Tag: Shapoorji Pallonji

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Market News Top 10 News

HPCL to Acquire SP Group’s Stake in Gujarat LNG Terminal JV – Top Indian Market News

HPCL to acquire SP Group’s share in Gujarat LNG terminal JV

Hindustan Petroleum Corporation Ltd (HPCL) has entered into a share purchase agreement with SP Ports Private Ltd (SPPPL) to acquire a 50% stake in its joint venture (JV)— HPCL Shapoorji Energy Private Ltd (HSEPL). HSEPL is in the course of developing a 5 million metric tonne per annum (MMTPA) LNG re-gasification terminal at Chhara, Gujarat. The acquisition is likely to be concluded by March 31, 2021. SPPPL is a unit of the Mumbai-based Shapoorji Pallonji Group.

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Biocon Pharma partners with Libbs Farmaceutica to launch generic drugs in Brazil

Biocon Pharma, a wholly-owned subsidiary of Biocon Ltd, has partnered with Libbs Farmaceutica to launch generic drugs in Brazil. This partnership marks the entry of Biocon’s generic formulations into Latin America. As part of the out-licensing deal with Libbs, Biocon Pharma would be responsible for drug development and manufacturing. Libbs Farmaceutica would leverage its deep expertise and reach in Brazil to import, distribute, and market Biocon’s generic drugs. 

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Dr Reddy’s expects Sputnik V vaccine to get approval from Indian regulator in next few weeks

Dr Reddy’s Laboratories expects the Sputnik V Covid-19 vaccine to get approval from the Indian drugs regulator in the next few weeks. A top company official said that Sputnik V is a two-dose vaccine and must be taken within an interval of 21 days. The vaccine demonstrated an efficacy rate of 91.6%. Dr Reddy’s has partnered with the Russia Direct Investment Fund (RDIF) to launch the Sputnik V vaccine in India and other countries.

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Kalyan Jewellers to expand retail footprint by 13% 

Kalyan Jewellers has unveiled plans to expand its retail footprint in India by 13% in the first quarter (Q1 FY22). The company plans to enhance operations across seven states and add 14 new showrooms on April 24, 2021. While the brand has plans to scale up existing operations in Tier-1 cities, it will also focus on Tier-2 and Tier-3 markets with mid-sized showrooms. Kalyan Jewellers had recently raised Rs 1,175 crore through an IPO, and most of the proceeds will be utilised for the enhancement of working capital. 

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Domestic fuel rates expected to fall as Covid-19 dampens crude oil cost

A decline in global crude oil prices on Monday has given hope for a similar fall in domestic petroleum prices. The Brent Crude futures slipped to $63 levels a barrel, while the US crude traded lower. The fall in oil prices comes after a massive wave of Covid-19 infections continued to impact large parts of Europe. As a result, global fears have led to a slowdown in economic recovery. As per reports, the rupee is also expected to depreciate due to rising cases and a fall in the equity market.

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Coal India’s production likely to fall for second consecutive year: Report

As per a report from BloombergQuint, Coal India Limited (CIL) is likely to post a marginal decline in output in the financial year 2020-21, as production dropped below 600 million tonnes last year. This is the second consecutive year that the company will show a contraction. CIL had a production target of 660 million tonnes and was expecting to hit 630-640 million tonnes by mid-year. The impact of the Covid-19 pandemic has been a major factor behind lower demand. 

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IHCL’s Taj Hotel in Rishikesh closed for three days after 76 people test Covid-19 positive

A Taj Hotel of Indian Hotels Company Ltd (IHCL) in Rishikesh has been shut for three days after 76 people were found to be infected with Covid-19 at the premises. The hotel was sanitised and has been closed as a precautionary measure. The hotel was earlier closed for 48 hours after 16 of its staff tested positive for Covid-19 in a day on Thursday. The Covid cases in Uttarakhand have been showing a rising trend over the past few weeks.

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Ramco Industries increases stake in Lynk Logistics to 23.78%

Ramco Industries Limited has acquired 5.98 crore equity shares at Re 1 each in Lynk Logistics Limited. This takes Ramco’s shareholding in Lynk Logistics to 23.78%. Chennai-headquartered Lynk Logistics is a small & medium enterprise (SME)-focused delivery platform. It is a leading tech aggregator that provides logistics services for individuals and businesses.

Rane Holdings increases its stake in Rane (Madras) to 68.47%

Rane Holdings Limited announced that it has acquired 8.49 lakh equity shares (or 1.95% stake) at Rs 10 per share from its subsidiary, Rane (Madras) Ltd. The company’s overall shareholding in Rane (Madras) now stands at 68.47%. Rane (Madras) is a leading manufacturer of steering and suspension systems for the automobile industry.

