BQuick On Sept. 25: Top 10 Stories In Under 10 Minutes

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

1. ‘Come To India,’ Modi Tells Investors

Prime Minister Narendra Modi urged global businesses to “come to India” as his government seeks to build a $5 trillion economy by 2025.

His address to chief executives at a summit in New York comes less than a week after India delivered a $20-billion tax cut stimulus to help shore up the $2.6-trillion economy that’s growing at the slowest rate in six years amid 45-year-high unemployment.

• Modi is meeting more than 40 major companies including Lockheed Martin Corp. American Tower Corp., Mastercard Inc. and Walmart at the Bloomberg Global Business Forum.
• The cut in corporate tax rates puts India on par with some of the lowest in Asia to help the south Asian nation compete with the likes of Vietnam and Indonesia for investments in the midst of ongoing global trade tensions.
• The cropped tax rates are the latest in a series of steps announced by the government, including easier foreign investment rules for companies from Apple to Huawei.

“If you want to invest in a market where there’s scale, come to India,” said Modi.

2. PMC Bank Aims To Resolve Issues In Few Months

A day after the Reserve Bank of India placed Punjab & Maharashtra Cooperative Bank under restrictions, the bank’s Managing Director K Joy Thomas clarified that depositors are in no danger of losing their funds.

• “We have sufficient liquidity. We are maintaining CRR (cash reserve ratio) and SLR (statutory liquidity ratio) as per RBI guidelines. We are maintaining the required liquidity norms. We have initiated the process of repaying all of our depositors. All our depositors are fully secured,” Thomas told BloombergQuint in an interview.
• PMC Bank aims to come out its stressed situation within a few months, Thomas said.
• According to RBI’s norms, CRR for scheduled urban cooperative banks are required to be kept at 5.5 percent of the net demand and time liabilities. The requirement for SLR is set at 22.5 percent.
• According to Thomas, the banking regulator placed restrictions on PMC Bank because the cooperative bank did not declare certain non-performing assets on its books.

Watch the full interview here.

3. Nifty Slumps; U.S. Stocks Decline

Indian equity benchmarks ended over a percent lower ahead of F&O expiry tomorrow.

• The S&P BSE Sensex fell 1.29 percent or 503.62 points to close at 38,593.52.
• The NSE Nifty 50 fell 1.28 percent to end at 11,440.20.
• The broader markets represented by the NSE Nifty 500 Index fell 1.38 percent.
• The markets could witness further short covering ahead of F&O expiry, according to Angel Broking.
• The market breadth was tilted in favour of sellers.
• Ten out of 11 sectoral gauges compiled by NSE ended lower.

Follow the day’s trading action here.

U.S. stocks fell for a fourth day as the impeachment drama intensified, adding another risk to markets already on edge over trade and slowing global growth.

• The S&P 500 Index fell 0.2 percent as of 10:06 a.m. New York time.
• The Nasdaq 100 Index lost 0.3 percent.
• The Stoxx Europe 600 Index sank 1.1 percent.
• The Bloomberg Dollar Spot Index jumped 0.4 percent.
• West Texas Intermediate crude sank 1.7 percent to $56.30 a barrel.

Get your daily fix of global markets here.

4. Allcargo Eyes Smaller Rival

Allcargo Logistics Ltd. is in talks to buy a stake in smaller rival Gati Ltd., people with knowledge of the matter told Bloomberg News, as India’s biggest cargo company attempts to boost its presence across Asia’s third-largest economy.

• Allcargo is in discussions to acquire Gati, that’s 6 percent owned by Goldman Sachs Group Inc., at an equity valuation of about Rs 1,300 crore ($183 million), one of the people said.
• The purchase will trigger a mandatory offer to buy Gati’s outstanding shares, the people said.
• India’s logistics and warehousing industry is attracting companies from Blackstone Group Inc. to Warburg Pincus as they seek to tap into a sector that Gati forecasts will be worth $217 billion by 2020.

