OPINION, P8 COMPANIES, P6 EDITORIAL RBI move on FPI is panicking, just let ` settle at its level ROBUST GROWTH GLOBAL COFFEE ALLIANCE Instead of long-term farm solutions, Modi promises a loan waiver in Karnataka RENU KOHLI INTERNATIONAL, P14 D’Souza-led Cognizant reports $520-m profit in March quarter Nestle buys rights to sell Starbuck products for $7.15 billion MUMBAI, TUESDAY, MAY 8, 2018 VOLUME XXXXXV NO. 352, 16 PAGES, `7.00 FOLLOW US ON TWITTER & FACEBOOK. APP AVAILABLE ON APP STORE & PLAYSTORE WWW.FINANCIALEXPRESS.COM READ TO LEAD P U B L I S H E D F R O M : A H M E D A B A D , B E N G A L U R U , C H A N D I G A R H , C H E N N A I , H Y D E R A B A D , K O C H I , K O L K ATA , L U C K N O W, M U M B A I , N E W D E L H I , P U N E SENSEX: 35,208.14 ▲ 292.76 NIFTY: 10,715.50 ▲ 97.25 NIKKEI 225: 22,467.16 ▼ 5.62 HANG SENG: 29,994.26 ▲ 67.76 `/$: 67.14 ▼ 0.28 `/€: 79.99 ▲ 0.01 BRENT: $75.58 ▲ $0.71 GOLD: `31,191.00 ▲ `188.00 GOING IT ALONE Kothari’s DSP buys out BlackRock stake Chanda Kochhar, ICICI Bank MD & CEO VIDEOCON KOSHER: KOCHHAR The board has made the stand very clear. We don’t have anything to add Every year after financial results are finalised, a meeting happens within small gap to finalise planning and budget for next year. So, this is routine As we see, the quarter speaks for itself. I think we have a very, very strong deposit franchise, technology franchise and that continues to remain strong Deal could be valued between `1,700 cr and `2,400 cr; marks exit of another foreign player from Indian asset management FE BUREAU Mumbai, May 7 VETERAN INVESTMENT BANKER Hemendra Kothari’s DSP Group has bought out BlackRock’s 40% stake in DSP BlackRock Investment Managers. While the price was not known, deals in the Indian mutual fund industry are typically valued at 5-7% of assets under management. As such, thetransactionwouldhavebeen priced at anywhere between `1,700 crore and `2,400 crore. The average assets under management (AAUM) at DSP BlackRock Mutual Fund in the January-March quarter were `86,325.70 crore, data from AssociationofMutualFundsin (` crore) ICICI Prudential MF 3,05,739 HDFC Mutual Fund 3,00,549 Aditya Birla Sun Life MF 2,47,529 Reliance Mutual Fund 2,44,904 2,17,649 1,54,939 UTI Mutual Fund Kotak Mahindra MF Franklin Templeton MF DSP BlackRock MF 1,24,691 1,03,152 R R R R 86,326 Overthe past fewyears several foreign players — JPMorgan MF, Fidelity MF, Morgan Stanley MF,ING MF,Goldman Sachs MF and Deutsche MF — have exited the asset management business. Continued on Page 2 EXIT MODE Special Feature Sweet nothings: The growth of candy market in India An improved distribution network and the increasing penetration of domestic and international players are expected to provide good impetus to the saturated candy market in India StanC PE India arm may find buyer in Jaisingh MANISHA SINGHAL Mumbai May 7 Losing currency FE BUREAU Rupee breaches 67 mark The rupee on Monday crashed below 67 to a 15-month low of 67.13 to the dollar following surging dollar demand as Brent zoomed past $75 a barrel ■ P10 `/$ Inverted scale 62.00 63.50 65.00 66.50 67.14 68.00 67.19 Feb 8, 2017 Apr 7, 2018 STANDARD CHARTERED PE is looking to exit its $3.5-billion private equity (PE) business globally and could find a buyerin the existing team lead byglobalco-headNaineshJaisingh,persons familiarwith the development indicated to FE. The size of the Indian PE business, headed by Uday Dhawan, is around $1 billion. However, the bank isn’t ruling out a sale to other interested parties, the persons quoted above added. Jaisingh, an IIM, Bangalore, alumnus, has worked with the global equity investment arm since 2000. Standard Charted Bank declined a comment on the story.AmongtheprominentPE deals in India are those in Coffee Day Enterprises, the holdingcompanyoftheCafeCoffee Day chain of cafes where SCB PE invested around $150 millionalongwithaclutchofother investors in 2010. Moreover, ■ SCB in talks to sell its PE business ■ A management buy- out is being looked at ■ Global PE