Yes Bank will be in focus after the Reserve Bank of India (RBI) raised the ceiling on investment by foreign institutional investors (FIIs) to 74% of the private sector bank's paid up capital from earlier 60%. RBI's nod for higher ceiling on investment by FIIs came after Yes Bank's board of directors and shareholders approved the proposal. The RBI has capped the total foreign shareholding from all sources in Yes Bank at 74% of the bank's equity. Last month, the Cabinet Committee on Economic Affairs cleared Yes Bank's proposal for increase in foreign investment limit in the bank's equity capital to 74% from 41.87% without any sub-limits.
Coal India announced on Sunday, 12 June 2016, that two of its subsidiaries Mahanadi Coalfields and Northern Coalfields will buyback total shares worth around Rs 1978 crore from their shareholders.
The board of directors of Northern Coalfields (NGL) approved buyback of 4.01 lakh fully paid equity shares, or 22.62% equity, of face value of Rs 1000 each from the members of NGL on a proportionate basis through tender offer for an aggregate amount not exceeding Rs 948.72 crore. The shares will be purchased at Rs. 23,610.04 each.
The board of directors of Mahanadi Coalfields (MCL) approved buyback of 4.43 lakh fully paid equity shares, or 23.82% equity, of face value of Rs 1000 each from the members of MCL on a proportionate basis through tender offer for an aggregate amount not exceeding Rs 1028.77 crore. The shares will be purchased at Rs 23,171.89 each.
Dr Reddy's Laboratories (DRL) may edge higher after the company inked a definitive agreement with Teva Pharmaceutical Industries and an affiliate of Allergan plc to acquire a portfolio of eight Abbreviated New Drug Applications (ANDAs) in the US for $350 million in cash. The acquired portfolio consists of products that are being divested by Teva as a precondition to its completion of the acquisition of Allergan's generics business. The portfolio being acquired is a mix of filed ANDAs pending approval and one approved ANDA. The portfolio comprises of complex generic products across diverse dosage forms. The branded versions of these drugs had aggregate sales of about $3.5 billion in the United States for 12-month period ended April 2016, according to IMS Health data. DRL is acquiring this portfolio of drugs on a cash-free, debt-free basis and expects to finance the transaction using a combination of cash on hand and available borrowings under existing credit facilities. The acquisition of these ANDAs is contingent on the successful completion of the Teva/Allergan generics transaction and approval by the US Federal Trade Commission of DRL as a buyer.
Tata Power Company announced on Sunday, 12 June 2016, that its wholly-owned subsidiary, Tata Power Renewable Energy (TPREL), has signed a share purchase agreement to acquire Welspun Renewable Energy (WRE). The acquisition is made at an enterprise value of Rs 9249 crore, subject to closing adjustments. Tata Power said that acquisition will enable it to expand its renewables energy portfolio. WRE, part of the Welspun Group, is engaged in the business of power generation in renewable sector. It has one of the largest operating solar portfolios in India spread across ten states. It has about 1,140 megawatts (MW) of renewable power projects comprising of about 990 MW solar power projects and about 150 MW of wind power projects. Out of 1,140 MW renewable portfolio, nearly 1,000 MW of capacity is operational and balance capacity is under advanced stages of implementation. TPREL currently operates 294 MW of renewable power capacity and 500 MW of renewable assets are being carved out of Tata Power into TPREL through a court process In addition, almost 400 MW of solar and wind power projects are under implementation. Thus, TPREL with all these assets, would have renewable assets portfolio of about 2,300 MW making it the largest renewable power company in India.
Stocks of public sector companies will be in focus after the Ministry of Heavy Industry & Public Enterprises announced the setting up of 3rd Pay Revision Committee which will give its recommendation on the revision of salaries of the executives of the Central Public Sector Undertakings (CPSEs). The committee will provide its recommendations on the matter to the government, covering board level functionaries, below-board level executives and non-unionized supervisory staff of CPSEs. While submitting the final recommendations to the government, the committee will take into account the report of the 7th Central Pay Commission. The Pay Revision Committee will make its recommendations within 6 months. The decision of the government on the recommendations of the committee will take effect from 1 January 2017.
Stocks of aviation firms will be in focus after the Ministry of Civil Aviation said in its proposed draft amendments to Civil Aviation Requirements (CARs) that airlines shall refund all statutory taxes and User Development Fee (UDF)/Airport Development Fee (ADF)/Passenger Service Fee (PSF) to the passengers in case of cancellation of tickets/non-utilisation of tickets/no show. In no circumstances, the cancellation charge shall be more than the basic fare.
In case of denied boarding, flight cancellation and flight delays, the ministry has proposed that an amount equal to 200% of booked one way basic fair plus airline fuel charge subject to maximum of Rs 10,000 would be paid to passengers in case airline arranges alternate flight that is to depart after one hour but within 24 hours of the booked scheduled departure. The ministry has proposed that an airline shall refund an amount equal to 400% of booked one-way basic fare plus airline fuel charge subject to maximum of Rs 20,000 in case where the airline arranges alternate flight that is scheduled to depart beyond 24 hours of the booked scheduled departure. In case passenger does not opt for alternate flight, the airline shall refund full value of ticket and compensation equal to 400% of booked one-way basic fare plus airline fuel charge, subject to maximum of Rs 20,000.
With regard to checked-in baggage charges, the ministry has proposed that the airline should restrict additional baggage charge at Rs 100 per kg for baggage between 15 to 20 kg. Director General of Civil Aviation M Sathiyavathy was quoted as saying on Saturday, 11 June 2016, that the changes in excess baggage fee norms will be implemented from 15 June 2016.
Fortis Healthcare announced after market hours on Friday, 10 June 2016, that one of its subsidiaries, Escort Heart Institute & Research Centre (EHIRCL), has received an order from The Directorate General of Health Services (DHS). The DHS has ordered to deposit Rs 503.36 crore towards recovery of unwarranted profit made by EHIRCL for alleged non-compliance of the conditions of allotment/lease of land since its allotment in 1982. EHIRCL believes that the impugned order in its view is legally flawed and untenable. The EHIRCL management will challenge the same in the High Court of Delhi or such relevant authority to seek suitable legal remedies available to it under law.
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