BQuick On Dec. 6: Top 10 Stories In Under 10 Minutes
This is a roundup of the day’s top stories in brief.
1. Kumar Mangalam Birla’s Warning
Aditya Birla Group Chairman Kumar Mangalam Birla has warned of a Vodafone Idea Ltd. shutdown if the government doesn’t provide relief on the liability it faces on past statutory dues following a Supreme Court order.
- Shares of the debt-laden telecom company fell as much as 9 percent after Birla’s comments at the HT Leadership Summit but pared some of the losses to end the day 5.48 percent lower at Rs 6.90 apiece.
If we are not getting anything (relief by government) then I think it is end of story for Vodafone Idea.Kumar Mangalam Birla, Chairman, Aditya Birla Group
- Birla’s comments follow those made by Vodafone Group Plc's Chief Executive Officer Nick Read that the company’s India venture may be headed for liquidation unless the government backs off on demands for mobile spectrum fees.
“We will shut shop,” Birla said when asked if they would pump more money in the venture.
2. Radhakishan Damani To Sell DMart Shares
Bank of America Corp. and Kotak Mahindra Capital Co. are among banks Indian billionaire Radhakishan Damani picked for another planned stake sale in Avenue Supermarts Ltd., owner of the DMart brand, people with knowledge of the matter told Bloomberg News.
- Damani selected the banks as he prepares to pare his stake in India’s largest listed retail chain by selling about 5.2 percent next year, the people said, asking not to be identified as the discussions are private.
- Damani, who sold about 1 percent earlier this year, has to sell more shares before the end of March to meet a minimum requirement for public float, one of the people said.
Here’s how much the 5.2 percent stake would be valued at.
3. Sensex Falls 334 Points, U.S. Stocks Rise
Indian equity benchmarks extended declines for the second consecutive trading session.
- The S&P BSE Sensex fell 0.82 percent or 334 points to close at 40,445.15.
- The NSE Nifty 50 fell 0.81 percent, the biggest fall since Nov. 08, to end at 11,921.50.
- On weekly basis, the 31-stock index halted their five-week gaining streak, the longest stretch of weekly gains since first week of April.
- All the 11 sectoral gauges compiled by NSE ended lower.
Follow the day’s trading action here.
U.S. stocks climbed and bonds fell as a strong jobs report bolstered confidence in the world’s largest economy.
- The S&P 500 Index extended gains into a third day after government data showed payrolls jumped 266,000 last month, the most since January -- with the jobless rate dropping to 3.5 percent and average hourly earnings exceeding projections.
- Treasury 10-year yields jumped above 1.8 percent. The dollar rose.
- West Texas Intermediate crude fell 0.6 percent to $58.10 a barrel.
Get your daily fix of global markets here.
4. Axis Bank’s CFO Resigns
After over four years, Axis Bank Ltd.’s Chief Financial Officer Jairam Sridharan has tendered his resignation and will vacate the position after serving a three-month notice period.
- In a stock exchange disclosure on Dec. 6, the bank said that Sridharan had resigned from his post as group executive and CFO of the private sector bank as he would like to pursue other career opportunities.
- He was appointed as CFO in October 2015.
- Sridharan had joined the bank in June 2010 after a stint with Capital One Financial, a consumer bank in the U.S.
- Prior to this he worked in ICICI Bank Ltd.’s retail lending business.
The bank has already initiated a succession plan for the post.
5. Why IndiGo Keeps Leading SpiceJet
SpiceJet Ltd. has added the most capacity since the grounding of Jet Airways India Ltd. Yet, its larger peer InterGlobe Aviation Ltd. remains better placed operationally in a market grappling with falling yields, volatile costs and engine glitches.
- Average fare per passenger per kilometre, or yields, have been falling in India because of higher capacity addition, weak demand and competition in India.
- Crude prices and the dollar remained fairly volatile.
- For an airline, cost volatility is high, as 60-70 percent of its expenses are dollar-denominated and fuel accounts for more than a third of its costs.
