ICICI Bank share price rises c. 3% on back of healthy numbers for June quarter. Amazon in talks to acquire Uber Eats India business. Flipkart makes offline debut, opens furniture experience centre in Bengaluru. Nirmala Sitharaman says sovereign bond roll-out won’t be stopped. “World Economy’s Biggest Week of 2019”: Fed expected to announce first rate cut in over a decade. India Inc cuts costs and spending as economy hits doldrums. 32,000 jobs affected as 286 auto dealers wind up operations. Udaan close to raising c. $500m in latest funding round. Know more about the tech that makes Swiggy stick.
Moving on to the top Business news of the day.
Nirmala Sitharaman says sovereign bond roll-out won’t be stopped. “World Economy’s Biggest Week of 2019”: Fed expected to announce first rate cut in over a decade.
Interest in Interest Rate Cuts: Nirmala Sitharaman has called on the RBI to “significantly” reduce interest rates. She also said that the government would not review its plan to issue overseas sovereign bonds, adding that the Budget’s surcharge on FPIs was “not intended to hurt investors”.
Following the Finance Minister’s comments, 10-year government bond yield fell 11bps to 6.42%. Yields had risen sharply last week on reports that the PMO was reconsidering the idea of issuing foreign currency sovereign bonds.
The Central Bank’s Monetary Policy Committee meeting will be held from 6-7 August. RBI Governor Shaktikanta Das recently said any further rate cuts (75bps have been cut in the last three quarters) would depend on data points, especially inflation.
Powell Power: Most market observers anticipate something to happen on Wednesday that hasn’t happened in over ten years – the Federal Reserve is widely expected to cut interest rates.
All Hands on Deck: The Fed’s announcement isn’t the only thing we’re looking forward to. US officials are heading to China for the first high-level talks since May. Moreover, economic data will indicate if the Fed will continue easing in the future, and central banks in Japan, Brazil, Turkey, UK and EU will either announce rate policies or important numbers.
India Inc cuts costs and spending as economy hits doldrums. 32,000 jobs affected as 286 auto dealers wind up operations.
Corporate Blues: India Inc is reportedly disappointed with the lack of stimulus measures in the recent Budget. And to cope with the ongoing slowdown, they are instructing executives to cut down on costs and spending. Recruiting has been hurt, too, with most being replacement hires. However, most bosses and veterans aren’t pessimistic – they expect a turnaround sooner rather than later.
Deceleration: Meanwhile, the auto slowdown continues. Auto sales fell 21% in May and passenger vehicle sales suffered the steepest fall in 18 years. 286 dealers have consequently shut shop, affecting an alarming 32,000 jobs. Most of the closures were in urban and semi-urban markets, and chiefly in the car segment.
Here again, industry representatives are hopeful of a revival of fortunes sooner rather than later.
Udaan close to raising c. $500m in latest funding round. Know more about the tech that makes Swiggy stick.
Udaan’s Latest Flight: B2B online marketplace Udaan is reportedly close to raising c. $500m in the latest funding round led by existing investors Lightspeed Venture Partners and DST Global. Other investors such as Hillhouse Capital and Altimeter Capital also said to be participating in the round.
The latest round of financing is likely to increase the company’s valuation to $2.7bn.
Launched in 2016, Udaan runs a web platform connecting SMBs, manufacturers, wholesalers, traders, and retailers. Further, the company also offers credit facility to select small sellers.
Deep Dive: Active in over a hundred Indian cities and valued at over $3bn, Swiggy ranks among the top five startups by valuation in India. It counts the likes of Naspers, Tencent, DST Global, and Accel Partners among its top investors.
The management at the food delivery platform soon realized that their technology needed to stand out from the rest of the pack. To that end, they swiftly brought on former Myntra tech executive Rahul Jaimini as their third co-founder.
Read this article to know more about the tech that makes Swiggy tick.
Amazon in talks to acquire Uber Eats India business. Flipkart makes offline debut, opens furniture experience centre in Bengaluru.
Amazon May Eat With Uber: Ecommerce giant Amazon is reportedly in talks to acquire the Indian arm of Uber Eats, which is the food delivery vertical of global ride-hailing company Uber.
The acquisition talks are in the initial stages and can also result in a strategic partnership, according to sources.
As per reports, Amazon believes that the food delivery business can restore customers to its Prime App more frequently than shopping for fashion, electronics or grocery.
Touch and See: Indian online retail giant Flipkart has announced its first furniture experience centre in Bengaluru - 'FurniSure'.
Flipkart is also working with Google to integrate Google Lens at these stores to ensure a better viewing experience for the consumers.
This is line with the industry trends wherein companies such as Ikea and Pepperfry have also ventured offline to boost sales. In fact, sales have doubled in every city that Pepperfry has launched a studio.
ICICI Bank posts healthy numbers for June quarters. NII up, slippages down, but low NPA recoveries and stressed book may play spoiler.
June Tidings: ICICI was the hardest-hit private bank during the bad loans crisis. Now, three years later, the lender reported healthy numbers in the June quarter, which has hearted investors and driven up stock price by 3%.
The Q1 results showed the bank’s slippages have fallen 22%, net interest income has grown by 27%, domestic loans have grown by 22%, and 88% of loans issued to companies in the past quarter were to firms rated A- and above.
Hold Your Horses: But ICICI is not out of woods yet. Lower NPA recoveries, a large stressed book, and possible instability in its unsecured personal loan and credit card segments may halt the bank’s recovery and thereby require close watching.