| | | Question of the Week Metro AG, which is in the process of selling off its India business, was started in November 1963 in Essen-Altenessen, a northern borough of the city of Essen in West Germany. Its founder Otto Beisheim had an action-packed career before coming to the relatively sedate world of retailing. What was it? | | |  | Here's a great value proposition Mint Monsoon Bonanza - Subscribe to Mint today and get 40% off (Flat 25% plus special bank offers). Your subscription now also comes with 8 leading OTTs. All this can be yours for just ₹160 per month. But hurry, the offer is valid till 21st July. Check out the convenient and affordable plans we have for you here. | | Good Morning Prefer audio? Now you can listen to your favourite newsletter. | | The News in Summary There is more action in India's scorching telecom business, with the Adani group announcing its intention to bid in the 5G spectrum auction later this month, a move that could end up threatening the near duopoly of Reliance Jio and Bharti Airtel in the sector. Meanwhile, regulatory investigations into the affairs at Axis Asset Management Co. Ltd signal more scrutiny of the country's rapidly growing mutual fund industry even as recent earnings of IT majors Tata Consultancy Services Ltd and HCL Technologies Ltd reinforce fears that the sector could increasingly face margin pressures. Finally, PE major KKR is looking to sell off its entire stake in Max Healthcare in a deal that could mark its biggest exit in the country, while the impending sale of Metro AG's India unit is attracting potential buyers by the day, with startup Udaan becoming the latest suitor to join the queue. | | | | Adani Juggernaut Turns to Telecom Now The Adani group's march into businesses that set it up in competition with India's largest conglomerate, Reliance, continues unabated, with one of its units, Adani Data Networks announcing its intention to bid for the much-prized 5G spectrum in the forthcoming auction. That would pit India's fastest rising conglomerate against incumbents Bharti Airtel Ltd, Reliance Jio Infocomm Ltd and Vodafone Idea Ltd. While Adani has said that the acquisition of 5G spectrum would be for developing a private network for its airports and ports business, analysts believe it could be part of a long-term strategy for a full-scale entry into the telecom sector which would include consumer services. The announcement led to a sharp fall in Bharti's share price with investors perceiving it as a threat to the country's second-largest telecom operator. Adani's move comes less than a month after Adani Data Networks was issued a letter of intent for the grant of a unified license with authorization of national long distance and international long distance for pan-India service and internet service for the Gujarat circle. That and the fact that the spectrum to be auctioned will come without any restrictions placed on the buyer clears the path for Adani's entry into telecom services. | | |  | | | | Axis Asset Management Findings Turn Lens on MF Business India's seventh largest mutual fund manager, Axis Asset Management Co, was hit by regulatory investigations which revealed a scam involving two employees and its chief dealer Viresh Joshi, who have since been sacked. The company in which British investment giant Schroders holds a 25% stake and Axis Bank Ltd holds the rest submitted the findings of an internal enquiry to regulators where it said that it had evidence to believe that the terminated executives had violated securities law. Meanwhile, the Securities & Exchange Board of India has been investigating potential front-running by the two. Joshi, who had been with the fund for more than 10 years, has filed a lawsuit alleging wrongful termination. Legal experts are predicting more scrutiny for the $465 billion Indian mutual fund industry with increased scrutiny of bank accounts and tax returns of fund managers and dealers and their immediate relatives, as the market regulator under its new chief Madhabi Puri Buch attempts to crack down on market irregularities. | | |  | | | | | | | | KKR Looks to Cash Out in Max Healthcare Three years after it took over the reins at Max Healthcare in partnership with Radiant Life Care, KKR & Co. Inc, the largest shareholder in India's third-largest hospital chain, is planning to sell its entire 27.54% stake for around Rs 10,000-12,000 crore. The New York-based private equity major is in talks with strategic and equity investors, including other PE firms, family offices, and wealthy individuals, looking for a premium of 20-30% over the current valuation. Max Healthcare owns 17 super-speciality healthcare facilities across the National Capital Region, Haryana, Punjab, Uttarakhand and Maharashtra. It also runs the Delhi-based BLK-Max Super Speciality Hospital and Nanavati Max Super Speciality Hospital in Mumbai. With its business taking a turn for the better as the pandemic eased, the company's shares have surged five-fold from the Rs 80 a piece that KKR had paid at the time of the takeover in September 2018. | | |  | | | | HCL Earnings a Warning of Tough Times for IT HCL Technologies Ltd's June quarter earnings added to the worries about Indian IT as the company posted a fall in the margin to a multi-quarter low, the second Tier I firm in the sector to do so after TCS. Indeed, the similarities in the results of the two companies point to the difficulties ahead for the sector. Talent woes continued unabated, with IT Services attrition at HCL over the last twelve months going up to 23.8% on a quarter-on-quarter basis. Overall, the company's higher subcontracting costs, increased attrition and travel costs, which hurt its Ebit margins, are a phenomenon that is likely to impact the earnings of most IT majors at a time when recession fears in their key markets remain uppermost. With the sector already going through earnings downgrades for FY23, investors are increasingly wary of the pain reflected in their share prices. | | | | Udaan Joins List of Suitors for Metro's India Business The battle to buy the India business of Metro AG is hotting up with India's largest business-to-business startup, Udaan, joining deep-pocketed suitors, including Reliance Industries Ltd and Thailand's Charoen Pokphand Group Co., in eyeing the Dusseldorf-based company's wholesale unit in India. The German cash and carry giant's 31 distribution centres in the country cater to small businesses, neighbourhood stores, and restaurants and would help the eventual buyer extend its reach. Earlier in May, 19 years after it opened its first store in India, Metro announced that it would exit the country and hired investment banks Goldman Sachs and JP Morgan to look for a buyer. An inability to scale up even as competition is getting more fierce, is believed to be behind the company's decision. | | | | Last Word  The Twitter Vs Elon Musk battle, now in the courts, will end badly, no matter who wins. Twitter's stock price is down nearly 20% for the year and considerably more from the $54.20 per share at which the merger deal had been initially struck. With all the muck that's been flying around thanks largely to Musk's tweets, it is unlikely to recover any time soon no matter what the final judgment. Tesla's stock, the main source of Musk's wealth, has also lost around 30% of its value since the deal was announced. So even though in its complaint, Twitter has alleged that Musk apparently believes that he - unlike every other party subject to Delaware contract law - is free to change his mind, trash the company, disrupt its operations, destroy stockholder value, and walk away, the last bit may not happen so easily. The maverick founder has done enormous damage to his reputation as an investor, and any future acquisition targets are sure to put in stringent clauses penalizing such behaviour. | | | | Elon Musk Just Abandoned his Twitter Deal... What Next? Here's an excellent video that maps out the various scenarios and how they could play out: | | Answer to the Question Otto Besheim served as a private in the German Army during the Second World War. In 1943, he sustained multiple injuries on the Eastern Front, but after recovering, he returned to serve again and was taken as a British prisoner of war in May 1945, only to be released in March 1946. | | | Do you have any questions? Send in your queries to sundeepkkhanna@gmail.com Were you forwarded this email? Did you stumble upon it online? Sign up here. | Please share your feedback with us What do you think about this newsletter? | | Written by Sundeep Khanna. Edited by Saikat Chatterjee. Produced by Samiksha Khanna. Send in your feedback to newsletters@livemint.com. | | | | | Download the Mint app and read premium stories | | | | | | View in Browser | Privacy Policy | Contact us You received this email because you signed up for Mint Top of the Morning or because it is included in your subscription. Copyright © HT Digital Streams. All Rights Reserved | | | | |
