The sun sets beyond a Ferris wheel at an amusement park near the port in Genoa, Italy (Photographer: Federico Bernini/Bloomberg)  

BQuick On Feb. 20: Top 10 Stories In Under 10 Minutes

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

1. Rs 48,239-Crore Lifeline

The government will infuse Rs 48,239 crore in 12 public-sector banks to provide minimum regulatory capital to banks that come under Reserve Bank of India’s prompt corrective action framework, and to prevent weak banks from breaching the framework’s triggers.

  • After this tranche of capital infusion, Rs 5,000 crore will remain to be infused by the government in public-sector banks for the current financial year.

Here’s how this will help particular state-run lenders.

2. Anil Ambani Guilty Of Contempt

The Supreme Court found Anil Ambani guilty of contempt for not paying dues to Ericsson AB, saying that the chairman of the Reliance Group risks a jail term if he fails to comply.

  • The apex court has given Reliance Communications Ltd. four weeks to clear the Rs 450-crore dues to Ericsson, which once supplied telecom network equipment to them.
  • The court also said Ambani could face three months in jail if the dues aren’t cleared by then, adding that the Reliance Group companies had no intention of adhering to the payment schedule for outstanding dues.
  • Shares of Reliance Group companies fell between 5 and 10 percent after the court's judgment.

Three Anil Ambani companies will also have to pay Rs 1 crore each to the apex court.

3. Nasscom Won’t Give FY20 Guidance

Information technology trade body Nasscom broke with tradition by not providing its guidance for the industry’s growth for the ongoing financial year.

  • Instead, the information technology trade body released findings of a survey of 100 IT sector chief executives, which showed that the industry was divided about the prospects for 2019.
  • Nasscom's guidance was based on history, and that is not the "right thing to do for the industry anymore because the past is very different from the future," said Nasscom President Debjani Ghosh.
  • Nasscom will not release its guidance even later, said Rishad Premji, the chairman of the industry body.
The survey presents a perspective in its naked form, and you can interpret from that, what you would like. 
Rishad Premji, Chairman, Nasscom

Here are the highlights from the first edition of Nasscom's CEO survey.

4. Nifty Rejig: Predicting The Exits And Entries

The next review of the NSE Nifty 50 Index is due and given the parameters that the National Stock Exchange of India Ltd. follows, state-run refiner Hindustan Petroleum Corporation Ltd. is most likely to be replaced.

  • The indices are reconstituted twice every year based on data for six months ending January and July. The last change happened in August when Lupin Ltd. made way for JSW Steel Ltd.
  • Based on these criteria, the stock in line to make an exit is HPCL. The refiner has a free float market cap of Rs 18,020 crore and has the smallest market cap among Nifty 50 constituents.

There are two eligible companies from Nifty Next that could replace HPCL: Britannia Industries Ltd. and Godrej Consumer Products Ltd.

5. Sensex Snaps Decline

Indian equities snapped their worst losing streak in eight years joining a global markets rally led by optimism over U.S.-China trade talks.

  • Also aiding sentiment was the buoyant outlook on India’s economy and corporate earnings.
  • The benchmark S&P BSE Sensex gained 1.2 percent or 404 points to 35,770.
  • The NSE Nifty 50 Index climbed 1.3 percent or 131 points to 10,742.
  • This was their best performance since Jan. 31.
  • All 11 sectoral gauges compiled by NSE advanced.

Follow the day’s trading action here.

BQuick On Feb. 20: Top 10 Stories In Under 10 Minutes

6. What’s Behind Ambuja Cements’ Slowdown

Ambuja Cements Ltd. posted the slowest volume growth compared to its peers for the three months ended December, dragged down by weak demand from the western region.

  • The Mumbai-based cement maker clocked 4.4 percent volume growth, its lowest since the first quarter of calendar year 2018.
  • This was weaker than other pan-India cement producers—UltraTech Cement Ltd., ACC Ltd. and Dalmia Bharat Ltd.—as well as regional players from south and north.
  • Ambuja Cements’ sizeable exposure to the western region—which has witnessed a slowdown in demand—is responsible for its lower volume growth, according to Sumangal Nevatia, lead analyst at Macquire.

The company’s lack of exposure in the fastest-growing southern market added to its woes.

7. GST Cut On Real Estate? Not So Soon...

Finance Minister Arun Jaitley adjourned the Goods and Services Tax Council meeting to Sunday in Delhi after some states said a decision on rates for the real estate sector should not be taken through video conferencing.

  • “I have always had an approach of moving as per consensus and since some of the states wanted a meeting where members are physically present, keeping the idea of consensus in mind, I adjourned the meeting to Sunday so that a physical meeting can be held,” Jaitley told reporters.
  • The council had to discuss a proposal recommended by a ministerial panel to bring down GST on under-construction properties to 5 percent from 12 percent.
  • The group of ministers, headed by Gujarat Deputy Chief Minister Nitin Patel, had also suggested lowering the tax rates on affordable homes to 3 percent or lower from 8 percent.

The GST Council may even consider lowering rates for affordable housing projects.

8. Saudi Aramco In Talks With Reliance Industries

Saudi Aramco, the world's largest oil exporter, said today it is in talks with Reliance Industries Ltd. and other Indian companies for investing in petrochemicals and refinery projects in the country.

  • The Saudi national oil company, which along with its partner U.A.E.'s Adnoc has taken a 50 percent stake in a planned $44-billion mega refinery-cum-petrochemical complex in Maharashtra by state-owned oil companies, has bullish outlook on India's energy demand and is keen on investing here.
  • Saudi Aramco Chief Executive Officer Amin Al-Nasser said he remains positive on the firm's investment in India, and is working with partners. Indian partners, he said, are "assuring us that things are going very well."

India is an investment priority for Saudi Aramco.

9. Who Is Middle Class In India, Today?

What is the precise definition and characterisation of ‘middle class’, and how many belong to it? Karthik Shashidhar uses income tax data to find out.

  • Most people in India, whether they barely pay taxes, or they make over a crore a year, describe themselves as ‘middle class’
  • The shape of the income distribution means that people who make less than you make only a little less than you, but people who make more than you make far more.

When you know people who make ten or a hundred times as much as you, it is virtually impossible to describe yourself as ‘rich’.

10. Pulwama – Avoiding The Tactical Trap

The best response to Pulwama would be to recognise the difference between tactical and strategic victories, writes former National Intelligence Grid Chief Executive Officer Raghu Raman.

  • Tactically successful operations can add up to strategic disasters and they often do.
  • The winner’s hubris typically ends with defeating the enemy, not ending the enmity.
  • The measured response for India should be to take this conflict into the strategic orbit.

Plan retribution that is meaningful and long-lasting, Raman writes.