BQuick On April 30: Top 10 Stories In Under 10 Minutes

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

1. Even As Covid-19 Cases Cross 33,000, Government Says Recovery Rate Improving

The total number of confirmed Covid-19 cases in India crossed the 33,000-mark as the government said it will soon come out with details of easing the lockdown from May 4.

• India reported 1,823 new cases over the last 24 hours, taking the total tally to 33,610 cases.
• So far, 8,373 have recovered while 1,075 have died in the country due to the infection.
• In the last 24 hours, 576 patients have recovered while 67 have died.
• Last night, India's home ministry said that new lockdown guidelines will be put in place from May 4 that will offer "considerable relaxations" to "many" districts.
• The health ministry today said that 78 percent of the patients who've died had co-morbid conditions.
• It said that more than half of the deaths have been among patients over 60 years of age.
• It added that 65 percent of the fatalities have been males.
• The government said the recovery rate of Covid-19 patients has improved to nearly 25.2 percent, from about 13 percent a fortnight ago.

Follow developments around the coronavirus outbreak in India here.

Globally, cases topped 32 lakh leaving over 2.27 lakh people dead.

• Spain recorded steep declines in new cases, Germany is set to extend restrictions.
• Britain will likely miss its daily testing target.
• Japanese Prime Minister Shinzo Abe signalled that he plans to extend a national state of emergency.

Track how the virus is spreading across the globe here.

2. RIL Announces Biggest Ever Rights Issue...

Reliance Industries Ltd. will raise close to Rs 53,125 crore via a rights issue, the biggest ever, as India’s most valued company looks to strengthen its balance sheet.

• The owner of the world’s largest oil refinery will issue more than 41 crore equity shares at Rs 1,257 apiece, according to an exchange filing.
• The rights issue—shares offered at a special price to existing shareholders in proportion to their ownership of old shares—is priced at a discount of 14.3 percent to closing price on April 30, and will lead to an equity dilution of 6 percent on the expanded equity base.
• The total equity base will increase to 675 crore.

Get more on the rights issue math here.

...Mixed Earnings

Reliance Industries reported its steepest drop in quarterly profit in at least 13 years as its mainstay refining unit was hurt by lower sales and margins due to the collapse of crude oil prices.

• Net profit fell 73 percent sequentially to Rs 2,580 crore.
• Gross refining margins stood at $8.9 per barrel.
• Exceptional loss of Rs 4,245 crore related to inventory loss.

Pressure was not confined to Reliance Industries’ refining business.

Reliance Jio Infocomm Ltd.’s profit surged in the quarter ended March, aided by tariff hikes and an exceptional gain.

• Net profit jumped 72.7 percent over the previous quarter to Rs 2,331 crore.
• ARPU rose to Rs 130.6 from Rs 128 earllier.

Here's what was behind the rise in profit.

...And Pay Cuts

RIL also announced pay cuts for employees in its hydrocarbons business with Chairman Mukesh Ambani forgoing his entire salary till the ongoing Covid-19 pandemic abates.

• The board of directors and all other senior executives of the company will take a 30-50 percent reduction in their salaries, RIL said in an internal note to its staff.
• Employees in the oil and gas unit earning over Rs 15 lakh per annum will take a 10 percent pay cut; those below this threshold will remain unaffected.

Annual bonuses and performance-linked incentives have also been put on hold.

3. HUL’s Q4 Volumes Contract, But 70% Capacity Is Back Online

Hindustan Unilever Ltd.’s quarterly profit missed estimates and volumes contracted more than anticipated as demand fell due to the Covid-19 lockdown.

• Profit fell 1.2 percent year-on-year to Rs 1,519 crore.
• Revenue fell 9.4 percent to Rs 9,011 crore
• Sales volumes fell 7 percent compared with the consensus estimate of -4 to 4 percent.
• This fall in sales was largely due to a disruption in supply in March, Chairman and Managing Director Sanjiv Mehta said after the earnings.
• The company’s production, he said, fell to zero for seven days after March 25—implementation of phase 1 of the nationwide lockdown.
• It has now come up to 70 percent of capacity, Mehta said.
  

HUL maintains a positive outlook on the FMCG sector with a medium to long-term perspective.

4. Nifty Marks Best Month Since 2009; U.S. Stocks Slump

Indian equity markets ended the truncated week on a high, ending with gains for the fourth straight day, its longest winning streak since February this year.

• The S&P BSE Sensex gained nearly 1,000 points in today's session, ending 3 percent higher at 33,717.
• For the week, the index was up 7.6 percent. 27 out of the 30 index constituents ended with weekly gains.
• The NSE Nifty 50 index ended 3.2 percent higher at 9,859. 44 out of the 50 index constituents ended with gains.
• The index was up 7.7 percent this week.
• Both benchmark indices have posted their best monthly gain since April 2009, registering gains of over 14 percent each.

Follow the day’s trading action here.

U.S. and European stocks slumped amid dire economic warnings, more dismal data and corporate results that showed the coronavirus’s toll on businesses.

