BQuick On Jan. 30: Top 10 Stories In Under 10 Minutes
A train travels across a bridge as the sun rises (Photographer: SeongJoon Cho/Bloomberg)  

BQuick On Jan. 30: Top 10 Stories In Under 10 Minutes

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

1. The RBI-Kotak Peace Pact

Private sector lender Kotak Mahindra Bank Ltd. has reached an agreement with the Reserve Bank of India, settling long-standing differences between the lender and its regulator over promoter shareholding.

In a notification to stock exchanges on Thursday, Kotak Mahindra Bank said the RBI has conveyed its in-principle agreement of the following:

  • Promoters voting rights in the bank to be capped at 20 percent of paid-up voting equity share capital until March 31, 2020.
  • Promoters’ voting rights in the bank to be capped at 15 percent from April 1, 2020 onward.
  • Promoters’ shareholding in the bank to be reduced to 26 percent within six months from the date of final approval of the RBI.
  • Thereafter, the promoters will not purchase any further paid up voting equity shares’ of the bank till the percentage of promoters’ shareholding reaches 15 percent.

Here are the implications of the truce.

2. HUL’s Parent Thinks The Tea Is Not Strong Enough

Unilever Plc. put its 2.9-billion-euro global tea business up for strategic review, a move that may have implications for its Indian unit Hindustan Unilever Ltd., the maker of Brooke Bond and Taj Mahal brands.

  • The review is a result of the company looking at various channel designs for future growth, the company said in a statement accompanying its earnings for the quarter ended December.
  • “We are reviewing (including the premium tea portfolio) on how we can best get value for our stakeholders. But we haven’t made a decision yet,” Alan Jope, chief executive officer at Unilever, told investors after the earnings.
  • Tea is witnessing lower recovery in the developed markets and is earnings dilutive, Unilever said, adding it’s not technology-linked and is structurally slow growing.

Tea contributes almost 20 percent of its food and refreshment revenue.

3. How Bajaj Auto, Indian Oil And Tata Motors Fared In Q3

Bajaj Auto Ltd.’s profit rose for the ninth straight quarter, beating estimates, and its margin expanded as raw material costs fell.

  • Net profit rose 14.5 percent year-on-year to Rs 1,261.6 crore.
  • Sales fell 4.6 percent to nearly 12 lakh units.
  • Revenue rose 2.7 percent to Rs 7,639 crore.

See how higher exports helped Bajaj Auto’s top line.

Indian Oil Corporation Ltd.’s third-quarter profit rose more than four times and its operational performance met estimates, aided by higher sales volume and inventory gains.

  • Net profit jumped to Rs 2,339 crore from Rs 563 crore in the September quarter.
  • Revenue rose 11.6 percent to Rs 1,24,615 crore.
  • GRM increased to $4.09 per barrel compared with $1.3 a barrel.

Find out how much inventory gain helped IOC.

Tata Motors Ltd.’s quarterly profit beat estimates even as sales of its luxury car arm Jaguar Land Rover fell and Indian business continued to grapple with a deepening slowdown.

  • Net profit stood at Rs 1,738.3 crore.
  • Revenue fell 6.8 percent year-on-year to Rs 71,676 crore.
  • Margin expanded more than 300 basis points to 10.3 percent.

Here’s why Tata Motors is concerned about consumer demand.

4. Fuel Subsidy Benefit For BPCL?

India plans to extend subsidy benefits for Bharat Petroleum Corp.’s cooking fuel customers after the state-run retailer is privatised, people with knowledge of the matter told Bloomberg News.

  • The government allows only state firms to sell cooking gas and kerosene under the subsidy program but plans to exempt BPCL post the asset sale, the people said, asking not to be identified as the discussions are private.
  • India’s cabinet is likely to discuss the proposal, the people said.
  • The subsidy extension will bring in clarity to prospective suitors about the future of BPCL’s LPG business.

Also read: Modi’s Many Stalemates Are a Drag on Indian Budget

5. Sensex, Nifty Resume Decline

The Nifty’s futures and options series posted a loss for the second straight month in January.

  • In the January series, the 50-stock index fell 0.8 percent, registering its worst F&O series in five months, according to data compiled by BloombergQuint.
  • Meanwhile, the Indian stock indices resumed declines after a one-day breather.
  • The S&P BSE Sensex fell 0.69 percent or 284.84 points to close at 40,913.
  • The NSE Nifty 50 fell 0.77 percent to end at 12,035.80.
  • The broader markets represented by the NSE Nifty 500 Index fell 0.9 percent.

