Transfin.
HomeNewsGuidesReadsPodcastsVideosTech
  1. News
  2. Explained

Reliance Industries Oil Field in Krishna Godavari Basin to Shut Down, Zomato Reports 40% Growth et al.

Professor of Financial Economics and Part-time Value Investor, Transfin.
Sep 22, 2018 12:57 PM 3 min read
Editorial

Good evening reader, 

 

What a week for the Indian stock market with the financial sector in turmoil! Wish we could talk about something else but can't ignore three elephants when they step in a room. Going in order, as and when they arrived:

 

Monday began with the government announcing merger of Vijaya Bank, Dena Bank, and Bank of Baroda, combining two comparatively decent shops with a much worse one, creating the country's 3rd largest lender.

 

Wednesday, ICICI Bank rumoured to be in conversation with SEBI looking to settle charges. Code word for CEO Chanda Kochhar admitting guilt? 

 

Friday, YES Bank crashes after Rana Kapoor's term not extended. RBI cracks the whip on private banks, promoter or no promoter. Investors treat news as forewarning for more NPAs. IL&FS defaults on three payments, NBFC stocks crash with fears of wholesale funding drying up. CEO and 5 Directors of IL&FS's Financial Services subsidary jump-ship. 

 

Weekly damage by Friday COB...Nifty Private Banks -5.9%; Nifty PSU Banks -8.4%; Nifty 50 -3.0%.

 

To cleanse the palate, here are Top 6 Business stories through our End Of Day Wrap Up:

 

INDIA

 

Zomato reports 40% growth in revenues and 73% reduction in losses for FY18.

Online food and restaurant discovery platform reports INR466cr of revenues for FY18 (+40% yoy) and losses at -INR106cr (-73% yoy). FY19 expected to be much choppier considering increased competition in food tech industry leading to deep discounts by peers Swiggy, UberEats, and Foodpanda.

 

Foreign firms left in initial rounds of discussions on e-commerce policy approach government, asking if they can be consulted for next round.

Foreign firms request to be consulted by the committee of secretaries reviewing draft rules. Industry bodies such as US-India Strategic Partnership Forum (USISPF) and US-India Business Council pushing for intervention. 'Forced' localisation, especially through data storage rules primary concerns.

 

Reliance Industries permanently shut down its only oil field in KG-D6 block.

RIL till date has made 19 oil and gas discoveries in the Krishna Godavari basin of which D26 or MA was the only oil discovery block. Initial plan projected minimum 15 years of shelf life however the field has been extinguished in 10 years.

 

IOC, BPCL, and HPCL ask Air India to clear dues towards daily billing amidst rising oil prices.

INR600cr worth of aviation fuel is bought by Air India on a monthly basis from the three oil marketing companies. 

 

US/INTERNATIONAL

 

China cancels planned trade talks with US.

Chinese officials say they will not bend to pressure tactics after President Trump announced new tariffs of $200bn in Chinese imports, prompting Beijing to retaliate with levies on $60bn in US goods.

 

Goldman Sachs close to spinning off its 3 year old app called Simon, which sells complex investment products.

JP Morgan Chase, Barclays, HSBC, Credit Suisse, Wells Fargo, and Prudential Financial in talks with Goldman Sachs to take stakes in Simon. Deal value estimated to be $100m. Simon—an acronym for Structured Investment Marketplace and Online Network, was originally developed as a link between Goldman’s securities desk and private bankers, who bought Goldman-issued notes on behalf of wealthy clients.

 

To receive a daily summary of the key business news and our succinct End Of Day Wrap Ups directly on your phone, subscribe to our WhatsApp feed here.