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The Reserve Bank of India (RBI) stuck to its trajectory of calibrated rate hikes in the current credit policy too. It hiked the repo rate by 25 basis points to 6.5% and the reverse repo rate also by 25 basis points to 5.5%. The repo rate is what banks pay to the RBI to borrow funds to meet short term liquidity needs and the reverse repo rate is what they get from the RBI, when they park surplus funds with the central bank.
Continue ReadingIt was not an endgame after all, for Lavasa Corporation. There were some fears that the government would order the project to be shut down, which would have affected the company, other companies who had invested in the project, people who have bought homes, and investors in Lavasa’s listed parent, Hindustan Construction Company. The Ministry of Environment and Forests submitted its final order on the project, after obtaining submissions from all parties, including Lavasa, and considering the central and state level appraisal committee’s report on the project.
Continue ReadingAxis Bank took the world of finance by surprise, announcing its decision to acquire Enam Securities investment banking and capital market transactions’ business. It will pay about Rs 2,067 crore in stock to Enam’s owners -Vallabh Bhansali, Jagdish Master, Nemish Shah and Manish Chokhani- in a cashless acquisition, structured as a merger.
After stock exchanges came commodity exchanges and now you have power trading exchanges. Their life just got more interesting, with the Central Electricity Regulatory Commission (CERC), the central power sector regulator, notifying a host of regulations they have to adhere to. The current exchanges too have been set up under the purview of the regulator, but these were in the form of guidelines.
Continue ReadingThe intertwining of agriculture and politics has usually meant that farmers and the consumers, especially those at the margin, suffer from government action or inaction. Food prices have been rising for a long period, at least a year, and show no signs of abating.
Today, the government announced the wholesale price index data (WPI) for the week ended November 14.
Indian companies have gone and acquired companies abroad in several sectors such as software, chemicals, FMCG, metals, engineering. But in the sugar sector, we have not seen any major foray abroad.
Shree Renuka Sugars has become the first sugar player to acquire a company in Brazil, the largest sugar producer and exporter in the world with India being the largest consumer. In recent times, India has relinquished its status as a sugar exporter, and the rising demand has made it an importer.
India’s goods traffic movement is a good lead indicator of how some core sectors are performing. Coal is shipped by rail. Steel plants transport ore and other raw materials to their plants, and transport finished steel back by rail. Other key commodities being transported by rail include fertilisers, foodgrains and crude oil. An increase in freight traffic either indicates higher demand for raw materials (coal is used by power and steel plants) or higher production because shipments are going up.
Bharti Airtel and MTN were unable to convince the South African government to accept their cross-border merger proposal. The government did not object to the merger per se but to the structure, which was outside the current regulatory environment. The two companies had proposed a structure, which ostensibly involved MTN taking up a stake in Bharti by subscribing to ADRs/GDRs. Bharti would in turn take up a stake in MTN, which was a direct transaction.
Bharti Airtel and MTN have extended their negotiations for a cross-border M&A transaction, a first in India’s telecom industry. Even as the two sides thrash out terms, the Indian government is considering making two-way cross-border mergers and amalgamations a reality.
The opponents of free markets must be cheering. “We told you so.” Don’t hand over the skies to private players. Don’t destroy the monopoly that Indian Airlines enjoyed in domestic markets. So what if their fares were high, so what if their service oscillated between the pathetic to the barely tolerable and you were at their mercy, if your flight got cancelled.