Sensex Registers All-Time High, Nifty Crosses 11,700 Mark, Nykaa Raises INR100cr in Funding, Turns 'Soonicorn', Airbnb Invests in OYO, SBI Proposes New Rescue Plan for Jet et al.

Sensex registers all-time high, Nifty crosses 11,700 mark. Nykaa raises INR100cr in funding. Airbnb invests in OYO’s series E funding round. SBI proposes new rescue plan for Jet, seeks exit of Naresh Goyal and Etihad. Lenders to create independent trust for sale of stake. Tensions rise between US and Ethiopian officials over 737 MAX crash investigations. Leaks reveal new information pertaining to the crash.

 

Moving on to the top Business stories of the day. 

 

MARKETS 


Sensex registers all-time high, Nifty crosses 11,700 mark. Embassy Office Parks REIT surges over 8% upon stock market debuts.

Record High: Sensex rallied over 349 points to a record high of 39,115 in early trade on Monday before closing at 38,837.18 (+0.42%). This is the second highest closing ever for Sensex.

Runner Up: NIFTY too, was up 88 points trading at 11,733 mark, closing at 11,669 (+0.39%). 

The rise was likely supported by hopes of a rate cut and a pick-up in China factory activity along with the hopes of a breakthrough in US-China trade talks.

Riding the Wave: Shares of Embassy Office Parks REIT rose as much as 8% to INR324 apiece in the intra-day trade on BSE after making a debut at INR300, the same as the issue price. The stock closed at INR314 (+4.70%) apiece.

High Hopes: Traders are expecting the Monetary Policy Committee (MPC) to yet again go for a 50 bps cut in the repo rate following its meeting on Thursday, given that the concerns over growth and inflation are below target. But there are multiple reasons why the MPC would be better off by not voting for a rate cut.

Read more here to find out why.

 

TECH 

Nykaa raises INR100cr in funding. Airbnb invests in OYO’s series E funding round. Amazon pumps INR240cr into food retail business arm.

Shades of a Unicorn: Online beauty products retailer Nykaa has closed its latest funding round after raising INR100cr in primary capital from TPG growth, the mid-market investing arm of equity major TPG Capital. 

Double Up: With the close of the latest funding round, the company’s valuation is expected to have topped INR5,000cr, which is 70% more than the previous year’s valuation when the company had raised capital.

Nykaa has in all raised INR355cr till date.

Future Plans: With these funds the company is looking to push its new initiatives like Nykaa Man, fashion and apparel categories along with expanding the company’s offline stores from 35 at present to 70 by March 2020.

Secret Backer: OYO has reportedly raised around $150m - $200m from Airbnb as part of its Series E funding round.

Selfish: Airbnb commented that it expects to leverage the investment in OYO to gain access to franchised and leased hotels as it looks to expand its offerings from its staple home rentals.

Already There: The Series E funding round of OYO led by SoftBank saw the company raise over $1bn from investors including Chinese ride-hailing firm Didi Chuxing, Singaporean ride-hailing company Grab, Lightspeed Venture Partners, Sequoia Capital, and Greenoaks Capital. This funding round valued the company at $5bn.

For the Foodies: Amazon has pumped in INR240cr in its Indian food-only retail businesses - Amazon Pantry and Amazon Now, which act as a seller of groceries and other packaged food products to the company’s local ecommerce marketplace.

Piece of the Pie: The move might have come in a bid to increase the company’s hold in the food and grocery segment in India’s retail market, which accounts for over INR540bn from a total of INR880bn.

 

INSOLVENCY 

SBI proposes new rescue plan for Jet, seeks exit of Naresh Goyal and Etihad. Lenders to create independent trust for sale of stake.


New Plan: SBI has proposed a new plan to revive debt-laden Jet Airways. The plan involves a total fund infusion of INR9535cr, and the exit of former Chairman Naresh Goyal and Promoter Etihad Airways.
 

The Plan Includes:

 

  • An equity infusion of INR3,800cr by two unidentified investors 
  • INR850cr equity infusion by state-run lenders led by SBI
  • INR485cr on behalf of public shareholders
  • An additional debt of INR2,400cr
  • Non-fund based facilities of INR2,000cr

 

Two to Tango: The plan takes into consideration that there will be two investors as partners. This is necessary to address the 49% cap on direct investment on airliners.

 

Adios: The plan also requires that Naresh Goyal and Etihad transfer all their shares in the airline to an independent trust managed by trustees. At the moment, Goyal holds 51% and Etihad holds 24% in Jet. 

 

Thereafter...: After the shares of Jet are placed in a trust, an issuance of new capital in the form of an equity infusion of INR5,135cr through a rights issue at INR150 per share will take place. This round would see participation from two unidentified investors who will invest INR1,700 crore and INR2,100 crore, respectively.

 

ENERGY 

Saudi Aramco reveals financial information for the first-time ever ahead of bond debut. L&T awarded contract for gas export pipeline by Kuwait Oil Company. 

First Time: Credit rating agency Fitch Ratings has given an A+ rating for Saudi Aramco ahead of the state-owned oil giant's first global bond sale. The reports by the agency reveal that Aramco's earnings before interest, tax, depreciation and amortization were $224bn.

One of a Kind: This makes Saudi Aramco the most profitable company in the world. 

The report by Fitch gives us some important new insights into this secretive company and about the Kingdom of Saudi Arabia, but it still leaves very significant questions. Read more here to find out.

Fair and Square: L&T has won the rights to a gas export pipeline contract from the Kuwait Oil Company (KOC). 

The order falls under "large" category that range between INR2,500cr and INR5,000cr as per its classification of contracts.

Bidding War: L&T has acquired the strategic gas export pipeline contract through an international competitive bidding on a Lump Sum Turn Key (LSTK) basis.

 

AVIATION 
 

Tensions rise between US and Ethiopian officials over 737 MAX crash investigations. Leaks reveal new information pertaining to the crash.
 

Disagreement: US and Ethiopian officials are at an impasse as investigators prepare to release an interim report in the Boeing 737 MAX crash. The preliminary report is expected to reveal suspected reason(s) behind the crash.
 

US investigators have complained about the inefficiency of the Ethiopian officials over the processing of the data obtained from the black box of the crashed 737 MAX aircraft. Experts from both countries have also disagreed on the interpretation of the data obtained from the crash site.
 

Slowed Down: The tension between the officials is further heightened by Ethiopia’s limited staff and experience investigating major airliner crashes.
 

New Info: New details have emerged from the investigation of the Ethiopian Airlines crash that point towards the involvement of the (Maneuvering Characteristics Augmentation System) MCAS system in the crash.
 

Pull Up: According to a WSJ report, in a recording obtained from the wreckage, one of the pilots can be heard speaking to the other, asking him to pitch up repeatedly. This would indicate that the MCAS system was active during the crash.

 

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