Tata Steel to get 45% stake in Thyssenkrupp joint venture: Sources

The changes happened after Thyssenkrupp's activist shareholders pressured management to squeeze better terms from the deal, which was originally a 50-50 split

Thyssenkrupp AG and Tata Steel Ltd. are closing in on a European steel joint venture after a last-minute change to the deal terms that won approval from Thyssenkrupp’s union.

In the revised deal, Thyssenkrupp will own about 55 per cent of the equity in the new company and Tata will have 45 per cent, according to people familiar with the matter. The changes happened after Thyssenkrupp’s activist shareholders pressured management to squeeze better terms from the deal, which was originally a 50-50 split. The voting rights will be equally split.

The talks over the joint venture have dragged on for more than a year and faced opposition from labour representatives, as well as activist shareholders. Thyssenkrupp’s labour representatives said on Thursday they would vote in favour of the joint venture, paving the way for it to go through.

Elliott Management Corp. and Cevian had argued that the terms needed to be improved after a long slump in Tata’s European steel profits. The new agreement represents an increase of more than 600 million euros ($695 million) for Thyssenkrupp shareholders compared with the previous deal, said the people, who asked not to be identified because the details aren’t public.

Changes to the deal follow weeks of mounting pressure on Thyssenkrupp’s Chief Executive Officer Heinrich Hiesinger by activist shareholders and labour representatives to get a better deal after profits plunged at Tata’s European steel business.

Even though the union will approve the deal, Thyssenkrupp shouldn’t be "scrapped like a used car," said Wilhelm Segerath, chairman of the General Works Council and a member of Thyssenkrupp’s supervisory board.

Equity investors and labor unions are equally represented on Thyssenkrupp’s supervisory board, giving them both influence over the deal.

Under the new terms, Tata also agreed to pay for potential environmental risks at a coke oven of its Port Talbot plant in Wales and for investments, should it be necessary, the people said.

Check Market Price : Tata Steel Share Price

Will Reliance Jio be able to hit 400 million subscriber target by 2020?

Jio is in a neck-and-neck battle with Airtel, which added a similar number of subscribers as Jio in the 15 months from February 2017 to April 2018

It took Reliance Jio just 170 days to hit the 100 million subscriber mark since its launch in September 2016.

But it took the company 15 months to grab the next 100 million, according to sources. Fighting a bitter battle with older telcos, the company reached the 200 million milestone in the middle of May this year. And, they are in a neck and neck battle with Bharti Airtel, which added a similar number of subscribers as Jio in the 15 months through a combination of new customer additions as well as the acquisition of rival telcos including Telenor (36 million) and Tata Teleservices (29 million, pending government nod).

Despite the bruising price war, the Vodafone-Idea combine also added 38 million customers during this period.

Clearly, all the big boys grabbed customers from the smaller players — Aircel, Reliance Communications, TTSL, and Sistema — whose share of the pie fell by half from 33 per cent in February 2017 to 16 per cent in April 2018. With Telenor already having joined Airtel and TTSL about to join, that percentage is likely to come down even more dramatically.

Also Read : Reliance Infrastructure Share Price

The reason for the longer haul for Jio to reach the next 100 million is simple, and that raises questions on whether they would be able to hit the 400 million target by 2020.

Older telcos, initially stumped by the Jio onslaught, are hitting back — matching tariffs and offering devices at similar prices as the Rs 1,500 feature phone of Jio. Also, the overall telecom market shrunk between February 2017 and April 2018, with 39 million lesser subscribers. This is a clear indication that the market has now matured and additional consumers will become a trickle.

Airtel saw its market share go up since the launch of Jio from 24 per cent to crossing 30 per cent in April end (after the Telenor acquisition). That share will go up further once the TTSL deal is cleared.

Vodafone, which had a 17.8 per cent market share when Jio launched in September 2016, had a market share of 19.74 per cent in April. Idea saw a sharp increase in its market share, up from 16.60 per cent in February 2017 to 19.27 per cent in April 2018, as it was able to grab a lot of 2G customers who were shifting from smaller incumbent players.

Lenders choose Tata Steel as preferred bidder for Bhushan Power & Steel

Tata Steel has already bagged Bhushan Steel, which has a capacity of 5.6 million tonnes

The committee of creditors (CoC) for Bhushan Power & Steel has decided on Tata Steel as the preferred bidder. The battle for Bhushan Power & Steel was closely fought between UK-based Liberty House, which submitted a late bid, and Tata Steel. People in the banking sector said that both bids were in close range initially.

