SEBI Bans Anil Ambani, Mpox Scare, Zomato-Paytm Deal And More — The Week That Was
NDTV Profit, in its weekly news wrap every Friday, brings you the mega events across businesses, industries and countries that have impacted investors' wealth.
The week saw a mix of regulatory actions, major acquisitions, market volatility, and growing concerns over a global healthcare crisis, amid speculation on when the world's largest economy will initiate interest rate cuts.
India's market regulator barred industrialist Anil Ambani and 24 other entities for five years for diversion of funds. The Mpox virus hit Asia as Thailand became the first to detect the new mutated strain of the virus.
Global markets were on high alert and traded with caution as the US Federal Reserve Chair geared up for his keynote at the Jackson Hole Economic Symposium.
Zomato Ltd. will acquire the entertainment, sports, and events ticketing business from Paytm operator One97 Communications Ltd. for Rs 2,048 crore.
NDTV Profit, in its weekly news wrap every Friday, brings you the mega events across businesses, industries and countries that have impacted investors' wealth.
SEBI Confirms Ban On Anil Ambani
The Securities and Exchange Board of India has barred industrialist Anil Ambani and 24 other entities for five years for syphoning funds from Reliance Home Finance Ltd.
The market regulator imposed a penalty of Rs 25 crore on Ambani and restrained him from being associated with the securities market, including as a director or key managerial personnel in any listed company, for a period of five years.
SEBI found that Ambani, with the help of Reliance Home Finance's key managerial personnel, orchestrated a fraudulent scheme to syphon funds from the company by disguising them as loans to entities linked to him.
It noted that the promoter and management of the company approved loans worth hundreds of crores to closely linked companies with little to no assets, cash flow, net worth, or revenue. Most of these borrowers failed to repay their loans, causing RHFL to default on its own debt obligations, resulting in a voluntary exit from the home finance business.
The investigation uncovered that many loan applications were processed and approved on the same day, with several deviations from standard approval procedures.
Mpox Scare
Thailand became the first Asian country in Asia to detect the new mutated strain of the mpox virus after the World Health Organisation declared the outbreak in Africa a new global health emergency.
The Southeast Asian country's authorities have identified 43 close contacts of the 66-year-old patient who tested positive and put them under surveillance.
The newer strain—with a fatality rate of 3%—has been spreading across several African countries like Burundi, Kenya, Rwanda and Uganda and is reported to have killed more than 500 people in the Democratic Republic of the Congo.
Asian countries, from China to India and Pakistan, have increased their surveillance after the virus was detected on the continent. India's Mumbai civic body has reserved a 14-bed ward in Seven Hills Hospital in Andheri's Marol area for MPox patients as a precautionary measure, PTI reported.
The Union Health and Family Welfare Ministry has instructed all states to take precautionary measures in connection with MPox.
NDTV Profit reported earlier that the Serum Institute of India is developing a vaccine amid concerns of a spike in cases. "Hopefully, with the ongoing progress, we will have more updates and positive news to share within a year's time," Chief Executive Officer Adar Poonawalla said.
The Zomato-Paytm Deal
Zomato will acquire the entertainment, sports, and events ticketing business from Paytm operator One 97 Communications Ltd. for Rs 2,048 crore, a deal considered to be overvalued.
The acquisition of Paytm's subsidiaries by the delivery platform has a deal valuation of roughly seven times the revenue and over 70 times its adjusted Ebitda.
According to Paytm, the deal works towards Paytm’s focus on core payments and financial services distribution. "The transaction generates significant profits for Paytm and further strengthens its balance sheet," it said. Paytm's Insider, which includes movies and events business, lags far behind market leader BookMyShow in the movie ticketing segment.
For Zomato, the deal means pulling out roughly Rs 2,050 crore from its cash balance of roughly Rs 12,000 crore. Zomato's acquisition of Insider also bolsters its going-out business, which it recently housed under a separate app called District.
Zomato’s acquisition of Paytm’s entertainment ticketing businesses is a calculated gamble that could significantly broaden its market presence.
Editor's Pick For The Week
As Powell Says 'Time Has Come', S&P 500 Index Soars
The US Federal Reserve Chair reinforced market expectations that the world's largest economy will see rate cuts in September as inflation is on track to the target.
The "time has come for policy to adjust" and the Fed does not seek or welcome further labour market cooling, he said on Friday in the keynote address at the Jackson Hole Symposium. "My confidence has grown that inflation is on the path to 2%."
The cooling in labour market conditions is unmistakable and it is unlikely that the job market will be a source of inflation soon, he said. But, Powell kept the market guessing about the magnitude of the rate cut as he emphasised that the timing, and pace of rate cuts depend on data, outlook and risks.
Investors are pricing in a quarter-point rate cut at the Fed’s Sept. 17–18 gathering but see almost a full percentage point of reductions by year-end, Bloomberg reported.
Powell concluded by reaffirming the Fed's commitment to maintain a strong labour market while achieving price stability. "We will do everything we can to support a strong job market." He also said the current policy rate provides ample room to address any emerging risks.
Wall Street cheered the expected move as the stocks soared while the bond yields plunged after Powell spoke about the September rate cuts. The S&P 500 index rose over 1% and is at the cusp of its all-time highs while the benchmark treasury yield fell by 5 basis points.
The S&P 500 and Nasdaq Composite soared 1.06% and 1.10%, respectively as of 11:59 a.m. (GMT). The Dow Jones Industrial Average climbed 0.91%.
AMFI Chief Explains Why Net SIP Is Not Disclosed
India's mutual fund body continued to defend not releasing the net inflows into the systematic investment plan, saying it distorts the bigger picture.
Gross inflows are more important as they measure the investments continuously coming into the scheme, the Association of Mutual Funds in India's Venkat Chalasani told NDTV Profit in an interview.
It's not going to be an 'apple-to-apple comparison' as the instalment that is being withdrawn is the amount that was being invested over some time, the chief executive officer said.
The outflows include various categories, such as redemption on achieving the goal, redeeming the portion and investing into another scheme, redeeming to invest the entire bulk into another scheme and cancellation, he said. "We are not in a position to break it up and come to the correct conclusion. And I don't want to give data that is not right."
