| Trouble viewing this email? View in web browser |  | | Tuesday, 05 April 2022 | | | Company Outsider | | A weekly newsletter that keeps track of the business of companies | |  | | By Sundeep Khanna | | | | Question of the Week Citibank, which sold its consumer business to Axis Bank, began operations in India in 1902, with its first branch in Kolkata. But which foreign bank was the first to set up a branch in the country? | | |  | Here's a great value proposition A digital subscription to Mint plus WSJ can be yours at just ₹292 per month. Check out the convenient and affordable plans we have for you here. | | Good Morning Prefer audio? Now you can listen to your favourite newsletter. | | The News in Summary PVR and Inox agreed to merge, taking the only option available to both as they struggled with losses stemming from the extended Covid-era lockdowns, have merged to form a giant film exhibition entity. Meanwhile, Citibank followed up last year's announcement to quit consumer banking in India by selling off the high-value business to Axis Bank for $1.6 billion in cash. Elsewhere, top-level exits rocked IndiGo when the skies were beginning to clear up for airlines after two years of uncertainty, and the Shapoorji Pallonji group paid off its loans to come out of the debt recast without its lenders having to take a haircut. | | | | PVR Inox Come Together for the Big Picture Forced by pandemic-led closures of theatres, exacerbated by the rising popularity of streaming platforms, PVR and Inox Leisure, India's top two multiplex chains, have agreed to a merger that will create the country's largest film exhibition entity with a network of more than 1,500 screens. Post the all-stock deal, Inox promoters and PVR's founders will own a 16.66% and 10.62% stake, respectively, in the combined entity. Both promoter families will have two seats each on the 10-member board. PVR's current chairman and managing director Ajay Bijli will be the managing director of the merged entity, while Pavan Kumar Jain, chairman of Inox, will be its non-executive chairman. While their current 1,546-odd multiplex screens will retain their existing brands, new cinemas opened post the merger will be branded as PVR Inox. With box office collections dropping to 50% below pre-covid levels, all the major players in the business have been hurting. Earlier reports had suggested that PVR was looking at merging with the Indian arm of Mexican theatre chain Cinepolis, and Inox was in talks with rivals Carnival and Miraj Cinemas to acquire their theatres. The merger is subject to approvals from the shareholders of Inox and PVR as well as from the regulators who will take a close whether the new entity's combined 42% share of Hindi and English content, apart from a screen share of 50% within the Indian multiplex space needs Competition Commission of India review. | | |  | | | | Nearly 25 years ago, PVR kicked off the multiplex era in the country with the launch of a four-screen cinema at PVR Anupam in Saket, New Delhi. Here's some footage from that launch: | | | | Citi Sleeps in Axis's Arms Ending months of speculation, Axis Bank Ltd finally announced the purchase of Citibank's consumer business in India for Rs 12,325 crore ($1.6 billion) in cash. The sale comes a year after Citigroup decided that it would exit its retail banking business in India as part of a global rejig in its strategy. Axis, the country's third-largest private lender, gets Rs 18,500 crore in consumer loans along with access to 2.55 million high-spending Citibank credit card customers. When added to its 8.6 million existing card customers, that would make it the fourth-largest player, after HDFC Bank, SBI Card and ICICI Bank, in terms of assets under management. With all banks facing stiff competition from tech-driven fintech startups, the deal adds to Axis's loan portfolio and deposit base besides giving it a chance to cross-sell its products to Citi's prized wealth and private banking customers. It will be a while, though, before Axis can start realizing the gains from its big, bold move. Regulatory approvals could take 9-12 months, with another 18 months required for integration. | | | | | | | | Top Level Departures Threaten IndiGo's Flight Plans  While the resumption of international flights to and from India following the two-year-long covid-induced hiatus brings much relief to IndiGo, the abrupt departure of two senior executives within days of each other is cause for worry. Willy Boulter, chief commercial officer who had joined the country's biggest airline four years ago, said he would leave the company in four months. This came a day after Jiten Chopra, IndiGo's finance chief, resigned effective immediately. The churn at IndiGo comes within months of co-founder Rahul Bhatia taking on the newly-created executive role of managing director in February after another co-founder, Rakesh Gangwal, stepped down from the airline's board while announcing plans to cut his stake gradually. While that brought a close to the long-running feud between the two, it also made the airline vulnerable at a time new airlines Akasa and Jet were on the verge of taking to the skies and the Tata group, reinforced by the addition of Air India to its airline portfolio, poses a renewed threat. Earlier, IndiGo announced that scheduled operations on more than international 150 routes would be restarted in a phased manner through the month of April | | |  | | | | Mistry Group Pays off its Debts Shapoorji Pallonji and Co Pvt Ltd (SPCPL) has repaid lenders Rs 12,450 crore to exit the Covid-enforced, one-time debt recast scheme implemented last year. The accelerated repayment was made possible by a Rs 5,100 crore infusion from the Mistry family and asset monetization worth Rs 3,750 crore from the sale of Sterling Wilson Renewable Energy and Eureka Forbes. With this, the flagship of the Shapoorji Pallonji group exited the debt recast that was implemented by lenders after it was forced to default on repayments. The move comes as a relief at a time when the Supreme Court is hearing a review petition filed by the group challenging an earlier verdict in favour of the Tata group in Cyrus Mistry's ongoing dispute with Tata Sons Limited. | | | | Uday Kotak's Job at IL&FS is Done Almost four years after he was appointed by the government to head the board of crisis-ridden IL&FS and six months after his term was extended, Kotak Mahindra Bank chief executive officer (CEO) Uday Kotak stepped down as the non-executive chairman of IL&FS with managing director C.S. Rajan taking over from him. On Kotak's watch, IL&FS has resolved nearly 55% of the group's outstanding debt, including the sale of its headquarters at Bandra Kurla Complex in Mumbai for Rs 1,080 crore to Brookfield. Of the 347 entities under IL&FS Group as of October 2018, a total of 246 entities have been resolved, leaving 101 entities to be resolved in the next fiscal year. The unravelling of the complex structure that the earlier team at IL&FS had put in place to engineer the Rs 1 trillion scam is probably Kotak's biggest contribution besides resolving Rs 55,000 crore of IL&FS's total debt. | | | | Last Word Less than a month into her new job as Sebi chief, Madhabi Puri Buch is already showing us how it is done. Refusing to bow to the demands of India's top conglomerates seeking relaxations to the proposed related-party rules, the markets regulator clarified that all material related-party transactions (RPTs) would need approval from shareholders. It also stood its ground on implementing the new rules effective starting 1 April. The firm stance closes a possible loophole that companies could have used to avoid seeking shareholders' approval for so-called material transactions. By standing her ground in the face of hectic lobbying from India Inc., Buch has laid down the marker for a new order of business which contrasts sharply with the more amenable style of the regulator in the last few years. With Indian business growing in scale, scope and complexity, and the danger of crony capitalism never too far, a tough but fair regulator is vital to its healthy growth. | | | | Answer to the Question Chartered Bank of India, Australia and China, now known as Standard Chartered Bank, opened its first Indian branch in Kolkata on 12 April 1858, just five years after being incorporated in London by James Wilson. | | | Do you have any questions? Send in your queries to sundeepkkhanna@gmail.com Were you forwarded this email? Did you stumble upon it online? Sign up here. | Please share your feedback with us What do you think about this newsletter? | | Written by Sundeep Khanna. Edited by Saikat Chatterjee. Produced by Samiksha Khanna. 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