BQuick On Feb. 18: Top 10 Stories In Under 10 Minutes

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

1. RIL, Aramco Accelerate Refinery Stake Sale Talks

Reliance Industries Ltd.’s talks to sell a minority stake in its oil-to-chemical division to Saudi Aramco have been gathering pace in recent weeks, people familiar with the matter told Bloomberg News.

• Aramco officials and bankers on the deal have been working at Reliance’s offices in Mumbai for due diligence this month, according to the people, who asked not to be identified as the information isn’t public.
• Both parties are trying to overcome differences over the deal’s structure, which had stalled the process last year, Bloomberg News previously reported.
• Mukesh Ambani’s Reliance is keen to sign a binding agreement before the next annual shareholders meeting, which is due to take place before the end of September, one of the people said

The deal will value 20 percent stake in the oil-to-chemical unit at $15 billion.

2. Nifty Rejig: Shree Cement In, Yes Bank Out

Shree Cement Ltd. will replace private lender Yes Bank Ltd. in the benchmark Nifty 50 Index from March 27.

• The lender's stock has tumbled 83.6 percent in the last one year, making it the worst performer on the index. Yes Bank dropped out of the Sensex, too, in December.
• Shree Cement has gained 55.7 percent in the last 12 months. The Kolkata-based firm will join UltraTech Cement Ltd. and Grasim Industries Ltd. in the Nifty 50, taking the number of the cement makers in the index to three.
• The National Stock Exchange of India Ltd. has also revised the criteria for inclusion of companies in its sectoral indices, according to its press release.

Here are the changes in other indices.

3. What Foreign Investors Bought And Sold In January

Foreign portfolio investors piled into stocks outside the key sectors as they remained net buyers for the fifth straight month in January, ahead of the Feb. 1 budget.

• Overseas investors funnelled as much as $1.69 billion into Indian equities last month, National Securities Depository Ltd. data showed.

• About 85 percent—or $1.43 billion—of foreign inflows went into miscellaneous stocks that don’t belong to any sector or category, the depository data showed. The non-categorised stocks received the highest monthly inflow since March 2018.
• The food, beverages and tobacco sector witnessed the highest net outflow in January after overseas investors sold stocks worth $174 million last month.

Click here for more on what stocks foreign funds bought and sold last month, according to bulk-deals data.

4. Sensex Logs Longest Losing Streak Of 2020, U.S. Stocks Drop

Indian equity indices ended lower for the fourth day in a row driven by losses in automakers such as Tata Motors Ltd. and Maruti Suzuki India Ltd.

• The 30-stock ended fell 0.39 percent to close at 40,894.38 and the NSE Nifty 50 declined 0.44 percent to end at 11,992.50.
• The market breadth was tilted in favour of sellers. About 1,164 stocks declined and 631 shares advanced on the National Stock Exchange.
• Nine out of 11 sectoral gauges compiled by NSE ended lower, led by the NSE Nifty Metal Index’s 1.2 percent fall.
• On the flipside, the NSE Nifty Media Index was the top sectoral gainer, up 1.9 percent.

Follow the day’s action here.

U.S. stocks slumped after Apple Inc. said sales would miss forecasts, spooking investors who had hoped for a limited economic impact from the deadly coronavirus.

• Tech shares led declines on the S&P 500 Index after the iPhone maker warned of production and demand disruptions due to the epidemic.
• HSBC Plc tumbled the most in three years after it said it will slash jobs in a restructuring, while also flagging risks due to the virus.
• Government bonds climbed, while the euro weakened after a German investor-confidence index plunged.
• Crude oil retreated toward $51 a barrel in New York.

Get your daily fix of global markets here.

5. Kumar Mangalam Birla Meets Telecom Secretary

Vodafone Idea Ltd.'s Chairman Kumar Mangalam Birla met Telecom Secretary Anshu Jain on Tuesday, amid talks that the government may encash telecom firms’ bank guarantees over default in payment on adjusted gross revenue dues.

• The meeting between the Aditya Birla Group chairman and the telecom secretary lasted for over an hour.
• "Cannot say anything at the moment,” Birla said after coming out of the meeting. He refused to respond to queries on whether or not Vodafone Idea would default on payment of AGR dues or if the company could head towards insolvency.
• On Monday, Vodafone Idea paid Rs 2,500 crore to Department of TeleCommunications and promised to pay another Rs 1,000 crore before the end of the week.

That is less than 5 percent of the annual gross revenue dues the DoT estimates the company owes the government.

6. Banks Recover 40% Of Dues From Top 12 Insolvency Accounts

Lenders to the 12 largest accounts, referred for insolvency proceedings in 2017, have managed to recover about 40 percent of their outstanding dues. Also, 11 cases have reached some form of resolution so far, while one case is still pending.

• Lenders have recovered Rs 1.16 lakh crore out of the Rs 2.96 lakh crore in claims admitted by financial creditors in these cases, according to data compiled by BloombergQuint.
• These 12 accounts, identified by the Reserve Bank of India, represented about a quarter of the banking system’s gross non-performing assets as of March 2016.
• Banks have seen an average haircut of 88 percent in the cases which were resolved in the October-December 2019 period, according to a Kotak Institutional Equities report.

Here are the three cases that pushed the total recoveries to 40%.

7. Promoter Reclassification: Who Calls The Shots?

The recent episodes at Yes Bank, CG Power, and Zee Entertainment demonstrate the conundrum with reclassification of promoters as public shareholders, writes Umakanth Varottil.

• Who enjoys the power to trigger the reclassification of a promoter as a public shareholder?
• Is it the company or the promoters themselves?
• Securities and Exchange Board of India went from being too liberal to unduly restrictive.

Now SEBI finds the need to review the regulation again. Here’s how that should be done.

8. Key India Sectors Impacted By Coronoavirus

Most analysts expect the outbreak of the novel coronavirus, that killed more than 1,000 people in China, to have a limited impact on the Indian economy.

• If the outbreak continues, global commodity prices may fall. And that, according to Nomura and Citi Research, may benefit users of such commodities such as oil and gas.
• But sectors such as pharmaceuticals and automobiles, which are heavily dependent on import of raw materials, are likely to be impacted, the brokerages said.

Here’s a detailed sector-wise impact of the coronavirus outbreak.

9. Air India Rescue Pilots’ Zombie Apocalypse Experience

As an Air India flight landed at the airport in Wuhan last month to rescue Indians stranded in the coronavirus-hit city, Captain Kamal Mohan couldn’t help but think that he had entered a post-apocalyptic film set.

“It was frightening,” Mohan said in an interview on Monday.

• The airport, which handled 20 million passengers last year, was completely deserted and there were only three ground personnel to help with the evacuation process, said cabin crew chief Chander Prakash.

The crew had to wear three pairs of gloves and “layer-over-layer” of clothes that looked like a spacesuit.

10. Indians Set For Smallest Salary Increases In A Decade

Pay increases across India’s organized sector will probably grow at the slowest pace since 2009 this year, according to a survey from Aon Plc.

• India Inc. will increase average pay by 9.1 percent in 2020, down from 9.3 percent in 2019 and 9.5 percent the previous year.
• The south-east Asian country still leads the Asia-Pacific region in pay rises, but that is mainly due to higher inflation and a “war for key talent and niche skills,” Aon said.
• E-commerce companies and start-ups will probably get the biggest salary increases, projected at an above-average 10 percent, while financial institutions will hand out 8.5 percent.

‘There is a general air of caution as we enter 2020’