In the aftermath of the Galwan clash between India and China, India has put its Army, Navy and Air
Force on high alert, including guarding the highly sensitive Indian Ocean. China has been making regular
forays into the Indian Ocean region and the Navy has been put on high alert. Over the last few days,
there have been repeated clashes on the Ladakh border with casualties on both the Indian and the
Chinese sides. The Chinese PLA is known for its short term ambush tactics and the Indian government is
not taking any chances on this front. The border issue has continued to weigh on Indian markets.
India’s state owned mining major, NMDC, has reported 76% fall in net profits to Rs.347 crore for the
Mar-20 quarter. Even the full year PBT of NMDC was down nearly 15% at Rs.6198 crore. NMDC’s overall
production this fiscal year was marginally lower at 31.49 million tonnes. The loss of production was only
about 10 lakh tonnes as the lockdown only impacted the last one week of March, translating into
revenue loss of Rs.220 crore. However, the impact is likely to be much bigger in the June and September
quarters where the lag effect of the lockdown and the supply chain constraints will be pronounced.
If you need affirmation on the attractiveness of gold loan companies, you only need to look at the full
fiscal year results of Muthoot Finance. Its net profits were up by 51% at Rs.3169 crore while its total
assets under management or AUM registered a growth of 22% at Rs.46,871 crore. The company had
reopened most of its branches only on April 20. However, the impact in the previous fiscal was limited
considering that only the last one week of business was lost in March. Muthoot will continue to grow its
gold loan business by 15% and sees a huge opportunity in the post-COVID scenario for gold loans.
Airtel has picked up a 10% stake in edutech start-up, Lattu Media. The start-up is already part of Airtel’s
start-up accelerator program. The acquisition will allow Airtel to add Edtech as an offering to its digital
portfolio of content offerings to its clients. The app focuses on digital learning for children with focus on
English language and maths skills through interactive videos and tutorials. Airtel already has around 160
million active digital customers across its platforms and this will allow them to attract the lucrative
digital learning space for children. Lattu Media was the fourth company in Airtel’s accelerator program.
According to a report prepared by Alliance Bernstein, Jio could end up with 48% market share by the
year 2025 literally dominating half the addressable Indian telecom market and having an active base of
50 billion active users. Reliance Jio has seen a slew of global PE funds and sovereign funds taking a stake
in Jio Platforms at an approximate valuation of $65 billion. These include some marquee names like KKR,
Facebook, Silver Lakes, Mubadala, TPG, Abu Dhabi Investment Authority, PIB of Saudi Arabia etc. Jio
Platforms has till date managed to monetize 24.71% of its holdings and has raised close to Rs.116,000
crore. Bernstein also expects Jio Platforms to come out with its IPO in the Indian and international
markets in the next couple of years. Jio is already the market leader with a minor edge over Airtel.
The Supreme Court has asked the government and the RBI to come up with a final answer on whether
interest should be charged on the waived EMI for the six month period. RBI had argued that waiving
interest rates would be credit negative for banks. The issue is likely to come up for hearing in the first
week of August, well before the second round of EMI moratoriums expire on 31 August. The RBI and the
government have argued that since the bank has to pay interest to the depositors, they would have to
charge interest on EMI portion too. SC is referring to interest charged on interest during moratorium.