BQuick On March 29: Top 10 News Stories In Under 10 Minutes

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

1. India To Borrow Rs 17,000 Crore/Week In FY20

The Indian government expects to raise Rs 4.42 lakh crore via market borrowings in the first six months of 2019-20, Finance Secretary Subhash Chandra Garg said on Friday. This implies that the government will be borrowing about Rs 17,000 crore each week.

• The borrowing planned in the April-September period is nearly 54 percent higher than the Rs 2.88 lakh crore borrowed in the same period in the financial year 2018-19.
• The government’s gross borrowing for the year is pegged at Rs 7.10 lakh crore, while net borrowings are seen at Rs 4.23 lakh crore.
• The net borrowing for the first half of the year stands at Rs 3.40 lakh crore.

Here’s a detailed look at the government’s borrowing plan.

2. Will Government Meet Fiscal Deficit Target?

The government has scrambled over the last few weeks to close divestment deals, raise funds through exchange-traded funds, and push tax agencies to step up their collection efforts. All this in an effort to meet a once-revised fiscal deficit target of 3.4 percent of GDP.

• While meeting fiscal deficit targets has often been a challenge in the past, the last two years have seen the government push things down to the wire.
• Until February this year, the government was running a fiscal deficit of 134.2 percent of the revised target.
• This is the highest in at least a decade and even higher than last fiscal year, when the introduction of the goods and service tax had led to volatility in tax collections.

Fiscal management has changed during the Modi government and the last minute rush to meet deficits adds to volatility.

3. Nirav Modi Denied Bail Again

Nirav Modi has been denied bail for a second time in 15 days by London’s Westminster Magistrate Court. The prosecution, in its final submission, had said that Modi is not cooperating with the Indian agencies and there is a risk he will fly out if granted bail.

• Modi’s first plea had been rejected on March 20, after his arrest on March 19. A London court had issued an arrest warrant against him on March 18.
• Toby Cadman, representing the crown prosecution on behalf of Indian authorities, also said that there is risk that Modi will influence witnesses and destroy evidence.

Catch live updates from the court hearing here.

4. Discounts Not Enough To Lure Car Buyers

It’s raining discounts for buyers of cars, motorbikes, and scooters. Still, that hasn’t lured enough people to pull automakers out of their despair.

• Sales either fell or grew marginally over the previous year for most automakers in March even as they continued to offer deep discounts, according to BloombergQuint’s poll of analysts and a survey of seven dealers in as many cities.
• The only silver lining appears to be that discounts have started exhausting inventory piled up at some dealerships.

Slowdown continued across segments, according to three brokerages polled by BloombergQuint.

5. Sensex Caps Strong End To Fiscal 2019

Indian equity benchmark Sensex clocked its best fiscal returns in four years.

• The S&P BSE Sensex advanced 17.30 percent this financial year, the highest since 2014-15.
• The NSE Nifty 50 returned 14.93 percent during the period, the highest since the financial year ended March 2017.
• On Friday, the 31-share index closed 0.33 percent higher at 38,672 and the 50-stock index closed at 11,621, up 0.47 percent.
• The broader market index represented by the NSE Nifty 500 Index closed 0.64 percent higher.
• Nine out of 11 sectoral gauges compiled by NSE advanced.

Follow the day’s trading action here.

• Stocks climbed to round out a strong quarter and Treasuries declined amid hopes for a trade deal between the world’s two largest economies.
• The S&P 500 Index was on pace for its best quarter since 2009, with energy companies leading gains Friday.
• Lyft Inc. makes its market debut after investors rushed to get a piece of the first big U.S. technology listing this year.
• Treasury 10-year yields advanced after a plunge earlier in the week triggered concern over an economic slowdown.
• The dollar fell, while the pound climbed on speculation that some Labour lawmakers could back Prime Minister Theresa May’s Brexit plan in a vote.

Get your daily fix of global markets here.

6. PNB To Sell Shares In PNB Housing Finance

Punjab National Bank will sell 13 percent stake in its housing finance arm to private equity firms General Atlantic and Varde Partners as the state-run lender, recovering from India’s largest banking fraud, looks to strengthen its capital base.

• The bank will sell PNB Housing Finance Ltd.’s 1.08 crore shares each at Rs 850 apiece for Rs 1,850 crore, according to its exchange filing.
• PNB’s stake in the mortgage lending subsidiary will fall to 19.78 percent from 32.79 percent as of December 2018.
• It will continue as the promoter and strategic shareholder of the company.

The money will help PNB shore up its capital base and make adequate provisioning.

Also Read: Jet Airways Misses Paying $109 Million Loan From HSBC

7. MPC’s Dilemma: How Deep Is The Slowdown?

It’s the Monetary Policy Committee’s judgment on growth that will now matter to assess the future trajectory of policy, writes Ira Dugal.

• The MPC will need to make an assessment of growth because inflation, barring any further shocks, will start to normalise simply on base effect.
• To begin with, a 25 basis point cut in the repo rate to 6 percent appears highly likely.
• With no sudden or sharp reversals in retail inflation evident yet, the MPC’s inflation projection leaves room for lower rates.

What is growth looking like? Read here.

8. Unholy SAINTS Of Indian Venture Capital

India’s venture capital ecosystem has seen a record rise in investments in two years. More than half of these have come from a clutch of foreign investors—mostly Chinese. Despite driving investment growth, these venture capitalists may be, in part, responsible for the funding drought that India’s early stage ventures are facing, according to analysis by WaterBridge Ventures.

• The “SAINTS”—as the authors of the analysis, Sarbvir Singh and Pulkit Mehrotra, call the group of SoftBank, Alibaba, Naspers, Walmart, and Tencent—view India as their largest open market and have rushed to invest in market leaders.
• But that has a fallout. Their influx has led to global investors rushing to fund established companies before the ‘SAINTS’ show up.
• So while mega deals are “holding up the sky”, seed and pre-series A investments in early stage startups have seen a sharp decline over the last three years.

But SAINTS are only one reason of the funding dry-up. Here are the others.

9. Congress Is Dynastic? So Is BJP

The Bharatiya Janata Party has had a similar number of ‘dynasts’ amongst its elected parliamentarians over the past two decades as the Indian National Congress, shows our analysis of a new data set containing the biographical profiles of all 4,807 parliamentarians since India’s first parliament in 1952.

• Since 1999, the Congress has had 36 dynastic members of parliament elected to the Lok Sabha, with the BJP not far behind with 31.
• In 1999, the beginning of the 13th Lok Sabha, 8 percent of Congress MPs were either descended from or married to former MPs, only slightly ahead of the 6 percent among the BJP.
• The most similar density of dynastic politicians was in 2009 when the Congress and BJP had 11 percent and 12 percent dynasts elected, respectively.

BJP can play the anti-dynast card only because their own dynasts are less visible than the Gandhis.

10. Chaas, Jeera Masala And Other Grandma Recipes For Coca Cola

First came a type of cumin-flavored sparkling water. Next up is a mix of unripe mangoes and spices. After that could be buttermilk. Then maybe some potions based on a 2,000 year-old system of traditional medicine.

• That’s a rough outline of Coca-Cola Co.’s strategy in India as it tries to outrun the global decline in consumption of sugary sodas.
• As consumers turn health-conscious at a rapid clip even in emerging markets, Coke’s mission globally is now to sell a lot more than just, well, Coke.
• In India, its hunt for alternatives has led it to tap into a rich vein of what’s known as “ethnic drinks” -- traditional beverages brewed by grandmas in kitchens around the country using local spices and fruits.

Demand for the packaged version of these Indian drinks has grown 32 percent over the last 3 years.