Bhushan Power sale to JSW Steel halted in test for bankruptcy law
A bankruptcy appeals court halted the transfer of Bhushan Power and Steel Ltd (BPSL) to JSW Steel Ltd and stayed the Enforcement Directorate’s (ED) move to attach assets of the insolvent steel maker, scuttling hopes of a swift resolution of the distressed asset, Mint reported. The National Company Law Appellate Tribunal (NCLAT) stayed the transfer of the payment by JSW Steel to the creditors of BPSL till investigation into allegations of fraud and money laundering by the former owners of the steel mill is decided. NCLAT will issue final orders on 25 October. The tribunal’s ruling could have far-reaching implications, especially for BPSL’s lenders, as the resolution process has lingered on for more than two years. In court, Sanjay Shorey, director (legal prosecution)at the ministry of corporate affairs (MCA), argued that ED has no jurisdiction to attach the property of BPSL, which is undergoing corporate insolvency resolution process. MCA argued that the rights of secured financial creditors (banks) are to be protected through the resolution process. A person privy to discussions within JSW Steel indicated that if the ED attachment on BPSL’s assets holds firm, then the value of JSW Steel’s bid will also fall proportionately, forcing a much larger haircut on bankers in their ₹47,000 crore exposure to the bad loan.
Adani Gas gets total on board in ₹5,700-crore deal for a 37.4% stake
Total SA has agreed to acquire a 37.4% stake in city gas distributor Adani Gas Ltd for around ₹5,700 crore, in the French energy major’s biggest bet on India’s clean energy push, Mint reported. The proposed acquisition also marks the largest foreign direct investment in India’s city gas distribution industry, with the deal giving Total joint control of Adani Gas, along with the Adani group. Total, the world’s second-largest liquefied natural gas company, will buy the stake in Adani Gas through a combination of tender offer to public shareholders and from the Adani family. The French company plans to acquire as much as 25.2% from the public and the rest from the Adani family. Eventually, the Adani family and Total shareholders will hold 37.4% stake each and public shareholders will hold the remaining 25.2%. The expanded partnership will develop re-gasification terminals, including Dhamra LNG on the east coast, sell liquefied natural gas (LNG) and through Adani Gas distribute gas to 7.5% of India’s population. The latest announcement comes a year after the two firms agreed to set up an equal joint venture to import and retail natural gas. As part of that, Adani and Total will build a fuel retail network of 1,500 stations along highways and intercity connections over 10 years.
IRCTC makes stellar stock market debut
Shares of Indian Railway Catering and Tourism Corp. Ltd (IRCTC) surged nearly 128% on BSE from their issue price on Monday, the biggest stock market debut for any company in nearly two years. The initial public offering (IPO) of state-run IRCTC, the sole provider of catering services and online bookings for Indian Railways, was subscribed 112 times at a price band of ₹315-320. The ₹645-crore issue was open for subscription between 30 September and 4 October. The stock opened 101.25% higher above the issue price of ₹320 at ₹644. It jumped 132% to touch a high of ₹743.80 and a low of ₹625 during the day, before closing at ₹728.60, an increase of 127.68%. This is the biggest listing gain for any stock since Astron Paper & Board Mill Ltd made its debut with gains of 139.40% on 29 December 2017. Earlier in the same year, Salasar Techno Engineering Ltd had jumped 151.94% on the day of listing, and Avenue Supermarts Ltd surged 114.30% on listing. In 2019, a dozen stocks debuted on the stock exchanges. Of them, only four fell on their listing day. Among the others, Indiamart Intermesh Ltd, Neogen Chemicals Ltd and Polycab India Ltd had listing gains of 33.87%, 22.58% and 21.75% respectively.
Paytm to raise $2 billion at a valuation of $15 billion
Financial services firm Paytm is set to raise $2 billion from a group of existing investors at a valuation of $15 billion, Mint reported citing a person close to the development. The identity of the investors could not be ascertained independently, but financial news service Bloomberg reported on Monday that the existing investors include Ant Financial and Japan’s SoftBank Group. The valuation of $15 billion is the same as when some of Paytm’s employees had sold their shares to investors earlier this year. In August, Paytm founder Vijay Shekhar Sharma said the company’s employees sold employee stock ownership plans worth $150 million at a valuation of $15 billion. Paytm was valued at $12 billion last year when Warren Buffett-controlled Berkshire Hathaway Inc. invested an undisclosed sum in the company. Although One97 Communications Ltd, the owner of Paytm, had not disclosed details of the deal, regulatory documents sourced from Paper.vc showed Berkshire had invested $300 million. The $2 billion that Paytm is set to raise is likely to help it fend off rivals across various segments of its business. The financial services firm is facing stiff competition from Google Pay, Amazon Pay, BHIM, and others in its payments operations. It is behind Flipkart and Amazon in its e-commerce business housed under Paytm Mall.
Air India to raise ₹2,500 crore via short-term loan to repay vendors
Debt-laden Air India Ltd plans to raise up to ₹2,500 crore through a short-term loan (STL) from domestic lenders by the end of this month, Mint reported citing a senior airline official. Proceeds of the loan would be utilized to repay a portion of the dues the airline owes its vendors, including oil marketing companies (OMCs). The loan would carry a sovereign guarantee. State-run fuel retailers Indian Oil Corp. Ltd, Bharat Petroleum Corp. Ltd and Hindustan Petroleum Corp. Ltd had on 10 October informed Air India that they will suspend jet fuel supplies at six airports if the airline does not clear pending fuel bills by 18 October. The national carrier owes about ₹4,000 crore in dues to the fuel retailers and is unlikely to meet the deadline. The fuel retailers had on 22 August stopped fuel supplies to Air India at six airports—Kochi, Mohali, Pune, Patna, Ranchi and Visakhapatnam—over payment defaults. They resumed supplies as part of a deal that allowed the oil companies to receive at least a total of ₹100 crore from Air India, every month, from September.
SoftBank-backed True Balance raises $23 million in its Series C
True Balance has raised $23 million (about ₹164 crore) from a clutch of investors, both new and existing, with the fintech startup also receiving its non-banking financial company (NBFC) licence from RBI, The Economic Times reported. The latest round of funding has seen Korean investors, which includes NH Investment & Securities, IMM Investment, HB Investment, IBK Capital, D3 Jubilee Partners, SB Partners and Shinhan Capital, put in money into the company. True Balance also counts SoftBank Ventures Asia, the early-stage investment arm of the Japanese investment giant, as an investor. The startup has also received its NBFC licence for its lending arm, True Credits, making it the latest in a slew of venture-backed startups to have received the same over the past few months. The five-year-old firm, founded by Charlie Lee, which has raised $65 million till date, plans to launch new products, such as rail tickets, bus tickets, EMI, digi-gold, instant cash loan and personal loan by the end of the current fiscal.