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QBiz: Etihad Agrees to Raise Jet Stake; IMF Doubts India’s GDP

1. Ending Months of Uncertainty, Etihad Agrees to Raise Jet Stake

Etihad Airways has formally communicated its intent to raise its stake in Jet Airways, ending months of uncertainty over its commitment to remain invested in one of the world’s fastest-growing aviation markets.

The Abu Dhabi-based airline submitted its expression of interest (EoI) on Thursday, said three people in the know. The development spells relief for Jet’s lenders, who have been struggling to save the sinking carrier that was forced to take the unprecedented step of cancelling all international operations on Thursday evening, 11 April.

The lenders have been working behind the scenes to persuade Etihad to bid for a majority stake in Jet. The Gulf carrier currently owns 24% and was reluctant to buy more. In March, Etihad had told Jet’s lenders that it would not raise its stake in the beleaguered airline and wanted the banks to buy out its shareholding at ₹150 per share.

(Source: The Economic Times)

Also Read: Deadline for Accepting Jet Airways Bids Extended Till 12 April

2. India's GDP Number 'Still Has Some Issues': IMF’s Gita Gopinath

After 108 economists and former RBI Governor Raghuram Rajan, International Monetary Fund's (IMF) Chief Economist Gita Gopinath has expressed doubt over India's growth rate, saying that there are still some issues with the way India calculates it.

This comes as a blow for the government as the key argument that senior officials in the NDA government have consistently made is that the GDP figures are accepted by global organisations like the World Bank and the IMF.

"With regards to the newer numbers that are coming out, we are paying close attention to it, we are speaking closely to our colleagues in India and then we will make a determination based on that," Gopinath told CNBC.

While she welcomed the changes made to the GDP calculation in 2015, including the change in base year, she also flagged concerns over the "deflator" used to calculate the real GDP.

(Source: Livemint)

Also Read: India’s High Fiscal Deficit Cause of Concern: Gita Gopinath at WEF

3. DoT Seeks ₹8,500 Crore as Bank Guarantee for Airtel-Tata Teleservices Merger

The Department of Telecommunications (DoT) has approved the merger of Tata Teleservices (TTSL) and Tata Tele Maharashtra (TTML) with Bharti Airtel, subject to the condition that the latter furnishes a bank guarantee of around ₹8,500 crore, said official sources on Thursday, 11 April.

The National Company Law Tribunal (NCLT) in January had approved Airtel’s acquisition of TTSL mobility business, but said the merger would be subject to the approval by the DoT.

The merger will help Airtel strengthen its 4G network and compete with Reliance Jio as the Sunil Bharti Mittal-owned firm gets additional spectrum pool of 178.5 MHz in the 1800, 2100 and 850 MHz bands.

The merger arrangement involves TTSL, Airtel and Bharti Hexacom (a subsidiary of Airtel).

Also Read: Affordable Data Plans From Airtel, Reliance Jio, Vodafone Compared

4. Ranbaxy Case: Singh Brothers Diverted Funds Despite SC Order, Says Daiichi Sankyo

Japanese firm Daiichi Sankyo told the Supreme Court on Thursday, 11 April, that former Ranbaxy promoters, Malvinder and Shivinder Singh who owe it Rs 4,000 crore, have diverted funds despite several orders asking them to maintain their stakes in Fortis Healthcare Ltd.

A bench comprising Chief Justice Ranjan Gogoi and Justices Deepak Gupta and Sanjiv Khanna reserved order on Daiichi’s contempt plea against the former Ranbaxy promoters and others.

Senior advocate FS Nariman, appearing for Daiichi, alleged that the Singh brothers diverted funds despite several orders by the Supreme Court to maintain their stake in Fortis Healthcare Ltd.

He said that they reduced their stakes in Fortis Healthcare Holding from more than 40 percent on 11 August 2017 to less than 1 percent now.

(Source: The Financial Express)

Also Read: Ex-Ranbaxy Director Held for Trying to Sell Mortgaged Property

5. Debt MFs with Essel Exposure Send Investors into a Tizzy

Worries about the prospects of debt mutual funds holding securities of Subhash Chandra’s Essel Group entities have resurfaced after Kotak Mutual Fund delayed full redemption in several fixed maturity plans (FMPs), sparking a scramble among investors to check if they too have any exposure to such paper.

