BQuick On Jan. 25: Top 10 Stories In Under 10 Minutes

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

1. Jaitley Hits Out At The CBI

Union Minister Arun Jaitley questioned the need to probe “who’s who of the banking industry” in the ICICI Bank Ltd.’s loans to the Videocon Group.

There is a fundamental difference between investigative adventurism and professional investigation, Jaitley, who is in the U.S. for treatment, wrote in a blog post. “Professional investigation targets the real accused on the basis of actual and evidences.”

A reason why India’s conviction rates are poor is that “adventurism and megalomania overtakes our investigators”, wrote Jaitley.

2. IBC Clears Supreme Court Test

The Supreme Court of India upheld the two-year old insolvency code in its entirety, quashing petitions which challenged the law saying it was discriminatory.

• The two-judge bench headed by Justice Rohinton Nariman also upheld the ban on promoters’ bids for the defaulting company undergoing the insolvency process.
• Today’s judgment will boost a clean credit culture, said Rajiv Kumar, secretary at the Department of Financial Services. The ruling will help recover Rs 1.8 lakh crore in the current financial year, he said.

Here’s how the ruling affects ongoing insolvency cases.

3. Subhash Chandra’s Open Letter

The market capitalisation of Zee Group companies eroded nearly Rs 14,000 crore after a report said its controlling shareholder Essel Group’s name emerged in a probe linked to large deposits made after demonetisation.

• The Serious Fraud Investigation Office is probing a company—Nityank Infrapower (formerly Dreamline Manpower)—for deposits of over Rs 3,000 crore made just after Prime Minister Narendra Modi outlawed old Rs 500 and Rs 1,000 notes in November 2016, news website The Wire reported.
• Its investigation showed that Nityank Infrapower and a group of alleged shell firms had carried out financial transactions that involved a few firms associated with the Essel Group of Subhash Chandra between 2015 and 2017, according to the report.
• Group Chairman Chandra said that today's stock fall across his group companies was triggered by "negative forces" who got a hint of "positive meetings" he had in London last night to expedite the stake sale of Zee Entertainment Ltd.

Here’s the full text of Chandra’s open letter.

4. Q3 Results: Maruti Suzuki, L&T

Maruti Suzuki India Ltd. reported lower-than-expected quarterly profit because of higher commodity prices, currency fluctuation and weaker demand.

• Net profit fell 17 percent year-on-year to Rs 1,489 crore.
• Revenue rose 2 percent to Rs 19,668 crore.
• Automobile sales growth has slowed and demand remained subdued during the festival season last year because of higher fuel prices and increased upfront insurance costs.

Maruti also saw exports decline.

Larsen & Toubro Ltd.’s profit rose for the twelfth straight quarter on the back of higher other income.

• Net profit rose 37 percent year-on-year to Rs 2,042 crore.
• Revenue rose 24 percent to Rs 35,709 crore.
• Consolidated order book grew over 5 percent.

‘Order pipeline looks encouraging’

5. DHFL's Disbursements Fall 95%

Dewan Housing Finance Corporation Ltd., one of the worst hit by the liquidity crisis that engulfed India’s non-bank lenders, saw loan disbursements plummet by 95 percent in the third quarter of the current fiscal.

• DHFL disbursed a mere Rs 510 crore in loans during the quarter ended Dec. 31, 2018, according to an earning release put out by the company on Friday.
• In the previous quarter, the firm had disbursed Rs 13,870 crore and in the year ago quarter disbursements stood at Rs 10,850 crore.
• Net profit in the third quarter fell 36.7 percent to Rs 313.6 crore.
• Net interest income was down 12.3 percent at Rs 840.6 crore compared to Rs 958.9 crore.

The crisis also forced the lender to actively sell down loan portfolios.

6. Sensex Drops 170 Points, U.S. Stocks Rise

India’s NSE Nifty 50 Index edged lower paced by Zee Entertainment’s 27 percent fall and 7 percent plus cuts in Maruti Suzuki and UltraTech Cement Ltd.

• The S&P BSE Sensex fell 0.47 percent or 170 points to 36,025.
• The NSE Nifty 50 Index dropped 0.64 percent or 69 points to 10,781.
• For most part of the day, benchmarks traded higher but the gains were wiped out in afternoon deals as Zee Entertainment dropped. Maruti Suzuki added to the selling pressure.
• All sector gauges compiled by National Stock Exchange, barring the Nifty IT Index ended lower led by the Nifty Media Index's 16 percent decline.

Follow the day’s trading action here.

U.S. stocks rose, paring the first weekly decline of the year, as corporate earnings bolstered confidence in the economy and the potential for a deal to end the government shutdown increased.

• The S&P 500, Dow and Nasdaq 100 all increased as traders largely seemed to shrug off weaker 2019 forecasts from Intel.
• Adding to investor optimism were reports that the Federal Reserve is weighing ending its program of reducing its balance sheet sooner than previously expected, a move that could ease measures of financial conditions.
• Treasuries yields rose and the dollar weakened against most of its major peers.

Get your daily global markets fix here.

7. A $1-Billion Outflow Risk

Indian stocks may see a $1-billion outflow as the MSCI plans to change how it computes foreign ownership limits, ultimately lowering the weight of domestic companies on its indices, according to Emkay Global Research.

• The world’s largest index compiler proposes to exclude depository receipts while computing the foreign ownership cap in Indian securities, according to its consultation paper.
• What that means is the weight of Indian stocks on MSCI indices will be equivalent to the foreign portfolio investment limits in India.

Two Nifty companies will be the worst hit.

8. How Mittal Can Reduce Airtel’s Debt

Billionaire Sunil Bharti Mittal plans to infuse funds into India’s No. 2 telecom operator as debt and capital requirement rise amid a bruising tariff war.

• Mittal is looking at selling fresh shares, listing his profitable Africa business and divesting non-core assets to raise funds. The company hasn’t spelled out the details.
• A committee is considering the options, Mittal told BloombergQuint on the sidelines of the World Economic Forum in Davos, Switzerland.
• Bharti Airtel is considering issuing new stock and even Mittal could participate

Here’s how Bharti Airtel can bring down its debt to a comfortable level.

9. Meet Yes Bank's New CEO

When Rana Kapoor exits as chief executive officer of Yes Bank Ltd. at the end of this month, he will hand over the reins of the bank he co-founded to a fellow veteran banker Ravneet Gill, who currently heads Deutsche Bank in India.

• At one time, Kapoor and Gill were both part of the foreign banking fraternity. Kapoor branched out to set up Yes Bank in 2003.
• Gill built a long career at Deutsche Bank and was appointed head of its India operations in 2012.
• He will step down from that post to take over as Yes Bank CEO by March 1.

Gill is a corporate banker with an eye for retail.

10. Modi’s Legislative Scorecard

Bring back black money. Reduce non-performing assets in the banking sector. Adopt Goods and Services Tax. Remove red tape and ambiguity in rules to make way for prompt decisions. The Narendra-Modi led Bharatiya Janata Party government’s election manifesto had promised all this by way of its legislative agenda. Four-and-a-half years later, has it delivered?

• The IBC disciplined promoters, made lenders bolder.
• The jury is still out on his war on black money.
• On ease of doing business, rankings improved, reality didn't.

Here’s what experts said about Modi's legislative agenda.