| | | Question of the Week What was ‘Gauhar be Baha’, a product named after the popular Hindustani classical singer, Gauhar Jaan? | | |  | | Good Morning | | The News in Summary An ED notice capped the mounting woes of Paytm Payments Bank, even as it struggled with the consequences of strictures from the Reserve Bank of India (RBI). Governor Shaktikanta Das categorically ruled out any immediate relief for the bank. Meanwhile, British American Tobacco announced it would look to monetize a part of its stake in its Indian subsidiary ITC, while a surprise move by Reliance to buy Disney’s stake in Tata Play could find India’s two largest conglomerates sharing stakes in a company for the first time. All this while, another large conglomerate, the Adani group, continued its recovery with Moody’s upgrading four of its companies. Finally, India’s insurance giant Life Insurance Corporation made hefty gains from the recent bull run in the markets. | | |  | | | | Paytm Bank Troubles Mount as RBI Governor Rules Out Relief Paytm Payments Bank Ltd (PPBL) sank further into turmoil with RBI governor Shaktikanta Das ruling out any review of the central bank’s action against it on grounds that the decision was taken after a comprehensive analysis of the lender’s functioning. The rebuke comes at a time when the parent company One97 Communication Ltd confirmed that it had received notices from the Enforcement Directorate (ED), requesting information on customers who have conducted business with its group companies. Simultaneously, an inter-ministerial committee is looking into the foreign direct investment (FDI) that Paytm Payments Services Ltd (PPSL), has received from China. In November 2022, RBI had rejected its application for a licence to operate as a payment aggregator, since the investment from China's Ant Group meant PPSL didn’t didn’t comply with regulations which mandate prior approval for foreign investments from countries that share land borders with India. Since then, Ant Financial has reduced its stake in the company to less than 10% and Paytm claims that this holding by Ant does not qualify for beneficial company ownership. | | | | Struggling BAT Looks to Monetize Some Stake in Thriving ITC  Through the 1990s, British American Tobacco (BAT) battled for control of ITC, where it had a 31% stake. Now in a reversal of roles, the British company has said it will offload some of its 29.02% stake in the Indian cigarette-to-hotels conglomerate. ITC is now a prized holding for BAT, which said in its results announcement that its share of post-tax results of associates and joint ventures increased from £442 million to £585 million which largely relates to the performance of its main associate, ITC in India. Driven by a massive writedown of its US cigarette brands, BAT swung to a pretax loss of £17.06 billion ($21.54 billion) for the year 2023. ITC’s market cap of nearly $61 billion means that even a 3.5-4% stake sale, still leaving it with the 25% needed to retain veto right over any resolution, will net a hefty $2.5 billion for BAT which is loaded with aggregate debt of around £40 billion. While regulatory approval for the dilution could take a while, analysts remain buoyant about the long-term growth prospects of ITC. | | | | | | | | This DW News video looks at the implications of the $31.5 billion dollar hit that BAT took after writing down the value of its US brands. | | | | Tata and Reliance Together Under One Dish In a move that could result in the strangest of bedfellows, Reliance Industries (RIL) is in talks to acquire Walt Disney’s 29.8% stake in Tata Play, the satellite TV and streaming service in which Tata Sons holds a majority 50.2% stake and Singapore-based investment firm Temasek the rest. The development could be a part of the merger talks between Reliance and Disney’s India business, and marks the Indian conglomerate’s expansion into the television distribution sector in pursuit of its goal to emerge as an entertainment giant. For Disney, it would be a culmination of a plan, first mentioned in Tata Play’s confidential offer document for an IPO filed in November 2022, to sell its entire stake in the satellite television operator which posted a Rs 105 crore loss on revenue of Rs 4,499 crore in 2022-23, sharply down from the Rs 68 crore profit in the previous year. | | | | Ratings Upgrade for Adani Companies The Adani group’s exertions over the past year following the setback it suffered from the damaging Hindenburg Report have paid off, with ratings firm Moody's upgrading two green energy firms and two electricity generation and distribution firms of the conglomerate following improved financials, timely debt repayments and a capital infusion by the group over the past year. The ratings of Adani Green Energy Ltd (AGEL), Adani Green Energy Restricted Group-1 (comprising Adani Green Energy (UP) Ltd, Parampujya Solar Energy Pvt Ltd and Prayatna Developers Pvt Ltd), Adani Transmission Step-One Ltd. and Adani Electricity Mumbai Ltd were enhanced from 'negative' to 'stable', while those of another eight firms remained unchanged as 'stable'. Meanwhile, lawyer Anamika Jaiswal filed a petition in the Supreme Court for a review of its earlier decision dismissing a plea for a separate investigation into allegations against the Adani group. Jaiswal’s petition states that there had been apparent errors in the court’s 3 January judgment and newly acquired evidence, including email communications which demonstrate flagrant violations of Rule 19A of the Securities Contracts (Regulation) Rules, 1957 by Adani Group companies, called for a review. Contesting the SC’s observation that there was “no apparent regulatory failure attributable to Sebi", the petitioner has argued that regulatory failures by Sebi were evident. | | |  | | | | LIC Cashes in on Bull Market Insurance giant Life Insurance Corp. of India (LIC) cashed in on soaring stock prices of several listed companies by selling a record $4.7 billion worth of shares in a 100 of them, whose prices reached all-time highs during the market bull run in the December quarter. With the BSE 30-share Sensex rising more than 10%, the state-owned insurance company made 31% more than the Rs 29,900 crore in the same quarter a year ago. Data compiled by Mint suggests that most shares sold were across sectors including financial services, pharmaceuticals, automobiles, metals & mining and technology in companies like Hindalco, Adani Ports, ICICI Bank, Dr Reddy’s Laboratories, Tata Motors and Bajaj Auto. The profit-taking will likely offer improved return on investments made by the company’s life insurance policyholders in the long term, but it also serves as a caution on valuations of companies for small investors and fund managers. | | | | Last Word  There’s some hope for stricken Go First with SpiceJet chairman and managing director Ajay Singh along with Busy Bee Aviation in which Nishant Pitti, co-founder of online travel platform EaseMyTrip, has a 51% stake, submitting one of two bids for the bankrupt airline. A second bid has come from Sharjah-based aviation company Sky One, which is into aviation services like Cargo Charters and Maintenance, Repair, and Overhaul (MRO). But it is the first bid that is hogging the limelight given SpiceJet’s own financial problems as well as the struggles of another consortium - Jalan Kalrock - which successfully bid for bankrupt Jet Airways three years ago, but has since been unable to get the airline off the ground. SpiceJet sees potential in the land assets of Go First, estimated to be worth around Rs 10,000 crore and the expected compensation from engine manufacturer Pratt & Whitney for engine grounding, but it’s a long way to getting Go First, grounded since May 2023, operational again. | | | | Answer to the Question Gauhar be Baha was a brand of local cigarettes launched by Bukhsh Ellahie & Co. in the 1890s. It was named after Hindustani classical singer Gauhar Jaan, who also featured in cigarette advertisements for the company which was set up in Calcutta by Bukhsh Ellahie in 1885. | | | 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. | | Written by Sundeep Khanna. Edited by James Mathew. Produced by Shad Hasnain. 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