Business News

Mumbai: Distressed debt aggregator CFM ARC has emerged as the winning bidder for defunct Carnival Cinemas.This follows CFM offering ₹78 crore to take over Carnival's ₹1,290 crore debt from rival JC Flowers ARC, which did not get any challenging bid by the October 31 deadline, people familiar with the matter said.JC Flowers will be transferring the loans of Carnival to CFM after completing the necessary paperwork and payment by this month-end, the people said.JC Flowers declined to comment, while CFM did not respond to an email query.Carnival's debt was taken over by JC Flowers from Yes Bank in December 2022 as part of a ₹48,000-crore stressed asset loan portfolio bought by the ARC for ₹11,200 crore in a 15:85 cash-to-security receipts structure.CFM's bid for Carnival's debt envisages an all-cash recovery of about 6% of the total dues. It includes a principal amount of ₹831 crore and interest of ₹459 crore owed by four entities - Carnival Films, Cinema Ventures, Carnival Films Entertainment and Stargaze Entertainment.Carnival Cinemas was classified as a non-performing asset (NPA) by its sole lender Yes Bank in 2022 after the Shrikant Bhasi-promoted multiplex chain defaulted on its payments due to losses incurred following the Covid-19 outbreak.Carnival had about 450 screens at peak, many of which did not reopen after the pandemic. The company had built its business model on the back of acquisitions.Starting with a four-screen theatre in Kochi, it grew aggressively after acquiring Anil Ambani's Big Cinemas for ₹700 crore, HDIL's Broadway for ₹110 crore and Network 18's Glitz Cinemas. Later, it announced taking over the operations of Maharashtra-based E-Square Cinemas' 37 existing operational screens.To be sure, as most of the cinema halls were on lease, the security the bank had was much lower than the value of the loan. It is unclear whether CFM plans to recover its investment in the debt.

Mumbai: Local subsidiaries of Volkswagen Group, Hyundai Motor and Toyota Motor are likely to apply under India's electric vehicle (EV) policy, which allows companies to import a certain number of high-end EVs at a concessional tariff, provided they agree to make long-term investments in domestic manufacturing, said people aware of the development.The decision of the companies will depend on final guidelines, or standard operating procedures, of the policy that the government is expected to announce in the next three to four months, the people said.The Scheme to Promote Manufacturing of Electric Passenger Cars in India was unveiled in March, this year.115267759Consultative DialoguesIt had raised hopes that Tesla would finally enter the local market, but the iconic US electric carmaker has, so far, not made any firm commitment to building a domestic factory.Volkswagen, Hyundai and Toyota have shown interest as the government began deliberations and consultative dialogues with the industry, following a lukewarm initial response.“The VW Group was always keen to participate in the EV policy as it allows import of a certain number of battery electric vehicles at a concessional duty,” said a person aware of the plans of the German group, which operates its India business under subsidiary Skoda Auto Volkswagen India. “In all likelihood, the group will submit its application once the guidelines are out,” the person added.“We are studying, in detail, the impact of this latest EV policy, and will evaluate the way forward accordingly,” said a company spokesperson.Greenfield & BrownfieldAmong other things, the decision has been prompted by the likelihood of the government considering a combination of investment in greenfield and brownfield (expansion in existing plants making fossil fuel-run vehicles) to meet the total investment threshold, said the person aware of the company’s plans.“That’s an ask by all manufacturers that are keen to participate,” said a government official.The guidelines which are in the process of getting firmed up will be common for all, the official said, declining to comment further.Under the policy, the government may consider investments in plants producing both fossil fuel-powered and electric vehicles as eligible for incentives to add scale and make large investments viable for automakers, ET reported on July 8.India levies a 70-100% duty on cars imported as completely built units. But the policy proposes a 15% duty cut on EVs valued at a minimum $35,000 (including insurance and freight) for up to five years if the companies invest at least $500 million in building new plants. They may set up new manufacturing facilities or deploy EV charging stations to meet the minimum investment requirement.A Hyundai Motor India (HMIL) spokesperson said the government is discussing with the industry a programme for widespread EV manufacturing and adoption. “HMIL has been making in India for over 26 years and welcomes any step to promote local manufacturing that offers innovative and safe mobility solutions to people and job creation. We await the rollout of the final policy and guidelines,” the spokesperson said in an email response to ET’s questions.An email sent to the Toyota Kirloskar Motor’s spokesperson remained unanswered till press time on Wednesday.Both Toyota and VW Group have committed fresh investment in Maharashtra a few months ago. TKM is set to establish a greenfield manufacturing facility at Auric City in Chhatrapati Sambhaji Nagar with an investment of ₹20,000 crore. The factory is expected to produce 4,00,000 vehicles annually, including electric and hybrid cars, the company said in July.In September, Skoda Auto Volkswagen India said it would invest ₹15,000 crore to expand capacity. The investment would include electric vehicle manufacturing.Industry WorkshopsThe government has appointed IFCI as its project management agency for the scheme. IFCI, in turn, has engaged consulting firm KPMG to assist it with making the guidelines, said the people cited earlier.IFCI is also the project management agency for various production-linked incentive schemes. It was entrusted with the task of verifying and monitoring capital subsidy schemes such as the Faster Adoption of Electric (FAME)—renamed the PM E-Drive—scheme earlier this year.On Tuesday, executives from the finance departments of auto companies, other representatives and senior officials from the ministries of commerce and heavy industries met for the second time in less than a month at a workshop on domestic value addition rules (DVA).To avail of the EV subsidy, companies need to comply with up to 50% minimum DVA and expand production capacity in India.“A lot of MNCs didn’t participate in the PLI (schemes). Therefore, the workshop conducted on Tuesday was more of a tutorial for the companies to understand the fineprint of DVA,” said an auto industry executive who attended.

