This is a roundup of the day’s top stories in brief.
1. Tata And Mistry: The Beginning Of The End?
So what does the Tata-Mistry corporate divorce entail? Mostly money. Lots of it. Somewhere in the region of Rs 2 lakh crore or $27 billion, writes Menaka Doshi.
- Agreeing on a valuation will be the first and most important step.
- The amount is large but not insurmountable for a group like Tata.
- Why, if Mukesh Ambani’s Reliance Jio was able to raise over $20 billion in the midst of a pandemic, surely Tata Sons Chairman N Chandrasekaran can pull off the same.
The question is how?
2. Postpaid Wars: Jio Vs Airtel Vs Vodafone Idea
Analysts expect Vodafone Idea Ltd. to witness a churn among postpaid subscribers on account of new plans launched by Reliance Jio Infocomm Ltd. and poor connectivity, at a time the cash-strapped telecom operator rebranded itself to take on rivals in India’s fiercely competitive wireless market.
- Reliance Jio’s new postpaid plus plans offer more content options than both Bharti Airtel Ltd. and Vodafone Idea across price points.
- But analysts see limited risks from these new plans for the Sunil Mittal-owned carrier.
- Vodafone Idea’s weak financial position and a higher proportion of postpaid subscriber base make it more vulnerable to losses.
Find out more about Jio’s postpaid offerings and how they stack up against rivals’ plans.
3. Nifty Ends Lower For Fifth Day
Indian equity markets ended lower for the fifth straight day, after a volatile trading session that saw swings between gains and losses.
- The S&P BSE Sensex ended 0.17% lower at 37,668 while the NSE Nifty 50 index declined 0.18% at 11,134.
- Both Sensex and Nifty posted their longest losing streak since early March.
- HDFC Bank Ltd., Hindustan Unilever Ltd. and Infosys Ltd. were among the gainers, while the Bharti Airtel and Bharti Infratel Ltd. were the top laggards, with both ending 8% lower.
Follow the day’s trading action here.
IPO Updates
- The initial public offering of Chemcon Specialty Chemicals was subscribed 149.14 times on the last day of bidding.
- The IPO of CAMS was subscribed 46.93 times on day 3.
- Angel Broking IPO was subscribed 1.46 times at the end of second day of bidding.
U.S. Stocks Decline Amid Fed Warnings On The Economy
Stocks fell amid warnings from Federal Reserve officials on the need for more stimulus to lift the economy from a coronavirus-induced recession.
- Fed Vice Chairman Richard Clarida reiterated that U.S. central bankers think “additional fiscal support will likely be needed” to bolster the recovery.
- The S&P 500 dropped, led by energy and tech shares.
- Tesla Inc. dragged down the Nasdaq 100 after its “Battery Day” event fell short of expectations.
- The Dow Jones Industrial Average outperformed on solid earnings from Nike Inc. and a rally in Johnson & Johnson amid its first big U.S. trial of a Covid-19 vaccine that may work after just one shot.
- Gold depreciated 0.8% to $1,885.46 an ounce.
Get your daily fix of global markets.
4. Shankar Sharma’s Advice To Investors
Shankar Sharma’s investment mantra is to minimise losses. A reason why his First Global turned cautious in February when the markets started tumbling. And the portfolio manager remains cautious even now when they have recovered nearly all the losses of the year.
- “A dollar or rupee gained does not give as much pleasure as a dollar or rupee lost gives pain,” he said.
- People have made a lot of easy money and the apt strategy would be to book some of the gains, he said.
Don’t squeeze a lemon till it turns bitter.Shankar Sharma, Founder, First Global
Sharma doesn't expect a bear market, but also doesn't rule out a sharp correction.
Also Read: The Curious Case Of GMM Pfaudler
5. India Looks To Extend Relaxation Of Insolvency Rules
India’s corporate affairs ministry is proposing to extend a suspension of new bankruptcy filings that has been in place since earlier this year, people familiar with the matter told Bloomberg News.
- The proposal is to extend the halt on new bankruptcy cases for another six months past its currently scheduled ending point this week.
