BQuick On Feb. 11: Top 10 Stories In Under 10 Minutes
This is a roundup of the day’s top stories in brief.
1. BJP's Third Straight State Election Setback
Prime Minister Narendra Modi’s Bharatiya Janata Party conceded defeat in a hard-fought state election for control of Delhi, the most significant test of his popularity after his religion-based citizenship law led to widespread protests across the country.
- The incumbent Aam Aadmi Party, led-by Chief Minister Arvind Kejriwal, was set to retain power as it led in 62 of the 70 seats in the state assembly, Election Commission data showed as of 7 p.m.
- BJP was ahead in eight seats, up from their previous total of three.
- Key candidates for AAP including Manish Sisodia, Atishi and Amantullah Khan all won from their respective constituencies.
- BJP unleashed an aggressive campaign to win Delhi, where it hasn’t won government for some 22 years, with Home Minister Amit Shah leading the charge.
- The run-up to the polls was marked by divisive speeches and calls to violence by some members of Modi’s party.
Read more on why the Delhi defeat will be a wake-up call for the BJP.
2. Infosys’ $250-Million Deal
Infosys Ltd. said that it will acquire Simplus, a leading Salesforce consulting and advisory firm in the U.S. and Australia, in an up to $250 million deal.
- The deal size is “$200 million including contingent consideration to be paid for the acquisition of shares subject to closing adjustments”, according to the Bengaluru-based company’s exchange filing.
- In addition, there are employee incentives and retention payments amounting up to $50 million on meeting certain performance conditions over three years, it added.
- Simplus is majority-owned by the institutional investors, founders and key employees, with Salesforce Ventures having a minority stake.
The acquisition is expected to close during the fourth quarter of the current financial year.
3. Nifty, Sensex Snap Losing Streak
Indian equities halted a two-day losing streak, led by the gains in Reliance Industries Ltd. and HDFC Ltd.
- The S&P BSE Sensex rose 0.58 percent or 236.5 points to close at 41,216.14.
- The NSE Nifty 50 rose 0.63 percent or 76.4 points to end at 12,107.90.
- The broader markets represented by the NSE Nifty 500 Index rose 0.42 percent.
- Nine out of 11 sectoral gauges compiled by the NSE ended higher, led by the NSE Nifty Media Index’s 1.63 percent gain.
- On the flipside, the NSE Nifty FMCG Index was the top sectoral loser, down 0.37 percent.
Follow the day’s trading action here.
Coal India Ltd.’s quarterly profit fell on the back of lower realisations from online auctions and higher operating expenses.
- Net profit fell 14.1 percent year-on-year to Rs 3,923.9 crore in the quarter ended December, the world’s largest coal miner said in an exchange filing.
- That’s because e-auction volumes of the world’s largest coal miner fell 33 percent over the previous year to 9.84 million tonnes, the filing said.
Revenue fell 7.4 percent. Here are the other highlights.
4. Top Mutual Fund Of 2019 Thinks A Revival Is On The Cards
India’s top-performing mutual fund of 2019 sees overseas investors ploughing money in both debt and equity markets this year as the economic slowdown has bottomed out and growth is picking up.
- “Worries of a slowdown in the economy are getting over, and we seem to have passed the trough in economic activity,” Chandresh Nigam, managing director and chief executive officer at Axis Mutual Fund, told BloombergQuint in an interview.
Flows look to be strong, January was a good month for flows into equity funds, and we are hoping that things pick up after the last few months which have seen flows slow down considerably.Chandresh Nigam, MD & CEO, Axis MF
- Budget 2020 is pro-global flows on both the equity and the debt side, according to Nigam.
BlooombergQuint spoke to Axis MF's Nigam, R Sivakumar and Jinesh Gopani on the market outlook, the economy and the impact of the budget.
5. Top Investors In DMart's Rs 4,100-Crore QIP
Avenue Supermarts Ltd. raised Rs 4,098 crore from a qualified institutional placement of shares to investors including the government of Singapore and ICICI Prudential Bluechip Mutual Fund.
- The board of the operator of DMart supermarket chain approved allotting 2 crore shares at the issue price of Rs 2,049 apiece, according to an exchange filing.
