This is a roundup of the day’s top stories in brief.
1. MPC Meeting Rescheduled At The Eleventh Hour
A meeting of India’s monetary policy committee, scheduled for this week, has been rescheduled.
“The meeting of the MPC during September 29, 30 and October 1, 2020 as announced vide Press Release 2019-2020/2248 dated April 20, 2020 is being rescheduled. The dates of the MPC’s meeting will be announced shortly,” the Reserve Bank of India said in a release on Monday.
The central bank did not ascribe any reason for the delay in the MPC meeting.
Ravindra Dholakia, Chetan Ghate and Pami Dua stepped down from the panel after the August meet.
Since then, the government has been deliberating on the new appointments to the committee but has not yet disclosed the names of the new members.
Without the external members, only the RBI appointees remain on the committee.
2. Tata Group Courts Investors For New Digital Platform
Tata Group is in talks with potential investors about taking stakes in a new digital platform, people familiar with the matter told Bloomberg News.
Tata Sons Pvt., the holding company of the $113 billion coffee-to-cars conglomerate, is working with advisers to explore bringing in financial or strategic investors, including global technology companies, the people said, asking not to be identified as they aren’t authorized to speak to the media.
The group plans to bring together digital assets across various Tata businesses to create the new entity, according to the people.
Tata Group is seeking to modernize its consumer businesses as retail giants like Amazon.com Inc. and billionaire Mukesh Ambani pile into the country’s fledgling e-commerce market.
Here's why the Tata Group is looking to bring in outside investors.
3. Sensex Surges 1,400 Points In Two Days; U.S. Stocks Rally
Indian equity markets rose for the second straight day, in-line with positive global cues.
The S&P BSE Sensex ended 1.6% higher at 37,981 while the NSE Nifty 50 index ended 1.6% higher at 11,226.
The Sensex has gained over 1,400 points over the last two sessions, while the Nifty has gained over 400 points.
Broader markets outperformed the benchmarks in today's session.
Follow the day’s trading action here.
U.S. stocks jumped after four weeks of declines and European shares added the most in three weeks as banks rebounded.
Automakers, banks and industrial companies led the S&P 500 Index more than 1.5% higher as investors found buying opportunities after a selloff that took the gauge to its lowest since July last week.
Uber Technologies Inc. rose after a judge ruled that the ride-hailing app can operate in London.
The pound strengthened on hopes that U.K. and European Union officials will make progress as a key week of Brexit talks begins.
West Texas Intermediate crude rose 0.7% to $40.54 a barrel.
Get your daily fix of global markets.
4. Why RBI Is Playing Gatekeeper On Resolution Plans From ARCs
The Reserve Bank of India remains unconvinced that asset reconstruction companies can act as resolution applicants as part of insolvency proceedings.
The regulator, according to a person familiar with the matter, believes that several enabling conditions would need to be put in place before allowing ARCs to act as resolution applicants.
The view comes after several rounds of discussions between the regulator, ARCs and other stakeholders, which followed an attempt by UV ARC Ltd. to purchase 74% stake in Aircel Ltd.
The deal, if it had gone through, would have made the ARC a promoter of a telecom company with over Rs 12,000 crore in debt.
The case has led to much discussion over the RBI’s stance.
5. Interest On Interest: Decision Soon
The Centre informed the Supreme Court on Monday that a decision is likely in two-three days on charging of interest by banks on instalments which were deferred during the moratorium period, in view of the Covid-19 pandemic.
The top court asked the Centre to bring the decision on record and circulate the affidavit to the parties in a batch of pleas challenging interest on deferred instalments.
Solicitor General Tushar Mehta, appearing for the Centre, said this issue is under active consideration of the government and a decision is likely to be taken within two-three days.
The top court had asked the Centre that a concrete decision on this should be taken with clarity.
6. Government-To-Government Defence Deals: Offset Clause Scrapped
India scrapped a rule that forced foreign suppliers of weapons, aircraft or military hardware to invest in the South Asian nation, as Prime Minister Narendra Modi seeks to accelerate defense purchases and reduce red tape.
The change in policy comes close on the heels of the country’s auditor admonishing Dassault Aviation SA, the French defense manufacturing giant, and European consortium MBDA for not meeting their commitment to reinvest part of their earnings in India from a deal to supply 36 Rafale fighter jets.
The exemption only applies to government-to-government or single-vendor deals and not for competitive bidding situations.
“We decided to do away with the off-set requirement because the policy did not work,” Director General of Acquisition Apurva Chandra said explaining the new policy.
New policy also allows defense forces to lease hardware.
7. Why ONGC Shares Surged
Shares of Oil and Natural Gas Corp. surged on reports that India is considering a floor price for natural gas produced from local fields.
The nation’s Oil Ministry has suggested benchmarking domestic producer gas price to Asian LNG price with a discount of about a dollar, Bloomberg reported on Friday quoting people aware of the matter.
Under the government’s new administered pricing rule, rates of domestically produced natural gas get revised every six months.
Reacting to the development, ONGC gained as much as 7% in Monday’s trade compared with a 1.6% rise in the Nifty 50 Index.
Here’s what brokerages had to say about the ONGC stock.
8. Another Risk To India’s Auto Recovery
One indicator may be worrying for India’s automakers even as sales rebound after April’s complete washout—lenders have turned stricter.
Around 80% of owners, according to an auto dealers' lobby, bought cars, motorcycles and scooters on borrowed money prior to the pandemic.
But as economic activity collapsed during the harshest lockdowns in the world, millions are estimated to have either lost jobs or saw their salaries slashed.
Lenders don’t find them creditworthy anymore.
The problem is not just with retail financing. Dealers, too, are finding it difficult to raise funds for buying inventory.
9. Get Succession Planning Right, For Business Longevity
One of the drivers of the longevity of a business is the succession planning of key executives who drive ground level execution and strategic decision-making around capital allocation, write Saurabh Mukherjea and the Marcellus Team.
All businesses face the event of succession of key management personnel, whether it be promoters or professionals.
However, succession planning is a process that is not adequately engrained in the DNA of most organisations due to the variety of challenges involved in this process.
As a result, many great businesses with strong competitive advantages fail to sustain in the long run.
10. India’s Covid Tally Crosses 60 Lakh
Coronavirus infections in India crossed the 60-lakh mark today even as new cases showed signs of slowing.
The country added over 82,000 new cases in the last 24 hours, according to health ministry data.
The last 10 lakh infections have been reported over a span of just 12 days.
Active cases are close to 9.6 lakh -- lower than the 10.17 lakh it had reached earlier this month.
Track the latest updates on the Covid-19 pandemic in India, here.
Globally, Covid-19 cases topped 3.29 crore with over 9.95 lakh dead.
France reported a third daily decline in new cases.
Myanmar has seen a spike in cases this month, prompting the government to order the construction of treatment and quarantine centers.
Covid-19 is spreading “at an alarming rate” in eight New York City neighborhoods, the city’s health department said.
Follow the global spread of the virus here.
Also Read: Why So Few Indians Pay Income Tax
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