Coffee Day IPO, Public Bank Mergers and Other Top News From India

The Indian government wants its banks to explore mergers and alliances between each other before a new regulatory structure is put in place. On Friday, the government announced a seven-pronged plan to revamp public banks, which it called Indradhanush (Rainbow). The main objective is to improve their health and functioning, so the rainbow program focuses on recapitalization and selection of heads of banks to ensure transparency and reduce political interference. Now, the finance ministry has encouraged banks to start looking out for opportunities to work together even before a Bank Board Bureau (BBB) is created, which will also look into the same areas. But, as a senior ministry official said, the government prefers that the banks identify and move themselves rather than waiting for the BBB to do it.

After Indigo Airlines, it’s the turn of Café Coffee Day. The coffee chain has received regulator approval to raise 11.5 billion rupees through its maiden share offering, helping it repay debt and expand the number of outlets. The good news is that the IPO market is perking up again with the total number of firms that have received SEBI approval this year has risen to 25. Sure enough, a few weeks ago, SEBI chairman UK Sinha himself said both bankers and companies are becoming more responsible in pricing of shares, which has helped revive the IPO market.

Birla Corp has agreed to buy two of Lafarge’s cement plants in India for 50 billion rupees. The two plants together have a capacity of 5 million metric tons. Lafarge had put them up for sale to meet the demands of the Competition Commission of India, the anti-trust regulator. Lafarge and Holcim, which have agreed to a global merger, had sought CCI approval, which was given with a rider to sell some Lafarge capacity in eastern India. Birla Corp is the flagship company of the MP Birla group, which some might remember as the focus of a surprise inheritance and a subsequent lawsuit.

"If the bank employees see value in that (merger) then it will happen quickly and nicely. In the wake of fierce competition, where survival is in question, then acceptance can be easy." Hasmukh Adhia, financial services secretary.

Bharti Airtel is facing a severe currency risk because of unhedged positions and exposure to the volatile African currencies, brokerages have said. With the yuan devalued and most related currencies including the Indian rupee following suit, it’s a risk worth looking into.

The food regulator does not plan to appeal the Bombay court’s order on Maggi Noodles, but will instead focus its energies on the class action lawsuit it has filed.

India has received rainfall that is 10 percent below average, even weaker than the 9 percent deficit predicted by the weather department. August has been especially dry and some of the main food producing states are facing a shortfall of nearly 25 percent

NDTV’s new e-commerce venture Gadgets 360 has raised money from One97 Communications, the parent of PayTM, valuing it at about $50 million.

Prime Minister Narendra Modi has had a fruitful trip to the Middle East and the UAE government has agreed to invest $75 billion in India through an infrastructure fund, although there has been no indication of the timeframe for this investment.

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