Today's top business news: Stocks pare gains, RBI puts curbs on HDFC Bank's digital and credit card operations, Silicon Valley pioneer HP to move out of California, and more

Photo for representation only.   | Photo Credit: Reuters

The Nifty and the Sensex have opened the day on a  positive note and have hit a fresh all-time high.

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

4:30 PM

S&P 500 CAPE ratio now above 1929 levels

 

4:00 PM

Sensex ends marginally higher; Nifty hits record peak

Stocks didn't manage to preserve their opening gains.

PTI reports: "Domestic equity benchmarks ended marginally higher on Thursday, with the Nifty settling at a fresh record, amid mixed cues from global markets.

After scaling an all-time intra-day peak of 44,953.01, the 30-share BSE Sensex pared some gains to end 14.61 points or 0.03 per cent higher at 44,632.65.

Similarly, the broader NSE Nifty touched a fresh intra-day high of 13,216.60, before settling 20.15 points or 0.15 per cent up at 13,133.90 -- its lifetime closing high.

Maruti was the top gainer in the Sensex pack, rallying around 7 per cent, followed by ONGC, Asian Paints, NTPC, SBI, Bajaj Finserv and Tata Steel.

On the other hand, HDFC Bank, TCS, Bajaj Auto, Infosys and M&M were among the laggards.

“Indian market opened mixed following mixed global market cues in Asian markets. Trades in the global markets also remained lacklustre...,” said Narendra Solanki, Head- Equity Research (Fundamental), Anand Rathi.

During the afternoon session, markets briefly traded in the negative territory but later scaled back to trade in the positive zone.

On sectoral front, the gains were led by metals, financials and bank stocks while auto sector traded marginally negative.

Elsewhere in Asia, bourses in Hong Kong, Tokyo and Seoul ended with gains, while Shanghai was in the red.

Stock exchanges in Europe were trading on a negative note in early deals.

Meanwhile, the global oil benchmark Brent crude futures rose 0.68 per cent to USD 47.92 per barrel."

3:30 PM

Indian economy witnessing V-shaped recovery: FinMin report

The Indian economy is witnessing a V-shaped recovery as the Gross Domestic Product (GDP) has recorded a quarter-on-quarter growth of 23% in the July-September quarter of this fiscal, according to the Finance Ministry’s latest Monthly Economic Review.

The decline in the GDP narrowed to 7.5% in the second quarter of this financial year, over 23.9% in April-June quarter.

“The year-on-year GDP contraction of 7.5% in Q2 of 2020-21 underlies a quarter-on-quarter surge in GDP growth of 23%.

“This V-shaped recovery, evident at the half-way stage of 2020-21, reflects the resilience and robustness of the Indian economy. The fundamentals of the economy remain strong as gradual scaling back of lockdowns, along with the astute support of Atmanirbhar Bharat Mission has placed the economy firmly on the path of recovery,” the Monthly Economic Review for November said.

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3:00 PM

With Rs 30K crore issue in pipeline, IPO street set for heavy traffic in new year

A flurry of IPOs in the pipeline for Indian markets.

PTI reports: "After a decent show so far in 2020 despite the pandemic, the initial public offer market is awaiting a bumper crop with more than 30 IPOs worth over Rs 30,000 crore lined up for the new year.

The primary market has been good so far this year raising over Rs 25,000 crore. And the street is abuzz since the past few months with more issues being lined up.

From a comparative reading, despite the pandemic driven lockdowns shaved off the second quarter fully and a part of the third quarter, this is still better than 2019 when 16 issues could mop up only Rs 12,362 crore as against 24 issues in 2018 which had raised Rs 30,959 crore, and that was a full 60 per cent lower than 2018.

Come 2021 IPO street, consumer companies are set to dominate the market with Kalyan Jewellers, Indigo Paints, Stove Kraft, Samhi Hotels, Apeejay Surrendra Park Hotels, Nureca, Mrs Bectors Food, and food delivery app unicorn Zomato are in the pipeline.

And if the government walks its tall talk of taking the nation’s financial behemoth LIC public, then 2021 will be a record year for IPO that will probably be broken never, as LIC will command a valuation that will run into trillions of rupees.

And most of these issues are likely to hit the market in the first quarter of itself, thus helping end the current fiscal with a good show, say market watchers.

The biggest among the IPO candidates is the Kerala-based jewellery major Kalyan Jewellers which has lined up a Rs 1,750-crore issue as well as Sequoia Capital-backed Indigo Paints which is set to raise about Rs 1,000 crore from the market.