"The difference was in the range of Rs 5-10 billion. Tata had offered around Rs 175 billion and Liberty Rs 180 billion as immediate upfront to financial creditors. But if you consider operational creditors, including employees, the Tata Steel bid looked slightly better. There is no standardised format to decide on what basis to select the bid," they said. Tata Steel's bid also has an additional capital infusion of Rs 75 billion. Subsequently, the CoC wanted comfort that Liberty House and Tata Steel can bring in the cash.

ALSO READ: Tata Steel Share Price : Live NSE/BSE Stock Price Today

"In the case of Liberty House, finances were not fully tied up and the CoC felt the Tata bid was better, as it was fully backed by financial arrangement. The matter has been referred accordingly to the tribunal, which has to take a call," said the people cited above. They added that in terms of track record, the CoC felt Tata Steel was a more established player. A Liberty House spokesperson said there was no information on the bid.

The matter was slated for hearing in the National Company Appellate Law Tribunal (NCLAT). Last week, Liberty had presented bank guarantees before the lenders. The NCLAT, where the matter is being heard, had asked the CoC to go ahead with the selection process and keep its decision in a sealed cover. The final decision would be subject to the outcome of the NCLAT verdict.

The CoC had filed an application seeking clarification in the process. Bhushan Power & Steel was a two-way race initially. Tata Steel and JSW Steel had submitted their bids within the deadline. However, Liberty House made a late bid. The CoC had rejected Liberty House's bid on grounds of late submission but the National Company Law Tribunal (NCLT) asked the CoC to consider it. Tata Steel had challenged the NCLT order in the NCLAT, but no stay on the proceedings was granted. If Tata Steel does bag Bhushan Power & Steel, it would likely make it the largest steel player in the domestic market.

Tata Steel has already bagged Bhushan Steel, which has a capacity of 5.6 million tonnes.

Tata Steel's capacity prior to the Bhushan Steel acquisition was around 13 million tonnes. Bhushan Power & Steel has a capacity of around 3 million tonnes and debt of around Rs 470 billion.

Bharti Airtel announces senior leadership appointments for its B2B unit

Ajay Chitkara has been appointed as Director and CEO, Airtel Business to spearhead the domestic and global enterprise business as one unit

Country's top telecom operator Bharti Airtel ltd has announced senior leadership appointments for its B2B unit.

Ajay Chitkara has been appointed as Director and CEO, Airtel Business to spearhead the domestic and global enterprise business as one unit.

Chitkara will continue reporting to Gopal Vittal, MD and CEO, Bharti Airtel.

Airtel also announced the appointment of Pankaj Miglani as CEO - Global Business. Miglani will report to Ajay Chitkara. In his previous role, Miglani was CFO, Bharti Infratel and played a key role in the company's IPO in 2012.

Chitkara has been with Airtel since 2001 and is credited with building brand Airtel in the global wholesale segment. In his previous role as Director & CEO, Global Business and Nxtra, he was responsible for creating business strategies for Carriers, Global Enterprise and OTT segments, and implementing them globally through the regional teams. Under Chitkara's leadership, Global Business grew in topline to become a billion-dollar business, while EBIT margins jumped five-fold since 2013.

Pankaj Miglani, who is a Chartered Accountant, Cost Accountant and Company Secretary with over 25 years of experience, has earlier worked in Airtel for 10 years in various roles.

Gopal Vittal, MD & CEO (India and South Asia), Bharti Airtel said, "I am delighted at Ajay's appointment to lead Airtel's B2B business as an integrated entity, which will help us leverage our global reach and deep relationships in the enterprise segment. I am also pleased to welcome back Pankaj after his successful stint with Bharti Infratel."

Check Bharti Airtel Ltd Market Price : Bharti Airtel Share Price : Live NSE/BSE Stock Price Today

HDFC MF gets Sebi go-ahead for IPO after nearly two months on backburner

It will be entirely an offer for sale by promoter HDFC and UK's Standard Life, who currently hold 57% and 38% respectively

HDFC Mutual Fund has obtained a go-ahead to launch its initial public offering (IPO), two investment bankers handling the issue said.

“Sebi has issued final observation on the offer document. The company will have to respond to the market regulator,” said an investment banker, adding that the asset manager is looking to launch its IPO in the second or third week of July.

