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19 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

‘Allow Non-auction Spectrum Allocation in Certain Situations’

The Indian government is seeking clarity from the Supreme Court on a crucial telecommunications issue. It has inquired whether it can allocate airwaves administratively, bypassing the usual competitive auction process. This request arises from the need to address unforeseen state priorities that may include national security concerns or situations where the technical and economic aspects make auctioning spectrum impractical. The government’s query underscores a balance between adhering to standard procedures and being flexible enough to respond to urgent national needs.

Equity Fundraises Break with Dec Tradition this Year

Breaking from the usual December tradition, equity fundraisers have taken a different turn this year. Traditionally, December is known for its reduced fundraising activities, as international investors take a hiatus during the Christmas and New Year holidays. This seasonal lull in financial activity is a well-established pattern, reflecting the global nature of the investment community and its rhythms. However, this year’s departure from the norm suggests a shift in market dynamics or investor behavior, indicating a potentially significant change in the global financial landscape.

US Parent of Ebix Cash Files for Bankruptcy

In a significant development, Ebix Inc, the US-based parent company of Indian payments and remittance company EbixCash, has filed for bankruptcy protection in a Texas court. This move comes after the company defaulted on a substantial $617-million loan, as reported by Bloomberg. The bankruptcy filing of Ebix Inc could have far-reaching implications for its Indian subsidiary, EbixCash, particularly in terms of its financial stability and operational continuity.

Construction in Top Gear, Equipment Sales Eye New Highs

The construction sector is witnessing a robust phase, with equipment sales on the rise and expected to hit record highs this financial year. This growth, marked by strong double-digit figures for the second consecutive year, is primarily driven by increased government investment in infrastructure development. The upcoming general elections next year further spur this momentum. The surge in construction equipment sales not only reflects a booming sector but also serves as an indicator of overall economic vitality.

With Flights Nosediving on Some Routes, Sky’s the Limit for Airfares

In a significant development in the aviation sector, airfares have skyrocketed on certain domestic routes. This price hike, reaching up to threefold in some cases, is attributed to reduced competition in these routes, leaving one or two airlines dominating the skies. This scenario has led to a substantial increase in airfares, affecting travelers and indicating a shift in the dynamics of the domestic aviation market.

NIA Arrests 8 ISIS Operatives in 19 Raids

The National Investigation Agency (NIA) of India conducted a significant operation against the Islamic State of Iraq and Syria (ISIS), a globally recognized terrorist organization. In a coordinated effort on Monday, the NIA carried out 19 raids across four states, targeting the Ballari module of ISIS. This operation led to the arrest of eight operatives, including the leader of the module, Minaz. The NIA’s crackdown was a proactive measure to thwart the group’s plans, which included executing terrorist acts, notably the deployment of improvised explosive devices (IEDs). This decisive action by the NIA is a key step in combating terrorism and preventing acts of violence orchestrated by ISIS, ensuring national security and public safety.

Ninth Round of Commercial Coal Auctions Set for December 20 with 26 Mines

The Indian government is preparing to launch the ninth round of commercial coal mine auctions on December 20. This upcoming round will put 26 mines up for auction, which includes seven fully explored and 19 partially explored mines. Additionally, five coal mines will be offered in the second attempt of the seventh round of these commercial coal auctions. This initiative is a part of the government’s ongoing efforts to boost the coal sector, enhance its efficiency, and meet the country’s growing energy needs.

Government Reconstitutes National Startup Advisory Council

In a significant move to bolster the startup ecosystem, the Indian government has reconstituted the National Startup Advisory Council (NSAC). The reformation of the NSAC includes the nomination of 31 non-official members, featuring prominent figures such as Abhiraj Singh Bhal from Urban Company and Kunal Bahl from Snapdeal. This council plays a crucial role in shaping policies and frameworks to encourage innovation and entrepreneurship, which are vital for the nation’s economic growth and technological advancement.

Siemens India Approves Demerger of Energy Business

Siemens Ltd, a prominent player in the Indian industrial sector, has taken a significant strategic step. The company’s board approved a plan to demerge its energy business into a separate entity, as detailed in a recent regulatory filing. This move indicates a major restructuring within Siemens India, aiming to streamline its operations and possibly unlock greater value in its energy segment. Such demergers often allow companies to focus more effectively on their core areas and adapt more rapidly to market changes.

Delayed BIS Approval Affects Imported Luxury Shoe Brands

The high-end footwear industry, known for its designer labels and luxury sports shoes, is facing a challenging situation. The delay in obtaining the Bureau of Indian Standards (BIS) nod for sourcing units has led to turmoil, with manufacturers expressing concerns that consumers might miss out on the new spring-summer season launches. This delay highlights the impact of regulatory approvals on the luxury goods market and the need for a more efficient process to avoid significant disruptions.

