The Department of Telecom (DoT) has asked the Registrar of Companies (RoC) to “withhold any further action” with regard to the merger between Bharti Airtel and Tata Tele as the department has “not given written approval yet” to the transaction, a move that may delay passage of the high-profile deal. The ministry will challenge the deal in the Supreme Court on various grounds, including the process through which the companies went ahead and announced the merger based only on an order of the Telecom Disputes Settlement Appellate Tribunal (TDSAT), sources said. The ministry said the merger “is in contravention” to certain conditions mentioned in the merger clause, especially that stipulates its final nod.
Walmart revives talks with Tatas to boost its retail play
After Reliance Industries chief Mukesh Ambani announced plans to induct a global partner to boost his retail business, Tata Group and Walmart are speeding up their talks to revive their retail business. Walmart executives held meetings with Tata brass to stitch an alliance, which could include a joint venture between the Arkansas-headquartered company and Tata Sons. Both want to accelerate their omni-channel or multichannel retailing play in the world’s sixth largest economy even as rivals Reliance and Amazon are said to be in talks for a similar partnership. Consumer retail is one of the growth engines of the Tata Group and the conglomerate has been consolidating its presence on this front (it has merged Tata Chemicals’ packaged food business with its beverage unit). The alliance with Walmart will be with Tata Sons, said people in the know. Walmart, which entered India through a wholesale joint venture with Bharti Enterprises in 2007 and subsequently bought out its Indian partner in 2013, made its big move last year by acquiring a 77% stake in India’s largest online retailer Flipkart.
JLR expects 20% drop in sales this year
Luxury carmaker Jaguar Land Rover (JLR) has said that it expects to sell 20% fewer cars this year in an equally shrinking luxury auto segment. However, the company said it will hold on to its category market share of 15%. JLR had sold about 4,000 vehicles in the previous year in a 27,000-car luxury market. “Everyone has been hit, and so have we been impacted. But we are holding our ground (in market share),” said JLR India managing director and president Rohit Suri. Speaking at the expansion of one JLR’s dealerships in Pune, Suri said that the main reason for the recent downturn is the unavailability of bank financing and that is impacting the entire value chain.
Moody’s lowers India’s GDP forecast
Rating agency Moody’s has lowered India’s growth forecast for 2019 and 2020 by 60 basis points to 6.2% and 6.7% respectively. The agency had earlier forecast 2019 growth at 6.8% and 2020 at 7.3%. India is among the 16 economies in Asia-Pacific whose GDP growth forecast has been revised downward by Moody’s. Singapore and Hong Kong have seen the biggest lowering of growth forecast. Following the revision, Vietnam, with an expected growth of 6.7%, will be the fastest growing economy this year. India will be sharing the second place with China, which is also expected to grow at 6.2% this year. The lowering of the growth forecasts was part of a periodic review of economies in the Asian region. Moody’s has said that while the RBI has been the most active among central banks in cutting interest rates in support of growth, lingering financial sector issues have blunt the effectiveness of monetary stimulus.
RBI blasts banks for poor compliance
RBI deputy governor M K Jain slammed banks for poor compliance with regulations, and pointed out that high-value frauds and fines are a result of their lackadaisical attitude on this. Jain said in some cases, the lack of compliance has been “recurring”, wherein banks have also ignored RBI’s instructions and commit the same mistakes time and again. “Despite the benefits offered for good compliance culture and the cost of poor conduct, the compliance culture at banks is far from satisfactory,” Jain, the commercial banker-turned central banker, said at the annual industry conference Ficci-IBA meet.
