Companies & Sectors
Blackstone to buy Mphasis in deal that can top $1 bn
Mumbai : Global private equity Fund Blackstone on Monday said it has reached a pact to buy a majority 60.5 percent stake in Mphasis, a leading IT services player, in a deal valued at between Rs.5,466 crore and Rs.7,071 crore ($825 million and $1.1 billion).
 
"As per the Takeover Code in India, the transaction will also trigger a mandatory open offer for a purchase of additional 26 percent shares of the company, and the acquiring entity has released a public announcement to the stock exchanges," Blackstone said in a statement.
 
The shares are being acquired from Hewlett Packard Enterprise that currently owns 60.5 percent in Mphasis. "Blackstone will pay a purchase price of Rs.430 per share," said the statement. Mphasis is listed on the National Stock Exchange and the BSE, earlier the Bombay Stock Exchange.
 
The shares of Mphasis were, however, down 1.48 percent at Rs.460.50 on the BSE.
 
Mphasis’ last 12 months revenue as of December 31, 2015 was Rs.59,996 million($904 million) while the profit after tax was Rs.6,923 million ($104 million). It has large revenues from banking and financial services and insurance apart from new generation services including digital solutions.
 
"Mphasis serves marquee customers across the globe including 6 top global banks, 11 out of 15 top mortgage lenders, and three top global insurance companies. The company has roughly 24,000 employees across 16 countries," the statement said.
 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.

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RBI's 50 bps rate cut can be effective: CEO survey
New Delhi : While 25 basis points (bps) cut in the interest rates by the RBI in the monetary policy is imminent, the real impact on lending costs will be felt if the apex bank goes for at least a 50 bps cut, says a CEO survey conducted by Assocham ahead of the monetary policy review on April 5.
 
"The RBI has all the building blocks in place to go in for re-aligning the repo rate to 6.25 percent on April 5 when it reviews the credit policy," Associated Chambers of Commerce and Industry of India (Assocham) said. 
 
The repo rate currently stands at 6.75 bps.
 
As many as 82 percent of the 110 CEOs across different sectors surveyed by Assocham said that a rate cut of 25 bps would be only a ‘baby step’ and would not create impact adequate enough to trigger a big positive business sentiment.
 
"The retail inflation at 5.18 percent is well below the RBI target while the government has delivered in terms of financial discipline," a majority of the CEOs said in the survey.
 
For the 2015-16 fiscal, the finance ministry on Friday said it had contained fiscal deficit at 3.9 percent of the GDP and targets it at 3.5 percent of the GDP during 2016-17. 
 
The government has also taken a bold decision to lower interest rates on the small savings and the Employees Provident Fund (EPF) contributions so that the banks can operate on a level-playing field, the survey said. 
 
Though the Reserve Bank of India (RBI) slashed the benchmark rate by 125 bps last year, the transmission by the banks was much lower. As many as 68 percent of the CEOs in the survey said the banks could have done more by way of rate transmission. 
 
With introduction of the new Marginal Cost of Funds based lending rate (MCLR), the transmission of rate is being effected at least to the extent of 10 basis points. 
 
With expectations of normal monsoon rains, the revival in agricultural production will bring about a further uptick in the economic environment, it said. 
 
Over and above the repo rate, the survey said that industry leaders want the RBI to infuse more liquidity by way of easing the cash reserve ratio by 50 bps, which again will lead to easing of the lending rates. 
 
In the policy review on April 5, the RBI is also expected to come out with further measures to deal with the non-performing assets (NPAs).
 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.

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RBI likely to cut interest rate by mininum quarter percent
Mumbai : At the new fiscal's first bi-monthly monetary policy review due on Tuesday, RBI Governor Raghuram Rajan is widely expected to cut interest rates by at least a quarter of a percentage point on the back of the union budget's fiscal prudence measures, reduction in small savings interest rates and low inflation.
 
"Though a 25 basis points (bps) rate cut is anticipated by market participants, and few even expect a possibility of a surprise 50 BPS cut as well, thereby setting the tone for the new financial year," Hiren Sharma, senior vice president, currency advisory at Anand Rathi Financial Services, told IANS.
 
At its sixth and the fiscal's final bi-monthly monetary policy review in February, Reserve Bank of India (RBI) kept its key lending rate unchanged at 6.75 percent.
 
"The Reserve Bank continues to be accommodative even as it leaves the policy rate unchanged in this review, while awaiting further data on inflation," Rajan said in his policy statement at the time.
 
The government has cut the small savings interest rate by up to 1.3 percent, facilitating an RBI rate cut.
 
India's annual retail inflation eased to 5.18 percent in February from 5.69 percent in the month before even as the 12-month wholesale inflation was in the negative for the 16th straight month, official data showed last month.
 
Rajan, last month, kept the cards close to his chest on possible easing of monetary policy with rate cuts, but said the government's decision to stick to its fiscal targets was comforting.
 
He also said economic recovery in the country was not smooth, particularly after data on index of industrial production (IIP), released by the Central Statistics Office last month, showed India's factory output had logged a decline in January for the third straight month.
 
Bansi Madhavani, analyst, India Ratings and Research, told IANS that a cautious assessment of US economic revival prospects in the FOMC (federal open market committee) minutes may push back expectations of a near-term rate hike.
 
While 25 basis points cut in the interest rates by the RBI in the monetary policy is imminent, the real impact on lending costs will be felt if the apex bank goes for at least a 50 bps cut, says a CEO survey conducted by Assocham ahead of the monetary policy review.
 
"The RBI has all the building blocks in place to go in for re-aligning the repo rate to 6.25 percent on April 5 when it reviews the credit policy," Associated Chambers of Commerce and Industry of India (Assocham) said in a statement.
 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.

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