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13 December 2023 : Important Financial News in India

FINANCE MARKET HEADLINES TODAY
FINANCE MARKET HEADLINES TODAY

Source: Economic Times, “Today’s ePaper”
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Table of Contents

Retail Inflation at 3-Month High; Factory Activity Rebounds

In India, retail inflation has risen to a three-month high of 5.6% in November, up from 4.9% in the previous month. This escalation in inflation reflects an increase in the cost of goods and services for consumers. Simultaneously, there’s been a significant rebound in industrial production, which reached a 16-month high of 11.7% in October. This boost in factory activity has been attributed to increased demand during the festive season and a favorable comparison with previous performance metrics. The combination of rising inflation and a surge in industrial production suggests a complex economic scenario, where the cost of living is increasing for consumers, but manufacturing and production sectors are experiencing robust growth. This situation presents both challenges and opportunities for the Indian economy.

SpiceJet Secures Crucial ₹2,254 Crore Investment

The financially struggling airline SpiceJet has received a significant boost with an investment of ₹2,254 crore. This funding comes from a group of funds and high net-worth individuals who plan to invest through the issuance of convertible warrants and fresh equity shares. This investment is crucial for SpiceJet, providing it with much-needed capital to continue its operations.

Slow Police Response Affects Mobile Phone Recovery Initiative

The Indian government’s initiative to recover lost or stolen mobile phones is facing setbacks due to slow responses from police forces across various states. This sluggishness in police action is impeding the effectiveness of the government’s efforts to address the issue of lost or stolen phones.

Surge in Demand for Imported Luxury Chocolates in India

India is witnessing a growing demand for luxury and premium imported chocolates. As the year-end season approaches, brands and retailers anticipate a significant increase in sales, signaling a robust market for these high-end chocolate products. This trend also suggests the potential entry of more imported premium chocolate brands into the Indian market.

Thermax Bags ₹500-cr Order for Bio-CNG Plants

Thermax, a company specializing in energy and environmental solutions, has secured an order exceeding ₹500 crore to establish five bio-CNG plants in India. These plants are slated for development in Rajasthan, Madhya Pradesh, Maharashtra, and Uttar Pradesh, marking a significant step in the expansion of bio-CNG infrastructure in the country.

IIFL Finance Recognized as Financial Creditor in Satra Properties Case

The National Company Law Tribunal (NCLT) has acknowledged IIFL Finance’s claim against real estate developer Satra Properties as a financial debt. This decision comes amidst an ongoing legal case between Satra Properties and its financial creditor Vistra ITCL (India).

BBC India Adapts to FDI Rules with ‘Collective Newsroom’

In response to foreign direct investment (FDI) regulations, four BBC staff members in India are set to establish a new entity named ‘Collective Newsroom.’ This entity will operate in compliance with FDI rules and provide services commissioned by the BBC.

Hindalco to Invest ₹800 Crore in Aluminium Plant in Odisha

Hindalco Industries plans to invest ₹800 crore in a new plant in Sambalpur, Odisha, for manufacturing battery-grade aluminium foil. This investment signifies Hindalco’s commitment to expanding its production capabilities in high-quality aluminium products.

DoT Alters Spectrum Charge Methodology for Captive Users

To facilitate ease of doing business, the Department of Telecommunications (DoT) has revised how spectrum charges are levied on captive users. The new system will charge for spectrum based on area, replacing the previous method that considered the number of devices.

Meftal Drug’s Adverse Reactions Deemed Rare

Blue Cross Laboratories, the owner of the Meftal painkiller brand, has stated that adverse reactions to the Meftal drug are rare. This statement follows concerns raised by the Indian Pharmacopoeia Commission (IPC) and is supported by medical literature in India and globally.

Underutilization of LNG Import Terminals in India

India is facing underutilization issues with most of its liquefied natural gas (LNG) import terminals. The expansion of these facilities has outpaced the growth in domestic gas demand, leading to a significant underutilization problem.

