Today's top business news: Domestic flights resume services, Anand Mahindra warns against lockdown extension, Jiomart goes live, and more

Staff and crew of various airlines during a drill at the Indira Gandhi International Airport on Sunday. V.V. Krishnan V.V. Krishnan

Staff and crew of various airlines during a drill at the Indira Gandhi International Airport on Sunday. V.V. Krishnan V.V. Krishnan  

Updates from the world of economy, markets, and finance

Equity, currency, commodity and bond markets are closed on Monday on account of ‘Eid-ul-Fitr’

Join us as we follow the top business news through the day.

4:30 PM

Companies borrow long to pay down short-term debt


4:00 PM

Lockdown extensions economically disastrous, create another medical crisis: Mahindra

A word of warning against further extension of the lockdown coming from a leading businessman.

PTI reports: "Mahindra Group Chairman Anand Mahindra on Monday said lockdown extensions are not just economically disastrous but also create another medical crisis.

While acknowledging that choices are not easy for policy makers, he said a lockdown extension will not help.

“Lockdown extensions aren’t just economically disastrous, as I had tweeted earlier, but also create another medical crisis,” Mahindra said in a tweet.

He was referring to an article that highlighted “the dangerous psychological effects of lockdowns & the huge risk of neglecting non-COVID patients."

Mahindra, who had earlier proposed a comprehensive lifting after 49 days of lockdown, further said, “The choices aren’t easy for policy makers but a lockdown extension won’t help".

He said, “The numbers (coronavirus cases) will continue to rise & the focus must be on rapid expansion of field hospital beds with oxygen lines”. He further said, “The army has enormous expertise in this“.

On March 22, before the government announced nationwide lockdown, Mahindra had proposed such a move expressing concerns over reports that India was likely to have already reached stage 3 of coronavirus transmission."

3:30 PM

India's April crude processing in biggest drop in at least nearly two decades

The significance of the drop in crude oil refining in April as demand cratered amid the nationwide-lockdown.

Reuters reports: "India's crude oil processing in April slumped by 28.8% from a year earlier, its biggest drop since at least 2003, as a nationwide lockdown weighed on fuel demand and forced refiners to cut production.

Refiners processed about 14.75 million tonnes or 3.60 million barrels per day (bpd) of oil last month, government data showed.

The lockdown and travel curbs aimed at stemming spread of COVID-19 since March 25 forced people to stay home, cutting India's fuel demand by 45.8% in April.

Falling demand led Indian refiners and gas importers to declare force majeure on imports.

Refiners, struggling to store oil and products, had to sell some oil to the federal government which used it to fill strategic storage.

Indian refiners operated at about 72% of their overall capacity of about 5 million bpd, the data showed."

2:40 PM

Debt MFs too carry risk

What are debt mutual funds?

Just like equity mutual fund schemes investing in equity or shares of listed companies, debt mutual funds invest in debt papers such as non-convertible debentures, government securities, corporate bonds and certificate of deposits, among other instruments.

Simply put, debt schemes invest in fixed income securities and generate returns by earning interest income.

Read more

2:30 PM

Franklin Templeton schemes invested in paper that turned illiquid

Some insights into what led to the Franklin Templeton fiasco.

IANS reports: "Franklin Templetons decision to wind down its schemes was because it had lent to holding companies (using promoter equity as security) and investing in paper that quickly became illiquid, according to Amit Tandon, Managing Director, Institutional Investor Advisory Services (IIAS), a corporate governance advisory firm.

In an interview with IANS, Tandon said that debt investors too need to worry about governance and not just equity investors. He cited the case of IL&FS which impacted debt investors.

“The recent decision of Vedanta to delist is driven by debt. The delisting if it goes through will enable the global parent to access the cash from the operating companies with minimum checks”, he added.

Tandon pointed out that SBI has called for a public gathering of shareholders as the SBI Act does not allow for a virtual meeting.

The relationship between investors and promoters is more equal than anytime before. Fifteen years ago, for each share an investor held, the promoter held three. Today for each share an investor holds, the promoter holds only 1.5, Tandon added."

2:00 PM

GoAir waits for clarity to resume operations in a phased manner, full operations from June 1

With some States like Maharashtra yet to decide whether to allow flights at their airports and Goa making it mandatory for COVID-19 test negative certificates for incoming air passengers, GoAir said, considering the lack of clarity, it would resume flight operations in a phased manner from May 25 and would operate full [the allowed 1/3rd] operations from June 1,2020 for which bookings have opened.

“GoAir has filed and received approval for its modified schedule which is based on one third of the pre-covid approved summer 2020 network,” the airline said in a statement.

