BQuick On July 20: Top 10 Stories In Under 10 Minutes

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

1. IndiGo To Lay Off 10% Staff

InterGlobe Aviation Ltd.’s IndiGo airlines has decided to lay off 10% of its workforce due to the economic crisis triggered by the coronavirus pandemic, Chief Executive Officer Ronojoy Dutta said on Monday.

• “From where things stand currently, it is impossible for our company to fly through this economic storm without making some sacrifices, in order to sustain our business operations,” Dutta said in a statement.
• “Therefore, after carefully assessing and reviewing all possible scenarios, it is clear that we will need to bid a painful adieu to 10% of our workforce. It is for the first time in the history of IndiGo that we have undertaken such a painful measure,” he said.

Those losing their posts will be paid severance equivalent to at least three months of salary.

2. Covid-19: Vaccine Progress; India Cases Jump

A coronavirus vaccine the University of Oxford is developing with AstraZeneca Plc showed promising results in early human testing.

• The vaccine increased levels of both protective neutralizing antibodies and immune T-cells that target the virus, according to the study organizers.
• Although stimulating production of neutralizing antibodies doesn’t prove a vaccine will be effective, it’s considered an important early step in testing.
• The results were published Monday in The Lancet medical journal.

AstraZeneca shares rose as much as 10% in London.

Confirmed Covid-19 cases in India rose past the 11 lakh mark as the country recorded the biggest spike in new cases.

• India added over 40,000 fresh cases taking the total tally to 11,18,043 in the world’s third-worst infected country, according to the Health Ministry’s update as of 8 a.m.
• Recoveries have crossed the 7-lakh mark while active cases are due to rise past the 4-lakh mark.

Track news and developments around the outbreak in India here.

3. Nifty Reclaims 11,000; U.S. Stocks Fluctuate

Indian equity markets held on to opening gains to end higher for the fourth straight day.

• The S&P BSE Sensex ended 1.1% higher at 37,418.
• NSE Nifty 50 index ended at 11,022, up 1.1%.
• The Nifty has ended above the mark of 11,000 for the first time since March 5, this year.
• Gains were led by I.T. stocks yet again. The I.T. index ended higher for the third time in the last four sessions, with gains of 2.6%.

Follow the day’s trading action here.

As most investors agree that big companies will keep getting bigger in the pandemic-rearranged economy, Mahesh Patil expects non-bank lenders to be among those that'll benefit the most.

Watch the full interview to see why Patil is betting on an NBFC comeback.

Technology shares led U.S. stocks higher as investors awaited a flood of earnings reports later in the week.

• The Nasdaq Composite S&P 500 rose after underperforming the broader S&P 500 last week.
• Microsoft, Intel, Tesla and Twitter are among the companies slated to deliver results this week.
• Noble Energy advanced after Chevron agreed to buy the company for about $5 billion in shares.
• The euro touched a four-month high as leaders made progress toward a stimulus package.
• Oil declined toward $40 a barrel.

Get your daily fix of global markets here.

4. PE Majors Eye Edelweiss Unit

Private equity firms Bain Capital and PAG are among bidders for a majority stake in the wealth and advisory business of India’s Edelweiss Financial Services Ltd., people familiar with the matter told Bloomberg News.

• Blackstone Group Inc. is also among suitors that have submitted bids for the assets, said the people, who asked not to be identified as the discussions are private.
• The first round of bidding ended last week, the people said.
• Edelweiss is seeking to raise more than Rs 5,000 crore ($666 million) from the stake sale.

The financial services company has been selling stakes in the business to bolster its capital ratios.

5. Almost A Fifth Of IL&FS Debt Resolved

The IL&FS Group—the infrastructure builder and financier whose payment defaults in September 2018 triggered a liquidity crisis, leading to its takeover by the government—has resolved 18% of the total debt to date.

