British Foreign Secretary Boris Johnson quits as BREXIT crisis mounts. Boris Johnson was the person who was supposed to be spearheading the BREXIT negotiations. However, Johnson’s exit followed immediately after the BREXIT secretary, David Davis, had also resigned. In fact, Davis had cited that the BREXIT plan agreed to by Theresa May was loaded in favour of the EU. This could be a real test, not only of the BREXIT plan but also of whether May would continue at the top job or not. The British Pound had weakened and is likely to weaken further as UK moves closer to the BREXIT date.
In one of the biggest IPOs in recent times, Lodha Developers got SEBI nod for its mega Rs.5500 crore IPO. This will be the second biggest realty IPO after DLF’s Rs.9200 crore IPO in 2007. It will be a combination of a fresh issue of Rs.3700 crore and Rs.1800 crore of offer-for-sale (OFS). The IPO will be crucial for a variety of reasons. The IPO market appetite for realty stocks has not been tested for some time. A combination of demonetization and the passage of the RERA Bill had taken the sting out of realty stocks. Inventory of residential realty continues to be elevated across key metros.
In one of the biggest “Make in India” decisions, Samsung is to set up the largest mobile phones manufacturing facility at Noida. This will be the world’s largest mobile phone fabrication plant. Samsung of Korea, the world leader in mobile hardware, will produce its entire range right up to the S9 in Noida. It will have a capacity to fabricate 120 million phones per year. The plant inauguration is to be done jointly by Mr. Modi and Mr. Moon of South Korea. The coming of Samsung is a big boost to the prime minister’s “Make in India” campaign and could open the gates for more such deals.
After a long wait and multiple iterations, the Telecom department cleared Idea-Vodafone merger, albeit with riders. Idea will now have to deposit cash and bank guarantees worth Rs.7300 crore for the share of Vodafone spectrum. This issue dates back to the Vodafone pan-India merger. At that point of time, Vodafone had just paid the bare minimum that was payable to action its merger and had Rs.4700 crore due as its share of spectrum fees payable. Effectively, Vodafone will not allow the deal to go through unless the requisite amount is deposited. The merger will create India largest telephony.
In a sort of moral victory for Mr. Ratan Tata and for Tata Sons, NCLT dismissed Cyrus Mistry’s please against Tata Sons regarding the compromise of minority interest by the Tata Sons management. The Tribunal dismissed all charges filed by Cyrus Mistry and contended that Ratan Tata and the Tata Sons had all the requisite authority to remove Mistry as Chairman of the group. This brings a partial to a sordid chapter that began when Cyrus Mistry was unceremoniously fired from the chairmanship of Tata Sons. While performance was cited as the key reason for the fallout, the real reason appears to be a larger issue of control over the Tata Group. There were major issues pertaining to the ownership structure and serious differences pertaining to upholding the basic DNA of the Tata Group.
Coal imports by power plants declines signalling stress. Of course, this can also be partially attributed to the fact that domestic production of coal has risen. But the fall has been sharp in case of power companies that were predominantly dependent on imported coal for their needs. Most power generators in India are under tremendous financial stress and that may be the reason for the fall in coal imports. April and May saw a 15% fall in coal imports on a YOY basis. Power is actually expected to be the next big challenge to the asset quality of Indian banks.
