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Mergers and Acquisitions

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Shriram Housing Finance In Merger Talks, Valuation May Create Hurdle

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In order to fund its business growth, the lender is planning a Rs 1,000-crore capital raise parallelly. Shriram City Union Finance, holding 85 per cent in its housing unit, had introduced Rs 500 crore during last year into it

Shriram City Union Finance subsidiary Shriram Housing Finance is looking for a smaller lender in the affordable housing space for the acquisition and merger purposes. Meanwhile the valuation mismatch could create a hurdle to the scheme of things.

Expectedly, the targeted company will be in the league of Rs 2,000 to 3,000 crore, according to the media report.

In order to fund its business growth, the lender is planning a Rs 1,000-crore capital raise parallelly. Also, this may prevail during the first quarter of the next fiscal.

Shriram City Union Finance, holding 85 per cent in its housing unit, had introduced Rs 500 crore during last year into it.

The mortgage lender booked a 54 per cent on loan asset growth on year-on-year basis to Rs 6,546 crore during September end. It is on track to reach the Rs 10,000 crore mark by September 2023, well ahead of its earlier target of March 2024, the media report added.

Possibly, it can also boost the large network of the Shriram group to grow business.

It caters nearly 35 to 40 percent of its business from the southern states including Karnataka, Tamil Nadu, Andhra Pradesh and Telangana. Gujarat falls in the category very strong state.

On the proposed capital raising, the official said the company may explore to rope in a new investor.

The company had nearly acquired Fullerton India Home Finance in 2020 before Sumitomo Mitsui Financials eventually bought it, quoted the media report.

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Maple Highways Acquires Eastern Peripheral Expressway In Rs 6,267 Cr

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The acquisition of the Toll Operate Transfer (TOT) project from the National Highways Authority of India (NHAI) is the largest road transaction that has taken pace this year. The six-lane express highway which stretches to 135-km is operative since 2018 which was designed to decongest Delhi’s commercial traffic

The Maple Highways said that it has acquired the Eastern Peripheral Expressway (EPE) in a Rs 6,267-crore deal. It is a dedicated India road investment platform of Canada-based pension fund CDPQ, which encircles the National Capital Region (NCR), on 11 November.

Under the asset monetisation programme by the government this year, the acquisition of the Toll Operate Transfer (TOT) project from the National Highways Authority of India (NHAI) is the largest road transaction that has taken pace.

The six-lane express highway which stretches to 135-km is operative since 2018 which was designed to decongest Delhi’s commercial traffic. It runs through Haryana and Uttar Pradesh, covering the eastern side of the NCR.

Maple Highways and CDPQ said that in order to explore more opportunities they continue to offer long-term shareholder value by sourcing mature toll road assets with long residual lives, established traffic and stable cash flows.

In the world, CDPQ is the second-largest institutional investor in infrastructure. It possess net assets of cash available for distribution to 45 billion in its infrastructure portfolio, including in India.

India still remains to be strategically important market for CDPQ considering country’s long-term growth potential and infrastructure needs, according to the fund.

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Reliance May Continue With Metro India’s Top Management After Acquisition: Report

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The multi billionaire business tycoon Mukesh Ambani led conglomerate was ready acquire the German firm in a deal including its 31 wholesale distribution centres, land and other assets owned by Metro. It is going to be the Rs 4,060-crore deal, according to a media report

A German retailer thinks Reliance Industries Limited will hold the company’s present management after the Metro AG acquisition deal is officially signed by the November end. This came days after it was public about Reliance Industries set to acquire Metro AG’s wholesale business in India.

The Metro AG recognised the Reliance Retail’s capacity of it being the largest retailer in country, to safeguard the employees’ interests and get quick regulatory approvals. It is going to be the Rs 4,060-crore deal, according to a media report.

The company’s subsidiary in India has around 5,000 employees working on roll.

According to a media report, the said deal is still being finalised will be inked officially probably by the month end.

