BQuick On April 24: Top 10 Stories In Under 10 Minutes
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This is a roundup of the day’s top stories in brief.
1. Indiabulls-Godrej Deal Brewing?
Indiabulls Group is in early talks to sell at least part of its real estate business to Godrej Properties Ltd., according to two people aware of the matter, as it wants to ensure that the merger of its mortgage lending unit with Lakshmi Vilas Bank Ltd. doesn’t face any regulatory hurdle.
- The group is looking to sell a stake in Indiabulls Real Estate Ltd. but a lot depends on the valuations of its Mumbai residential projects and rent-yielding offices.
- Godrej Properties is also open to acquiring projects if the deal to buy the entire business doesn’t fructify.
- Pirojsha Godrej, executive chairman at Godrej Properties, declined to comment, while Indiabulls Real Estate is yet to respond to emailed queries.
One RBI rule may be the potential irritant nudging Indiabulls towards the sale.
2. Patanjali Faces More Scrutiny
The Goods and Services Tax investigation body intends to widen the probe against Patanjali Ayurved Ltd. for not passing the benefit of reduced tax rates to consumers, according to three people aware of the matter.
- The Directorate General of Anti-Profiteering in a report said that Patanjali profiteered to the extent of Rs 176 crore on various consumer goods on which tax rates were reduced.
- The period of investigation covered was until August 2018, which is now likely to be extended till March 2019.
- Consumer goods makers have been facing probes for not passing on GST benefits to consumers after rates were lowered.
The probe may widen despite Patanjali’s objections to previous findings.
3. RBI Directs Banks To Disclose Exposure To IL&FS Separately
The Reserve Bank of India has directed banks to disclose overdue loans to the Infrastructure Leasing and Financial Services group in their ‘notes to accounts’ to avoid any under-reporting of non-performing assets.
The RBI’s directive followed an order by the National Company Law Appellate Tribunal asking banks not to tag loans to IL&FS and its group companies as NPAs without the court’s permission. While the RBI is seeking to get that order modified, it is yet to succeed.
In the interim, the regulator has asked banks to release the following details separately:
- The loans outstanding to the IL&FS group.
- The loans overdue by more than 90 days but not marked as NPA.
- Provisions required as per the RBI’s ‘Income Recognition and Asset Classification’ rules.
- Provisions actually made against the accounts.
The IL&FS group owes banks and other lenders around Rs 91,000 crore.
4. Earnings: Bharti Infratel, Indiabulls Housing, UltraTech
Bharti Infratel Ltd. reported a surprise fall in profit in the January-March period as the exit of two key tenants—Vodafone India Ltd. and Idea Cellular Ltd.—after their merger weighed on the telecom tower company’s financials.
- Net profit fell 6.1 percent sequentially to Rs 608 crore.
- Revenue fell 1.1 percent to Rs 3,600 crore.
- Operating profit rose 1.4 percent to Rs 1,534 crore.
Infratel said the consolidation in the industry hurt financials.
Indiabulls Housing Finance Ltd.’s profit for the March-ended quarter missed estimates.
- Net profit fell 6.9 percent year-on-year to Rs 1,001 crore
- Net interest income stood at Rs 1,835 crore, a 1.1 percent dip.
- Gross bad loans stood at Rs 1,061 crore.
Cost of funds jumped to 8.73 percent from 7.75 percent earlier.
UltraTech Cement Ltd.’s profit for the quarter-ended March more than doubled, surpassing analysts’ estimates.
- Net profit rose 109 percent year-on-year to Rs 1,017.5 crore.
- Revenue jumped 18 percent to Rs 10,500.3 crore.
Operating profit rose by a third even as realisation fell.
5. Nifty Recovers, U.S. Stocks Drift
Indian equity benchmarks snapped their three-day fall and ended higher, led by the gains in oil retailers and banking stocks.
- The S&P BSE Sensex ended 1.27 percent higher at 39,054.
- The NSE Nifty 50 was 11,726 at close, up 1.30 percent - the index’s biggest single-day rise since January.
- The broader market index represented by the NSE Nifty 500 Index ended 1.05 percent higher.
