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  • 1. Top Headlines Reliance Media in tie-up talks with Cinepolis. GIC, Baring India PE Investing $100M In Marico Essar Steel raises Rs 2,600 crore for Odisha project Indraprastha moves HC after tariff blow. Mitsui Sumitomo Picking 26% In Max New York Life Insurance For $530M. Unmetric Raises $3.2M In Series A Round Led By Nexus Ventures. Pragati India Fund Invests $5M In Jash Engineering. Weekly Economic Review A major telecom operator has made it clear it is shutting down shop in areas where its licenses were lost. We have learnt that Loop Telecom plans to wind up operations in areas affected by 15May. It’s also wants the government to pay a compensation of Rs3,800crore. Loop’s decision to wind up some services follows similar announcements by Stel and Estisalaat DB. The company lost 21 licenses after the Supreme Court’s ruling on 2 February. The legal battle between markets regulator SEBI and the MCX exchange is finally headed towards a resolution. On Wednesday, the Supreme Court disposed a special leave petition from SEBI on the issue. But that dismissal came only after both sides arrived at an agreement. According to the consent terms reached, SEBI will modify regulations on the buyback of shares. SEBI and MCX will then act in concert three months from now, on the issue of equities trading. At present, MCX can only trade in currency derivatives. SEBI had petitioned the Supreme Court after the Bombay High Court set aside its order stopping MCX from offering equity trading. Shares of MCX’s parent firm, Financial Technologies surged 5.75% on the BSE on a day the Sensex dropped 0.26%. 1
  • 2. Switching gears, petrol and diesel may have become a lot moreexpensive, but one carmaker is working on a way to cut fuelconsumption. Mahindra and Mahindra is working on a full hybridvehicle for India. Pawan Goenka, the head of the company’s auto sector,says the vehicle will be rolled out commercially in three years. Ofcourse, other firms have tried to bring hybrid cars to the Indian market,but high costs have turned customers away. But M&M and other rivalslike Tata Motors plan to create locally produced and less expensivehybrids.There’s some good news for Air India.The Cabinet Committee onEconomic Affairs approved the plan for financially restructuring thecarrier. Air India will now be able to convert Rs21,348 crore worth ofshort-term loans into long-term debt. There will also be an assuredequity support of more than Rs23, 481 crore until the fiscal year 2021.And that’s not counting an upfront equity infusion of Rs6,750 crore. Therestructuring plan will mean Air India can save an extra thousandcrores every year. And the airline will get a one-year moratorium oninterest payments. It will also be able to pay up Rs5,800 crore in dues inaddition to other dues to employees.In other developments, new figures indicate the country’s factoryoutput remains sluggish. The index of industrial production forFebruary was lower than most expectations. It rose just 4.1% during themonth. And the revised figure for January now stands at a mere 1.1%.The reduced numbers for January’s IIP reflect the volatility of the index.The drastic revision came largely because of an error in the estimate forsugar productionHere’s how the IIP numbers break up by sector. Manufacturing inFebruary grew by 4%. While electricity generation expanded by ahealthy 8%. And capital goods went up a full 10.6%. But intermediategoods dipped 0.6%. And consumer goods also went into negativeterritory, falling 0.2%. All in all, industrial output has remained slowthroughout the year, with slowing growth and high interest rates takingtheir toll. But the disappointing numbers could push the Reserve Bankto consider a cut in rates during its policy statement on 17 April. 2
  • 3. Inside The StoryReliance Media in tie-up talks with Cinepolis.Reliance MediaWorks, controlled by billionaire Anil Ambani, is in talksto sell stake in some of its movie theatres to Mexicos multiplex operatorCinepolis, said media repors on Monday. Cinepolis, the fourth largestcinema chain in the world, is in talks to "either buy several keyproperties or get into a tie-up," the report said, quoting an unnamedperson familiar with the development. The talks have been underwayfor the past two months, it said. The report did not have any financialdetails of the deal. Cinepolis has a small presence in India for the pastthree years. A deal with Cinepolis will help Reliance Media Works focuson film and media services business and reduce dependence on themultiplex business, the report said.GIC, Baring India PE Investing $100M In MaricoSingapore’s