NSE goes down, RBI’s googly, New Bugatti owner? and other news
Business news and insights to jump start your day.
“Be undeniably good. No marketing effort or social media buzzword can be a substitute for that.”
- Anthony Volodkin
Good morning!😀
Here’s what made it to the top:
India’s longest-ever trading outage
Get to memorising your debit/credit card numbers
India’s largest renewable power producer going public in the US
📈 How did the markets fare
BSE Sensex - 50,781.69 | +2.07% ⬆
NSE Nifty - 14,982.00 | +1.86% ⬆
10-Yr Bond Yield - 6.147% | -0.0725 ⬇
S&P 500 - 3,925.43 | +1.14% ⬆
USD/INR - ₹ 72.32 | -0.19% ⬇
Benchmark equity index Sensex rose 1,030 points yesterday, led by banking stocks in a day marred by technical glitches at the National Stock Exchange.
Sona BLW Precision Forgings, an automotive technology company backed by private equity giant Blackstone, filed for a Rs 6,000-crore initial public offering. It will be the largest IPO by an auto component firm in India.
📰 What's happening around us
Markets
Trading on the National Stock Exchange, India’s largest, was halted for four hours yesterday due to a technical glitch, leaving investors and traders exasperated. It was India’s longest-ever trading outage and normal operations resumed only at 3:45 pm, with the session extended to 5:00 pm by both NSE and rival BSE.
Early on in the day, NSE started experiencing difficulties with the price of certain indices not updating and trade was finally halted at 11:40 am. The exchange said it was due to issues with telecom links. NSE has a backup service provider to deal with such scenarios but, lo and behold, both service providers – Bharti Airtel and Tata Communications – were down at the same time.
Many traders were left fuming as pending orders were cancelled and some brokerages closed out open positions to mitigate risks. But the big beneficiary of the halt was BSE, Asia’s oldest exchange, whose volumes surged as many switched exchanges to get their trading fix.
It’s not the first time the exchange is facing a technical glitch in the last few years and it’s not a good look for IPO-bound NSE. Market regulator SEBI has sought a detailed report analysing the root cause of the outage.
Markets
India’s largest renewable power producer, ReNew Power, is all set to be listed (become a publicly-traded company) on the NASDAQ after inking a deal with a special-purpose acquisition company (SPAC) in the U.S. ReNew Power will raise $1.2 billion, valuing it at $8 billion, approximately Rs 58,000 crore.
ReNew Power is a pure-play clean energy company with a committed capacity of 9.9 GW – 52% wind and 48% solar. The company is well placed to ride the renewable energy boom in India with the government targeting an ambitious 450 GW of installed renewables capacity by 2030. India is also set to overtake EU as the world’s third-largest energy consumer by 2030.
One of the big-name investors during the process will be Sri Lankan-born billionaire venture capitalist and ex-Facebook executive, Chamath Palihapitiya. He’s blown up in recent years with many of his investment calls such as Bitcoin, Tesla and GameStop working out, and he’s quickly becoming one of the most followed names on Wall Street.
SPACs have been an immensely popular route for companies to list on Wall Street and another Indian company Grofers is also eyeing that route. SPACs, otherwise known as blank-cheque companies, raise money through an initial public offering (IPO) to merge with a privately held company that then becomes publicly traded.
Banking
Come July 2021, you will have to enter your credit/debit card details — name, card number and expiry date — every time you make a transaction online. This is because the Reserve Bank of India's new guidelines won’t allow online merchants, payment aggregators and e-commerce websites from storing your debit and credit details.
At a time when companies are trying to reduce friction with regard to online transactions, companies argue that the RBI move will severely hamper the customer’s online payment experience. Single-click payments and customised checkouts will be impacted. So will recurring payments for subscription-based services like Netflix and Spotify, as these platforms will not be able to auto-renew services.
While RBI’s intention is to reduce the risk of fraud and financial theft, one thing is clear, it will be more tedious for users who have to enter card details each time.
🎯 News Bites
Prime Minister Narendra Modi batting for privatisation said that the government has no business to be in business and his government’s mantra is "monetise and modernise". The government plans to monetise around 100 underutilised and unutilised public assets which would create an investment opportunity of around Rs 2.5 lakh crore.
Centre has extended the production-linked incentive (PLI) scheme to the pharmaceutical and information technology hardware sectors, offering over Rs 22,000 crore worth of sops to boost domestic manufacturing.
Tim Cook revealed that Apple has acquired about 100 companies over the last six years. Apple's largest acquisition in the last decade was its $3bn purchase of Beats Electronics, the headphone maker founded by rapper and producer Dr Dre.
Suzuki Motor Corp’s 91-year-old Chairman Osamu Suzuki is stepping down after leading the automaker for more than four decades. He will remain with the company as an advisor. He is widely credited with turning the carmaker into what it is today: one of the largest small-vehicle manufacturers in the world.
The Reddit trading army is at it again. GameStop Corp, the darling stock of the WallStreetsBets forum was up over 300% (including gains in after-hours trade) on Wednesday as traders piled into the stock again.
American Denim brand Levi’s has signed Bollywood actor Deepika Padukone as its global ambassador. She is the only female celebrity from India to be on the brand’s global endorser list.
Croatian EV manufacturer Rimac is reportedly eying Volkswagen Group-owned supercar maker Bugatti. According to reports, Volkswagen was looking to offload its marque brands, in order to direct more resources towards its high-volume ID electric vehicle program.
That's it for today. Good day!
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