Market CRASH! IDBI Takeover News, India Restricts Trade, MobiKwik Loss, Power Grid Dividend

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Stock markets take a sharp dive, major banking acquisition news, and significant trade restrictions – get the full story here! Today, we break down the Indian stock market crash of May 20th, driven by weak global cues and FII selling. We also delve into Emirates NBD's potential acquisition of IDBI Bank, India's new import curbs on Bangladesh, MobiKwik's Q4 FY25 performance, Power Grid's latest earnings and dividend, plus a look at upcoming Q4 results. Stay informed on the key financial and business news impacting India!

Indian Stock Market Plunges (May 20th):
The Indian stock markets experienced a significant downturn on May 20th, marking the third consecutive day of losses. The Sensex closed down by 873 points at 81,186.44, and the Nifty ended 261 points lower at 24,683.90. This sharp sell-off was attributed to weak global cues, including concerns from Asian markets, hawkish U.S. Fed commentary, and rising Japanese bond yields, making investors risk-averse. All sectoral indices ended in red, with auto stocks being the worst performers. Even the Nifty Bank index fell by 543 points. Foreign Institutional Investors (FIIs) continued their selling spree, offloading ₹525.95 crore worth of shares, fueling fears of institutional outflows due to high market valuations. The India VIX, a volatility index, saw a slight increase, signaling rising market fear. Adding to the pressure were India-U.S. trade uncertainties, a falling rupee, Moody’s downgrade of U.S. debt outlook, and a rise in COVID-19 cases in Asia and parts of India.

Emirates NBD's Strategic Move for IDBI Bank Acquisition:
In major banking news, Emirates NBD is reportedly shifting to a wholly-owned subsidiary (WOS) model in India to strengthen its bid for IDBI Bank. This strategic move positions them against Prem Watsa’s Fairfax Capital. A WOS structure offers foreign banks greater freedom for branch expansion and simplifies domestic bank acquisitions, a model favored by the RBI, as seen with the DBS-Lakshmi Vilas Bank deal. Emirates NBD has already secured in-principle approval from the RBI to convert its three Indian branches into a WOS. This could give them a regulatory advantage over Fairfax, which already owns CSB Bank, as RBI norms typically discourage a single promoter from owning multiple banks. The IDBI Bank acquisition process might conclude by the end of FY25 or early FY26, though IDBI Bank's strong employee unions could present post-acquisition challenges.
India Imposes Import Restrictions on Bangladesh:

Trade tensions are escalating as India has restricted 42% of imports from Bangladesh, valued at approximately USD 770 million. These restrictions primarily affect goods like garments, food, and plastic imported through land ports. Notably, Bangladeshi garments, a USD 618 million annual import, can now only enter India via Kolkata and Nhava Sheva seaports.

MobiKwik Q4 FY25 Performance: Flat Growth, Deepening Losses:
Fintech platform MobiKwik reported flat revenue growth in Q4 FY25, with revenue at ₹268 crore, nearly unchanged from ₹265 crore in Q4 FY24. However, for the full fiscal year FY25, revenue grew 33.9% to ₹1,192 crore. Despite this annual growth, the company saw a sharp increase in net loss to ₹56 crore in Q4 FY25, compared to a ₹0.6 crore loss in the same quarter last year. The full-year loss stood at ₹121.5 crore.

Power Grid Q4 FY25 Results & Dividend Declaration:
Power Grid Corporation of India announced a marginal 0.56% year-on-year decline in its consolidated net profit for Q4 FY25, at ₹4,143 crore. However, the company's revenue from operations saw a 2.4% YoY increase to ₹12,275 crore. Total expenses for the quarter rose by 6.8% YoY to ₹7,550 crore. Power Grid has recommended a final dividend of ₹1.25 per equity share for FY25, subject to shareholder approval. This marks the fourth dividend announcement for the fiscal year 2024-25, underscoring consistent shareholder payouts.

Upcoming Q4 Results (Wednesday, May 21st):
Keep an eye out for notable Q4 FY25 results announcements on May 21st from companies like IndusInd Bank Ltd. (focus on credit growth, asset quality), Oil and Natural Gas Corporation Ltd. (ONGC - impact of crude oil prices), InterGlobe Aviation Ltd. (IndiGo - passenger load factors, yield), Colgate Palmolive (India) Ltd. (volume growth, market share), and Mankind Pharma Ltd. (consumer healthcare segment performance).
What are your thoughts on these market movements and company performances? Let us know in the comments below! 👇

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