Today’s top business news: Shares recover losses to hit fresh high, Mukesh Ambani says India will grow to be among top three economies in two decades, 2021 could be the year of reflation, and more

The Nifty and the Sensex have opened the day on a  negative note as investors seemed to be worried about rising inflation and its likely effect on RBI policy going forward.

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

4:30 PM

2021 could be the year of reflation


4:00 PM

Benchmarks inch up to fresh highs; HDFC twins sparkle

Stocks managed to recover their morning losses.

PTI reports: “Equity benchmark Sensex recovered from early losses to end marginally up at its new closing record on Tuesday, led by gains in index majors HDFC twins.

The 30-share BSE index ended 9.71 points or 0.02 per cent higher at 46,263.17.

Similarly, the broader NSE Nifty rose 9.70 points or 0.05 per cent to close at its fresh all-time high of 13,567.85.

Bajaj Finance was the top gainer in the Sensex pack, surging around 5 per cent, followed by Bajaj Finserv, HDFC, Tech Mahindra, HDFC Bank, UltraTech Cement and Tata Steel.

On the other hand, HUL, Nestle India, ICICI Bank, Axis Bank, SBI, TCS and ITC were among the laggards.

S&P Global Ratings on Tuesday raised India’s growth projection for the current fiscal to (-) 7.7 per cent from (-) 9 per cent estimated earlier on rising demand and falling COVID-19 infection rates.

Meanwhile, retail inflation declined to 6.93 per cent in November on softer food prices, though it remained above the comfort level of the Reserve Bank, official data released after market hours on Monday showed.

The rupee closed 8 paise lower at 73.63 (provisional) against US dollar.

Foreign portfolio investors (FPIs) were net buyers in the capital markets as they purchased shares worth Rs 2,264.38 crore on Monday, according to provisional exchange data.

Elsewhere in Asia, bourses in Shanghai, Seoul, Hong Kong and Tokyo closed on a negative note.

Stock exchanges in Europe were trading with gains in early deals.

The global oil benchmark Brent crude futures rose 0.16 per cent to USD 50.37 per barrel.”

3:30 PM

Farmers’ protest resulting in daily loss of Rs 3,500 crore: Assocham

The economic cost of the farmer protests.

PTI reports: “Industry body Assocham on Tuesday urged the Centre and farmers’ organisations to resolve the impasse over the new agri laws, saying that the protests are inflicting a heavy blow to the economies of Punjab, Haryana, Himachal Pradesh and J&K.

“A daily loss of Rs 3,000-3,500 crore is resulting in the economies of the region from the value chain and transport disruption because of the protests,” according to a rough estimate by the chamber.

Assocham President Niranjan Hiranandani said, “The size of the combined economies of Punjab, Haryana, Himachal Pradesh and J&K is about Rs 18 lakh crore. With the ongoing farmers’ agitation and blockade of roads, toll plazas and railways, the economic activities have come to a halt.”

On Monday, the Confederation of Indian Industry (CII) had said the farmer agitation has led to supply chain disruptions, which will impact the economy in the coming days and may impinge upon the ongoing recovery from the economic contraction due to COVID-19.

Assocham’s Hiranandani observed that industries such as textiles, auto components, bicycles, sports goods which cater significantly to the export markets would not be able to fulfil their orders, ahead of Christmas, harming the industry’s goodwill among the global buyers.

Recovering from the harsh COVID-19 blow, the Indian economy needs to double down on growth which is possible only with a conducive environment for industrial activities, investment including the Foreign Direct Investment, Assocham stated.

The Confederation of All India Traders (CAIT) said in the last 20 days, trade and other activities of about Rs 5,000 crore have been affected in Delhi and its surrounding states.

According to an estimate, about 30 to 40 per cent of the goods coming to Delhi have been affected by the movement of farmers, which is adversely affecting the trade and other activities of Delhi and neighbouring states, the traders’ body stated.”

