Category: Market News

Global Tech Giant, Google has initiated exploratory discussions to acquire a stake in the struggling Indian Telecom Company Vodafone Idea. This is a big step that Google is taking in its efforts to gain inroads into the Indian Telecom Market. Earlier reports coming in suggest that Google is eyeing a 5% stake in Vodafone Idea.

What this means:

With this stake purchase, Google locks horns with Facebook and the market-dominating Company Jio, for supremacy in the highly appealing and fast-growing Indian Telecom Market. This move could also mean that Google would further try to cement its presence in India with more multiple investments. But the news assumes more importance to the struggling Company Vodafone Idea. An investment from Google would provide the Company a major lifeline at a time when it has been ordered by the Supreme Court to pay Rs 53,000 crore adjusted gross revenues dues to the government. Though UK based Vodafone PLC acknowledges the grim situation Vodafone Idea is in, the Company had refused to inject more equity, having booked billions of pounds of losses related to its Indian foray. At this point in time, Google’s interest in the Vodafone Idea would come as a major breather for the telecom player. The deal is still in its early stage and changes in terms of the final deal can also be expected as a possibility.

ITC Ltd has entered into a strategic partnership with direct selling company Amway India for distributing its new immunity beverage. As part of this, ITC today introduced ”B Natural+” range of fruit juices, which would be distributed exclusively by Amway using its direct selling network for a limited period of time. It is expected that going forward, in the next couple of months, more such products would be jointly introduced by the companies in the market.

What this means:

This move is the first time ever that ITC is partnering with a direct selling Company to sell its isolated product range. With this move, the Company is leaving no stones unturned to stay relevant and to compete with rivals like Dabur, Coca Cola and PepsiCo in the breakfast market. ITC is sensing a good potential in the health and immunity-boosting space during the pandemic and hopes to make the most of it. With heightened awareness about health and self-care being the motto during this lockdown period, categories like health supplements, chyawanprash, health bars etc have registered double-digit growth and sale of immunity-boosting foods have shot up by an estimated 20-40%.  With the move, it seems ITC is hoping to leverage on this growth to further their business and improve penetration in this growing market.

Biocon subsidiary Biocon Biologics has received approval from the Drugs Controller General of India (DCGI) for the use of extracorporeal blood purification (EBP) device CytoSorb in the treatment of COVID-19 patients. The license will be effective until control of the COVID-19 outbreak in the country.

What this means:
With the regulatory nod, Biocon Biologics will be able to treat COVID-19 patients, aged 18 and above, who have been admitted to the intensive care units (ICU) with confirmed or imminent respiratory failure. CytoSorb is an in-licensed unique device that reduces cytokine storm in critically ill patients and was introduced by Biocon in India in 2013. The approval will provide an impetus to the Company in their role in aiding Corona Virus Treatment efforts.

Power Giant and India’s largest power generation utility firm, NTPC Limited has expressed their interest to purchase 51% stake in BSES Rajdhani Power Ltd (BRPL) and BSES Yamuna Power Ltd (BYPL), the Delhi Distribution Business of Reliance Infrastructure Ltd. Others Companies who are in the foray to acquire the said businesses are Enel Group of Italy, Torrent Power Ltd, and Greenko Group.

What this means:
This acquisition move holds significance because, with this, NTPC, which is primarily a power generation company is venturing into the distribution business. The deal seems quite juicy for NTPC since these power distribution utilities are some of the most stable and lucrative assets in India, with the national capital reporting the lowest aggregate technical and commercial loss of 9.7% in the country. Adding to that, acquisition of a majority stake in BSES discom business will help NTPC in forwarding integration as it already supplies about 70 percent of discom’s electricity requirement from various sources. Going ahead, NTPC is also likely to compete in the privatization exercise of power distribution utilities in the Union Territories which planned by the Union Government.

Indian IT Giant Infosys has entered into a strategic partnership with Avaloq, a wealth management software and digital technology provider headquartered in Switzerland, to provide end-to-end wealth management capabilities through digital platform. Infosys will be an implementation partner for Avaloq’s wealth management suite of solutions, to help clients modernize and transform their legacy systems into digital advisory platforms. The partnership aims to offer end-to-end products and services as Software-as-a-Service (SaaS), private cloud, or public cloud across the globe 

What this means: 

The deal is expected to help Infosys expand their global reach. The Company hopes to focus their operations in Europe, the Middle East and Africa and Asia-Pacific (APAC) regions. What the Company aims is to “create a one-stop-shop” for its wealth management clients. Infosys is making significant investment in the said partnership which they hope will enhance the value of their financial services and will complement their approach to provide industry focused wealth management solutions.​

Tata Motors has announced that the Company will raise a sum of ₹1,000 crores through allotment of non-convertible debentures (NCDs) on a private placement basis. A committee, constituted by the company’s board on May 20, has approved the allotment of 10,000 non-convertible debentures (NCDs) with a face value of ₹10,00,000 each. All 10,000 NCDs are being offered to the State Bank of India (SBI) at an interest rate of 8.80% per annum. The debt instruments are proposed to be listed on the wholesale debt market segment of the BSE Ltd and the NSE Ltd. 

What this means: 

With the announcement Tata Motors joins the bandwagon of other Companies in Auto Industry like, Mahindra and Mahindra, TVS Motor Company Ltd and Motherson Sumi Systems Ltd, who have resorted to fund raising through NCDs. In the current crisis, Auto Industry is one of the worst hit with a steep fall in demand, which might now take a while to get back to more comforting levels. Though a hike in demand for small cars and two wheeler segment is anticipated post lockdown, the industry will still have to deal with liquidity crisis and the current fund raising move will help provide the much needed liquidity injection to the Company to manage their costs and liquidity requirements as sales slowly picks up.

Bharti Telecom, parent Company of Bharti Airtel, is planning to raise almost $1 billion by selling shares in the mobile phone operator through a block deal on Tuesday at ₹ 558 a unit. With the stake sale, the promoter plans to dilute 2.75% stake in the Company. With the current sale the promoter’s shareholding in the Company will come down to 56.23%.

What the deal means:

The proposed stake sale will ease the debt burden of the Company, which going forward will help improve the Company rating. At the promoter level, the debt levels will turn zero. This would also provide room for further stakeholder support needed for the Company when needed. With tariff increase in December, expected moderation in capital expenditure on the Company’s Indian Mobile Operations and anticipation of stronger earnings, the outlook looks positive for the Airtel.

Indian Multinational Conglomerate company, ITC Limited, has entered into a share purchase agreement to acquire a 100 per cent equity in Kolkata-based packaged spice maker, Sunrise Foods Private Limited. ITC said the proposed acquisition is aligned with its strategy to rapidly scale up its FMCG or fast-moving consumer goods businesses. The deal, which is one of the largest for the Company, is subject to the fulfilment of terms and conditions.

What the deal means:

ITC already has a huge presence as a Market Leader in Telangana and Andhra Pradesh. Sunrise Foods, which sells its products under the Sunrise brand, on the other hand, has extensive presence across East India, where it is the market leader, and also operates in Uttar Pradesh, Delhi National Capital Region, Rajasthan, and Bengaluru. It also sells its products in Bangladesh and Nepal. With the proposed purchase, ITC will gain inroads into all these markets. The current deal also would provide a push to the Company’s plans to not only rapidly scale up their FMCG business but also balance their revenue into non tobacco business verticals as well. The deal could very well be a step towards the Company achieving its target of Rs 1 lakh crore in revenue from its FMCG business by 2030.