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Weekly Finance News

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Weekly newsletter

  1. 1. Top Headlines Vodafone seeks to buy out minority shareholders in India unit for $1.7B. Espresso Logic raises $1.6M led by Inventus Capital. Aditya Birla Real Estate Fund invests $20.3M in Tata Housing and Sidhartha Group's joint project. German firm SQS Software to buy majority stake in Thinksoft for $23M. Tatas scrap $1.2B bid for Orient-Express. Nicco Parks MD & CEO Arijit Sengupta steps down. RBI allows expanded foreign bank presence in new rules Indian Economy News Brokers said the market, which is worried about economic slowdown, remained under pressure as the rupee dropped to a six-week low of 62.75 versus dollar, raising concerns about inflation which may force RBI to look at hiking rates again. The BSE benchmark Sensex today fell by 157 points, the fourth drop in a row, on heavy selling in bluechips like HDFC, RIL, TCS and Maruti Suzuki after rupee slid further amid a downtrend in global markets. The Sensex, which had lost 417 points in the past three sessions, fell further by 156.62 points, or 0.75 per cent to 20,666.15, after touching the day's low of 20,600.90. In the 30share index, 21 stocks like SBI, ICICI Bank, ONGC, Coal India, Airtel, ITC, Infosys and Sun Pharma ended in red. Brokers said the market, which is worried about economic slowdown, remained under pressure as the rupee dropped to a six-week low of 62.75 versus dollar, raising concerns about inflation which may force RBI to look at hiking rates again. Indian stocks were also weighed down by a weakening trend in the Asian region and lower opening in Europe after faster-than-expected US economic growth fuelled concerns that the Fed may taper its stimulus quicker than most estimates. 1
  2. 2. For the week ended November 8, Sensex fell by 531 points or 2.5 per cent -- the biggest such drop since the week ended September 27 when it slid down 567 points or 2.65 per cent. The broad-based National Stock Exchange index Nifty fell by 46.50 points, or 0.75 per cent, to end at 6,140.75 led by banking and interest-sensitive stocks. Also, the SX40 index of MCX-SX fell 119.6 points to end at 12,273.64. Sectorally, the BSE Consumer Durable index was the major loser today as it plummeted 2.04 per cent, followed by Banking index (1.27 per cent), Oil and Gas index (1.19 per cent), PSU index (0.69 per cent) and Auto index (0.45 per cent). Inside The Story Vodafone seeks to buy out minority shareholders in India unit for $1.7B Vodafone Group Plc has sought approval from the authorities to raise its stake in the India unit for 101.41 billion rupees it said on Tuesday, after India allowed foreign companies to take full ownership of local carriers.Vodafone directly owns 64.38 per cent of the India unit.In August, India relaxed rules on foreign holdings in the sector to allow companies such as Vodafone to own 100 per cent of their Indian businesses.Before the rule change, foreign companies were limited to direct stakes of no more than 74 per cent in Indian carriers.Piramal Enterprises owns about 11 per cent of Vodafone India. The remainder is owned by investors including businessman Analjit Singh, Vodafone India's non-executive chairman. Espresso Logic raises $1.6M led by Inventus Capital. Silicon Valley-based Espresso Logic Inc, which offers database backend services for mobile and web developers, has secured $1.6 million led by Inventus Capital Partners. Raju Reddy, founder of Sierra Atlantic, which was acquired by Hitachi; Gokul Rajaram, product engineering lead at Square; Anurag Jain, founder of Access Healthcare and Lee Nackman, former VP (software product units) at HP also participated in the round.The capital will be used for product development as well as marketing and sales efforts. The firm offers a reactive logic programming-based database backend as a service for mobile and web developers to connect the applications to external databases including MySQL, Oracle Server and Microsoft SQL Server. 2
  3. 3. Aditya Birla Real Estate Fund invests $20.3M in Tata Housing and Sidhartha Group's joint project The real estate dedicated realty fund of Aditya Birla Group has invested Rs 125 crore ($20.3 million) in a joint residential project being developed by Tata Housing and Sidhartha Group on the Dwarka Expressway in Gurgaon, said sources privy to the development.The two developers are jointly developing 2 million sq ft area in a 51:49 JV where Tata Housing is the majority partner. The investment is in the form of debt secured against stake of the project.A source privy to the development said, “It is a fixed return deal for the fund with an investment period of three-and-a-half years.” In a separate report The Economic Times said the structured transaction is expected to give Aditya Birla Real Estate Fund an internal rate of return (IRR) of 22-24 per cent over four years. German firm SQS Software to buy majority stake in Thinksoft for $23M. Cologne-headquartered SQS Software Quality Systems AG is acquiring a controlling stake in Chennai-based Thinksoft Global Services Ltd for Rs 146.6 crore ($23.4 million), as per a stock market disclosure.This automatically triggers a mandatory open offer for acquiring 3 million shares more which may cost around Rs 79 crore more. However, if the open offer is not fully successful, the promoters have agreed to sell that many more shares to allow SQS to hit a shareholding of 56 per cent by selling their remaining shares.The deal has been struck at Rs 260 per share or over 60 per cent premium to the last traded price a day ahead of the deal announcement. Thinksoft scrip was up 20 per cent hitting the upper circuit of the day at Rs 194.15 on the BSE in a weak Mumbai market on Friday. Tatas scrap $1.2B bid for Orient-Express. Tata Group’s flagship hospitality firm and India’s largest hotel chain operator Indian Hotels Company Ltd (IHCL) has decided not to pursue further its takeover bid for luxury hospitality chain Orient-Express Hotels Ltd. In a meeting on Friday, its board took a call not to pursue the proposed transaction and all contracts that were entered into to facilitate the bid, have all since been cancelled.This follows a rejection of the bid by the board of Orient-Express Hotels which had communicated its inability to consider IHCL’s offer as it reckoned it was not an opportune moment for them to consider a sale of their company. 3
  4. 4. Nicco Parks MD & CEO Arijit Sengupta steps down Arijit Sengupta, MD and CEO of Nicco Parks & Resorts Ltd which manages amusement parks, is stepping down after working for the company for 18 years. Sengupta would be replaced by Abhijit Dutta as MD & CEO with effect from January 1, 2014.The company reported net loss of Rs 46 lakh for the third quarter of the current fiscal year. It posted net sales of Rs 5.79 crore, an increase of over 50 per cent for same period time last year which was Rs 3.87 crore. Nicco Parks started Eastern India’s the first theme amusement park on March 17, 1989. The company was started as a joint venture firm between diversified Nicco Group which has interests in power cables, IT and engineering solutions and government of West Bengal. In 1994, the company floated public issue and got listed in Mumbai and Kolkata stock exchanges. RBI allows expanded foreign bank presence in new rules The Reserve Bank of India (RBI) said it will treat foreign banks operating in the country on nearly equal terms with local lenders if they move to a wholly owned subsidiary structure, as it seeks to bolster its regulatory powers in the wake of the global financial crisis.The rules issued by the RBI late on Wednesday were generally in line with expectations and could expand opportunities for international banks in the country, since they would have greater freedom to open branches and would be able to participate more fully in the development of the Indian financial sector.However they could also face a greater regulatory burden.Currently foreign banks in India with substantial networks - a category including Citigroup, HSBC, and Standard Chartered - operate as branches, not subsidiaries, a distinction which crucially affects their regulatory framework. 4

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