- TRF surges after calling off merger with #TataSteel
- #Paytm faces battle for survival on streets
Tune in to 'The Reporter' for these and more top news of the day. #NDTVProfitLive
- #Paytm faces battle for survival on streets
Tune in to 'The Reporter' for these and more top news of the day. #NDTVProfitLive
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TVTranscript
00:00 for the second straight session.
00:02 Markets end in the green for the second straight session.
00:07 PSU Bank indexed the top sectoral gainer
00:10 after hitting a fresh life high.
00:12 Ahead of the monetary policy, all economists polled by Bloomberg
00:18 expect the RBI to maintain a status quo.
00:21 TRF hits the upper circuit after it calls off merger with Tata Steel,
00:28 sees business performance improve in the last few quarters.
00:31 Brokers body president Vijay Mehta tells NDTV Profit
00:38 that an extension to trading hours of derivatives
00:42 was unanimously approved in a board meeting.
00:44 That's an NDTV Profit exclusive.
00:47 Prime Minister Modi hits out at the opposition,
00:52 says the Congress is spreading misinformation about PSUs
00:56 and their net worth has jumped to 17 lakh crore rupees
01:00 from over 9 lakh crore in the last 10 years.
01:03 Hello and welcome, you're watching the Reporter on NDTV Profit.
01:15 I'm your host Pallavi Nahata.
01:17 And as always, we'll bring to you market headlines
01:20 along with national and international news makers.
01:24 Let's go straight to the markets first.
01:26 The Nifty and the Sensex saw a lackluster day of trade,
01:30 with the only exception being PSU Banks.
01:33 Let's go across to Neeraj Shah for a wrap of the day's market action.
01:37 Neeraj.
01:38 Well, an interesting penultimate
01:43 to the policy day, because we were coming off a day
01:47 which was trending and ended at the day's high, which is yesterday.
01:49 We didn't have that kind of a day today, but the Nifty 50 flat
01:54 as flat can be, obviously for the Sensex the same.
01:58 Nifty Bank about a quarter of a percent higher because Nifty IT
02:02 was not doing well today, much unlike yesterday.
02:05 Nifty ID kind of salt in trade about one point two five percent lower.
02:09 Mid caps and small caps.
02:11 They had a really good start.
02:13 The close wasn't the strongest, but index wide about one
02:16 seven five percent higher for the mid cap index is not bad.
02:19 And half a percent for the small cap to 50.
02:21 Not bad either.
02:22 In fact, there's a day of 20 percent and I'll get to that in a moment.
02:25 First, let me get the heat map for the large caps.
02:28 And you will see that banks and financials didn't have a bad day
02:32 from a Bajaj Finance to an Axis Bank to HDFC Life
02:35 to SBI being the key mover today.
02:38 Three point eight four percent and a lot of other smaller banks also did well.
02:43 What didn't do well is IT.
02:45 The top losers.
02:48 Tech Mahindra in forces, there is TCS.
02:51 There was also Wipro about point eight percent.
02:54 Some weakness in power grid yet again.
02:56 Two days on a trot.
02:57 Now it's ending as the worst performer.
02:58 So there's some weakness there.
03:00 But I didn't have a great day today.
03:02 So that was the other problem.
03:03 The thing to note, though, today that the broader end of the spectrum,
03:07 there were a lot of stocks which were very, very active on a large volume.
03:11 So I call them 20 percenters as a day, because if you look at the nifty
03:15 500 gainers, you will see that a lot of these had some
03:19 stupendous moves.
03:20 IOB 20 percent, EIH 20 percent, Trent about 19.48 percent.
03:26 And some of these on results, both Trent as well as EIH were on results.
03:30 There was some strength, of course, for some other result boys as well.
03:34 And in terms of weakness, you probably saw Yes Bank,
03:38 EUCO, Central Bank, et cetera.
03:40 So banking space was very active.
03:41 And mind you, just before we wrap up, the PSU banks were very active.
03:44 So those have to be kept in mind.
03:46 But all in all, not a bad pre-policy day.
03:49 Let's see what Shakti Kantadas and the MPC have in store for us tomorrow.
