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Morning Scan: All the big stories to get you started for the day

A round-up of the biggest articles from newspapers

October 12, 2021 / 03:45 PM IST

Equalisation levy on digital MNCs to be removed only in 2 to 3 years

India is planning to let go of the equalisation levy imposed on multinational digital companies, The Economic Times reported.

Why it’s important:  This will have a direct impact on global companies such as Google, Facebook, Netflix and Amazon among others.

The move will be in place till the proposed global tax regime is rolled out.

India gets about Rs 4,000 crore through the equalisation levy, which will have to be withdrawn as part of the global tax deal finalised by the OECD.

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G20 FMs to discuss the new tax deal this week.

The tax regime is likely to come into effect only by 2023-24.

Tata to set up an advisory team for AI integration, board meet tomorrow

Tata Sons is moving to form an advisory team for Air India integration, The Economic Times reported.

Why it’s important: The new team will have key executives from the Tata Group companies and aviation experts from around the world.

The Tata Sons board will be meeting on Tuesday to chalk out the strategy.

Funding plans for the group’s airline businesses, including Air India, will also most likely be discussed.

The new team will handhold Air India’s integration into the fold, including takeover and handover formalities.

The expertise of Chairman emeritus Ratan Tata will also be tackled for the purpose.

Tata Sons is planning to get employees to spend time working at Norwegian airlines, seen as one of the most professionally run global airlines.

Govt plans to clear AI debt with Rs 30,000 crore bond sale

The Centre is mulling to raise over Rs 30,000 crore through bonds to repay Air India debt, The Economic Times said.

Why it’s important: Air India Asset Holdings Ltd was formed to take over the AI’s debt of about ₹75,000 crore and assets worth ₹17,000 crore to issue the bonds.

The monetisation of some of the assets and earnings through sale will help in repayment of a substantial portion of AI’s debt.

But the government will still need to pay over Rs 30,000 crore.

AIAHL now holds about Rs 30,000 crore of Air India debt and another about ₹45,000 crore will be transferred to it before Air India is handed over to the Tata Group.

The debt includes about ₹7,400 crore of non-convertible debentures.

‘There is space for a 3+1 telecom operator in India’

Nunzio Mirtillo, Head of Ericsson Southeast Asia, Oceania and India, in an interview with The Economic Times, said that there is space for a 3+1 telecom operator market structure in India because of the country’s sheer size,

What he says:

India is a huge market so definitely there is space for three (private telcos) plus one (government player).

The financing part is very important where the government is helping.

For Ericsson, India is an attractive market because of its volume.

Vodafone Idea will have a great chance to do well in India with the latest help from the government.

The country should not lose momentum in 5G.

If the telecom service providers don’t get access to the millimeter wave spectrum, the country will not be as effective as the rest of the world (through 5G).

Is Dish TV also staring Zee-like impasse?

Dish TV India Ltd’s largest shareholder Yes Bank plans to take Dish TV to a company court if it fails to agree to EGM, Mint reported.

What the Yes Bank wants: Yes Bank wants shareholders to vote on its proposals to sack Dish TV managing director Jawahar Goel, the younger brother of Essel Group founder Subhash Chandra, four other directors and induct two Yes Bank executives as nominee directors and five independent directors.

Why it’s important: Yes Bank is asking for a special meeting of shareholders by 13 October.

If the matter reaches the NCLT, it will mark the rerun of the Zee Entertainment Enterprises-Invesco saga.

Dish TV says that the removal and appointment of directors need prior approval from the ministry of information and broadcasting.

Pine Labs is likely to file for a $1 bn Nasdaq IPO this month

Pine Labs may file paperwork for its IPO by this month itself, Mint reported.

Why it’s important: It is planning to raise as much as $1 billion through a mix of primary and secondary stake sales.

The merchant commerce platform is aiming for a $6 billion Nasdaq listing.

It hired Morgan Stanley to manage the plan.

