Top Headlines: GDP shrinks by 7.3%, fiscal deficit drops below target

GDP shrinks by 7.3 percent in FY 2020-21, Carlyle Group to acquire a controlling stake of over 50 per cent in PNB Housing Finance. Top news this morning.

India's annual economic growth rate picked up in January-March compared with the previous three months, but then a second wave of Covid-19 infections hit the country. Our top headlines Tuesday morning explain what's for the economy next.

GDP grows by 1.6 per cent in Q4, shrinks by 7.3% in FY 21

India’s economy grew 1.6 per cent in the fourth quarter of FY 2020-21, indicating that recovery was well underway before the second wave of Covid-19 struck. In the full financial year 2020-21 the country's gross domestic product (GDP) contracted 7.3 per cent. In FY2019-20 it was 4 per cent.

Gross value added (GVA) grew 3.7 per cent in real terms in the March quarter, but for the full financial year, real GVA fell 6.2 per cent slightly better than projected 6.5 per cent contraction. Read more.

Fiscal deficit for FY21 settles at 9.2%, below the target of 9.5%

The Centre’s fiscal deficit for the financial year 2020-21 settled at 9.2 per cent of the gross domestic product, which is marginally below the government’s revised target of 9.5 per cent.

This was due to better-than-expected revenue receipts with expenditure staying broadly at the level targeted in the revised estimates of the Budget.

India’s fiscal deficit was Rs 18.21 trillion,lower than the projected Rs 18.48 trillion, as per the provisional estimates released by Controller General of Accounts. The fiscal deficit of 9.2 per cent has been estimated based on provisional estimates for FY21 GDP of Rs 197.46 trillion.  Read more.

Carlyle Group set to acquire controlling stake in PNB Housing Finance 

Private equity firm Carlyle Group and associates will acquire a controlling stake of over 50 per cent in PNB Housing Finance by investing in the Rs 4,000 crore in preferential issue of equity and warrants of the mortgage lender.

The proposed transactions, expected to be completed by January 1, 2022, Carlyle will also have the right to nominate the chairperson of PNB Housing Finance (PNB HF) which  will continue as long as it holds at least 40 per cent of the share capital on a fully diluted basis.

Pluto Investments, affiliate of Carlyle Asia Partners, will invest up to Rs 3,185 crore through a preferential allotment of equity shares and convertible warrants at Rs 390 per share, for a 30.2 per cent in PNB HF’s expanded capital.  Read more.

Paytm to raise $1.5 bn via primary issue of shares ahead of IPO

Paytm is looking to raise up to $1.5 billion as part of primary share sale, leading up to its initial public offering (IPO), planned for November, a person familiar with the developments said.

The company is looking to file its draft red herring prospectus (DRHP) by July, according to sources. 

Though the details of the listing are being worked out, Paytm may take the qualified institutional buyer (QIB) route to list and issue fresh equity to raise funds, according to sources. Read more.

Demand pushes up construction and manufacturing sectors in Q4FY21

Construction, manufacturing, financial services and agriculture showed positive Gross Value Added (GVA) growths in the fourth quarter of fiscal year 2020-21, driven largely by pent-up demand in the first three and growth in output in the fourth, experts said.

However, the growth in the key sectors of construction and manufacturing driven largely by pent-up demands shows ominous signs for the current quarter as the second wave of Covid-19 is seen to have affected that very part of the economy, the experts added.

Among the four, construction registered a healthy growth of 14.5 per cent in the January to March quarter of 2020-21 as consumers scrambled to complete their purchases which was struck due to the extended lockdown and slow growth in the first three quarters. Read more.