BQuick On May 15: Top 10 Stories In Under 10 Minutes

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

1. Chandrasekaran’s Restructuring Drive Continues

The Tata Group will bring its consumer businesses under one unit as the salt-to-software conglomerate continues to streamline its operations.

• Tata Chemicals Ltd. will demerge its food business to Tata Global Beverages Ltd., one of the biggest makers of branded tea and the owner of Tetley, the company said in an exchange filing.
• Shareholders will get 114 shares of Tata Global for every 100 held in Tata Chemicals.
• The deal values Tata Chemicals’ consumer business at nearly Rs 5,800 crore, according to BloombergQuint’s calculation. This as per Tata Global’s share price of Rs 199, as of close on May 15.
• Tata Chemicals’ consumer business that will be transferred to Tata Global includes sourcing, packaging, marketing, distribution and sales of its Tata Salt, pulses and spices under the Sampann brand, and its snacks business. These did a turnover of Rs 1,847 crore in financial year 2018-19.

This is the third such consolidation under Tata Sons Chairman Chandrasekaran.

2. Trade Deficit At Five-Month High

India’s trade gap widened to a five-month high in April due to lower growth in exports, amid weakening global trade and rising concerns over tensions between the U.S. and China.

• The gap between India’s imports and exports stood at $15.33 billion in April compared with $10.89 billion in March.
• The deficit was wider than the $13.5 billion forecast in a Bloomberg poll of 21 economists.
• Imports rose by 4.48 percent in dollar terms on an annual basis. Inbound shipments stood at $41.4 billion in April, down from $43.44 billion in the preceding month but higher than the $39.63 billion a year ago.

The culprit behind the wider deficit was slower export growth.

3. IndiGo’s Long Haul Strategy

Low-cost airlines, the pioneers of brief discomfort at bargain prices, have struggled to master long-haul flights. Now one of the world’s most successful budget carriers is considering cut-price business class seats as a way into the Europe-Asia market.

• IndiGo, which currently flies as far as Istanbul, is mapping out an ambitious long-distance network. The airline aims to start one-stop trips further into Europe within six months, Chief Executive Officer Ronojoy Dutta told Bloomberg in an interview.
• Dutta’s long-haul plans are forcing a product overhaul to help passengers endure longer flights and he’s considering everything from extra snacks to a brand-new business class.

IndiGo's success could upend the long-haul market between Asia and Europe.

4. Election Commission Curtails Campaigning In West Bengal

The Election Commission on Wednesday ordered campaigning in nine West Bengal constituencies to end at 10 p.m. on Thursday night, a day before its scheduled deadline, in the wake of violence between Bharatiya Janata Party and Trinamool Congress workers in Kolkata.

• The two parties have traded charges of inciting the violence during BJP President Amit Shah's massive road show in the state capital on Tuesday.
• During the violence, a bust of Bengali icon Ishwar Chandra Vidyasagar was vandalised.
• The Election Commission invoked Article 324 of the Constitution to curtail the campaigning for the last phase of the election on May 19.

5. Sensex, Nifty Fall Again; U.S. Stocks Recover

Indian equity benchmarks resumed declines after a one-day breather.

• The S&P BSE Sensex ended 203 points or 0.55 percent lower at 37,114 after a volatile session.
• The NSE Nifty 50 Index ended at 11,157, down 0.58 percent.
• The broader market index represented by the NSE Nifty 500 Index ended 0.57 percent lower.
• Nine out of 11 sectoral gauges compiled by NSE declined.

Follow the day’s trading action here.

U.S. stocks turned higher after President Donald Trump said he plans to delay imposing tariffs on auto imports.

• The S&P 500 wiped out declines of as much as 0.7 percent after Bloomberg reported the president would delay by up to six months a decision on car tariffs that was due by Saturday.

• The tech-heavy Nasdaq 100 also rose after Treasury Secretary Steven Mnuchin added to hopes of a trade deal when he said U.S. officials were in “serious” talks with China to improve trade ties.

• Shares fell in early trading after weak U.S. retail and factory numbers spurred growth concerns.

• Treasuries gave back gains after the two-year yield touched the lowest level since February 2018, while the 10-year rate traded around 2.38 percent.

• Oil retreated as mounting tensions in the Middle East over U.S.-Iran relations added to demand for haven assets

Get your daily fix of global markets here.

6. Welspun Corp Investment: Auditor’s Red Flag

PricewaterhouseCoopers, the independent auditor of Welspun Corp Ltd., has flagged concerns over the pipemaker’s investments in its Saudi Arabian joint venture.

• The deteriorating financial position at two joint ventures—Welspun Middle East Pipes LLC and Welspun Wasco Coatings Pvt. Ltd.—indicated that investments, loans and receivables worth Rs 292 crore could be a “potential impairment”, the auditor said in its note.
• That’s nearly 10 percent of the company’s overall net worth of Rs 2,797.3 crore.
• The auditor, going by the management’s assessment of improving future cash flows from the Saudi business, called these investments as “reasonable”.
• PwC, however, highlighted that no provisions were made by the company against these investments and loans.

Welspun, however, said it expects the investments to yield “fair returns”.

7. Disclosure Risks Hang Over RBI’s Bank Inspection Reports

Reserve Bank of India and banks will both have to tread cautiously on disclosure of bank inspection reports, writes Ira Dugal.

• Trouble will arise if the information released is published selectively and without much context.
• In the worst possible scenario, you’d have a scare around a deposit-taking institution and risk a run on the bank.

SEBI puts out a detailed investigation report, RBI needs to do the same.

8. SoftBank Backs Grofers

Masayoshi Son isn’t losing his appetite for backing money-losing startups.

• Son’s SoftBank Vision Fund is leading an investment round of more than $200 million in Grofers, the Indian online grocery startup said in a statement.
• Tiger Global and Sequoia Capital and new investor KTB joined SoftBank in the deal, which pushes the company’s valuation to almost $1 billion even as it competes against powerful rivals: Walmart Inc.-controlled Flipkart, Amazon.com Inc. and BigBasket, backed by Chinese e-commerce giant Alibaba Group Holding Ltd.
• The investment comes just after SoftBank-backed Uber Technologies Inc. flopped in its initial public offering, a sign that some investors are souring on tech startups with big dreams and bigger loses.

Grofers operates in a $600 billion market with many competitors.

10. Jet Airways Employees’ Attempt

Representatives of an employees’ consortium that plans to bid for Jet Airways (India) Ltd. met officials of SBI Capital Markets on Thursday and discussed various issues related to bidding process, according to a statement.

• The meeting comes two days after the consortium proposed to take over the ailing airline, with at least Rs 3,000 crore expected from outside investors for the bid.
• SBI Caps officials detailed the process of bidding which is already underway during a meeting held in Mumbai, a statement issued by Society for Welfare of Indian Pilots and the Jet Aircraft Maintenance Engineers Welfare Association.

Shortlisted bids are expected to be finalised next week.