#1. Amended benami law cannot be applied retrospectively, says Supreme Court
The Supreme Court has ruled that the 2016 modification to the benami property law cannot be applied retrospectively, quashing all cases where transactions prior to October 25, 2016, were being probed. The court also struck down a provision of the Benami Transactions (Prohibition) Act of 1988 that provides for a prison term of three years and a penalty, saying it was unconstitutional and arbitrary.
Why it’s important: The apex court ruling will provide relief to hundreds of individuals and businesses facing retrospective action. A law that is overly broad, disproportionately harsh and operates without adequate safeguards is unconstitutional, the judges said.
#2. Payment aggregators to approach Reserve Bank to ease lending rules
Payment aggregators will ask the Reserve Bank of India to relax rules for digital lending have eliminated the need for intermediaries. The regulator has said all would loans go directly from regulated entities to customer accounts, eliminating the role of payment aggregators. The Fintech Association for Consumer Empowerment is seeking a relaxation of these norms, which invalidate their business model.
Why it’s important: If the central bank does not allow payment aggregators to play a role in digital lending, these fintech firms will see massive disruption that will force them to go back to the drawing board to chalk out new business models and adjust their relationships with traditional lenders.
#3. Adani acquires 29 percent of NDTV, launches open offer for majority stake
An Adani group firm has acquired a 29 percent stake in NDTV and launched an open offer to buy an additional 26 percent, as mandated by law. Adani first bought a firm that had prior links to Mukesh Ambani. This company had loaned Rs 250 crore to NDTV in 2008-09 and the Adani group firm has now exercised the option to convert that debt into a 29.18 percent stake.
Why it’s important: Adani has made a serious play in India’s media and entertainment industry. NDTV said the acquisition was done without consulting the promoters, which effectively makes this a hostile takeover.
#4. Reserve Bank to bring down inflation to 4 percent in two years
The Reserve Bank of India aims to reduce retail inflation to its mandated target of 4 percent in the next two years, governor Shaktikanta Das has said. Consumer price inflation, the main anchor of the central bank’s monetary policy, was at 6.71 percent in July, dropping below 7 percent for the first time in four months, but still above the Reserve Bank’s upper tolerance limit of 6 percent.
Why it’s important: Persistently high retail inflation would force consumers to tighten purse strings, which might derail India’s economic growth that is majorly driven by domestic consumption. The central bank has been raising interest rates to tame the stubborn rate of price rise.
#5. SpiceJet looking to raise Rs 2,000 crore by selling stake, other options
Budget airlines SpiceJet is looking to raise up to Rs 2,000 crore through various means, including a stake sale, according to Ajay Singh, the firm’s largest shareholder and chairman. The beleaguered carrier is also raising funds through the government-supported emergency credit line guarantee scheme and through sale and leaseback process of its new Boeing aircraft.
Why it’s important: SpiceJet has been posting losses for the past four years. It is currently operating less than 50 percent of its flights on orders by the aviation regulator following safety concerns.
#6. India placed agent on Twitter payroll, firm denies whistleblower allegations
Peiter Mudge Zatko, a former Twitter security chief, has alleged the Indian government forced the social media company to put a government agent on the payroll, according to a whistleblower disclosure with the US Securities and Exchange Commission. Twitter has denied the allegations.
Why it’s important: Twitter has challenged the Indian government in a local court by asking it to overturn government orders to remove content. It has alleged abuse of power by officials.
#7. Uber says it has no plans to exit or reorganize India business
Uber has no plans to exit or reorganize its India mobility business, the US-based ride-hailing firm’s India and South Asia president Prabhjeet Singh has said. India is a large and under-penetrated market for ride-hailing, and there is huge scope fro growth, he said in an interview.
Why it’s important: There has been recent reports that Uber was looking to transfer ownership of its India operations. A strong denial by the company would lay to rest these speculations.
#8. Adani Group are deeply overleveraged, may fall into debt trap, says Fitch arm
Adani Group is deeply overleveraged and may land in a debt trap, Fitch group unit CreditSights has said, as the conglomerate borrows aggressively to invest heavily in multiple businesses, in many of which it does not have proven expertise. The group’s expansion plans have pressured its credit metrics and cash flows, CreditSights said.
Why it’s important: The report came a day after the Adani Group became India’s most valuable conglomerate. In the worst-case scenario, the group may fall into a debt trap and default on borrowings. That seems unlikely as the conglomerate seems to have too big to fail.
#9. Tata Sons may have to write off AirAsia India losses
Tata Sons will have to make a provision of Rs 2,600 crore as accumulated losses for AirAsia India, which it proposes to absorb into Air India and merge with the no-frills Air India Express. Tata-owned Air India proposes to acquire 100 percent of AirAsia India and has sought the aititrust regulator’s permission.
Why it’s important: An auditor’s report has cast doubt on AirAsia India as a going concern because its net worth is eroded, and liabilities exceed current assets. The firm could be saved yet if it merges with Air India, which is scripting a turnaround after being acquired by the Tata group.
#10. Government to allow retail investments in infrastructure investment trusts
The central government will approach the capital markets next month and seek retail investments in highway projects, transport minister Nitin Gadkari has said. It will an experimental approach, which is why there will be a cap on retail investment, the minister said.
Why it’s important: The infra trusts are similar to mutual funds, designed to pool money from investors and invest in assets that will provide cash flows over a period of time. There might in retail interest in them, going by the recent inflows into mutual funds.
