Question of the Week
In 1993, Madame Tussauds, the waxwork museum in London, displayed its first commercial figure “to reflect the ever-growing popularity of international travel”. What was the figure?
Good Morning
The News in Summary
Just ahead of its 47th AGM, Reliance Industries received clearance from the Competition Commission of India (CCI) for the merger of its entertainment business in India with that of Disney. Meanwhile, Hinduja-owned IndusInd International Holdings (IIHL) has clarified that it has no intention of carrying on business under the Reliance name once its takeover of Reliance Capital is complete, belying fears of the Anil Ambani group. Elsewhere, Rakesh Gangwal pruned his stake further by selling another 5.2% stake in IndiGo, the airline he co-founded 18 years ago while besieged fintech company Paytm caught a break with the finance ministry greenlighting its investment in its payment services business. Finally, the government cleared Singapore Airline’s FDI in Air India, setting the stage for the completion of its merger with the other Tata group airline, Vistara.
CCI Clears Reliance-Disney Merger to Create Entertainment Giant
Relief finally for Reliance Industries and Disney with the Competition Commission of India (CCI) approving the $8.5 billion merger of the two companies’ Indian media assets six months after the deal was announced. The approval came after both parties agreed to specific voluntary modifications. It will lead to the creation of an entertainment behemoth spanning two streaming services and 120 television channels. Reliance, which has committed to invest Rs 11,500 crore ($1.4 billion) into the joint venture to support its growth strategy, will own a 63.16% stake while Walt Disney will retain the remaining 36.84% in the merged entity. It isn’t clear if the cricket broadcast rights, which were a major stumbling block in getting the competition regulator’s nod, are among the concessions agreed upon. Earlier, CCI had expressed concerns that since Disney-Star holds the exclusive digital and TV rights to ICC events from 2024 to 2027 and IPL broadcasting rights from 2023 to 2028, and Jio has the IPL streaming rights, the merged entity could potentially harm competition. Its nod to the merger would suggest that it is satisfied with whatever modifications the two companies had offered.
IndusInd Says it Won’t Use Reliance Name for Financial Services Business
IndusInd International Holdings (IIHL) has clarified before the Mumbai bench of the National Company Law Tribunal that it has no intention of carrying on business under the Reliance name once its takeover of the insolvent company is complete. The Hinduja Group-owned company, which in October 2023 won approval from the National Company Law Tribunal (NCLT) to acquire Reliance Capital (RCAP) for Rs 9,850 crore, said that the acquired company will be rebranded under the ‘IndusInd’ name. Its clarification came after the Anil Dhirubhai Ambani group filed a plea seeking to restrain IIHL from using the brand ‘Reliance’. The dispute came about since the resolution plan allowed IIHL to use the brand Reliance for another three years even though the brand licensing agreement of April 2014, that was signed between ADAG group and Reliance Capital ended in April 2024 this year. IIHL had argued that since there were various financial services companies under Reliance Capital, it needed the extra time for a smooth transition.
Gangwal Family Continues to Pare Stake in IndiGo
Rakesh Gangwal’s plans to completely exit IndiGo, the airline market leader that he co-founded in 2006, continues apace. In the latest round, Gangwal’s Chinkerpoo Family Trust sold a 5.24% in IndiGo’s parent firm InterGlobe Aviation Ltd through a block deal which was worth an estimated Rs 9,549 crore. Morgan Stanley Asia (Singapore) Pte acquired 28.54 lakh shares, representing a 0.74% stake in the airline while the identity of the other buyers wasn’t clear. The current stake sale will bring the Gangwal-backed promoter group’s holding in the airline to under 15%, down from the 36.6% it held in 2022 when he resigned from the company’s board and announced that he would trim his stake over the next five years. Gangwal, along with co-founder Rahul Bhatia, led IndiGo to a dominant 60% market share of the domestic aviation market, before the two partners decided to part ways. Since then, the former chief executive officer and chairman of US Airways has joined the board of US low-cost carrier Southwest Airlines besides making a small $20 million investment in Indian manufacturing-services company Zetwerk.
Relief for Paytm Following Clearance for Investment in Payment Services Business
Besieged fintech company Paytm has received approval from the finance ministry to invest in its payment services business, Paytm Payment Services, which accounts for a major share of its business. While the exact investment isn’t known, it marks a major break for the company, which has been under scrutiny by the Enforcement Directorate and the Reserve Bank of India (RBI) which ordered it to wind down its payments bank in January 2024, two years after it rejected its application for a payment aggregator licence. The latest approval allows the company to re-submit the application for a licence for Paytm Payment Services. The recent softening of the government’s stance on Chinese investments in India may be one reason for the reprieve for Paytm since its earlier application for a licence had likely been rejected because of investments from China’s Ant Group Co.
Decks Cleared for Air India-Vistara Merger as Govt Okays FDI from Singapore Airlines
The decks are finally clear for the merger of the two Tata group airlines Vistara and Air India after the government gave its nod for Singapore Airlines foreign direct investment (FDI) to the tune of S$360 million ($276 million) into the new entity. The complex deal, which entails the Vistara brand being snuffed, will see Singapore Airlines acquire a 25.1% stake in Air India. With the FDI clearance in place as well as the approvals received from the Competition Commission, the merger, to create one of the world’s largest airline groups, should be done and dusted by the end of the year. Significantly, after the merger, Singapore Airlines will be the only foreign player to have a significant stake in an Indian airline. Coming at a time when market leader and low-cost carrier IndiGo just launched its business class, the clearances give Air India, which continues to rile passengers with its poor service, a chance to consolidate its operations.
With Air India-Vistara slated to merge on 12 November 2024, in the process creating a single, new airline, the Vistara brand will cease to operate. This Mint video looks at what that means for fliers:
Last Word
In a pleasant surprise for investors, Reliance Industries announced that its board will consider a bonus issue of shares in the ratio of 1:1. This will be the company’s sixth bonus share issue since it went public in 1977, and the first in the last seven years. At the company’s 47th AGM, its chairman Mukesh Ambani sounded buoyant while outlining five growth engines that will help double the group’s size by the end of the decade. Among these, the most significant is the new energy business, revenues from which over the next five years, Ambani said, will be similar to what the legacy O2C business achieved in four decades. However, while speculation had been rife about a likely announcement on the listing of RIL’s retail and digital arms, Ambani was silent about any such plan.
Answer to the Question
In 1993, Madame Tussauds unveiled a waxwork of the Singapore Girl, the first commercial figure to be displayed at the museum. The Singapore Girl was chosen “to reflect the ever-growing popularity of international travel”, and to commemorate the 21st birthday of both Singapore Airlines and the Singapore Girl.
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Written by Sundeep Khanna. Edited by James Mathew. Produced by Shad Hasnain. Send in your feedback to [email protected].
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Publish date : 2024-09-03 21:53:00
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