Mumbai: Shares of Food delivery firm Swiggy on Wednesday listed at a 5.6% premium to its initial public offer (IPO) price of ₹390, making it the first company with issue size of over ₹10,000 crore in the past decade to have listed above the offer price. The stock closed 17% above its issue price at ₹455.95 in a weak market, surpassing analysts' expectations of a tepid debut. The company's market capitalisation at close on Wednesday was ₹1.02 lakh crore.Brokerage Macquarie initiated coverage on the stock with an 'underperform' rating and a target price of ₹325, implying a 28.7% downside from Wednesday's close. The firm said Swiggy has a 'long and winding road to profitability.'"We are very excited for the next wave of our journey as a company," said Sriharsha Majety, co-founder and CEO of Swiggy, in a press conference following the listing ceremony at NSE. "As for the profitability, even in the build-up to the IPO, we have talked about how the food delivery business has already gotten profitable and we expect that to continue at a steady clip."115273995In the first quarter of FY25, Swiggy posted operating revenue of ₹3,222 crore, up 34% from the same period a year ago. Its net loss widened to ₹611 crore in April-June from ₹564 crore a year ago. Rival Zomato's consolidated net profit soared 389% to ₹176 crore in the second quarter of FY24, compared with ₹36 crore a year ago. Revenue from operations rose 68% to ₹4,799 crore in the reporting period.Swiggy's ₹11,327-crore IPO, the country's sixth largest, received bids for 3.59 times the shares on offer, driven by demand from institutional investors. Investors had placed bids for 57.53 crore shares in the issue, against the 16.01 crore shares offered by the company. It had also raised ₹5,085.02 crore from 151 anchor investors on November 5.In the IPO, investors such as Prosus, Accel, Elevation Capital, Chinese tech majors Meituan and Tencent, along with Swiggy's founders Majety, Nandan Reddy, and Rahul Jaimini, sold over 175 million shares.Japan's SoftBank's $450 million investment in Swiggy was now valued at close to $1 billion on the listing day. The fund did not sell shares in the IPO. The value of Prosus' holding, which is now 25% of the company's equity, was valued at $ 3 billion on Wednesday - a gain of over $2 billion on its total investment of $1.3 billion in the firm. The Dutch-listed investment arm of South Africa's Naspers sold shares worth $500 million during the OFS.Swiggy is the only company other than Coal India with IPO size of over `10,000 crore to have listed above the issue price. Companies with large IPOs such as Hyundai Motor India, LIC, Paytm, GIC and SBI Cards and Payments had listed below issue price. In its IPO documents prospectus, Swiggy indicated plans to allocate a significant portion of the money raised from the issue to expand its quick commerce business, Instamart, which competes with Zomato-owned Blinkit, Zepto, Flipkart Quick, and Bigbasket’s BB Now. “The increase IPO fundraise by over 19% –the majority of which will go to Instamart,” Majety told ET in an earlier interview. In the press meet on Wednesday, he said, “If you look at the mix of our businesses, in our quick commerce business Instamart also, where also we have shown a healthy trajectory over the last two-three years.”