Follow the day’s trading action here.

U.S. stocks slumped on speculation that the coronavirus epidemic could rattle the fragile state of the global economy.

  • The S&P 500 Index trimmed its gain for January to 1 percent.
  • As the death toll from the coronavirus rises and authorities lock down cities in China, concern over spending and production intensifies. The hit to the world’s second-largest economy could exceed that seen during the SARS outbreak of 2003, according to Nomura Holdings Inc.
  • Federal Reserve Chairman Jerome Powell said Wednesday that the viral outbreak will likely hit the Chinese economy and could spill wider, but it was too early to judge what impact it would have on the U.S.
  • West Texas Intermediate crude sank 2.4 percent to $52.05 a barrel.

Get your daily fix of global markets here.

Also read: Why UBS Thinks Indian Banks’ Bad Loan Cycle Will Extend Into Next Fiscal

6. Jindal Steel Allowed To Sell Rs 2,000-Crore Worth Inventory

The Supreme Court allowed Jindal Steel & Power Ltd. to sell Rs 2,000-crore worth of iron ore inventory from its Sarda mines in Odisha if the steelmaker pays Rs 933 crore in dues to the state government by Feb. 28.

  • That comes after the Odisha government on Jan. 15 said it will allow JSPL to sell iron ore from its Sarda mines if the company gave an affidavit of undertaking worth Rs 900 crore for royalty dues owed to the state.
  • The top court had in 2017 directed that a 100 percent penalty would be levied on steelmakers that have illegally extracted iron and manganese ore in Odisha since 2000-01.
  • VR Sharma, managing director at the steelmaker, had told BloombergQuint that the company has a “legitimate right” over the material at the mine as it has paid the duties and royalties levied on it.

Sarda Mines was among the eight lessees accused of transferring leases without the government’s prior approval.

7. Air India Roadshow

Indian officials met with as many as nine companies during roadshows to gauge interest in a stake sale in the nation’s loss-making flag carrier, people with knowledge of the matter told Bloomberg News.

  • Officials from the South Asian nation met executives of companies including British Airways parent IAG SA, IndiGo, India’s biggest airline that’s operated by InterGlobe Aviation Ltd., SpiceJet Ltd. as well as Tata Sons Ltd., the people said asking not to be identified discussing preliminary meetings.
  • The airline will have to shut down if it can’t find a buyer, Aviation Minister Hardeep Singh Puri told the Indian parliament in November.

Despite the huge losses, Air India has some lucrative assets.

8. India’s Luxury Home Inventory Jumps

Inventory of luxury homes in India’s top seven cities jumped as a slowing economy worsened the demand for upmarket properties.

  • The number of unsold luxury units priced above Rs 1.5 crore rose 10 percent year-on-year to 89,200 in 2019, according to a report by Anarock.
  • This stock is worth Rs 1.59 lakh crore, about 34 percent of the total real estate inventory in the seven cities.
  • Barring Kolkata, the numbers rose in all cities with Hyderabad witnessing the biggest spike.
  • The Mumbai Metropolitan Region led with the highest number of unsold posh homes, followed by Delhi-National Capital Region, Bengaluru, Hyderabad, Pune, Chennai and Kolkata.

Unsold luxury stock jumped even as the category has the lowest share in the total inventory.

Also read: The Crisis That Shattered India's Economic Dreams

9. First Case Of Coronavirus In India

India reported their first confirmed cases of the coronavirus, as the not-seen-before illness continues its global spread.

  • A student who attended Wuhan University tested positive in Kerala, the Indian government said.
  • The patient is stable and is being closely monitored.
  • The government has also reached out to over 600 Indians living in China's Hubei province, the epicentre of coronavirus, to ascertain their willingness to be brought back to India.
  • Globally, the death toll rose to 170 and confirmed cases in China soared past 7,700.

Follow the spread of the deadly virus here.

Also read: The Global Battle to Force the Coronavirus Below Its Tipping Point

10. Man Brandishes Gun And Shoots At Protesting Jamia Millia Students

A student from Jamia Millia Islamia was injured when a man opened fire at a group of protesters on Thursday afternoon and shouted "Yeh lo azaadi".

  • The man, identified as Rambhakt Gopal, was detained after he fired at students demonstrating against the Citizenship (Amendment) Act, police said.
  • He was overpowered by protesters.
  • The Delhi police and media were both present when the incident took place.

Students have now blocked the area in protest after their march to Jantar Mantar was stopped by the police.

BQ Install

Bloomberg Quint

Add BloombergQuint App to Home screen.