Oil Prices Expected to Hit $100, Uber Lowers Valuation Target Ahead of Upcoming IPO, Microsoft Hits Trillion-Dollar Value, Nirav Modi to Remain in Custody et al.

Oil prices expected to hit $100, poses biggest risk to Indian equities. SFIO reveals major lapses in Deloitte audit of IL&FS and its key subsidiaries. Uber lowers valuation target in upcoming IPO. Quikr acquires used goods marketplace Zefo. Amazon reports robust quarterly earnings, beats expectations. Microsoft hits the trillion-dollar value mark. Nirav Modi to remain in custody for another 28 days. RBI “duty bound" to disclose its annual inspection reports of banks along with the list of defaulters, says SC. 

 

Moving on to the top Business stories of the day. 

 

 ECONOMY 

Oil prices expected to hit $100, poses biggest risk to Indian equities. India set to reduce the share of households below the poverty line from 15% today to 5% by 2030. 
 

A Whooping $100 Per Barrel: Oil prices may hit $100 per barrel if the US ends all Iran sanction waivers, as per Christopher Wood, MD and Equity Strategist at CLSA.
 

Why Should India Be Concerned: Rising oil prices are the biggest risk to the Indian equity story from a five-year horizon. With India currently importing more than 10% of its crude oil from Iran, the government faces the immediate challenge of having to find alternative suppliers to meet its massive energy needs.
 

Backstory: Worthy to note is the fact that the price of Brent crude has been rising steadily in the last few months, and has increased by almost 50% since it hit a low of about $50 in December, on back of OPEC cutting supply to boost prices.
 

Slumdog Millionaire: As per a report by the World Economic Forum, India will uplift around 25 million households out of poverty and reduce the share of households below the poverty line from 15% to 5% by 2030, primarily on back of economic expansion, increase in internet access and a favourable demographic dividend.

 

 CORPORATE 

SFIO reveals major lapses in Deloitte audit of IL&FS and its key subsidiaries.Tata Steel reports better-than-expected consolidated net profit, shares rally over 7%.
 

Busted: The Serious Fraud Investigation Office (SFIO), has revealed many irregularities in the books of IL&FS, specifically relating to the IL&FS Financial Services (IFIN) account.
 

SFIO had on Wednesday questioned Deloitte’s former CEO Udayan Sen and two others over the alleged audit.
 

The excessive remuneration paid to Deloitte at a time when IL&FS firms were facing liquidity crunch has come under the scanner too.
 

Days of Our Lives: Shares of Tata Steel rallied more than 7% before closing at INR547.45 on Friday after the company reported a better-than-expected consolidated net profit of INR2,295cr. 
 

Tata Steel's consolidated revenue grew 26% at INR42,424cr vs INR33,705cr last year. Consolidated was also up 17% YoY at INR7,814cr.

 

 TRANSACTIONS 

Uber lowers valuation target in upcoming IPO. Quikr acquires used goods marketplace Zefo.
 

Target Lowered: Uber has lowered its target valuation to a range of about $80bn-$90bn ahead of its IPO.
 

The ride-hailing giant is seeking to price its shares between $44 and $50 apiece as it aims to raise $8bn-$10bn in the IPO. 
 

Previously: Uber had previously outlined a potential price of $48-$55 a share, which would have been a valuation between $90bn-$100bn on a fully diluted basis.
 

A probable reason for Uber’s lowered valuation target could be that smaller rival Lyft has struggled as a newly public company.
 

Quikr Meets Zefo: Online classifieds marketplace Quikr has acquired Bengaluru-based used goods marketplace Zefo in a INR200cr deal. 
 

The acquisition will enable Quikr to offer a broader selection of products at even more competitive prices.

 

 TECH 

Amazon reports robust quarterly earnings, beats expectations. Microsoft hits the trillion-dollar value mark.

Amazon: Amazon reported the best-ever quarterly profit at $3.56bn, on back of its cloud-computing unit and burgeoning advertising business, helping to offset sluggish growth from the core online retail business.

Microsoft: Microsoft on Thursday became the third publicly traded US company to reach the $1tr market cap benchmark, on back of robust quarterly earnings driven by growth in cloud computing and business services.

From the Archives: In August 2018, Apple first took the spotlight for achieving this feat, followed by Amazon in September.

 

 WHITECOLLAR 

Nirav Modi to remain in custody for another 28 days. RBI “duty bound" to disclose its annual inspection reports of banks along with the list of defaulters, says SC. 
 

Denied Bail: Nirav Modi, the prime accused in the INR13,500cr PNB fraud was today denied a bail by the UK Westminster Court, following which he shall remain in custody for another 28 days till May 24, 2019.
 

Nirav Modi is currently undergoing the extradition process initiated by the Indian authorities. The next hearing in the matter will be on May 24, and the full hearing will take place on May 30. 
 

'Duty Bound': The SC on Friday said that the RBI was “duty bound" to disclose its annual inspection reports of banks along with the list of defaulters under the Right to Information Act (RTI) unless they are exempted under law.
 

The SC also directed RBI to withdraw its non-disclosure policy which is in violation to an order passed by it in 2015 which had directed the Central Bank to disclose information under the provisions of RTI. 

The development comes after the RBI denied disclosure of information that included copies of inspection reports of ICICI Bank, Axis Bank, HDFC Bank and State Bank of India from April 2011 to December 2015 stating that such information was exempted under Section 8(1)(e) of the RTI Act and Section 45NB of the Reserve Bank of India Act.

 

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