The weekend is here, and so is our weekly wrapup. This week, we will talk about why Saudi Aramco went public, SBI's decision to cut lending rates, the problem with Mudra loans, the new labour reform bill and S&P's threat to downgrade India's sovereign bonds. Let's get started then!
Saudi Aramco finally goes public
On Monday, we spoke about why the Saudi's have now decided to take their crown jewel public.
For the uninitiated, Saudi Aramco is the largest oil producer in the world. It also happens to be the most profitable company in the world. Until recently, it was fully owned by the Kingdom of Saudi Arabia. But that changed a few days ago, when Aramco officially went public. Now for most people the story ends there. But here's the interesting thing. The IPO fetched the Saudi crown about $25 Billion. Not a bad sum by any account. But the company is already yielding a massive dividend of about $75 Billion.
So, what's another 25 Billion going to do when you are already making such crazy money? More importantly, if they are not doing it for the cash, why are they taking Aramco public at all?
That's the important question here and if you want to know what we think, you can go ahead and click right here.
Cheap Home loans everyone! Let's rejoice
On Tuesday, we talked about SBI's decision to cut its one-year marginal cost-based lending rates (MCLR) by 0.1%. The most obvious story here is that the cut in MCLR is going to make home, auto and other retail loans cheaper.
But that's not all. MCLR rates are a little more complicated than that. And we wanted to provide a simplified guide for readers to navigate this esoteric subject. So if you are the inquisitive kind you can read the full thing here
The Problem with Mudra Loans
On Wednesday, we spoke about the problems plaguing Mudra Loans. The Prime Minister of India launched the Pradhan Mantri Mudra Yojana (PMMY) in 2015 to foster growth and generate large scale employment in this country. Through this, the Government also sought to drive entrepreneurship by giving young men and women easy access to collateral free loans i.e. Mudra Loans. It's a great concept. However, the execution is where things get tricky.
And our story on Wednesday tries to understand just that i.e. Where did things go wrong? You'll find the full draft here.
Labour Reforms are here
On Thursday, the focus was on India's Labour laws.
Right now, there are multiple acts governing employee rights and most of them are often vague, rigid and make firing workers and winding up business operations unnecessarily complicated. So, the Government finally decided to intervene by introducing the Industrial Relations Code, 2019 before the parliament.
Now considering the legislation had so many fine details, we decided to offer a distilled version so you want have to spend time searching for the important bits elsewhere.
Why did Standard & Poor threaten us with a downgrade?
On Friday, we spoke about S&P's dire warning to India. Earlier this month, Standard and Poor, one of the world’s largest global rating agencies, reaffirmed India’s sovereign rating to BBB-, meaning they were still telling the worls that we were investment grade material. But a couple days back they clarified that they will have to downgrade our rating if the economy doesn’t recover as expected.
And sure enough, the threats were enough to spook investors everywhere and here’s a Finshots explainer detailing exactly what transpired afterwards.
And that's it from us! You have a great weekend now :)