The multi billionaire business tycoon Mukesh Ambani led conglomerate was ready acquire the German firm in a deal including its 31 wholesale distribution centres, land and other assets owned by it, reported a media house on 7 November

A Reliance official said that the company evaluates every opportunity in an ongoing basis business deal.

On the other hand, Metro AG’s official said that it better not to comment on market rumour or speculations.

At present, Metro AG is operating in 34 countries. It had entered the Indian market back in 2003. In India, it operates business six stores in Bengaluru, four in Hyderabad, two each in Mumbai and Delhi along with stores in various other cities, including Kolkata and Jaipur.

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Jio Proposes To Deposit Rs 3,720 Cr To Acquire RCom’s Tower, Fibre Assets

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The multi-billionaire Mukesh Dhirubhai Ambani-run Jio has offered the bid of Rs 3,720 crore in November 2019 for the acquisition of Reliance Communications (RCOM). Jio said that inter-creditor disputes causing delay in acquisition of RITL assets will deteriorate the value of assets

The telecom operator Jio to affect Reliance Infratel’s (RITL) acquisition and proposed to deposit Rs 3,720 crore in an escrow account. Currently, Reliance Infratel is undergoing liquidation process.

The multi-billionaire Mukesh Dhirubhai Ambani-run Jio has offered the bid of Rs 3,720 crore in November 2019 for the acquisition of Reliance Communications (RCOM). The tower and fibre asset of debt-ridden subsidiary is managed by his younger brother Anil Ambani.

In the last month, Jio’s subsidiary Reliance Projects and Property Management Services while filing an application before NCLT (National Company Law Tribunal) said that the company is committed and willing to implement the resolution plan of Reliance Infratel. The same was approved by the committee of creditors (CoC) previously. 

Jio said that inter-creditor disputes causing delay in acquisition of RITL assets will deteriorate the value of assets.

The Jio’s arm during a fresh application before NCLT, Mumbai said, “In order to avoid any further delays, the applicant proposes to deposit the total resolution amount in an account with State Bank of India as was directed by this hon’ble tribunal in the plan approval order,”

RITL currently holds fibre assets of nearly 1.78 lakh route kilometers and 43,540 mobile towers across the country. For the tower and fibre assets of RCOM, RITL is the holding company.

Reliance Project and property Management Services Limited has placed a fresh application in the NCLT Mumbai to affect the acquisition process. It is a subsidiary of Jio, and the successful resolution applicant for RITL

As soon as the inter-creditors dispute over the distribution of resolution funds is settled amongst the lenders, the funds will be distributed amongst them. SBI along with few other banks such as Doha Bank, Standard Chartered Bank, and Emirates Bank, are involved in a legal battle regarding the distribution of funds.

Doha Bank, being the financial creditor, had challenged the classification of claims from the indirect creditors of RITL, by the resolution professional. The matter is pending at the Supreme Court.

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ZEE Gets Shareholders’ Approval Over Merger With Sony At EGM

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The EGM was conducted as per National Company Law Tribunal’s (NCLT) order. The Managing Director (MD) and Chief Executive Officer (CEO), ZEE, Punit Goenka, thanked the equity shareholders of the company on behalf of entire and ZEE. The merged company will be led by Goenka as its MD and CEO

Zee Entertainment Enterprises (ZEE) shareholders voted in favour of the company’s proposed merger with Culver Max Entertainment (formerly Sony Pictures Networks India) at its extraordinary general meeting (EGM) on 14 October.

The EGM was conducted as per National Company Law Tribunal’s (NCLT) order. Putting the proposal forward, a statement from ZEE said, “The approval marks yet another firm and positive step forward, in the overall merger completion process.”

The Managing Director (MD) and Chief Executive Officer (CEO), ZEE, Punit Goenka, thanked the equity shareholders of the company on behalf of entire and ZEE for recognising the value-accretive opportunities which the proposed merger will deliver to all its stakeholders.

Earlier, the Mumbai bench of NCLT, in its 24 August order had directed the ZEE management to hold a shareholder meeting on 14 October for voting on the proposed scheme of merger. The bench was presided by judicial member JV Subba Rao and technical member Anuradha Sanjay Bhatia.