“This is in line with the calibrated ramp-up capacity allocation policy outlined by the Ministry of Civil Aviation. GoAir is ready and prepared to resume safe operations after the two month lockdown,” it said.

Read more


1:40 PM

40% travel, tourism firms staring at complete shutdown risk in next 3-6 months

Many firms in the country's travel sector could face an existential crisis in the coming months.

PTI reports: "Around 40 per cent companies operating in the travel and tourism sector are staring at the risk of complete shutdown over the next 3 to 6 months, says a report, even as the domestic flights resume operations after over 2-month suspension due to lockdown.

Also, nearly 36 per cent of such companies are likely to witness a temporary shutdown, according to the report by BOTT Travel Sentiment Tracker in partnership with seven national associations like IATO, TAAI, ICPB, ADTOI, OTOAI, ATOAI and SITE.

The report said that 81 per cent travel and tourism companies have lost their revenue up to 100 per cent while 15 per cent of the companies have witnessed it slide up to 75 per cent.

The BOTT Travel Sentiment Tracker survey was done online with over 2,300 travel and tourism business owners and company representatives across the country over a period of 10 days.

“The pandemic has hit the travel and tourism sector hard with as many as 40 per cent companies facing the risk of complete shutdown in the next 3 to 6 months while another 35.7 per cent might go for a temporary shutdown,” it said.

The survey report further revealed that 38.6 per cent travel companies are going for job cuts and another 37.6 per cent of the companies are considering the option with uncertainty looming large."

1:20 PM

Global remittances set to take a hit as incomes fall


1:00 PM

Deepak Fertilisers forays into hand sanitiser segment

Given the rising demand for hand sanitizers and other personal hygiene products, various companies are redirecting their production resources.

PTI reports: "Deepak Fertilisers and Petrochemicals Corporation Ltd (DFPCL) on Monday announced its foray into hand sanitiser segment under the brand name ‘Cororid’

The product based on Isopropyl Alcohol (IPA) is available in different volumes from 500 millilitre, 1 litre, 5 litre, 10 litre, 20 litre, 25 litre, 200 litre to tanker load, the company said in a regulatory filing.

Commenting on the development, DFPCL’s Chairman and Managing Director Sailesh C Mehta said: “There has been an overwhelming response for ‘Cororid’ since its launch during mid of April 2020.”

DFPCL is leveraging its existing strong distribution network along with pharmacy and hypermarket chains, modern trade and e-commerce channels to make the product easily available on PAN India basis, he said.

Stating that there is unprecedented surge in demand for disinfecting agents due to COVID-19 pandemic situation, Mehta said, “We are also evaluating other IPA-based downstream product opportunities to gradually move closer to our end customers.”

This initiative is also in line with our long-established strategy to move from commodity to speciality products, he added."

12:30 PM

India may register recession in third quarter of this fiscal

The Indian economy is likely to slip into recession in the third quarter of this fiscal as loss in income and jobs and cautiousness among consumers will delay recovery in consumer demand even after the pandemic, says a report.

According to Dun & Bradstreet’s latest Economic Observer, the country’s economic recovery will depend on the efficacy and duration of implementation of the government’s stimulus package.

“The multiplier effect of the stimulus measures on the economy will depend on three key aspects i.e. the time taken for effecting the withdrawal of the lockdown, the efficacy of implementation and duration of execution of the measures announced,” Dun & Bradstreet India Chief Economist Arun Singh said.

The report noted that the government’s larger-than-expected stimulus package is likely to re-start economic activities.

Read more

12:00 PM

Homefoodi plans to expand operations in 10 cities within 2 years

A new player in the food-delivery business even as existing players find it hard to survive.

IANS reports: "Home-made food service provider Homefoodi plans to expand its operations in 10 cities across the country in the next two years.

The company is also targeting to raise $2-5 million funds from venture capital firms and plans to extend its operation in Delhi and Gurugram in 2020.

Through the Homefoodi mobile app, consumers now have access to home-made food from over 200 chefs in homes across Noida, Greater Noida, and Indirapuram, the company said in a statement.

Founder and Director of Homefoodi, Narendra Singh Dahiya said: “Within six months from the inception of Homefoodi, we have grown from 100 Home Chefs to over 200 plus home chefs. Every dish raises the bar of taste, health, hygiene, and cleanliness.”

“In the next two years we would be creating India’s largest self-employment opportunity for women in India. We will be present across the top 10 cities of India with over one lakh home chefs on our platform,” he said."

11:30 AM

Oil falls as U.S.-China tensions take toll

Tensions between the United States and China could be leading to concerns over bounce back in demand.