Wealth managers said investors have turned jittery about the repayment capabilities of Essel, which has bought time from lenders – mutual funds and non-banking finance companies (NBFCs) – till 30 September to pay back the money. HDFC Mutual Fund, the country’s largest, has given unit holders the option to roll over investments for another 380 days instead of redeeming at maturity on 15 April. It is not clear whether investors seeking refund would have to take a haircut.

(Source: The Economic Times)

Also Read: Essel Group Chief Apologises, Alleges “Negative Forces” at Play

6. Not Amazon, Flipkart: 4,000 New Retail Stores Needed to Meet Growing Food, Grocery, Apparel Demand

While retail stores may have suffered at the hands of e-commerce, they are likely to stay as a formidable force. Strong demand in food and grocery and apparel categories may require 4,000 new retail stores, research and brokerage firm Motilal Oswal said in a report this week. Retailers have witnessed an expansion in their footprint, revenue and overall growth, the report added, affirming that the future is not so bleak for retail stores as it seems.

Predicting a remarkable growth of retail market with its size expected to triple by FY25, the report also said that the food & grocery and apparel segments are likely to witness CAGR of 27 percent and 22 percent. It is to this growth that the report attributes the need for retail stores. “To cater to robust demand, about 4,000 new store additions will likely be required over the next eight years (2017-25), offering a huge runway of 15 percent CAGR in retail footprint over the next eight years,” Motilal Oswal said.

(Source: The Financial Express)

Also Read: Amazon Said to be Working on AirPods-Like Alexa Wireless Earbuds

7. TCS, Infosys to Report Q4 Results Today: 5 Things to Watch out for

India’s top software exporters, TCS and Infosys, report March quarter results on Friday, 12 April, kicking off the earnings season. Despite March being a seasonally weak quarter for IT companies, Elara Capital expects India IT services firms to report a good quarter of revenue growth. Another brokerage Motilal Oswal also sees IT companies reporting another quarter of “healthy" set of numbers.

“There is significant revenue acceleration amid strong momentum in deal activity; however, the rupee appreciation can act as a headwind," Motilal Oswal said in a note.

Shares of IT companies have outperformed markets in the past one year, with Nifty IT index rising about 24 percent as compared to 11 percent gain for the Nifty50 index. Both TCS and Infosys are set to report earnings after market hours today.

(Source: Livemint)

Also Read: Govt Selects Infosys to Develop Rs 4,242 Crore I-T Filing System

8. Cairn India’s CEO, CFO Quit in Quick Succession

Vedanta-owned Cairn India’s CEO and CFO have resigned in quick succession.

BusinessLine had reported on Monday that Sudhir Mathur, Cairn India’s CEO, had resigned, and Pankaj Kalra, CFO, had quickly followed suit.

But it was only on Thursday, 11 April, that the company issued a statement saying, that “Such movements in management are part of natural evolution in any organisation, and are in line with the career aspirations and personal priorities of individuals. We want to emphasise here that these movements are unconnected and have been spread over a period of time.”

Shares of Vedanta fell 3.72 percent on the BSE during intraday trade on Thursday.

This is not for the first time that company has seen a top management change since 2012.

(Source: The Hindu Business Line)

Also Read: Tuticorin to Zambia: A History of Vedanta’s Legal Misadventures

9. Sachin Bansal in Talks to Put Microfin Firm in Cart, may Become Chief Exec

Flipkart cofounder Sachin Bansal is betting big on the domestic financial services sector as he looks to acquire a majority stake in a Bengaluru-based microfinance firm, two people familiar with the matter said. A successful transaction could also result in Bansal taking the top job at the firm, marking his return to an executive position, the sources said.

The 37-year-old internet billionaire is expected to pick up as much as 75 percent stake in Chaitanya Rural Intermediation Development Services which runs a microfinance institution, Chaitanya India Fin Credit (CIFCPL), according to the people cited above.

The deal, which may be a mix of primary and secondary sale of shares, is in the final stages of closure and will be Bansal’s first equity investment in the financial services space.

(Source: The Economic Times)

Also Read: Sachin Bansal Says Goodbye to Flipkart in Emotional Facebook Post

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