sovereign wealth fund GIC and Baring Private EquityPartners India are investing Rs 500 crore ($100 million) in public listedconsumer products company Marico Ltd. This comes after two monthsof Marico announcing a deal to buy the personal care brands, includingSet Wet, Livon and Zatak among others, from Reckitt enckiser.Although,Marico did not disclose the deal value But The Deal value had estimatedit to be around $100 million so the latest transaction could be to fundthe acquisition. As per the deal, Indivest Pte Ltd, an investment arm ofGIC is investing Rs 375 crore ($75 million) and Baring India PrivateEquity Fund is putting in another Rs 125 crore ($25 million) in Marico.GIC will hold 3.4 per cent in Marico while Baring India PE will pick 1.1per cent in the firm.Essar Steel raises Rs 2,600 crore for Odisha projectEssar Steel has raised about Rs 2,600 crore in loan for its new project atOdisha that will integrate its steelmaking process and reduce steelproduction cost by about 42%.The Ruias-controlled Essar Steel has builta pellet plant - a facility that converts ore fines into high grade usablelumps - in Odisha and a slurry pipeline to bring the ore to the port for 3
  • 4. Shipping them to its steelmaking plant on the western coast, at a totalproject cost of Rs 4,200 crore."This is part of the Rs 37,500 crore thatwe are spending to raise the steel capacity to 10 million tonnes," saidEssar Steel CFO Amit Agarwal. "The cost of borrowing is in the range of11.5-12% and was closed a year back. There have been no newcovenants for the loan that we raised and lenders are satisfied with theasset that we are creating," he added. Essar Steels term loan currentlytotals Rs 20,000 crore.Indraprastha moves HC after tariff blowHanded a one-two on its solar plexus in the form of a massive 60% tariffslash by the Petroleum and natural Gas Regulatory Board (PNGRB), astaggering Indraprastha Gas Ltd moved the Delhi High Court onTuesday challenging the regulator’s constitutionality and legality of itspowers.“We are not clear how they (PNGRB) have calculated this tariff.We do not know the assumptions made,” said M Ravindran, managingdirector, IGL, at a press conference. A joint venture of GAIL (India) Ltd,Bharat Petroleum Corp and the state government of New Delhi, IGL sellsauto and cooking gas in New Delhi and adjacent areas.Mitsui Sumitomo Picking 26% In Max New York LifeInsurance For $530M.Japan’s Mitsui Sumitomo Insurance Company Ltd is acquiring 26 percent stake in Max New York Life Insurance Company Ltd for Rs 2,731crore ($530 million), in a two-tiered transaction that would mark theexit of USA’s New York Life Insurance Co from the JV.As per thearrangement, Max India, the majority partner in the Indian insurancejoint venture, will acquire 9.37 per cent stake in Max New York LifeInsurance from its US JV partner New York Life Insurance for Rs 182.2crore ($35 million), which it would sell to Mitsui Sumitomo for Rs984.45 crore ($191 million). The Japanese insurance major will acquirethe balance 16.63 per cent from New York Life Insurance for 1,746crore ($339 million).Mitsui Sumitomo is Japans largest non-life insurerby revenue. 4
  • 5. Unmetric Raises $3.2M In Series A Round Led By NexusVentures.Social media benchmarking company Unmetric Inc has raised $3.2million in Series A funding led by Nexus Venture Partners. Unmetric willuse the funds to continue developing its benchmarking platform,enabling companies to survey and analyze the content strategy of abrand and the key terms that are triggering customer engagement.Unmetric will also be using the round to further expand its team in theUS.Headquartered in Chicago with offices in Chennai &Coimbatore, Unmetric works with clients in North America, India andother regions. The company launched its service last September,although the company was formed in 2010 by two executives workingat Vembu Technologies, Lakshmanan Narayan and Kumar Krishnasami.Pragati India Fund Invests $5M In Jash Engineering.Pragati India Fund, a sector-agnostic private equity fund targeting toinvest in economically underdeveloped and low-income states of India,has made its maiden investment of $5 million in Indore-based JashEngineering Ltd, a manufacturer of customised engineering goods forwater and waste water infrastructure sector.Narayanan Shadagopan,managing director of Pragati Equity Advisors Pvt Ltd, said, “The fundand the company prefer to keep the percentage stake confidential at thispoint but it is a significant minority stake. In due course, we would lookat increasing the stake, subject to certain conditions being met.” 5
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