On a day when the RBI held status quo on repo rates in its monetary policy, the BSE Sensex closed 294 points lower while the Nifty was 92 points lower. The pressure came from weekly F&O expiry as the rate decision was almost factored in. However, the tone of the RBI continued to be hawkish and that may have perturbed the markets. The bigger concern for the markets on the economy front was the delayed rains, which was already a week behind schedule. Delayed rains impact sowing, which impacts foodgrain output.
The Insolvency and Bankruptcy Board of India (IBBI) has proposed changes to the existing insolvency rules under the IBC. A voting with preference is proposed to be introduced for creditors so they can also vote on their choices. If no plan gets 66% favourable votes, then the proposal with least first preference votes is eliminated and its first preference is allotted to the second highest voted plan. This is likely to make the voting more granular and meaningful. IBBI is also offering more flexibility to creditors in submitting claims.
With the debt default by Byju’s and the ongoing legal tussle in a US court, it looks like the cash crunch is deepening at India’s largest edtech company. Now Byju’s is expected to lay off another 1,000 employees, although there has not been any official statement from Byju’s. in the current year, over 1000 job cuts have already taken place across product, content, media, and technology teams; apart from sacking top level employees with hefty pay packages. Lenders are tightening demand for the $1.2 billion loan taken.
Monsoons finally arrived in Kerala 7 days behind its normal onset date. A late start to monsoon delays the sowing of major kharif crops like paddy, oilseeds, and pulses; where sowing happens during the June-July period. While the rainfall has been widespread over Kerala, it has to travel North and that will still take time. Last year, the rice bowls of Uttar Pradesh, Bihar and West Bengal received scanty rainfall leading to deficit production of foodgrains during Kharif season, although the Rabi output eventually made up for it.
The Directorate General of Civil Aviation (DGCA) has asked the IRP of Go First to submit the resumption plan only after receiving approval from the committee of creditors (CoC). This could put the company in a sort of quandary. Go First has outstanding debt of Rs11,463 crore, of with Rs6,521 crore is owed to the Indian banks. Last week, the Go First IRP had submitted a 6-month revival plan to the DGCA to resume operations with half its fleet. However, Go First will have other issues as it has to buy fuel on cash-n-carry.
Vedanta Resources reduced its gross debt from $9.8 billion to $7.8 billion in the year to March 2023. The company has confirmed that debt had fallen further to $6.4 billion by end of May 2023. The parent of Vedanta Ltd, generated EBITDA of $4.6 billion in FY23 and pre-capex free cash flow of $2.8 billion. In fact, Vedanta expects further improvements in its capital structure. Vedanta Resources had raised billions of dollars by pledging shares of its group companies as collateral to Glencore, a major competitor of Vedanta.
Tata Power Renewable Energy secured a contract to set up 966 MW hybrid renewable power project for Tata Steel. It will be round-the-clock facility. This will comprise of hybrid renewable capacity of 379 MW solar and 587 MW wind power. Tata Steel, has annual crude steel capacity of 35 million tonnes per annum (MTPA), and is one of the leading steel players. The project will save nearly 2.39 million tonnes of CO2 and help meet its green energy requirements, here in India. Tata Steel will invest 26% equity in the project.
The beleaguered Future Retail has received claims totalling Rs21,555 crore from 35 creditors, of which claims worth Rs19,404 crore was admitted by the NCLT. Some of the major creditors are BNY Mellon, BOB, Union Bank, Central Bank, BOK, PNB, SBI, Indian Bank, and Axis Trustee Services. BNY Mellon has claimed Rs4,670 crore and has 21.18% voting share in the COC. Future Retail was supposed to be sold to Reliance Industries in 2020 as part of a slump sale. However, the deal fell after objections from Amazon.