- Lone Cypress was allotted 23.93 lakh shares or 11.97 percent of the total issue size
- Government of Singapore got 16.96 lakh shares or 8.48 percent.
- Europacific Growth Fund received 11.92 lakh shares or 5.96 percent.
- ICICI Prudential Bluechip Fund was allotted 11.7 lakh shares or 5.85 percent.
Promoter Radhakishan Damani has been selling his stake to meet SEBI’s requirements.
6. Steelmakers Are Going Slow On Expansion
Two of India’s major steelmakers have delayed their expansion and capital expenditure plans.
- While Tata Steel Ltd. said in a post-earnings call for the quarter ended December that it would go slow on the expansion of its plant at Kalinganagar in Odisha,
- JSW Steel Ltd. said it would commission its unit at Dolvi, Maharashtra, in the first half of the year ending March 2021 compared with the previous target of March 2020.
- Rakesh Arora, the managing partner at Go India Advisors, told BloombergQuint that the “writing was on the wall” for steelmakers given their high debt levels."
- “The debt-to-Ebitda (ratio) of steel companies is extremely high, well above 4 times. With the recent large acquisitions and ongoing iron mine auctions, the steel companies already have too much on (their) plate,” he said.
Here’s how much capacity the two top steelmakers have planned to add.
7. M&M Expects Ssangyong To Turn Profitable By 2022
Mahindra & Mahindra Ltd. has chalked out an “aggressive” three-year plan to turn its South Korean arm profitable.
- “We will be taking up a plan to reduce material costs saving as much as $75-80 million per year,” said Pawan Goenka, managing director of Mahindra & Mahindra—which holds over 74 percent stake in Ssangyong Motor Co.
- “We’re also looking at capex and bringing in synergy with Mahindra and Ford without compromising on our product development plans.”
- Goenka, who was speaking at a conference in Mumbai today, also said the company will look to develop new overseas markets—Vietnam this year and Russia in 2021—to improve export volumes.
- That comes as M&M’s December quarter results were dented by impairment of investments worth Rs 600.56 crore that “primarily” emerge from the South-Korea-based firm.
M&M said it required $380-422 million for the subsidiary’s revival, half of which it expects to raise from equity and rest through debt.
8. RBI Proposes Alternate Retail Payments System
The Reserve Bank of India is proposing to set up an alternative digital retail payments organisation as it aims to prevent a monopoly in a system that’s currently dominated by National Payments Corporation of India Ltd.
- The new umbrella entity will set up, manage and operate new payment systems, especially in the retail space, the RBI said in a set of draft guidelines released on Monday.
- This organisation will operate clearing and settlement systems.
- It will also identify and manage relevant risks such as settlement, credit and liquidity, the draft guidelines added.
Find out who can set up the new ‘umbrella entity’.
9. Rs 1 Note Gets Another Makeover
India’s one rupee note is getting a makeover. Almost as if in time for the upcoming summer 2020 season!
- In a pastel pink and pistachio colour scheme, the latest avatar of the one rupee with multi-tonal watermarks went into circulation from Feb. 7, 2020, said a notification from the government.
- The note will be rectangular with dimensions of 9.7X6.3 centimeters.
- The watermarks will include the Ashok Pillar, the numeral 1 and the word Bharat written in Devnagiri.
Here’s how the humble one rupee has changed over the years.
10. After Years Of Restraint, Bezos Is Selling Amazon Stock
Jeff Bezos’s stake in Amazon.com Inc. barely budged over the past decade. That’s started to change.
- Bezos sold 2 million shares, worth $4.1 billion, as part of a pre-arranged trading plan between Jan. 31 and Feb. 6, according to regulatory filings.
- That’s the largest seven-day selldown by any executive tracked by the Bloomberg Billionaires Index, which began in 2012.
- For Bezos, it’s a sharp reversal from years of relative restraint even as the value of his Amazon stake eclipsed 12 figures in 2017.
- The proceeds still make up just a fraction of his wealth.
- The divestiture amounted to less than 4 percent of his Amazon holdings, which had a value of $116 billion on Friday.
What could be behind this increased pace of sales by Bezos this year?