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Your daily dose of crisp, spicy financial news in 80 words.
Maruti Suzuki has decided to recall 166 units of its Suzuki DZire Tour S owing to Airbag Control Unit failure. Owners of suspected units produced between the 6th and 16th of August will be contacted by authorised workshops for free repairs.
Thankfully for Maruti Suzuki, the repairs are preventive. A "free repair" in the face of a grievous incident would have been a PR nightmare. How mediocre production led a brand to be a market leader, I'll never know.
Imagine paying at a shop, and instead of handing you confectionary (we don't expect change back anymore), the shopkeeper sends you off! Wait, where's your money?! Well, the shopkeeper's charging you in lieu of using your money.
This dystopian scenario wouldn't have been too far from reality had RBI allowed payment intermediaries to charge users for UPI payments. The charge aimed to help intermediaries generate revenue against the free mode of payments. Guess the intermediaries are on their own now.
Inox Leisure shares tumbled down the red stairs today as Consumer Unity & Trust Society (CUTS) filed a complaint against the multiplex giant to the Competition Commission of India (CCI). The complaint was in regards to the company's obviously anti-competitive merger with PVR.
"How is the merger anti-competitive?" you ask? Well, imagine a scenario where you dislike one multiplex provider because of exorbitant F&B prices. What are you gonna do? Switch? Well, you cannot; it's just one big company!
Nykd, Nykaa's athleisure and lingerie brand, has opened a brick-and-mortar store in New Delhi. The store is breaking out of its online-only presence to strengthen its foothold in India by making the process of buying innerwear more empowering with the use of tech. While the country's female youth has grown less uncomfortable with the environment, older customers still struggle.
Tech would reduce human interaction and improve the experience. This begs the question, maybe the humans involved could have been better?
Following Vauld and WazirX's asset freeze, Finance Minister advised investors to treat crypto as "not a currency" and to practice caution with investing in the same until new rules are implemented. The crypto exchanges faced investigation following alleged money laundering threat. The laundering threat was assumed when following high-value transactions; a few of the accounts on the platforms showed significantly reduced activity.
For once, there seems to be a reason behind the government opposing crypto instead of just tech aversion.
What if I said you could trade in your current two-wheeler while riding it to the showroom where you want to trade it in? If the "smart-screen" electric two-wheelers become a thing, Hero Motocorp could turn this somewhat outlandish statement true!
According to Hero, customers can trade in their two-wheelers from any brand and receive a "fair valuation" on their phygital platform. It's either going to be fair to the customer or Hero, never both!
Congratulations to the Indian Economy on gaining 6,000 new crorepatis for the FY 2022, with the total number now standing at 1,31,000 crorepatis! Now, if only there were a way to get a count on the number of faces that went unfed for the same period... Or the number of "real" crorepatis. Oh, let me clarify, this 1,31,000 is the number of crorepatis the IT Department came up with, based on ITRs filed.
Welcome 6,000 more to the "-ani club".
Yes Bank will finally bother someone other than SBI customers. For once, SBI account holders can breathe easy that their deposits won't be used to fund sinking banks! Yes bank is seeking shareholder approval for an infusion of funds worth ₹8,900 crore from US-based PE investors Carlyle and Advent.
Ahead of this infusion, Yes Bank shares experienced a rise of 12% today. Carlyle and Advent might lose some serious dough if this confidence isn't well founded.
Reliance might repeat its “data mania” with 4G as it has submitted the largest bid for the 5G spectrum, weighing in at ₹88,078 crore 🤑, for more than half of the total airwaves being auctioned.
While a business is meant to strive for improvement with growth in tech, if history repeats itself with Jio becoming data vendor for the masses, the future might be bleaker than before for both competitors and users. Monopoly doesn’t just kill the competition. ☠
Has it been a year already? With a lost hope, the investors of this food delivery platform can only pray for a miracle to let the stock prices rise again so that they can exit, saving a little face (and of course money).
The Monday was actually blue for Zomato investors since the company's shares tanked over 13 percent to record lows. This occurred after most of its shares were released of the mandatory one-year lock-in after the IPO.
Tighten your seatbelts as this ITR session might get slightly out of hand. Or, on second thought, don't tie yourself down; you might need to go on a few chakkars of the daftar in a little hurry. Why? Because the Revenue Secretary, Tarun Bajaj, declared that the Central Government is not considering extending the ITR submission date beyond 31st July this year. This decision, very uncharacteristic of most Indian Government calendars, comes to change the norm of the deadline being extended. ⌛
The Secretary also added that close to 50 lakh ITRs were submitted on or closely before the deadline, and he has asked "his people" to be prepared to handle twice the number of submissions this year. This confidence comes from the fact that by the extended deadline of 31st December 2021 for the last financial year, around 5.89 crore returns were filed, and this year's returns as of 20th July are already really close to half of that number.
