Fiat Chrysler Proposes Merger Plan with Renault, Google to Release Pricing and Launch Information of Gaming Platform Stadia, Govt to Merge CSO and NSSO And Other Top Business News Today

Fiat Chrysler proposes merger plan with Renault. Lenskart in talks with SoftBank to raise $350m, set to join the unicorn club. Google to release pricing and launch information for its gaming platform Stadia. Govt to merge the Central Statistics Office and the National Sample Survey Office. Analysts split on the fate of Rupee following Modi’s resounding win in the General Elections 2019. Benchmark 10-year bond yield falls to the lowest level in over a year. 

 

 

Moving on to the top Business news of the day.

 

 REFORMS 


Next wave of bank consolidation likely to take place in Q3. Govt to merge the Central Statistics Office and the National Sample Survey Office.


 
A Proposal You Cannot Refuse: The Ministry of Finance has started seeking information from PSBs on possible targets for amalgamation/mergers and acquisitions with justification on how such an initiative will synergise operations and strengthen the bank.


 
What You Need to Know: The move comes ahead of the next wave of bank consolidation which is likely to take place during the October-December quarter of the current fiscal. 


 
Previously: Last year, alternative mechanism (AM) or a group of Ministers under former Finance Minister Arun Jaitley, which was created in 2017 to fast track consolidation and help create strong and competitive banks had approved the proposed merger of Vijaya Bank and Dena Bank with Bank of Baroda (BoB). 


 
Also, This: In 2017, the State Bank of India absorbed five of its associates and the Bharatiya Mahila Bank.


 
This fiscal is likely to witness the merger of Punjab National Bank (PNB) with smaller PSBs. Syndicate Bank, Oriental Bank of Commerce, Andhra Bank and Allahabad Bank are being considered for the merger.


 
The Countdown Begins: With the election results now out, the countdown for Budget 2019 India has begun! Here are the top 5 expectations from Modi government by Fitch Ratings.


 
Under One Umbrella: The Ministry of Statistics and Programme Implementation has approved the decision to merge the Central Statistics Office and the National Sample Survey Office into a National Statistical Office.


 
The Central Statistics Office provides data on economic indicators such as the Gross Domestic Product and Index of Industrial Production, while the National Sample Survey Office conducts research on matters such as consumption expenditure and unemployment.


 
The move comes in an attempt to avoid duplication of work and leverage the strength of the statistical system.

 

 CORPORATE 

 

Fiat Chrysler proposes merger plan with Renault. Jet Airways founder Naresh Goyal detained at Mumbai Airport.
 
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The Mega Merger Plan: Fiat Chrysler Automobiles has proposed a merger with French rival Renault.

 
The deal, if it goes through, would create the third-largest auto maker, only behind Volkswagen and Toyota Motor with a combined value of about $37bn and annual vehicle production of almost nine million passenger cars and light trucks.

 
As per the plan, the combined business would be 50% owned by its shareholders and 50% by Renault shareholders with a “balanced governance structure.”

 
Crystal Clear: Fiat Chrysler said that its proposal came after an initial period of discussions with Renault to identify products and markets where they could collaborate to better meet the expensive challenge of electric vehicles, self-driving cars and in-car connectivity. Following the discussions, it became rather clear that a full merger was the most efficient option.

 
More on the proposed merger here

 
In Other News…: Jet Airways founder Naresh Goyal and wife Anita were detained at Mumbai airport on Saturday following a widening inquiry into diversion of funds and the source of their equity in Jet Airways. 

 
The ground Jet owes over INR8,500cr to lenders, led by State Bank of India. 
 
 
 TECH 
 
 
Lenskart in talks with SoftBank to raise $350m, set to join the unicorn club. Google to release pricing and launch information for its gaming platform Stadia.

 
Unicorn Spotted: Eyewear retailer Lenskart is in talk with Softbank’s Vision Fund to receive $350m in fresh funding round, valuing the platform at $1.3bn.

 
This would be a huge jump from its previous valuation of $460-470m.

 
SoftBank’s discussions come on the back of Carlyle Group’s interest in Lenskart. However, talks with Carlyle Group fell through as the private equity firm was proposing a valuation of about $700m, much lower than the company’s expectations.
 
 
Lenskart recently entered Singapore and the plan is to open 50-60 stores over the next three years in the island-city, before expanding to markets such as the Philippines, Taiwan and the Middle East.

Stadia is a cloud based gaming platform that was announced by Google this March. The platform is designed to run games on high-capacity servers, making it possible to stream them to any device connected to the Internet. It will also remove restrictions on game-developers’ hardware requirements.  
 
 
 MARKETS 
 

Analysts split on the fate of Rupee following Modi’s resounding win in the General Elections 2019. Benchmark 10-year bond yield falls to the lowest level in over a year. 

 
Split: While Citigroup is positioning for a weaker rupee, Nomura Holdings expects the sweep of Modi’s win to attract robust overseas flows to the nation’s assets, giving another leg to the rally.

 
Investor sentiment turned positive last week as the rupee gained one percent and stocks rose record highs following Modi decisive success. However, with the election results now settling in, it remains to be seen how the Modi Government 2.0 will tackle the slowing economic growth.
 
 
Tumbling Down: The benchmark 10-year bond yield on Monday fell to the lowest level in over a year on back of decline in crude oil prices and fresh Open Market Operations announcement by the RBI. The yield fell to 7.16%, the lowest level since April 9, last year, after closing at 7.23% on Friday.
 
 
 CONSUMER 


Indians report increased instances of fraud-related losses over the past 12 months. 

 
Two-Pronged: The National Pension System (NPS) allows you to open two accounts: Tier-I and Tier-II. 

 
The latter, which can be opened only if you have a Tier-I account, has seen limited interest despite its advantages. NPS Tier-II is perhaps the cheapest investment product available now, and its long-term gains could be huge.
 
 
For instance, subscribers to the NPS Tier-I account can withdraw only up to 60% of their accumulated corpus on retirement. But NPS Tier-II subscribers can withdraw as much as they want, and whenever they want. 

 
Ignored: Despite this flexibility, the combined asset under management (AUM) of NPS Tier-II is just INR815cr. The combined AUM of NPS Tier-I is INR18,973cr. 

 
Here’s a deep dive into the much ignored NPS Tier-II.

 
According to Experian India Fraud Report 2018 -19, 65% Indian consumers surveyed have reported an increase in fraud-related losses over the past 12 months. These include account takeover attacks and fraudulent account openings. Identity theft at 28 percent and market alert frauds at 28% were the leading contributors to the overall frauds.

 
In an interview with Moneycontrol, Sathya Kalyanasundaram, Country Managing Director of Experian India, elaborates on the fraud trend in the country.
 
 
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