Daily Pulse India: Relief For Vodafone, DLF Wants to Prune, Private Equity Booms

Vodafone can now celebrate its second win against Indian tax authorities in its long-drawn battle. This is one of the cases often cited by foreign investors as an example of the perils of doing business in India. The Bombay High Court ruled in favor of the telecom company in a $2 billion transfer-pricing dispute over the sale of its call center in 2007. IBM, Nokia and Shell are also fighting similar cases against the tax department in Indian courts. Last year, Vodafone won its first victory when a $500 million tax demand was overruled by the court on income from its rights issue. Increasing India’s ranking on ease of doing business (it now ranks at an abysmal 142 out of 189 countries surveyed by the World Bank) is high on the Modi government’s agenda and this ruling will be a push in that direction.

The promoters of DLF plan to sell 40 percent stake in their rental properties unit for an estimated $2 billion. The objective is to raise cash to reinvest and drive growth in the rental business. One of its biggest such properties is the DLF Cybercity office complex in Gurgaon.

Nascomm, the IT industry lobbying body, is worried about $1 billion of dues owed by the government to services companies. This has prevented some of the bigger IT companies from bidding for government contracts, it has said. These are typically contracts such as digitization of passport services, implementation of Aadhaar and the modernization of India Post.

India has had its best year as far as private equity firms are concerned. There has been a record $14 billion of investment by PE firms between January and September, nearly a third more than a year ago. Click here to read details and this image from the same article shows the top five deals.

 Foreign portfolio investors are getting increasingly disillusioned by Indian government banks. In the last seven quarters, data shows that FIIs have almost continuously cut their holdings of Indian public banks. No big surprises, considering most of them are battling weak margins, high bad loans and a general sluggishness in loan growth. We’re curious to see what the data shows for private banks – ICICI Bank, HDFC Bank and Axis Bank.

Nestle continues its fight to bring back Maggi. The foodmaker has now questioned the consumer disputes commission’s jurisdiction to hear a class action suit filed by the government. But we’ll have to wait for the results of a retest ordered in August before we can expect the popular snack back on the store shelves.

Alibaba seems to be having second thoughts about buying a stake in mobile phone maker Micromax. After the buzz that the Chinese giant will invest $1 billion for a stake in the homegrown phone company, comes the news that Daniel Zhang, CEO, has doubts about investing in a hardware company. There is little the two have in common, if you actually think about it.

It was a faulty handbrake. That's why Volkwagen recalled 389 of its hatchback  Volkswagen Polo in India this week. 

And if you’re wondering what that cover image is all about, here’s the background.

Cover Image: Independent lawmaker, Engineer Rashid (CR) is thrashed by BJP legislators in the legislative assembly in Srinagar on October 8, 2015. Independent lawmaker Engineer Rashid, who was thrashed by BJP legislators, said he had not indulged in any illegal act by hosting a beef party at his official residence on the evening of October 7. 

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