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BQuick On May 17: Top 10 Stories In Under 10 Minutes

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

1. Rahul Gandhi Calls For New Economic Paradigm

Congress President Rahul Gandhi said that there is no option other than to offer India a new economic model that reboots the economy from the current framework that was set out in 1991.

  • “You do need a new paradigm,” Gandhi told The Quint's Raghav Bahl and Sanjay Pugalia in an interview on the sidelines of a campaign rally in Solan, Himachal Pradesh.
We are faced with a tremendous challenge, as big as any we have ever faced, of a massive population, youth, and an inability to create jobs.
Rahul Gandhi, President, Indian National Congress
  • Gandhi proposed making a two or three “global strategic bets” that should be “transformational”, along with working on deregulation.

Watch and read the full interview with the Congress chief here.

Meanwhile, Prime Minister Narendra Modi attended a press conference for the first time in his five-year tenure. Yet, Modi didn’t take a single question, instead directing it towards BJP President Amit Shah. You can watch the full press conference here.

2. Earnings: Bajaj Auto, Dr. Reddy’s, UPL, Indian Oil

Bajaj Auto Ltd. was able to skirt an industry-wide slowdown as it reported better-than-expected profit in the March quarter.

  • Profit rose 21 percent year-on-year to Rs 1,306 crore.
  • Operating profit fell 13 percent to Rs 1,161 crore.
  • Margin narrowed 390 basis points to 15.7 percent.

The automaker has announced a bumper dividend.

Dr. Reddy’s Laboratories Ltd.’s quarterly profit beat estimates due to higher sales in emerging markets, including India.

  • Profit jumped 44 percent year-on-year to Rs 434 crore.
  • Revenue rose 14 percent to Rs 4,016 crore.

Sales from emerging markets including India rose.

Indian Oil Corporation Ltd.’s profit for the quarter ended March beat estimates, rising nearly eightfold over the last quarter on higher other income.

  • Net profit stood at Rs 6,099 crore.
  • Revenue declined 9.8 percent to Rs 1,26,214 crore.

Jump in other income aided profit growth.

UPL Ltd.’s profit for the quarter ended March missed estimates due to an exceptional loss which includes cost related to acquisition of Arysta Lifesciences Ltd. and a foreign exchange loss.

  • Net profit plunged 72 percent year-on-year to Rs 206 crore.
  • Revenue rose 50 percent to Rs 5,691 crore.

Find out how the Arysta deal triggered an exceptional loss.

3. Airtel’s Rights Issue Oversubscribed

Bharti Airtel Ltd.’s rights issue to raise Rs 25,000 crore was oversubscribed before it closed on Friday, according to its media statement.

  • Billionaire Sunil Mittal-backed telecom operator, which is looking to pare more than Rs 1,12,000-crore debt, had priced its rights issue at a 31 percent discount.
  • The proposed fund infusion would cut its debt by 19 percent and lower its leverage ratio to 3.5 times its earnings before interest, tax and depreciation and amortisation, according to BloombergQuint’s calculations.

This is the company’s fourth attempt to pare debt.

4. Sensex's Best Weekly Gain Since March-End

Indian equity benchmarks halted their weekly rout and gained the most in nearly two months.

  • The S&P BSE Sensex closed over 1.2 percent higher this week to end at 37,930.
  • The NSE Nifty 50 ended at 11,407, down 1.1 percent.
  • The broader market index represented by the NSE Nifty 500 Index closed 0.43 percent higher during the period.
  • The benchmark indices had declined during the last three weeks.
  • Eight out of 11 sectoral gauges compiled by NSE ended higher.

Follow the day’s trading action here.

Stocks fell as China signaled a tougher stance in its trade war with the U.S.

  • The S&P 500 headed for the first decline in four days after China’s state media indicated a lack of interest in resuming negotiations.
  • Technology shares led benchmarks lower. Adding to woes, Deere & Co. slumped after the company warned the trade spat was weighing on American farmers.
  • Futures briefly pared losses before the open after the Trump administration delayed by six months any tariffs on car imports from Europe and Japan.
  • Ten-year Treasury yields pared a drop, while the dollar extended its rise after U.S. consumer sentiment data reached a 15-year high.
  • The yuan, already trading at five-month lows, slid further.
  • Oil traded above $63 a barrel.

Get your daily fix of global markets here.

