NOVEMBER, 20249HINDUJA GROUP SEEKING CAPITAL FROM JAPANESE BANKS FOR ACQUISITION ASSISTANCESAMSUNG ON TRACK TO HIT RS.80,000 CRORE REVENUE MILESTONEIndusInd International Holdings Limited (IIHL), a Hinduja group company, is seeking to raise up to 8,000 crore from Japanese banks to finance its bid for Reliance Capital, formerly owned by Anil Ambani. The move comes ahead of the May 27 deadline set by a bankruptcy court to finalize the deal. IIHL's approach to Japanese banks is seen as a strategic move to secure financing at potentially lower interest rates, leveraging Reliance Capital's association with Nippon Life, a joint venture partner.The discussions with Japanese banks, including Mizuho, SMBC, and MUFG, center around securing five-year loans at an interest cost of 8-9 percent per annum. This would represent a significant reduction in interest rates compared to other lenders, potentially providing cost-effective financing for the acquisition. However, the funding arrangements are yet to be finalized.The Hinduja group had previously explored raising $1 billion from global private credit funds, but the interest rates offered by those sources were relatively high, at 15-16 percent per annum. By tapping into Japanese banks, IIHL aims to secure more favorable terms for financing the acquisition of Reliance Capital.While IIHL may raise a significant portion of the required funds through this new financing route, the Hinduja family may need to inject additional equity to bridge any funding gap. The Hinduja group did not respond to queries regarding the matter, while Mizuho's executives were unavailable for comment, and MUFG and SMBC declined to comment.Japanese financiers have been increasingly active in India, demonstrating a greater appetite for risk and providing funding for local businesses. Japanese banks have previously financed Indian corporates with foreign currency loan requirements, but their involvement in local financing has been expanding. Recent investments by Mizuho, MUFG, and SMBC in their Indian operations highlight their commitment to the Indian market and their willingness to provide substantial funding to support business activities. Samsung India is on track to achieve over Rs 80,000 crore in total smartphone revenue for the current financial year, driven by a robust sales volume growth of about 12 percent, significantly outpacing the sluggish domestic market, according to sources familiar with the matter.The company experienced accelerated sales momentum, fueled by a trend towards premiumization, resulting in a 22 percent increase in average handset selling prices, surpassing the industry average of 17 percent. Additionally, the proportion of no-cost EMI purchases has risen from 54 percent to 60 percent during the year. Furthermore, the tenure for no-cost EMI schemes has been extended to 18 months from the previous 12 months.While Akshay Rao, Samsung India's General Manager for Mobile Experience Business, declined to officially confirm the revenue performance for FY24, he emphasized the company's strong growth trajectory in terms of value."In value terms, our domestic mobile phone sales have witnessed a 12 percent growth, surpassing the industry's growth rate of 8-10 percent. Our objective is to sustain growth ahead of the market, driven by a heightened focus on 5G handsets. For instance, in 2023, approximately 60 percent of our smartphone shipments to India were 5G handsets, a figure we aim to increase to 75 percent this calendar year," stated Rao.An industry executive noted that Samsung's mobile phone exports may have slowed down this year due to global recessionary conditions and consumer reluctance to spend in various markets. This situation has compelled many handset manufacturers, including Samsung, to adjust their production strategies. TOP STORIES
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