This is a roundup of the day’s top stories in brief.
1. India Hikes MSP For Six Rabi Crops Amid Parliament Protests
India has hiked minimum support prices for six rabi crops including wheat, chickpeas, and masoor dal.
Wheat MSP has been increased by Rs 50 per quintal to Rs 1,975 per quintal.
The move comes amid protests in Parliament over the passage of three farm bills, that farmer groups fear will pave the way for the government to pull back its minimum price guarantees and hurt the sector.
The government has however assured farmers that the MSP mechanism will continue and that the farm reform was the need of the hour.
Earlier in the day, eight Rajya Sabha members were suspended from the Parliament for protesting the three bills.
Following their suspension, opposition parties sat in protest in the Parliament premises.
There have been widespread protests by opposition parties and farmer groups in Punjab, Haryana and some other states.
2. SBI's Loan Restructuring Rules
State Bank of India has detailed the process and rules it intends to follow as the country’s largest lender initiates an exercise to restructure personal loans, as permitted by the Reserve Bank of India.
The bank, on Monday, launched a website where borrowers can check their eligibility and upload relevant documents.
This preliminary check would be followed up by scrutiny and approval at the branch level.
According to a set of FAQs published, the bank will assess applications based on whether borrowers have lost their jobs or seen incomes reduced as a result of the Covid-19 crisis.
Should customers pass that scrutiny, they may be eligible for an extension of the tenure of their loan, with a commensurate change in their equated monthly installments or EMIs.
This, however, would come at a cost.
SBI will seek either a personal guarantee from promoters or pledge of listed shares as part of its process of restructuring non-personal loans.
India’s largest lender detailed its rules for such restructuring on Sept. 21, which the Reserve Bank of India permitted without a downgrade in classification of the loan to non-performing.
A list of benchmarks have been provided by an RBI-appointed committee on restructuring of loans in individual industries.
Banks, however, have also been asked to frame board-level policies for the upcoming restructuring.
In a set of frequently asked questions issued, SBI said additional security would need to furnished in the case of restructuring.
Find out key highlights from the FAQs.
Also Read: Who Moved My Credit Score?
3. U.S. Markets Slump; Sensex Hits Five-Week Low
Stocks slumped to a two-month low amid growing concern over tighter coronavirus restrictions and as a report detailed suspicious transactions at global banks.
The S&P 500 dropped for a fourth day -- its longest slide since February -- with commodity and industrial companies leading losses.
JPMorgan Chase & Co., Bank of America Corp. and Citigroup Inc. sank more than 2.4%, while Carnival Corp. and American Airlines Group Inc. paced declines in travel companies.
Nikola Corp.’s founder stepped down in the wake of regulatory probes and a short seller’s allegations that the electric-truck startup misled investors, sending shares plunging.
Oil tumbled as Libya signaled the resumption of some crude exports.
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India’s benchmark equity index fell to a five-week low as a global risk-off sentiment remained a drag on stocks.
The S&P BSE Sensex closed down 2.1%, the lowest level since Aug. 14, while the NSE Nifty 50 Index slipped 2.2% to 11,250.55.
Only 3 out of the 50 Nifty constituents ended the day with gains.
Route Mobile Ltd., a cloud infrastructure provider, surged 86% in its trading debut after the share sale was oversubscribed 73 times.
Follow the day’s trading action here.
4. Chemcon, CAMS IPOs: Divergent Demand
The initial public offering of Chemcon Speciality Chemicals Pvt. was subscribed 5.2 times on the first day of bidding, led by retail demand.
Institutional subscription hasn't kicked off yet.
Non-institutional investor portion was subscribed 1.24 times.
Retail subscription demand stood at 9.86 times.
More details about the offer here.
On the other hand, the IPO of Computer Age Management Services Pvt. was subscribed 0.82 times on the first day.
According to data from Kotak Securities, the portion of shares reserved for retail investors was subscribed 1.40 times while non-institutional investors bid 0.30 times on shares earmarked for them.
Institutional buyers have so far bid 0.25 times.
Find out more about the company here.
5. How To Pick Stocks Like Saurabh Mukherjea
Saurabh Mukherjea uses three filters to narrow down on the companies worth having in his stock portfolios. Be it large cap, small cap, FMCG or pharma, the companies must satisfy this basic philosophy.
