Business News at 09:30 am on 10th November 2023

Let’s begin. In a setback to personal guarantors of highly indebted firms, the Supreme Court on Thursday upheld key provisions of the Insolvency and Bankruptcy Code regarding start of the resolution process by creditors against them. The court’s decision will mean that personal guarantors would not get an opportunity to be heard, even before the appointment of resolution professional. Also, moratorium on such guarantor’s assets will come to play as soon as the debtor files the insolvency petition. The petitioners asked for an additional layer in the process for adjudication, and a chance for the personal guarantors to be heard even before the appointment of RP.
On to industry. IT major Wipro is likely to skip giving hikes to top performers who are in the higher salary bracket in the salary revision process, which may take place in December. The company will prioritise employees with lower compensation among those eligible for a raise. The development comes at a time when IT companies are looking at protecting their margins by controlling their wage bill. Nagendra Bandaru, managing partner and president of the enterprise future business line informed employees in an e-mail, quote, “We are doing a selective merit salary increases rollout based on our business affordability. This approach is based on prevailing market practices and echoes our industry peer companies, where increments have been either cancelled, muted or provided with selective coverage of employees,” unquote.
Meanwhile, Large-cap equity funds recorded net inflows of Rs 723.8 crore in October, after five straight months of net outflows, according to data released by the Association of Mutual Funds in India. In April, the category had seen Rs 52.6 crore in net inflows. NS Venkatesh, CEO of Amfi, said the large-cap category witnessed a noteworthy resurgence, reflecting broader market recovery. The court has rejected the petitioners’ arguments on the ground that the present mechanism already provides adequate provisions for the personal guarantor to be heard at the appropriate time to present its case before the Adjudicating Authority. The SC bench observed that to accept that adjudication should be permissible at the stage of appointment of an RP by the AA would amount to “rewriting the statute”.
Moving on. Indian hotels sector has seen a 15.6% growth in average daily rate in third quarter of the calendar year 2023 resulting in a RevPAR (revenue per available room) growth of 15.1%, said a new report. The Q3CY23 witnessed strong growth in ADR due to multiple international events being held in key cities. The sector witnessed a marginal decline of 4.5% in RevPAR in Q3 2023, as compared to Q2 2023, according to Hotel Momentum India Q3, 2023 report by global property consulting firm JLL. The six markets (Bengaluru, Chennai, Delhi, Goa, Hyderabad, and Mumbai) continue to display strong growth driven by ADR on the back of sustained demand from corporate travel, it said.
On to banking. Public sector banks will continue lateral hirings from the private sector at senior levels directly from the private sector, said bankers. And most believe that this is was more of an “one-off” incident. This comes in the backdrop of the recent ‘bob World’ controversy wherein Bank of Baroda has claimed that it had ‘terminated’ the services of its chief digital officer Akhil Handa — a private sector hire — after the Reserve Bank of India barred it from onboarding new customers on its app. Handa, credited with building the flagship bob World app, said that he had resigned earlier in August. Some also believe that while Handa built the mobile application, operating it was not under his direct control.
India remains vulnerable to recurring and overlapping food price shocks notwithstanding the recent moderation in core inflation, Reserve Bank of India Governor Shaktikanta Das said on Thursday. In a speech at the Symposium on Indian Economy 2023, he said, quote, “In these circumstances, monetary policy remains watchful and actively disinflationary to progressively align inflation to the target, while supporting growth,” unquote. The speech was organised by Institute of Indian Economic Studies in Tokyo. India’s retail inflation fell to a three-month low of 5% in September from 6.83% in August. However, it remained above the RBI’s 4% target. In its latest meeting, RBI’s monetary policy committee projected retail inflation to ease to 5.4% in 2023-24.
Lastly, let’s look at the stocks in focus today. These include ICICI Bank, Aurobindo Pharma, Samvardhana Motherson International, and ESAF Small Finance Bank among others. The ICICI Bank has received approval from the Reserve Bank of India for making ICICI Securities a wholly owned subsidiary, subject to certain conditions, the Bank said in a regulatory filing. The approval came for the proposed delisting of equity shares of ICICI Securities pursuant to a scheme of arrangement. Ashok Leyland in the other hand is upbeat about seeing 8-10% industry growth for FY2024.