Arvind's Newsletter

1.RIL in talks for stake in Tata Play, may buy Disney's 29.8% share, reported Business Standard

Mukesh Ambani-owned Reliance Industries (RIL) is in discussions to acquire a 29.8 per cent stake in Tata Play from the Walt Disney Company, according to sources close to the development. This move is seen as part of RIL’s broader strategy to deepen its footprint in India’s television distribution sector.

Tata Sons, the holding company of the Tata group, currently holds a 50.2 per cent stake in the satellite television broadcaster. Besides Disney, the remaining shares are owned by Temasek, a Singapore-based fund.

If the negotiations are successful, it would mark the first time the Tata group and the Ambanis have partnered in a joint venture. It would also extend the reach of JioCinema across the Tata Play platform. Disney had intended to divest its shares during Tata Play's initial public offering, but as the listing was postponed, the American company began exploring other exit strategies.

(This strategic partnership could lead to potential conflicts in the future. It is also not clear why Tata group, which does not hold any significant media and entertainment interests, would want to continue to hold Tata Play in the long run. If this JV happens, could in eventually lead to sale of business to Reliance?
Maybe or maybe not. Lets wait and see.)

In other news, Business Standard also reported that Tata Group is considering a potential spinoff of its battery business, according to people familiar with the matter, as the Indian conglomerate expands its foray in the country’s renewable-energy and electric-vehicle sectors.  

Tata is in the early stage of discussions about eventually breaking out Agratas Energy Storage Solutions Pvt as an independent unit, the people said, asking not to be identified because the matter is private. Such a structure would allow the battery business to raise funds and go public in Mumbai at a later stage, the people said. 

A listing may value Agratas at $5 billion to $10 billion depending on its growth and market sentiment, they said.

Agratas designs and makes batteries for the automobile and energy sectors, with factories in India and the UK, according to its website. Tata Motors Ltd. and its unit Jaguar Land Rover Automotive Plc are its anchor customers. 

2.Supreme Court Unanimously Strikes Down Electoral Bonds Scheme, Holds It Unconstitutional

The electoral bonds scheme and relevant amendments to the Representation of the People Act and the Income Tax Act mandating non-disclosure of particulars on political contributions through electoral bonds is unconstitutional, the top court ruled.

The electoral bonds scheme is violative of the right to information and the right to freedom of speech and expression provided under Article 19(1)(a), a five-judge constitution bench headed by Chief Justice Chandrachud ruled.

Information about funding of political parties is essential for voters to effectively exercise their right to vote, Chief Justice Chandrachud said, reading the judgment.

The court observed that the amendment to section 182 of the Companies Act which treats companies and individuals alike for the purposes of political donations is manifestly arbitrary, as a company exercises a much wider influence on the political process than an individual. Contributions by companies are purely business transactions, the court held.

Electoral bonds could lead to ‘quid pro quo’ relationships between donors and politicians, top court says

Read more at: https://www.ndtvprofit.com/law-and-policy/supreme-court-strikes-down-anonymous-electoral-bonds-holds-them-unconstitutional

3.ACME Looks to Sell 35% Stake to Raise ₹3k crore, reports The Economic Times

ACME Cleantech, the largest independent solar power producer in India, is set to sell about 35% stake in the holding company for about ₹3,000 crore, said multiple people aware of the development.

The fundraise, a combination of debt and equity, will be used for completion of its ongoing projects and expansion in green hydrogen and ammonia production, they said.

Investment bank Ambit has been hired and feelers were sent to large investors such as Mubadala, GIP (Blackrock), Actis and NIIF, said the people, who did not wish to be identified.

ACME, established in 2003 by Manoj Kumar Upadhyay, is the largest solar independent power producer in India with a diversified portfolio of 5.5 GW spread across 12 states and with a mix of central and state utilities. Its portfolio of operational solar power projects has grown to 2.9 GW from 15 MW in 2011. The rest of the 2.6 GW is under different phases of development.
Read more at:
https://economictimes.indiatimes.com/epaper/delhicapital/2024/feb/15/et-brands/acme-looks-to-sell-35-stake-to-raise-3k-crore/articleshow/107701910.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst

4.Major German companies including the automaker Volkswagen and the chemicals giant BASF moved to distance themselves from operations in China following media reports of their ties to forced labor in Xinjiang.

