LIQUIDITY CRUNCH
B2B marketplace ReshaMandi fires 80% of workforce amid fund crunch
The B2B marketplace focused on silk products failed to secure Series B funding. Laden with over Rs 300 crore debt, it is facing court cases and may also be taken to insolvency court.
NCLT rejects JAL's claim of liquidity crunch due to delay in govt approvals, litigations
JAL has submitted that it is an "asset rich company", even after sale of cement plants to resolve the loans under Bucket 1 and Bucket 2A, assets like Real Estate Business - Noida and Greater Noida (about 11,000 flats) will remain with the company. Besides, it had other assets such as two 5 Five Star Hotels/Resort in Delhi, and one in Agra, two Golf Courses in Noida and Greater Noida, a Formula One Sports Complex and Cricket Stadium with Real Estate.
Defence stocks: Long runway, hedge a bit to avoid narrative-based decisions; 8 PSU & Pvt sector stocks, 4 with upside potential of upto 44%
In an election season, there are bound to be times when one or the other narrative may make one question about whether one should sell the stocks. The underlying reason would be fear of losing the gains on which one is sitting. Especially when it comes to sectors like defence, railways and others which have seen a strong re-rating and siting with big gains and already there has been skepticism about their stock price moving ahead of time. Now let's look at the issue in two ways, first is whether the fundamentals of the sector are on a strong foot and business is fine or not. Second, how to hedge the exposure so that one is not forced to sell due to narrative, because the fact is that a continuation in policy push means that the companies have just started their journey. While defence PSUs are well known, there are other private sector players, whose lifeline is dependent on defence expenditure and in the last few years they have also done well, both on the street and in terms of real business. So, it is better that one should hedge and stay with them and not get jittery because of one or the other narrative which will keep hitting the street till 4th June.
Liquidity deficit surges to four-month high
The shortfall of funds has pushed up the weighted average call rate (WACR), which represents banks' overnight cost of borrowing and functions as a determinant of other borrowing costs in the economy too. On Wednesday, the WACR closed at 6.75%, the same rate as the RBI's Marginal Standing Facility (MSF).
Can't pay mutual fund SIP? Missing SIP installment attract hefty penalty; how to decide when to pause or stop SIP
Mutual fund SIP: What happens when you miss your mutual fund SIP installment due to insufficient balance? Do you have to pay a penalty if you don't have money in your bank account to pay your SIP installment? If you can't afford to continue a SIP, should you pause it or exit — how can you make that decision? ET Wealth Online spoke to several experts to find out how to decide when to pause your SIP and when to stop it.
Defence stocks: Stay bullish, just hedge a bit to avoid narrative-based decisions; 4 stocks with upside potential of up to 33%
One of the sectors which has seen strongest re-rating in the last four years has been defence. Now in the last few days, the way markets have corrected and a narrative has come on the street that it is poll jitters which is making FPI sell, without realizing the fact that after a strong phase of upward movement, the global money tends to move in one from one country to another, especially in emerging market segment, it might lead to a situation where one might end up selling the long term winner early because of the narrative. Rather than getting jittery, it would be better to create a hedge and stay with the stocks where there has been a big change in the fundamental ways things operate.
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Byju’s fires 500 employees; India Inc and influencer marketing
Troubled edtech Byju’s has fired nearly 500 staffers amid a severe cash crunch. More details on this in today’s ETtech Top 5.
Many mid- and small-cap mutual funds have not fared well in Sebi’s stress test; Find out if your MFs are safe
Are investors drawing the right conclusions? Are some funds illprepared for a doomsday scenario? Should you buy or exit a fund based on these test results? We attempt to filter out the noise around the much-hyped stress tests to find out whether investors need to be worried.
Road ministry to release excess performance security deposit to contractors to ease liquidity crunch
The ministry of road transport and highways, in a notification said it will extend the provision of capping the additional performance security deposit to 3% of the bid price to existing road contractors building highways on the engineering-procurement-construction (EPC) mode and release any additional performance security deposited by them at the time of bidding, subject to certain condition, to address the issue of availability of funds and ensure timely completion of projects.
Liquidity deficit tightening financial conditions: CRISIL
Financial conditions have tightened the economy with liquidity going into a deeper deficit putting upward pressure on short-term rates, according to a research report by CRISIL Market Intelligence and Analytics. The report released during the month also said that foreign portfolio investors turned net sellers further aggravating the tight liquidity conditions.
View: China’s glut, India’s drought. Two faces of liquidity
The liquidity drought may be deliberate. Unlike Beijing, New Delhi has every reason to be sanguine about growth. A 7%-plus rate of economic expansion gives it breathing room to slay inflation before embarking on a fresh investment spree after the polls. Unless the Modi government surprises analysts by announcing a populist spending program in its Feb. 1 budget, the reasonable assumption is that it’s angling for an upgrade to its sovereign rating, which is perched at the lowest rung of investment grade. Meanwhile, the monetary authority is seeking to buttress its credibility as an inflation fighter.
