India Inc’s $70 Bln Forex Debt, The Rosneft-Essar Deal And Other Top India News

India Inc has racked up $70 billion of forex debt in the last fiscal, which is not that alarming. But the fact that a lot of that is unhedged is. The rupee has been stable for the past year or more, which seems to have given the companies a false (?) sense of security and led them to conclude that they could save on hedging costs. According to this study, two-thirds of CFOs surveyed said they had considerable forex exposure and more than half of them said they were unhedged. Which means that any jump in the exchange rate will send their borrowing costs zooming. The central bank is aware and worried as it highlighted in its report last week. To be sure, this is nothing new, companies take such risks all the time. What’s different this time is the precarious world economy and India’s own fragile recovery.

But local debt will see a surge in supply as seven government institutions will be selling 400 billion rupees or $6 billion of tax-free bonds in rupees to the Indian public.

The Rosneft-Essar Oil rumor, which had been doing the rounds for the past few weeks has been finally confirmed. The Russian oil major will buy 49 percent of Essar Oil, which runs the Vadinar Refinery, India’s second-biggest. No monies were included in the announcement, but Essar Oil’s market cap at the end of the day’s trade was about $4.5 billion. For Rosneft, this is a foot in the door to one of the world’s biggest crude markets and for the Ruia brothers who own Essar, it will help secure supply of crude to its refinery and also more funds to ramp up production.

Economic recovery might be still in early stages here, but consumer companies aren’t waiting for any confirmation. They have stepped up their ad spend and sales promotion even as sales slowed. Naturally, margins have taken a hit, but Unilever and co are banking on a jump in demand this year to make up for it.

Eros Now, the streaming music service of Bollywood Studio Eros is raising money. Singapore-based Temasek Holdings may buy a 10 percent stake, valuing the service at $800 million. Also raising money are News in Shorts, a mobile app that pushes top stories in bite sized portions, and Zoom Cars, a self drive car rental company. News in Shorts is raising $100 million from existing investor Tiger Global, while Zoomcar raised $11 million from Sequoia.

TaxiForSure CEO Arvind Singhal has quit, signaling that owner Ola is swiftly integrating the businesses of the two radio taxi services after its February acquisition. Uber India has scored a win as a Delhi court set aside the government’s rejection of its license application.

Azim Premji, founder of the Wipro group, has given away more stake to charity adding another $80 million a year to its Foundation’s funds. This is a part of the Giving Pledge, sponsored by Warren Buffet and Bill Gates, which exhorts the world’s wealthiest to donate a majority of their wealth to charity. Premji was the first Indian to sign it.

Meanwhile, while we were asleep, the NYSE shut down for a few hours. For details, read John C Abell’s update on global news here.

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