BQuick On Dec. 4: Top 10 Stories In Under 10 Minutes
This is a roundup of the day’s top stories in brief.
1. Bharti Airtel’s $3 Billion Fundraise
Bharti Airtel Ltd. plans to raise $3 billion or Rs 21,500 crore—its second such exercise this year—to repay adjusted gross revenue dues to the government.
- The telecom operator will raise $2 billion or Rs 14,300 crore via equity, while the remaining $1 billion or Rs 7,200 crore will be through debt, according to an exchange filing.
- To be sure, the company has passed a resolution to raise $2 billion via debt but will now raise only $1 billion.
- The fundraise is necessary as the carrier has to repay nearly Rs 34,260 crore by January 2020.
- To raise Rs 14,300 crore via equity, the company would have to issue close to 31 crore shares at Wednesday’s closing price, leading to an equity dilution of 6 percent.
Here is how Airtel's debt picture will look like after the fundraising.
2. Reliance Jio Brings New Plans, Hikes Tariff By 39%
Reliance Jio announced new tariff plans which will be costlier by up to 39 percent compared to the existing plans for its customers.
- The company, however, claims that it has priced all the new plans up to 25 percent cheaper than the new call and data plans rolled out by its competitors Bharti Airtel Ltd. and Vodafone Idea Ltd.
- Jio customers will now have to pay Rs 555 for 84-day validity and 1.5 GB of data per day, which is 39 per cent higher than the earlier plan of Rs 399 offering same features.
- The Mukesh Ambani-owned operator has also raised price of its lowest plan. Earlier, Rs 149 would get you 1.5 GB of data a day for 24 days. Now the price has been hiked to Rs 199 for 28 days.
The new prices will be effective from Dec. 6.
3. New Bond ETF, Citizenship Bill And Data Protection Law
The Union Cabinet has approved the launch of the first bond exchange-traded fund, which will create a new window for fundraising by state-owned firms, and give affordable entry to retail investors in the bond market.
- The Bharat Bond ETF will be a basket of bonds issued by public sector firms or any government organisation, and will be tradeable on the exchanges, Finance Minister Nirmala Sitharaman said in a press briefing after the cabinet meeting.
- The unit size will be Rs 1,000, allowing small investors to invest, she said.
The move is aimed at providing easy and low-cost access to bond markets and increase participation of retail investors.
The Cabinet also cleared the Citizenship (Amendment) Bill that seeks to grant citizenship to non-Muslim refugees from Pakistan, Bangladesh and Afghanistan if they faced religious persecution there.
- A bill to amend the Citizenship Act, 1955, is likely to be introduced in the Parliament in the next two days, sources told PTI.
The bill has faced serious opposition.
The Cabinet also approved the Personal Data Protection Bill that will spell out a framework for handling of personal data including its processing by public and private entities.
- Information & Broadcasting Minister Prakash Javadekar said the bill will be introduced in Parliament during the current winter session.
- The bill is likely to contain broad guidelines on collection, storage and processing of personal data, consent of individuals, penalties and compensation, code of conduct and an enforcement model.
Earlier, IT minister had said that India would never compromise on data sovereignty.
4. Nifty Halts Three-Day Losing Streak
Indian equity benchmark—NSE Nifty 50—halted a three-day losing streak, led by the gains in ICICI Bank Ltd. and Infosys Ltd.
- The 50-stock index rose 0.41 percent to close at 12,043.20.
- The S&P BSE Sensex rose 0.43 percent to end at 40,750.29.
- The broader markets represented by the NSE Nifty 500 Index rose 0.4 percent.
- The market breadth was tilted in favour of buyers.
- All the 11 sectoral gauges compiled by NSE ended higher.
Follow the day’s trading action here.
India’s top performing bank stock is getting more love from analysts even after its strong run of gains in 2019. ICICI Bank Ltd., with a 45 percent climb this year that’s the most among a gauge of the nation’s financial stocks, has a recommendation consensus of 4.87 on a Bloomberg scale where 5 is a unanimous buy.
Does the stock still have more room to rally?
Stocks Advance On Fresh Hopes For U.S.-China Deal
Stocks rose and bonds fell on speculation the U.S. and China will reach a deal that avoids tariffs due to take hold in 11 days.
- The S&P 500 Index halted a three-day slide after Bloomberg News reported negotiators are getting near an agreement on the amount of tariff relief in a phase-one accord between the world’s two largest economies.
- Treasury 10-year yields climbed after posting the biggest decline since August.
- The dollar dropped. Oil rallied.
Get your daily fix of global markets here.
5. Grand Market Debut, Bumper Subscription And Stake Dilution Via IPO
CSB Bank Ltd., backed by billionaire Prem Watsa, rose 54 percent in the best debut for an Indian lender since 2006.
- The stock listed at Rs 275, 41 percent higher than the issue price of Rs 195 on the National Stock Exchange.