Rs 2,700 cr cash consideration will be shown as the disinvestment receipts from AI: DIPAM’s Pandey

Department Of Investment and Public Asset Management (Dipam) Secretary Tuhin Kanta Pandey in an interview with Mint said that it is a long process to conclude the Air India privatisation.

What he says:

Rs 2,700 crore, which is the cash consideration, will be shown as the disinvestment receipts from AI.

BPCL privatisation due diligence process is going on.

The expression of interest for IDBI Bank will be out, at least by December.

There is a privatization part. Not all privatizations yield big money unless it is a big transaction such as BPCL or LIC IPO.

Concor, which could have given big money, unfortunately, is not happening.

The department of public enterprises will spearhead the government’s monetisation drive of non-core assets such as land and buildings through a SPV.

The name of the SPV will soon be announced after the Union cabinet gives it go ahead.

E-commerce clocks $2.7 bn in four days of festive sales

E-commerce platforms got $2.7 billion in the first four days of festive sales that began on 2 October, Mint reported.

Why it’s important: It includes early access for premium members, as per RedSeer Consulting research.

This will help online retailers such as Flipkart and Amazon India cross $4.8 billion of gross merchandise value in the first week of festive sales.

Last year, the first four days of the festive week contributed 63% of overall festive week sales, compared with this year’s 57% of projected sales.

Snapdeal, which ran its Toofani Sale from 3 October to 10 October, saw a 98% increase in overall sale volumes this year.

The Freshworks IPO is India’s IPO: Mathrubootham

Freshworks founder Girish Mathrubootham in an interview with Mint said that they have been practicing life as a public company for 12-18 months.

What he says:

Feeling energized and humbled by the response to the IPO and it was truly India celebrating.

The Freshworks IPO is India’s IPO.

Taking the responsibility for creating value for a new set of public market investors.

Looking at Freshworks as two broad units, a customer line of business and an employee line of business.

The mission at Freshworks is to make it fast and easy for every business to delight their customers and employees.

‘Reform-oriented governance reason for market outperformance’

Mukul Kochhar, head of equities, Investec India, in an interview with Business Standard said tapering by the US Federal Reserve and inflation are the two biggest risks facing the equity markets.

What he says:

The key risks facing the global equity markets are tapering, slow withdrawal of excess liquidity by major central banks, and inflation.

With India’s current account normalisation, we will be able to withstand tapering, inflation is more of an open risk.

Specific to India, politics remains the biggest risk.

Any change in the outlook for political stability in the country will impact the Indian stock market negatively.

Even though valuations of the Indian equity indices are approaching highs, and are also the most expensive globally, we continue to find good investments.

India’s improving macroeconomic environment, alongside ample global liquidity, has driven the stock outperformance in the country.

‘The NARCL must attract top-quality talent’

Tarun Bhatia, Managing Director & Head of South Asia (Forensic Investigations & Intelligence), Kroll, said in an interview with Business Standard that the National Asset Reconstruction Company (NARCL) can be a game-changer in cleaning up India’s bad-loan mountain and help banks to lend more freely to India Inc.

What he says:

The biggest advantage of NARCL is aggregation.

And with the blessings of and backed by a government guarantee, it would have more teeth than the previous version of ARCs set up by banks.

The NARCL will have to recruit good talent.

The key will be to position NARCL as a very strong, independent body with high-caliber people.

Jhunjhunwala’s holding in Nazara Tech breaches ₹ 1,000-crore threshold

Rakesh Jhunjhunwala’s holding value in Nazara Technologies crossed the Rs 1,000-crore mark, Business Standard reported.

Why it’s important: The market price of Nazara has zoomed 78 per cent in the last one month.

The stock rallied 19 per cent on the BSE in Friday’s intraday trade.

Jhunjhunwala has a 10.82 per cent stake in Nazara as of June 30.

Based on the intra-day high, the company’s market capitalisation stood at Rs 9,800 crore, while Jhunjhunwala’s net worth is at Rs1,060 crore.

On a closing level basis, Jhunjhunwala's net worth in Nazara stood at ₹ 1,029 crore.
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