Retail inflation rises to 7 percent on higher food prices, factory output slows
India’s retail inflation climbed to 7 percent in August, reversing three months of modest decline, while industrial growth slumped to a four-month low of 2.4 percent in July from 12.7 percent in June. The rate of price rise, led by food prices, makes it the eighth consecutive month that the Consumer Price Index has stayed above the central bank’s upper tolerance limit of 6 percent.
Why it’s important: The Reserve Bank will have no option but to continue its monetary tightening to tame inflation, which has now become broad-based and could derail India’s economic growth.
Air India leases 30 aircraft to start fleet expansion after Tata takeover
In its first move to expand the fleet after the Tata group took over, Air India has leased 25 Airbus narrow-body aircraft and five Boeing wide-body planes. These will enter service starting December, the carrier has said. Air India will also buy planes and has been in talks with Airbus and Boeing.
Why it’s important: The fleet expansion comes after years of no growth, indicating that a turnaround is on the way for India’s flag carrier that continues to see robust demand for its long-haul flights.
Private equity firm TPG to sell Manipal Health stake as promoter buyback plan fails
Private equity house TPG has approached investors to offload its stake in Bengaluru-based Manipal Health Enterprises after a proposed promoter buyback in the hospital chain stalled. Manipal founder Ranjan Pai was in talks to raise debt to buyout TPG’s stake. But that plan has been scrapped now.
Why it’s important: Investors have been looking to exit investments in hospital chains as business has grown after the easing of the pandemic, when patients had delayed elective surgeries and other treatments.
Overseas investors consider putting in $250 million in PharmEasy
General Atlantic, Canada Pension Plan Investment Board and Abu Dhabi Investment Authority are evaluating about $250 million investment in API Holdings, the parent of PharmEasy. Existing investors TPG Growth, Prosus Ventures, Temasek and ADQ are set to invest about $70-80 million in the latest funding round through a convertible instrument, but the valuation and pricing will be set by the new investors.
Why it’s important: The valuation of India’s largest online pharmacy, which has expanded through venture capital and 11 acquisitions, could be at almost half its October 2021 pre-IPO valuation of $5.4 billion. The IPO was withdrawn about three weeks ago.
Bharti Telecom to raise up to Rs 6,000 crore through non-convertible debentures
Bharti Telecom, a promoter company of Bharti Airtel, plans to raise up to Rs 6,000 crore of debt via non-convertible debentures to buy the balance portion of the 3.33 percent stake that Singapore Telecommunications will sell in the Indian telecom company.
Why it’s important: The Bharti group has to raise debt to fund the Singtel stake purchase as the southeast Asian carrier ruled out any fresh equity infusion in Bharti Telecom. It will pave the way for Airtel’s controlling company to further boost its shareholding in India’s second-largest wireless operator.
Piramal Pharma in discussions to raise Rs 225 million through overseas loans
Piramal Pharma, the spun-off unit of Piramal Enterprises, is set to raise $225 million in offshore loans. Axis Bank, HSBC and State Bank of India are likely to extend the loan, which could be raised in the Gujarat GIFT City. Discussions for the financing with scheduled repayment in five years are at an advanced stage and could be finalized in the next two weeks.
Why it’s important: The drugmaker is looking to boost its financial metrics ahead of its impending listing as an independent company.
Smaller investment banks smell opportunity as bigger ones turn picky
Large investment banks are taking a selective approach when it comes to opting for mandates, turning down initial public offerings of less than Rs 1,000 crore and focusing on more lucrative deals. This has opened up opportunities for smaller investment banks. Many of them are strengthening their investment banking teams and pitching for deals that would have otherwise gone to larger banks.
Why it’s important: Although IPO launches have slowed in recent months in India due to increased market volatility, draft document filings continue to be strong. The higher workload has opened up a window for smaller investment banks.
Losses shrink at Amazon India unit as revenue rises 30 percent
E-commerce firm Amazon India reported a 30 percent increase in revenue at its five units, marketplace, transportation, internet, data, and payments, for the year ended 31 March, even as it narrowed losses by 17 percent, according to regulatory filings sourced from Tofler, a business intelligence firm.
Why it’s important: In India, Amazon is the second-largest e-commerce company after Flipkart. The country is one of Amazon’s biggest markets outside the US and also one of its fastest growing.
India made iPhones could comprise 12 percent of global sales by 2025-26
India could account for at least 12 percent of the value of Apple’s iPhones made by its vendors globally by 2025-26. The number represents a significant shift for the Cupertino-based company’s heavy dependence on China, where 95 percent of its phones are still being made.
Why it’s important: After the supply disruptions due to the pandemic, Apple has decided to reduce its dependence on China to manufacture its products. India seems to be a beneficiary of that shift.
WeWork India in talks with private equity firms to raise $300 million
WeWork India, an arm of US-listed coworking firm WeWork Inc, is in discussion with private equity funds, including Cerberus Capital, to raise $300 million to expand its local operations on hopes of rising demand for office space after the pandemic. It has also reached out to two other funds, including KKR & Co, for its fundraising, which is expected to be concluded by the end of this year.
Why it’s important: As the pandemic recedes, demand for quality workspaces has increased. People have started moving back to offices and this is creating more opportunities for firms like WeWork.
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