BQuick On Jan. 29: Top 10 Stories In Under 10 Minutes

This is a roundup of the top stories of the day.

1. Blow For The Ruias

The Ahmedabad bench of the National Company Law Tribunal has rejected the settlement offer by Essar Steel’s promoters.

• The tribunal has pointed out that an application of withdrawal under Section 12A of the Insolvency and Bankruptcy Code can only be considered if it's filed by the applicant who initiated insolvency in the first place.
• In the Essar Steel insolvency matter, State Bank of India and Standard Chartered Bank had applied for proceedings.
• The NCLT bench will now hear the resolution plan submitted by U.K.-based ArcelorMittal, which had been approved by the committee of creditors in October 2018.

Here’s what SBI Chairman Rajnish Kumar had to say.

2. Yes Bank Co-Founders’ Truce

The two co-founding families of Yes Bank Ltd.—one of India’s youngest private lenders—have resolved differences after nearly a decade-long dispute, as the lender prepares to transition towards a new leadership.

• In a statement to stock exchanges, the bank said that two promoter groups would nominate one representative director each to join the bank’s board.

This is intended to ensure better coordination by the two promoter groups.

3. Earnings: Axis Bank, Bajaj Finance, HCL Tech, HDFC

Axis Bank Ltd.’s quarterly net profit surpassed estimates aided by a surge in other income.

• Net profit jumped 2.3 times year-on-year to Rs 1,681 crore.
• Other income rose 54 percent to Rs 4,001 crore.
• Asset quality improved with GNPA at 5.75 percent.

Retail loan book grew at 20 percent.

Bajaj Finance Ltd.’s quarterly profit met estimates even as the non-banking lender’s asset quality worsened.

• Net profit rose 48 percent year-on-year to Rs 1,023 crore
• Net interest income rose 42 percent to Rs 3,094 crore.
• Gross bad loans ratio rose to 1.55 percent from 1.49 percent in the previous quarter.

The “only issue” was the IL&FS account.

HCL Technologies Ltd.’s quarterly profit met estimates despite facing cross-currency headwinds.

• Net profit rose 2.8 percent sequentially to Rs 2,605 crore.
• Revenue in constant currency rose 5.6 percent to Rs 15,699 crore.

Operating margin fell largely due to wage increments.

Housing Development Finance Corporation Ltd. reported a lower-than-expected quarterly profit, as it had reported one-off gains in the year-ago period.

• Net profit fell 60 percent to Rs 2,114 crore.
• The mortgage lender had an exceptional gain of Rs 3,675 crore in the base quarter due to an initial public offering of HDFC Standard Life Insurance Company Ltd.
• Net profit rose 17.3 percent adjusted for the one-time gain.

Profit missed estimates but results were better than other housing financiers.

4. SBI To Own 15% Of Jet

State Bank of India is set to take an equity stake of at least 15 percent in Jet Airways India Ltd. as lenders to the carrier plan to convert part of their loans into equity, people with knowledge of the matter told Bloomberg News.

• Under a new rescue deal in the works, the nation’s biggest full-service airline’s founder Chairman Naresh Goyal’s stake will fall below 20 percent from the current 51 percent, the people said, asking not to be identified as the information is not public.
• Etihad Airways PJSC, the current equity partner with 24 percent stake, is expected to infuse additional funds to take its total holding to more than 40 percent, they said.

Jet Airways now needs shareholders’ approval.

5. Indian Markets’ Third Day Of Decline

Indian equity benchmarks clocked their worst three-day performance in over a month led by declines in Reliance Industries Ltd., HDFC twins and Larsen & Toubro Ltd.

• The S&P BSE Sensex fell 0.18 percent or 64 points to 35,592.
• The NSE Nifty 50 Index declined 0.1 percent or 9 points to 10,652.
• Eleven of 19 sector gauges compiled by the BSE ended lower led by the S&P BSE Energy Index's 1.2 percent decline.
• On the flipside, S&P BSE Telecom Index was top gainer, up 1 percent.

