An employee scarfs a steel slab during production at the at a facility. (Photographer: Daniel Acker/Bloomberg)

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

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

1. One Stock, Two Very Different Prices

Insolvency resolution of Electrosteel Steels Ltd. has thrown up an unexpected concern for exchanges: a wide gap between the prices of the stock on two bourses.

  • Shares of the steelmaker, taken over by Vedanta Ltd., were trading at Rs 10 apiece on the National Stock Exchange at 2.30 p.m. on Wednesday compared with Rs 51 on the BSE Ltd.
  • To curb such large variations, the bourses have jointly written to the regulator to “harmonise” prices across platforms.
Such a difference can lead to disputes and leave undue room for manipulation which neither exchange wants. They need to come to a common ground on the price else the investors will have no option but to approach the regulator.
Arun Kejriwal, Director, Kris Capital

There are more such cases.

2. Government Asks RBI To Identify Banks For Mergers

India has asked the Reserve Bank of India to prepare a list of candidates for merger among 21 government-controlled lenders, people familiar with the matter said.

  • Earlier this month, the finance ministry had also asked the RBI to suggest a time frame for consolidation.
  • The move is aimed at creating fewer, better-capitalized lenders and improving regulatory oversight, they said.

Here’s why its imperative for public sector banks to consolidate.

3. Sensex, Nifty Drop; U.S. Stocks Flat

Indian equity benchmarks halted their record closing spree dragged by Reliance Industries Ltd. after it snapped its seven-day rally.

  • The S&P BSE Sensex Index fell 0.45 percent or 174 points to 38,723.
  • The NSE Nifty 50 Index declined 0.4 percent or 47 points to 11,692.
  • Thirteen out of 19 sector gauges compiled by BSE ended lower led by the S&P BSE Energy Index’s 1.13 percent drop.

Follow the day’s trading action, here.

U.S. stocks held at fresh records, with technology shares pacing gains, as investors awaited the next developments on trade.

  • The S&P 500 Index churned near 2,900, a level it first breached on Tuesday.
  • The Bloomberg Dollar Spot Index increased 0.1 percent.
  • West Texas Intermediate crude increased 0.7 percent to $69.02 a barrel, the highest in seven weeks.

Get your fix of global markets, here.

4. Where's The Black Money?

Almost all of the demonetised currency notes have been counted and accounted for by the Reserve Bank of India, the central bank said in its annual report for the year 2017-18.

  • Rs 15.31 lakh crore worth currency notes have now been returned, since Nov. 8, 2016.
  • This represents about 99.3 percent of the total currency notes which went out of circulation on a single day.
  • At the time of demonetisation, it was felt that a significant amount of the demonetised currency would not return to the system, implying that the stock of black money would be extinguished.

For more details about the currency in circulation, read this.

Indian 500 rupee banknotes are arranged. (Photographer: Dhiraj Singh/Bloomberg)
Indian 500 rupee banknotes are arranged. (Photographer: Dhiraj Singh/Bloomberg)

Also read: Hard Earned Macroeconomic Stability Must Be Preserved, Says RBI

5. Varde, Aditya Birla Creating $1 Billion Joint Venture

Varde Partners Inc. and Aditya Birla Capital Ltd. are creating a joint venture to invest as much as $1 billion in distressed assets in India, according to people familiar with the transaction.

  • The U.S. investment firm and Indian financial services provider are expected to deploy this sum over three years.
  • The venture, which will scout for deals of up to $100 million, might get announced as early as this week.
  • Varde’s Co-Chief Investment Officer Ilfryn Carstairs had called the opportunity in India’s distressed assets’ “enormous” in an interview last year.
I see systemic opportunities in India.
Ilfryn Carstairs, Co-CIO, Varde

Read about Aditya Birla Capital’s interest in stressed assets.

6. Adani Deal To Help Make Reliance Infrastructure ‘Zero Debt’ By Next Year

Reliance Infrastructure Ltd., which recently defaulted on debenture payments, approved sale of its power business in Mumbai to Adani Transmission Ltd. as the Anil Ambani-led firm looks to repay debt.

  • The deal—worth Rs 18,800 crore—was approved by the company’s board at a meeting today.
  • “It is the largest ever debt-reduction in the infrastructure sector,” Anil Ambani, chairman of the company, said.
  • Reliance Infrastructure’s debt will come down to Rs 7,500 crore from Rs 22,000 earlier.
  • It aims to be a “zero-debt” company by next year, Ambani said.

Here’s more on Anil Ambani’s debt reduction plans.

 Anil Ambani at a news conference in Mumbai, India. (Photographer: Adeel Halim/ Bloomberg News)
Anil Ambani at a news conference in Mumbai, India. (Photographer: Adeel Halim/ Bloomberg News)

7. Losses Widen For Paytm’s Parent

Losses widened for Paytm’s Alibaba-backed parent, which recently raised funds from billionaire investor Warren Buffett’s Berkshire Hathaway Inc.

  • One97 Communications Ltd. reported a loss of Rs 1,604 crore for the financial year 2017-18 compared with Rs 899.6 crore a year ago.
  • While revenues for the last financial year weren’t available, the company reported sales of Rs 640 crore for the year ended March 2017.

Here’s a deep-dive into the Vijay Shekhar Sharma-led firm’s financials.

8. Government Unlikely To Issue Directions To RBI On Stressed Power Accounts

Ruling out invoking of exceptional powers to issue directions to the Reserve Bank of India, a top finance ministry official said today that the central bank should take a pragmatic view on resolving stressed assets in the power sector.

  • The official told PTI that Section 7 of the RBI Act can be invoked only in exceptional circumstances and the power sector stress is too small an issue.
  • As per the estimates of the finance ministry, only 10 companies will get impacted.
  • Five of those companies can be revived, while the other five can be restructured through the Insolvency and Banking Code, the official added.
  • Earlier this week, the Allahabad High Court turned down a petition by independent power producers challenging the Feb. 12 circular of the RBI.

Read more on the options to deal with the power sector stress.

9. Cabinet Approves Extra 2% Hike In Dearness Allowance

The Cabinet today approved additional 2 percent hike in dearness allowance and dearness relief, a move that will benefit about 1.1 crore central government employees and pensioners, an official release said.

  • The hike will be effective from July 1.
  • The impact on the exchequer on account of both DA and DR would be Rs 6,112.2 crore per annum.
  • The hike will benefit about 48.41 lakh central government employees and 62.03 lakh pensioners.

Read more on the boost for government employees.

10. Supreme Court Orders House Arrest Of Activists Till Sept. 6

The Supreme Court of India in an interim order said that five human rights activists arrested by the police in connection with the probe into Bhima Koregaon violence should be kept under house arrest till Sept. 6.

  • The top court agreed to hear a batch of petitions challenging the arrests filed by civil society members Romila Thapar, Satish Deshpande, Parbhat Patnaik, Devaki Jain and Maju Daruwala.
  • Till the next hearing on Sept. 6, all related cases in other courts will be on hold.
  • Activists Vernon Gonsalves, Gautam Navlakha, Sudha Bhardwaj, Arun Ferreira and Varavara Rao were arrested from various locations across the country yesterday in sudden raids by the Pune Police.
  • The arrests stem from the probe into last year’s violence that took place at Bhima Koregaon, Maharashtra.
  • A number of high-profile lawyers including Abhishek Manu Singhvi, Indira Jaising, Dushyant Dave, Raju Ramachandran, Rajeev Dhawan, Prashant Bhushan, Vrinda Grover and others appeared for the petitioners.

Catch the arguments in the apex court, here.