With both food and fuel inflation numbers looking up, the next government may not enjoy the privileges that the Narendra Modi govt did. The new govt should ease land acquisition rules, as per CEA Krishnamurthy Subramanian. Merger of PNB, OBC, Andhra Bank and Allahabad Bank likely to ensue post the appointment of the new administration. DHFL halts accepting fresh deposits, puts premature withdrawals on hold. Snapdeal close to acquiring ShopClues in an all-stock deal. Flipkart plans to open brick-and-mortar stores in India to sell food items. Tata Motors’ debt grows to $14bn, further burdened by the fallout of the ThyssenKrupp deal in Europe and fall in volume of JLR sales in China. Apple to tweak the design of its butterfly keyboard once again. Hyundai bets on electric vehicles run on hydrogen fuel cells.
Moving on to the top Business news of the day.
TOMORROW
With both food and fuel inflation numbers looking up, the next government may not enjoy the privileges that the Narendra Modi govt did. The new govt should ease land acquisition rules, as per CEA Krishnamurthy Subramanian.
The Times Are A Changing: While the exit polls predict a landslide victory for the Narendra Modi led NDA government, the Indian economy may not enjoy the same privileges it did during Modi’s first term.
Beginner's Luck: The first term of the Narendra Modi govt enjoyed a benign inflation both on the fuel and food fronts. However, the same may not be the case for the next govt as both food and fuel inflation numbers are looking up.
Deep Dive:
- An escalating US-China trade war may trigger a rise in crude oil prices.
- The recently released wholesale price index numbers show that the food inflation is firming up after a long period of disinflation.
- Plummeting consumer demand in multiple sectors including FMCG and passenger vehicles.
New Laws: India’s next government should make it easier for companies to acquire land and scrap archaic laws around hiring workers as part of its first reform measures, enabling them to compete globally, as per Krishnamurthy Subramanian, Chief Economic Advisor.
The CEA also emphasized on the need for regular monitoring of asset-liability mismatch and availability of more information on short term ratings.
The new government will also have to continue to clamp down on wilful defaulters, money laundering, and tax evasion in order to cut down on cronyism to restore confidence in the corporate sector, he added.
FINANCIALS
Merger of PNB, OBC, Andhra Bank and Allahabad Bank likely to ensue post the appointment of the new administration. DHFL halts accepting fresh deposits, puts premature withdrawals on hold.
This will be in line with the proposition of the Narendra Modi-government, which has been advocating for the creation of 5-6 larger banks in the country.
If the merger goes through, it would be a significant one after the state-run Bank of Baroda was merged with Dena Bank and Vijaya Bank under the current NDA regime.
DHFL share price tanked over 13% before closing at INR117.25 (+9.81%).
ECOMMERCE
Snapdeal close to acquiring ShopClues in an all-stock deal. Flipkart plans to open brick-and-mortar stores in India to sell food items.
Final Lag: Online marketplace
Snapdeal is close to acquiring its nearest rival ShopClues in an all-stock deal.
If the merger goes through, the deal is likely to see ShopClues investors get one Snapdeal share for every nine they hold, and will likely give them a 10% stake in the combined entity. Interestingly, Shopclues has been pushing to get at least a 30% stake in Snapdeal as part of the transaction.
What You Need to Know: While foreign investors are not allowed into the retail space, 100% FDI is allowed in “food retail” business and lets the investor open physical store.
Globally, around 50-60% of Walmart’s sales come from food. Flipkart’s foray into offline store will be in line with Walmart’s overall scheme of things.
TURNAROUND
Tata Motors’ debt grows to $14bn, further burdened by the fallout of the ThyssenKrupp deal in Europe and fall in volume of JLR sales in China.
Increasing Debt: Tata Motors’ debt has grown to $14bn, further burdened by the collapse of the ThyssenKrupp steel deal in Europe and the slump in volume of Jaguar Land Rover in China.
Tata had bought British luxury carmaker JLR from Ford Motor in 2008 for $2.3bn.
Hit A Bump: After years serving as a cash cow, JLR seems to have hit a bump in Europe amid concerns over a disruptive Brexit and the industry’s shift away from fossil-fuel vehicles.
Tata had acquired steel maker Corus Group for a whooping $12.9bn. However, Tata’s steel business was slammed by the financial crisis in 2008 and a commodity crisis eight years later, prompting the Group to look for ways to dispose of the assets.
Nevertheless, Tata Motors isn’t looking to sell JLR and expects a turnaround in China in the coming months.
Read this article for a deep dive into Tata’s misfortune and a potential fix for it’s problems.
Repercussions: Last September, IL&FS and its subsidiaries had defaulted on debt worth INR99,354cr. Following investigations into the case, the government-appointed board of IL&FS proposed punitive action against Deloitte and BSR & Co, part of the KPMG network, stating that it had found the two firms failed to issue warnings about shortcomings while auditing the books of IL&FS Financial Services (IFIN), a subsidiary of IL&FS.
Here’s discussing why every time there is corporate scam, audit firms and auditors are the first ones to be blamed.
PRODUCTS
Apple to tweak the design of its butterfly keyboard once again. Hyundai bets on electric vehicles run on hydrogen fuel cells.
In addition to this, the tech giant is also expected to announce the creation of yet another version of its butterfly keyboard, which will ship on the new MacBook Pros.
As per Apple, the “new materials” used in the switch mechanism are likely to significantly reduce the occurrence of double and missed key presses.
New Plans: South Korea’s Hyundai Motor Group is placing strong bets on electric vehicles (EVs) that run on hydrogen fuel cells.
Hyundai has been developing both battery electric, as well as hydrogen fuel cell EVs. In India, it is expected to launch its first EV later this year.
The move comes at a time when several of its global rivals sharpen their strategies towards lithium-ion battery-based EVs for eco-friendly transport.
Others in Line: Firms such as Japan’s Toyota Motor and Honda Motor have also been investing in hydrogen fuel cell electric vehicles
Hyundai plans to test its new model through Ola Cabs in around 2021.
Here’s all you need to know about Hyundai’s new plan.
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