- It must get final approval from Finance and Corporate Affairs Minister Nirmala Sitharaman, according to the people, who asked not to be identified because the details are private.
- The suspension has helped financially strapped borrowers hit by the pandemic stay out of court.
But the move has challenged banks with further delays in clawing back money they are owed.
6. India’s Parliament Passes Three Labour Bills
The parliament on Wednesday approved three key labour reform bills that are said to remove impediments for winding up of companies and allow firing of staff without government permission in firms with up to 300 workers.
- Amid boycott by opposition parties including Congress and Left over suspension of eight lawmakers, Rajya Sabha passed by voice vote the three remaining labour codes on industrial relations, social security and occupational safety.
- Replying to the debate on the three labour reforms bills, Labour Minister Santosh Gangwar said the bills will help result in job creation and encourage employers to hire.
- Over 29 labour laws have been merged into four labour codes.
The government claims the bills safeguard the interest of workers and provide universal social security.
7. One App To Rule Them All?
When State Bank of India launched its mobile banking application in November 2017, it named it YONO —an acronym for ‘You Only Need One’. If the idea back then was that SBI customers will only need this one application to do all their transactions, the bank’s ambitions have now grown in the hope that YONO can become a bigger standalone play.
- SBI plans to hive off its mobile banking application YONO as a standalone platform and will share the underlying technology with other banks through a ‘plug and play’ model, SBI Chairman Rajnish Kumar told BloombergQuint.
- Work is on in this direction and hopefully in a year or so you will see it as a separate subsidiary, he said.
- Using application programme interfaces, or APIs, SBI will allow smaller banks like cooperative banks, rural banks and others to use YONO’s underlying technology to build their own apps, Kumar said. “This way you don't need to worry about developing your own tech.”
Are such banking super apps the next big potential market?
8. ITC’s Biggest Brands
India’s best-selling branded wheat flour underscores how much ITC Ltd. has diversified outside its mainstay cigarette business.
- Aashirvaad is worth Rs 6,000 crore as of fiscal ended March, up from Rs 4,600 crore a year earlier, according to an investor presentation by the company.
- Sunfeast, a biscuits -to-breakfast cereal brand, follows at Rs 4,000 crore, up from Rs 3,800 crore in FY19.
Find out which are the other big brands for ITC.
9. Covid-19: India Cases Cross 56-Lakh-Mark
India’s total Covid-19 tally crossed 56 lakh even as the pace of the pandemic’s spread slowed down.
- The country added a little over 83,000 new cases in a matter of 24 hours taking the total tally above 56 lakh.
- This includes more than 45 lakh patients who have recovered and over 90,000 deaths.
- Active cases dropped further to 9.68 lakh to constitute 17% of the total caseload.
- Recoveries make up 81% of the tally, while the fatality rate remains below 1.6%.
Track developments around the Covid outbreak in India, here.
The ongoing pandemic has rekindled the debate over the cost of private and government healthcare: How is it that private hospitals, despite their exorbitant bills, claim that they are charging patients their best, most reasonable price while government hospitals charge little to nothing? How do government hospitals absorb this heavy cost?
- IndiaSpend has investigated various aspects of the distortion in healthcare costs during the pandemic in its series ‘The Price of COVID.’
- In IndiaSpend’s interviews with people from the corporate healthcare sector, a few common complaints came up which, these representatives said, explains why they need to charge higher prices: The Covid-19 lockdown meant that people postponed their elective surgeries; it also dried up the usually steady inflow of people with chronic illnesses that need regular in-facility interventions such as dial
- A common explanation by hospital executives is that they do not get any financial help and must generate their own revenues and profits.
Read more here.
10. Heavy Rains Halt Mumbai
Authorities in Mumbai asked offices to close wherever possible and suspended rail services after India’s financial hub saw its wettest September day in three years.
- Mumbai received about 29 centimeters of rains over the past 24 hours through Wednesday morning, government data show.
- The weather office predicted moderate-to-heavy showers to continue through the day.
- Train services, currently operational only for some essential workers like health care, food distribution or banking, were halted in certain parts after tracks got flooded.
More details here.
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