Hush-hush tales from the world of stock markets, banking, corporate world and corridors of power
Last Updated: August 22, 2022 / 11:55 AM IST
Private Equity Ahoy!
We had told you earlier that a recent record stake sale by a bulge bracket US fund in a fast growing healthcare firm had galvanized the private equity deals market. PE exits ( full or partial ) seem to be the flavour of the season and now we hear that post the sale of shares worth more than $2 billion in the last two weeks, atleast 3 more private equity share sales are lined up in segments including IT and Insurance. Watch this space for more.
Light At The End Of The Tunnel?
Clouds of uncertainty have hovered over this mega deal ( which was announced after a fierce bidding war) for more than a year with the proposed open offer hitting a hurdle due to judicial intervention. The case has been on the backburner since then but word on deal street is that much awaited legal clarity is likely soon in a few days. Let's wait and watch to see the outcome.
Asking for the ‘moon’
All is not well at a leading commodity bourse , so we hear. The plan was to launch an upgraded version of the exchange software by end of next month, but it now appears that the IT services vendor will not be able to deliver on time. So the management has gone back to the original licensor of the software, which is also responsible for the maintenance of the systems. But buzz is that the promoter of the licensor firm is demanding his pound of flesh now that the balance of power has shifted in his favour.Understandable, since his firm was kept out of the bidding process for the software upgrade. Since his firm is under no legal obligation to maintain the software after the current contract expires, he is said to be allegedly demanding a king’s ransom to stay on till the new software becomes operational. Frantic parleys are on to resolve the matter, but the licensor is playing hard ball. As they say, revenge is a dish best served cold.
Will the twain meat?
A leading retail chain, known for its value-for-money philosophy, is upping the game in its food business. In addition, the CEO is said to be in favour of eggs and frozen meat products being made available at all its retail stores, given the juicy margins they fetch. The low profile promoter of the retail chain is not averse to the proposal (despite the likelihood of a backlash from his community), considering that all leading rivals are doing the same. But we pick up his confidante is dead against the idea, for religious reasons. In the past, the promoter has always deferred to the wishes of his confidante, who it is said has the last word on the company’s strategy. Remains to be seen if profit will triumph over sentiment or whether it will be the other way round.
Back in the fray
The race for the top job at an exchange has got interesting. Till a week back, it seemed to be a done deal that the new CEO would be someone from within the bourse itself. That is because both the names approved by the Nomination and Renumeration Committee and forwarded to SEBI happened to be internal candidates. That did not cut ice with the regulator and it sent back the recommendations to the exchange, saying there needed to be an external candidate as well. Talk is that the former CEO of a commodity exchange, who was initially in the reckoning, but got sidelined by the NRC, is now back in the fray.
Speed dial market for funding
Recently a large telecom company dialed the number of the money markets to scoop up some funds instead of going over to banks. An interesting bit is that the bank may not have been able to sign off on a loan since its lowest lending rate is still above that of a commercial paper. The fund house the bank sponsors is willing to pick up such papers at a rate lower than the bank’s lending rate. In a nutshell, the telco wins in its funding plan. This has given hope to many who so far were getting dropped calls in the money market. We hear short-term money market papers are buzzing again just before they become a bit more expensive in this interest rate cycle. Fund managers are willing to put their money in when the issuer has a strong credit record. It is an age-old chase between bankers and bond investors for short-term credit and firms like the telco get to win either way. Historically, these chases have been short-lived but this time seems different.
Uncorking the bubbly early
Last week, the PSB trade union leaders were in the mood to party when the media reported about 'RBI comments' suggesting a big bang approach to privatisation can do more harm than good. Unions which have been fighting hard against the privatisation bid went to the town touting this as a voice of support from the regulator. However, the celebrations didn't last long. On Friday, the RBI clarified that the said comments were actually part of an article authored by RBI researchers and did not represent the central bank's opinion. Boom! This came as a bolt from the blue for the unions. Now what? Suffice to say the regulator played party spoiler over the week end!
How low can they go?
It is hard being a brick-and-mortar (B&M) retailer of appliances with online stores and their deep discounts. So stores do cut prices to make a sale. That said, they don’t usually slash rates to lower than e-tailers’ rates. That would be taking the price war too far and would make survival hard for other offline stores, especially those without deep pockets. But the old rules of the game seem to be changing because a reputed chain is annoying peers by chopping prices to unheard of lows. They are openly competing with e-tailers. All is fair in love and business but other B&M retailers are grumbling and hoping that the OEMs will make them toe the line.
India's efforts to become part of the global bond indices have been ongoing for more than three years but much of the progress has been thwarted by what insiders say is a lack of clarity from index aggregators on what India needs to do to meet various criteria. People with direct knowledge of the matter point to a growing sense of frustration with goal posts being shifted every time a new breakthrough is made on the list of demands placed in front of the finance ministry by international index aggregators. Goldman Sachs latest note suggesting that Indian bonds may become part of a global bond index next year hints at possible headway made by authorities in meeting the requirements of index providers. Yet the biggest lesson has been that international bond investors have chosen to squeeze as much concessions out of India as possible but the country has resisted those efforts with aplomb giving only what it wants to, not because it has to.
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