This is a roundup of the day’s top stories in brief.
1. Indigo Promoter Spat Reaches SEBI
Interglobe Aviation Ltd. promoter Rakesh Gangwal has alleged “questionable” related-party transactions between the IndiGo’s parent and private entities of the other promoter Rahul Bhatia in a letter to the Securities and Exchange Board of India.
- Apart from the related party transactions, Gangwal also alleged that various governance norms and laws are not being adhered to which will lead to “unfortunate events”, according to the letter where he asked SEBI to step in to resolve grievances.
- Earlier BloombergQuint reported how several companies owned by or connected to Bhatia provided the airline services ranging from ticketing to crew accommodation to simulation training.
- The airline’s Chief Executive Officer Ronojoy Dutta, in an interview with CNBC-TV18, later confirmed that the two were in talks over these issues. Gangwal, however, has now sought SEBI’s intervention.
Here’s the full text of the letter.
2. Flat Quarter For TCS
Tata Consultancy Services Ltd.’s first-quarter profit remained flat and its margin narrowed as expected on higher employee costs.
- Net profit rose 0.1 percent over the previous three months to Rs 8,131 crore.
- Revenue rose 0.4 percent to Rs 38,172 crore
- Operating profit fell 3.3 percent to Rs 9,220 crore.
- Margin contracted 90 basis points to 24.2 percent.
This was a seasonally strong quarter and muted performance may weigh on the full year growth.
3. Another Auditor Quits Manpasand Beverages
Statutory auditor to Manpasand Beverages Ltd. resigned amid a tax probe and top-level exits at the maker of MangoSip juice.
- The recent developments including an investigation by Goods and Services Tax authorities, and resignation of directors and the company secretary led the auditor to resign, the beverage maker said in an exchange filing.
- Mehra Goel & Co. Chartered Accountants is the second auditor to quit in little over a year. The firm was appointed after Deloitte Haskins & Sells resigned as the company’s auditor in May 2018, citing that the company was not sharing “significant information”.
- Manpasand Beverages’ shares tumbled 63 percent since May 24 after top officials were arrested for alleged Rs 40-crore fake invoicing related to GST.
That had led four directors to quit.
4. Sensex, Nifty Remain Subdued
Indian equity benchmarks ended little changed as the gains in Bajaj Finance Ltd. and Sun Pharmaceutical Industries Ltd. were offset by losses in Titan Company Ltd.
- The S&P BSE Sensex and the NSE Nifty 50 ended little changed at 38,730.82 and 11,555.90 respectively.
- The broader market index represented by the NSE Nifty 500 Index ended 0.1 percent higher.
- Titan—India’s largest jewellery maker clocked its steepest fall in over a decade after predicting a muted first quarter as Asia’s third-largest economy faces a slowdown.
- Bajaj Finance registered its biggest gain in over eight months as its assets under management rose 41 percent on a yearly basis.
- Seven out of 11 sectoral gauges compiled by NSE ended lower.
Follow the day’s trading action here.
5. Portfolio Managers’ Worst Month Of The Year
India’s top portfolio managers suffered the worst loss in six months in June as shares of auto and consumer goods makers fell.
- The 50 largest portfolio management firms—that collectively manage close to Rs 1.16 lakh crore of investor money—lost 1.6 percent on an average last month.
- That’s the worst return since January when the firms—accounting for more than 80 percent of the funds managed by all portfolio managers—lost about 4 percent.
- Portfolio managers’ returns continued lag the Sensex and Nifty year-to-date and for the 12-month period.
Nineteen of the top 50 portfolio managers tracked by BloombergQuint managed to beat the Sensex.
6. Why Bajaj Finance Shares Jumped
Assets managed by Bajaj Finance Ltd. have jumped the most in at least nine quarters, causing its shares to rebound a day after ending in losses on account of a cautious commentary by the head of its parent.
- Bajaj Finance’s assets under management rose 41 percent year-on-year—the biggest jump since at least the first quarter of financial year ended March 2018—to Rs 1.29 lakh crore in the three months ended June, according to its exchange filing.
- In the March quarter, its AUMs stood at Rs 1.16 lakh crore.
- Bajaj Finance shares on Tuesday jumped as much as 6.2 percent—the most since May 17—to Rs 3,624.05 apiece.
Lending has been hurt by the liquidity crisis and the slowing economy.
7. No Rebound Yet For Consumer Goods Makers
Consumer goods makers’ sales remained under pressure in the previous quarter, according to a BloombergQuint survey, indicating that demand is yet to recover as the monsoon was delayed.
- Sales volumes were either flat or rose marginally in the three months ended June, the survey of 11 distributors in 10 states, including Delhi-National Capital Region, revealed. They spoke on the condition of anonymity out of business concerns.
- Multiple indicators from auto sales to consumer goods volumes point to a slowing economy.
- Makers of cars to shampoos hoped a good monsoon to drive demand in the second half. But late rains delayed sowing, which could impact output and incomes.
BloombergQuint’s survey found that the sluggishness persists. Here are some of the findings.
8. It’s Dirty But We Need It: Adani On Coal Plant
The Indian billionaire behind the controversial Carmichael coal mine in Australia is hitting back at criticism that the endeavor will be both unprofitable and too dirty.
- In an interview in New Delhi, Gautam Adani took aim at two major faults opponents have flung at the development: that the mine’s low-quality coal won’t earn enough money to justify his $2 billion investment, and that the world must abandon the fuel in favor of renewable energy to avoid catastrophic climate change.
- “If the project wasn’t viable, we wouldn’t have pursued it,” said Adani, whose net worth of $9.6 billion makes him India’s sixth-richest person, according to the Bloomberg Billionaires Index.
- “Renewable energy is good for the nation, but it can’t meet our baseload power needs,” he said.
Adani said the board approved 10 million metric tons of annual output from Carmichael’s first phase
9. India’s Office Supply At Record High
Office space supply in India surged to a record in the first six months of 2019 even as the residential market may have shown signs of recovery.
- That’s according to Knight Frank India’s half-yearly report for real estate, which studied eight major cities.
- Office space supply rose 31 percent over last year to a decade high of 23.9 million square feet in the first six months of 2019, with the information technology/IT-enabled services sector accounting for over a third of space utilisation, the report said.
- Sales of residential launches, it said, grew 4 percent, with project launches rising 21 percent.
Co-working spaces continue to drive transaction volumes and influence occupier demand.
10. India Gets Its First Full Electric Car
A full-fledged electric vehicle just made its debut in a market known for affordable, entry-level cars. Hyundai Motor Co. on Tuesday launched its Kona SUV in India, where 3.4 million new cars and SUVs hit the roads last year, and is the only major market without a real electric vehicle.
- The vehicle will sell starting at Rs 25.3 lakh ($36,000), more than eight times the starting price for the Maruti Suzuki Alto, India’s most popular and best-selling car.
- Hyundai’s electric car plan is betting on Prime Minister Narendra Modi’s attempt to move Asia’s third-largest economy toward cleaner energy in everything from vehicles to power plants and contain the world’s worst pollution level in major cities.
- While the country is yet to set an official deadline to sell only electric vehicles, the government has talked about phasing out gasoline and diesel cars.
Kona has a 452 kilometers and 80 percent of the battery can be charged in less than an hour.
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