News in numbers, Nov 25, 2015: Drought-hit Indian states, advance pricing agreements…

9

What is it? Number of states that have declared drought so far. Telangana is the latest to to so with parts of the state in drought because of successive monsoon deficits. Ten districts covering 231 sub-districts are declared as drought affected.

Why is it important? Distress in agriculture will affect rural demand and has potential to fuel inflation in a few items like oilseeds because of lower output.

Tell me more: Rural India has 90.2 million agricultural households, and 63% of them depend on agriculture as main source of income.

Rs 3,310 crore

What is it? Amount paid by Idea Cellular, India’s third largest mobile operator, to buy airwaves in two circles from Videocon Telecommunications.

Why is it important? This is the first trading after government allowed telecom companies to sell the spectrum they hold. The price paid by Idea is nearly twice of what Videocon valued it in March 2015, and it will help Idea offer 4G services in Gujarat and Western Uttar Pradesh.

Tell me more: With Reliance Industries planning to launch its 4G services next fiscal, existing players are sprucing their high-speed offering. Airtel, the market leader, is launching 4G services in 296 cities and towns.     

11

What is it? The number of advance pricing agreements (APA) signed by Indian tax authorities with multinational companies. An APA covers future intercompany transactions belonging to the same group (let’s say, Accenture India provides service to Accenture UK) but located in different countries. It would specify the profit margins on top of cost, so that tax can be levied.    

Why is it important? APA helps in reducing tax disputes especially in cases of related party transactions as there is certainty on how tax authorities will treat the transaction. In fiscal 2015, tax authorities disputed more than 50% of international related party transactions involving upward revision of taxable income of Rs 46,465 crore.    

Tell me more: Ever since APA was introduced in August 2012, Finance Ministry has received 329 applications till December 2014 and it had now signed 31 APAs.

Rs 2,265 crore

What is it? Amount paid by Japan-based Nippon Life Insurance Co to raise its stake in Reliance Life Insurance from 26% to 49%, the maximum allowed now.

Why is it important? This is the first deal in the life insurance segment after government increased foreign investment limit to 49% this year. Cash from sale could help Anil Ambani-controlled Reliance Capital to invest in other businesses or reduce debt.

Tell me more: On Monday, UK-based Bupa Plc acquired additional 23% in the medical insurance joint venture, Max Bupa Health Insurance Co Ltd, for Rs 191 crore, valuing the company at Rs 830 crore.

Rs 5,828 crore

What is it? The value of construction contract bagged by state-run National Buildings Construction Corporation (NBCC) to build 3,000 flats for the All India Institute of Medical Sciences (AIIMS) in Delhi.

Why is it important? Apart from providing residential accommodation for doctors and nurses working in India’s apex hospital, the project also entails selling 10% of area so as to make it commercially viable.

Tell me more: Already NBCC is redeveloping 86 acres of government land just across the road from AIIMS. Even here residential accommodation is mixed with commercial space.

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News in numbers, Nov 24, 2015: Bupa increasing stake in Max Bupa, Qatar’s penalty waiver…

Rs 191 crore

What is it? Amount paid by UK-based Bupa Plc. to raise its stake in Max Bupa Health Insurance Co Ltd, India’s seventh largest health insurance firm, from 26% to 49%.

Why is it important? This is the first deal after the government increased foreign direct investment limit to 49% in domestic insurance firms earlier this year.  Indian partner, Max India, will hold 51% and also management control.

Tell me more: Max India, which sold 23% stake for an all-cash deal, will use the money to buy majority stake in Delhi-based hospital, Saket City Hospitals Pvt. Ltd.

Rs 15,000 crore

What is it? Gammon India’s debt that has been converted into equity by its lenders.

Why is it important? Creditors will now hold majority stake in Gammon India.  The exercise is part of a new strategy – called, strategic debt restructuring – to manage bad loans where debt is converted into equity. In the second step, a new investor and management is brought in to manage the company.  

Tell me more: Gammon India is the sixth company where lenders have acquired majority stake by converting debt into equity.    

$ 1 billion

What is it? Penalty waived off by Qatar after Petronet LNG, India’s largest importer of liquefied natural gas, reneged on its 25-year contract with the gulf nation. As a part of the deal, benchmark price was also revised. It will now be based on three-month average of Brent crude as compared to 60-month average of Japanese crude oil price.

Why is it important? Downward revision of prices will lower cost of LNG to $7-8 per million British thermal unit as against current price of $ 12-13. If passed on, customers will benefit from lower cooking and fuel gas prices.   

Tell me more: Slump in global gas prices – almost 50% in last one year – prompted buyers to prefer spot markets where cost was lower.

22 million

What is it? The number of women with only one child who is a girl, according to the latest census data.

Why is it important? It’s significantly lower than the number of women with single child, who is a boy, which is, 28.5 million. Confirms the continuity of prevalence of male child preference and prenatal sex determination. The gap – 6.5 million – represents the missing girl child.

Tell me more: The skewed sex ratio continues for women who had two and three children.  

2135

What is it? LME (London Metal Exchange) Metal Index, which consists of six primary metals including copper, aluminium, lead, tin, zinc and nickel.

Why is it important? It’s 6-year low for the index and comes on the back of weak economic data from China. Raw material intensive sectors like auto and auto components, and power equipment would benefit from lower metal prices, while metal producers will be hit.

Tell me more: Operating profit margins of 142 manufacturing firms rose to the highest level since June 2014 because of decline in commodity prices.

 

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