Here is a roundup of the day’s top stories in brief.
1. Maruti Suzuki’s 2021 Optimism
India’s biggest carmaker is expecting next year to be “much better” than 2020 as the economy rebounds and consumers emerge from pandemic-induced lockdowns to buy its vehicles.
Maruti Suzuki India Ltd., the local unit of Japan’s Suzuki Motor Corp., is expecting retail sales in December to be “pretty good” as there are pending orders with its dealerships and the rate of enquiries has sustained even after the festive season, Chairman R.C. Bhargava said in an interview with Bloomberg Television.
“The pending demand has been very much in the forefront of what is causing the increase in sales,” said Bhargava.
“We lost the first quarter so I definitely expect 2021 to be much better than 2020,” Bhargava said.
2. Economic Ups And Downs? Not For These Companies
Corporate earnings suffered as India’s growth slowed even prior to the pandemic as mounting bad loans slowed credit growth, defaults by IL&FS group caused a credit crisis and slowing consumption cooled GDP growth.
Despite a slowing GDP growth prior to Covid-19, four companies delivered returns better than the nominal GDP growth in the last five years.
Four companies that showed resilience to a slowing economic cycle include Avenue Supermarts Ltd., the operator of D-Mart supermarket chain; KEI Industries Ltd., a wire and cable maker; Safari Industries (India) Ltd., a luggage manufacturer; and ready-to-cook food maker Tasty Bite Eatables Ltd.
Curious about how these firms outpaced the economy? Read this BQ Blue exclusive.
3. Sensex Pares Losses; U.S. Stocks Decline
Indian equity markets recovered from the lowest point of the day to end largely unchanged.
The S&P BSE Sensex ended 37 points lower at 44,618 while the NSE Nifty 50 index ended flat at 13,114.
The Sensex recovered nearly 450 points from the day's low while the Nifty bounced 130 points from the lowest point of the day.
Broader markets were mixed in today's session.
Follow the day’s trading action here.
U.S. equities fell as concern over the outlook for stimulus talks helped to cool the economic reflation trade that has dominated financial markets.
The S&P 500 Index dropped from a record high after ADP Research Institute data showed payrolls increased by 307,000 during the month, the smallest advance since July.
Britain’s pound slumped after the European Union’s chief Brexit negotiator Michel Barnier reportedly told envoys the outcome of any deal is still too close to call.
Bitcoin hovered around $19,000 after nearly reaching $20,000 on Tuesday.
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4. Hungry For Burger King
Burger King India Ltd. attracted strong investor interest on the first day of its initial public offering.
The issue was subscribed 3.14 times as of 5:00 p.m. on Dec. 2, led by retail investors, according to data from Edelweiss Partners.
Subscription breakup:
Institutional investors: 17%.
High net worth individuals: 72%.
Retail investors: 15.68 times
Here's everything you need to know about the Rs 810-crore issue.
5. Bharti Airtel Subsidiary Increases Infratel Stake
Bharti Airtel Ltd.'s subsidiary Nettle Infrastructure Investments Ltd. has acquired an additional 4.94% stake in the telecom tower operator Bharti Infratel Ltd. for Rs 2,882.3 crore.
Nettle's stake in Infratel now stands at 18.62%, according to an exchange filing.
Airtel's aggregate stake in Infratel, including shares with Nettle, now stands at 41.66%.
6. Three Bids For Bharat Petroleum
The government has received three preliminary bids to buy a controlling stake in India’s second-largest fuel retailer Bharat Petroleum Corp., Oil Minister Dharmendra Pradhan said on Wednesday.
Mining-to-oil conglomerate Vedanta Ltd. had earlier confirmed putting in an expression of interest for buying the government's 52.98% stake in BPCL.
The other two bidders are said to be global funds, one of them being Apollo Global Management.
The government is already scrutinising the preliminary bids.
7. Delhi High Court Curtails Powers Of NCLTs On Insolvency
Once the insolvency process is over, applications for objectionable transactions cannot be entertained by National Company Law Tribunals unless a provision is made in the resolution plan, the Delhi High Court has ruled. Further, such applications must be decided by the NCLT before a resolution plan is approved, the high court has said.
In saying so, the Delhi High Court set aside an avoidance application filed by the erstwhile resolution professional of Bhushan Steel Ltd., which was acquired by Tata Steel Ltd. in June this year.
Experts disagreed with the high court order saying if resolution plans have to await the conclusion of avoidance applications, it’ll frustrate the timelines laid down under the Insolvency and Bankruptcy Code.
Read more to see what this ruling could mean for insolvency proceedings.
8. Will RBI Rethink Its Easy Money Stance?
The Reserve Bank of India may have cause to review its ultra-easy liquidity policy when it meets this week, as short-term corporate and government borrowing rates have remained below its policy benchmark rates for an extended period.
Yields on commercial paper have traded not only below the policy repo rate, the rate at which the RBI lends overnight funds to banks, but also below the reverse repo rate at which banks park funds with the central bank.
According to data from CARE Ratings, the average liquidity surplus in the banking system rose further to Rs 5.31 lakh crore in November, compared to Rs 4.03 lakh crore last month and Rs 2.33 lakh crore in November 2019.
The excess liquidity is driving down the short-term government and corporate borrowing rates.
Read more to find out what are the options in front of the RBI ahead of the monetary policy meeting.
9. Covid-19: India’s Cases Climb; U.K. Authorises Vaccine Use
India’s coronavirus tally continued to climb at a slower pace even as states braced for the possibility of a second wave of infections.
India reported over 36,600 new cases in 24 hours, taking the total tally to 94.9 lakh.
That includes over 89 lakh recoveries and more than 1.38 lakh deaths.
Authorities reported 43,062 recoveries in a day, making it the fifth straight day that new cases trailed recoveries.
Track news and developments around the Covid-19 outbreak here.
The U.K. became the first western country to approve a Covid-19 vaccine, with its regulator clearing Pfizer Inc. and BioNTech SE’s shot ahead of decisions in the U.S. and European Union.
The emergency authorization clears the way for the deployment of a vaccine that Pfizer and its German partner have said is 95% effective in preventing illness.
The shot will be available in Britain from next week.
Here’s how the U.K. is ramping up preparations for a vaccination drive.
10. Farmers Refuse To Budge, Call For Repealing New Laws
Protesting farmers have demanded that the central government call a special session of Parliament to repeal the new farm laws and threatened to block other roads of the national capital if their demands are not met.
Addressing a press conference, farmer leader Darshan Pal accused the Centre of dividing farmer organisations and said protests will continue till the three farm laws are repealed.
Meanwhile, the number of protesting farmers swelled at Delhi border points as police stepped up security after thousands blocked key gateways into the national capital for the seventh day on the trot.
More details here.
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