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Morning News Snapshot

Ø  Following the Office of Fair Trading of the UK (OFT)’s directive United Spirits Ltd (USL) would have to sell at least 70 % of its scotch whisky subsidiary Whyte & Mackay (W&M), USL has said it is evaluating various options for the move.It is understood USL is planning to raise about $800 million through the sale and is close to appointing bankers for the transaction.

Ø  Reliance Jio Infocomm has entered the voice segment for the first time and bought more airwaves for fourth-generation services, this time in the 1800 MHz band in 14 service areas for around . 11,000 crore. It has bought five or more MHz in each of the circles, which is a necessity for 4G.The company dropped out of the race for the more expensive airwaves in the 900 MHz band which were won by Vodafone India, Bharti Airtel and Idea Cellular.

Ø  Tilaknagar Industries, maker of Mansion House and Courrier Napoleon brandies, is in the advanced stage of discussion with Tamil Nadu (TN)-based Indian made foreign liquor (IMFL) maker Imperial Spirits.The deal is expected to be in the range of Rs 400 crore.

Ø  Bharti Airtel offers 4G services on mobiles in Bangalore.The country’s largest telecom operator Bharti Airtel is launching 4G services for smartphones such as iPhone 5S, 5C and Xolo, from this month.

Ø  According to sources close to the development, the government is likely to give 10 % discount to ONGC and Oil India from the current market price to buy IOC Stake. At the current market price, the government is expected to fetch Rs 5,300 crore by selling 10 % equity or 242.7 million shares at discounted price to ONGC and OIL. Both the companies would be buying 5 % each.

Ø  As it prepare to cross a major milestone by crossing $1 billion (over Rs 6230 crore) in revenues, IT outsourcing services provider L&T Infotech is aggressively looking at making an acquisition to further its growth. The Mumbai-headquartered company,is in active discussion with a few prospects both in the US and Europe, and hoping to close an acquisition anytime soon, senior executives said.

Ø  The board of directors of Credit Analysis and Research Ltd (CARE Ratings) have approved a hike in the foreign institutional investor investment limit in the company’s shares to 74 %  from 24 % .In sync with the move, five big shareholders, including IDBI Bank, are likely to sell their stakes in the credit rating agency. These shareholders together have over 45 %  stake in the company.

Ø  The Petroleum and Natural Gas Ministry’s terms of supplement agreement for the bank guarantee, to be paid by Reliance Industries and its partners in the KG-D6 block, has taken the private sector explorer by surprise.“The draft only deals with RIL and does not mention the consortium partners – BP and Niko. This needs to be sorted out,” said an official aware of the development.

Ø  Dr Reddy’s Laboratories (DRL) is set to invest more than Rs. 1,000 crore on capital expenditure (capex) in the next financial year, a top executive of the pharma major said.The drug maker spent Rs. 230 crore towards capex during the third quarter ended on December 31, 2013 and expects to spend another Rs. 200 crore during the current quarter.

Ø  The Kalyani Group has entered into a strategic alliance with defence and security company Saab to address key Indian Army’s air defence projects, including the VSHORAD and SRSAM requirements. An agreement to this effect was signed by Håkan Buskhe, CEO and President, Saab and Baba Kalyani, Chairman, Kalyani Group.

Ø  Essar’s Mahan Coal Ltd has received the stage II forest clearance from the Ministry of Environment and Forests for the coal block in Madhya Pradesh subject to conditions.This coal block was allotted in 2006. Essar Power, subsidiary of Essar Energy, owns 50 per cent stake in Mahan Coal Ltd, along with Hindalco Industries.

Ø  The World Bank said on Thursday it was investigating claims of labour and human rights abuses at an Indian tea plantation project that it jointly finances with tea giant Tata Global Beverages in the northeastern state of Assam.

Ø  Country’s largest private solar power developer Hindustan Cleanenergy plans to hit the capital markets with an IPO this year to unlock value.Hindustan Cleanenergy is a subsidiary of Hindustan Power, which in turn is a group company of homegrown storage devices major Moser Baer.Hindustan Cleanenergy, which has a generation capacity of 350 mw now, also said it will invest Rs 5,500 crore on various solar farms by 2016 by the generation is expected to touch 1-gw (1,000 mw). 200 mw will go on-stream this year-end.

Ø  The deal announced by holiday operator Thomas Cook to merge Chennai-based Sterling Holiday Resorts (India) Ltd could possibly see the former acquiring 74.9% of the equity share capital, through various modes.This would include the subscription shares, the minimum sale shares and the shares acquired through the open offer.

Ø  Scotch whisky prices in India are likely come down after successful conclusion of free trade agreement with European Union, a top official of Scotitsh investment and trade promotion agency SDI said.The current 150 % of import duty on Scotch whisky may come down to 40 % once the FTA (free trade agreement) talks are concluded successfully.

Ø  Tata group’s Taj Hotels Resorts & Palaces is undertaking a major re-branding of its two iconic properties in the heart of London.Weeks into the process, St. James’ Court Hotel and 51 Buckingham Gate Suites are now operating under the Taj Luxury brand and claim to have introduced a significantly enhanced service experience from the existing standards.

Ø  As part of an ongoing captive block review exercise, the coal ministry has imposed bank guarantee of Rs 138 crore on power generator NTPC Ltd for failure to develop its captive coal block Pakri Barwadih in Jharkhand on time.The block, with reserves of 1.4 billion tonne (BT), is the largest among six such acreages held by NTPC.

Ø  Asian Paints (International) Limited (APIL), a wholly-owned subsidiary of the Asian Paints, has made Berger International Limited (BIL) its wholly-owned subsidiary and delisted BIL from Singapore Exchange Securities Trading Limited (SGX-ST).