First, the books must be clean, that’s the 10-15 years of forensics.
The second criteria, Mukherjea said, is to focus on companies that are selling essential products or services.
The final filter is to look for monopolies or companies with a near dominant position in the market, irrespective of its market .
Interested in how to make those three filters work for you? Watch the full interview with Mukherjea here.
6. Sajjid Chinoy Has A Contrarian View On India's Fiscal Room
The government may have more fiscal elbow room in the second half of the financial year than conventional wisdom suggests, according to Sajjid Chinoy, chief India economist at JPMorgan.
Conventional wisdom suggests that the pool of household financial savings may not be enough to support expanded borrowing programmes by the centre and states.
Together, with a pick-up in private credit demand, the large borrowings could push up interest rates and lead to tighter financial conditions in the second half of the financial year.
Chinoy sees its slightly differently.
Think about the macros here. India is running a current account surplus... By construction, when you run a current account surplus, you have excess savings. That’s compounded by strong capital flows. So we have the pool of savings. You’re seeing this in strong deposit growth; banks don’t want to lend to the real economy. There is a presumption here that those resources will ultimately be channelled into government bonds.Sajjid Chinoy, Chief India Economist, JPMorgan
In addition to borrowings, the government must also release funds through a multi-year asset sale programme, Chinoy said.
7. Rajan-Acharya Duo's Call To Action
The status quo in the Indian banking sector is untenable and reforms must be initiated to ensure the sector becomes an engine of growth rather than a drag on growth.
That’s according to former Reserve Bank of India Governor Raghuram Rajan and former Deputy Governor Viral Acharya, who have co-authored a paper titled Indian Banks: A Time to Reform?
“With the current enormous strains on government finances, there may be a window of opportunity in which these reforms may be possible since the status quo is untenable,” Rajan and Acharya wrote.
“There are strong interests against change,” the authors said, adding they are “optimistic that a middle road is achievable.”
Rajan and Acharya went on to list the reforms, while acknowledging that some of these have been suggested earlier by committees over the years.
8. GMM Pfaudler OFS
Promoters of GMM Pfaudler Ltd. plan to sell up to 28% stake in the maker of industrial equipment maker to raise funds, days after the firm announced its plan to buy a controlling stake in its American parent.
U.S.-based Pfaudler Inc, Millars Machinery Co. Pvt. and Urmi Patel plan to sell up to 40.93 lakh shares at a floor price of Rs 3,500 apiece—a discount of about 33% to current market price—through an offer-for-sale, according to an exchange filing.
This offer includes an oversubscription option for another 15.22 lakh shares or 10.41% stake.
If the offer for sale is oversubscribed, promoters’ stake will fall from 75% to 47%.
9. Covid-19: New Cases In India Drop Below 90,000 For First Time In Six Days
India reports the lowest number of fresh Covid-19 infections in six days, while daily recovery rate topped 90,000 for a third straight day.
The country added close to 87,000 new cases in a matter of 24 hours, taking the total tally near 55 lakh.
This includes almost 44 lakh patients who have recovered and more than 87,000 deaths.
Track developments around the outbreak in India, here.
Globally, cases topped 3.08 crore leaving over 9.58 lakh dead.
U.S. deaths related to Covid-19 approached 2 lakh and the nation’s new cases rose in line with a one-week average.
In Europe, Germany’s health minister said the trend of cases is “worrying” while the U.K. cautioned the rate of coronavirus infections could reach around 50,000 by mid-October.
Indonesia’s capital is adding thousands of beds to house patients as its health system struggles with record infections.
Follow the global spread of the virus here.
10. News And The Subscription Equilibrium
Having spent a good part of my career seeking new revenue models, this was the first time I was seeing it from the other side – as a pure, and admittedly reckless, consumer, writes Parry Ravindranathan.
I spent the last few months looking for journalism that I would be willing to pay for and I was overwhelmed by the number of quality publications.
But after months of subscribing, from eight international publications and four Indian ones, I am now subscribing to four international ones and three in India.
It was less about affordability and more about how much I can consume.
Read more.
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