03:52 Thanks a lot for that, Neeraj.
03:55 Now, as he pointed out, India's Monetary Policy Committee
03:59 is set to announce its decision tomorrow.
04:01 Now, we already know that it's likely to be a status quo,
04:04 both on the key lending rate as well as on the stance.
04:08 In fact, all of the economists polled by Bloomberg actually expect the MPC
04:13 to hold the repo rate steady at six and a half percent.
04:17 But that's not to say that it's going to be a dull MPC.
04:20 We'll be watching out for whether the governor's commentary
04:24 will be a tad less hawkish.
04:25 We're also closely going to be tracking what the central bank
04:29 will say on the key macros, the economy, inflation and, of course, liquidity.
04:34 Now, liquidity conditions have been persistently tight
04:38 ever since the last policy.
04:41 It's likely that the central bank will continue its active presence
04:45 in liquidity management, addressing it through measures
04:49 like the variable rate reverse repo auctions.
04:51 Now, moving on to the economy front, ever since the last policy,
04:56 the National Statistics Office published the first advance estimates
05:01 that was earlier this month in January, actually.
05:04 Now, while these figures are published to help set the stage for the budget,
05:09 they did present a positive surprise.
05:11 Domestic growth does look like it's steady, though.
05:15 The momentum in high frequency activity indicators
05:18 has been a tad more mixed off late.
05:21 Now, moving on to inflation, that, of course, remains above
05:25 the central bank's 4 percent target.
05:27 In December, the inflation print came in at five point six nine percent.
05:32 Food inflation was elevated, but core inflation
05:36 has continued to provide comfort to the central bank.
05:39 Now, going forward, the RBI does expect inflation to continue
05:45 on a downward trajectory and come in closer to the 4 percent target.
05:49 But that will only be by Q2 of FY25.
05:54 At Davos 2024, RBI Governor
05:57 Shaktikanta Das spoke about the central bank's inflationary targets
06:02 for the next year. Listen into a slice of that.
06:04 You see, immediately after the Ukraine war,
06:09 our headline inflation had touched seven point eight percent.
06:12 Now, thereafter, because of the monetary policy actions
06:15 which we have taken, which was also supplemented by aided by
06:20 the supply side measures taken by the government,
06:23 inflation has been steadily coming down and we are on our way
06:27 to achieve reach 4 percent target.
06:30 But next year's average is expected to be four point five percent.
06:34 The positive aspect of it is that we are our inflation is now well within the,
06:39 you know, the target band of inflation.
06:41 But we are not satisfied with that.
06:43 We would like our inflation to reach four percent and remain around four percent.
06:47 What? Just let me complete that bit.
06:50 So therefore, that is our endeavor.
06:52 And the core inflation there also, the core inflation has now come below,
06:57 you know, marginally below the four percent headline target.
07:01 So we expect next year's average inflation to be four point five.
07:04 Inflation to steadily moderate towards four percent.
07:09 Now, moving on to the top headline from the M&A space,
07:13 TRF has called off the merger with parent company Tata Steel.
07:18 TRF shares have risen 20 percent on the back of this.
07:22 My colleague Varsha Channani is joining us to explain the stock impact further.
07:27 Varsha, what's happening on that?
07:29 So if you see TRF has hit 20 percent upper circuit now
07:34 after its merger with Tata Steel calls off.
07:37 Now, this the merger announcement was made back in September 22.
07:42 Since then, Tata Steel has been giving operation and financial support to the company.
07:46 Now, Tata Steel says that TRF is witnessing a turnaround in its business.
07:51 So maybe amalgamation is not needed.
07:53 But if you see from TRF perspective and merger was announced,
07:56 the swap ratio was not favorable.
07:58 So TRF shareholders were to get 17 shares of Tata Steel for every 10 shares.
08:04 Now, if you see why stock prices up 20 percent today is,
08:08 so considering yesterday's closing price, if this deal were to happen,
08:12 the shareholders of TRF would have lost almost 10 percent in trade.
08:17 So which is I mean, so so this is a reason why the share prices up 20 percent,
08:22 because now the merger has been called off so that 10 percent loss
08:25 won't be to shareholders.