Domestic Natural Gas Consumption Rises 6% in November

India’s domestic natural gas usage saw a 6% year-on-year increase in November, buoyed by a surge in supply from domestic fields, according to data from the Ministry of Petroleum and Natural Gas. This uptick in consumption reflects the country’s growing energy demands and the government’s focus on enhancing the usage of cleaner energy sources.

Ambuja Cements Plans ₹6,000 Crore Investment in Green Energy

Ambuja Cements has announced an ambitious plan to invest ₹6,000 crore by the financial year 2025-26. This investment aims to add 1,000 MW of solar and wind power capacity across Gujarat and Rajasthan. Such a significant investment underscores the company’s commitment to sustainable energy and aligns with the broader environmental goals of reducing carbon emissions.

Sembcorp Collaborates with Japanese Firms for Green Ammonia Project

Sembcorp Industries, based in Singapore, revealed a partnership with two Japanese companies to produce green ammonia in India, intended for supply to Japan. This collaboration marks a significant step in the development of sustainable energy sources and highlights the increasing global cooperation in tackling environmental challenges through innovative projects.

Chanda Kochhar Challenges Prosecution Sanction in High Court

Former ICICI Bank CEO and MD, Chanda Kochhar, has approached the Bombay High Court, challenging the sanction granted by the bank’s board for her prosecution. This move is in connection with the alleged irregularities in loans provided to Videocon. The case draws attention to the ongoing scrutiny and legal challenges faced by executives in the financial sector.

28K & Counting: That’s the 2023 Layoff Data from Startup Land

In 2023, startups are facing a significant challenge as over 28,000 employees were laid off in the first three quarters. This trend highlights the struggles within the new-economy sector, particularly among startups. These companies are undergoing major restructuring efforts, aimed at conserving cash and focusing on essential verticals for sustaining operations. This shift comes amidst a prolonged period of reduced funding, often referred to as a “funding winter.” It indicates a cautious approach by startups in managing resources and prioritizing areas critical for their survival and continued functioning in a challenging economic landscape.

Inside Amazon’s Effort to Challenge Musk’s Starlink

Amazon.com Inc. embarked on a daring venture to challenge Elon Musk’s Starlink by launching its first satellites. This ambitious project, however, faced initial turmoil when it seemed one satellite was lost after entering orbit over the Atlantic Ocean at 2:24 pm. This moment of uncertainty lasted for a tense hour or two, signifying the high stakes and challenges involved in space technology and the expanding competition in the satellite-internet sector.

Udaan Lays Off 120 Employees

Udaan, a Business-to-Business (B2B) e-commerce company, announced the layoff of approximately 120 employees, equating to 10% of its workforce. This decision was made shortly after the Bengaluru-based firm secured a substantial $340 million in a funding round. The layoffs reflect the ongoing adjustments and shifts in the e-commerce sector, as companies reevaluate their strategies and workforce needs in response to evolving market conditions.

IBM to Buy Data Integration Assets from Software AG

IBM has announced a significant acquisition, agreeing to purchase the enterprise integration platforms of Software AG for 2.13 billion euros ($2.33 billion). This strategic move is aimed at strengthening IBM’s capabilities in artificial intelligence and hybrid cloud services. The acquisition underscores IBM’s commitment to expanding its technological offerings and enhancing its competitive position in the AI and cloud computing markets.

Indian Cos Seek Comprehensive Cybersecurity: HPE India CTO

The Chief Technology Officer of Hewlett Packard Enterprise (HPE) India reported that Indian organizations across various sectors are increasingly focusing on cybersecurity. There is a growing demand for a multi-layered, comprehensive, and “secure-by-design” cybersecurity model. This trend highlights the heightened awareness and proactive approach of Indian companies in safeguarding their digital infrastructure against the evolving landscape of cyber threats.

Zupee Revenue Doubles to ₹832 crore in FY23

Zupee, an online real-money gaming startup backed by Matrix Partners, has achieved a significant milestone by doubling its operating revenue to ₹831.51 crore in FY23, up from ₹405.10 crore in the previous year. This remarkable growth demonstrates Zupee’s strong market presence and the expanding potential of the online gaming industry in India.

Accenture Launches GenAI Studio

Accenture has launched a generative artificial intelligence studio in Bengaluru. This new studio is dedicated to developing a comprehensive suite of generative AI capabilities for enterprises. These capabilities are designed to optimize business processes, reflecting Accenture’s commitment to innovation and its role in advancing AI technology within the corporate sector.