• The S&P 500 Index fell from a seven-week high as the latest U.S. unemployment figures showed a larger-than-expected jump in claims.
• Strong results from Microsoft Corp., Facebook Inc. and Tesla Inc. limited losses on the tech-heavy Nasdaq gauges, and sentiment also got a boost from the Federal Reserve’s plan to expand the scope of its Main Street Lending Program.
• The Stoxx Europe 600 Index fell amid a barrage of bad economic readings and after European Central Bank President Christine Lagarde said the euro-area economy could shrink 12 percent this year.
• Crude futures jumped for a second day on signs fuel consumption is starting to recover in the world’s biggest economies.

Get your daily fix of global markets here.

5. Behind UPL’s Biggest Surge In Six Years

Shares of UPL Ltd. rose the most in six years after the maker of agrochemicals said it expects debt to reduce by 31 percent quarter-on-quarter in the three months ended March.

• The company expects its debt at $2.9 billion as on March 31, down $900 million from a year earlier and $1.3 billion since December, according to its exchange filing.
• That’s a more than Rs 9,400 crore in a quarter, higher than what the street anticipated. Jefferies in a report released today said it expected UPL’s overall debt to fall by Rs 2,300 crore in the entire 2019-20.
• The debt had risen after the acquisition of Arysta LifeScience.

UPL said demand for crop protection products remained robust as the farming season continues to be normal.

6. Stocks That Foreigners Offloaded During Pandemic

Overseas investors pared shareholding in Indian companies in their worst selloff in the domestic equity market on fears that the coronavirus pandemic will cause a recession.

• Of the 30 Nifty 50 constituents that have disclosed foreign shareholding as of March-end, 27 reported a decline in overseas ownership since December, according to data compiled by BloombergQuint.
• Eicher Motors Ltd. — the maker of the Royal Enfield motorcycle — witnessed the sharpest cut, followed by Tata Steel Ltd., Axis Bank Ltd. and ICICI Bank Ltd.
• On the other hand, foreign holding in Zee Entertainment Enterprises Ltd., Dr. Reddy’s Laboratories Ltd. and Wipro Ltd. rose marginally during the period.

See how foreign investors changed their holdings in Indian equities.

7. NBFCs Brace For Refinancing Test

India’s non-bank lenders are set to face higher interest costs as borrowings come up for refinancing this year. Risk aversion among Indian investors and lenders, despite record-high levels of liquidity, will mean that at least some of these non-bank financial companies and mortgage lenders may see higher borrowing costs.

• According to data from Bloomberg, the top ten NBFCs and HFCs have Rs 91,674 crore in bonds and loans maturing between May and September this year.
• Of this, Rs 64,794 crore in borrowings is through corporate bonds.
• Housing Development and Finance Corporation Ltd. has around Rs 32,000 crore in bonds maturing by September, followed by LIC Housing Finance Ltd. at Rs 15,300 crore, L&T Financial Holdings at over Rs 8,580 crore and Bajaj Finance Ltd. at a little under Rs 8,300 crore.

Find out why NBFCs and HFCs are in a tight spot today.

8. Coming Soon: Gold Loans Rush?

Indians may borrow more against their stash of gold as the world’s biggest lockdown raises financial stress in an economy that’s set for its first contraction in four decades.

• With economic activity coming to a virtual standstill after Prime Minister Narendra Modi ordered a 40-day nationwide lockdown to combat the coronavirus, more Indians are likely to turn to gold loan companies to raise money against the precious metal.
• “Recycling and collateralized loans against gold may be expected to grow exponentially in the next few quarters,” P.R. Somasundaram, managing director for India at the World Gold Council, told Bloomberg News.
  

Here’s what Muthoot Finance Ltd. and Manappurram Finance Ltd. expect.

9. How Vulnerable Is India’s Workforce?

Manufacturing and construction, the biggest employers among industries, are the most vulnerable for job losses, followed by accommodation and food services, as the lockdown to contain the Covid-19 pandemic has disrupted economic activity, according to Crisil Ratings.

• Industrial workforce is expected to see the highest job cuts because of the restrictions, the research and ratings company said in teleconference while releasing the report.
• The services sector is likely to witness a medium impact and agriculture will be least affected, it said.
• Bulk of the job losses in India’s workforce will be largely in the informal sector that employs about 90 percent of the 46.5 crore active working population, according to Crisil.

Here are the other sectors which are most affected from the lockdown.

Related Coverage

• Centre’s borrowing from RBI’s WMA window spikes but states stay away.
• India’s oil revenue loss in lockdown seen exceeding $5 billion.
• Maharashtra’s farmers are struggling to ship their mangoes amid lockdown.
• India needs a Roosevelt-style ‘New deal’.
• Modi’s soaring popularity lets him forget pre-virus India woes.

10. When Rahul Gandhi Interviewed Raghuram Rajan

India needs to be cleverer in lifting the coronavirus lockdown and open up its economy in a “measured way” soon, as it does not have the capacity to support people for too long, former Reserve Bank of India Governor Raghuram Rajan said in an interview with Congress leader Rahul Gandhi.

• To Gandhi’s question on how much money would be needed to help the poor in the current situation, Rajan said India needs Rs 65,000 crore to help the poor in the times of pandemic and considering its total gross domestic product, it can afford to do that.
• Rajan also asserted that India cannot afford to be a divided house especially in times when “challenges are so big”.

It’s easy to lockdown forever, but that is unsustainable, Rajan said.