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Market News Top 10 News

DBS Completes Takeover of Lakshmi Vilas Bank – Top Indian Market News

DBS completes takeover of Lakshmi Vilas Bank

Singapore-based DBS Group, on Monday, stated that its Indian subsidiary- DBS Bank India- has completed the takeover of distressed Lakshmi Vilas Bank (LVB). LVB’s banking services have been restored, with all branches, digital channels, and ATMs functioning as usual. The interest rates on savings bank accounts and fixed deposits will remain unchanged until further notice. All employees of LVB will continue in service and are now part of DBS Bank’s workforce. 

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Govt likely to spend Rs 18,000 crore on priority vaccination for Covid-19

The Indian Government is likely to spend Rs 18,000 crore for the first phase of priority vaccination for Covid-19. This is according to a report from CNBC-TV18. The projected cost has been estimated by an expert panel comprising of Niti Ayog and Health Ministry officials. Currently, the panel is in the process of identifying 30 crore priority beneficiaries such as health care workers, police, sanitation workers, and the elderly. However, the report also states that these are approximations and the actual cost is yet to be finalised.

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Banks in India to see capital decline over two years without fresh infusion: Moody’s

A report from Moody’s Investors Service stated that Indian banks will see a larger capital decline without further infusion, over the next two years. Moody’s says that the uncertain trajectory of asset quality is one of the biggest threats for emerging market banks. The report also states that the 2021 outlook for banks in emerging markets (such as India) is negative.

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Hindustan Construction, Vensar JV wins Rs 236 crore railway order

Hindustan Construction Company Ltd, in a joint venture with Vensar Constructions Company Ltd, has bagged two contracts worth Rs 236 crore, from the Northeast Frontier Railway. The companies will construct a portion of the Bairabi-Sairang broad gauge rail line. This is part of the Indian Railways’ plans to improve its network across North-East India. Hindustan Construction’s share in the order is placed at Rs 130 crore.

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Shapoorji’s $1.2 billion deal with ADIA on hold over debt issues: Report

The Shapoorji Pallonji Group has kept its logistics venture with Abu Dhabi Investment Authority (ADIA) on hold. According to a report from Business Standard, the reason for keeping the deal on hold is due to debt issues and the ongoing Covid-19 pandemic. The group had planned to launch a $1.2 billion (~Rs 8,874 crore) venture with ADIA to invest in logistic centres in India.

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Serum Institute rejects volunteer’s claims of suffering side effects; seeks damages worth Rs 100 crore

The Serum Institute of India (SII) filed a Rs 100 crore defamation case against a Chennai-based volunteer who took part in its ‘Covidshield’ vaccine trials. The volunteer had alleged that the vaccine triggered an adverse reaction, which included neurological impairment. On November 21, the volunteer sent a legal notice and sued SII for Rs 5 crore. SII has denied the allegations and has stated that there was no correlation between the vaccine trial and the medical condition of the volunteer.

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Tata Sons may raise stake to over 76% in AirAsia India by end of FY21: Report

As per a report from Business Standard, Tata Sons is planning to gradually raise its stake in AirAsia India to more than 76% by the end of 2020-21. This may allow Malaysia-based AirAsia Group (which holds a 49% stake in the company) to exit its operations from India. The AirAsia Group earlier stated that it was struggling to recover from the Covid-19 impact, and had hinted at exiting its operations in India.

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Paytm Money launches IPO investments for retail investors

Paytm’s wholly-owned subsidiary, Paytm Money, will now facilitate investments in Initial Public Offerings (IPOs). It will enable investors to instantly apply for the latest IPOs from their UPI-linked bank accounts and complete the application process in 3-4 days. The company is aiming to capture 8-10% of applications market share in the first year of launch.

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IHCL announces expansion in eastern India with Ambuja Neotia Group

Indian Hotels Company Ltd (IHCL) has announced the signing of three hotels in eastern India (two in Kolkata and one in Patna), with the Ambuja Neotia Group. The company’s CEO Puneet Chhatwal stated that 60% of revenue in FY21 is expected to come from its leisure segment. He further stated that IHCL will be present in 9 out of 10 states in the east. IHCL, which runs the Taj group of luxury hotels, is owned by the Tata Group.

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Indian Railways record 371% increase in electrification during 2014-2020

Piyush Goyal, the Union Minister of Railways, stated that the electrification of 18,065 km of railway lines has been completed during 2014-2020. There constitutes a 371% increase in electrification, as compared to the period between 2009-2014. The minister also stated that the electrification process will help eliminate pollution, cut down imports of fuel, and save costs.

