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SC Issues Notice to Anil Ambani, Bandhan Bank to Acquire HDFC-led Mortgage Lender Gruh Finance, Apple to Revive Talks with India et al.

Professor of Financial Economics and Part-time Value Investor, Transfin.
Jan 7, 2019 2:53 PM 4 min read
Editorial

SC issues notice to Anil Ambani over Ericsson dues worth INR550cr, Bandhan Bank to acquire HDFC-led mortgage lender Gruh Finance, Apple to revive talks with India after facing defeat in China.  

 

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

  SC Issues Notice to Anil Ambani, Bandhan Bank to Acquire HDFC-led Mortgage Lender Gruh Finance, Apple to Revive Talks with India et al. 

ECONOMY

Govt to launch second round of oil block auction today. GST Council to discuss easing of compliance burden for MSMEs on Thursday.


The What: The much delayed oil block auction will have 14 blocks measuring 29,333 square kilometres in aggregrate area on offer.

Step back: India had in July 2017 under the Open Acreage Licensing Policy (OALP) allowed companies to put in an expression of interest for mining of oil and gas in any area that is presently not under any production or exploration license. 

Statement of Purpose: The policy attempts to bring about c. 2.8 million sq km of unexplored area in the country under exploration in a bid to raise domestic output and cut imports.
 

Relief for MSMEs: GST Council to meet on Thursday to deliberate increasing sales threshold for compulsory GST registration from INR20L to INR50L for MSMEs to ease compliance burden.

 

BANKRUPTCY

SC issues notice to Anil Ambani over Ericsson dues worth INR550cr; RCom agrees to clear dues but opposes media trial.

The What: As per a Livemint report, the Supreme Court has issued a notice to Anil Ambani, Chairman of Reliance Communications on a plea by Ericsson India seeking initiation of contempt proceedings for allegedly not complying with its order to clear dues of INR550cr.

Also, this: Ericsson has also sought Ambani's detention in civil prison unless the payment is made.

The Big Picture: SC had on 30 November cleared the sale of spectrum by RCom to Reliance Jio on condition that the seller yields INR1,400cr as corporate guarantee to the government within two days following which a no-objection certificate was to be issued.

Old dues: However, DoT refused to furnish the no-objection certificate after Reliance Jio refused to assume payment liabilities of RCom to complete the spectrum trading deal between the two companies.

What next?: As per a Business Standard report, RCom remains committed to clearing the dues from the proceedings of the spectrum sale, however condemns Ericsson India’s push to hold a media trial and sensationalise the issue.

A little humor never hurt nobody: Standup comedian Atul Khatri’s take on the issue is rather amusing.

 

Bandhan Bank to acquire HDFC-led mortgage lender Gruh Finance in a share swap deal.

Up Close: As part of the deal, shareholders of Gruh Finance will get 568 shares of Bandhan Bank for every 1,000 shares held in the home financier.

The Why: The move will help Bandhan Financial Holdings to cut its promoter holding from the existing 82% to 60%. This is in line with RBI’s banking license rules which require the promoter to reduce its stake to 40% within three years of starting business.
 

Hit refresh: RBI had last year restricted Bandhan Bank from opening new branches, and froze remuneration of MD and CEO after the bank failed to comply with the licensing condition.

Bandhan Bank closed 6% lower at INR495.55.
 

Because it all comes down to data: View a detailed breakdown of the two entities’ financials here.

 

APPLE

Apple to revive talks with India after facing defeat in China.
 

Let’s talk: As per a Business Standard report, Apple is set to revive talks with the Indian govt after it recently had to cut forecast following dampening demand in China, which accounts for nearly 20% of the tech giant’s sales.
 

Up Close: Commerce and Industry Minister Suresh Prabhu is scheduled to meet senior executives of Apple later this month.
 

Deal Breaker: Apple had earlier proposed to manufacture in India, but had additionally insisted on a series of sops, including a 10-year tax holiday and duty-free imports of components, amongst others.
 

However, is India really the answer for Apple’s troubles? Click here for a deep dive into the issue.
 

Click here to read how Apple has failed in four out of five ways to drive its earnings.

  SC Issues Notice to Anil Ambani, Bandhan Bank to Acquire HDFC-led Mortgage Lender Gruh Finance, Apple to Revive Talks with India et al.

STARTUPS

Flipkart co-founder Binny Bansal-backed 021 Capital hits first close of about $32m; invests in six startups. Also launches tech startup xto10x Technologies.

Zero to One: As per an Economic Times report, the early-stage venture capital fund spearheaded by Binny Bansal has roped in Wipro Chairman’s Azim Premji Foundation, Myntra and Curefit Cofounder Mukesh Bansal, MakeMyTrip India Chief Executive Rajesh Magow, PhonePe’s Sameer Nigam and Rahul Chari, Myntra CEO Ananth Narayanan, former Flipkart executive Mekin Maheshwari, former senior Facebook and Dropbox executives Ruchi Sanghvi and Aditya Agarwal as institutional investors, or limited partner (LP).

Zoom Out: The Bengaluru-based firm is targeting a final close of $50m by the end of the year and seeks to invest in startups in Southeast Asian countries such as Singapore and Indonesia other than India.

xto10x: As per a YourStory article, Binny Bansal and former McKinsey consultant Saikiran Krishnamurthy have launched tech startup xto10x Technologies, which will offer technology tools, learning and consulting services to growth-stage startups, which are looking to scale up.

 

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