Top Business News Today: Netflix Loses Friends, Bhushan Steel Case Might Be India's Biggest, Rethinking Indian Economy

Car sales, two-wheeler sales, commercial vehicle sales – all decline in June, as per SIAM.  Stock Market witnesses a sweeping loss as Budget 2019 proposes surcharge on individual income above INR2cr. IndiGo Family Fued: Rakesh Gangwal seeks SEBI’s intervention to curb alleged governance violations by co-founder Rahul Bhatia. Airbus on track to outpace Boeing in commercial plane deliveries this year. IBM acquires Red Hat in a $34bn deal. Byju's raises $150m from Qatar's sovereign fund and Owl Ventures. Netflix will soon lose streaming rights to Friends and The Office. PhonePe’s transformation from small payments app to Paytm competitor. Bhushan Steel is evolving into Indian courts’ biggest case ever. Rethinking India – is it time we talked about the shape of the economy, in addition to its size?

 

Moving on to the top Business news of the day.  

 

 INDIA 

 

Car sales, two-wheeler sales, commercial vehicle sales – all decline in June, as per SIAM. Stock Market witnesses a sweeping loss as Budget 2019 proposes surcharge on individual income above INR2cr.
 

And We All Fall Down: As per data released by the Society of Indian Automobile Manufacturers (SIAM), domestic passenger vehicle sales fell by 18% to 2,25,732 units in June vs 2,73,748 units last year
 

Domestic car sales were also down 25% to 1,39,628 units during the same period as against 1,83,885 units in June 2018. 
 

In the two-wheeler category, sales declined to 16,49,477 units compared to 18,67,884 units vs last year.
 

Sales of commercial vehicles were down 12% to 70,771 units against 80,670 units in the previous year.
 

A Sweeping Loss: More than INR3L cr of equity investor wealth got wiped out on Monday as Budget 2019 proposed surcharge on individual income of INR2-5cr and over INR5cr by 3% and 7% respectively. 
 

This would mean that if a Foreign Portfolio Investor is to accumulate an income of over INR2cr entirely from listed equities, he/she will now attract 25% surcharge over he/her capital gains tax, short or long. In the case of income of INR5cr and above, the same will go up to 37%. 

 

 AVIATION 

IndiGo Family Fued: Rakesh Gangwal seeks SEBI’s intervention to curb alleged governance violations by co-founder Rahul Bhatia. Airbus on track to overtake Boeing in commercial plan deliveries for 2019.
 

Simmering Tensions: In a letter to the Securities and Exchange Board of India (SEBI), Rakesh Gangwal has accused co-founder Rahul Bhatia of several violations at IndiGo including those pertaining to related-party transactions, appointment of senior management personnel, directors and the chairman, who has always been an independent director by convention. 
 

Gangwal has subsequently sought the market regulator’s intervention in the matter.
 

Brushing off all allegations, Bhatia accused Gangwal of trying to dilute the controlling rights of his holding company InterGlobe Enterprises Pvt. Ltd (IGE) in the low-fare carrier.
 

More on the feud here
 

Meanwhile, IndiGo CEO, Ronjoy Dutta has assured that the issues between promoters have nothing to do with the airline and its functioning and that IndiGo’s mission, direction and growth strategy remain unchanged and firmly in place.
 

Racing Ahead: As per data released, Airbus is on track to overtake Boeing in commercial plane deliveries for 2019. The news comes on the back of the aircraft manufacturer outpacing its US rival mid-year following the recent 737 MAX crash in Ethiopia. 
 

Boeing, which has halted deliveries of 737 MAX since mid-March, reported 239 commercial plane deliveries in 2019 through the year's midpoint, down 37% vs last year.
 

Airbus reported 389 deliveries for the same period, up 28% from the same period in 2018.

 

 DEALS 

 

IBM acquires Red Hat in a $34bn deal. Byju's raises $150m from Qatar's sovereign fund and Owl Ventures.
 