3:00 PM

Rupee settles 8 paise lower at 73.63 against US dollar

The rupee couldn’t recover its morning losses.

PTI reports: “The rupee depreciated by 8 paise to settle at 73.63 (provisional) against the US dollar on Tuesday, tracking muted domestic equities.

At the interbank forex market, the domestic unit opened at 73.62 against the US dollar and witnessed an intra-day high of 73.59 and a low of 73.67.

The local unit finally closed at 73.63 against the American currency, registering a fall of 8 paise over its previous close.

On Monday, the rupee advanced by 9 paise to settle at 73.55 against the US dollar.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading 0.06 per cent lower at 90.65.

On the domestic equity market front, the BSE Sensex ended 9.71 points or 0.02 per cent higher at 46,263.17, while the broader NSE Nifty rose 9.70 points or 0.07 per cent to 13,567.85.

Foreign institutional investors were net buyers in the capital market as they purchased shares worth Rs 2,264.38 crore on a net basis on Monday, according to exchange data.

Brent crude futures, the global oil benchmark, rose 0.12 per cent to USD 50.35 per barrel.”

2:30 PM

S&P betters India growth forecast to (-) 7.7 this fiscal

The recovery is making ratings agencies revise their forecasts.

PTI reports: “S&P Global Ratings on Tuesday raised India’s growth projection for the current fiscal to (-) 7.7 per cent from (-) 9 per cent estimated earlier on rising demand and falling COVID infection rates.

“Rising demand and falling infection rates have tempered our expectation of COVID’s hit on the Indian economy. S&P Global Ratings has revised real GDP growth to negative 7.7 per cent for the year ending March 2021, from negative 9 per cent previously,” S&P said in a statement.

The US-based rating agency said its revision in growth forecast reflects a faster-than-expected recovery in the quarter through September. For the next fiscal, it projected India’s growth to rebound to 10 per cent.

India’s gross domestic product fell 7.5 per cent in the July-September quarter, against a contraction of 23.9 per cent in the April-June quarter.

S&P said India is learning to live with the virus, even though the pandemic is far from defeated and reported cases have fallen by more than half from peak levels, to about 40,000 per day. The feared resurgence following the recent holiday season has yet to materialise.

“It is no surprise that India is following the path of most economies across Asia-Pacific in experiencing a faster-than-expected recovery in manufacturing production,” S&P Global Ratings Asia-Pacific chief economist Shaun Roache said.

Manufacturing output was about 3.5 per cent higher in October 2020, compared to the year-ago period, while the output of consumer durables rose by almost 18 per cent.

“This recovery underscores one of the more striking aspects of the COVID-19 shock — the resilience of manufacturing supply chains. Again, as with demand, some slowing of output momentum has emerged more recently,” S&P said.

Earlier this week, Fitch had revised its growth forecast for India to (-) 9.4 per cent, from (-) 10.5 per cent on signs of economic revival.”

2:00 PM

India will grow to be among top three economies in two decades: Ambani

Mukesh Ambani on Tuesday said India will grow to be among the top three economies in the world in the next two decades and per capita income would more than double.

At a fireside chat with Facebook head Mark Zuckerberg, he said India’s middle-class, which is about 50% of the nation’s total number of households, will grow 3-4% per year.

“I firmly believe that in the next two decades, India will grow to be among the top three economies in the world,” said Mr. Ambani, who heads oil-to-retail-to-telecom conglomerate Reliance Industries Ltd.

He said, “More importantly, it will become a premier digital society, with young people driving it. And our per capita income will go from $1,800-2,000 per capita to $5,000 per capita.”


1:30 PM

Mrs Bectors Food Specialities IPO off to flying start; subscribed 1.57 times within first few hours

The IPO mania is in full force.

PTI reports: “The initial public offer of Mrs Bectors Food Specialities was subscribed 1.57 times within the first few hours of opening of bidding on Tuesday.

This is the second initial public offer this month to have received over subscription in the first few hours itself after Burger King India.