According to market experts, the momentum is expected to continue in 2021 as a huge pipeline of issues is likely to hit to the market, which is awash with liquidity on one hand a buoyant secondary market on the other with the indices trading over life-time highs. The pandemic induced fear had seen a 35 per cent sellout in March alone.

“I believe the IPO pipeline will continue to remain strong in 2021 as there are quality issues plenty in the line-up. Over the past three years, there have been many quality companies hitting the market and rewarding investors big way,” V Jayasankar, senior executive director and head of equity capital markets at Kotak Investment Banking, told PTI.

“While this year saw several financial services and industrial companies such as SBI Cards, UTI AMC and Gland Pharma tapping the market, lots of consumer focused companies are hitting the market next year,” he added.

Several consumer-oriented companies, including Stove Kraft, Samhi Hotels, Apeejay Surrendra Park Hotels, Nureca, Mrs. Bectors Food and food delivery unicorn Zomato, have announced their IPO plans.

According to market watchers, the weight of consumer-oriented companies on the market cap is only about 8 per cent, which is relatively low if we compare other large markets.

India being one of the fastest growing consumer economies, and given that many companies are growing in size and wanting to go public to raise capital, there is huge interest from both foreign and domestic investors for consumer-focussed firms, argued Jayasankar.

“The interest shown by investors in consumer-focused companies like Avenue Retail which runs the D-Mart branded retial chain, shows the pent-up demand for such shares,” he further said.

Kalyan Jewellers, which has already received the Sebi nod for the IPO, could be the first to hit the market in 2021, merchant banking sources said.

The estimated Rs 1,750-crore Kalyan issue would consist of a fresh equity issuance of Rs 1,000 crore and an offer for sale worth Rs 750 crore, according to the draft offer document.

The 2020 IPO market was dominated by financial services and industrials such as SBI Cards that raised Rs 10,355 crore in March, the Hyderabad-based pharma major Gland Pharma raising Rs 6,480 crore, CAMS mopping up Rs 2,240 crore and UTI Asset Management Company collecting Rs 2,160 crore from the much delayed issue.

“This year the primary market has done well especially in the second half of the year on the back of a buoyant secondary market. This is also driven by strong liquidity conditions,” says Pranav Haldea, the managing director at Prime Database .

“I believe the IPO market will continue to remain buoyant in 2021, as there is a strong pipeline with over 30 companies bagging Sebi nod to raise over Rs 30,000 crore,” Haldea further said.

Meanwhile, the ongoing IPO of city-based quick service restaurant chain Burger King India was fully subscribed within hours on the first day of bidding Wednesday and 1400 hrs on Thursday it was subscribed 5.6 times for its Rs 460-crore issue."

2:30 PM

FreshToHome expands its fresh delivery services in Bengaluru, Hyderabad, Pune

FreshToHome, an integrated online fresh fish and meat delivery brand has expanded its daily delivery service, FTH Daily, which specialises in delivering milk (55 varieties), groceries, fruits, vegetables, and daily essentials, in Bangalore, Hyderabad, and Pune.

FTH Daily offers grocery and staples, farm-fresh fruits and vegetables, dairy, bakery, and a variety of other food products. It handles close to a million free home deliveries every month at the golden hour: before 7:30 am.

Shan Kadavil, Co-founder and CEO, FTH Daily said, “FreshToHome has launched FTH Daily to ease the lives of millions of consumers with their daily essential needs. We aim to become our customers’ daily nutrition partner, catering to their food needs at competitive prices. Our free delivery platform allows our customers to order only what they want daily thereby preserving nutrition intact”.

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2:00 PM

Radhakishan Damani, persons acting in concert sell 0.79% stake in Trent for over Rs 202 crore

A stake sale from some big-ticket investors.

PTI reports: "Ace investor Radhakishan Damani, promoter of Avenue Supermarts, and persons acting in concert (PACs), have trimmed stake in Tata group’s retail arm Trent by selling over 28.22 lakh shares in the open market for an estimated sum of over Rs 202 crore.

As per regulatory filing, Radhakishan Damani, Kirandevi G Damani, Jyoti Kabra, Bright Star Investments Pvt Ltd, Damani Estates and Finance Pvt Ltd, Derive Investments and Derive Trading and Resorts Pvt Ltd, sold 28,22,516 shares in the open market.

The shares were sold on November 27, 2020, and, based on the weighted average price of the stock at Rs 717.92 apiece, the transaction is estimated at Rs 202.63 crore.