Allcargo is also building large warehouses in four Indian cities and reworking its existing storage facilities near ports.

5. Banks Consider MSME Loan Restructuring

Lenders have started considering restructuring loans to stressed small businesses after the government backed the central bank’s eight-month-old debt recast scheme for such borrowers, according to three senior public-sector bankers.

• Last week, Finance Minister Nirmala Sitharaman said no micro, small and medium enterprise will be classified as a non-performing asset till Mar. 31, 2020. She pointed out that the Reserve Bank of India had come out with an enabling circular and banks must follow it.
• The norms allow banks to restructure the debt of MSMEs with aggregate loans up to Rs 25 crore and classified as standard accounts as on Jan. 1, the day the RBI issued the circular.
• While banks don’t have to tag these accounts as bad loans this fiscal, they have to make an additional provision of 5 percent, over and above whatever they held, for such accounts.

Both the moves were seen as a return to forbearance for RBI.

6. Retaining Faith In Essel Group’s Subhash Chandra

Four asset managers continue to own Essel Group’s debt backed by shares of Zee Entertainment Enterprises Ltd. after agreeing to give the promoters of the broadcaster up to six more months to repay.

• Aditya Birla Sun Life Mutual Fund, HDFC Mutual Fund, ICICI Prudential Mutual Fund and Franklin Templeton Mutual Fund together have close to Rs 1,735 crore worth of exposure secured by shares of Zee companies, according data provided by industry executives who didn’t want to be identified as the information is not public.
• By comparison, Essel Group’s share-backed debt with mutual funds, according to people in the Mutual Fund Industry, stood at Rs 4,600 crore at August-end.

Here’s why the mutual funds are staying put.

7. SpiceJet Mulls Listing Arm, Buying 100 New Jets

Indian budget carrier SpiceJet Ltd. plans to sell shares in its logistics business in an initial public offering, as the rise of e-commerce drives demand for fast shipping across the region.

• The one-year-old cargo division, known as SpiceXpress, could be listed on a stock exchange within 12 months, SpiceJet Chairman Ajay Singh said in an interview.
• The business would continue to be owned by SpiceJet, he said.

The no-frills carrier is expanding its nascent cargo-hauling arm to fill the growing need for overnight shipping services.

SpiceJet is also weighing an order for at least 100 Airbus SE planes as Boeing Co. grapples with the fallout over its grounded 737 Max.

• The budget carrier, a major global customer for the Max, may buy a “sizable” number of Airbus A321LR and XLR jets to accommodate a planned expansion, Singh said.
• No decision has been made, he said, and the airline would consider a competing midrange jetliner if Boeing decides to build one.

An order of that scale could exceed $10 billion based on 2018 sticker prices.

8. Maruti Suzuki Cuts Car Prices

India’s largest carmaker, Maruti Suzuki India Ltd., has cut prices of some of its cars, a week after the government reduced corporate tax rates to spur growth in the Indian economy.

• The measure, Maruti Suzuki said in an exchange filing Wednesday, is aimed at passing benefits of the corporate tax cut to customers, amid the auto slowdown.
• Sales of cars and utility vehicles dropped to a 22-year low in August, according to data from Society of Indian Automobile Manufacturers.
• The car price cut, according to the filing, will be applicable on an immediate basis and will be over and above the current promotional offers that the company is giving.

Here's how much the cars will get cheaper after the price cuts.

9. Rejig In Prime Minister’s Economic Advisory Council

The government has reconstituted Economic Advisory Council to the Prime Minister, or PMEAC, and has retained Bibek Debroy as its chairman.

• Ratan Watal, principal adviser at NITI Aayog, also continues to be member secretary of the council.
• The PMEAC will no longer have Rathin Roy and Shamika Ravi as part-time members.
• The number of part-time members in the panel now stands at two against four earlier.
• Ashima Goyal, a professor at Indira Gandhi Institute of Development Research, will continue to be a part-time member of the panel.

A well-known corporate economist too has joined as another part-time member.