YES Bank share price dips to 52-week low. Fed cuts rates once again. Wow! Momo raises $23mn from Tiger Global. Groww raises $21mn in Series B funding round.
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Sharing is Disobeying: In a move that could be to the detriment of emerging fintech startups, the RBI has directed commercial banks and NBFCs to stop sharing customers’ credit data held by credit bureaus with unregulated entities. As of now, scores of fintech startups’s business models rely on such consumer data, which the Central Bank argues should be kept in the banks’ confidence and not be divulged without the customer’s consent. Lenders will be reportedly given 15 days’ time to implement these new norms.
Parallel Ventures: Piyush Goyal’s much-awaited one-for-all national e-commerce policy is slated to be formulated by next June. Meanwhile, multiple ministries are working to develop their own e-commerce policies on a variety of issues including regulation of non-personal data and consumer protection. More details here.
Recognition, Finally: The Code on Social Security, 2019, proposed by the Labour Ministry, has for the first time recognised gig workers and platform workers in India’s labour law legislation. While saying these workers fall in the unorganised sector, the Code also seeks to guarantee them employment-related rights like life and disability cover and old age benefits, among others. At the same time, they would not be entitled to EPF, ESIS or gratuity benefits.
(California recently passed a landmark Bill recognising gig economy workers as regular employees. More on that here.)
Swiggy Wiggy: With protests against pay reductions, boycotts from partners, and a repudiation from restaurant unions, the food-tech industry in India is at a crossroads, an inflection point. Amidst all the chaos of recent weeks are the delivery agents, who some say are paid too less while others argue are merely the victims of a market correction.
Nose-Dive: YES Bank share price crashed over 17% today before closing at INR54 (-15.76%), diving to a new 52-week low today.
The slump came after CARE Ratings lowered the rating of non-convertible debentures (NCDs) worth INR800cr of Rana Kapoor-owned Morgan Credits Private Limited, also a promoter entity of the private lender to BBB- from A-.
CARE said the revision in rating takes into account the fall in the stock price of the underlying shares of YES Bank which are held by Morgan Credit Private Limited (MCPL) or promoters and their relatives.
Yes Bank share price has dropped a 75% in the last five months, and this has left fund managers fretting.
Fund houses that have financed Yes Bank co-founder Rana Kapoor are particularly having a tough time. Lured by returns during good times, fund managers had entered into a layered deal that uses Kapoor’s Yes Bank shares as collateral for a loan. The loan is unsecured since the shares were unencumbered, meaning that investors can’t force Kapoor to sell his share to make good a repayment. More on this here.
Bonus: Moody’s flags off rising credit risks to bank from real estate exposure. View tweet here.
Wow! Money: Wow! Momo Foods, which owns and operates two quick-service restaurant brands Wow! Momo and Wow! China has raised $23mn in a Series B funding round led by Tiger Global, valuing the restaurant chain at $120mn, up 187% from the $42.19mn valuation that garnered in a funding round last year.
Money Grows Money: Online investment platform Groww has raised $21.4mn in Series B funding round led by Ribbit Capital. The round also saw participation from existing investors, Sequoia India and Y Combinator.
Previously: The financing round comes shortly after Groww raised $6.2mn in January this year in Series A round led by Sequoia, prior to which it had raised a pre-series A funding round of $1.2mn from Insignia Venture Partners, Y-Combinator, and prominent angel investors such as Cure.Fit founders Mukesh Bansal and Ankit Nagori, among others.
Powell Powers: As expected, the US Federal Reserve cut its benchmark interest rate yesterday for the second consecutive time. The quarter-point cut now puts its key short-term rate in the range of 1.75% to 2%.
The vote was 7-3, with two officials wanting to keep rates unchanged and another arguing for a bigger half-point cut. Fed Chairman Jerome Powell was ambiguous about the Central Bank’s future course of action, stating if the economy weakens additional rate cuts may be in the offing but suggesting economic expansion and numbers for now appeared strong and durable.
Strenuous Bonds: Meanwhile, halfway around the world, investors in India’s bond market are on edge over whether New Delhi will resort to big giveaways and spending and thus sacrifice its fiscal deficit goals in order to boost slowing growth.
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