Radhakishan Damani and persons acting in concert, held 3.87 per cent stake in Trent earlier. It has now come down to 3.08 per cent.

Last month, Trent had reported a consolidated net loss of Rs 78.56 crore and revenue from operations stood at Rs 585.37 crore for the second quarter ended September 30, 2020."

1:00 PM

Silicon Valley pioneer HP to move headquarters to Texas

Tech giant Hewlett Packard Enterprise said it is moving its global headquarters to the Houston area from California, where the company’s roots go back to the founding of Silicon Valley decades ago.

Texas Gov. Greg Abbott’s office announced that the relocation will increase the company’s presence in the area, which is already home to more than 2,600 employees. The company also has locations in Austin and Plano.

"As we look to the future, our business needs, opportunities for cost savings, and team members’ preferences about the future of work, we are excited to relocate HPE’s headquarters to the Houston region,” CEO Antonio Neri said in a written statement Tuesday.

Adam Bauer, a company spokesperson, said that employee relocation is voluntary.

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12:30 PM

HDFC Bank shares fall 1% after RBI asks Co to temporarily stop launch of new digital initiatives

HDFC shares reacted adversely to news of RBI's curbs on the bank.

PTI reports: "Shares of HDFC Bank declined over 1 per cent in early trade on Thursday after the company said that the Reserve Bank has asked it to temporarily stop all launches of its upcoming digital business-generating activities and sourcing of new credit card customers.

Erasing all its early gains, the stock dipped 1.33 per cent to Rs 1,388.20 on the BSE.

At the NSE, it declined 1.28 per cent to Rs 1,388.85.

“RBI has issued an order dated December 2, 2020, to HDFC Bank Ltd with regard to certain incidents of outages in the internet banking/ mobile banking/ payment utilities of the bank over the past two years, including the recent outages in the bank’s internet banking and payment system on November 21, 2020, due to a power failure in the primary data centre,” HDFC Bank said in a regulatory filing on Thursday.

HDFC Bank said the Reserve Bank of India (RBI) order “has advised the bank to temporarily stop all launches of the digital business-generating activities planned under its program Digital 2.0 and other proposed business generating IT applications and sourcing of new credit card customers“.

In addition, the order has directed the bank board to examine the lapses and fix accountability, HDFC Bank added.

The lender said the above measures shall be considered for lifting, upon satisfactory compliance with the major critical observations as identified by the RBI.

HDFC Bank said “over the last two years, it has taken several measures to fortify its IT systems and will continue to work swiftly to close out the balance and would continue to engage with the regulator in this regard."

12:00 PM

India's central bank puts curbs on HDFC Bank's digital, credit card operations

RBI tightens the screws on HDFC Bank.

Reuters reports: "The central bank has forbidden India's largest private lender, HDFC Bank, from adding new credit card customers or launching digital businesses after its digital payment services were hit by a power failure last month.

The Reserve Bank of India has asked the bank's board to examine the lapses and fix accountability, the lender said in a stock exchange filing on Thursday.

“The above measures shall be considered for lifting upon satisfactory compliance with the major critical observations as identified by the RBI,” it added, referring to the central bank's curbs.

On Nov. 21, HDFC Bank's digital payments business was down for more than 12 hours, following a power outage in its primary data centre.

Shares of HDFC Bank turned negative after its statement, giving up earlier session gains of more than 1%, and were last trading down 0.3% by 0516 GMT.

“The bank believes that these measures will not materially impact its overall business,” the lender said."

11:30 AM

China's Ant considers Paytm stake sale amid tensions with India: sources

Chinese fintech giant Ant Group is considering selling its 30% stake in Indian digital payment processor Paytm amid tensions between the two Asian neighbours and a toughening competitive landscape, people with direct knowledge of the matter said.

Financial details of the possible transaction have not been firmed up and Ant, the Alibaba-backed payments-to-consumer credit behemoth, has not launched a formal sale process yet, four people told Reuters.

Paytm, which is also backed by SoftBank Group Corp among others, was valued at about $16 billion during its latest private fundraising round a year ago. At that valuation, Ant's stake in the Indian firm is worth about $4.8 billion.

Both Ant and Paytm said that the information was incorrect. A Paytm spokesman said “there has been no discussion with any of our major shareholders ever, nor any plans, about selling their stake.”

