YIR 2020: Top 10 business stories of the year

The stringent nationwide lockdown imposed on 24 March to control the virus dealt a hammer blow to India’s 2.9 trillion-dollar economy. Private consumption, the mainstay of the economic mechanism, saw a sharp decline of 27 percent with travel, tourism, retail, aviation and automotive industries nosediving. An estimated 140 million lost their livelihoods because of it, while the economy contracted for two consecutive quarters to enter its first recession after independence. With lockdowns being lifted in the recent past, it is gradually limping back to normalcy. However, it would take a couple of years for the economy to rebound completely, predict experts.

The poor bore the main brunt of the pandemic induced lockdown. Suddenly stripped of their livelihoods, millions, without any financial cushion, made their way back to their native villages. To alleviate their misery, the government announced a stimulus package of 1.7 trillion rupees just two days after the lockdown. The money was meant for direct cash handouts and free food items such as rice, wheat and pulses for the economically vulnerable.

Two months later came the announcement of another stimulus package, far more sweeping in its scope. Called Atmanirbhar bharat or self-reliant India, it aimed at not just resuscitating the economy but also making it a key player in the global stage. To achieve the goal, it set out to make important policy changes vis-à-vis the supply chain, tax systems, land and labour and industrial production. A whopping 20 lakh crore rupees – equivalent to 10 percent of the nation’s GDP – was earmarked for the scheme. And the initiative is already showing promise – many domestic companies have ramped up production under the production linked incentive of the scheme.

The unprecedented challenge posed by COVID-19 resulted in the markets oscillating between extremes in India. The Sensex and Nifty touched multi-year lows in March. And then in May again, Sensex was down more than 2000 points. Both Sensex and Nifty rallied 81 percent after that to deliver positive returns on the back of liquidity infused into the system and the subsequent reopening of the economy. The Nifty Midcap 100 index and Nifty Smallcap 100 index rallied 92 and 116 percent as well. That was up until today. The Sensex and Nifty have crashed again on news of a new strain of a highly virulent coronavirus found in the UK.

The pandemic spelt trouble for IPOs this year. After 10 IPOs worth $1.41 billion in the first three months, things went downhill as investor sentiment tanked because of COVID-19. Subsequently, stocks of SBI Cards and Payments Services, the credit-card arm of SBI bank, listed at a steep discount of 13 percent from the offer price in the billion-dollar IPO. Taking a cue from the debacle, others such as Antony Waste Handling Cell, Burger King, Rosary Biotech, KPR Agrochem and Dinesh Engineers shied away from the market. Now, with the virus somewhat under control, the IPO scene looks promising again. Burger King recently had a bumper listing while Anthony Waste Handling stock just made its debut on a positive note.

In an otherwise gloomy economic environment, eight start-ups became the reason for cheer as they entered the billion-dollar unicorn club. Of them, online cosmetics retailer Nykaa, online stockbroking company Zerodha, online education technology company Unacademy, SaaS startup Postman and payment gateway Razorpay achieved the status during the peak of the pandemic. Before that, in January this year, Noida-based payment solutions startup Pine Labs became the first unicorn of 2020, after raising an undisclosed amount from New York-based financial services major Mastercard. Most recent to enter the club is Gurugram-based online used car marketplace Cars24 which raised $200 million to become a unicorn.

Reliance Jio, launched in 2016, accumulated massive debt as it enticed subscribers with its free voice calling and dirt-cheap data. The risky bet paid off – it became the number one player in the Indian telecom industry in no time. Impressed by its raging success, global investors pumped 1.16 crore rupees in the telecom arm of Reliance Industries. Of them, Facebook and Google invested $5.7 billion in April and $4.5 billion in June respectively for a minority stake in the company. This not just helped Reliance Jio, but also its parent Reliance Industries, clear a massive debt of Rs 161,035 crore in less than two months – and in the middle of a global pandemic in June. The aim was to get there by 31 March 2021.

94-year-old Lakshmi Vilas Bank (LV Bank) made headlines for all the wrong reasons: mounting losses, a large pile of bad loans and depleting capital. As it struggled to survive, the Reserve Bank of India (RBI) jumped to its rescue by proposing its merger with DBS Bank India, a wholly owned subsidiary of DBS, Singapore’s largest lender. Subsequently, from 27 November, Lakshmi Vilas Bank ceased to exist; all its branches started functioning as the branches of DBS Bank India. The deft move by RBI and the cabinet’s nod was hailed by all.

Farmers, particularly from the northern states of Punjab and Haryana, have taken to the chilly, winter streets of the NCR region to protest against the three contentious farm bills passed on 27 September. While the government claims these policy changes will boost the agricultural sector by paving the way for private investment that will help build infrastructure and supply chains for farm produce, farmers feel otherwise. Contract farming, they feel, can only deepen the problem of penury-stricken marginal farmers by giving them a raw deal. Besides, by allowing farmers to sell their produce outside mandis to whoever they want – something that might fetch them better prices through competition – states will lose their commissions and mandi fees

New Delhi, so far, has banned 267 Chinese apps in tranches. It all began in the immediate aftermath of China’s brutal attack on Indian army in the freezing cold Himalayan border of Galwan, some 14,000 feet above sea level. Instead of retaliating physically, the government simply banned 59 Chinese apps including the highly popular Tik Tok. The possible misuse of the humungous amount of data collected by these apps was cited as the reason behind the move. However, it wasn’t hard to see that the ban was meant to weaken the grip of these consumer internet firms – an important contributor to China’s economy – on the Indian market too.