- Ten out of 11 sectoral gauges compiled by NSE ended higher.
Follow the day’s trading action here.
U.S. equities were little changed as investors assessed corporate earnings and economic data.
- The S&P 500 Index fluctuated between small losses and gains after closing at a record Tuesday.
- AT&T Inc. and Caterpillar Inc. fell after reporting first-quarter results, while Boeing Co. rose.
- The Stoxx Europe 600 Index edged lower, threatening to snap the longest rally since 2017.
- U.S. Treasuries joined a global rally in sovereign bonds and the dollar extended its rally to a six-week high.
- The euro fell after key gauges of confidence in the EU’s two largest economies unexpectedly deteriorated.
- West Texas crude fell 0.2 percent to $66.16 a barrel.
Get your daily fix of global markets here.
6. Dismissed Court Masters Feature In Alleged Conspiracy Against Chief Justice of India
There’s a fresh twist in the case of sexual harassment allegations against the Chief Justice of India and a counter claim by a Delhi lawyer that these allegations are an effort to frame the judge.
- The lawyer, Utsav Bains, has claimed in his affidavit that the conspirators include two court masters that were recently dismissed by Chief Justice Ranjan Gogoi.
- This became evident when a three-judge bench, comprising Justices Arun Mishra, Rohinton Nariman and Deepak Gupta heard Bains today.
- Bains claimed two of the conspirators had met earlier and that he would like to file another affidavit – for which the court gave him time till Thursday 10.30 a.m.
So far Bains has filed two affidavits.
7. TikTok Ban Overturned
The Madras High Court has lifted the ban on short video streaming app TikTok paving way for new users to download and start using the app once it is available again on the Google Play Store and the Apple App Store.
- The Supreme Court had earlier passed an order saying that the ban would be lifted if the Madras High Court did not pass an interim order by the given date.
- The app was banned on April 3 as the high court deemed it to be unfit for children due to presence of inappropriate content, including pornography.
- TikTok had filed a counter affidavit saying its in-built security mechanism will moderate content and will not allow uploading of obscene and vulgar content.
8. A Backdoor Opening For Promoters?
A curious interpretation of the interplay between company law and the IBC - when the corporate debtor has reached the liquidation stage - may make way for backdoor promoter participation.
- The National Company Law Appellate Tribunal, in the case of Gemini Communication Ltd., has said that a scheme of compromise must be considered first at the liquidation stage before the assets of the company can be liquidated.
- But it hasn’t explicitly stated whether such a scheme can be proposed by promoters, who are barred to participate in the resolution process even at the liquidation stage under the Insolvency and Bankruptcy Code, 2016.
Here is the likely impact of NCLAT’s view.
9. Aadhaar Data Breach: We Told You So!
Unique Identification Authority of India recently acknowledged the data breach of personal details of over 7 crore Aadhaar holders. This debate isn’t about UIDAI versus activists or political parties. This is about our freedom, liberty and rights, writes technology lawyer Mishi Choudhary.
- Let’s hope that this FIR is the harbinger of a mature conversation about security and data protection.
- It should prompt UIDAI to stringently investigate other instances of Aadhaar data breach.
- UIDAI has no control over a system it has forced upon the largest democracy in the world.
Perhaps it’s time for India to give up on this vain project, she writes.
10. The Silver Lining From Parched Lands
The bed of the Bodhegaon reservoir looks like a playground as the region battles its third drought in five years. The road to the reservoir is lined with tractors waiting to cart the silt away.
“If we put this nutrient-rich silt in our fields, our income will increase,” said Ragunath Gaded, a farmer from local village in Parli taluk of Beed district, about 490 kilometres east of Mumbai. “After using this, we don’t need to buy fertilisers. It will help us get a good crop.”
- Farmers like Gaded pay Rs 100 a kilometre to carry silt to their farms.
- Their confidence stems from the success stories of dam desilting projects by Manavlok, a non-government organisation, in 2016.
- Not only does it provide farmers fertile silt but also increases the capacity of reservoirs so that they retain more water.
Read how drought-hit villages are trying to beat drought, one silt excavation at a time.