BQuick On Feb. 14: Top 10 Stories In Under 10 Minutes

This is a roundup of the day’s top stories in brief.

1. Jet Airways’ Debt Recast Plan

Jet Airways Ltd. agreed to give lenders the majority stake by converting part of its debt to equity as the airline battles a cash crunch.

• The board, as part of a provisional resolution plan, agreed to allot 11.4 crore shares at an aggregate value of Re 1 to the lenders’ consortium led by State Bank of India.
• Through the conversion, the lenders will end up owning 50.1 percent in the full-service carrier.
• Jet Airways needs about Rs 8,500 crore, including Rs 1,700 crore for debt repayments, to stay on course, according to the resolution plan.

Here’s more on debt resolution plan.

2. Poor Lending Or Quid Pro Quo?

The Central Bureau of Investigation’s first information report in the ICICI Bank Ltd.-Videocon loan case red flagged six high value loans given to Videocon group companies.

• It alleged a quid pro quo in one of those six cases where money was transferred from Videocon Group entities to a firm promoted by Deepak Kochhar — husband of former ICICI Bank chief executive Chanda Kochhar, soon after a loan was sanctioned.
• In response to the CBI’s FIR, Chanda Kochhar argued that none of the credit decisions at the bank are taken unilaterally.
• BloombergQuint reviewed Registrar of Companies filings of the four Videocon Industries’ subsidiaries to whom loans were granted. The companies are Applicomp India Ltd, Techno Electronics Ltd, Sky Appliances Ltd and Millennium Appliances Ltd.
• The data shows that these firms were, at best, making small profits at the time the loans were granted, raising legitimate questions over why this credit was approved.

Was this a classic case of poor lending practices rampant during those years or a quid pro quo on the part of Chanda Kochhar?

3. Sugar MSP Hiked

Concerned over mounting cane arrears ahead of the Lok Sabha polls, the government on Thursday hiked the minimum selling price of sugar by Rs 2 per kilogram to Rs 31 per kg for helping millers clear farmers’ dues.

• The MSP is the rate below which the mills cannot sell sugar in the open market to wholesalers and bulk consumers like beverage and biscuit makers.
• Industry body Indian Sugar Mills Association had recently said cane arrears stood at around Rs 20,000 crore at the end of January.

This will help millers pay back the cane farmers, food minister Ram Vilas Paswan said.

4. Indian Markets Extend Slide

Indian equity benchmarks ended lower led by the declines in Reliance Industries Ltd. and HDFC Bank Ltd.

• The S&P BSE Sensex closed 0.44 percent or 157 points lower at 35,876.
• The NSE Nifty 50 Index ended below 10,750, down 0.44 percent.
• The 50-stock index clocked its longest losing streak since Sept. 24.
• Eight out of eleven sectoral gauges compiled by NSE advanced.

Follow the day’s trading action here.

U.S. stocks opened lower, Treasuries extended their advance and the dollar retreated after disappointing American retail sales data suggested the country’s economic growth is slowing.

• The S&P 500 Index, Dow Jones Industrial Average and Nasdaq 100 all sank Thursday after the U.S. Commerce Department reported the the worst drop for retail sales in nine years, while initial jobless claims came in higher than estimated.
• Banks were among the hardest hit, as the 10-year Treasury yield sank below 2.65 percent.
• Coca-Cola saw its biggest one-day loss in three years after selling fewer drinks in the Americas in the fourth quarter.
• The U.S. retail sales data for December -- which came out after a four-week delay due to the government shutdown -- may reinforce the expectation that the Federal Reserve will avoid raising rates this year.
• West Texas Intermediate crude fell 0.6 percent to $53.57 a barrel.

Get your daily global markets fix here.

5. Earnings: Ashok Leyland, ONGC

Ashok Leyland Ltd.’s quarterly profit fell less-than-anticipated beating the average analyst estimate.

• Net profit declined 21 percent year-on-year to Rs 381 crore.
• Revenue fell 12 percent to Rs 6,325 crore.
• Monthly sales fell the most in nearly two years in December after a muted festive season.

The company had called its sales slowdown a temporary blip.

