QBiz: ICRA Forecasts Lower GDP Growth in Q2; WeWork to Cut Jobs
Catch the latest business news for the day.
1. At 4.7%, ICRA Forecasts Lower GDP Growth in Q2FY20 on Economic Slowdown
Leading ratings firm ICRA expects further deterioration in the growth of India's GDP to 4.7 per cent in Q2 of FY2020, due to weakening momentum in industry.
The ICRA also forecast the country's gross value added (GVA) at basic prices in year-on-year (YoY) basis to 4.5 per cent respectively in the quarter ending September of FY2020.
The GDP and GVA were 5.0 per cent and 4.9 per cent respectively in Q1 and agriculture and services may maintain the growth rate recorded in the first quarter, an ICRA statement said on Thursday.
2. After Junking Report on Consumption, NSO Now Looks for Reasons
India’s statistics ministry has sought critical field inspection reports pertaining to a junked consumption survey on a “most urgent" basis, a move seen by many statisticians as an attempt at digging up dirt on the report to justify its scrapping.
Statisticians including former top government officials said the move appears to be an attempt to find grounds for burying the report after already having rejected its findings over “data quality issues".
3. Subhash Chandra Stays on at Helm of Zee, for Now
A clutch of institutional investors bailed out the promoters of Zee Entertainment Enterprises Ltd by buying a 15.7% stake in the company on Thursday, helping founder Subhash Chandra retain control of India’s largest listed television network, at least for now.
Foreign funds, including GIC Pvt. Ltd, BlackRock, HSBC Global, Fidelity India, Norges Bank, Marshall Wace, Wellington Management and local investors such as SBI Mutual Fund and Reliance Mutual Fund bought the pledged promoter stake in ZEEL through a series of block deals on Thursday, reducing Chandra’s stake in the company to just 5%, according to data from the National Stock Exchange (NSE).
4. Wipro Bets Big on Acquisitions to Bolster Its Digital Business
Bengaluru-based software services firm Wipro Ltd is strengthening its digital business inorganically through strategic acquisitions of digital-native companies.
Digital is a crucial part of Wipro’s business, contributing nearly 40% of total revenue in the September quarter.
“We pride ourselves on making sensible acquisitions that amplify our existing capabilities and expand our presence across different markets. These included Designit, Appirio, Cooper, Syfte and, most recently, International TechneGroup (ITI), a digital engineering and manufacturing solutions company," said Rajan Kohli, president, Wipro Digital.
5. NTPC May Shell Rs 10,000 Crore for Centre's Stake in NEEPCO, THDC: Report
Country's largest power producer NTPC may make an aggressive bid of about Rs 10,000 crore to buy out the Centre's stake in two hydro power producing companies - NEEPCO and THDC, two persons having knowledge of the development said.
The Cabinet Committee on Economic Affairs (CCEA) on Wednesday cleared strategic disinvestment in the two hydroelectric power generating PSUs in favour of NTPC that is looking to expand its operations and boost the renewable portfolio.
6. Sliding Interest Rates: Falling CASA Ratios May Hit Private Banks’ Profitability
At the end of the September quarter, most large banks saw their CASA (current account savings account) ratios sliding on a year-on-year (y-o-y) basis. As interest rates fall and the larger banks enable the auto-sweep feature for their savings accounts (SA) customers, balances have been moving from CASA deposits to term deposits, bankers say.
The fall was more remarkable for the private banks, with Axis Bank’s CASA ratio falling 700 basis points (bps) y-o-y to 41% at the end of September. At ICICI Bank, the CASA ratio declined 410 bps to 46.7%, while that at HDFC Bank slipped 300 bps to 39% at the end of Q2FY20.
(Source: The Financial Express)
7. Eyeing Global Market, Nashik Farmers to Grow New Variety of Grapes to Compete
A Nashik-based company, owned by farmers, has begun a new project to undertake plantation of new Californian variety of grapes in order to compete in the export market.
Sahayadri Farmers Producer Company (SFPL) has brought seedlings of the Californian variety of grape seedlings Arra-32 that can withstand adverse weather conditions and has a sweet taste. The company has opted for the black Arra variety.
(Source: The Financial Express)
8. RBI’s DHFL Takeover Took Banks by Surprise
The Reserve Bank of India sprang a surprise on lenders to Dewan Housing Finance Corp. Ltd (DHFL) by superseding its board on Wednesday, four bankers aware of the matter said, even as these bankers were meeting to craft a rescue plan for the troubled lender.
The central bank also named an administrator to run the shadow lender under its newly acquired powers, worried that a delay might lead to further deterioration of DHFL’s assets and hurt a planned bankruptcy resolution, the people cited above said on condition of anonymity.
9. WeWork to Lay off 2,400 Employees Globally in SoftBank Revamp
WeWork said on Thursday it is laying off around 2,400 employees globally, as the office-sharing company seeks to drastically cut costs and stabilise its business after it transformed from a Wall Street darling into a pariah in a matter of weeks.
The long-anticipated layoffs are the biggest move yet by Japanese technology investment company SoftBank Group Corp, which is providing a $9.5-billion lifeline and will soon own about 80 percent of its shares, to make sure WeWork refocuses on its core business and on trying to make money.
Under co-founder and ex-CEO Adam Neumann, WeWork had become bloated, was diversifying into all kinds of areas – including setting up a school and running apartment buildings – and was expanding at a breakneck speed without any clear route to profitability.
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