The initial public offer (IPO) received bids for 2,08,27,550 shares, against 1,32,36,211 shares on offer, according to data available with the NSE.

The offer comprises a fresh issue of Rs 40.54 crore and an offer-for-sale of up to Rs 500 crore.

Price range for the IPO, which would close for subscription on Thursday, has been fixed at Rs 286-288 per share.

Mrs Bectors Food Specialities on Monday raised Rs 162 crore from anchor investors.

SBI Capital Markets, ICICI Securities and IIFL Securities are the managers to the offer.

Mrs Bectors Food manufactures and markets a range of products such as biscuits, breads and buns. It markets a wide variety of biscuits and breads under the flagship brand ‘Mrs Bector’s Cremica’ and the ‘English Oven’, respectively.”

1:00 PM

U.S. tech giants face 6-10% fines as EU set rules to curb their power

Amazon, Apple, Facebook and Alphabet unit Google may have to change their business practices in Europe or face hefty fines between 6-10% under new draft EU rules to be announced on Tuesday.

The rules are the most serious attempt by the 27-country bloc to rein in the power of the U.S. tech giants which control troves of data and online platforms on which thousands of companies and millions of Europeans rely on.

They also mark the European Commission’s frustration with its antitrust cases against the tech giants, notably Google, which critics say did not address the problem.

Regulatory scrutiny has been growing worldwide of tech giants and their power.

European Competition Commissioner Margrethe Vestager and EU Internal Market Commissioner Thierry Breton will present the rules, a bid not just to rein in tech giants but also to prevent the emergence of anti-competitive dominant companies.


12:30 PM

Remain committed as an open, neutral platform: Facebook

Facebook reiterates its commitment to fairness amid accusations of bias.

PTI reports: “Social media giant Facebook, which has over 400 million people using its family of apps in India, on Tuesday said it continues to remain committed to being an open, neutral and non-partisan platform.

Facebook, which sees around 2.5 billion people globally use Facebook, Instagram and WhatsApp apps daily, has drawn flak in the past for its handling of hate speech on the platform in India, which is among its biggest markets.

“When hundreds of millions of people use our services every day, talking to each other, sharing their lives, their opinions, their hopes and their experiences, a tiny fraction can be hateful. We recognise that puts a big responsibility on us, one which we take very seriously,” Facebook India vice-president and managing director Ajit Mohan said.

The company is not complacent on the issue and continues to remain committed to being an open, neutral and non-partisan platform, he added.

“We’ve been a part of India story since 2006. Our journey began in Hyderabad with just one app with less than 15 million people using it to connect with friends and family. Today, we are Facebook and WhatsApp and Instagram. More than 400 million people use these apps,” he said at the Facebook Fuel for India 2020 event.

Mohan said India has placed itself at the heart of a transformation where digital is playing a central role in changing lives, in creating opportunity and in spurring entirely new models of innovation and enterprise for the world.

“One in two Indians own a smartphone today, more than half the population has access to the internet, and data costs are amongst the lowest in the world. As the world’s largest democracy, with an open and boundaryless internet, India’s transformation is one of hope and immense possibility,” he noted.

Mohan said with partners like Jio, there is a “canvas of opportunities” to provide billions in the country with access to digital tools. In April, Facebook had announced an investment of USD 5.7 billion (Rs 43,574 crore) in Jio Platforms.

“Companies like Meesho and Unacademy, both less than 6 years old, show the possibilities of writing scripts unencumbered by legacy…we see ourselves in the story of India’s transformation, playing a supporting role, celebrating India’s rise and always, looking for opportunities to fuel compelling ideas and bold dreams,” he said.”

12:00 PM

M&M arm SsangYong Motor Co misses loan repayments worth around Rs 408 crore

Funding issues at a loss-making Mahindra business arm.

PTI reports: “Mahindra & Mahindra on Tuesday said its loss-making Korean arm SsangYong Motor Company has missed repayments of loans aggregating to 60 billion KRW (around Rs 408 crore).

