TRACKPAD

Moody's Upgrades India's Credit Rating After 13 Years 

The US-based rating agency Moody’s has upgraded the sovereign credit rating of India on Friday giving hope to a rather sluggish economy. The credit rating was upgraded by a notch to ‘Baa2’ with a stable outlook on the back of expectation of higher growth as a result of the economic and institutional reforms implemented by the government. 

The economy that has been largely hit by demonetisation in the second half of FY17 is now grappling with the implementation of GST. However, the improved credit rating by the international agency has again instilled a wave of optimism in the market, sending S&P BSE Sensex and NSE Nifty50 higher by one per cent in intra-day trade on Friday. The upgradation in India’s rating has come after a long gap of 13 years. The international agency had upgraded India’s credit rating to ‘Baa3’ in 2004, during the tenure of Vajpayee government. Further, in 2015, Moody’s changed the rating outlook of India from ‘stable’ to ‘positive’. The ‘Baa3’ rating is the lowest investment grade, just a level up from the ‘junk’ status. 

In a statement, Moody’s said that the rating has been upgraded on the expectation that the reforms introduced in the economy will boost India’s growth potential and its large and stable financial base will most likely lead to a decline in the government's debt burden in the medium term. However, the credit rating agency also cautioned that the high debt burden of the country remains a constraint on its credit profile.

RCom To Sell Assets For Rs 801 crore 

Following the debt failure on the back of default on dollar bounds, Reliance Communication (RCom) approved the sale of its real estate assets in Delhi and Chennai to Canada-based firm Brookfield Asset Management Inc. The company approved the asset sale for a consideration of Rs 801 crore to Brookefield Asset Management Inc, according to media reports. 

At present, RCom is burdened with a surmounting debt of Rs 45,000 crore. The company is likely to repay debt amounting to Rs. 27,000 crore through sale of land and assets, according to the company statement. 

The company posted a consolidated loss of Rs. 2,709 crore in the second quarter of FY18. The company posted loss for the fourth consecutive quarter in Q2FY18. It had recorded a profit of Rs 62 crore in the second quarter of the previous year.

JIO To Hit USD 5 Billion Income By FY25: Goldman Sachs 

Global brokerage major Goldman Sachs has reiterated in a client note that Reliance Jio Infocomm will be the growth driver for Mukesh Ambani-led Reliance Industries in the long term. The brokerage firm also said that Reliance Jio Infocomm is likely to generate an operating income of over USD 5 billion by the financial year 2025. 

The company said that Reliance Industries’ Jio has invested over USD 30 billion in the telecom business over the last five years, creating a solid asset base that commands the potential to be the growth engine for the company in future. The company also assigned enterprise value of USD 43 billion as well as equity value of USD 22 billion to the telecom arm of RIL. 

It has estimated that Reliance Jio will attain its modest earnings before interest, tax, depreciation & amortisation (EBITDA) breakeven in the current financial year itself, besides generating USD 3 billion operating income by FY20. Further, Goldman Sachs also expects the telecom major to post a 20 per cent revenue market share by FY21. However, the company also added that its expectations are materially below the RIL management’s guidance. Reliance Industries recorded a YTD return of 72.31 per cent on the bourses as on November 22, 2017.

Biocon Receives EIR From USFDA 

Pharma company Biocon received the Establishment Inspection Report ( EIR ) from the US Food and Drug Administration (USFDA) on Monday. The EIR was received by the company in regard to the CGMP (current good manufacturing practice) inspection of the aseptic drug product facility. 

The company’s aseptic facility was audited between May 25 and June 3 in 2017. The US FDA classified the outcome of the inspection as voluntary action indicated with the EIR stating that the inspection is closed, according to the company statement. 

In the second quarter of FY17, the company reported a 53 per cent decline in its net profit to Rs 68.8 crore on the back of lower off-take of APIs, disruption in production due to plant modification and tender delays. 

The company will get GMP compliance certificate for the drug product facility only after a follow-up inspection by EMA to verify the implementation of the corrective and preventive actions for the plant. Until the facility is cleared, Biocon will not get marketing approval for its biosimilars in Europe.

Eris Lifesciences Acquires Strides Shasun 

Indian pharma major Strides Shasun was acquired by Eris Lifesciences for Rs 500 crore. Following the acquisition, Eris will acquire the marketing and distribution rights of Stride’s Indian branded business in the domains of neurology, psychiatry, nutraceuticals and gastro. However, Strides will retain the global rights of these products. 

Eris Lifesciences is among the top 10 companies in the central nervous system (CNS) segment. It is also in the top 20 companies in the cardiology segment and ranks among top 10 in the diabetology segment. Since 2007, it has focused on the chronic segments of cardiology and diabetology. 

The acquisition of Strides Shasun has enabled Eric Lifesciences to enter into the league of top 25 companies whose market share is more than one per cent in the Indian pharmaceutical market.

L&T BAGS Mauritius Metro Project 

Engineering and construction major Larsen & Toubro (L&T) has bagged order worth Rs 3375 crore from the Mauritius government-led Metro Express Limited to design and build an integrated light rail-based urban transit system in the African island nation. The project will be be commissioned by 2019-20, making L&T to be the first Indian firm to build metro outside India. 

The 26-km route will connect Curepipe to Immigration Square in Port Louis and will feature 19 stations, two of which will be elevated stations. The project is scheduled to be completed in 48 months. L&T has committed to complete and deliver a priority section of 13 km in 24 months. The project has been won against competition and will be fully funded through a Government of India grant and Line of Credit.