Top Business News This Week: Saudi Aramco Reliance Deal, Inflation in India, Govt Agrees to Sell 95% Stake in Air India

 Saudi Aramco set to acquire 20% stake in Reliance’s oil business at an enterprise value of $75bn. RIL announces launch date of Jio Giga Fiber. Viacom and CBS reunite after 13 years to cope with new media landscape. ViacomCBS: the road to a long-anticipated merger. ShareChat raises $100m in Series D funding round led by Twitter. MCA raises cap on shares issued with differential voting rights. Govt agrees in principle to sell 95% stake in Air India. India’s retail inflation eases to 3.15% in July; breaking 5-month rising trend. India’s WPI inflation falls to multi-year low of 1.08% in July. Trade deficit narrows to $13bn as exports rise.

 

Moving on to the top Business news stories of the week:

 

 INDIA 

India’s retail inflation eases to 3.15% in July; breaking 5-month rising trend. India’s WPI inflation falls to multi-year low of 1.08% in July. Trade deficit narrows to $13bn as exports rise.
 
 
Easing Out: India’s retail inflation, calculated on the basis of Consumer Price Index (CPI), eased to 3.15%, breaking a 5-month-long rising streak, in the month of July. The fall in retail inflation comes despite higher food prices.
 
 
This is well within the RBI’s target level of 4%.

 
Previously: Consumer price inflation had touched an eight-month high of 3.18% in June 2019 on the back of delayed monsoon.
 
 
View India’s Inflation Rate trend here
 
 

Easing Out: Wholesale price-based inflation fell to a multi-year low of 1.08% in July vs 2.02% last month and 5.27% in July 2018. 

 
The decline has been credited to cheaper fuel and food items. 
 
 
Also, This: India’s retail inflation too eased to 3.15%, breaking a 5-month-long rising streak, in the month of July.
 
 
Narrowing Down: India’s trade deficit in July narrowed to $13bn in July vs $18.63bn last year, on back of growing exports and declining imports.
 
 
During the period, exports grew by 2.25% to $26.33bn. Meanwhile, imports slipped by 10.43% to $39.76bn.

 

 RIL 

Saudi Aramco set to acquire 20% stake in Reliance’s oil business at an enterprise value of $75bn. RIL announces launch date of Jio Giga Fiber.


 
The What: In one of the biggest foreign investments in the history of Reliance Industries, oil giant Saudi Aramco is set to acquire 20% stake in its oil refinery and chemical business at an enterprise value of $75bn.


 
As part of the deal, Saudi Aramco will supply 500,000 barrels per day to Reliance’s twin refineries at Jamnagar in Gujarat. 


 
Saudi Aramco will take 20% stake in a proposed special vehciles housing the twin refineries as well as the firm’s petrochemical complex.


 
The announcement was made by Mukesh Ambani at Reliance Industries' 42th annual general meeting. 


 
More to Come: Ambani also announced the launch date of Jio Giga Fiber, Jio set top box and First Day First in a major push to make Reliance Jio India's largest network.

 

 VIACOM CBS 

Viacom and CBS reunite after 13 years to cope with new media landscape. ViacomCBS: the road to a long-anticipated merger.

 
Merging Matters: In 2006, Viacom and CBS split. Yesterday, a long-anticipated and long-fought reunion was finally agreed upon in a $30bn deal. The godparents of this merger hope that ViacomCBS will be able to compete with rivals in the increasingly cluttered and brutal media market. 


But even the combined prowess of these two media giants might be insufficient to tackle the likes of Disney, WarnerMedia and Netflix. Viacom's CEO is optimistic, though, opining that the the merged entity will be "one of only a few companies with the breadth and depth of content and reach to shape the future of our industry".


13 Years Why: The deal reunites Viacom and CBS and pools assets such as Paramount Pictures, CBS, Showtime and MTV in a new entity to be called ViacomCBS Inc. after over 13 years of the two operating in largely separate media domains. But the path to the Viacom-CBS reunion was not straightforward. It was in fact very rocky. Read more about it here.
 