- Intraday, it rose as much as 57.43 percent but closed slightly lower at Rs 300.35. A total of 3.7 crore shares of the company traded on the NSE during the day.
Read more about CSB Bank’s listing.
The initial public offering of Ujjivan Small Finance Bank was subscribed 166 times on the last day of the share sale, exchange data showed on Wednesday, with non-institutional investors doing the bulk of the buying.
- In the process, it overtook Indian Railway Catering And Tourism Corporation Ltd. as the most subscribed IPO in 2019, data on the National Stock Exchange website showed.
- Against an issue size of 124 million equity shares, the Ujjivan Small Finance Bank IPO received bids for 20.52 billion shares—indicating 165.55 times subscription.
Find out more about the small finance bank’s IPO here.
The State Bank of India’s board has approved dilution of up to 8.25 percent stake in UTI Asset Management Company's initial public offering, India’s largest lender said on Wednesday.
- The bank said it offers to sell up to 1,04,59,949 equity shares, subject to approval from the markets regulator and such other concerned authorities and departments.
- As on March 31, SBI held 18.24 percent stake in UTI AMC, equivalent to 2.31 crore shares, an annual report showed.
SBI’s stake will fall to 10 percent after the IPO.
6. Who Owns The Shares Karvy Pledged? SAT Tells Banks To Approach SEBI
The Securities Appellate Tribunal directed HDFC Bank Ltd., IndusInd Bank Ltd. and ICICI Bank Ltd. to approach the market regulator to secure shares pledged to them by Karvy Stock Broking Ltd.
- Banks must approach a whole-time director of the Securities and Exchange Board of India on or before Dec. 6 and the regulator must pass an order before Dec. 12, the SAT said in an oral order.
- A bench comprising CKG Nair and MT Joshi, however, rejected the banks’ plea to freeze or bring back shares transferred to 83,000 beneficiary accounts.
- Transfers were done and further rights were created on such shares, making the plea untenable, the appellate tribunal observed.
Bajaj Finance was the first to move against the SEBI order. Here’s what it sought.
7. Rate Cuts Aren’t Working To Arrest India’s Economic Slump
So what else can the Reserve Bank of India try? There are calls for two solutions from the U.S. Fed’s playbook:
Try ‘Quantitative Easing’, writes Andy Mukherjee; one that’s targeted at non-banks.
If an ‘Operation Twist’ is on the cards, here’s what RBI needs to keep in mind, cautions Soumyajit Niyogi.
8. P Chidambaram’s 106-Day Custody Ends
Former Finance Minister P Chidambaram walked out of the Tihar Jail after more than 100 days as the Supreme Court granted him bail in the INX Media case.
- The top court bench headed by Justice Banumathi, however, directed that Chidambaram won’t be allowed to make any comments to the press in relation to the case and would make himself available for investigation whenever required.
- The bench also ordered Chidambaram to produce a bail bond of Rs 2 lakh and asked him not to leave the country without the court’s permission.
The court didn’t find any material to indicate that Chidambaram tried to influence witnesses or tampered with evidence.
9. Online Pharmacies Are Getting Big. But Plenty Challenges Remain.
Ease and deep discounts have fuelled the growth of online pharmacies as Indians turn to the internet to buy everything from mobile phones to groceries. There are as many as 245 e-pharmacy startups in the country, according to Tracxn data, with players Medlife, PharmEasy, Netmeds and 1Mg leading the pack.
- So far, global and domestic investors have continued their support to the fledgling market. In 2017, 12 online startups selling drugs raised about $60.4 million in external funding.
- Most of that is going into customer acquisition through discounts. Higher investments in advertising and promotions took the industry’s cash burn to around Rs 7-8 crore a month
- Moreover, e-pharmacies comprise only 2-3 percent of India’s pharmaceutical market. And they mostly sell drugs for chronic ailments—such as heart ailments and diabetes—where purchases can be planned.
But these problems fade in the face of resistance they face from pharmacy stores.
10. Alphabet Answers A CEO Question But Raises New Ones
Google’s parent company took an obvious step to replace its absentee chief executive officer. And while Alphabet Inc.’s leadership change removes a cloud hanging over the company, it also creates potential new ones, writes Shira Ovide.
- Larry Page and Sergey Brin, the founders of Alphabet, wrote that Sundar Pichai will become the CEO of the corporate parent of Google in addition to the post as Google boss that he has held since 2015.
- This change was long overdue.
- It’s not that his company necessarily suffered from Page’s reluctance or inability to fulfill his role.
- But as long as Page was the Alphabet CEO, there was a problem of split authority — or a perception of it — between the figurehead boss and the functional one. That problem is gone.
Now Alphabet faces big questions. One of them is if Pichai is up for the horrible, unpleasant task of being a big tech CEO.