BQuick On Feb. 7: Top 10 Stories In Under 10 Minutes

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

1. Anil Ambani Says His Net Worth Is Zero

The brother of Asia’s richest man has pleaded poverty in his dispute with three Chinese banks seeking $680 million in defaulted loan.

• “The value of my investments has collapsed,” Anil Ambani said, according to a court filing by the banks in a London lawsuit.

• The lawsuit was filed by three state-controlled Chinese banks which argue that they provided a loan of $925 million to Ambani’s Reliance Communications Ltd. in 2012 with the condition that he personally guarantee the debt.
• The comments were disclosed Friday as Ambani sought to avoid depositing funds with the court ahead of a trial.

Ambani said he never gave a guarantee tied to his personal assets -- an “extraordinary potential personal liability.”

2. Coming Soon: Full-Fledged WhatsApp Payments Service

Facebook Inc.-owned messaging service WhatsApp is moving closer to launching full-fledged payments service on the unified payments interface, as it has met a number of the key pre-conditions, two people in the know have confirmed.

• WhatsApp Pay, which was to launch two years ago with State Bank of India, HDFC Bank Ltd. and ICICI Bank Ltd., has a pilot project running which offers payment services to about a million people.
• A full launch of WhatsApp Pay had been stalled after the Reserve Bank of India released data localisation norms in April 2018.
• WhatsApp has now met most of the data localisation conditions and will soon be in a position to expand payment services, said one of the two people cited above.
• Business Standard first reported on Friday that NPCI had cleared WhatsApp Pay’s launch and that it would look at a phased roll out.

A final decision on the extent of rollout permitted may be taken in the next week or so.

3. How Brittania, NTPC, Tata Steel And UPL Fared In Q3

Britannia Industries Ltd.’s quarterly profit met estimates as tax expenses fell.

• Net profit rose 24 percent year-on-year to Rs 372.6 crore.
• Tax expenses fell 24 percent to Rs 127.3 crore.
• Revenue rose 5 percent to Rs 2,982.7 crore.

Rural demand stabilised during the quarter but urban consumption weakened.

NTPC Ltd.’s quarterly profit rose as expected on higher other income.

• Net profit increased 25.6 percent year-on-year to Rs 2,995 crore.
• Other income jumped nearly threefold to Rs 540.63 crore.
• Revenue, however, fell 2.6 percent to Rs 23,496.4 crore.

Operating profit, too, improved.

Tata Steel Ltd. reported a surprise loss in the quarter ended December as domestic demand failed to pick up and performance of its European business deteriorated.

• Net loss stood at Rs 1,029.1 crore.
• Revenue fell 8.6 percent to Rs 35,520 crore.
• Operating profit fell 46.1 percent to Rs 3,619.8 crore.

The loss was exacerbated due to exceptional expenses.

UPL Ltd.’s third-quarter profit met estimates on higher revenue growth in Latin American markets.

• The agro-chemical maker reported a net profit of Rs 701 crore.
• Revenue stood at Rs 8,892 crore.
• Operating profit stood at Rs 1,883 crore.

Here’s how higher crop protection demand in Brazil helped UPL.

4. India Inc.’s Cash Hoarding Firms

Sixty companies are sitting on excess cash of around Rs 88,600 crore that they can return to shareholders through dividends and buybacks.

• That’s the takeaway from the Dividend and Buy-back Study 2020 done by the proxy advisory Institutional Investor Advisory Services based on FY19 financials of BSE 500 firms.
• Of the 60, just five—Infosys Ltd., ITC Ltd., Wipro Ltd., Tata Consultancy Services Ltd., and SBI Life Insurance Co. Ltd.—account for more than half of the total distributable cash, it said.
• The number of companies with excess cash in FY19 reduced to 60 from 75 a year ago, while the absolute quantum of excess cash dropped to Rs 88,600 crore from Rs 1.08 lakh crore.

Here’s why IiAS is advocating for companies to return their surplus cash to shareholders.

5. Nifty Snaps Gaining Streak

Indian equities halted a four-day gaining streak, led by the declines in Reliance Industries Ltd. and HDFC Ltd.

• The S&P BSE Sensex fell 0.4 percent to close at 41,141.85.
• The NSE Nifty 50 fell 0.33 percent to end at 12,098.35.
• The market breadth was tilted in favour of buyers.
• Six out of 11 sectoral gauges compiled by NSE ended lower.