HDFC MF couldn’t be immediately reached for a confirmation.

The processing status of draft offer documents filed with Sebi, uploaded on June 22, featured names of 26 companies that are awaiting approval. The list didn't include the name of HDFC MF.

Among the companies awaiting a nod for their IPO include Lodha Developers, Mazagon Dock and Srei Equipment Finance. As per Sebi’s website, the IPO of Lodha Developers, country’s leading real estate company, has been “kept in abeyance for examination of past violations.”

According to an update on Sebi’s website on April 27, HDFC MF’s IPO was kept abeyance for past violations.

“Sebi needed clarity on some issues, which were provided to them,” said a banker.

Nomura, Kotak Mahindra Capital, Axis Capital, BofA Merrill Lynch, Citigroup, CLSA India, HDFC Bank, ICICI Securities, IIFL Holdings, JM Financial, JP Morgan and Morgan Stanley are the investment banks handling HDFC MF’s IPO.

HDFC MF’s IPO will be the second by a domestic asset manager after Reliance Nippon MF. HDFC MF’s offering will be entirely an offer for sale by promoter HDFC and UK’s Standard Life, who currently hold 57 per cent and 38 per cent respectively. In the IPO, HDFC is selling 4 per cent and Standard Life is offloading 8 per cent stake. The IPO size is expected between Rs 35 billion and Rs 38 billion. The maiden offering could value the asset manager at Rs 307 billion.

HDFC MF currently manages assets worth over Rs 3 trillion making it the second-biggest fund house in the country after ICICI Prudential MF.

Check here : HDFC Bank Ltd Share Price.

Here's why India's life-saving plan for IDBI Bank makes no sense

It's hard to see how the transaction could bolster the reputation of any of India's three financial regulators

Rescuing a dying bank with taxpayers' money is often the only way to prevent a costlier contagion. But nursing a deposit-taking institution by tapping life-insurance premiums of policyholders? That's like allowing a localized infection to spread all over, hoping the natural immunity of an otherwise healthy body will help beat back the germs.

India's plan to sell a majority stake in IDBI Bank Ltd to Life Insurance Corp of India is not modern medicine. It's bureaucratic quackery. New Delhi hasn't found a genuine private-sector buyer for the ailing IDBI for more than two years. Hence, the stage is being cleared for state-owned LIC, the government’s preferred buyer of stuff nobody wants.

If LIC cares about its fiduciary responsibility to policyholders, it will pass this one up. But then, it can never say no to New Delhi. LIC already owns about 11 percent of IDBI, thanks to its previous participation in rescue missions. The new proposal is for it to take roughly half of the government’s 81 percent interest to become the majority shareholder. It could cost LIC around $3 billion to pay the government and top up IDBI’s capital for one year.

That's money down the drain.

At more than $8 billion, the bank’s gross nonperforming assets are nearing 28 percent of the total. If all IDBI’s distressed loans currently classified as standard assets have to be marked down, NPAs would rise to almost 36 percent, in India Ratings & Research Pvt.’s assessment.

Suppose NPAs do go up, but only to the halfway mark of 32 percent. The math is still stark: A 70 percent loss on 32 percent of the bank’s $29 billion loan book would translate to a $6.5 billion hit, of which only about $4 billion could be absorbed by existing loan-loss provisions. The remaining $2.5 billion would wipe out IDBI’s Tier 1 capital. Whatever price LIC pays for IDBI shares would be too much. Instead of buying from the government, LIC could purchase new stock in IDBI. However, that would dilute minority investors while generating zero cash for the government’s stretched budget.

It’s hard to see how the transaction could bolster the reputation of any of India’s three financial regulators.

Read more about : IDBI Bank LTD Market Price.

Markets remain listless; Bank of Baroda drops 7% Edit

Markets remain listless; Bank of Baroda drops 7%

Benchmark shares indices continued to trade firm led by gains in index heavyweights ITC and Reliance Industries and IT majors.

At 10:30am, the S&P BSE Sensex was up 22 points at 27,797 and the Nifty50 was down 4 points at 8,572. In the broader market, the BSE Midcap and Smallcap indices were trading flat with mixed bias. Market breadth was firm with 1011 advances and 948 declines on the BSE.

ITC was up 1.3% on renewed buying interest while Reliance Industries was up over 1%.

IT majors continued to trade firm with Infosys and TCS were up 0.5%-0.9% each.