Supreme Court Postpones Kochhars’ Bail Hearing

The Supreme Court of India has deferred the hearing on the CBI’s challenge against the Bombay High Court’s decision to grant bail to former ICICI Bank CEO Chanda Kochhar and her husband Deepak Kochhar in a loan fraud case. The hearing is rescheduled for January 3, 2024.

Air India Introduces New Uniforms for Crew

Air India has unveiled new uniforms for its cabin and cockpit crew, designed by Manish Malhotra. These uniforms will be gradually introduced over the coming months, coinciding with the service entry of Air India’s first Airbus A350 aircraft.

Rise in Pyramid Scheme Launches in India

According to Strategy India, over 400 new multi-level-marketing pyramid schemes were launched in India in 2023, marking the highest number in five years. This surge indicates an increase in such schemes in the country.

US and Europe as Preferred Study Destinations for Indian Students

Following Australia’s decision to reduce migrant intake and tighten student visa rules, Indian students are increasingly considering the United States and Europe as alternative study abroad destinations.

IIT Madras and FedEx Partner for Sustainable Logistics

The Indian Institute of Technology, Madras, is partnering with FedEx Express to establish the ‘FedEx Centre of Excellence for Smart and Sustainable Supply Chains,’ aiming to innovate in the field of logistics and supply chain management.

Choosing ELSS Tax-Saver Funds

As the financial year-end approaches, investors under the old tax regime in India are looking for ways to save tax under Section 80C. Equity-Linked Savings Schemes (ELSS) offer a tax benefit of up to Rs 1.5 lakh. These schemes are a popular choice for their dual benefits of tax saving and the potential for higher returns from equity investments.

Stock Market Experiences Profit Booking

The benchmark indices in the Indian stock market ended their two-day winning streak, closing below their opening levels in Tuesday’s trade. Sectors like oil and gas, realty, and utilities were the biggest losers. Analysts suggest that the market may remain range-bound until next week, as it has entered an overbought condition and could experience consolidation.

Shriram Finance to Raise $500 Million Overseas

Shriram Finance plans to raise up to $500 million (about ₹4,160 crore) through an international asset-backed securities (ABS) model. This marks the company’s first foray into global funding via the ABS route, with the issuance expected in mid-January 2024 and likely to be priced at under 9%.

Yes Bank Seeks to Offload Bad Loans

Yes Bank is looking to sell over ₹4,200 crore of bad loans, following a successful sale of a ₹48,000 crore loan book last year. This move is part of the bank’s strategy to clean up its balance sheet and improve financial health, with the bank seeking all-cash offers for these loans.

ChrysCapital and Capital Group Divest Stake in Mankind Pharma

ChrysCapital and Capital Group sold a 7.6% stake in Mankind Pharma for ₹5,589 crore through open market transactions. Following the sale, shares of Mankind Pharma fell by 3.61% on the BSE. The sale involved a 4.47% stake by Beige Ltd (an affiliate of ChrysCapital) and a 3.14% stake by Cairnhill CIPEF and Hema CIPEF (I) Ltd (affiliates of Capital Group).

Wall Street Gains After Inflation Data

Wall Street’s main indexes saw modest gains following the release of November inflation data. This data maintained expectations of a rate cut in May, with investors also awaiting the Federal Reserve’s policy decision later in the week. The indexes experienced choppy trading but were on track to reach fresh closing highs.

Bond Rally Expected to Fizzle Out

Top US bond forecasters predict that the strong year-end rally in bonds won’t continue into 2024. Notable forecasters like Goldman Sachs Group’s Praveen Korapaty and Joseph Brusuelas from RSM believe that the 10-year Treasury yield will climb to about 4.5% by the end of next year, signaling an end to the current bond rally.

Spandana Sphoorty’s Ambitious Growth Plan

Microfinance lender Spandana Sphoorty Financial has set an ambitious target to expand its assets under management to ₹28,000 crore by the end of the financial year 2028. This growth, calculated at a compounded rate of about 23% over the next three to four years, reflects the company’s strategic vision and aspirations for significant expansion.