Reuters reports: "Oil prices eased on Monday on concerns over rising tensions between the United States and China over Beijing's plans to impose security laws on Hong Kong and the possibility of sanctions from Washington.

Oil prices have risen sharply in recent weeks as an easing of coronavirus restrictions has led to increased demand, but the tensions between the United States and China are beginning to weigh on sentiment.

Brent was down 19 cents, or 0.5%, at $34.94 a barrel by 0152 GMT. U.S. oil was down by 6 cents, or 0.2%, at $33.19 a barrel. Both contracts have risen for the past four weeks, although prices are still down around 45% so far this year.

Ties between Washington and Beijing have soured since the outbreak of the new coronavirus. President Donald Trump and President Xi Jinping have traded barbs over the outbreak, including accusations of cover-ups and lack of transparency.

Clashes between the superpowers have included Hong Kong, human rights, trade and U.S. support for Chinese-claimed Taiwan."


11:00 AM

Searches for ‘remote work’ surges by over 377% in Feb-May

Job searches for remote work in India have surged by over 377% during February to May amid the coronavirus crisis, a report said.

Job seekers across the country are showing greater interest in working remotely, with a spurt in search for terms like ‘remote’, ‘work from home’ and related phrases, job site Indeed said in the report.

Searches for remote work have increased by over 377% as a share of all searches on Indeed India during February to May 2020, it added.

Similarly, job postings for remote work and work from home have also seen an increase of 168%.

Read more

10:40 AM

Gold down as potential Japanese stimulus boosts risk appetite

Investors are deserting the precious metal as risk-on sentiment prevails.

Reuters reports: "Gold declined on Monday as Japanese equities rose on news of a potential stimulus programme that boosted investors' risk appetite, though fresh tensions over Hong Kong limited the metal's fall.

 Spot gold fell 0.4% to $1,728.06 per ounce by 0252 GMT. U.S. gold futures were down 0.4% at $1,728.50. “I think the play into stocks and other risk assets has probably supported the risk appetite, and diminished the appeal for gold in the short term,” said IG Markets analyst Kyle Rodda.

“There still seems to be the broad issue of gold prices trying to break too far above the 1,740, 1,750 mark.” Gold on Friday rose as much as 0.8% to touch $1,739.51, before paring gains.

Japan is considering fresh stimulus worth over $929 billion, which mostly consists of financial aid programmes for companies hit by the coronavirus pandemic, the Nikkei newspaper said. Japan's Nikkei jumped 1.5% following the report.

Gold is seen as a safe-haven asset during political and economic uncertainties. Reflecting investor sentiment, SPDR Gold Trust holdings, the world's largest gold-backed exchange-traded fund, rose 0.4% to 1,116.71 tonnes on Friday."

10:20 AM

Jiomart goes live to take on Amazon, Flipkart

Reliance Industries (RIL) has taken its e-commerce platform JioMart live in an attempt to take on rivals Amazon and Flipkart. Pilots were carried out in Navi Mumbai, Thane and Kalyan.

Jiomart, an online-offline model that combines the strengths of Reliance Jio and Reliance Retail, has started offering products at a minimum 5% discount to the maximum retail price on select products.

“Farm produce will directly be sourced from farmers that have collaborated with the brand,” said the JioMart website.

JioMart has started offering more than 50,000 products in the fruits and vegetables, dairy and bakery, staples, snacks and branded foods, beverages, personal care, home care and baby care categories, according to its website.

Read more

10:00 AM

Domestic flights to resume, but coronavirus cases rise

The airline sector, which has been the worst hit by the 2-month long nationwide-lockdown, is set to get a boost today.

Reuters reports: "Domestic flights will resume across India on Monday after a day of “hard negotiations”, the federal civil aviation minister said on Sunday, after some states sought to limit the number of flights.

Flights will restart under an easing of restrictions imposed over the coronavirus, though the number of new cases rose by a record 24-hour amount on Sunday. The 6,767 new cases took the total to over 131,000.

Airlines are preparing to resume about a third of their domestic flight operations from Monday, even without clarity over what quarantine rules may apply to passengers.

Maharashtra and Tamil Nadu agreed to operate limited flights from Monday, while southern state of Andhra Pradesh would allow flights from Tuesday, India's civil aviation minister, Hardeep Singh Puri, said on Twitter late on Sunday.

“It has been a long day of hard negotiations with various state government to recommence civil aviation operations in the country.....Domestic flights will recommence across the country from tomorrow,” he said."


Recommended for you
This article is closed for comments.
Please Email the Editor

Printable version | Jul 10, 2020 7:39:27 PM |

Next Story