08:27 Thanks a lot for that, Farsha.
08:30 Now, moving focus to the FinTech space.
08:32 My colleagues Pragati and Mimansa bring us an overview
08:36 of day one at the Bharat FinTech Summit 2024.
08:41 Well, NADV Profits team was here at the Bharat FinTech Summit 2024
08:47 in Mumbai for the whole day.
08:49 And as of 4 p.m., it's sort of a wrap on the first day of this event.
08:54 And what we have been able to pick so far is not to heightened conversations,
08:59 because what we have realized with the recent event that has happened
09:02 or the recent clampdown that RBI did on Paytm and Payments Bank,
09:04 the mood is a little somber.
09:06 So while there is excitement in the FinTech ecosystem
09:09 because of the general or the larger landscape, there is still fear.
09:13 And there are also compliance issues and conversations happening.
09:16 Mimansa is here with me.
09:18 What are you what have you picked up so far?
09:20 Yes, Pragati, we spoke to a lot of bankers today.
09:22 And what we are getting is that they are still in a wait and watch mode.
09:27 They are not willing to talk about what are the strategies that are going to
09:30 formulate in terms of capitalizing on the market share
09:35 that Paytm had enjoyed so far.
09:38 So they are still saying that, you know, we have to wait till February 29,
09:42 which is the date that RBI has given to Paytm to fix its compliance issues.
09:47 And only after that, bankers will have a clearer view
09:51 on whether they want to take further steps on capitalizing on this market share
09:55 or launch new products and so on and so forth.
09:58 For the FinTech players, when we spoke to them, they were
10:01 there's a there's a commonality here with all the players,
10:04 all the participants who came here that regulatory compliance is a key focus.
10:08 Exactly.
10:08 The entire narrative has just become that compliance regulator.
10:11 Everywhere it was a part of that conversation.
10:14 Yes. And regulatory compliance is something that RBI has also spoken about it
10:18 time and again, and they have been tightening the noose on FinTech players
10:23 that, you know, you can't go, you can't get away from such loopholes
10:28 and you have to fix these issues before continuing your operations.
10:32 Yeah, you're right.
10:33 So compliance definitely is one big keyword that we've picked on.
10:37 Rather, it has always existed, but the entire repetition of it
10:41 is in the in the part of conversations is very exciting.
10:44 Another thing, Moman, that I have picked up on in my random chats
10:47 with some FinTech players, founders and co-founders is that investors,
10:51 these FinTech players, when they are meeting investors,
10:53 now investors are posing question mark while they still want to invest
10:57 in their companies and they are excited,
10:59 but they are also taking a little bit step back, asking more questions.
11:02 So some sort of a fickle mindedness possibly coming from the investor's side.
11:07 While we can't say that the deals are not happening or conversations
11:10 are not happening, business continues as it is.
11:13 But yes, there are more questions being asked and FinTech players
11:16 are possibly ready to answer them as well.
11:19 Right, right.
11:19 So within startups, it has been a thing that, you know,
11:23 investors are very excited about Indian startup scene.
11:25 But right now in the FinTech space, investors are taking a little step back
11:30 on putting in their money and doing thorough checks on whether
11:34 the companies are doing proper regulatory compliances or not.
11:38 Right. Well, that's a wrap that we have for you from Bharat FinTech Fest.
11:42 First day tomorrow again, the event will happen.
11:45 We'll keep bringing you the latest updates as to what the mood is on the ground.
11:49 Stay tuned.
11:49 Thanks a lot for that, Pragati and Mimansa.
11:52 As they say, they've been picking up that the mood is now a little bit more
11:57 sober and cautious.
11:59 Meanwhile, Paytm has gained for the second straight session
12:02 after the founder met with the finance minister.
12:05 He was asked to comply with the RBI's rules.
12:08 The bigger question is why startups like Paytm and Baiju's are facing the heat,
12:13 why they could not retain success that they've achieved in the startup run.
12:17 Now, my colleague Niyati Bhora joins in on what went wrong with these startups
12:22 and their startup founders star status.
12:24 Hi Niyati.
12:26 Where's the extra time?