Budget 2024: NBFCs bat for credit guarantee scheme, among other measures in Interim Budget
Gold loan NBFCs urge for fiscal measures in Union Budget 2024 to infuse liquidity and introduce partial credit guarantee scheme for onward lending to micro-enterprises. They also seek priority sector status, gold linked credit line via UPI, liquidity support from SIDBI or NABARD, regulatory easing for digital lending, and co-lending partnerships. Indian households' idle gold can be leveraged for financing. Giving priority sector status to eligible gold loans will benefit small borrowers, self-employed, micro business owners, and MSMEs. Extending priority status to all micro gold loans can enable gold loan NBFCs access to increased funding.
Liquidity deficit in banking system at highest-ever, tops Rs 3 lakh cr after eight years
A consequence of the tight liquidity was elevated funding costs for banks as the weighted average call rate - which represents banks' overnight cost of borrowing - rose to 6.85% on Wednesday, much above the RBI's repo rate of 6.50% and higher than the Marginal Standing Facility (MSF) rate of 6.75%.
New Year, New Rhythms: The rupee's destiny to 82.50 amid RBI's tactical moves and liquidity challenges
As there was a dollar and Rupee liquidity mismatch in the system, the local currency failed to track the fundamentals and the weaker dollar index.
2023 Year in Review: Secondary rounds may headline deal flow at startups next year too
Risk investors ET spoke with said secondary share sales are likely to continue in 2024, as the focus would be on the limited number of good assets where existing investors are looking to part-sell their stake.
Liquidity crisis will be addressed in 45-60 days, I’ll be the last man standing: Byju Raveendran tells senior execs
Raveendran also addressed concerns from on changes in its business plans and optimisation of cost – both on people and business front – to withstand the current crisis.
India's banking liquidity deficit at near 5-year high, to narrow next week
India's banking system liquidity deficit reached its highest level in nearly five years on monthly goods and services tax payments. The deficit, which stands at Rs 1.74 lakh crore ($20.90 billion), is the highest since Dec. 26, 2018, when it had hit Rs 1.86 lakh crore. Economists are hopeful that the gap will narrow next week, as GST outflows of around Rs 1.4 lakh crore since Monday
Pakistan struggles to pay salaries to overseas diplomatic staff due to dollar shortage
The Pakistani government is facing a cash shortage, resulting in delayed salaries for staff at certain diplomatic missions. Press attaches and press counsellors stationed in the US, Hong Kong, and Singapore have not received salaries since June due to the country's depleted foreign exchange reserves. This poses a significant challenge for officials in expensive cities like Washington, DC, and Hong Kong.
Pakistan fails to pay salaries to press attaches, counsellor in embassies due to dollar liquidity crunch
Press attaches working in the US, and Hong Kong as well as press counsellors deputed in Singapore continue to live without salary from June.
Have Franklin Templeton mutual fund investors got closure?
Forced capital gains and long illiquidity period have left a bad taste.
Banking system liquidity in deficit as incremental cash reserve ratio kicks in
Daily central bank data showed that the RBI injected funds worth ₹23,644.4 crore into the banking system on August 21, marking the first infusion of cash since March 27. An injection of funds by the RBI reflects deficit liquidity conditions in the banking system.
China's Country Garden flags H1 net loss, vows to address liquidity concerns
In its rescue plan, the company aims to ensure the timely delivery of property projects, while also effectively controlling pre-sale monitoring funds. It said it also intends to adopt various debt management measures and ensure orderly operations, among others.
Startups and their new normal: Funding crunch, disgruntled employees and allegations of fraud
With the global liquidity situation changing, institutional investors were no longer interested in waiting patiently for startups to go hybrid. The pressure of meeting the promised targets and churning out profits even as ground reality turned hostile led several startup founders to cut corners in recognising revenues, reporting financials or painting an all-is-well picture.
First Republic shares tumble again as liquidity worries linger; peers rebound
Shares of First Republic Bank extended a recent slump on Monday with a 15% drop, after a report the regional bank could raise more money fanned worries about its liquidity despite a $30 billion rescue last week. S&P Global downgraded the bank deeper into junk status on Sunday and said the recent cash infusion from 11 large U.S. banks may not solve its liquidity problems
Silicon Valley Bank collapse: top developments so far
Silicon Valley Bank (SVB) — a prominent tech-focused bank managing funds of close to about 40% of US startups — was shut down by a California regulator triggering panic within the startup ecosystem.
Byju’s is said to seek $250 million in Aakash pre-IPO funding
Aakash Educational Services will issue convertible notes that will convert into equity at a discount of 20% to the listing price of the unit’s planned initial public offering
How budget 2023 can help fintech market reach $200-billion in revenue by 2030
Experts say the government should promote digital payments over feature phones and rope in SHGs to improve the confidence of people in UPI. NBFCs flag up the liquidity pangs that have been haunting them since the IL&FS crisis.
PayU-BillDesk saga: uncertainty looms over Indian fintechs
Multiple founders and investors ET spoke to said the development has come at a particularly challenging time for the sector, which has been pummelled by a swathe of regulatory changes that have affected fintech businesses across the board.
Triple trouble for crypto: Liquidity crunch, bear market, new tax rules
Consider this: Between January and March of this year, the average daily turnover on three of the leading crypto exchanges in India — WazirX, CoinDCX and Bitbns — was $110 million, data from CryptoWire showed.
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