5. $600 Million Tata-GIC Hotel Bet

Tata Group-controlled Indian Hotels Co. Ltd. has joined hands with Singapore’s wealth fund, GIC Pte., to invest as much as $600 million over three years in buying hotels in India.

  • The partners will acquire fully-operational hotels mainly in the luxury, upper scale and upscale segments and house these in a separate special purpose vehicle with its own funding, according to an exchange filing by the Indian partner in Mumbai.
  • The equity contribution of Indian Hotels in the acquisitions will be 30 percent and GIC’s will be 70 percent, the filing said.
  • The strategic partnership will extend the Indian company’s presence at the top-end of the market.

The deal will allow Indian Hotels to pursue acquisitions in an asset-light format.

6. Godrej Nature’s Basket Sold

Spencer’s Retail will acquire Godrej Industries Ltd.’s groceries and fresh food store chain Nature’s Basket for Rs 300 crore as it focuses on retailing food, apparel, electronics and lifestyle products.

  • The deal will give Spencer’s Retail access to Nature’s Basket’s 36 stores at prime locations in Mumbai, Pune and Bengaluru, RP Sanjiv Goenka group’s flagship said in an exchange filing.
  • “These stores have high sales throughput per square feet and will add Rs 363 crore of top line to Spencer’s Retail portfolio,” Shashwat Goenka, sector head for retail and FMCG for RP Sanjiv Goenka Group, said in a statement.

Here’s why Godrej felt they had to sell Nature’s Basket.

7. NSE Prepares To Challenge SEBI

The National Stock Exchange decided to challenge the market regulator’s Rs 1,100-crore penalty for allowing preferential access to some high-frequency traders.

  • The board of India’s largest stock exchange will contest the Securities Exchange Board of India’s orders in co-location and dark fibre cases.
  • The exchange said it believes that it has strong grounds to contest the orders, including the penalty, in the Securities Appellate Tribunal.

The decision follows legal opinion provided to the board.

Also read: NCLAT Overturns Jaypee Infratech Creditors’ Voting Process, Fresh Voting On May 31

8. Vedanta, Glencore Get 'Divorce' Notice

Zambian President Edgar Lungu threatened to “divorce” the local copper units of Vedanta Resources Plc and Glencore Plc after the companies said they’d curb operations in the southern African nation.

  • “I want to make it very clear that I have come here to sanction, if it’s the will of the Zambian people, that we divorce these mines,” he said in a speech broadcast live on Facebook as the crowd responded with cheers.
  • “My position is that enough is enough. The attorney general is here, the lawyers are here. They will guide us how to proceed with this divorce,” he said.

The threat marks an escalation in tensions between the mining industry and the government.

9. First China. Now India?

In recent months, President Donald Trump has made clear that the trade war will reach beyond the People’s Republic of China. Not only has he threatened Japan and Europe with import duties on cars, he’s repeatedly blasted India as “the tariff king,” writes Atman Trivedi.

  • Trump has obsessed over New Delhi’s high levies on Harley-Davidson motorcycles and complained about its modest $24.3 billion surplus in trade with the U.S.
  • In March, the president gave Congress notice that he plans to terminate duty-free privileges for $5.6 billion worth of Indian exports to the U.S. He could do so at any moment.
  • And Trump may not stop there. His administration is toying with the idea of exercising the same legal authority used to levy unilateral tariffs against China to impose higher duties on India.
  • Imagine the world’s largest democracy, which Washington has diligently sought to enlist as an ally against Beijing, being lumped together with America’s main strategic competitor.

This even as India represents the rare bright spot in U.S. foreign policy.

10. Sevenfold Rise In Anonymous Political Funding

Thanks to murky bearer bonds launched by Prime Minister Narendra Modi’s government, anonymous funding for India’s political parties has spiked nearly sevenfold.

  • Electoral bond sales, since being launched last year, have already crossed Rs 5,000 crore till May 4, replies to a Right To Information query by Mumbai-based activist Manoranjan Roy show.
  • That is significantly higher than the total annual income of national political parties over the last five years.
  • The whole notion of advertising electoral bonds as a method of improving transparency in elections was a sleight of hand,” said Milan Vaishnav, Director and senior fellow at the Carnegie Endowment for International Peace.
The whole point of electoral bonds is that they are non-transparent; you neither can identify the donor or the recipient.
Milan Vaishnav, Director, Carnegie Endowment for International Peace

Find out why electoral bonds are bound to add even more opacity to political funding.