 The car company said it was in talks with its joint venture there, while BASF said it would sell its stakes in its joint ventures in Xinjiang. The news came as the Financial Times reported thousands of Volkswagen cars were impounded in U.S. ports over a component that apparently breached rules over forced labor. China’s foreign ministry said the allegations were “entirely a lie.”

The latest reports do not, however, represent the overall trend when it comes to German investment in China, which last year rose to a record high.

5.U.S. intelligence agencies are reportedly concerned over Russian capabilities to deploy a space-based nuclear weapon to target Washington’s satellite network. 

The worries were publicised by a U.S. lawmaker’s cryptic call for the White House to declassify information related to a “serious national security threat,” though officials cited by The New York Times and Politico said the issue was not new and not considered urgent. On the ground, Western leaders pressed Congress to pass a bill delivering military assistance to Ukraine: U.K. Foreign Secretary David Cameron likened Russia’s invasion to Hitler’s expansionism, writing in The Hill that the latter “came back for more, costing us far more lives to stop his aggression.”

6.Why Apple fans are starting to return their Vision Pros

Comfort, headache, and eye strain are among the top reasons people say they’re returning their Vision Pro headsets, reported The Verge.

For some Apple Vision Pro buyers, the honeymoon is already over.

It’s no coincidence that there’s been an uptick on social media of Vision Pro owners saying they’re returning their $3,500 headsets in the past few days. Apple allows you to return any product within 14 days of purchase — and for the first wave of Vision Pro buyers, we’re right about at that point.

Comfort is among the most cited reasons for returns. People have said the headset gives them headaches and triggers motion sickness. The weight of the device, and the fact that most of it is front-loaded, has been another complaint.

7.India’s unprecedented love-in with the Middle East, opines the Economist.

As a flex of India’s newfound geopolitical muscle, it was hard to top. Visiting the Middle East this week Narendra Modi stopped first in the United Arab Emirates (uae), where he signed an investment treaty, headlined a rally of 40,000 Indian expatriates and opened a vast new Hindu temple. Then India’s prime minister headed to nearby Qatar, having just secured the release of eight Indians jailed there for espionage. All the while, a dozen Indian navy ships were in nearby waters, helping to protect global shipping under threat from pirates and Houthi missiles.

The two-day trip, which ended on February 14th, thus neatly entwined some of the key strands—business, migration and security—of a historic shift in India’s approach to the Middle East. Mr Modi is now injecting new momentum into arguably his most important diplomatic initiative since taking power a decade ago: downgrading relations with Iran and aligning India with Israel and the Gulf Arab states.

The shift could pay huge dividends for all sides, boosting foreign investment to India in particular. It could also help establish India as a competitor to China on infrastructure and technology in the region. And it could add ballast to efforts by America and its Gulf Arab partners to stabilise the Middle East. But there are significant risks too. And those have intensified in recent months as violence has spread from Gaza into the Red Sea and beyond, threatening India’s investments and expatriates, as well as its ships and cargo.

Mr Modi’s visit was, to some extent, about politics back home. With a general election in India due by May, the rally in Abu Dhabi was part of a global effort to mobilise overseas Indians, a big source of political funding. Opening the temple there will further energise his Bharatiya Janata Party’s Hindu-nationalist base, less than a month after he inaugurated one in northern India on the site of a mosque demolished by Hindu extremists in 1992.

The visit also reinforced a campaign message that Mr Modi is bolstering India’s global stature, including in the Islamic world. Indian expatriates say the results are palpable in the uae, which he has visited seven times since 2015, when he became India’s first prime minister to go there since 1981. “Respect for Indians has really increased,” says Biswajit Ray, a 43-year-old Indian banker at the rally. “We see it in our offices. We feel it walking on the street.”