 
 STARTUPS 
 
ShareChat raises $100m in Series D funding round led by Twitter. MCA raises cap on shares issued with differential voting rights.
 
 
Sharing Joy: Bengaluru-based regional language social platform, ShareChat, has raised $100m in its latest round of financing led by Twitter. This brings the total capital secured by the company till date to $224m.
 
 
Other than Twitter, TrustBridge Partners, and existing investors Shunwei Capital, Lightspeed Venture Partners, SAIF Capital, India Quotient and Morningside Venture Capital also participated in the Series D round.
 
 
A New Spin: Top scooter rental companies - Vogo, Bounce and Drivezy - are increasingly adopting the asset-light business model. These firms have tapped a handful of companies to own the thousands of scooters that run on their platforms. The obvious advantage - assets, scooters in this case, go off-book, even as they still get a reliable supply of vehicles.
 
 
Here’s a closer look at the business models of these scooter rental companies.
 

 
Joy to the World: In a fillip to startups, the Ministry of Corporate Affairs has revised the cap on differential voting rights (DVR) shares upwards to 74% of the total voting power from the existing 26%. 
 

This will enable companies to retain control while raising equity capital.
 

Another key change is the removal of the earlier requirement of distributable profits for three years for a company to be eligible to issue shares with DVR. 
 

Narrow Road Ahead: The number of IPOs more than halved in the first six months of 2019 to eight from 18 during the same period last year — touching its lowest in the last three years, and as per Mukund Ranganathan, Executive Director at Motilal Oswal Investment Banking, “The current market conditions are quite challenging and it is difficult to see a significant recovery in the IPO markets in this calendar year".
 

More on this here.
 
 
 
 
 AIRWAYS 
 
 
Govt agrees in principle to sell 95% stake in Air India. Air India puts to auction more than 60 real estate assets. Hopeful that all 19 of its grounded aircraft will rejoin the fleet by October. Claims by creditors of Jet Airways rise from INR24,000cr a month ago to INR30,558cr now, making hope of revival dimmer. Cathay Pacific CEO Rupert Hogg resigns amid Hong Kong protest row.


Let it Go: A Committee of Secretaries led by Cabinet Secretary P K Sinha has agreed in principle to sell 95% in Air India, retaining 5% for ESOP of permanent employees. The proposal will now be put up for approval of the Committee of Ministers in the next 15 days.
 
 
Fresh Attempt: Following failed attempts in 2001 and 2018, the government is now doing all it can to ensure that the Air India sale is successful, including reducing the debt burden for the potential buyer and rewriting the rules of the privatisation process.
 
 
Air India has put to auction more than 60 real estate assets, including some it could not sell at its last auction in April.
 
 
 
The last date for submitting bids is 30 August, according to a tender document issued by the airline.
 
 
Where There is Hope, There is a Way: The national carrier is hopeful that all 19 of its grounded aircraft will rejoin the fleet by October, as it plans to commence flight operations to Africa and Canada.
 

 
Uh Oh: Claims submitted by creditors against Jet Airways have shot upfrom INR24,000cr a month ago to INR30,558 crore now, making hopes of any revival of the defunct airline dimmer.
 

The news comes shortly after Etihad Airways, which holds 24% in Jet, said on Monday that it did not submit an expression of interest (EoI) for the airline due to unresolved issues pertaining to its liabilities. Additionally, Anil Agarwal’s Volcan Investments had submitted an EoI last Saturday, but pulled out shortly.
 
 
In Other News: The Enforcement Directorate, which is probing the money-laundering charges against Religare Enterprises former promoters Malvinder Mohan Singh and Shivinder Mohan Singh, has established a diversion of funds worth $400m to a subsidiary in Mauritius and then to a Jersey-based entity. 

 
More on this here
 

It's Time to Go: The CEO of Cathay Pacific Airways has resigned following pressure by Beijing on the Hong Kong carrier over participation by some of its employees in anti-government protests.
 

Hogg will be replaced by Augustus Tang, CEO of Hong Kong Aircraft Engineering Company Limited (HAECO), which is also under the Swire Group.
 
 
 
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