Business Live: Shares fall as HDFC Bank drags finance stocks; top oil producers agree on modest output boost from August

Updates from the world of economy, markets, and finance

The Nifty and the Sensex opened the day on a negative note after HDFC Bank missed earnings expectations.

Join us as we follow the top business news through the day.

Razorpay acquires TERA Finlabs

One more acquisition by a fintech startup.

PTI reports: "Fintech startup Razorpay on Monday said it has acquired TERA Finlabs, a Bengaluru-based startup that provides technology, risk and capital solutions to enable embedded financing solutions for businesses.

TERA Finlabs is an Indian subsidiary of UK-based digital lender, GAIN Credit.

The company, however, did not disclose the financial details of the transaction.

"This acquisition of TERA Finlabs is aligned with Razorpay’s strategy of financially supporting as many MSMEs as possible by building core-competencies in capital solutions, credit underwriting, and data-driven risk management capabilities.

"TERA will provide its entire technology stack, risk management capabilities, and onboarding solutions to create and enable a credit line for Razorpay’s merchant network," a statement said.

Razorpay Capital along with TERA Finlab’s technology capabilities will be able to service the credit needs of over 10,000 businesses in India by next year, the statement said.

Razorpay had forayed into the business-to-business (B2B) small and medium-sized enterprises (SME) lending space with the launch of Razorpay Capital in 2019.

This is Razorpay’s third acquisition in less than three years. Previously, Razorpay had acquired Thirdwatch – an Artificial Intelligence-driven company that helps reduce Return-to-Origin or RTO fraud losses in e-commerce – in 2018, and Opfin – a payroll management software company – in 2019.

Razorpay CEO and co-founder Harshil Mathur said in India, banks are wary of providing business loans to startups and new SMEs due to the risks attached to new revenue models of startups.

"Through our lending platform, Razorpay Capital, we have been striving to solve these cash flow challenges, making it easier for businesses to get finance and grow. And progressing in that journey, an acquisition such as this fits perfectly with our vision of developing tailor-made affordable credit solutions for the underbanked small businesses across industries so that they can digitally transform and disrupt," he added.

Mathur pointed out that the team at TERA FinLabs comes with exceptional domain knowledge in credit underwriting and risk management, and Razorpay sees immense value in TERA Finlabs core lending infrastructure capabilities.

"MSMEs were an underserved market for a long time. However, in the last 16 months, they have started to show rapid growth with their adoption of digital. And this has created an opportunity for significant disruptions in the lending sector – Embedded Credit is one such innovation that I’m certain will transform this space," Pradeep Rathnam, co-Founder and CEO of TERA Finlabs, said.

TERA Finlabs’ robust end-to-end platform will enable new entrants to build a scalable and profitable credit business, he added.

Razorpay – which is backed by investors like GIC, Tiger Global, Sequoia Capital India and MasterCard – has been witnessing a 40-45 per cent growth month-on-month. It has achieved USD 40 billion TPV (Total Payment Volume) and currently powers payments for over 8 million businesses, Airtel, Ola, Zomato, Swiggy, Cred, ICICI Prudential and others. It aims to reach 200 million customers by 2021."

Rupee tumbles 20 paise to 74.77 against US dollar in early trade

The drubbing of stocks this morning affects the rupee as well.

PTI reports: "The Indian rupee depreciated 20 paise to 74.77 against the US dollar in opening trade on Monday as firm American currency and weak domestic equities weighed on investor sentiment.

At the interbank foreign exchange, the rupee opened at 74.73 against the dollar, then fell further to 74.77, registering a fall of 20 paise over its previous close.

On Friday, the rupee had settled at 74.57 against the US dollar.

The Indian Rupee started on a weaker note this Monday against the greenback tracking the strength of the dollar, Reliance Securities said in a research note.

Asian currencies have started weak against the greenback this Monday morning and will weigh on sentiments.

Moreover, the local unit could remain weak, as investors will flee towards the safety of the greenback amid concerns over rising COVID-19 cases globally, the note added.

The dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading up 0.02 per cent at 92.70.

Global oil benchmark Brent crude futures fell 0.57 per cent to USD 73.17 per barrel.

On the domestic equity market front, BSE Sensex was trading 345.62 points or 0.65 per cent lower at 52,794.44, while the broader NSE Nifty declined 92.50 points or 0.58 per cent to 15,830.90.

Foreign institutional investors were net sellers in the capital market on Friday as they offloaded shares worth Rs 466.30 crore, as per exchange data."

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Indian shares fall at open on underwhelming HDFC Bank profit

The largest private sector bank drags down stocks.

Reuters reports: "Indian shares fell at the open on Monday, dragged by HDFC Bank as it missed quarterly profit expectations, with sentiment further dented by broader Asian peers falling in early trade on a renewed coronavirus scare.

By 0352 GMT, the NSE Nifty 50 index was down 0.69% at 15,812.75 and the S&P BSE Sensex was down 0.72% at 52,760.08. Both indexes ended the week nearly 1.5% higher, their first weekly gain in three.

HDFC Bank fell as much as 3.2%, its lowest in nearly a month, after the lender reported a quarterly profit that missed expectations on Saturday as bad loan provisions rose and asset quality deteriorated. The NSE Nifty Bank index was down as much as 2.1%.

Investors will focus on telecom stocks with the Supreme court set to hear the adjusted gross revenues (AGR) case later in the day. India’s top court, in September last year, reaffirmed dues payable by telecom companies Bharti Airtel and Vodafone Idea.

Investors are also eyeing results from Nifty 50 components HCL Tech and HDFC Life.

The Indian parliament’s monsoon session begins on Monday with issues such as petrol prices and the country’s COVID-19 status up for discussion.

Asian shares slipped to a one-week low on Monday and perceived safe haven assets, including the yen and gold, edged higher amid fears of rising inflation and a surge in coronavirus cases, while oil prices fell on oversupply worries."

Top oil producers agree on modest output boost from August

The world’s leading oil producers agreed on Sunday to continue to modestly boost output from August, after the United Arab Emirates blocked a deal earlier this month.

An OPEC+ meeting agreed to raise output by 400,000 barrels per day (bpd) each month from August to help fuel a global economic recovery as the pandemic eases, the Vienna-based group said in a press statement.

The grouping will “assess market developments” in December, it said. The deal also extends a deadline on capping output from April 2022 to the end of 2022.

Days of negotiations of OPEC+ members to continue to further ease production cuts became deadlocked early this month, exposing a row between the world’s largest oil exporter Saudi Arabia and brash neighbour the United Arab Emirates.

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