• As of June 2020, its new board, headed by veteran banker Uday Kotak, resolved debts worth Rs 17,640 crore belonging to various group entities by way asset sales, insolvency proceedings, debt restructuring and monetisation strategies, according to a company presentation.
• The group also plans to address more than Rs 57,000 crore worth of debt, with Rs 50,500 crore likely to be pared by March next year.

Find out how the new board effected its recovery strategy.

6. Systemic Risks In Banking: ‘Normally’ Safe, Compliant, And Very Risky

In the light of the Covid-19 crisis and the Reserve Bank of India governor’s comments, it is time to rethink certain critical aspects of the systemic stress-testing that RBI conducts, writes risk management expert Deep Mukherjee.

• Inadequacy in the stress-testing framework provides a false sense of complacency in good times, aggravating the problem when the risk events occur.
• Assuming an event to be rarer than it actually is, by using normal distribution, fails the core purpose of stress-testing.
• Continuing with normal distribution assumptions will cause the regulator as well as the banks to under-estimate the impact of the shock.

Read more.

7. Small Businesses Go Online

India’s small businesses, particularly retailers, have lobbied hard for curbs on large online retailers alleging predatory pricing and malpractices. But they too are now moving online as people are still afraid of venturing outdoors even though India has eased world’s strictest Covid-19 curbs.

• That will accelerate the online shift in India after cheap data and half a billion internet users triggered an e-commerce boom. Everyone from Amazon Inc., Walmart-backed Flipkart Group to Mukesh Ambani’s Reliance Group are vying for a piece of the market that Forrester Research, prior to Covid-19, estimated to double to $85 billion by 2023.
• Godrej Appliances, a supplier to Laxman’s National Electronics in Aurangabad, Maharashtra, created more than 12,000 social pages on Facebook and helped dealers selling its products to get detected on Google Business.
• Other small businesses also tapped online retail marketplaces or social media platforms.

But has going online helped sales? Find out here.

8. Indian Unicorn Plans Rare IPO

Online insurance platform Policybazaar aims to go public in 2021 at a valuation north of $3.5 billion, potentially becoming the first of India’s mega-startups to debut as its digital economy booms.

• The startup plans to secure about $250 million in a round of financing at a $2 billion-plus valuation before a September 2021 initial public offering, co-founder Yashish Dahiya told Bloomberg News.
• Policybazaar is now selecting two to three IPO lead underwriters from a roster that includes several Wall Street banks, said Dahiya, chief executive officer of Policybazaar parent ETech Aces Marketing and Consulting Pvt.

Policybazaar intends to list in Mumbai but will consider a dual listing if rules change.

9. An Ant Worth Over $200 Billion

Billionaire Jack Ma’s Ant Group is seeking a valuation north of $200 billion as it goes public in Hong Kong and Shanghai, people familiar with the matter told Bloomberg News, kicking off a landmark coming-out party for China’s leader in internet finance.

• The parent of China’s largest mobile payment company will pursue a simultaneous dual-listing in Hong Kong and on the Shanghai stock exchange’s STAR board, the Hangzhou-based firm said, in what promises to be one of the largest debuts in years.
• Ant is already more richly valued than most Wall Street firms and, if conditions are favorable, it could seek to raise more in its IPOs than Saudi Aramco’s record $29 billion haul, one of the people said, asking not to be identified talking about a private deal.

Ant has been quickly diversifying its business to fend off the challenge from Tencent.

10. Most Dangerous Countries For Workers

Workers of the world are increasingly at risk as governments and employers continue to violate globally recognized labour rights.

• According to the latest International Trade Union Confederation’s Global Rights Index which ranks 144 countries on their respect for workers’ rights, “the breakdown of the social contract” is at its worst point since the index’s creation in 2014.
• The most dangerous locations were Bangladesh, Brazil,Colombia, Egypt, Honduras, India, Kazakhstan, the Philippines,Turkey and Zimbabwe.

This report was compiled before the full scale of Covid-19 was known.