Digital Disruption Making Inroads: In what is hailed to be one of the largest tech acquisitions of all time, IBM has closed its $34bn acquisition of the American multinational software company, Red Hat
 
The acquisition of Red Hat would enable IBM to offer its clients the chance to merge their private and public clouds - regardless of which provider they use.
 
This is likely to prove beneficial for the company as businesses are starting the next chapter of their digital reinventions, modernising infrastructure and moving mission-critical workloads across private clouds and multiple clouds from multiple vendors, noted Ginni Rometty, IBM Chairman, President and CEO.
 
Raking Up More: Ed-tech platform Byju's has raised $150m as part of its ongoing Series G fund raising from Qatar Investment Authority (QIA), the sovereign wealth fund of Qatar, and San Francisco-based Owl Ventures. 
 
The proceeds from the injection is expected to be used for “aggressive plans for international market expansion and the creation of world-class learning products for students across the globe”, as per the company. 

 

 DISRUPTION 

 

Netflix will soon lose streaming rights to Friends and The Office. PhonePe’s transformation from small payments app to Paytm competitor.
 

We Will Be On A Break: The super-famous sitcom Friends, which has been streaming on Netflix for years, will soon leave the streaming platform. From 2020, WarnerMedia’s own streaming platform, HBO Max, will showcase the much-loved ’90s comedy show.
 

The loss of Friends is bad news for Netflix – it was the second-most popular show on the platform. And it comes on the heels of the announcement that Netflix will also lose the rights to The Office, its most-streamed TV show, to NBC’s own streaming service.
 

Streamy Hot Competition: This is part of a larger trend of studio houses bringing home their own shows as they launch their own streaming services to compete with Netflix, Amazon Prime, Hulu etc.
 

Besides WarnerMedia and NBC, Disney and Apple are also boarding the streaming train, and they’ll most likely take back their movies and TV shows from the current consortium of streaming platforms, in addition to launching new projects.
 

The Goose That Laid The Golden Egg: When Walmart bought Flipkart for $16bn last year, it got PhonePe as part of the deal. Now, with the digital payments market booming and the volume of transactions done on the platform quadrupling over the past year, PhonePe is emerging as a giant on its own, a separate entity apart from Flipkart, and one that may be worth about $14-15bn according to some analyses.
 

The Indian government’s push for cashless transactions, increasing internet penetration and the world’s cheapest data rates have helped the whole industry, and PhonePe, which was founded in 2015, has exploited the ripe opportunities to expand at a rapid pace, and is now quickly catching up on Paytm.

 

 OPINION 

 

Bhushan Steel is evolving into Indian courts’ biggest case ever. Rethinking India – is it time we talked about the shape of the economy, in addition to its size?

 
The Giant That Dwarves Goliath: To say the size of the Bhushan Steel case is titanic would be akin to calling Jupiter “sort of big”.
 

The MCA-filed chargesheet is 70,000 pages-long, the original accused are 284 in number, just taking the attendance of all accused could take almost five hours and there are talks of an alternate trial venue because how can a courtroom house all the accused and their counsel?
 

The case is now evolving into a multi-bank fraud investigation – in addition to PNB, as many as 33 lenders have exposure to Bhushan Power.
 

And considering the less-than-leisurely pace that Indian courts are notorious for, we can all safely assume that the bloated Bushan Steel trial will not end anytime soon.
 

Too much legal? Yes. Hopefully there’s also too much (timely) justice as well.
 

And Now, This: Budget season has passed and, just as expected, a plethora of columns, statistics and verbal jousting accompanied a Budget Speech that hit the bullseye with the pretty bahi khata at least, even if its actual contents didn’t exactly elicit universal agreement/contentment over originality or boldness.  
 

But now, with the din of debate past us, maybe it’s time to talk about the real issues facing real people in India, to talk not only about the size of the economy but also its shape.

 

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