Future Enterprises Lenders Seek New Bids

The creditors of Future Enterprises (FEL), owned by Kishore Biyani, are looking to reinitiate the bidding process. This decision aims to achieve better valuations for the company, which currently owes over ₹13,000 crore to its lenders. The process to seek fresh expressions of interest began early December and concluded recently.

Doms Industries: A Potential Growth Opportunity

Doms Industries, a major player in the pencil and stationery market, is planning to raise ₹350 crore through new share issues. This capital will be used to expand the company’s capacity. Additionally, ₹850 crore will be raised through an offer for sale by the Italian stationery maker Fabbrica Italiana Lapis ed Affini (FILA) and the Indian promoter Rajani family. Doms has a strong track record of growth, making it an attractive investment opportunity.

Adani Group’s $100 Billion Green Energy Commitment

The Adani Group has announced a significant shift towards green energy, committing to invest $100 billion over the next decade. This initiative is part of the group’s broader goal to achieve net-zero carbon emissions by 2050 across five of its companies.

Poonawalla Housing Finance Rebrands and Plans Listing

Poonawalla Housing Finance, now rebranded as Grihum Housing Finance, plans to list following a change in ownership. US-based private equity firm TPG Capital recently acquired a 99% stake in the company, marking a new phase in its corporate journey.

Indian Rupee’s Stable Performance Ahead of US Fed Meeting

The Indian rupee closed stable at 83.37 against the US dollar, as investors exercised caution ahead of the US Federal Reserve’s policy meeting. The rupee’s performance was influenced by selling pressure in domestic equity markets, according to forex traders.

Neo Asset Management Refinances Steel Exchange India Loan

Neo Asset Management has refinanced a ₹275-crore loan for Steel Exchange India, previously taken from Edelweiss Alternatives. Additionally, a fresh primary loan of ₹100 crore was provided to Steel Exchange at a reduced interest rate of 18.75%, marking a decrease from the previous rate of over 21%.

Getting Job-Ready

The Pradhan Mantri Kaushal Vikas Yojana 4.0, introduced in March this year, has revitalized skills training in India. This comes after a significant decrease in enrollments that lasted almost a year. This scheme is a step towards enhancing the skill sets of individuals, making them more employable and job-ready. The initiative reflects the government’s focus on upskilling its workforce, which is crucial for both personal career growth and the overall economic development of the country. By providing training in various sectors, the program aims to bridge the gap between the demand and supply of skilled labor. This move is particularly significant in a country like India, where a large portion of the population is young and entering the workforce. The renewed focus on skill development under this program demonstrates the government’s commitment to not only increase employment opportunities but also to ensure that the workforce is adequately trained to meet the evolving demands of various industries.

Centre may Save ₹30k cr as States Falter

The Indian government is expected to save a substantial amount of money, approximately ₹30,000 crore, from its allocated budget of ₹1.3 lakh crore for 2023-24. This saving arises due to the underutilization of funds by states for capital expenditure. The situation indicates a significant gap between the allocation of funds and their actual utilization on the ground. This discrepancy could be due to various reasons, such as delays in project implementation, lack of efficient management, or other logistical challenges faced by the states. The unspent money, while indicative of savings for the Centre, also raises concerns about the effectiveness of financial planning and execution at the state level. It suggests a need for better coordination and monitoring mechanisms to ensure that allocated funds are used effectively to achieve their intended purpose. This development is particularly important in the context of India’s overall economic growth and development, where capital expenditure plays a crucial role in creating infrastructure, generating employment, and stimulating economic activities.