Managing Partner, Economic Laws Practice, Suhail Nathani, presided over the EGM as the chairperson. Early in October, ZEE received approval from the Competition Commission of India (CCI), for the proposed merger. It was received with certain modifications.

Also in July, the Company had received approvals from the Bombay Stock Exchange (BSE) and National Stock Exchange (NSE). During last year on 22 December, ZEE and SPN had signed a definitive agreement to merge the two companies. Giving effect to the deal, ZEE would be merged into SPN. And after closing, the merged company will be publicly listed in India.

Going by the agreement, the merged company will be led by Goenka as its MD and CEO. In total the board will hold nine directors, of whom five would be nominated by the Sony Group, whereas three will be independent.

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SIA Confirms On Vistara-Air India Merger Talks With Tata Group

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According to media reports, the situation is still blurry of what stake, if any, SIA would hold if merger of Vistara and Air India happens or if fresh funds would be required to the ail Air India group. The said deal may require the green light from Singapore’s competition watchdog and the authorities in India, according to a media statement

Singapore Airlines confirmed about being in talks with India’s Tata Group over a potential merger of Vistara airline and Air India. There exists a joint venture between the two companies viz Singapore airline and Vistara airline. And Tata Group recently completed 100 per cent acquisition of Air India. 

The confirmation popped in amid media reports that Tata planning to merge it 100 per acquisition with Vistara. Tata holds 51 per cent stake in Vistara, whereas SIA holds 49 per cent.   

According to media reports, the situation is still blurry of what stake, if any, SIA would hold if merger of Vistara and Air India happens or if fresh funds would be required to the ail Air India group. 

The said deal may require the green light from Singapore’s competition watchdog and the authorities in India, according to a media statement.

Back in 2013, when Vistara was established, it gave the SIA group a stake in India’s fast-growing aviation sector. India having prominent domestic and international traffic flows, may witness to more than double over in coming 10 years. 

It can be noted that, along with international and domestic traffic, India will soon become the third-largest aviation market across globe nearly by 2024, as according to the International Air Transport Association

Indian Civil Aviation Minister Jyotiraditya Scindia had said in November 2021 about India becoming the third-largest domestic aviation market in the world. 

Media reports say, the SIA considers the Vistara stake as an integral part of its multi-hub strategy. This will give it access to crucial sources that complement its strong Singapore hub. 

SIA backs Vistara with operational and management expertise at the same time Tata provides the corporate umbrella and domain knowledge in India.  Chief executive of Vistara is a Singaporean, Vinod Kannan. Vinod has been approved from SIA followed by his colleague Leslie Thng, who returned to Singapore and is now CEO of Scoot.

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Balsara Family Exits Agency After WPP Acquires Remaining 26% Stake In Mediacom

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Back in 2008, WPP and the Balsaras had entered into a joint venture and under such arrangement, the Balsaras held 51 per cent stake and the rest remained with WPP

WPP, Sam Balsara and Lara Balsara Vajifdar in an announcement informed that it purchased the remaining 26 per cent stake of the Balsara family, on 7 October.

As a result. the deal will mark the exit of Balsara family from the agency. The deal could not be worked out immediately.

“Almost 15 years ago we invested in this innovative partnership. It has been a great success for all parties involved. MediaCom in India established as a fast-growing and highly respected agency by advertisers,” said Balsara.

Sam Balsara and Lara Balsara Vajifdar discussed with WPP to exit the agency, after WPP’s decided to merge agencies Essence and MediaCom globally in April according to a statement from MediaCom.

Back in 2008, WPP and the Balsaras had entered into a joint venture and under such arrangement, the Balsaras held 51 per cent stake and the rest remained with WPP. However, in 2017, the Balsara family sold one-fourth of their 51 per cent stake to WPP.

“The rapid growth that MediaCom experienced in India, is due the the deal between WPP and the promoters of Madison. It has made it today India’s one of most respected agencies,” the statement added.

