Government to Relax Angel Tax Norms, Widens the definition of a Startup, Sony, Apple, Comcast Compete for Stake in Zee Entertainment et al.

Sony, Apple, Comcast compete for stake in Zee Entertainment. Government to relax Angel Tax norms for startups. Govt widens the definition of a Startup. New evidence suggests Fortis fraud may exceed INR2,000cr.

 

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

 

DEALS 

 

Sony, Apple, Comcast compete for stake in Zee Entertainment. Vedanta and JSW Steel to team up against Arcelor Mittal in their bid for Essar. PayU to invest $150m in digital lender Capital Float.

 

Up For Sale: The management of Zee Entertainment Enterprises has shortlisted US cable service provider Comcast, Japanese MNC Sony, tech giant Apple and homegrown Reliance Industries as it deliberates a stake sale.

 

Backstory: Zee had in November announced its promoters’ plans to sell up to 50% of the stake to a strategic partner in order to deleverage their balance sheet.

 

Joining Forces: Vedanta and JSW Steel in talks to partner up to bid for Essar steel. 

 

The move comes in a bid to eliminate the threat posed by ArcelorMittal – another potential bidder for the debt laden firm.

 

Zoom Out: The bid could be in the range of INR45,000cr-INR48,000cr and would be made on the grounds of value maximization. Arcelor’s previous bid for Essar was for INR42,000cr.

 

Betting Big: Global fintech company PayU is in talks to invest $100-$150m in Bengaluru based digital lending platform Capital Float, as it seeks to expand its reach into India’s small and medium lending segment.

 

PayU is seeking to acquire c. 30% stake in Capital Float.

 

New Deal: The Indian Oil Corporation has become the first Indian state refiner to buy US oil under an annual contract.

 

IOC has agreed to pay about $1.5bn annually for 60,000 barrels a day until March 2020 in a bid to diversify its crude sources.

 

MACRO 

 

RBI may push banks to lower interest rates. Central Bank to inject INR12,000cr into the system via Open Market Operations.

 

A Little Nudge: RBI is set to meet the Chiefs of Public and Private banks on Thursday to discuss the transmission of the recent rate cut to the banks. 

 

Earlier this month, the RBI cut the repo rate by 25 basis points to 6.25%.

 

Let it Flow: RBI is set to inject INR12,500cr into the system through the purchase of government securities in a bid to increase liquidity. The purchase will be made through open market operations.

 

Bringing it Down: The GST Council may cut GST rates on under-construction residential properties in its meeting tomorrow. 

 

At present, 12% GST is levied with input tax credit (ITC) on payments made for under-construction property or ready-to-move-in flats where completion certificate has not been issued at the time of sale.

 

The GST rate on such properties may be reduced to 5% without ITC while in the affordable housing segment, the GST rate could be slashed to 3%, from 8%.

 

STARTUPS 

 

Government to relax Angel Tax norms for startups. Govt widens the definition of a Startup.

 

Loosening Up: Government to relax angel tax norms for startups, including increasing the investment limit to INR25cr for availing income tax concessions. 

 

Presently, startups can avail tax concession only if the total investment, including funding from angel investors, does not exceed INR10cr.

 

Changing Definitions: The definition of startups has been widened to an entity which has been in operation for up to ten years from its date of incorporation or registration, instead of the current seven years. 

 

Additionally, an entity shall be considered a startup if its turnover for any of the financial year, since its incorporation or registration, has not exceeded INR100cr instead of the existing INR25cr.

 

What You Need to Know: The proposals aim to simplify the process of tax exemptions for Startups.

 

Rising Up: According to Tracxn, a private investment-tracking firm, digital healthcare start-ups in India received about $565m in venture capital investments in 2018, an all-time high and 43% higher than the previous year. Read more on the sector’s phenomenal growth here.

 

SCAM 

 

New evidence suggests Fortis fraud may exceed INR2,000cr.

 

Hidden Fraud: The Serious Fraud Investigation Office has discovered a trail of funds which could add up to more than INR2,000cr, much higher than the earlier SEBI estimate of INR403cr, in relation to the alleged fund diversion at Fortis Healthcare.

 

The Usual Suspects: Those alleged in the fund diversion include Gurinder Singh Dhillon, Head of Radha Soami Satsang Beas, and Sanjay Godhwani, a former associate of Malvinder and Shivinder Singh.

 

RHC Holding Pvt. Ltd, the holding company promoted by brothers Malvinder and Shivinder Singh, extended loans worth INR5,482cr to Dhillon family members, their associates or entities controlled by them.

 

Read more on this here.

 

Price of Divinity: In his complaint filed with the Economics Offences Wing, Malvinder Singh alleges that his brother Shivinder initiated, as well as permitted the siphoning and malfeasance of funds entrusted to him with the ulterior motive of gaining ultimate control of the seat of the spiritual head of the Radha Soami Satsang Beas. Read more on the matter here.

 

COMPANIES 

 

Apple shuffles top leadership as it seeks to diversify revenue streams. Honda shuts down major UK production plant.

 

Looking for More: Apple is shaking up its top leadership and reordering its priorities as it looks to diversify its revenue streams to reduce dependence on iPhone sales. 

 

Major reordering includes promoting AI Chief John Giannandrea to the executive team, replacing departing Retail Chief Angela Ahrendts with Head of HR Deirdre O’Brien and pushing out top Siri voice-assistant executive Bill Stasior. The tech giant has also trimmed 200 people from its autonomous-vehicle project, and is redirecting much of the engineering resources in its services business, led by Eddy Cue, into efforts around Hollywood programming.

 

Click here know how the company plans its transition from an iPhone-driven company to one where growth flows from services and potentially transformative technologies.

 

Shutting Down: Japanese automaker Honda to shut down its largest plant in the UK on back of approaching Brexit deadline. The plant currently employs 3,500 people, besides the thousands in the factory’s supply chain.

 

Honda produced some 160,000 cars last year at the Swindon plant, where the company has been producing cars since 1992. Its Civic is the U.K.’s third-most-exported car, many of which are sold in the US.

 

With the Brexit deadline approaching, contingency planning by businesses is kicking into higher gear.

 

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