Fiscal Prudence Remains Top Priority: FM

Finance Minister Nirmala Sitharaman emphasized the importance of fiscal prudence in the government’s policy, stating that it remains a top priority. However, this focus on fiscal responsibility does not mean a reduction in social welfare spending. Instead, the government aims to balance judicious spending on social welfare with a careful management of the country’s finances. This approach is crucial for sustainable economic growth, ensuring that the government’s resources are used efficiently while also addressing the needs of the less privileged sections of society. It reflects a comprehensive strategy where financial stability is not achieved at the cost of social welfare, but rather in conjunction with it. This policy direction is significant, especially in a diverse country like India, where managing fiscal resources effectively while addressing varied social and economic challenges is a complex task.

NCLAT Reserves Order on Appeal

The National Company Law Appellate Tribunal (NCLAT) has deferred its decision regarding an appeal that challenges the proposed sale of three Jet Airways aircraft to Ace Aviation. This development is a part of the ongoing legal and financial complexities surrounding the aviation industry, especially in cases of distressed assets like Jet Airways. The decision to reserve the order suggests that the tribunal is taking a cautious approach, considering all aspects of the case before arriving at a conclusion. The outcome of this decision could have significant implications for the aviation sector, particularly in terms of asset management and the resolution of distressed companies. It is an example of the intricate legal processes involved in corporate disputes, and how they can impact the broader business landscape.

Fitch: India, B’desh may see Broad Policy Continuity after 2024 Polls

According to Fitch Ratings, India and Bangladesh are likely to maintain a broad continuity in their policy directions following the 2024 elections. This prediction indicates stability and consistency in the governance and economic policies of both countries. Such continuity is crucial for investors and international partners, as it reduces uncertainty and allows for long-term planning. This stability is also important for the economic and social development of the countries, ensuring that ongoing projects and policies are not disrupted by political changes. The expectation of policy continuity underlines the strength and maturity of the political systems in India and Bangladesh, where despite electoral changes, there is a sustained focus on long-term national objectives.

APY Enrolment Crosses 6 crore

The Indian government announced that the total enrolment under the Atal Pension Yojana (APY) has surpassed 6 crore, with over 79 lakh new enrolments in the current financial year. This milestone signifies the growing awareness and acceptance of government-backed pension schemes among the Indian populace. APY is designed to provide a stable pension to the unorganised sector, which forms a significant part of the Indian economy but often lacks formal pension plans. The success of this scheme highlights the government’s efforts in promoting financial security and inclusion, especially for those who are not covered by traditional pension systems. It reflects a broader commitment to ensuring long-term financial stability for all sections of society, particularly those who are most vulnerable.

Ship Building and Repair Clusters to be Developed: Sonowal

Sarbananda Sonowal, the Minister for Ports, Shipping, and Waterways, announced the development of ship building and repair clusters in various Indian coastal regions, including Mumbai, Kochi, Chennai, Gujarat, Goa, Vishakhapatnam, Andaman and Nicobar Islands, and Odisha. This initiative is a significant step towards enhancing India’s maritime infrastructure and capabilities. The development of these clusters is expected to boost the maritime economy, create job opportunities, and strengthen India’s position in the global maritime sector. It also aligns with the government’s focus on harnessing the potential of the blue economy, which includes the sustainable use of ocean resources for economic growth, improved livelihoods, and jobs while preserving the health of the ocean ecosystem.

‘No Plan to Expand Laptop, PC Import Curbs to Other Goods’

The Indian government informed the World Trade Organization (WTO) that it has no intention of extending its import management system for IT hardware products, such as personal computers and laptops, to other goods. This clarification comes amidst global discussions on trade policies and import regulations. By limiting the import management system to specific products, India aims to balance its domestic industry’s protection with its commitments under international trade agreements. This move is also indicative of the government’s approach to trade policy, where measures are taken considering the specific needs and impacts on different sectors. It reflects a nuanced approach to trade, focusing on targeted measures rather than broad, sweeping restrictions.

