Reliance, Adani in race to acquire Metro Cash & Carry
Three business houses — Reliance, Adani Group, and Thailand’s conglomerate Charoen Pokphand — are likely to be in the final race to strike a deal with Germany’s Metro AG for investing in its India unit, Metro Cash & Carry, which has 31 stores and 5,000 direct employees in the country. Around 20 companies were approached by the German chain, inviting them to bid for the Indian wholesale business.
Why it’s important: If Reliance wins the bid, the deal will consolidate its position in the retail segment. For Adani, it would be a new front in addition to its recently launched Fortune Marts.
Banks may invoke personal guarantees of Kishore Biyani family
Lenders to cash-strapped Future Group could invoke the personal guarantees of the promoter Biyani family to recover unpaid loans given to group companies. Promoter Kishore Biyani and some of his family members have pledged personal assets, including real estate holdings, to secure loans of Rs 102.2 billion for group companies and Rs 14.41 billion for Future Retail.
Why it’s important: Businessmen often offer personal guarantees to secure a loan. With Future Group companies owing lenders close to Rs 250 billion and defaulting on a series of repayments, banks could sell personal assets to recover a part of the loans.
Volatile markets force IPOs plans worth Rs 1.6 trillion on backburner
Stormy markets have put public share sale plans of nearly Rs 1.6 trillion on hold as companies and investors wait for the return of stable times. This includes firms that have received approval for IPOs worth Rs 894.68 billion and issues awaiting approvals totaling Rs 693.2 billion.
Why it’s important: Markets across the world have been roiled ever since war started in Ukraine war and the US Federal Reserve hiked interest rates. The developments fueled commodity prices and drained money from equity markets, cooling enthusiasm for IPOs.
Venture capital firms start restricting funding to Indian startups
Big-ticket funding rounds at India’s startups have suffered a blow in the past two months, signaling a reluctance among investors to write large cheques. In the period between April 1 and May 16, there were only nine funding rounds of more than $100 million, cumulatively amounting to a little over $2 billion, compared to 27 such deals in the January-March period this year, according to data by New York-based analytics platform CB Insights.
Why it’s important: The flood of venture capital directed at Indian startups in recent years seems to be drying up. A clutch of global investors has cautioned entrepreneurs about turbulent financial markets.
Government to canvas global investors for IDBI Bank stake sale
The Centre is looking to woo top global investors for the sale of its stake in IDBI Bank as a team of senior government officials visits the United States for roadshows this week.
Why it’s important: There is interest among US investors to participate in the central government’s next key privatization initiative. It is yet to decide the quantum of the stake to sell in IDBI Bank.
Jay Mahindra being groomed for top role in Kotak Mahindra Bank
Harvard alumnus and Uday Kotak’s elder son Jay Kotak has lately had significant enhancements to his executive role at the Kotak Mahindra Bank, prompting analysts to view the assignments as a start to long-term succession planning at the financial empire bearing the family name of Asia’s richest banker.
Why it’s important: Although executives said Jay Kotak’s progress will depend on merit, India’s business houses prefer to keep operational control within the family. The lender would prefer a smooth long-term transition at one of India’s best run private banks.
Increasing GST audits will not be a burden for businesses: Board chief
The Central Board of Indirect Taxes and Customs will ensure that the growing number of GST audits meant to improve the quality of indirect tax returns filed does not become a burden to businesses, the board’s chairman Vivek Johri said.
Why it’s important: Audit of accounts under GST law has picked up momentum, with the board gearing up its compliance management efforts. The introduction of GST in 2017 had imposed a heavy compliance burden, especially for small enterprises. It would perhaps be different this time.
Adani in talks with State Bank for Rs 12,000 crore loan to build Ganga Expressway
The Adani group is in talks with the State Bank of India to raise about Rs 12,000 crore in long-term project loans to build the Ganga Expressway, billed as the country’s longest motorway linking Meerut in northwest Uttar Pradesh to Prayagraj in the east. The lender is engaged in a road traffic survey before loan terms are finalized.
Why it’s important: The project has the potential to generate huge real estate business opportunities. The expansion of business fueled by borrowings continues at the Adani group.
Auto firms post higher sales, profits in March quarter
Aggregate net sales and net profits of automakers rose 12 percent and 15 percent, respectively, on an annualized basis in the quarter ended March although a steep increase in raw material prices, and the demand slowdown facing a few segments have crimped margins.
Why it’s important: Auto companies expect margins to remain under pressure because the chip shortage is unlikely to be resolved soon and may prevent them from leveraging scale. A persistent inflationary trend will also continue to mount pressure.
Freshworks gives CEO $233 million in stock awards in massive remuneration package
Freshworks has given its founder and chief executive, Girish Mathrubootham, $233.41 million in stock awards that will vest over the next seven years. The stock award is addition to Mathrubootham’s salary, which totalled $611,980 last year.Why it’s important: The stock award is one of the biggest compensation packages received by an Indian business leader in recent years.