In a regulatory filing, Mahindra & Mahindra (M&M) said the South-Korea listed SsangYong Motor Company (SYMC) has outstanding loans aggregating to 100 billion Korean Won (approximately Rs 680 crores).

SYMC has outstanding loans of 60 billion KRW (around Rs 408 crore) from JP Morgan Chase Bank, 10 billion KRW (around Rs 68 crore) from BNP Paribas and 30 billion KRW (around Rs 204 crore) from Bank of America, the filing said.

“Out of the above mentioned total outstanding amount with these banks, SYMC has missed repayments of… loans aggregating an amount of approx. 60 billion KRW (approx Rs 408 crore) which were due and payable on December 14, 2020,” it added.

M&M said “whilst the company has made a commitment to cover the above-mentioned loans given by the Banks, its final liability will be limited to the extent not recovered from SYMC.”

It further added that “on payment of the dues by the company to the banks, the company will be subrogated to all the rights of the banks against SYMC and the company will step into the shoes of the banks as creditor, and will be entitled to all rights which the banks had against SYMC, with respect to these loans.”

In April this year, M&M said its board had rejected a proposal to inject any fresh equity into SYMC.

The management and labour union of SYMC had sought a funding of 500 billion KRW (USD 406 million) from the Mumbai-based auto major over the next three years.

Mahindra had acquired the loss-making SYMC in 2010, but failed to turn it around since then despite several attempts.

M&M holds nearly 75 per cent in the Korean company now and has since invested over USD 110 million.

SsangYong has been struggling with deteriorating earnings since 2017, when it slipped into the red with a net loss of 66 billion wons as against a net profit of 58 billion wons in 2016.

In 2018, its net loss rose to 62 billion wons and then ballooned to 341 billion wons in 2019.

Shares of M&M were trading 0.12 per cent higher at Rs 711.95 apiece on BSE.”

11:30 AM

WFH drove festive e-com sales: Nielsen

Products that cater to the consumer’s need for convenience while adapting to the homebody economy dominated the festive sale period — October 15 to November 13 — in India, according to data and market measurement company, Nielsen.

With the need for communication and increased media consumption, mobile phones and accessories, such as earphones, headsets, case covers, etc, continued to account for over half of e-commerce sales during the festive period, according to Nielsen.

While notably, the share of electronics, including laptops, printers, peripherals, etc, increased by 10% compared to 7% during the festive season last year given the increase in remote working and remote schooling, said Nielsen after analysing sales patterns on more than 30 e-commerce platforms in the country.

The measurement firm tracked a double-digit increase in average spend of online shoppers for electronics and accessories (39%), mobile and accessories (12%), fashion, including apparel, footwear, and accessories (10%), and appliances such as TV, washing machine, refrigerators, etc at 9%.


11:00 AM

Small businesses face worst credit crunch


10:40 AM

Rupee slips 8 paise to 73.63 against US dollar in early trade

The rupee’s open mirrored that of stocks.

PTI reports: “The rupee depreciated 8 paise to 73.63 against the US dollar in opening trade on Tuesday tracking muted domestic equities.

At the interbank forex market, the domestic unit was trading in a narrow range against the US dollar. The rupee opened at 73.62 against the greenback, then inched lower to touch 73.63, registering a fall of 8 paise over its previous close.

In a volatile trade, the local unit also moved to a high of 73.59 against the American currency.

On Monday, the rupee advanced by 9 paise to settle at 73.55 against the US dollar.

According to IFA Global Founder and CEO Abhishek Goenka, the lower than expected headline CPI print should bring some cheer to the bond markets.

Retail inflation declined to 6.93 per cent in November on softer food prices, though it remained above the comfort level of the Reserve Bank.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading 0.01 per cent higher at 90.71.

“US Dollar Index was trading weaker this Tuesday morning in Asian trade ahead of the Federal Reserve meeting this week and as demand for the safest assets remained weak amid progress toward agreeing US fiscal stimulus and optimism for a Brexit deal,” Reliance Securities said in a research note.