12:28 It's been three years.
12:30 When half the world was struggling with the pandemic in 2021,
12:34 Indian startups were writing new golden stories every day
12:37 because of the lack of funding.
12:40 44 unicorns, $42 billion funding, only in 2021.
12:45 Then came 2023.
12:47 The spring of funding changed in a flash.
12:50 Just two years ago, the world's startup ecosystem was in a state of shock.
12:55 Instead, silence was heard.
12:58 The chapters of failure were added to the golden stories.
13:02 And now, 2024 has begun with the breaking of the startup stars.
13:08 Paytm and Baiju's, two companies that were the inspiration for young entrepreneurs
13:14 who had dreamed of starting a startup a few years ago.
13:17 Their founders were seen as the superstars of the startup league.
13:21 Today, the same faces, the same companies are going through an existential challenge or crisis.
13:28 This is a fight to save their existence.
13:31 What has happened to Indian startups?
13:35 Where did they go wrong with big faces, big brands and big business companies?
13:40 Is there a way out of this dark well?
13:45 Or has the wall of the dead end come in the journey of startup dreams?
13:50 Many more companies will collide with it and scatter.
13:54 Before talking about Paytm, it is important to talk about Airtek company Baiju.
13:58 The series of bad news that started from January 2023 is still going on.
14:04 Recently, the company said that it will raise $200 million through rights issues.
14:09 Do you know at what valuation?
14:11 $225 to $230 million.
14:14 If you want to understand this data, then you will have to keep in front of you the company's peak valuation,
14:19 which was $22 billion.
14:23 That is, 99% of the company's value has been cleared today.
14:28 On February 4, news came that Baiju is putting its contract on hold with football star Messi.
14:35 It was a 3-year contract, every year 5 to 7 million dollars.
14:40 But now that the well of funding has dried up, how will it be possible to continue it?
14:47 Now remember the timing of this contract, November 2022.
14:50 Here Messi was signed, and there Baiju's 2,500 employees were signed on the order of the 6th.
14:57 The question will have to be asked, which was the business template,
15:00 where for a deal 2,500 jobs were not even a moment before the stake was laid.
15:06 How is it possible that the business model that Baiju, Zavindran and team found very strong,
15:12 was shattered in just 6 to 8 months?
15:16 There are many more questions, but either there is no answer or we all know the answer.
15:24 As long as easy funding was coming, money was flowing like water.
15:28 Such acquisitions were made, which did not add any value to the core business.
15:33 The lessons of governance, risk management and compliance were thrown out of the window.
15:39 And this was the same in the case of Paytm.
15:42 When founders become larger than life,
15:44 when the company riding on the steroids of growth is only dependent on one face,
15:49 then you should understand that everything is not right.
15:53 If the business model is strong, then whether the face remains or not, the company should remain.
15:59 Because the company's business and value are bigger than any face.
16:04 Otherwise, the same thing happens with shareholders, which happened in Paytm.
16:08 The business was trusted, the QR scanner and soundbox on every shop, etc. came to this voice.
16:16 But what did the investors get in return?
16:20 Improper KYC, a link of thousands of accounts with a single PAN,
16:24 and the alleged accusations of money laundering due to it.
16:28 The result was that RBI has decided to completely cover up Paytm Payments Bank.
16:35 And the share bought at the price of Rs. 2150 in the IPO of the investors,
16:40 is in the hands of the buyers, which is fluctuating at Rs. 438.
16:46 Will Vijay Shekhar Sharma come forward and speak ill of the investors?
16:50 Will he tell why the mistake was made?
16:53 Or will he keep this message hidden only on Paytm,
16:56 that the app will work properly even after 29th February?
17:01 And with that, it's time to slip into a very short break.
17:04 But stay tuned, we've a lot more lined up for you on the other side.
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19:33 Welcome back, you're watching the reporter on NDTV Profit.
19:37 PM Modi has hit out at the opposition today in the Rajya Sabha.
19:41 He said that the Congress is spreading misinformation about PSUs
19:45 and their net worth has jumped to 17 lakh crore rupees
19:49 from 9 lakh crores in the last 10 years.
19:51 Listen in.
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