Follow the day’s trading action here.

U.S. equities were mixed as investors weighed the latest corporate earnings and the chances of a trade breakthrough between the world’s biggest economies.

• Industrial companies were among the biggest gainers as 3M Co. advanced after reporting profits, while technology stocks dragged on major U.S. indexes.
• Treasuries and the dollar were little changed.
• The pound edged higher as the Speaker of the U.K. House of Commons chose amendments to delay Brexit and renegotiate the deal to go to a vote later Tuesday.
• Oil climbed as U.S. banned Venezuelan exports.

Get your daily global markets fix here.

6. Domestic Mutual Funds Are Upstaging Foreign Investors

Mutual funds saved the value of institutional investments from shrinking last year even as overseas investors sold Indian equities, underscoring the extent to which domestic asset managers provided support to the Indian market.

• Asset management companies account for a little under 16 percent of the total equity assets of institutions compared with a 43 percent contribution by foreign portfolio investors as of December, according to data available on the website of National Securities Depository Ltd.
• The value of stocks managed by mutual funds rose by 1.02 lakh crore in 2018 compared with a Rs 96,837-crore decline in investments by foreign portfolio investors.

That’s a contrast from a few years ago when selling by FPIs spooked Indian markets.

7. Only A Temporary Reprieve For Essel Group’s Lenders

Over the weekend, the Essel Group said that it had arrived at an “understanding” with its lenders, following a sharp fall in the stock price of the group’s listed entities, including Zee Entertainment Ltd. and Dish TV Ltd.

• The fall in these stocks had meant that covenants included in some of the debt securities subscribed to by mutual funds and non-banking finance companies had been breached.
• The breach of these covenants allowed lenders to invoke ‘an event of default’ but they chose not to.

The clock, however, is ticking.

9. Modi’s Marquee Schemes

Prime Minister Narendra Modi's government is planning to unveil the final budget of its first term. While the government undertook a number of reforms from demonetisation to GST, it has unveiled (and refurbished) some big-ticket schemes with significant budgetary allocations.

• The Jan Dhan Yojana, launched in 2014, aimed to ensure that all Indians get bank accounts. 80 percent of Indians now have bank accounts.
• The second key scheme in improving the spread of banking is the attempt to push more credit through to small businesses under the Mudra Yojana. Loans worth Rs 2.54 lakh crore were classified as Mudra loans in 2017-18, a 41 percent rise.
• Launched in September 2014, the ‘Make in India’ initiative was one of Modi’s first big initiatives. But it failed to take off.

Here’s an analysis of Modi’s big six schemes.

9. Why Rahul Gandhi Dumped The United Opposition Plan

With Priyanka Gandhi’s entry into politics, the much-talked about pan-India Congress-led mahagathbandhan stands buried, writes Amitabh Tiwari.

• The Congress has announced it will contest alone in Uttar Pradesh, West Bengal, and Andhra Pradesh, which account for 27 percent of the Lok Sabha’s 543 seats.
• With half of all seats expected to be a contest between existing members of the National Democratic Alliance and the United Progressive Alliance, there’s not much room left for a mahagathbandhan.
• The Congress is being blamed by a section of politicians and commentators for ‘working against the larger cause of defeating the BJP in 2019’.

Is the Congress laying the ground for a longer-term revival beyond 2019?

10. Government Wants To Return Land Around Ram Mandir Site

The central government moved the Supreme Court seeking its permission to return the 67-acre acquired land around the disputed Ram Janambhoomi-Babri Masjid site to original owners.

• In a fresh plea, the Centre on Tuesday said it had acquired 67 acres of land around the 2.77 acre disputed Ram Janambhoomi-Babri Masjid site, in 1991.
• The plea has said that the Ram Janambhoomi Nyas (a trust to promote construction of Ram Temple) had sought return of excess land acquired in 1991 to original owners.

Earlier, the Supreme Court had maintained status quo with regard to the 67 acre land.