BQuick On July 17: Top 10 Stories In Under 10 Minutes
Here’s a roundup of all the top stories of the day in brief.
1. Wipro Misses Estimates; Yes Bank Continues Its Cleanup
Wipro Ltd.’s profit for the April-June period slipped but met estimates even as its margin narrowed due to a stronger rupee in the quarter.
- Net profit fell 3.9 percent to Rs 2,388 crore.
- Bengaluru-headquartered company’s revenue fell 2.4 percent to Rs 14,786 crore.
- Revenue from IT services declined 1.3 percent sequentially to $2,038.8 million, which fell short of the company’s forecast of $2,046-2,087 million.
- Margin from IT services continued to slide for the second straight quarter.
Wipro is awaiting approval from SEBI to complete its buyback.
Yes Bank Ltd. returned to profitability in the April-June 2019 quarter after an unanticipated loss in the previous quarter. Profits, however, fell short of street expectations.
- The private lender’s net profit fell to Rs 114 crore from Rs 1,260 crore a year ago.
- Net interest income, or core income, rose 2.8 percent to Rs 2,281 crore.
- Gross non-performing asset ratio rose to 5.01 percent from 3.22 percent in the March quarter.
- However, provisions in the April-June period were lower than the previous quarter.
Yes Bank Chief Executive Officer said "we have put the house in order this quarter".
2. Coal India Break-Up?
India may spin off units of Coal India Ltd., the world’s largest coal miner, into separate listed companies to boost competition and raise government funds, people with knowledge of the matter told Bloomberg News.
- The state-run company and the coal ministry are studying a proposal by the finance ministry’s Department of Investment & Public Asset Management to list four of Coal India’s biggest production units, as well as its exploration arm, said the people, who asked not to be named as the plan isn’t public.
- The development is in an early stage and it was unclear how long it may take, the people added.
- Prime Minister Narendra Modi’s government has sought to sell some state assets to raise funds, and these divestments will continue to remain a priority, Finance Minister Nirmala Sitharaman said July 5, setting a record target of raising Rs 1.05 lakh crore in the current fiscal year.
Here’s how breaking up Coal India will help boost competition in the domestic coal market.
3. RBI’s Surplus: Staggered Transfer
A committee set up to review the Reserve Bank of India’s economic capital framework has finalised its report and will submit it to the central bank soon, according to a person familiar with the matter.
- The panel’s recommendations include a transfer of some reserves from the RBI’s balancesheet to the government over a 3-5 year period, this person said, without disclosing the amount that will be transferred.
- BloombergQuint had earlier reported that the interim report of the panel suggested a transfer of Rs 8,000-8,500 crore.
- The person also said that the committee has recommended a periodic review of the economic capital framework from here on.
It appears that the report may include dissenting views.
4. Jet Airways: Deeper Forensic Audit
Lenders to Jet Airways (India) Ltd. have sought a deeper review of the grounded airline’s financials after a limited forensic audit threw up a series of anomalies.
- The lenders, led by State Bank of India, have begun preliminary discussions with EY on a deeper forensic audit of Jet Airways’ books to capture any large financial irregularities, two people in the know told BloombergQuint, on condition of anonymity.
- The lenders had originally sought a limited forensic audit when Jet Airways was still operational, according to the people quoted above.
- The limited review included a check on revenue billings, costs (excluding sales and distribution) and related party transactions identified in the books of the company, BloombergQuint had reported in January.
This forensic audit will be done outside the ambit of the IBC.
5. Jaypee Infratech: Door Open For Fresh Bids
The National Company Law Appellate Tribunal has asked the lenders to Jaypee Infratech Ltd. to submit the terms and conditions for bidders in the resolution process of the debt-laden company.
- The terms and conditions have to be submitted by the committee of creditors before Friday, the bench headed by Justice SJ Mukhopadhayay said. It will then pass further directions.
- The interest of the homebuyers, the tribunal said, will have to be protected by the resolution applicant.
- The court’s directive may open the door for fresh bid for Jaypee Infratech, including one from the Adani Group whose resolution plan has not been considered by the CoC so far.