Claims of a robust website capable of handling this increased traffic seem a bit out of place from the same set of websites that cannot handle the task of displaying board results in an orderly way. But I speak from a 6-year-old experience, government websites must have developed a lot since then and can keep up with the current netizens' demands, right?
Scooting over a little from the everyday Joe's income, we discuss the fake entity, Reliance's profits. Of course, I use the term "fake" loosely and only mean "artificial" when I say it. The Ambani-owned corporate titan has reported that its Q1 profits went ⬆ by 24% to reach ₹4,335 crore, a significant rise from last year's ₹3,501 crore but not a large leap from last quarter's ₹4,173 crore. This might be Reliance "one big bang" before things spiral out of control as the Neo-Ambanis take the company's reins, or the next line of Ambani's might have inherited their grandfather's biz prowess and Reliance might still have a lot of juice left in its tanks. Only time will tell.
SBI's spending habits on sinking businesses might finally be catching up to it (looking at you, Yes Bank)!🙄 The bank acquired board permission to borrow ₹11,000 crore through various convertible and non-convertible debt instruments. Reportedly, the loans will be acquired to meet regulatory requirements and support business growth. Now, correct me if I'm wrong... but aren't businesses supposed to fulfil these requirements with their own funds? Then how does a bank (a literal money business) run out of funds like that?
So much for the "largest bank" in the country with a 25% market share in deposits and loans...
Well, if I were to cut the old-time finance giant some slack, I'd shift my sight to a recent siphon of the bank's reserves. You couldn't guess who in a 100 tries unless you got lucky! It's the Adani group! The multi-business conglomerate has borrowed close to ₹32,000 crore from poor old SBI in the last 4 months. The funds have been used for the following ventures:
But why would Adani Group, with the richest man in Asia go to a pseudo-sarkari bank for so many loans? Ask the boss for some funding, no?
The simple answer; poor fund management. I suppose they could take a page out of my impeccable finances. I always know where I want to spend my money, and I'm done spending it all before the calendar even reaches the 15th of the month!
For too long, India has suffered the plight of income disparity! A hero shall emerge, a Robinhood that shall take from the rich and give to the masses! This hero will be... the 5G network?🤔
Ok, let's take a few steps back from the grand entrance and snap back to reality. As 5G comes ever close to launching, the new network will reportedly cost around 10-20% more in its initial stages than its predecessor, the 4G network. The timeline of 5G tariffs will go something like this:
The initial tariffs will hit the richer demographics of the country more as only people above a certain income level can afford 5G compatible smartphones. The affordable plans will be released to drive customer acquisition higher.
So, in a way, the rich shall pay for the bandwidth needs of the masses. Hooray for equality (I guess? 🤷♂️)
Speaking of phones and retail consumers getting some fair treatment, the department of consumer affairs plans to implement Right to Repair in India. In its pilot stage, the right shall apply to the following products:
If the new law is successfully implemented, consumers of the products mentioned above can avail of repair services from third-party vendors who will be provided with proper information and genuine parts required for said fixes. Finally, warranties would mean something for the retail customer for once, as a phone in need of repair doesn't add to the e-waste pile; just because a "genuine repair" shop isn't available nearby. 🙄
The government might again hurt the poor in an attempt to help them as Tuesday, 19th July 2022, marks the day "essential goods" fall under the purview of the GST regime. The tax shall apply to packages containing goods less than 25 kg or 25 litres. While this might target the retail purchases of the aforementioned goods, the monetarily underprivileged often buy in smaller quantities as bigger purchases that would not be taxed are not always feasible for them. The essential goods to be taxed anew or at an increased rate include, but are not limited to:
Staying on trend with the collapse of the Indian economy, the Indian Rupee hit a record and psychological low of ₹80 against the dollar. As the national currency deteriorates, Indian companies with foreign liabilities make a beeline to manage these liabilities to mitigate the threat of currency depreciation. How this rush to soothe liabilities will affect the companies, possibly through a liquidity crunch; only time will tell.
Jindal Stainless bags a deal with Indian Railways to supply the government transport department with 3,500 tonnes of stainless steel. The agreement is to supply the materials for the USBRL (Udhampur-Srinagar-Baramulla Railway Link) tunnel project. The USBRL tunnel is a 272 km long rail link between Jammu and Kashmir. Even if with just rails, the disjointed state seems to be establishing some semblance of fraternity🤗.
Going off on a tangent with public transport and oil, India is finally experiencing a slash in oil prices. Of course, the oil is edible, but it's still a respite from the ever-imposing price of the golden liquid. Adani Wilmar chopped off as much as ₹30 from its range of cooking oils. Maybe EVs aren't quite the way forward yet, but vehicles powered by edible oil might not be such a bad idea. Affordable both ways 🤷♂️.