- Both SpiceJet and IndiGo, operated by InterGlobe Aviation, saw costs also rise due to grounding of Boeing 737 Max aircraft and replacement of engines of Airbus A320neos, respectively.
Still, IndiGo scores higher on two key parameters. Here’s what they are.
6. There’s A Ton Of Offers On Real Estate. Here’s Why You Should Be Wary.
Till a few years ago, a homebuyer scouting for property in Mumbai always felt anxious. Developers gave an impression that prices could jump overnight, putting potential customers under pressure to commit.
- Builders can no longer invoke this kind of price anxiety, said Sandeep Sadh, founder of Mumbai Property Exchange.com.
- The time taken to buy a flat on an average has increased from 15-30 days to one to three months, he said.
- That’s because India’s residential real estate sector is struggling and developers are no longer in control.
- As the CREDAI-MCHI Expo, a property exhibition, returned to Mumbai after a year, developers tried to sweeten the deal to lure buyers in India’s costliest real estate market.
- From easy staggered payouts to no instalments till possession or part payment at the time of booking and rest when the property is handed over, developers are trying everything to revive sales.
Here’s what’s on offer in the real estate market and how prospective buyers can beware of risky deals.
7. Dabur Is Ready For Acquisitions And Rural Push
Dabur India Ltd., the household goods maker controlled by the billionaire Burman family, is willing to spend part of its about $500 million cash reserve to acquire companies and revive sales that grew at the slowest pace in two years.
- The company is exploring options in the health care, foods and personal care segment, Chief Executive Officer Mohit Malhotra said in an interview.
- Dabur has identified potential targets and is looking to buy companies in the Rs 100-1,000 crore price range.
We have a ready war chest available to acquire companies.Mohit Malhotra, CEO, Dabur India
The company is also fanning out operations to remote parts of the country to access more consumers.
8. NSE Appoints New Chairman
The National Stock Exchange of India Ltd. said it has appointed public interest director Girish Chandra Chaturvedi as its new chairman.
- The appointment comes following the approval of the market regulator Securities and Exchange Board of India.
- The position was vacant since Ashok Chawla resigned as the chairman of NSE in January.
- In a statement, the bourse said Chaturvedi has been appointed as the chairman of the governing board of the NSE with the approval of SEBI, effective Friday.
Chaturvedi has had a long career in government service.
9. Why A New Rule By RBI Is Hampering India Post And Paytm
The Reserve Bank of India’s final guidelines for ‘on-tap’ licencing of small finance banks may leave two large hopefuls disappointed. Both India Post Payments Bank and Paytm Payments Bank, which had expressed an interest in pivoting to the small finance bank model, are unlikely to make the cut based on the rules released on Thursday.
- The guidelines allow non-bank finance companies, microfinance firms and Local Area Banks to apply for an SFB licence. While they say that payments banks are permitted to apply for conversion, the caveats virtually rule out such a conversion.
- The guidelines specify that only payments banks which have been in business for five years can apply to become small finance banks.
- Besides, proposals from government-owned and public sector entities will not be entertained.
Here’s how these new rules will disqualify India Post and Paytm from applying for a small finance bank license.
10. Netflix Is Spending $420 Million On Indian Content
Netflix Inc. is plowing Rs 3,000 crore ($420 million) this year and next to produce more local content in India, one of the biggest and most-crowded markets for the world’s largest paid streaming-service provider.
- “You’ll start to see a lot of stuff hit the screen, big investment,” Chief Executive Officer Reed Hastings said at an event in New Delhi on Friday.
We’re really trying to invest in that becoming more Indian in the content offering.Reed Hastings, CEO, Netflix
- Hastings has said Netflix’s goal is to attract 100 million customers in India -- almost 25 times its estimated subscriber base there as of this year.
But competition with Amazon Prime and Hotstar is set to spice up in India as Disney prepares to launch its premium streaming service.