co-head Nainesh Jaisingh driving the deal ■ This will also include India PE business headed by Uday Dhawan ■ Size of PE business globally is $5 billion the portfolio was also invested in InterGlobe Travel Quotient, which is the travel reservation arm of IndiGo. It holds over 35% with other PE players. Continued on Page 2 CENSUS CHOICE Non-BJP state FMs against 15th FC terms FE BUREAU Amaravati, May 7 ILLUSTRATION: ROHNIT PHORE FINANCE MINISTERS OF select non-BJP-ruled states met in Amaravati on Monday toopposethetermsofreference of the Fifteenth Finance Commission (FFC),withAndhraPradesh chief minister N Chandrababu Naidu claiming progressive states would lose heavily if the 2011 census was taken as thebasisforthedevolution of central funds. Andhra Pradesh finance ministerYanamalaRamakrishnudu claimed his state would lose`8,000croreayearbecause of the FFC’s faulty terms of reference (ToR) that would go againstthestatesthathaveperformedwellonpopulationcontrol. Last month, Kerala had hosted a similar conclave of finance ministers of southern states to oppose theToR. TheFFC,whoseawardwillbe valid for the 2020-25 period, will rely on the 2011 Census THE DELHI HIGH COURT on Mondaydismissed the government’spetitionchallengingthe Vodafone Group’s move to initiate two international arbitrations against India in connection with a retrospective tax liability imposed on the telco forits$11-billionacquisitionof Hutch’s stake in HutchisonEssarin 2007. ThecourtsaidtheCentrecan approachtheUKarbitrationtribunalundertheIndia-UKBilateral Investment Protection Agreement (BIPA). Continued on Page 2 Source: Amfi Axis Mutual Fund 77,325 India showed.The total AAUM across 42 players is about `23 lakh crore; flows into MFs among the biggest in 2017-18 at `1.71 lakh crore on the back of flows of `70,300 crore in 2016-17.DSPBlackRockmanages and advises Indian assets in excess of `1.10 lakh crore. Delhi HC dismisses govt’s plea against Voda INDU BHAN New Delhi, May 7 Average assets under management (AUM) for the quarter of January - March 2018 SBI Mutual Fund ● INT’L ARBITRATION data, while the 1971 Census numbers were mostly used by the previous finance commissions; the 14th commission, whose award (2015-20) is now being implemented, had given weight to both the 1971 (17.5%) and 2011 (10%) censuses.AspertheToR,amongthe measurableperformance-based incentives, the FFC would consider“effortsandprogressmade inmovingtowardsreplacement rate of population growth”. Continued on Page 2 WALMART-FLIPKART DEAL High-stakes tax fight in India can’t be ruled out Despite seeking treaties’ cover, no guarantee won’t be Vodafone-like scrap SUMIT JHA New Delhi, May 7 US-BASED RETAIL giant Walmart is most likely to encounter an aggressive Indian taxman, who could deny it a certificate of withholding tax waiver over the proposed mega deal to purchase a substantial stake in Flipkart from existing investors in the Indian online retailer. Walmart, tax experts said, could try and obtain a ■ Walmart could seek nil-tax-liability order from AAR, but even this doesn’t guarantee relief ■ Tiger Global arms could seek protection under grandfathering clause in New Delhi’s 2016-amended treaties with Mauritius/ Singapore ■ If SoftBank takes US route, it may delay deal till August 2019 so that capital gains are longterm and taxed less nil-tax-liabilityorderfrom the Authority for Advance Ruling (AAR) before going aheadwith the deal, but even that won’t guarantee that the imminent purchase would not precipitate a high-profile Vodafonelike tax fight. It is also possible that the US major is protected by a commercial indemnityclause, in which case it would be immune to an India tax cost from the deal. At least one or even both of sellers — Tiger Global and SoftBank — may cite residency in a treaty-protected country to escape/reduce a capital gains tax liability here. (In case of a tax liability, the buyer withholds the tax while the burden is on the seller.) Continued on Page 2
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