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Rupee sheds 9 paise against US dollar at 72.02

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Rupee

Mumbai | The rupee depreciated by 9 paise to 72.02 against the US dollar in early trade Monday at the interbank foreign exchange, halting its four-day winning streak, ahead of RBI’s board meet. Fresh demand for the American currency from importers amid rise in crude prices weighed on the domestic unit, dealers said.

However, weakness in the US dollar against some currencies in global market and a higher opening of the domestic equity markets limited the rupee fall ahead of Reserve Bank of India’s board meet, dealers said. Finance Ministry nominees and some independent directors are expected to take on Governor Urjit Patel and his team later in the day over issues ranging from micro, small and medium enterprises (MSME) credit to the central bank’s reserves, though both sides are in favour of reaching a common ground.

Meanwhile, the international benchmark, Brent crude was trading higher by 0.72 per cent to USD 67.40 per barrel. The rupee on Friday strengthened by 4 paise to close at a fresh two-month high 71.93 against the US currency, despite a rebound in oil prices and a stronger dollar.

Foreign institutional investors (FIIs) bought shares worth Rs 844.82 crore on Friday, as per provisional data. The benchmark BSE Sensex was trading 159.66 points, or 0.45 per cent, higher at 35,616.82 in opening trade.

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Brookfield Asset Management bets big on India

Ali Azar

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Brookfield Asset Management – A Canadian firm with $ 350 billion of assets under management and a 120 year heritage, seems to be favouring India, and is on a deal making spree in the country with acquisition of hotels, real estate and a massive gas pipeline.

Just last week, an investment trust led by Brookfield bought Reliance Industries’ East West Pipeline – a 1,400 km pipeline that transports natural gas and connects Kakinada on the eastern Andhra coast to Bharuch in Gujarat on the west coast for an acquisition price of ₹ 13,000 crore.

Previously, Brookfield had invested around $ 7 billion in India, which includes the acquisition of office and retail assets of Hiranandani Developers in Mumbai, purchase of Equinox Business Park from Essar Group, which is a commercial property in Mumbai’s business district of Bandra Kurla Complex and has also invested in roads and renewable energy.

However, its latest acquisition on Monday, of hospitality chain, Hotel Leela Ventures is the one that’s making waves. At a transaction value of ₹ 3,950 crore, Brookfield marked its entry into the Indian hospitality sector and the promoters of the Leela brand, led by C.P. Krishnan Nair, who founded the group in 1986, will transfer assets, properties, management and other contracts of Leela Hotels at Delhi, Bengaluru, Chennai and Udaipur; which collectively contributed 88% of the net worth in F.Y. 2018.

However, Brookfield is not alone in its bullishness on India; almost all sovereign funds from West Asia, Singapore as well as Canadian Pension Funds are recognising India as a key destination and purchasing assets here.

 

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Mukesh’s help saves day for Anil as RCom makes Rs 550 crores payment to Ericsson

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ambani

New Delhi | Embattled billionaire Anil Ambani Monday warded off a possible jail term as RCom cleared dues of a Swedish service provider at the eleventh hour with money received from elder brother Mukesh and his wife Nita, whom he thanked for standing by him in trying times and extending “timely support”.

Anil’s heavily debt-laden Reliance Communications made a Rs 550 crore payment, including interest, to Ericsson just a day before expiry of the deadline set by the Supreme Court to clear dues or face a three-month jail term.

Soon after making the payment, RCom announced termination of a Rs 17,000 crore deal to sell telecom assets like spectrum, fibre and tower to Mukesh’s Reliance Jio, citing delays in approvals from the government and lenders.

Anil, whose businesses in telecom and power sectors went into heavy debt in the face of regulatory headwinds and intense competition, thanked Mukesh and his wife Nita for bailing him out.

“My sincere and heartfelt thanks to my respected elder brother, Mukesh, and Nita, for standing by me during these trying times, and demonstrating the importance of staying true to our strong family values by extending this timely support,” a late night statement issued by Anil’s firm quoted him as saying.

Anil said he and his family “are grateful” and “deeply touched with this gesture” that they “have moved beyond the past”.

