India GDP Grows at 4.5% in Q2, RIL Becomes First Indian Company to Hit INR10L cr Market Cap

India GDP grows at 4.5% in Q2 - slowest in six years. RIL becomes first Indian company to hit INR10L cr market cap. Subhash Chandra resigns as Zee Entertainment Chairman. DHFL becomes first financial services company to be taken to NCLT. Uber denied renewal licence in London. LVMH agrees to buy Tiffany in a $16.2bn deal.

 

INDIA

At 4.5%, Q2 GDP growth is slowest in six years and marks sixth consecutive quarter of falling growth.

Slowing and Steadily Losing the Race: India's GDP grew at the slowest pace in six years at 4.5% in the July-September Q2 quarter. This number was lower than Q1's 5% and the 7.1% for the same period last year. This also marks the sixth consecutive quarter of sagging growth.

 

The weak growth was the result of weak manufacturing, falling consumer demand and private investment and a drop in exports.

 

The declining speed reflects the ongoing economic slowdown that has affected virtually all sectors of the economy. It adds pressure on the government to launch more reforms to revive the economy's animal spirits.

 

Gross value added (GVA) growth during the second quarter stood at 4.3% against 4.9% in April-June this year and 6.9% in the September quarter last year. Gross fixed capital formation at current prices declined sharply to 1.02%, compared with 11.8% in the same quarter last year. BS

Fiscal deficit target for this FY already exceeded.

Another One Bites the Dust...: In more sobering news for the Indian economy, the country's April-October fiscal deficit has already exceeded the full-year target for this FY.

 

Fiscal deficit stood at INR7.2Lcr, which is 102.4% of the budgeted target for this fiscal year. Net tax receipts in this period were INR6.83Lcr while total expenditure was INR16.55Lcr. Moneycontrol

After India, Japan may not join RCEP.

 RCEP Jolt: India had left the Regional Comprehensive Economic Partnership - which would have formed the world's largest free trade area - earlier this month citing unresolved apprehensions. The remaining 15 members had then said that they would go ahead with the deal without India, adding that the door would be left open for New Delhi to join in the future.

 

Now, it has emerged that Japan is not considering signing on to RCEP without India onboard. More details here.

 

COMPANIES

RIL becomes first Indian company to hit INR10L cr market cap.

Stop Only At The Summit: Mukesh Ambani-led Reliance Industries has become the first Indian company to hit INR10L cr market capitalisation, making it the most valued Indian firm in terms of m-cap.

 

Only last week, RIL had became the first Indian firm to cross a m-cap of INR9.5L cr.

 

Fun Fact: Interestingly, the oil-to-telecom-retail conglomerate took only 25 sessions to rise to INR10L cr in m-cap from INR9L cr. Whereas, it had taken 285 sessions to escalate from INR8L cr to INR9L cr.

 

Meanwhile, RIL share price has risen 39% in the last 1 year and 40% just in 2019. The stock has been on a high since RIL and Saudi Aramco signed a non-binding letter of intent in August this year under which Saudi Aramco will buy a 20% stake in RIL's oil-to-chemical business at an enterprise value of $75bn. Adding to this was the recent tariff increase announcement by Reliance Jio. Besides these, some other factors that greatly contributed to RIL's rise were a rise in gross refining margins, strong finances of consumer businesses, the launch of the home broadband business and lower capital expenditure intensity. CNBC TV18

Subhash Chandra resigns as Chairman of Zee Entertainment.

Stepping Down: Media baron Subhash Chandra has stepped down as the Chairman of Zee Entertainment with immediate effect, in light of the recent changes in shareholding and complying with a rule which mandates that the Chairman of a company's board cannot be related to its Managing Director (MD) and Chief Executive Officer (CEO). Punit Goenka, the present MD & CEO of Zee Entertainment Enterprises, is the son of Subhash Chandra.

 

He will however, remain an non-executive director.

 

Last week, Subhash Chandra-led Essel group had reported that it was planning to sell 16.5% stake in Zee Entertainment to financial investors in order to repay loan obligations to certain lenders of the group, following which Essel Group's stake in Zee Entertainment will be reduced to 5%. Business Today

RBI files insolvency proceedings against DHFL.

In Bad Books: The Central Bank has filed for insolvency proceedings against Dewan Housing Finance Corp. Ltd (DHFL). Under the new norms, an interim moratorium will apply on the housing financier until the case is either admitted or rejected by the National Company Law Tribunal (NCLT).

 

DHFL has an outstanding debt of INR83,873cr. 

 

The RBI had first announced on Nov. 20 that it has superseded DHFL’s board and appointed an administrator to run the company. It has also appointed a three-member advisory committee to help the administrator it appointed to manage the company. Bloomberg Quint

SEBI clamps down on stock broker Karvy for client defaults.

Broker Goes Broke: Recently, market regulator SEBI banned stock broker Karvy Stock Broking (KSBL) for client defaults to the tune of INR2,000cr making it one of the country’s largest cases of equity broker defaults. In an ex-parte interim order, SEBI banned Karvy from taking new clients and also from executing trades for existing clients.

