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Facebook Invests In Reliance; Strong Value Unlocking On Cards

In one of the biggest deal in the recent history, Reliance Industries has informed that the global social media giant, Facebook will invest Rs 43,574 crore in Reliance’s subsidiary for digital services-Jio Platforms. The deal is also termed as the largest FDI for minority investment in India.

The investment has a strong value unlocking opportunity for the company. The statement from the company to the stock exchanges said that Facebook’s investment values Jio Platforms at Rs 4.62 lakh crore pre-money enterprises, resulting to USD 65.95 billion, at the exchange rate of Rs 70 per USD. The amount translates into 9.99 per cent equity stake in Jio Platforms on a fully-diluted basis. It further added that the investment translates Jio Platforms as part of the top-five listed companies in India by market capitalisation.

Reliance Industries (RIL) has taken a few important and aggressive steps to achieve its debt reduction target. The company, as of September 2019 balance sheet, reported consolidated borrowing figure at Rs 2,52,190 crore. Major part of this amount is attributed to the large expansion of Jio, which was launched at USD 40 billion in 2016.

The deal with Facebook will help RIL to reduce the debt burden. This also has a scope of further expansion when RIL will stage itself for new spectrum auctions. 

Wockhardt receives USFDA QIDP status for WCK 6777

Wockhardt announced that the company has received qualified infectious disease product (QIDP) designation for WCK 6777 from United States Food & Drug Administration (USFDA). WCK 6777 is once-a-day combination antibiotic of β-lactam enhancer.

WCK 6777 is based on Wockhardt’s NCE Zidebactam. It overcomes various problematic bacterial resistance mechanisms such as metallo-β-lactamases, etc. and also the ability to overpower other tough resistance mechanisms such as reduced drug uptake and drug efflux encountered in contemporary multidrug (MDR) resistant Gram-negative pathogens. It is expected to be the first-ever antibiotic facilitating the treatment of MDR infections in out-patient settings. It is used for the treatment of complicated urinary tract infections, including pyelonephritis (cUTI) and also of complicated intra-abdominal infections (cIAI). The company intends to work for the global development of WCK 6777, covering important markets of US, Europe, China and India.

Wockhardt is a research-based global pharmaceutical and biotech company. Wockhardt's new drug discovery programme has focussed on unmet need of anti-bacterial drugs that are effective against the menace of untreatable superbugs. 

TVS Motor acquires Norton Motorcycles

Indian multinational motorcycle company, TVS Motor Company informed that one of its overseas subsidiaries had signed an asset purchase agreement with Norton Motorcycle Holdings Limited and Norton Motorcycles (UK) Ltd to acquire certain assets from Norton, including its brand as well as other associated brands.

The company further informed that it was an all-cash deal with a total amount of GPB 16 million (Rs 153.12 crore). The project was concluded by Project 303 Bidco Limited, which is a newly-incorporated company (with no business) acquired by TVS Motor Singapore Pte Limited for GBP1. 

TCS collaborate with Amway for transforming its IT operations

Indian multinational information technology service & consulting company, Tata Consultancy Services (TCS) and American multi-level marketing company-Amway, have entered into a strategic partnership to transform latter’s global technology operations.

TCS informed that Amway was looking to transform its IT infrastructure & operations as well as its global service desk in order to improve agility, accelerate speed to market & enhance its customer experience. For this purpose, the duo collaborated and consequently, TCS will leverage its Business 4.0 framework to deliver a new operating model by implementing its cognitive automation software i.e. machine first delivery model (MFDM), which is powered by Ignio. It will help in making Amway proactive from reactive as well as a predictive model as MFDM helps in enhancing business growth through automation & cloud.

Besides, TCS will also help in transforming Amway’s IT infrastructure model by including services such as self-healing capabilities, chatbots, self-help along with the improvement of its service desk mobile app. The abovementioned features will ultimately, improve Amway’s operational resilience & end-user experience. 

US crude oil price bounce back from below zero

Tuesday morning i.e. on April 21, 2020, was shocking as US crude oil i.e. WTI Crude price had fallen below zero. It isn’t the first time in 2020 for crude prices to plummet by a high percentage. However, post-noon, the WTI crude price showed a mere recovery by trading above zero to USD 0.10 per barrel. In the overnight trade, May futures for US crude oil WTI fell to negative USD 37.63 per barrel ahead of the expiry on Tuesday of May WTI futures contracts. Mayhem in the oil market that basically led to a negative crude price suggested that the sellers were paying buyers to take deliveries so as to avoid any additional storage cost incurred to store the excessive unused oil. This situation was seen as majority of the world is under lockdown and experiencing extremely reduced trading activities. As a relief, OPEC allies had announced on cutting down the oil supply but currently, there is still excess oil with a lack of storage space.

A contrasting situation can be seen as US WTI crude price crashed but Brent crude continued to trade at USD 25.36 per barrel. The difference is seen as in reality, WTI has to be delivered physically at Cushing, Oklahoma (US) whereas for Brent, deliveries can be done offshore at multiple locations. Hence, storage constraints at Cushing (Oklahoma) led to dumping and unwinding of May futures. As for June contract, the prices stayed around USD 20.43 per barrel.

This crash in prices has highlighted the stark difference by which US oil markets were oversupplied on one hand and by the slowdown in industrial and economic activity caused by COVID-19, on the other hand. A common thought that occurs is that a drop in crude prices may lead to reduced petrol prices. This is actually incorrect as the cost of Indian basket of crude is made up of the average of Oman and Dubai while, Brent crude and was last at USD 20.56 per barrel on April 17, 2020. The retail petrol and diesel prices in India are linked to the price of these fuels in global markets and not that of crude oil directly. 

Jyothy Labs launches hand sanitiser

The company informed that it has launched Margo hand sanitiser, an alcoholbased neem extract, which guarantees 99.9 per cent germ kill. The product is available in 40 ml SKU, priced at Rs 20.

This comes amid the recent announcement of World Health Organisation (WHO) which had released a circular regarding the prevention strategies to combat COVID- 19. It recommended people to wash their hands repeatedly or use sanitiser if they are travelling and cannot carry soap & water all the time. Soon after this, there was a massive demand of sanitisers in the market, leading to a huge price rise of the product and less supply in the market. Jyothy Laboratories had recently forayed into the hand-wash segment and thus, launched this product in an affordable price as it was the need of the hour.

Jyothy Labs Ltd is Mumbai-based fast-moving consumer goods company, founded in 1983. The company has six business divisions namely-fabric care (Ujala as market leader), household insecticide (Maxo), utensil cleansers (Exo), fragrances, personal care (Margo) and fabric care service.

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