But electioneering is only a tactical cherry on the strategic cake. Though India’s links to the Middle East date back centuries, its diplomatic influence there waned for decades after independence in 1947, largely because of Arab states’ support for Pakistan. India’s ties to Iran and solidarity with the Palestinians also stymied relations with Israel. Mr Modi now seeks to re-establish India as one of the region’s essential players.

Consider the economic picture first. India’s business links with the region used to be defined by its imports of oil and exports of cheap labour. In the past few years, however, bilateral trade has diversified, with the UAE emerging as India’s second-biggest export market. Last year the two countries signed a free-trade deal aimed at doubling non-oil bilateral trade to $100bn by 2030. Indian commercial and political ties with Iran, by contrast, have dwindled after India stopped importing all Iranian oil in 2019 due to American sanctions.

At the same time, India has lured billions of dollars of investment from Gulf Arab states keen for a stake in the world’s fastest-growing major economy. Emirati investment flows into India totalled $9.8bn in the half-decade to 2023, almost triple the figure for the previous five years. The UAE’s largest sovereign-wealth fund has committed to investing $75bn in Indian infrastructure. Saudi Arabia’s has pledged $100bn.

Big Indian companies have also won infrastructure contracts in the region as America presses Gulf Arab states to seek alternative partners to China. One of them, Larsen & Toubro, says that some 30% of its $55bn order book stems from the region, mainly Saudi Arabia. And Indian commerce with the uae is expected to grow faster with the agreements Mr Modi just signed, including the bilateral investment treaty, a deal to link the two countries’ digital-payment systems, and a commitment to advance a plan backed by America and the eu to establish a trade corridor linking India to Europe via the Middle East.

As business ties have grown, so too has the Indian diaspora in the Middle East. There are now some 9m Indian nationals in the Gulf Co-operation Council countries (Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the UAE), up from 7m in 2013. The UAE has about 3.5m, representing 36% of its population.

They are still mostly blue-collar workers. But in recent years many more wealthy and middle-class Indians have been moving to the UAE, especially Dubai. Some migrated because of covid-19, which hit India hard. Many used the UAE’s “golden visas” which since 2019 have granted ten years’ residency to qualified professionals, entrepreneurs and investors.

The influx also reflects the UAE’s efforts to emphasise inclusivity. Hence the new Hindu temple, which Mr Modi proposed in 2015. The UAE’s president, Muhammad bin Zayed, allocated 27 acres of land for it. At the Abu Dhabi rally, Mr Modi hailed Sheikh Muhammad as his “brother” and thanked him for looking after Indian expatriates. “We are partners in each other’s progress,” Mr Modi said, pledging to elevate to new heights a relationship “based on talent, innovation and culture”.

On the security front, the landscape has changed even faster. Israel has become one of India’s top three weapons suppliers in recent years. Along with several Gulf Arab states, it is an important Indian partner on counter-terrorism. And now India is making a notable contribution to maritime security in the region, with its biggest-ever naval deployment there. India’s navy has not joined the American and British force in the Red Sea that has hit Houthi targets in Yemen. It is focusing instead on piracy in the wider area, where it has investigated some 250 vessels, boarding 40. It is co-ordinating closely with America and Britain.

Mr Modi’s pivot has suffered some setbacks. After breaking with Indian precedent by voicing strong support for Israel following last year’s Hamas attacks, his government had to adjust its position a few days later to reaffirm support for a two-state solution. That followed intense criticism of Israel among developing countries, including China, which India sees as its rival for leadership of the “global south”. India may have to recalibrate again if Israel’s actions prompt Gulf Arab states to harden their own positions.

India was also shocked in October when a Qatari court condemned to death eight former Indian Navy officers accused of spying for Israel. It is unclear how India secured their release but last week it signed a $78bn deal to extend imports of Qatari liquefied natural gas until 2048. There will no doubt be more challenges ahead. But as India’s Middle Eastern interests expand, so does its appetite for risk. “India is now playing a game in which you’ll get hurt sometimes, you’ll get pushed around or you have to push other people around,” says C. Raja Mohan of the National University of Singapore. “It’s part of joining the big boys’ club.