BQuick On Nov. 12: Top 10 Stories In Under 10 Minutes
Here is a roundup of the day’s top stories in brief.
1. Atmanirbhar 3.0: Stimulus Reaches 15% Of GDP
India increased stimulus measures to rescue companies and save jobs in an economy clobbered by a sudden lockdown in March to stem the coronavirus pandemic. The new measures will have an estimated cost of Rs 2.65 lakh crore. It was not specified how this additional spend will be funded.
- The emergency credit-linked guarantee scheme was extended for 26 stressed sectors and healthcare firms where banks will be able to provide collateral-free, fully-guaranteed loans till March 31, 2021.
- The outlay for the urban part of ‘housing for all’ scheme was also increased by Rs 18,000 crore to help the real estate sector.
- Income tax relief was announced for developers and homebuyers to allow sale of primary residential units of up to Rs 2 crore below the circle rate.
The actual fiscal cost for the government, though, may be much less than stated.
2. TCS' Second Acquisition In A Week
Tata Consultancy Services Ltd. agreed to acquire the employees and select assets of Pramerica Systems from insurance giant Prudential Financial Inc., helping the insurer cut costs to counter low-interest rates and the coronavirus fallout.
- TCS and the Newark, New Jersey-based life insurer signed the agreement for the Letterkenny, Ireland-based tech-services business Wednesday, TCS said.
- The Indian company will take on more than 1,500 Pramerica employees. No cash will change hands, a person familiar with the matter told Bloomberg News earlier.
The deal deepens the Indian IT giant’s relationship with a key client and expands its foothold in Ireland and Europe.
3. Ridham Desai Stays Bullish
Equity investors are underestimating earnings growth in India and asset prices still have a considerable upside even as the benchmarks are at a record high, according to Morgan Stanley's Ridham Desai.
- “Right now, the market is still not in that camp that we’re going to get a big positive growth on earnings over the next 12 months,” Desai, managing director at Morgan Stanley India, told BloombergQuint’s Niraj Shah in an interview.
- “The market is pricing in close to 0% growth in earnings going forward in the next 12 months. I think the number could be between 10% and 15%,” he said.
Find out where Desai's optimism stems from.
4. Nifty’s Rally Grinds To A Halt
India’s benchmark equity gauges retreated from new record highs set in the past three days, snapping their longest winning streak in a month.
- The S&P BSE Sensex ended 0.54% or 237 points lower at 43,357.
- The NSE Nifty 50 index ended 0.4% lower below the 12,700 mark.
- The Nifty PSU Bank index was the biggest laggard, ending 2.3% lower.
Follow the day’s trading action here.
India’s factory output rose after six months of decline in September, led by higher power generation and mining activity.
- The Index of Industrial Production grew 0.2% year-on-year in September compared with a revised contraction of 7.36% in August.
- For the first half of the financial year, IIP has contracted by 21.1% over the same period last year.
Read more to see IIP internals here.
6. Moody’s Raises India GDP Forecast
Moody’s Investors Service has revised upwards India’s GDP forecast citing the steady decline in new and active Covid-19 cases and easing of restrictions.
- India’s gross domestic product is estimated to contract by 8.9% in calendar year 2020 compared with a contraction of 9.6% predicted earlier, according to the Global Macro Outlook by Moody’s published on Thursday.
The ratings agency also raised India’s GDP growth forecast for 2021.
7. Eicher Motors' Profit Falls 40%
Eicher Motors Ltd.’s quarterly profit fell as sales continued to remain under pressure in the first full quarter of operations after India eased lockdown curbs.
- Net profit for the maker of Royal Enfield motorcycles fell 40.13% year-on-year to Rs 343 crore.
- Revenue, too, declined 3% to Rs 2,134 crore.
- Operating margin dropped to 22.1% from 24.7%.
Get more details here.
8. Hedge Fund Vs Anil Agarwal’s Vedanta
A hedge fund shareholder of Vedanta Ltd. has asked the Indian commodities firm to recall a $956 million loan to units of its parent, setting the stage for a battle with billionaire Anil Agarwal.
- The loan represented an “improper transfer of value” away from minority shareholders to Agarwal controlled Vedanta Resources Ltd., London-based hedge fund Kyma Capital, which owns less than 1% in Vedanta, wrote to the company late Wednesday.
- “This is a clear-cut case of siphoning off funds and value that belongs to Vedanta Ltd., and all its stakeholders,” said the fund, which is run by Akshay Shah, a former Blackstone Group Inc. manager.
Kyma, which was founded by Shah in 2018, has a history of activism.
9. Grasim Sells Fertiliser Business
Grasim Industries' board on Thursday approved the divestment of the company's fertiliser business, Indo Gulf Fertilisers, by way of a slump sale to Indorama India Pvt., a subsidiary of Indorama Corporation Pte., Singapore, the company said in a regulatory filing.
"The transfer of the business will be for a lump-sum cash consideration of Rs 2,649 crore to be paid by IIP to Grasim. This consideration is commensurate to the strength and future potential of the business," it said.
The divestment will unlock value for Grasim.
10. New Wheels: Which Small Car Gives The Best Bang For Your Buck
The lockdowns that followed the Covid-19 outbreak may be over, but the pandemic has changed the way we travel.
- Demand for small cars for India's largest carmaker, Maruti Suzuki India Ltd. surged during the festive season.
- Cars have always been an aspirational purchase but now, there is also the aspect of safety to consider, according to Hormazd Sorabjee, editor of Autocar India.
On this week's New Wheels podcast, Sorabjee talks about the resurgence of the small car market and the best options available in the category.