, values Uber at $82.4bn.
It may have been one of the worst times for the American economy, but the years right after the financial crisis were among the best ever for startup investments.
Childhood Friends: Uber and the forerunner of group-messaging company Slack were founded in 2009, along with mobile-payments firm Square. The year prior birthed home-sharing service Airbnb and cloud platform Twilio. In 2010, as the financial crisis ebbed, came another payments firm, Stripe Inc., image search company Pinterest Inc. and office-sharing startup WeWork, while Uber rival Lyft raised its first institutional capital.
Those nine companies alone are valued together at over $250 billion now, using their most recent private or public valuation. They have either made their public debuts or are expected to do so in the next year, delivering their earliest investors and founders once-in-a-lifetime returns.
More on this here
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