The Rupee hits a record low of ₹79.65 against the Dollar on 12th July, Tuesday. Other Asian currencies also faced a fall in value against the dollar in response to a perceived global recession threat. Just like the US seems to be the hub for alien invasions in Hollywood movies, the "currency depreciation problem" seems to be limited to the Asian continent.
Speaking of Hollywood movies, Adani group is trying to climb the 5G tower, like King Kong on the Empire State Building. The current value of the auction is not yet available to the public domain. So, does this mogul's entry into the 5G airspace mean a repeat of the 2016 "Jio phenomenon" with the masses shifting their focus to the new shiny and fast network? Well, not quite, Adani's current bids on the 5G airwave is to acquire it for private use. Adani could make a splash in the telecom market, however, all they would need to do is obtain the appropriate licenses and India would be ready for Fortune 5G!
Let’s talk about fundraising. Power Grid Corporation of India, the state-owned electric utility corporation, is all set to issue secured/unsecured, non-convertible, noncumulative/cumulative, redeemable, taxable/ tax-free debentures/bonds under private placement in the FY2023-24 as the company gets the positive nod to raise funds up to ₹6,000 Crore.
That was about the PSU; private companies are never behind when it comes to fundraising. Paisalo Digital, a leading systematically important NBFC, has already raised ₹14 crores through NCDs with a tenure of 10 years from the date of allotment.
Moving forward to unlisted startups, GrowthX, a social learning community, announced that they have raised $1.5 Million, apparently the largest ever community-led seed round funding, a collective contribution of 212 angel investors. Nevertheless, 65% of the funds were raised by the company's very own community members.
Adani Transmission, the power transmission arm of the Adani group, is set to acquire shareholder approval to enter related party transactions with three of its special purpose vehicles. The power business cousin of Fortune Oil will be transacting with Adani Enterprises Ltd. @ ₹2,500 crore, Adani Infra (India) Ltd. @ ₹5,200 crore and Adani Properties Pvt. Ltd. @ ₹2,900 crore.
Moving from one oil company to another, the producer of arguably India's favourite hair oil, Marico Ltd., is slipping down an oil slick as it reported a reduced sales volume for the first quarter of the financial year 2023. While Parachute, the face of Marico, faced only a marginal dip in sales volume, the cause of the company's lowered sales was reported by the FMCG giant to be a fall in the sale volume of Marico's Saffola.
Moving from one edible liquid to another (Parachute is edible btw, just so you know), Coffee Day enterprises ltd. reported a total default of ₹470.18 crore. The default was in context to borrowings from banks and financial institutes. The reason behind this default was reported to be "liquidity crisis" by the QSR company.
The loan book of IDBI bank's crossed ₹10,000 crore, doubling from the ₹5,000 crore seen two years ago. The bank gives credit for this growth to its fully automated loan processing system, which allows customers to finish the borrowing process in around 15 minutes.
Speaking of banks... Yes Bank, a perpetual black sheep for both investors and customers, has shown some positive with a "healthy" growth in the deposits from ₹1.63 lakh crore last year, to ₹1.93 lakh crore this year. However, this growth is not a full-fledged positive as the current figures are a fall from the deposits worth ₹1.97 lakh crores from the last quarter ending in March 2022.
Trailing away from banks, but on the topic of payments, UPI transactions stayed above the threshold of ₹10 lakh crore at ₹10,14,384 crore with around 5.86 billion transactions. These figures have fallen by 2.6% from the previous month's 5.95 billion transactions worth ₹10,41,506 crore. UPI as a mode is still far from done as this fall came after a rise from the 5.58 billion transactions worth ₹9,83,302 crore observed in the month of April. The rise was almost twice the fall, so things might not be too bleak for the digital intermediary.
On the weekly expiry day for Nifty options, i.e. Thursday, an unknown trading house placed an order. It can become India's biggest trading mistake yet, causing the trading house a loss of approximately 250 crores. How was it done? Well, mouse misclick.
This, as people like to call it, is a 'fat finger' trade, caused by punching a wrong key or a mouse misclick which leads to a huge loss for the one executing the trade and windfall gains for others.
Between 2:37 pm and 2:39 pm, a trader sold 25,000 lots of Nifty call options at 14,500 strike at an erroneous price of Re 0.15. The market price of the contract was about ₹2100 when this trade was placed in the exchange. Each lot of Nifty contract is of 50. So, the simple calculation for loss is 25,000 x 50 x Rs 2,000 = Rs 250 crore.
Apparently, two brokers, based in Kolkata are said to have benefitted from this, one up by 50 crores and the other by 25 crores.
The reason we believe that it COULD be the biggest mistake trading mistake in the history is because, since the trade was between two brokers, it is most likely that the trader had insurance and the loss can be covered.
Let’s see if this becomes a record in history or a learnt lesson.
Or copy the link to this bullet -
https://insider.finology.in/bullets/page/53?b=indias-biggest-trading-mistake-ever
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