BQuick On April 26: Top 10 Stories In Under 10 Minutes
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Here is a roundup of the day’s top stories in brief.
1. Painful Quarter For Hero Moto, Yes Bank
Yes Bank Ltd. reported an unexpected loss in the first earnings released under new Chief Executive Officer Ravneet Gill as bad loans and provisions surged.
- The company’s Rs 1506 crore net loss for the fourth quarter of 2018-19 compares to the previous quarter’s net profit of Rs 1,001 crore.
- Net interest income was up 16 percent to Rs 2,506 crore.
- Gross NPA rose to 3.22 percent while net NPA’s rose to 1.86 percent.
The bank stepped up provisions significantly.
Hero MotoCorp Ltd.’s quarterly profit fell sharply as India’s largest two-wheeler maker continued to face challenges from the slowdown in the automobile industry.
- Net profit fell 24.5 percent over last year to Rs 730.3 crore.
- Revenue declined 7.9 percent to Rs 7,885 crore.
- Margin narrowed 240 basis points to 13.6 percent.
But the management says a turnaround is likely later this year.
2. RBI Asked To Make Critical Bank Inspection Reports Public
The Supreme Court asked the Reserve Bank of India to comply with its 2015 judgment to make its annual inspection reports of banks public—information that banking experts said can be damaging if used out of context.
- A bench of Justice L Nageswara Rao and Justice MR Shah rejected the argument of the central bank that it has a fiduciary relationship with the lenders and therefore the information sought was exempted under the Right to Information Act.
- The lenders—in this case ICICI Bank Ltd., HDFC Bank Ltd., and State Bank of India—had said that the disclosure will adversely affect their competitive position.
- “It is unfortunate because nowhere in the world have I heard of any regulator having to make their inspection reports public,” R Gandhi, former deputy governor at the RBI, told BloombergQuint.
This is a comprehensive and holistic report on the banks’ performance and when it is made public people can take it out of context, which could lead to an unnecessary loss of confidence in banks.R Gandhi, Former Deputy Governor, RBI
The top court said it could have found the RBI to be guilty of contempt but gave it one last opportunity to withdraw the disclosure policy.
3. NBCC's Unusual Proposal
In its bid to take over insolvent infrastructure and realty company Jaypee Infratech Ltd., the government-owned NBCC Ltd. has offered to sell unsold homes to the secured financial creditors of Jaypee’s Committee of Creditors.
- According to the revised resolution plan submitted by NBCC on Wednesday, the builder has stated that if it is allowed to take over Jaypee Infratech, it reserves the right to sell the unsold inventory to financial creditors at a price decided by them.
- The lenders can then sell these homes in the open market, thereby making an upside.
BloombergQuint has reviewed a copy of the resolution plan. Here’s what it says.
4. Top Picks Of Top Investors
India’s equity indices reported their best quarterly returns in more than a year helped by strong foreign flows, favourable macroeconomic factors and expectation of higher earnings growth.
- Billionaire investor Rakesh Jhunjhunwala added the most to his holding in VIP Industries Ltd., taking his overall stake in the luggage and travel accessories maker to nearly 5 percent as of March.
- Chennai-based Rajiv Khanna, who invests in the name of his wife Dolly Khanna, added household cooking appliance maker Butterfly Gandhimathi Appliances Ltd. to his portfolio.
- Ashish Kacholia, who usually bets on small caps, added GTPL Hathway Ltd. to his portfolio in the quarter ended March.
But those weren’t their only bets. Here’s the entire list.
5. Sensex Rallies, S&P 500 Flat
Indian equity benchmarks closed higher on the back of a rally in metal stocks triggered by Tata Steel Ltd.'s quarterly earnings.
- The S&P BSE Sensex ended 0.87 percent higher at 39,067.
- The NSE Nifty 50 ended at 11,754, up 0.97 percent.
- The broader market index represented by the NSE Nifty 500 Index ended 0.63 percent higher.
- Eight out of 11 sectoral gauges compiled by NSE ended higher.
Follow the day's trading action here.
U.S. stocks fluctuated on mixed corporate earnings reports and Treasuries climbed after data signaled tepid inflation in the first quarter.
