Live: Sensex Drops 300 Points; Auto, IT Stocks Among Worst Hit

BloombergQuint spoke to Anil Singhvi, chairman, Ican Investment Advisors, Sucheta Dalal of Moneylife and M Damodaran, former SEBI Chairman on how the IL&FS came to a point of default and what needs to be done next to rescue IL&FS.

Key highlights of conversation:

Sucheta Dalal

• Government has no plan and it has put in a new Board because they had to do something
• A lot of senior people at IL&FS made a lot of money and that needs to be investigated
• There can’t be a rescue for IL&FS from public money
• Have sent a notice to LIC chairman against using public money to rescue a private company
• LIC does not have any right to put money in rescuing a private company
• Way people have been asked to keep quiet is surprising
• Board members have failed to take any action
• Many subsidiaries are under multiple litigation and bearing high litigation expenses
• Board should look at divesting SPVs rather than looking for one Ajay Piramal to rescue them
• Investigation should go back to who the LIC member was and what value did it see in investing in IL&FS

Anil Singhvi

• Why should there be a rescue plan for IL&FS and not for other infrastructure companies
• LIC should stay out of this mess of rescuing IL&FS, let them first rescue IDBI Bank
• Surprised and amused comparison of IL&FS with Satyam
• IL&FS was run with a very tight situation with Ravi Parthsarthy
• IL&FS was taking up larger projects without experience
• IL&FS Employee Welfare Trust was given a large holding to give an exit to some fat cats
• Amazed how the board allowed to open over 160 subsidiaries
• Road forward will be to identify the saleable assets and sell and pay the creditors

M Damodaran

• There is no comparison at all with Satyam
• Way forward is to make the structure simpler
• Way forward is to take haircuts because its not like there are too many buyers for many projects
• New board needs to first assess the current problem and identify key people to bring in
• Unaware of what happened in the board room
• The complex company structure is a big problem

Indian rupee recovered sharply after a report suggested that the government is in talks with the Reserve Bank of India for a separate window for oil refiners to hedge their dollar positions, CNBC TV18 reported.

The rupee which fell to record low of 73.42 per dollar, recovered some lost ground, and last traded at 73.16 per dollar.

Shares of the Chandigarh-based steel wheel rim maker rose as much as 3.2 percent to Rs 1,108 after it won truck wheel orders from U.S. and European trailer markets, Steel Strips said in an exchange filing.

The company has won export order for supply of 1 lakh caravan and truck wheels to U.S. and European markets from October until December. The order is valued at $ 3 million and will be shipped from its manufacturing facility in Chennai.

Indian equity benchmarks extended decline led by losses in TCS, ICICI Bank, HDFC Bank and Reliance Industries.

The Sensex fell 0.9 percent or 325 points to 36,200 and the Nifty 50 Index tumbled 1 percent or 108 points to 10,900.

Eight of 11 sector gauges compiled by National Stock Exchange were trading lower led by Nifty Auto Index's 1.8 percent drop. On the flip side, the Nifty Metal Index was top gainer, up 1.15 percent.

The mid- and small-cap shares were mixed as the S&P BSE MidCap Index fell 0.6 percent while S&P BSE SmallCap Index climbed 0.4 percent.

Shares of the Mumbai-based lender extended gains for second day in a row and rose as much as 11 percent, the most in over two years, to Rs 222.95.

The company on Monday disclosed NPA numbers for the September quarter ahead of its earnings. Yes Bank’s gross NPA stood at 1.35 percent for Q2FY19 versus 1.82 percent as of Q2FY18.

Meanwhile, Yes Bank said the private lender will find Rana Kapoor’s successor by the Jan. 31 deadline given by the Reserve Bank of India.