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Latest News Today: Chandrayaan 2 Launch Delayed, China GDP Growth Falls, Amazon Upcoming Sale, 5g in India

Professor of Financial Economics and Part-time Value Investor, Transfin.
Jul 15, 2019 12:59 PM 5 min read

Chandrayaan-2 launch delayed due to technical snag. China GDP growth falls. IndiGo Board to question cofounder. France calls for jet fuel to be taxed. Softbank may invest $1.4bn in Piramal Group. Sachin Bansal invests INR200cr in Piramal Enterprises’ debt. TRAI is at it again – sets high base price for 5G spectrum. What DHFL’s downfall teaches us. Why Trump’s rant against Bitcoin drove up its price and delighted crypto enthusiasts. Amazon upcoming Prime Day sale.


Moving on to the top Business news of the day.




Chandrayaan-2 launch delayed due to technical snag. IndiGo Board to question cofounder. France calls for jet fuel to be taxed.

Countdown Extended: India will have to wait a little longer to descend on the moon’s South Pole. At T-56 minutes, ISRO spotted a technical snag in the Chandrayaan-2 launch vehicle system and took the decision to postpone the mission.
Details on the snag are yet to be revealed, alongwith the new mission date, which could be in September, which is when the next launch window is.
Oh My IndiGod: Today in IndiGo’s ongoing crisis, some Board members are reportedly set to question cofounder Rakesh Gangwal on “exclusive parleys” with engine-maker Pratt & Whitney. The Board will probe whether Gangwal executed his duties as Director to keep it informed of aircraft and equipment purchase-related developments.
Party Like It’s 1945: Since World War II, the global consensus was to not tax jet fuel in order to incentivise commercial aviation. All these years, while petrol and diesel used in cars or trucks was taxed, fuel on international flights was exempt from such levies.
This could change with France calling for an “eco-tax” on intra-EU economy flights and flights outside the EU. Alongside this eco-tax, France has called for the EU Commission to end the jet fuel tax exemption.
The Goal?: Reducing emissions, which could fall by 11% if such a tax is implemented.
The Downside?: Higher prices – even the minimum tax would increase flight ticket prices by 10%.




Softbank may invest $1.4bn in Piramal Group. Sachin Bansal invests INR200cr in Piramal Enterprises’ debt.

The What: As per reports, Japanese multinational conglomerate SoftBank is in talks with Piramal Group for a capital infusion of c. $1.4bn. 
Zooming Out: The news comes on back of speculations that Reliance Jio and Piramal Group may set up a joint venture for consumer lending and fintech.
Details of the potential deal here.
In Other News: Flipkart co-founder and tech entrepreneur Sachin Bansal has invested INR200cr in debt paper issued by Piramal Enterprises, who have their primary focus on pharma and financial services.
The non-convertible debentures (NCDs) that Bansal has subscribed to carry an interest coupon of around 9.5% and a repayment period of two years.
Back to the Past: The deal adds to debt investments worth more than $100m made by Bansal in the recent past. Here’s a rundown of his other recent investments.
TRAI is at it again – sets high base price for 5G spectrum. What DHFL’s downfall teaches us.
TRAI-ing Too Hard To Aim Too High: When it comes to spectrum prices, India’s are the highest in the world. And a lot of this has to do with TRAI setting the base price too high.

In 2010, the bid price for Delhi was INR663cr/MHz while the base price was INR64cr. Two years later, TRAI used the 2010 auction price to raise the base price to INR717cr. And though the DoT lowered this, the auction failed – the industry was cash-strapped, after all.

Now, yet again, TRAI has pushed high reserve prices for the 5G spectrum. The DoT is asking the regulatory body to reconsider its recommendations but, given its history, is TRAI likely to take a road not taken?

Death By Default: DHFL is on edge. A long history of rolling over short-term borrowings and filling its books with risky loans has finally caught up with the mortage lender. Now, the crisis-hit DHFL is struggling to remain above water because no one wants to give it funds and a resolution process is still nowhere on the horizon. In the end, DHFL was the first casualty of the subprime market of risky realtors with dodgy credit.
China registers slowest quarterly GDP growth in 27 years. India Inc struggles to balance its sheets.

How To Tame A Dragon: The trade war continues to take a toll on China’s economy. Second-quarter results released today pegged GDP growth at 6.2%, the lowest since the first quarter of 1992, which was when records began.

China’s Y-o-Y growth has been declining since Q1 2018 from 6.8% to 6.2% today.
While the numbers are a new low for China, they were still within most analysts’ expectations. Which is why stocks rose and global markets welcomed the news.
Balancing Act: India Inc’s balance sheet has seen better days. In FY19, companies’ combined borrowings increased 13.2% year-on-year while shareholders’ equity was up only 11.3% compared to the 14% growth a year ago.
The result? The country’s top companies and business groups reported an uptick in their debt-equity ratio this financial year, halting three years of balance sheet deleveraging.
Non-financial PSUs and government-owned companies fared worse, with the latter seeing borrowings increase by 13.5% and cash decline by 12.8% YoY. For PSUs, meanwhile, average debt-equity ratio reached a record high of 0.68.
Why Trump’s rant against Bitcoin drove up its price and delighted crypto enthusiasts. Amazon's office turns into a “war room” during its Prime Day sale.

Donald’s Diatribes: Three days ago, Donald Trump suddenly took to Twitter to tell the world he is “not a fan of Bitcoin”. He said cryptocurrencies are “based on thin air” and “facilitate unlawful behaviour” before exalting the US Dollar.

In the immediate aftermath of Trump’s tweets, Bitcoin rose in value and digital currency enthusiasts patted themselves on the back. Why? It wasn’t the substance of Trump’s tweets on Bitcoin – it was the fact that he had tweeted about Bitcoin.

Less than a decade after its inception as an open-source software by an unknown creator, Bitcoin is being discussed by the President of the United States and scaling new heights in value.

For crypto enthusiasts, if politicians and bureaucrats are taking Bitcoin seriously, it is the surest sign that cryptocurrencies have a serious future. Which is why Bitcoin’s value rose after Trump’s tweets. Which is why some commentators see this moment as “the starting point in a titanic battle over the shape of our global money system”.

Battlestar Amazonia: The monsoon is pouring down but that doesn’t deter an army of delivery agents spiralling from 20,000+ storage centres to ship countless goods to millions of customers. Numerous analysts have spent almost nine months preparing for just these two days, coordinating with fulfillment centres, payment agents, manufacturers, space partners and digital marketers so that Amazon’s most crucial 48 hours are a success. No wonder the company’s office is compared to a “war room” during the Prime Day sale.

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