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Dec 30 2020 . ISSUE 44
THE DAILY NEWSLETTER

Good morning! Good morning Keep smiling, says the market. But for your how long? Asks us 😮


An investment in knowledge pays the best interest.


– Benjamin Franklin


GAINERS & LOSERS

NIFTY

13932.60

+ 59.40

SENSEX

47613.08

+ 259.33

GOLD

50,035.00

+ 22.00

CRUDE OIL

3,526.00

- 14.00

HOT STOCKS IN NEWS

UPL completed the pre-payment of $410 million of 3.25% Senior Notes due October 2021. This prepayment is in line with its commitment to reduce debt.

IIFL Securities to open its Rs 90-crore share buyback on December 30.

DAILY FLICKS
Tata Sons Acquire majority stakes in Air Asia India.
Documents in a folder with Trump Organization insignia

Tata Sons have taken a huge step towards their prospective entry into the airline sector. 


Tata Takes Over AirAsia India


Malayasian carrier AirAsia Berhad has announced the sale of 32.67% of their stake in AirAsia India to Tata Sons Pvt Ltd for $36.7 million dollars. 


The Malaysian wing was forced to sell their stake in the Indian operations due to the grave effects of the pandemic. 


With the completion of the deal, AirAsia Berhad's stake in the Airlines has plunged to 16.33% and Tata Sons has the option to buy off the rest of their stake after this deal. 


Bottom line: A promising deal for Tata Sons to strive towards any ambition of becoming a major player in airline industry. 

RBI's Annual Report Suggests Landslide for Financial sector.
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If 2020 wasn't bad enough for the financial sector, then 2021 is right around the corner with a much rougher ride.  


On The Decline


The Indian Banking & Non-banking financial sectors were affected gravely by the pandemic but showed some steely resilience to stay afloat till the end of the disastrous year but it looks like 2021 isn't going to be any better. 


With almost 40% of outstanding loans under moratorium, RBI predicts a sharp deterioration in asset quality for financial houses going forward. 


The annual Report on Trend and Progress of Banking in India by the RBI showcased strengthened asset quality, capital positions and profitability for the current year but also forecasts warning signs for banks and non-banks in the following year as the report suggests that the true gravity of the aftermath of the virus will be known. 


Bad Loan Ratio


The report also showed how the gross non-performing assets (GNPAs) ratio of scheduled commercial banks declined from 9.1% at end-March 2019 to 7.5% at end-September 2020. On the other hand the capital to risk-weighted assets ratio (CRAR) strengthened substantially. 


Bottomline: For the banks to scrape through, the economy has to improve greatly, but with how things are it seems to be quite a stretch to hope for. 


DHFL Saga: Enam may exit deal with Oaktree.
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The Dewan Housing Finance Limited (DHFL) saga continues as yet another potential deal unfurls.


The Pull Out? 


Investment bank Enam is said to be likely to exit the deal with Oaktree Capital to take over the insurance business of DHFL. 


Enam was in talks with Oaktree to acquire Pramerica Life Insurance, the insurance joint venture of DHFL. The limit on Foreign Direct Investment (FDI) has been touted as one of the obstacles for Oaktree Capital in acquiring Pramerica Life Insurance. 


Story so Far


Earlier the year DHFL had been declared bankrupt and the firm had put itself for sale and invited bids. The initial round of bidding was contested by four companies - Oaktree Capital Management, Piramal Enterprises, Adani Group, and SC Lowy. The result is yet to be declared but sources believe that Oaktree and Piramal are the frontrunners to seal the deal.


Bottomline: Keep a close eye on this one, might just spring a few surprises. 


OTHER FLICKS
  • US fund Interups pulls out of Air India race as deal with employees fails. Interups had planned to team up with the employees with 49:51 per cent shareholding, promised to invest billions of dollars in Indian aviation sector
  • Glenmark becomes the first to launch Remogliflozin + Vildagliptin fixed dose combination for adults with Type 2 Diabetes
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