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Top News Today: Four SoftBank-Backed Firms Lay Off A Combined 2,600 Employees, OYO Lets Go of Hundreds of Employees and Others

Professor of Financial Economics and Part-time Value Investor, Transfin.
Jan 13, 2020 2:01 PM 5 min read

Sensex and Nifty close at record highs. Retail inflation rises to 7.35% in December. Reliance may get a non-Ambani MD for first time in company’s history. Many Indian startups downsize workforce as investor scrutiny rises.



Sensex and Nifty close at record highs.

Sky is the Limit: BSE Sensex and NSE Nifty today hit new highs on the back of positive domestic and global cues. Sensex rose 258 points to a new closing high of 41,859.69 (+0.62%). Nifty closed at 12,329.55 (+0.59%). 


Among the Sensex 30 stocks, Infosys was the top gainer, rising 5% before closing at ₹772.50 (+4.65%). Livemint


Extra Crunch: Technology is the ultimate disruptor. It has changed everything about everything. And the world of stocks has by no means escaped the tech onslaught. India allowed algorithmic trading only in 2008, but algos control nearly a third of all trades already. Complex algorithms will soon be behind more daily stock trades than humans. What if the math goes wrong? Moreover, is it even  fair for a few well-heeled market participants to secure undue advantages with the help of technology? Click link for the full scoop.



Retail inflation rises to 7.35% in December.

Out of Control: Retail inflation in India rose to 7.35% in December (breaching RBI's medium-term target of 4%) vs 5.54% in November and 2.11% in December 2018. Business Today


Once promising economies such as Mexico, Brazil, or Turkey could never break into the ranks of rich nations. Unfortunately, they fell into what economists call the “middle-income trap.” Coined in 2006 by World Bank economists Indermit Gill and Homi Kharas, the term refers to a sustained economic slowdown following a period of strong growth.


Is India, which began sprinting towards the goal of a high-income economy after economic liberalisation in the 90s, headed for such a trap? Read in full here.  



Reliance may get a non-Ambani MD for first time in company’s history.

Dawn of a New Era: If the directive by the Securities and Exchange Board of India (SEBI) on separation of the Chairman and Managing Director posts is implemented as per schedule on April 1, Reliance Industries is likely to get its first non-Ambani Managing Director (MD).


Mukesh Ambani, CMD of RIL will become the non-executive Chairman while a non-Ambani may become RIL’s MD for the first time in the company’s history.


Probable names strewn include those of RIL Executive Director Nikhil Meswani's, Mukesh Ambani's confidante and right hand man, Manoj Modi and other two executive directors, Nikhil's younger brother, Hital and P.M.S. Prasad. HT


Nusli Wadia withdraws criminal defamation suit against Ratan Tata

Bombay Dyeing Chairman Nusli Wadia has withdrawn a defamation suit against Tata Group Chairman Ratan Tata. 


A bench headed by Chief Justice SA Bobde allowed Wadia to withdraw the petition in the apex court after the court recorded that Tata and others had no intention to defame him (Wadia).


Wadia had filed a criminal defamation case against Tata sons, the holding company of Tata group and its executives in 2016. He had sought ₹3,000cr as damages. Wadia has moved the apex court challenging the Bombay high court order of last year which quashed proceedings initiated by a local Mumbai court against Tata group executives and board members including Ratan Tata. Moneycontrol



Walmart fires 56 executives in India as it restructures its business.

Revamped: The world's largest retailer is trimming its ranks in India.


Walmart has reportedly fired 56 of its executives in the country. The move has "mostly affected" those in the company's real estate division, which takes care of store expansion. And it happens at a time when Walmart is seeking to focus on its e-commerce bet in the country over its physical stores (of which it has 28 in India).


Walmart has around 600 employees in its India head office and a total of around 5,300 nationally. Reuters


Many Indian startups downsize workforce as investor scrutiny rises.

End of the Road: Walmart isn't the only company trying to cut down employee costs. Many of India's home-grown startups have handed out punk slips lately or are likely to in the immediate future. These include OYO, Ola, Paytn, Quickr, Zomato and Rivigo.


Why?: One reason is rising debt and another is increased investor scrutiny of these firms' business models. Read details here.



Proposed US hemp regulations worry farmers and industry.

Uncertainty Ahead: A year ago, US lawmakers reclassified hemp as a legal agricultural crop. Hemp growers and entrepreneurs were ecstatic and licenses for hemp cultivation topped a half-million acres in 2019 - 450% above 2018 levels.


Now, the US government is drafting regulations for the industry, and businesses are worried Washington will use a heavy hand that could result in many crops failing required tests and being destroyed. In fact, the US Department of Agriculture, the agency writing the rules, estimates 20% of hemp lots would fail under the draft regulations.


What's the Worry?: Most of the anxiety surrounds how the government will test THC (a high-inducing compound also found in marijuana, which is illegal) and THCA (a nonpsychoactive component). The government considers plants with less than 0.3% amount of THC to be hemp; anything above that number is banned and growers could be prohibited from growing hemp and/or prosecuted.


But the regulation of THC in hemp varies amongst states - some allow concentrations above 0.3%, some don't account for THCA, some allow more harvesting time after THC testing etc. The challenge is to harmonise these diverse regulations into a rule-book acceptable to all. AP


Why Google is after millions of medical records.

Mad for Meds: The king of the search engine industry is eyeing the healthcare market. Google has struck partnerships with some of largest hospital systems and most-renowned health-care providers in the US, many of them vast in scope and few of their details previously reported. In just a few years, the company has achieved the ability to view or analyse tens of millions of patient health records in at least three-quarters of U.S. States, according to a Wall Street Journal analysis of contractual agreements. Click here to read more.


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