- The S&P 500 Index was little changed as Intel and Exxon Mobil slumped after profits fell short of estimates, while Ford gained after performing better than expected.
- Ten-year government bond yields dipped below 2.5 percent following a report showing underlying weakness in the economy even amid faster-than-expected growth in the first quarter.
- The dollar pared its second consecutive weekly increase.
- West Texas oil fell 3 percent to $63.26 a barrel.
Get your daily fix of global markets here.
6. Sunil Mittal Buys CG Power Stake
Sunil Bharti Mittal Holdings Pvt. Ltd. has bought nearly 3.8 crore shares, or 6.13 percent stake, of CG Power and Industrial Solutions Ltd. through a series of block deals in March, the electrical equipment maker said in an exchange filing.
- The purchases, the filing said, may be a fresh investment as it doesn’t indicate any such prior buys made by the Sunil Mittal-owned investment firm. Based on Thursday’s closing price, the stake may be worth around Rs 150 crore.
- A spokesperson for the Bharti Group didn’t comment when asked about the stake purchase.
- The promoter shareholding in CG Power has dropped by nearly two thirds to 12.79 percent over last quarter.
Shares of CG Power have declined over 65 percent from their record high.
7. Buried In Debt With No Resolution Framework
Videocon Industries Ltd., Reliance Communications Ltd., and IL&FS—three large groups, two common problems: too much debt and no group insolvency framework to resolve it.
- Without recourse to these assets, the lenders of the parent don’t stand to recover much.
- The NCLT order in the IL&FS case noted that unfortunately the Insolvency and Bankruptcy Code doesn’t provide for a joint resolution of group of companies.
- This is necessary, the tribunal said, because the resolution of the parent and group companies as a whole is inextricably linked to the resolution of each of these companies.
Are group insolvencies the undeniable need of the hour?
8. China’s Travel Giant Now Owns Almost Half Of MakeMyTrip
Ctrip.com International Ltd., the world’s second-largest online travel firm, is set to own half of MakeMyTrip Ltd.
- Naspers Ltd. will exchange its entire shareholding in India’s largest ticket-booking platform for the newly issued shares of Ctrip, MakeMyTrip said in a statement.
- This marks the exit of South African internet conglomerate after its portfolio company Ibibo merged with MakeMyTrip in October 2016.
- After the transaction, Ctrip will own approximately 49 percent of MakeMyTrip shares and Naspers will own 5.6 percent of Ctrip.
This allows Ctrip to enjoy a larger exposure to India’s travel market.
9. PepsiCo’s Settlement Offer
Food and beverages giant PepsiCo on Friday offered to settle lawsuits against four farmers who it had dragged to court for allegedly illegally growing a variety of potatoes “registered” by the company.
- Nine farmers from Sabarkantha and Aravalli districts are being sued by PepsiCo for allegedly growing a variety of potatoes for which it has claimed Plant Variety Protection rights.
- During a hearing in the commercial court in Ahmedabad on Friday, the firm offered to settle the dispute if the farmers gave an undertaking to purchase this specific variety of seeds from the company and thereafter sell the potato produced to it.
- Senior counsel Anand Yagnik, who appeared for the four farmers of Sabarkantha district, told the court he will discuss this settlement proposal with the farmers and inform the court about the outcome during the next hearing.
PepsiCo has sought damages of Rs 1 crore from each of the four farmers.
10. Avengers: Endgame Review
The wait to find out what happens on the other side of The Snap is over. By the time you read this, the rollout of Walt Disney Co.’s Avengers: Endgame will have already begun unspooling to fans across the world, the epic finale featuring gargantuan battles as well as a resurrection, of sorts, at the end of Marvel’s superheroes-and-foes saga.
- The film, which opens April 26 on a record 4,600 screens nationwide, is the culmination of a 21-movie buildup of standalone installments, sequels, spinoffs, and superhero mashups that began with the release of Iron Man in 2008.
- In that time the franchise has generated $18.6 billion worldwide in ticket sales, a springboard for handsomely profitable television shows and merchandise.
Here’s a spoiler-free review of life after the Snap in Marvel’s universe.