This insolvency process has been going on for more than two years now.
6. Sensex Rises, U.S. Stocks Slip
Indian equity benchmarks extended gains for the third consecutive trading session, registering their longest gaining streak in nearly two weeks.
- The S&P BSE Sensex closed 0.22 percent or 85 points higher at 39,215.64.
- The NSE Nifty 50 closed at 11,687.50, up 0.21 percent.
- The broader market index represented by the NSE Nifty 500 Index closed 0.14 percent higher.
- The market breadth, however, was tilted in favour of sellers.
- Nine out of 11 sectoral gauges compiled by the NSE ended higher.
Follow the day’s trading action here.
U.S. stocks fell as investors assessed mixed corporate earnings amid fresh trade tension. Treasuries rose and the dollar was steady.
- The S&P 500 Index dropped below 3,000, led by industrial companies. The Dow Jones Transportation Average, a barometer of economic growth, sank the most since May.
- Bank of America Corp. climbed as gains in its retail division drove overall profit to a record, while the trading unit saw a drop in revenue. Netflix Inc. dropped before reporting its results.
- West Texas Intermediate crude rose 0.6 percent to $57.98 a barrel.
Get your daily fix of global markets here.
7. 35% Minimum Public Shareholding: Winners And Losers
Can the government and Securities and Exchange Board of India balance interests of public shareholders with those of promoters, companies and acquirers, ask Cyril Shroff and the Cyril Amarchand Mangaldas team.
- Boards of listed companies may struggle with the singular option available to them.
- Promoters may find such costs unviable or misaligned and may prefer going private.
- Another set who may find resonance with the promoter perspective will be acquirers.
- But there are other stakeholders who will benefit from better price discovery due to increased liquidity.
8. Soon, You Could Pay Only Two Months’ Rent As Deposit
The government’s draft model law for tenancy provides for a separate regulator and suggests how rent can be increased as the Modi administration looks to unlock housing and boost the rental market.
- The Ministry of Housing and Urban Affairs put up the draft Model Tenancy Act, 2019—which aims to balance the interests of landlords and tenants—on its website for feedback from public and stakeholders till Aug. 1.
- It proposes to establish a rent authority by states, and addresses issues like tenancy agreement, how rent can be increased, the level of security deposit and repossession of property, among others.
- The draft covers all kinds of tenancy-landlord agreements, according to property consultant Anarock.
Here’s how renting a house will be different if the new draft law comes into effect.
9. Pakistan Told To Review Kulbhushan Jadhav’s Death Sentence
The International Court of Justice on Wednesday ruled that Pakistan must review the death sentence for Indian national Kulbhushan Jadhav, who has been sentenced to death by a Pakistani military court.
- Reading out the verdict, President of the Court Judge Abdulqawi Ahmed Yusuf ordered an "effective review and reconsideration of the conviction and sentence of Mr. Kulbhushan Sudhir Jadhav".
- Jadhav, 49, a retired Indian Navy officer, was sentenced to death by the Pakistani military court on charges of "espionage and terrorism" after a closed trial in April 2017.
His sentencing evoked a sharp reaction in India.
10. Karnataka MLAs Case: Supreme Court’s Order
The Supreme Court has ordered that the Congress and Janata Dal (Secular) rebel MLAs in Karnataka can’t be compelled to participate in the state assembly proceedings, including a trust vote by Chief Minister HD Kumaraswamy on Thursday.
- The bench headed by Chief Justice of India Ranjan Gogoi also gave Karnataka Speaker KR Ramesh Kumar liberty to decide on the MLA resignations within the timeframe he chooses.
- The speaker, Supreme Court said, should not be forced to take a decision within a time frame.
- The Congress-JD(S) government, which was formed last year after the election results threw up a hung assembly in Karnataka, is facing a political crisis with 15 MLAs resigning from their membership.
Here are the arguments made by the lawyers for the MLAs, the speaker and the chief minister.
What are the possible outcomes of the Karnataka trust vote and who has the edge? Watch this debate with Krishna Prasad and Narendra Pani.