| | | Question of the Week Nasdaq-listed Cognizant Technology Solutions Corporation was founded as a joint venture between US-based Dun & Bradstreet and a now discredited Indian software company. Which one? | | |  | | Good Morning | | The News in Summary There was little relief for Paytm Payments Bank, with both the Reserve Bank of India and the finance minister refusing to cut any slack to the bank over the regulatory issues it faces. Meanwhile, in the dispute between Sony and Zee, a Singapore arbitration court said it had no jurisdiction or authority to prevent the Indian company from approaching the National Company Law Tribunal (NCLT). Elsewhere, Cognizant confirmed the difficult year ahead for IT services firms with a projection of flat or lower revenue, while confirming the group’s comeback, Adani Green Energy began talks with a clutch of foreign banks to raise about $500 million via dollar bonds. Finally, airline market leader IndiGo posted bumper profit and sales growth for the December quarter. | | |  | | | | Paytm Finds Little Sympathy in the Face of Regulatory Action  The crisis at Paytm Payments Bank intensified with the Reserve Bank of India reiterating that the regulatory restrictions placed on the bank came after persistent non-compliance, and only after prolonged engagement with the entity. While RBI governor Shaktikanta Das said this with reference to all regulated entities, they were read by the markets as a comment on its measures against Paytm Payments Bank. Not surprisingly, the share price of the bank’s parent company One97 Communications’ was locked at 10% lower circuit the following day. The company’s founder General Atlantic, Prosus Ventures, Peak XV and Chan Zuckerberg Initiative, among other large shareholders of troubled edtech Byju’s, have demanded an EGM to oust founder and chief executive Byju Raveendran and recast the company’s board. This comes days after Think & Learn Pvt. Ltd, the parent of Byju’s, said it was Vijay Shekhar Sharma also found little support at his meeting with finance minister Nirmala Sitharaman who made it clear that the government wouldn’t interfere in a regulatory issue. The central bank’s restrictions on Paytm Bank led to a sharp decline in downloads of the app even as it spurred downloads of competing apps from PhonePe, Google Pay, and BHIM. With two of the bank’s independent directors quitting its board, One 97 Communications formed an advisory committee chaired by M. Damodaran, former chairman of the Securities and Exchange Board of India (Sebi), to help strengthen its compliance and regulatory framework. | | | | This Mint video explains how things could get even more difficult for Paytm Payments Bank after the 29 February when the restrictions imposed by RBI will come into effect. | | | | | | | | Singapore Court Says NCLT Right Forum to Resolve Zee-Sony Dispute  Sony Pictures suffered a setback in its post-parting litigation against Zee Entertainment with the Singapore International Arbitration Centre (SIAC) turning down its emergency petition seeking to prevent the Indian company from seeking legal remedies from the National Company Law Tribunal (NCLT) and other legal forums. The emergency arbitrator said it had no jurisdiction or authority to prevent Zee from approaching the NCLT to implement the planned merger which Sony has since terminated citing non-compliance by the Indian media company with certain financial terms specified in the merger agreement. While Zee saw it as a minor victory, Sony Pictures while expressing disappointment with the decision, said it would continue to “vigorously arbitrate the matter in Singapore in front of a full SIAC tribunal and pursue SPNI’s (Sony Pictures Networks India's) right to terminate the merger agreement and seek a termination fee and other remedies.” A day later, NCLT issued notice on the petition filed by Zee seeking implementation of the proposed merger and asked Sony to file its response within two weeks. | | | | Underlining IT Sector’s Woes, Cognizant Projects Flat Sales for Year Ahead  Confirming the deceleration in the growth of the IT Services industry, Cognizant Technology Solutions, which follows a January to December fiscal year, predicted that it may end 2024 with a revenue of $19-19.8 billion, against $19.8 billion estimated by analysts and the $19.35 billion it did in calendar 2023. The Nasdaq-listed firm also expects its first quarter (January-March) revenue to decline by 3-1.5% in constant currency terms after a 2.8% drop in the three months ending December 2023, as businesses across the world continue to cut back on IT spending amid high interest rates and persistent inflation. S. Ravi Kumar, who replaced Brian Humphries as the firm’s CEO exactly a year ago, said that the banking, financial services and insurance (BFSI) sector was in a ‘wait and watch’ mode. Kumar, who faces a major challenge in restoring growth at the company even as its profitability continues to lag its top four Indian IT peers, TCS, Infosys, HCL Technologies and Wipro, said it was a “period of uncertainty and change.” | | | | Return to Bond Market Signals Adani Group Turnaround Even as Gautam Adani re-entered the $100 billion wealth club, group company Adani Green Energy Ltd. began talks with a group of foreign banks to raise about $500 million via dollar bonds, its first overseas issuance since January last year when the Hindenburg report rocked the group and halted all such plans. The terms of the bond sale, expected later this year, are yet to be finalized and may still change, but it marks an end to concerns about the conglomerate’s ability to refinance borrowings. The move caps a marked turnaround for the group as well as its founder Adani whose net worth rose to $100.7 billion this week, after it slumped by over $80 billion through the first half of 2023 following allegations of market manipulation and fraud leveled by the US-based short seller. | | |  | | | | With Bumper Profits, IndiGo Continues to Soar IndiGo reinforced its complete dominance of the Indian airline market with a stellar performance in the December quarter, posting a profit after tax of Rs 2,998.1 crore against the Rs 1,422.6 crore a year earlier, even as total income during the period rose 30.2%. That marks the fifth straight quarter of net profit since October-December 2022, a sharp recovery from the covid-era losses, and turning the airline net worth positive again. The performance was tempered by the increase in its aircraft on ground (AOG) to the mid-70s due to the inspection and maintenance needs stemming from issues with the Pratt & Whitney engines. The duration of the inspection could range from 250 days to 300 days for all the engines that are going to be recalled. While that will cause some concern for the airline’s top brass, its overall performance through 2023 continues to be impressive. The airline remained unmatchable when it came to absolute numbers, operating 1,42,436 more departures in 2023 than what it did in 2019. The 9.19 crore domestic passengers it carried in 2023, was also the highest ever for any airline in India. | | | | Last Word The post-covid boost to India’s packaged consumer goods industry seems to be over with growth for the makers of soaps, shampoos, biscuits and beverages likely to moderate this year according to estimates. With consumption slowing, both volume and value growth fell sequentially during the last quarter in both urban and rural markets. Market research firm NielsenIQ (NIQ) has pegged growth for the current calendar year at 4.5-6.5% in value terms, sharply down from the 8.4% in 2022 and 9.3% in 2023. Companies, including market leaders like HUL, are cutting prices to push demand and that’s affecting numbers. Thus, consolidated net profit at Britannia dropped 40% year-on-year over the corresponding quarter of the previous year, while HUL too disappointed with its standalone net profit barely up for the December quarter of FY24, over the same quarter of the previous financial year. | | | | Answer to the Question Cognizant was established in 1994 in Chennai as Dun & Bradstreet Satyam Software (DBSS), a 76:24 joint venture between Dun & Bradstreet and Satyam Computer Services. In July 1997, Dun & Bradstreet bought Satyam's 24% stake in DBSS. | | | 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. Send in your feedback to newsletters@livemint.com. | | | | | Download the Mint app and read premium stories | | | | | | View in Browser | Privacy Policy | Contact us You received this email because you signed up for Mint Top of the Morning or because it is included in your subscription. Copyright © HT Digital Streams. All Rights Reserved | | | | |