Oil and Natural Gas Corporation Ltd.’s profit in the October-December quarter flatlined but beat estimates as weak crude prices offset the profit gain.

• Net profit of the state-run oil and gas explorer was flat at Rs 8,263 crore.
• Revenue was dipped 1.05 percent sequentially to Rs 27,694 crore.
• Operating profit was up 5 percent to Rs 16,571 crore.
• Operating margin expanded to 59.84 percent from 56.4 percent in the previous quarter.

Oil prices were lower by almost $7 a barrel during the quarter.

6. A Creditor Vs Liquidator Fight

A lender has sought the liquidator’s removal in the first such instance under India’s bankruptcy law where the majority of cases end with piecemeal sale of stressed assets.

• Edelweiss Asset Reconstruction Company Ltd. has moved the insolvency court against the liquidator appointed for Abhijeet MADC Nagpur Energy Pvt. Ltd., according to the petition—BloombergQuint has reviewed a copy.
• It alleges that the liquidator, Vinod Kumar Kothari, didn’t conduct the process in a fair and transparent manner by settling a Rs 30-crore claim with Reliance Infrastructure Ltd. for a third of that amount.
• Edelweiss said Kothari put a 271-MW power plant on auction at a reserve price of Rs 55 crore, a low amount for the unit.

The creditor is now demanding three things. Here’s what they are.

7. An Independent Data Verifier?

An Indian think tank founded by the central bank wants the government to form an independent body to vet official data after questions were raised about the credibility of the nation’s statistics.

• Some of the assumptions for economic growth and deficits made in the interim budget “are subject to much debate,” Amartya Lahiri, director at the Mumbai-based Centre for Advanced Financial Research and Learning, or CAFRAL, said in an interview.
• The view of the think tank, set up by the Reserve Bank of India, comes almost two weeks after the government pegged budget deficit target at 3.4 percent of gross domestic product for the current fiscal year ending in March as well as the next.
• That was narrower than expected and surprised India watchers.

Find out what the think-tank estimates India's actual fiscal deficit should be.

8. Pulwama Terror Attack Death Toll Rises

Dozens of Indian security forces were killed today and many more injured in the most serious terrorist attack to occur since Prime Minister Narendra Modi came to power in 2014.

• Central Reserve Police Force Deputy Inspector General M. Dhinakaran confirmed at least one bus carrying 39 passengers was attacked as the convoy -- which consisted of 78 vehicles and about 2,500 personnel -- traveled through Pulwama district, outside the capital, Srinagar.
• Investigations are continuing into the exact number of dead and injured, he said.
• Modi condemned the attack, which he described as "despicable" in a tweet on Thursday evening. "The sacrifices of our brave security personnel shall not go in vain."
• An ambush on a military camp in Uri in 2016 that killed 19 people prompted India to launch cross-border attacks against Pakistan.

Pakistan-backed Jaish-e-Mohammed claimed responsibility for the attack.

9. What The U.S.-China Trade War Is Really About

What’s the broader, deeper context to the year-long trade war between the United States and China? Are the people who call it ‘New Cold War’ or a ‘Thucydides Trap’ right or wrong? Is it an ‘Open Society’ War as suggested by George Soros in Davos? Raj Bhala tests Soros’ theory by asking:

• In practice, do the four specific areas of dispute in America’s Section 301 case suggest the Chinese economy is ‘open’?
• In theory, does governance in China bear the three hallmarks of an ‘open’ society?

The case for a negative answer to both questions is strong, Bhala writes.

Read why, here.

10. Time (Zone) Is Money

Each evening, the sun sets more than 90 minutes later in western India than in the east of the country, yet the entire country follows the same time zone.

• Later sunset means people stay awake longer, which induces sleep deprivation among children and negatively affects their study efforts, a new study by a research scholar at Cornell University has found.
• “Back-of-the-envelope estimates suggest that India incurs annual human capital costs of roughly $4.1 billion (nearly Rs 29,000 crore) or 0.2 percent of nominal GDP [gross domestic product] due to the existing policy regulating time zone boundaries,” Maulik Jagnani, the author of the study, told IndiaSpend in an email interview.

Here is the cost Indians pay for losing daylight and following a single time zone.