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11:00 AM

Tata Chemicals records longest winning streak in 18 years

10:40 AM

Conditions will improve for Indian corporates in 2021 as economic activity gathers pace: Moody’s

Conditions will improve for Indian corporates next year as economic activity picks up steam post-lockdown and earnings grow on the back of widespread demand revival across sectors, Moody’s Investors Service said on Wednesday. Most companies’ earnings will grow as demand starts to recover following a sharp slump, and financially strong companies will maintain good access to funding, but speculative-grade issuers will face challenges, it said.

“Broad-based demand revival and a low base in 2020 will support strong GDP growth of 10.8 per cent in India in fiscal 2022 ending March 2022, following a decline of around 10.6 per cent in fiscal 2021 — the country’s first contraction in four decades, Moody’s Analyst Sweta Patodia said.

In 2021, conditions will improve for Indian corporates as economic activity gathers pace post-lockdown and earnings grow on the back of widespread demand revival across sectors, underpinning Moody’s stable outlook for the corporates next year, Moody’s said.

“A combination of higher earnings and reduced capital spending will support deleveraging over the next 12-18 months,” Ms. Patodia added.

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10:20 AM

RIL tops Fortune 500 list of Indian companies, IOC at second spot

The richest Indian businesses as ranked by Fortune magazine.

PTI reports: "Oil-to-telecom conglomerate Reliance Industries Ltd topped the Fortune 500 list of Indian companies, Fortune India announced on Wednesday.

Indian Oil Corporation Ltd (IOC), the nation’s biggest oil firm, bagged the second spot, followed by Oil and Natural Gas Corporation (ONGC) at the third, it said.

The country’s largest lender State Bank of India was in the fourth position, while India’s second-biggest fuel retailer Bharat Petroleum Corporation Ltd (BPCL) took the fifth spot.

The list was published by Fortune India, which is part of the Kolkata-based RP Sanjiv Goenka Group.

Tata Motors was ranked sixth, followed by gold refiner Rajesh Exports at the seventh spot.

India’s largest IT services firm Tata Consultancy Services took the eighth spot, while ICICI Bank was at ninth, and Larsen and Toubro at tenth.

In the global rankings released in August, RIL broke into the world’s top 100 companies.

IOC had slipped 34 positions to rank 151st globally, while ONGC was ranked 190th, 30 notches lower than its last year’s ranking."

10:00 AM

Indian shares hit record high as banks, Reliance gain

The bull run continues unabated.

Reuters reports: "Indian shares rose to a record high on Thursday, led by finance stocks and market heavyweight Reliance Industries, as upbeat coronavirus vaccine developments fuelled risk appetite globally.

The NSE Nifty 50 index climbed 0.45% to 13,173.15 by 0349 GMT and was on course for a third straight session of gains, while the benchmark S&P BSE Sensex was up 0.39% at 44,792.01.

Boosting sentiment was news that Britain became the first Western country to approve a COVID-19 vaccine, with doses of the Pfizer-BioNTech vaccine available for those at high risk starting next week.

In Mumbai, the Nifty Bank Index climbed nearly 1% after sliding 1.2% in the previous session. Top private-sector lender HDFC Bank Ltd was the biggest boost to the indexes, rising as much as 1.6%.

India's largest company by market value, Reliance Industries Ltd, rose nearly 1% to its highest in more than a week.

Data released late Wednesday showed India's trade deficit in November narrowed 21.93% from a year earlier, as imports fell sharply compared to the drop in exports."

9:30 AM

Government’s payback scheme on interest is arbitrary, Industry tells Supreme Court

Industry and business sectors complained to the Supreme Court on Wednesday that the government’s decision to restrict its payback scheme to “small” borrowers covering only eight categories of loans, worth up to ₹2 crore, was “arbitrary.”

A Bench led by Justice Ashok Bhushan was hearing a host of pleas from various sectors for similar financial relief to help them overcome the stress caused by the pandemic and lockdown.

One of them even sought an extension of the moratorium till March 31, 2021.

So far, the payback scheme covers only MSME, education, housing, consumer durables, credit card, auto, personal and consumption loans. Under this scheme, lenders have already returned over ₹4,300 crore as the difference in the compound interest and simple interest charged between March 1 and August 31 (moratorium period). Ex-gratia payments had been made into 13.12 crore bank account as of November 13, the Supreme Court had noted from the government’s submission in a judgment on November 27.

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Printable version | Jan 26, 2021 6:09:52 PM | https://www.thehindu.com/business/businesslive-3-december-2020/article33236719.ece

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