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Editorial

Mistrys Cut Business Vows with the Tatas After 70 Years of Legacy

Shapoorji Pallonji tata

A few days back, Shapoorji Pallonji Group decided to sell off its 18.4% stake in Tata Sons. The Shapoorji Pallonji Group(SP Group) is headed by Pallonji Mistry and his son, ex-Tata Chairman Cyrus Mistry. The Mistrys and Tatas have been associated with each other for the past 70 years. Their relationship has turned sour in the past few years.

The reason why SP Group and the Tatas were in news was since SP Group which has been hit by a liquidity crunch intended to raise capital by putting their 18.4% stake as collateral. This did not go down well with Ratan Tata. He did not want their stake to go in the wrong hands. A battle followed in the courts. How did Ratan Tata’s relationship with Cyrus Mistry turn sour? Why is SP Group selling its complete stake in Tata Sons? Let us find out what lead the long-time friends turning into foes.

Cyrus Mistry Ratan Tata’s Blue Eyed Boy

Ratan Tata had immense faith in Cyrus Mistry. In fact, it was him who declared Mistry as his successor as Chairman of Tata Sons in 2013. Shortly after he was appointed as chairman, many of his business decisions did not go down well with Ratan Tata. Tata felt that many of Mistry’s decisions were against the ethics and morals of the company and that some of his decisions didn’t do justice to the Tata name. After all, Tatas are admired for their ethics.

Ratan Tata earlier offered Mistry to resign voluntarily, he even asked his close confidante Nitin Nohria, also the Dean of Havard Business School and Director at Tata Sons, to convince Mistry to resign voluntarily. Mistry failed to comply. He was voted out as chairman by the Tata Sons Board on 24 October 2016. Thereafter he was voted out of every possible board, making the bitterness between Ratan Tata and Cyrus evident.

Why does SP Group want to Sell Off Their Stake?

SP Group hasn’t done very well in the past few years. The company has accumulated a lot of debt. The company works mostly in the real estate and infrastructure sector which hasn’t performed well over the past year. When COVID struck, the situation worsened. SP Group currently owes debt worth Rs 28,000 crores.

In the past, SP Group has already pledged a few its shares in Tata Sons to raise a capital close to Rs 1,437 crores. However, SP Group missed the deadline for payment.
This was worth worrying for many at Tata Sons.

Tata’s Worry

While SP Group still owed the debt, it decided to raise capital by pledging shares it has in Tata Sons. They wanted to raise money to finance themselves by keeping Tata Sons shares as collateral. In case SP Group fails to pay, the shares might be transferred to the creditor. This did not go down well with Ratan Tata since he did not want Tata Sons’ shares to go into the hands of an unfriendly investor.

Tata Sons Board approached the Supreme Court. The plea was to restrict the SP Group promoters from raising capital by pledging their shares in Tata Sons. Their plea was that under the company’s articles of association (AoA), the board of Tata Sons has the first right to buy the shares at fair market value. The move shattered SP Group’s hope of raising the capital of Rs 3,750 crores from Canadian Investor Brookefield as well.

Coming To A Common Ground

Recently, SP Group confirmed their intentions of selling their complete 18.4% stake in Tata Sons. SP Group said in an official statement: “a separation from the Tata Group is necessary due to the potential impact this continuing litigation could have on livelihoods and the economy”.

The best-case scenario for SP Group would be to get a fair value for its stake in the Tata’s in order to get their company out of a liquidity crisis. The value of the 18.4% stake which SP Group has in Tata Sons is 1.78 lakh crores or $24 Billion. Such a big amount may not be covered at one-go but in parts, a proposed by Tata Sons.

Apart from a few companies like TCS, none of the Tata Companies have faired well this quarter owing to the COVID-19 pandemic. For Tata Sons, the problem of arranging funds and deciding on the fair value of the purchase still remains. Tata has set up a team for contingency fund planning, which shall decide on how to arrange funds to buy out the stake owned by the Mistrys.

TCS’s buyback has given Tata Sons some relief. Tata Consultancy Services’ buyback of shares has infused close to Rs.11,000 crores in Tata Sons. This gives Tata some liquidity to begin the acquisition in parts if it decides to do so.

Also recently, there were unconfirmed reports about Walmart investing around $25 Million into Tata Group’s proposed ‘super app’, which will bring all of Tata’s Retail channels under a single app. The amount to be invested by Walmart and the amount which Tata shall give to SP Group is a close figure… What do you think is cooking up?