Follow the day’s trading action here.

U.S. equities slumped amid speculation the recent rally may have gone too far too fast and as concern about the economic impact of the coronavirus overshadowed data showing a strong American jobs market.

• The S&P 500 Index snapped a four-day winning streak, while drops in miners and carmakers led the Stoxx Europe 600 Index lower.
• Yields on 10-year Treasuries fell below 1.6 percent after data showed U.S. employers hired at a faster-than-expected pace in January as wage gains rebounded.
• West Texas Intermediate crude fell 1.3 percent to $50.29 a barrel.

Get your daily fix of global markets here.

6. Time’s Running Out For Jet Airways

Bankrupt carrier Jet Airways India Ltd., once the nation’s biggest by market value, faces fresh warning signs as a deadline to avoid liquidation looms.

• Creditors will likely be forced into extending a Feb. 17 deadline for the sale of the airline as the shortlisted bidders have yet to form bidding groups, people familiar with the matter told Bloomberg News.
• Time is tight as creditors may have to push the company into liquidation if there is no resolution by around mid March.
• The two shortlisted bidders Synergy Group Corp. and Prudent ARC Ltd. had both submitted expressions of interest in January, but haven’t yet cobbled together bidding groups.

Creditors will be forced to push Jet Airways into liquidation if the bankruptcy process extends beyond 270 days.

7. India Sweetens The Deal For Sovereign Funds Investing In Infrastructure

In an effort to attract foreign investment, especially long-term in nature, to fund the Rs 103 lakh crore National Infrastructure Pipeline, Finance Minister Nirmala Sitharaman has offered a 100 percent tax exemption on the returns that such investment would earn, be it equity or debt.

• This is only available to sovereign wealth funds, namely Abu Dhabi Investment Authority as well as any entity wholly owned and controlled, directly or indirectly, by a foreign government.
• While the Finance Bill mentions that official notification will list eligible funds, the criteria it lays down cover conventional SWFs such as Norway’s Government Pension Fund Global with $1.2 trillion in investments as also Singapore’s Temasek—an investment fund with a $313-billion portfolio.
• Underscoring this point, a government official said on condition of anonymity that investment vehicles of sovereign wealth funds registered as foreign portfolio investors in India will also be allowed to avail the tax exemptions.

BloombergQuint explains the tax exemption criteria and how it gives more freedom to sovereign funds.

8. Cairn, Vodafone Eligible For Tax Amnesty

Vodafone Group Plc and Cairn Energy Plc are eligible to settle a tax dispute with India’s government under a new amnesty program, a senior government official said.

• The companies will need to pay their taxes by March to benefit from the interest and penalty waivers under the programme, Pramod Chandra Mody, chairman of the Central Board of Direct Taxes, told Bloomberg News.
• “We are trying to see to it that the litigation is kept to barest minimum,” Mody said, adding that “if they wish to come, they are welcome.”

The companies had previously rejected a similar offer in 2016.

9. State Borrowings Set To Surge

Indian states may see a sharp jump in their borrowings in 2020-21, following a slowdown in tax revenues and a drop in transfers from the central government in FY20, according to rating agency ICRA.

• The ratings agency estimates a 20-25 percent jump in the net issuance of state government bonds, known as state development loans in technical parlance, in 2020-21.
• Gross borrowings of states could rise to Rs 6.9-7.1 lakh crore in FY21.
• Net borrowings are likely to be in the range of Rs 5.5-5.8 lakh crore, according to a release by ICRA on Friday.
• The net issuance of state bonds is likely to exceed that of the central government, which is estimated at Rs 5.5 lakh crore in FY20, according to ICRA.

ICRA, like many others, flagged off the risk to state finances from lower and delayed transfers from the central government.

10. India’s Diamond Woes To Worsen From Coronavirus

Diamond and jewelry exporters in India can’t catch a break.

• After a pick up in December, the first quarter is looking increasingly bleak as the coronavirus outbreak that’s disrupting travel across the world hurts demand in Hong Kong, India’s biggest export market.
• The blow comes after months of protests in the city and the protracted trade war between the U.S. and China already sapped demand.
• India’s cut and polished diamond exports to Hong Kong have slumped 23 percent in the nine months to December from a year earlier to $5.4 billion.

January exports have been hit and it may take at least a month or two to recover.