In the statement, RCom said Rs 550 crore dues to Ericsson, including interest dues, has been made in compliance with the Supreme Court judgement.

However, the company did not give details about the source of funds but cited “timely support” from Mukesh in the trying times.

The two brothers had fought a bitter public battle after his father Dhirubhai died without leaving a will. They split his businesses between themselves, with Anil getting telecom and power while Mukesh retained oil and petrochemical businesses.

The split did not end the feud and the two bickered over commitment of Mukesh’ Reliance Industries for supply of gas to Anil’s power plants. In 2008, Anil’s RCom wanted to merge with South Africa’s MTN but the move was thwarted by Mukesh citing his holding right of first refusal.

Since then, the two brothers scrapped a no-compete agreement and Mukesh re-entered telecom business in 2016 offering free voice call for life and data at dirt cheap prices.

As debt grew, RCom, in December 2017, entered into a deal with Jio to sell spectrum and other assets such as fibre network and telecom towers for an estimated Rs 17,000 crore.

But the deal could not progress amid regulatory hurdles faced as the Department of Telecommunications wanted a written assurance on who would pay for RCom’s dues such as spectrum fee.

Jio refused to make a commitment to pay for such fee and lenders to RCom also played hardball, resulting in the deal falling through.

In separate statements, RCom and Jio announced the scrapping of the deal, citing delays in getting approvals from the government and lenders.

“The said transactions have become incapable of being consummated in accordance with the terms thereof, on account of various factors and developments since the execution of the said agreements nearly 15 months ago…,” RCom said.

Jio said the master agreement for acquisition of certain specific assets of RCom and the spectrum trading agreement for change in allotment of certain specific spectrum stand terminated.

This, it said, also follows the Board of Directors of RCom passing a resolution to seek fast track resolution through bankruptcy court and the National Company Law Appellate Tribunal (NCLAT) on February 4 restricting the sale, transfer or alienation of any movable or immovable property of RCom.

“The termination of the master agreement shall not, in any manner, affect the rights and obligations of the parties, accrued prior to the date of termination,” it said.

An Ericsson spokesperson confirmed that it has received balance payment of Rs 458.77 crore (principal amount) from RCom on Monday. Together with Rs 118 crore it had previously paid, RCom has cleared all dues including interest.

Last month, the Supreme Court held Ambani in contempt for not paying Ericsson’s dues despite promising to do so. The court had warned to send Anil as well as Chhaya Virani and Satish Seth – chairmen of two RCom units — to jail if they fail to pay the dues in four weeks. The deadline expires Tuesday.

The company suffered a blow when National Company Law Appellate Tribunal (NCLAT), last week, refused to free up Rs 260 crore tax refunds withheld by the lenders. Banks had opposed release of the tax refunds.

In 2017, Ericsson moved a bankruptcy court alleging it had not been paid dues around Rs 1,600 crore after signing a deal in 2013 to operate, maintain and manage the telco’s nationwide network. It extracted a personal guarantee from Ambani to pay the dues.

RCom scrip closed at Rs 4 a share on the BSE Monday, 9.30 per cent lower than the previous close.

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India’s most valuable brands of 2019

Ali Azar

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Interbrand – The world’s leading brand consultancy has come out with its 6th annual “most valuable Indian brands” list for 2019.

The list names Tata, Reliance and Airtel as the 3 most valuable Indian brands of 2019. The combined value of the top 40 brands was 5,03,000 crores or ₹ 5.03 trillion , which represents a 5.2% growth in value over the previous year. Financial Services and Automotive sectors contributed the most with 27% and 13% of value respectively in this year’s top 40.

Ever since the inception of these rankings, Tata has continued to hold the top position in the best Indian brands table. However, Tata’s brand value grew by a modest 6.5% – contributed significantly by its flagship tech services business TCS. Reliance, after taking over the number two spot from Airtel last year, consolidated itself at second, with an increase in brand value of 12%, phenomenally bolstered by the growth of Jio.

The rankings are given based on three parameters; financial performance, the role the brand plays in influencing customer choice and the brand’s ability to command a premium price.

 

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