On the losing side, Bank of Baroda was down 7% after the state-owned bank reported 60% year-on-year (YoY) drop in net profit at Rs 424 crore for the quarter ended June 30, 2016 (Q1FY17) due to higher provisions and lower net interest income. Further, the bank’s gross net performing assets (NPA) as a percentage of total loans rose to 11.15% at the end of the June 2016 quarter as compared to 9.99% in the March quarter and 4.13% in the June 2015 quarter.

Sun Pharma was down 2% on the back of weak earnings from its overseas subsidiary Taro Pharmaceuticals.(more)

Hero MotoCorp gains after launching Splendor iSmart

Hero MotoCorp gains after launching Splendor iSmart 110

Hero MotoCorp rose 0.94% to Rs 3,281.70 at 9:25 IST on BSE after the company launched its first in-house designed and developed motorcycle, Splendor iSmart 110.

Meanwhile, the BSE Sensex was up 48.29 points, or 0.17%, to 27,990.40.

On BSE, so far 2,347 shares were traded in the counter, compared with an average volume of 39,942 shares in the past one quarter. The stock hit a high of Rs 3,289 so far during the day, which is also a record high for the counter. The stock hit a low of Rs 3,261 so far during the day. The stock hit a 52-week low of Rs 2,259.10 on 7 September 2015. The stock had outperformed the market over the past one month till 14 July 2016, rising 7.96% compared with 5.86% rise in the Sensex. The scrip had, however, underperformed the market in past one quarter, rising 3.16% as against Sensex's 9.03% rise.

The large-cap company has an equity capital of Rs 39.94 crore. Face value per share is Rs 2.

Hero MotoCorp (HMCL) after market hours yesterday, 14 July 2016, announced the launch of the new Splendor iSmart 110, the first motorcyle to be developed completely in-house, with HMCL's own technology. Built on a completely new chassis and frame, the bike is powered by the new 110cc Torque on Demand engine that also features HMCL's patented i3S technology, the company said. The bike is now available at the Hero dealerships across India. The bike is priced at Rs 53,300 ex-showroom Delhi.(more)

Tamil Nadu: Blow for Karunanidhi family's business interests?

Tamil Nadu: Blow for Karunanidhi family's business interests?

Thursday’s state election results are likely to make the fortunes for some businesses and mar for some others. The biggest and most prominent loser of the day was from the family of DMK chief M Karunanidhi. On the day of the results, the Sun TV stock lost Rs 2,229 crore in market value. Its market capitalisation fell from Rs 16,845 crore at its close on Thursday to Rs 14,616 crore at the end of the day. By virtue of his 75 per cent holding, DMK chief M Karunanidhi’s grandnephew Kalanithi Maran would take three-fourths of that hit.

This notional loss could be an indicator of the bad news in store for the family’s business interests that extend beyond media. While Maran was among the first in the family to get into organised business through his venture into broadcast media in the early 1990s, there were others who have followed in his footsteps. After a brief break-up in relations with the Marans, Karunanidhi’s immediate family members floated Kalaignar TV in 2007. At the time Karunanidhi’s wife Dayalu Ammal owned 60 per cent, while his daughter Kanimozhi owned 20 per cent. Karunanidhi’s grandsons, from his sons Stalin and Azhagiri have also built interests in a range of businesses from real estate to movies to granite mining.

The management of Sun TV has often maintained that its business is independent of the government in power, but the market seems to be understanding it differently. A second term of the AIADMK could prove to be tougher for the family as it does not have the cushion of a friendly regime at the Centre. Read more.

Markets likely to remain volatile, Railway Budget eyed

Stock markets are likely to see volatile trading sessions this week amid derivatives expiry, with all eyes set on two key events -- Railway Budget and Economic Surveyreport, say experts.
"Trend in global markets, crude oil prices, Economic Survey, reform measures announcement in upcoming Railway Budget and rupee-dollar movement will dictate trend on the bourses. Indices may remain volatile with positive bias ahead of expiry of February series derivative contract in the week ahead," said Gaurav Jain, Director, Hem Securities.

Investment via P-Notes rises to Rs 2.58 lakh cr in October

Investment through Participatory Notes (P-Notes) into India's capital market grew to over Rs 2.58 lakh crore (about $39 billion) at the end of October.

P-Notes, mostly used by overseas HNIs (High Net Worth Individuals), hedge funds and other foreign institutions, allow such investors to invest in Indian markets through registered foreign institutional investors (FIIs).