Ø  Infosys BPO, the business process outsourcing subsidiary of Infosys, today announced that Royal Philips of the Netherlands has extended its existing seven-year outsourcing agreement with Infosys for an additional five years.

Ø  NTPC aims to go on an expansion drive by buying out some stranded private generation plants for which it is in talks with the concerned companies.The company will also advertise for the same, asking companies to come forward with their stranded projects, evaluate them one by one and then take a call.

Ø  ibibo Group has secured a stake in PayU Global-an international online payment solution company present in over 12 countries. The stake has come in exchange for its local payment portal PayU-India.PayU-India was a 100 per cent owned business by the ibibo group launched in 2011. Ibibo group’s holding company MIH Ltd is owned by Naspers. The South African giant Naspers also holds majority stake in PayU Global.

Ø  CPCI (Mauritius) Ltd has picked up 9.63% share in Hinduja Group firm Hinduja Foundries, through a Qualified Institutional Placement (QIP).The company has acquired 70 lakh shares and on the trade date of January 29, 2014, the share price of the company in the market was Rs 27.95 per equity share.

Ø  Investors and punters in commodity markets may benefit from a regulatory move on Thursday that allows exchanges to levy different transaction charges for different contracts. Forward Markets Commission (FMC), it’s also learnt, will shortly direct exchanges to levy uniform transaction charges on brokers who trade the same contract.

Ø  ICRA downgraded United Bank of India’s capital bonds (tier II) and certificates of deposits (CDs) on higher than expected deterioration in asset quality, pressures on margins and profitability.The ratings have been put on watch with negative implications, ICRA said in statement.  Its cut rating for lower tier II bonds from “AA-“ from “A-“. The rating for CDs have been downgraded from “A1+ “ to “A2+”.

Ø  Sebi cleared a slew of measures that will make independent directors on company boards more accountable and give a bigger say to public shareholders in listed entities. The capital market watchdog also cleared a long-term policy on mutual funds (MFs), which will require funds to maintain a higher capital base and invest a minimum sum in their own schemes, making it more expensive for them to operate in the local industry.

Ø  The Government has been able to mop up an estimated Rs 61,162 crore from the auction of 900MHz and 1800MHz spectrum that ended on Thursday after 10 days of aggressive bidding by the telcos.As companies have the option to pay in instalments, the Government will get a around  Rs 16,000 crore in the current fiscal year, about 41 per cent higher than the Government’s Budget target from the auction which was pegged at Rs 11,343 crore for the current year.

Ø  Persons with a taxable income of over Rs 1 crore annually may breathe easy when Finance Minister P Chidambaram presents his first interim Budget on Monday. A surcharge of 10 % introduced in the last Budget on such income may not be extended for another year.The relief is also likely to be extended to the corporate sector. A surcharge of 5 % and 3 % levied on domestic and foreign companies, respectively, may not continue for another year as the government gets ready to face the polls in about two months.

Ø  All India Power Engineers Federation (AIPEF) opposed the proposed doubling of natural gas prices from April 1, 2014 as announced by the central government.Federation secretary general Shailendra Dubey warned that power tariffs would move north following the decision, while it would also be detrimental for the domestic fertiliser companies.

Ø  The Reserve Bank imposing a cap banks’ exposure to group entities will help contain possible contagion from failure of a group entity to core commercial banking operations, according to a report.Besides, the cap will not have any immediate negative rating impact on them, the report added.

Ø  India Ratings, a Fitch group company, has kept the outlook negative for India’s infrastructure sector for the coming fiscal, 2014-15, due to weak credit profiles for most project companies.The credit rating agency does not expect a sharp movement, especially in the short term, in the fortunes of the sector following the Lok Sabha elections in first half of 2014-15.

Ø  The United Progressive Alliance government is yet to pay Rs 1,100 crore of export credit subsidy to banks, the entire amount due for this financial year, bankers say.Initially,RBI had opposed the government’s proposal that banks pay the subsidy benefit upfront, but had later agreed. Banks claim reimbursement from RBI on a quarterly basis.

Ø  The civil aviation ministry is offering sops including concessions in night parking charges and priority in allocation of slots at key cities to airlines operating to tier II and III cities.

Ø  Ahead of interim Budget, a United Nations report said the government is unlikely to meet fiscal deficit target of 4.8 % of the GDP in the current fiscal due to low growth and high subsidy.

Ø  The Commerce Ministry has initiated the process of formulating the country’s foreign trade policy (FTP) for the period 2014-19 which will be unveiled by the new government in April.

Ø  Irda has allowed insurance companies to invest in new instruments issued by domestic banks.This include Debt Capital Instruments, Redeemable Non-cumulative Preference Shares and Redeemable Cumulative Preference Shares under Tier II capital.
Ø  The Cabinet Committee on Security has cleared a proposal worth over Rs 1,800 crore for procuring night-vision equipment in a bid to enhance performance of the Army’s tank fleet at night.

International News

Ø  Lehman Brothers Holdings Inc asked a judge to approve a $767-million settlement with Freddie Mac to pay off a $1.2 billion bankruptcy claim, one of the biggest remaining against the defunct bank.

Ø  Comcast Corporation confirmed that it was buying Time Warner Cable for $45.2 billion, in an all-stock deal that would merge the two largest cable TV providers in the United States.The combined company would serve some 30 million subscribers, or about 30 % of the pay television market in the country.

Ø  China’s Cabinet has announced that 10 billion yuan ($1.6 billion) has been set aside this year to reward cities and regions that make significant progress in controlling air pollution, highlighting how the issue has become a priority for the leadership.
China January CPI rose 2.5% on year, PPI fell 1.6%

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