“Working with Sam Balsara and Lara Balsara has always been a pleasure and it gave successful growth to the business in India. With pioneering digital expertise running throughout, we will build on that legacy to deliver the agency model our clients future-founded wants on brilliant strategy and brand-building capabilities,” said Nick Lawson, global CEO, MediaCom.

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FM Urges CCI To Fairly Address Cross-Border Merger Issues

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FM Nirmala Sitharaman while addressing at the virtual inauguration of the CCI office for the Western Region in Mumbai asked CCI to have proactive approach instead of waiting for people to reach them with complaints

Finance minister (FM) Nirmala Sitharaman urged the Competition Commission of India (CCI) to “fairly and squarely” address issues rising due to corporate mergers involving cross-border elements on 6 October.

Minister while addressing at the virtual inauguration of the CCI office for the Western Region in Mumbai also asked CCI to have proactive approach instead of waiting for people to reach them with complaints. 

“Aspiring be a digital economy, it is also very important for us to address the challenges that digitisation brings, we cannot ignore them,” said Sitharaman. 

“Considering the multi-national nature of activities, various companies are looking to have interlocking positions in global value chains. There are holding companies, new acquisitions taking place, there are mergers and such related events happening across the globe, ” she further added.

The finance minister’s delivers her thoughts at a time when a parliamentary panel is in the process of examining the new competition bill. The bill empowers CCI to regulate cross-border mergers and digital companies.  It was presented in the parliament during the Monsoon session.

TEJAS Network

Tejas Network To Merge Its Subsidiaries

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Saankhya Labs shareholders to be issued 3,871,084 equity shares of Tejas Networks. Swap ratio of 112 shares of Tejas Networks for 100 shares of Saankhya Labs will be applied as per a company statement.

Saankhya Labs Private Limited and Saankhya Strategic Electronics Private Limited to be merged via process approved by the National Company Law Tribunal (NCLT), informed Tejas Networks in an announcement. 64.40 percent of shares of Saankhya Labs Private Limited were acquired by Tejas Networks in July 2022.

According to a statement given by the company, 3,871,084 equity shares of Tejas Networks will be issued to shareholders of Saankhya Labs holding 35.60 percent equity shares. Swap ratio of 112 shares of Tejas Networks for 100 shares of Saankhya Labs will be applied to complete the transaction.

Expectedly the amalgamation will help Tejas for the expansion of wireless network with the help of 5G Open Ran (ORAN). The deal will also allow Tejas improve its expertise in fabless semiconductor chip designs. ORAN is a 5G cellular broadcast and satellite communication product.

Acquisition of 93,571 equity shares of Saankhya Labs (Saankhya) at a price of Rs 454.19 per equity share via secondary purchase was done Tejas Networks in last August, as per a leading media house report.

Mandatory approval for the proposed deal is yet to be received from markets regulator like Securities and Exchange Board of India (SEBI), company’s shareholders, Saankhya Labs, Saankhya Strategic, NCLT and other statutory and regulatory bodies.

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“The modern CFO’s role exceeds traditional accounting” CFO, Bosch Global Software Technologies (BGSW)

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CFOs have evolved into forward-looking strategic business partners who manage broad responsibilities and influence all aspects of the organization, from leadership to strategy

In an interaction with Urvi Shrivastav, editorial lead, BW CFO, BW Businessworld; Kaushik Sarkar, Senior Vice President and CFO, Bosch Global Software Technologies (BGSW) speaks about the leadership trends of Chief Financial Officers (CFOs) and the industry trends.

What are the changing trends in the leadership style of CFOs?

The modern CFO’s role exceeds traditional accounting, auditing, and financial planning responsibilities. It extends to broader duties like corporate strategy, digitization, and enterprise transformation. Although the former responsibilities remain essential to the role, CFOs today wield their influence over a wider spectrum of organizational functions and operations than ever before.

CFOs have evolved into forward-looking strategic business partners who manage broad responsibilities and influence all aspects of the organization, from leadership to strategy. It is now essential for CFOs to be brave and look ahead of the curve for new opportunities that can unlock business value.