On the domestic equity market front, the 30-share BSE benchmark Sensex was trading 345.04 points lower at 45,908.42, and the broader NSE Nifty dropped 92.80 points to 13,465.35.

Foreign institutional investors were net buyers in the capital market as they purchased shares worth Rs 2,264.38 crore on a net basis on Monday, according to exchange data.

“FPIs are now utilising close to 43 per cent of their investment limit in Gsecs (up from around 40 per cent a month ago). The RBI continues to mop up inflows and that is keeping USD/INR supported,” Goenka said.

Brent crude futures, the global oil benchmark, fell 0.62 per cent to USD 49.98 per barrel.”

10:20 AM

CII urges Centre to disinvest aggressively, monetise assets

The Confederation of Indian Industry (CII) has urged the government to look at fiscal management from a three-year perspective, as complete recovery was expected only in FY22.

In its recommendations for the Union Budget, it has also suggested aggressive disinvestment, including bringing down stake in majority public sector banks (PSBs) to below 50%, as well as monetisation of assets.

The industry association submitted its recommendations to Finance Minister Nirmala Sitharaman on Monday. “CII has suggested that the Budget proposals should focus on growth, and alongside, look at fiscal management from a three-year perspective. “Aggressive disinvestment and monetisation of assets can augment government revenues at a time when tax revenues have fallen sharply,” Uday Kotak, president, CII, said.

He added that the Centre should prioritise expenditure in three areas — infrastructure, healthcare and sustainability — and that the Budget proposals should address critical areas of boosting private investments and providing support for employment generation. The representative body has suggested that healthcare expenditure be increased to 3% of the GDP over three years.


10:00 AM

Shares fall as November inflation print remains above RBI target

A moderate correction stocks this morning on inflation numbers.

Reuters reports: “Indian shares fell on Tuesday after data showed the country’s retail inflation print for November was above the upper limit of the central bank’s recommended 2%-6% target.

Investors’ sentiment was also dampened by losses in broader Asian markets as increasing COVID-19 deaths and restrictions overshadowed vaccine-related enthusiasm.

By 0355 GMT, the blue-chip NSE Nifty 50 index fell 0.26% to 13,522.55 and the benchmark S&P BSE Sensex slid 0.29% to 46,120.44.

Both the indexes scaled all-time highs in 16 of the past 24 sessions, boosted by record inflows from foreign institutional investors and progress on COVID-19 vaccines globally.

Government data on Monday showed November’s annual retail inflation eased to 6.93% after holding above 7% for two straight months. However, the elevated print leaves little scope for the Reserve Bank of India to cut rates.

ICICI Bank and conglomerate Reliance Industries fell 0.8% and 0.6%, respectively, and were among the top drags to the Nifty 50.

Kotak Mahindra Bank was among the top boosts to the Nifty 50, rising 0.3%, after the bank on Monday said the central bank had approved the re-appointment of Uday Kotak as managing director and chief executive officer.”


9:30 AM

Focused on investing in India for long run: Facebook

Facebook is committed to investing in India for the long term and continues to build tools for businesses to help them build and grow their online presence, a top company official said.

Speaking to PTI, Facebook Chief Revenue Officer David Fischer said the company has made investments and undertaken some unique bets that it hasn’t done in any other part of the world.

“One of the things that really stands out about India is the pace of innovation, and the transformation that’s happening here and the impact that it is having. And that’s the reason that we are making special investments, we’ve set up a special structure for India and doing some things in India that we haven’t done anywhere else around the world, making some unique investments and bets,” he said.

Facebook is hosting ‘Fuel for India 2020’, which will see its chief Mark Zuckerberg and Reliance Industries Chairman and Managing Director Mukesh Ambani engage in a conversation around opportunities in India, the way digital can accelerate economic progress, and how small businesses will be a key part of the global recovery going forward.