 

KSBL said it has around INR25-30cr worth of outstanding dues to less than 200 clients. “The whole issue is of outstanding payment to around 150-180 clients of the brokerage...and in the next few days (or could be less than a fortnight) the payments to these clients would be cleared,” Karvy Group Chairman C Parthasarathy reportedly said. Hindu BusinessLine

 

As of date, it is estimated that around 5,000 brokers and brokerage houses are active in Indian equity markets. SEBI's gag order on Karvy is likely to lead to a wider investigation into the country's brokerage houses. Deccan Herald

 

FYI: Confused regarding what to do if you're one of Karvy's 2.55L clients? Here's an explainer.

 

WhatsApp rolls-out self-destructing 'Delete Message' feature in latest android beta version.

 

TECH

WhatsApp rolls-out self-destructing 'Delete Message' feature in latest android beta version.

WhatsAppening?: Facebook-owned messaging platform WhatsApp is gradually rolling out a self-destructing message feature for its Android Beta version.

 

Disappearing Act: The update will automatically delete a message after a particular period of time as set by the user. Unlike the 'Delete for Everyone' feature that already exists on the popular messaging app, this feature will automatically delete or in fact make the messages "disappear" in a way that would seem like the message never existed.

 

Reportedly, WhatsApp has renamed the feature's name from 'Disappearing Messages' to 'Delete Messages' before the official roll out. It will be initially available for group chats and can be enabled by the group's administrators. Once enabled, the feature can be toggled in Contact Info or Group Settings. Livemint

Alibaba's secondary listing in Hong Kong raises $11.2bn, becomes 2019's biggest stock offering so far.

King (Hong) Kong: Aibaba's secondary listing has emerged as the biggest stock offering so far this year. Its Hong Kong-listed shares rose nearly 7% in their market debut, and the company managed to raise c. $11.2bn (though this could rise to $13bn).

 

Alibaba's IPO is 2019's largest yet, but could be dwarfed by Saudi Aramco's listing, which is expected in the coming weeks and which could top the $25bn record for largest IPO set by Alibaba in 2014 when it listed in New York. WSJ

 

The secondary listing of the world's largest e-commerce company in Hong Kong bears special significance. For starters' the decision to list elsewhere was important for Alibaba given the increasing distrust between Washington and Beijing. In case the US government takes action against Chinese companies listed in the country, having one foot close to home will be beneficial to Alibaba. In addition to this, a successful listing in Hong Kong showcases business confidence in the city, which has been roiled in anti-Beijing protests since April. Forbes

 

RIDE-HAILING

Govt considering capping commission of firms like Uber and Ola to 10% of total fare. 

Cap the Commission: In its upcoming rules for taxi aggregators - the first of its kind in India - the central government is reportedly considering capping the commission earned by firms like Uber and Ola to a maximum of 10% of the total fare of a ride.

 

Presently that number is 20%.

 

"We are planning to release the draft (aggregator rules) for public feedback sometime next week,” an official said. “It will largely be in line with the guidelines that were shared, with a few small changes.”

 

As for the issue of surge pricing, it could be limited to two times the base fare. ET Tech

Uber has been denied licence renewal in London.

No Uber No Cry: London’s transport regulator, Transport for London (TfL), has refused to grant ride-hailing platform Uber a new license in the city after authorities found that more than 14,000 trips were taken with uninsured drivers.

 

Transport for London announced the decision not to renew the ride-hailing firm’s licence at the end of a two-month probationary extension granted in September.

 

Uber has meanwhile confirmed that it will appeal the decision. The Guardian

Twitter to delete inactive accounts.

Back From the Dead?: Social-media platform Twitter has always encouraged users to log in and tweet every six months. Now it’s taking the added measure of reaching out to inactive users, prompting them to log in prior to December 11 or risk being deleted. 

 

A large scale removal of inactive accounts would mean that usernames, previously unavailable, may start coming up for grabs. TechCrunch

 

Brownie Points: "Once Silicon Valley’s highest-flying darlings, companies from WeWork to Uber have collectively lost about $100bn in value this year". As investors grow more cautious about spending, startup executives have been prompted to talk up profitability over growth. Read more here.

 

DEALS

CCI approves 37.4% acquisition of Adani Gas by Total Group. 

Go Ahead: The Competition Commission of India (CCI) has approved the acquisition of 37.4% shareholding and joint control by Total Group in Adani Gas. 

 

CCI noted that the deal would contribute towards bridging the energy deficit, augment supply of natural gas in India, enable Total Group to provide services in a cost-efficient manner and meet the country's long-term need for cleaner energy. ET Energyworld

 

Adani Gas share price jumped over 10% on the back of the news before closing at INR160.70 (+7.53%).

Future Group stocks rally as CCI approves Amazon's 49% acquisition in Future Coupons.

In Other News: Shares of Future Group companies gained over 18% today as the CCI approved the 49% acquisition of stake in Future Coupons by Amazon.

 

Future Coupons own 7.3% shares in Future Retail, and with the transaction in motion, Amazon would acquire around 3.58% stake in Future Group. Moneycontrol

LVMH has agreed to buy Tiffany in a $16.2bn deal.

Luxury Meets Jewellery: French luxury goods company, LVMH Moët Hennessy Louis Vuitton has agreed to buy US jeweller Tiffany in a $16.2bn deal. 

 

Tiffany's acquisition is likely to strengthen LVMH's position in jewellery and further increase its presence in the US.

 

Previously: Tiffany had turned down LVMH's initial advance made just five weeks ago, stating that it significantly undervalued the company. The new deal values each of Tiffany shares at $135 in cash and is higher than the initial offer of $120 a share, which valued the business at $14.5bn. BBC News

FIN.

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