In addition to the financial aspects of their jobs, today’s CFOs are:

● Experts in managing enterprise risk

● Focussed on growth & future-proofing their organization

● Evaluating and influencing the adoption of new technologies for digital transformation

Enterprises today are transforming fast, using emerging technologies like automation, AI, and cloud services that help improve business agility and resilience. The CFOs knowledge and understanding of the enterprise’s financial position is essential in providing direction and support to other departments and functions. CFOs use financial data and advanced analytics to drive business goals and strategies and are at the forefront of business transformation. With the rapidly evolving technological landscape, the rise of new business models, sustainability-led business models, and cybersecurity concerns, CFOs are constantly readapting themselves to achieve business success and stay relevant in an ever-evolving landscape.

At BGSW, we think having an agile, efficient, and innovation-driven workforce will be more crucial in this constantly changing world. The CFOs office is also responsible for implementing the appropriate processes and technologies to assist in retaining and acquiring the right talent required to maintain market leadership in a new era.

What new work models have emerged post-pandemic?

The pandemic has changed how businesses function globally. It has built resilience and strength as organizations decoded the new normal. Now, as the virus subsides, the world of work has changed permanently. We have embraced new remote and hybrid work models and added more flexibility to our post-pandemic lives. To succeed in the new normal, we need to weave a digital fabric that brings employees together from across the organization, making the digital experience just as enriching and necessary as the physical one.

Providing employees with an inclusive experience is especially crucial in a hybrid model. Organizations must focus on employee experience and flexible working models which are intelligent, connected & sustainable. Adopting technology that helps achieve seamless and easy work transitions between home, office, and back improves associates’ efficiency. At Bosch, we are defining nextgen work models and experimenting with new workplaces of the future models and concepts to accelerate our associate experience. We have opened centres in Hyderabad and Pune to bring work closer to our talent. We have also launched our smart campus Spark.NXT in Adugodi, Bangalore, which will commence operations in July 2023.

How do you take care of employee wellness?

Even though no organization could have prevented the pandemic, the event made us realize how important it is to remain prepared for change. Like all circumstances, the contemporary hybrid workplace has its advantages and disadvantages, but the disadvantages frequently have a more severe effect on employees’ health. Excessive hours spent in front of screens, blending personal and professional lives, among and other factors contribute to physical and mental illness. Regular health examinations and no-cost consultations can aid in dealing with health difficulties more successfully.

At Bosch Global Software Technologies (BGSW), we have created an atmosphere that stimulates creativity and encourages individuality, freedom, and autonomy. We have provided various benefits, like a work-from-home allowance to support a hybrid work culture. We are also creating a revamped and new-gen office space with designated collaboration areas to enhance team-led innovations and creativity. Keeping in mind the health and safety of our employees, we have recently increased their health insurance coverage.

Our programs create a high-quality working environment that promotes work-life balance and ensure employee physical and mental health via – counselling, flexi-work, breakout rooms, sports centres, innovation garage, and competitive compensation, among others. We aim to enhance both core and professional competencies of our employees.

How have the mergers and acquisitions trends changed, and how has the CFO’s role evolved in this?

Deal-making has always been at the fulcrum of the CFO’s role. The CFO knows and understands the nuances of the business and is responsible for financial aspects like valuation of assets and risk assessment. I also believe that sometimes CFOs wear two hats at a go – one of a deal enabler alongside the execution team and another hat of a steering committee member along with other senior executives. Hence, you may also view the CFOs role as a bridge between the execution team and the management.

In terms of the technology trend, I see that digital adoption is gaining traction in the market. Be it cloud-led transformation, big data analytics, or IoT, all the underlying technologies that enable digital adoption are sought after as against the traditional application development or software testing business. Besides, clients today attach much value to adopting AI/ML techniques in software projects. Beyond the traditional M&A, the start-up space in India is also vibrant. Indian start-up firms raised almost $74B in 2021 from various VC/PEs. We at Bosch have an appetite for investments and acquisitions in the technology space, which fits in the Bosch eco-system and aligns with our software focus, and fit-for-future strategy.

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