Stocks have opened the day with modest gains after suffering a minor loss yesterday even as coronavirus cases in the country continue to surge.
Credit growth in India continues to be lackluster as the pandemic-hit economy struggled to find its feet.
Join us as we follow the top business news through the day.
Ola enables in-app ‘tipping’ globally
Ola, the mobility platform and a ride-hailing company, has rolled out a global feature for customers to reward drivers for going the extra mile to deliver a safe and high-quality ride experience.
Through Ola’s new in-app ‘tipping’ functionality, customers can now include a tip as a token of appreciation for their drivers’ for providing a great ride experience. The feature has been rolled out to all Ola users across India, Australia, New Zealand and the United Kingdom.
As restrictions eased, the driver-partners on the Ola platform have had to follow a comprehensive safety protocol and sanitising cars after every trip, drivers have taken extra steps personally to keep themselves and their families safe. In this scenario, the in-app tipping feature serves as an opportunity for customers to reward drivers for going the extra mile, and contribute to increasing their earning potential. Customers can choose to voluntarily tip their drivers and the amount will be credited to the drivers’ account in its entirety as part of the regular earnings cycle, as per a company statement.
External debt rises $15.4 billion to $558.5 billion in March
India’s external debt stood at $558.5 billion in March, an increase of $15.4 billion compared with the year-ago period, according to RBI data.
Commercial borrowings remained the largest component of the external debt, with a share of 39.4%, followed by non-resident deposits at 23.4% and short-term trade credit at 18.2%.
The data showed valuation gains due to the appreciation of the U.S. dollar against the Indian rupee and other major currencies were at $16.6 billion. “Excluding the valuation effect, the increase in external debt would have been $32 billion instead of $15.4 billion at end-March 2020 over end-March 2019,” it said.
Indian shares edge higher even as coronavirus cases surge
It looks like equity investors have priced in the surge in India’s coronavirus cases.
PTI reports: “Indian shares inched higher on Wednesday as investor optimism was boosted by strong factory data out of China, offsetting fears of rising coronavirus cases, with Bharti Airtel Ltd leading small gains after a deal with Carlyle.
The NSE Nifty 50 index rose 0.25% to 10,327.65 by 0350 GMT, while the benchmark S&P BSE Sensex was up 0.3% at 35,019.67.
Broader Asian stocks struggled for traction as better than expected Chinese factory activity could not soothe persistent worries that a surge in coronavirus cases in the United States could hinder an economic recovery.
Cases in India jumped by more than 18,000 to 585,493 as of Wednesday morning, including 17,400 deaths, according to federal health ministry data.
Bharti Airtel topped gains in Mumbai, rising as much as 2.7% after Carlyle said it will buy a 25% stake in Bharti’s data centre arm for $235 million.”
Non-food credit growth slows to 6.8% in May
The ongoing economic contraction is now being confirmed by credit indicators.
PTI reports: “The non-food credit growth decelerated to 6.8 per cent year-on-year in May from 11.4 per cent in the same period of last year, RBI data showed.
The outstanding incremental non-food credit stood at Rs 90.3 lakh crore as of May 22, 2020, as against Rs 84.51 lakh crore on May 24, 2019.
In April, non-food credit growth decelerated to 7.3 per cent on a year-on-year basis from 11.9 per cent in the same month last year.
Bank loan growth to industry decelerated to 1.7 per cent in May from 6.4 per cent in the same month last year.
Within industry, credit growth to beverage and tobacco, petroleum, coal products and nuclear fuels, and paper and paper products accelerated, according to the RBI’s release on Sectoral Deployment of Bank Credit — May 2020.
However, credit growth to chemicals and chemical products construction, infrastructure, food processing, textiles, and all engineering decelerated/contracted.
Credit growth to agriculture and allied activities decelerated to 3.5 per cent during the reporting month from 7.8 per cent in May 2019, as per RBI data.
Loans growth to the services sector slowed down to 11.2 per cent from 14.8 per cent in the same month of last year.
Personal loans growth decelerated to 10.6 per cent in May 2020 from 16.9 per cent in May 2019, RBI said.”
Carlyle to acquire about 25% stake in Airtel’s Nxtra Data
The Carlyle Group will acquire about 25% stake in Airtel’s data centre business, Nxtra Data, for USD 235 million (about ₹1,780 crore), the company said in a statement on Wednesday.
This will peg the enterprise valuation of Nxtra at USD 1.2 billion which is over ₹9,084 crore.
On completion of the deal, Carlyle will hold about 25%in the business with Airtel continuing to hold the remaining stake of about 75 per cent.
“Bharti Airtel and Comfort Investments II, an affiliated entity of CAP V Mauritius Limited, an investment fund managed and advised by affiliated entities of the Carlyle Group, today announced an agreement under which Comfort Investments II will invest USD 235 million in Nxtra Data Limited, a wholly owned subsidiary of Airtel engaged in the data centre business,” a Bharti Airtel statement said.