Pvt Banks Need to Catch up with PSBs on Fin Inclusion Schemes: Secy

Financial Services Secretary Vivek Joshi stressed the need for private banks in India to increase their involvement in financial inclusion schemes, highlighting the gap between their performance and that of public sector banks (PSBs) in this area. He emphasized the importance of operationalizing inoperative accounts, encouraging account nominations, and raising awareness about cyber fraud. This call to action underlines the critical role banks play in promoting financial inclusion, a key factor in ensuring economic equality and stability. It also points to the need for greater collaboration and effort from private financial institutions in supporting government initiatives aimed at increasing access to banking and financial services for all sections of society, particularly the underserved.

Panel Soon for Jewellers’ Customs Plaints

The Central Board of Indirect Taxes and Customs (CBIC) plans to establish a panel to address the grievances of the gems and jewellery industry regarding customs clearances. This decision reflects the government’s responsiveness to the concerns of this significant sector, which is a major contributor to India’s export earnings. The formation of such a panel is expected to streamline the customs process, thereby facilitating smoother trade for the industry. It also indicates the government’s commitment to supporting the growth and global competitiveness of the Indian gems and jewellery sector by addressing bureaucratic and logistical challenges.

Pharma MNCs Want New Drug Launches Made Public

The Organisation of Pharmaceutical Producers of India (OPPI), representing major multinational pharma companies in India, has requested the drug controller to make information on new drug launches and approvals for Indian pharma firms publicly available. The aim is to help MNCs track potential patent infringements and obtain timely court injunctions. However, the proposal, if implemented, could negatively impact Indian companies. In a nutshell, multinational drug makers want more transparency on Indian firms’ new products so they can better enforce their patents. But local companies argue this could unfairly cripple drug discovery efforts within India.

Macquarie Capital Buys Stake in EV Charging Startup

Macquarie Capital, the investment arm of Australian firm Macquarie Group, has acquired a minority stake in ChargeZone, an Indian electric vehicle charging infrastructure startup. The deal provides funding to expand ChargeZone’s operations in India’s fast-growing EV market. Macquarie adds global expertise while the startup contributes local market knowledge – a mutually beneficial partnership in sustainable transport.

Volkswagen India to Hike Prices from January

Volkswagen Passenger Cars India announced it will increase vehicle prices by up to 2% starting January 1st, 2024 to offset rising input costs. Several other automakers have also announced nominal price hikes in early 2023 citing inflationary pressures. While the moves aim to protect profit margins, they may temporarily dampen consumer demand if purchasing power remains subdued next year as well.

Godrej Properties Targets Rs 3,000 Crore Revenue from New Luxury Project

Realty developer Godrej Properties will launch a new premium residential project in Gurugram with an expected revenue potential of Rs 3,000 crore. The company is capitalizing on resurgent demand for high-end properties after several pandemic-hit years. With India’s real estate market on the recovery path, Godrej sees a profitable opportunity in luxury housing. However, any global economic weaknesses ahead could upset the optimistic projections.

KPIT Launches Sodium-ion Battery Technology

KPIT Technologies, an automotive software provider, has unveiled its sodium-ion battery technology. This new battery chemistry uses more abundant and cheaper materials compared to mainstream lithium-ion cells. The launch signals KPIT’s push into clean mobility and advanced battery solutions for electric vehicles. If scalable, sodium-ion tech could accelerate EV adoption through lower costs.

Aviation Minister Discusses Airfare Monitoring With Airlines

Civil Aviation Minister Jyotiraditya Scindia met with airline representatives to discuss airfare pricing on certain routes as well as internal monitoring systems followed by carriers. There are concerns over rising ticket prices in some areas. The discussion indicates efforts to promote fair airfares without excessive regulation. Striking an optimal balance for both customers and airlines will be key.

Taiwan’s Gogoro Plans India Investment in Electric Two-Wheelers

Taiwan’s Gogoro plans to scale up India investments over the next few years to locally manufacture electric two-wheelers and set up battery swapping infrastructure. Gogoro sees India’s massive two-wheeler market combined with increasing EV focus by the government as a major global opportunity. The company brings proven urban battery swapping experience from Taiwan. Significant planned commitments signal confidence in India’s EV policy direction.

 

 

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