This saves time and cost for them, but the flip side is that the route can also be used for round-tripping of black money.

According to Sebi data, total value of P-Notes investment in Indian markets (equity, debt and derivatives) increased to Rs 2,58,287 crore at October-end, from Rs 2,53,875 crore in the previous month.

This was the second successive month when investment through this route increased.

ALSO READ:

Fight against black money: Sebi to discuss P-Notes issue

The total outstanding value of P-Notes witnessed a steady rise since January and the momentum continued till March.

However, investments through this route registered a drop in April, but hit a seven-year high in May. The inflows slipped in the subsequent three months (June-August) but marginally rose in September and again grew in October.

As things stand, P-Notes make up around 15-20% of the total FII investment in India since 2009. While it used to be much higher 25-40% in 2008, the reading was as high as over 50% at the peak of stock market bull run in 2007.

The drop in investment via P-Notes during June-August comes amid Supreme Court-appointed Special Investigation Team (SIT) on black money asking Sebi to review its regulations on participatory notes to help identify the end users of these instruments.

However, the government later said it has no intention of banning this financial instrument overnight.

Responding to a query on apprehensions that P-Notes are being misused, Sebi chief UK Sinha had last month said the regulator has all the data about entities who are using this.

The quantum (percentage) of FII investments via P-Notes remain unchanged at 11%.

Till a few years ago, P-Notes used to account for more than 50% of total FII investment, but their share has fallen over the years after Sebi tightened disclosure norms and other related regulations.

In absolute terms, the value of P-Notes investment rose to a record of Rs 4.5 lakh crore in October 2007, but dropped to Rs 3.22 lakh crore in February 2008 and Rs 60,948 crore in February 2009.

Article Source: Business Standard.

Asia shares rise on Wall Street bounce as Fed hikes seen gradual- Business Standard

Asian share markets rose on Thursday as Wall Street bounced on expectations the Federal Reserve would be confident enough of the US economy to raise rates in December but would then proceed with great caution on further tightening.

The prospect of the first US hike in almost a decade kept the dollar strong overall and commodities under severe pressure. Investors also have to steer past a Bank of Japan policy meeting and minutes of the European Central Bank's last meeting.

Japan's Nikkei firmed 1%, brushing aside a disappointing report on exports and imports.

MSCI's broadest index of Asia-Pacific shares market outside Japan added 0.6%. Australia's main index rose 1.1%, aiming for a third straight session of gains.

Sentiment was supported by the Dow which ended Wednesday with a gain of 1.43%, while the S&P 500 added 1.62% and the Nasdaq 1.79%.

Major European stock indexes fell as security issues remained a focus for investors. A suicide bomber blew herself up in a police raid that sources said had foiled a jihadi plan to hit Paris's business district, days after attacks that killed 129 across the French capital.

The French CAC 40 index fell 0.6%.

Minutes of the Fed's last policy meeting showed most members were ready to sanction a lift off in December as long as further moves were then highly dependent on the economy continuing to perform well.

"If - when - they lift rates in December, the Fed will likely be very aggressive in highlighting the idea of a very gradual pace," said Tom Porcelli, chief US economist at RBC Capital Markets.

"We fully expect Yellen to promote this heavily at her press conference."

The bond market seemed to get the message with longer-term debt outperforming and the yield curve flattening noticeably. While two-year yields rose 3 basis points those on 30-year paperactually dipped a basis point.

The premium offered by US two-year debt over its German counterpart also yawned out to 124 basis points, the fattest margin since 2006 and a fillip to the dollar.

The dollar hit a seven-month peak against a currency basket and a 10-month high on the Swiss franc . The euro edged up to $1.0676 , having hit its lowest since August.

The dollar was steady on the yen at 123.51 , after touching a three-month peak of 123.67.

The Bank of Japan holds a policy meeting Thursday and is thought likely to maintain its current pace of asset buying despite the economy slipping back into recession.

Minutes of the European Central Bank's last policy meeting are also due later Thursday and will likely reinforce expectations of further easing in December.

In commodity markets, the high dollar and worries about Chinese demand saw zinc, copper, lead and nickel prices near their lowest in five to seven years.

Oil prices came off three-month lows as short-covering lifted a market initially suppressed by worries about a global supply glut. US crude was up 13 cents to $40.88 a barrel, while Brent stood at $43.14.

Article Source: Business Standard.