Business in brief: Market recovery makes investors richer; monsoon brings hope

The BSE Sensex is expected to trade at 56,683 points by the end of the quarter ended August 2022. It jumped 515 points to close at a four-month high of 59,330 points on Thursday as a slowdown in US inflation gave an indication that the Federal Reserve may not pursue its aggressive rate hike trajectory.

There has been a consistent market recovery since June, making investors richer by around ₹39 lakh-crore.

Paytm conundrum

Paytm CEO Vijay Shekhar Sharma should be replaced with a professional CEO, says IiAS, a corporate governance and proxy advisory firm. Since its listing, the stock price has fallen nearly 64 per cent from the issue price of ₹2,150, resulting in wealth destruction. Sharma has made several commitments to make the company profitable; however, these have not played out.

“We believe the board must consider professionalising the management,” IiAS said. It has also asked shareholders to vote against approval of Sharma’s remuneration, as his overall remuneration is higher than the remuneration levels of all S&P BSE Sensex companies’ CEOs, most of which are profitable. IiAS estimates that Sharma’s remuneration for FY23 is ₹796.28 crore, which comprises 21 million stock options at an exercise price of ₹9.

Impact: Investors could see a repeat of the controversy at fintech start-up Bharat Pe, where the board replaced the CEO and co-founder Ashneer Grover over allegations that his wife, Madhuri Jain, who was the company’s head of control, was misappropriating funds.

Also read: Business in brief: Softbank to slow down Indian start-up investments

The rainier the better

India’s cumulative monsoon rainfall this year is 8 per cent above average.

Impact: A better monsoon will positively impact the country’s economy, with higher crop yield. This will have a positive impact across all sectors.

Airline earnings

Vistara, AirAsia India and Jet Airways have seen their earnings dip further. AirAsia India’s losses increased 42 per cent on a year-on-year basis to almost $275 million. Its revenue grew nearly 39 per cent to $238 million. Vistara’s losses increased 35 per cent to $256 million year-on-year, while revenues grew more than twice to $659 million.

Jet Airways’ standalone net loss for Q1 was ₹390.1, crore compared with ₹129 crore in the same period last year.

Impact: The relaunch of Jet Airways’ operations and removal of the airfare cap could result in better earnings for all domestic airlines.

The meeting agenda

Restaurant Brands Asia: To meet investors and analysts on August 12.

PG Electronics: To meet investors and analysts on August 12.

One 97 Communications (Paytm): To meet investors and analysts on August 12.

CESC: To meet investors and analysts on August 12.

Himatsingka Seide: To meet investors and analysts on August 13.

Apollo Tyres: To meet investors and analysts on August 16.

Mahindra Logistics: To meet investors and analysts on August 16.