IndiGo Headed for NCLT as Differences Arise Between Promoters, US Places Huawei on Trade Blacklist, GDP Likely to Grow at Around 7% in FY20 and Other Top Business News of the Day

IndiGo headed for NCLT as differences arise between promoters. US escalates battle against Huawei Technologies. Places Huawei and 70 affiliates on US trade blacklist. Donald Trump set to overhaul immigration system, to propose merit-based immigration. GDP likely to grow at around 7% in FY20, as per CEA Krishnamurthy Subramanian. RBI releases 'Vision 2021' for payment systems for a 'cash-lite' society. Tata Chemicals to transfer food and beverages business to Tata Global. RIL-BP makes its first bid for an oil and gas exploration block in more than a decade. 

 

Moving on to the top Business news of the day.

 

 COMPANIES 

 

Tata Chemicals to transfer food and beverages business to Tata Global. RIL-BP makes its first bid for an oil and gas exploration block in more than a decade.

 

Big Plans: Tata Group has announced the demerger of its consumer products business of Tata Chemicals into Tata Global Beverages

The move is a part of a larger mandate to bring food and beverages under one unit.

Only Change Is Constant: Tata Global will be renamed Tata Consumer Products after the demerger and will see its turnover rise 25% to INR9,099cr with Ebitda of INR1,154cr. The market capitalisation of the new entity will be INR18,000cr at the current share price of Tata Global, which is an increase of nearly INR5,800cr over its Wednesday’s market capitalisation, which stood at INR12,500cr.

Under the demerger process, 114 shares of Tata Global will be issued for every 100 shares of Tata Chemicals, taking the latter’s post-demerger share base to 920 million from 631 million now.

An Offer You Cannot Refuse: RIL-BP has made its first bid for an oil and gas exploration block in more than a decade. The combined entity made an offer for one block off the east coast.

A total of 32 blocks were up for auction in the OALP-II and III bid rounds. Mining major Vedanta put in as many as 30 bids, ONGC bid for 20 areas. Oil India Ltd (OIL) bid for 15. 

Under the open acreage licensing policy or OALP, companies are allowed to put in an Expression of Interest (EoI) for prospecting of oil and gas in any area that is presently not under any production or exploration licence. The EoIs can be put in at any time of the year but they are accumulated twice annually.

 

 ECONOMY 

 
GDP likely to grow at around 7% in FY20, as per CEA Krishnamurthy Subramanian. RBI releases 'Vision 2021' for payment systems for a 'cash-lite' society.
 
 
Candid: In an interview with Business Standard, CEA Krishnamurthy Subramanian projects India’s gross domestic product (GDP) growth for 2019-20 to be around 7%. He adds that the next government should focus on capital, labour and land reforms, and that the debate on the accuracy of the official data is misinformed.
 
 
Read the excerpts from the interview here.
 
 
Cash-Lite Life: The Central Bank has released a vision document which envisages a 'cash-lite' society.
 
 
The RBI expects the number of digital transactions to increase more than four times to 8,707 crore in December 2021 and is subsequently pushing for a safe, secure, convenient, quick and affordable e-payment system.
 
 
The aim is to enhance customer experience, empower payment system operators and service providers, enable the payments ecosystem and infrastructure, put in place forward-looking regulations and undertake risk-focused supervision.
 
 
View the Payment and Settlement Systems in India: Vision – 2019-2021 document here.
 
 
 CONSUMER 
 
Tata Sky launches ‘Tata Sky Binge’. Paytm ties up with Citibank to launch its credit card business.
 
 
Curtains Up: DTH service provider Tata Sky has launched ‘Tata Sky Binge’, a platform that houses digital content from multiple apps.
 

‘Tata Sky Binge’ will allow subscribers to stream digital content from a diverse mix of apps through a single platform and single subscription fee.

 
The service will initially offer digital content from, Hotstar, Sun NXT, Eros NOW, Hungama Play via a single subscription fee of INR249 a month

 
 
This marks yet another step by Paytm towards becoming a full-fledged financial services conglomerate.
 
 
 INDIGO 
 
IndiGo headed for NCLT as differences arise between promoters. 
 
 
We Need to Talk: Private carrier IndiGo is likely to approach the National Company Law Tribunal (NCLT) for resolving differences that have arisen between major shareholders Rahul Bhatia and Rakesh Gangwal regarding clauses in the shareholders’ agreement and the airline's expansion strategies, amongst others. 
 
 
FYI: Rahul Bhatia and Rakesh Gangwal, along with other promoter entities hold about 75% in InterGlobe Aviation Ltd., the listed company that runs IndiGo.
 
 
Bhatia and Gangwal have hired law firms JSA Law and Khaitan & Co, respectively, for dispute resolution.
 
 
Keep Calm: Amidst this confusion, Ronojoy Dutta, CEO, InterGlobe Aviation, in an email to his employees on Thursday wrote that the growth strategy of IndiGo remains unchanged and the airline's management has full backing of the company's board of directors to implement it.
 
 
 US 

US escalates battle against Huawei Technologies. Places Huawei and 70 affiliates on US trade blacklist. Donald Trump set to overhaul immigration system, to propose merit-based immigration. 
 
 
Cat Fight: The Trump administration has escalated its battle against Huawei Technologies with a pair of actions that threatens to both cut the Chinese telecommunications giant off from American suppliers and ban it from doing business in the US.
 
 
US President Donald Trump has signed an executive order that enables the US to ban telecommunications network gear and services from “foreign adversaries.” 
 
 
While the order does not name any countries or companies, officials and industry executives believe that its targets likely included Huawei and its Chinese rival ZTE Corp., whom US officials believe are beholden to the Chinese government.
 
 
Shortly afterward, the Department of Commerce said it had put Huawei and 70 affiliates to its so-called “Entity List” - a move that bans the telecom giant from buying parts and components from US companies without US government approval, essentially forbidding it from doing business with American companies.
 
 
The dramatic move comes as the Trump administration has aggressively lobbied other countries not to use Huawei equipment in next-generation 5G networks fearing Huawei’s collusion with the Chinese government and amidst concern of national security threat to the US. 
 
 
Merit Over Rank: In a major policy speech Thursday, US President Donald Trump is all set to announce a new proposal to overhaul the country's immigration policy that would give preference to foreigners based on merit rather than the existing system that gives preference to family ties.
 
 
The new plan would focus on reducing family-based immigration to the US in favor of employment-skill-based immigration.
 
 
As of now, about 66% of the green cards are given to those with family ties and only 12% are based on skills.
 
 
Such a move is likely to benefit hundreds and thousands of Indian professionals on H-1B visa whose current Green Card wait, on an average, is more than a decade.
 
 
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