Physics Wallah Eyes Offline Expansion

Edtech unicorn Physics Wallah is planning a significant expansion in 2024, aiming to increase its offline presence from 64 to 100 centers. Co-founder Prateek Maheshwari revealed that the expansion would be funded by a ₹100-crore corpus allocated for a two-year period starting January 2023. This expansion strategy highlights the company’s ambition to enhance its physical footprint and underscores the growing trend of blending online and offline educational models.

Bose Acquires Minority Stake in Noise’s First Fundraise

Bose Corporation’s investment in Noise, an Indian wearables brand, marks Noise’s first fundraising venture. This partnership is significant, as Bose is a global leader in audio technology, and Noise is a growing brand in the wearables sector. The collaboration could lead to innovative products and growth in the smart wearable market, similar to a small startup gaining expertise and market access through a partnership with a tech giant.

Landmark Telecom Bill to Overhaul Old Laws

The Indian government’s Telecommunications Bill 2023 is set to replace outdated telecom laws, impacting the sector significantly. This new bill favors Over-The-Top (OTT) services like WhatsApp and Signal by excluding them from traditional telecom regulations. It also proposes easier spectrum allocation for satellite communications. This update is akin to modernizing old infrastructure to better suit the digital age, potentially transforming the way digital communication is regulated and managed in the country.

Trai’s Consultations on Satcom and OTTs to Become Redundant

With the new Telecommunications Bill 2023, the ongoing consultations by Trai (Telecom Regulatory Authority of India) on satellite communication (Satcom) and Over-The-Top (OTT) services might become unnecessary. The bill’s provisions are likely to override current discussions, making previous deliberations on these topics redundant. It’s like an updated law making older, less relevant discussions moot, streamlining the regulatory approach to these sectors.

Electric Buses’ Market Share Expected to Double

Crisil Ratings predicts that electric buses will account for about 8% of new bus sales in India, a significant increase from current figures. This growth reflects the shift towards sustainable and environmentally friendly transportation solutions. The rising adoption of electric buses is similar to the trend of consumers increasingly choosing electric cars over traditional gasoline vehicles, indicating a broader move towards green energy and reduced carbon footprints in public transportation.

TDSAT Directs DoT to Adjust Excess Collection from Vi

The Telecom Disputes Settlement and Appellate Tribunal (TDSAT) has directed the Department of Telecommunications (DoT) to adjust an excess collection of Rs 755.52 crore from Vodafone Idea (Vi) against its statutory dues. This decision provides financial relief to the struggling telecom operator. It’s akin to a customer receiving a refund for an overcharge, easing their financial burden and correcting a balance discrepancy.

Insacog to Review Covid Situation Amid Rising Cases

The Indian SARS-CoV-2 Genomics Consortium (Insacog) plans to review the current COVID-19 situation, especially with new variants emerging. This meeting signifies the government’s continued vigilance and proactive approach in monitoring and managing the pandemic. It’s comparable to a medical task force convening to assess and strategize against a resurgent health threat, ensuring preparedness and appropriate response measures.

Centre Urges States to Increase Covid Testing

The Indian health ministry has advised states to ramp up COVID-19 testing in response to the rise in cases and the emergence of new variants. This action is similar to a heightened security check in response to increased risks, aiming to detect and contain the spread of the virus more effectively, thereby safeguarding public health.

Banks Request RBI to Defer Norm on Penal Interest Rate

Banks in India have requested the Reserve Bank of India (RBI) to postpone the implementation of a new rule that prohibits penal interest rates on non-compliant borrowers. This request is akin to students asking for an extension on a new, stricter examination policy. The banks are seeking additional time to adjust to the changes, suggesting a shift to the next financial year for implementation.

Remittances to India Projected to Increase to $125 Billion

Remittances to India are expected to surge to $125 billion in 2023, according to the World Bank. This increase, amounting to a 12.4% rise, would make India the world’s largest recipient of remittances. The growth in remittances is similar to a significant boost in income for a family, enhancing the country’s financial stability and contributing to its GDP.

Incentives for Underground Mining Under Consideration

The Indian government is contemplating offering incentives for the mining of critical minerals, essential for various sectors like electronics and defense. This consideration is akin to providing extra support to farmers for cultivating vital crops. These incentives aim to boost the production of minerals crucial for high-tech industries and national security.

India and ADB Sign Agreements to Enhance Infrastructure

India has signed agreements with the Asian Development Bank (ADB) for two loans totaling $500 million to improve its infrastructure. This financial support is similar to getting a substantial loan for major home improvements, aiming to enhance the country’s infrastructure capabilities and support economic growth.

Spice Prices Contribute to Inflation Surge

The prices of spices like cumin, turmeric, and chillies have significantly increased, contributing to the overall inflation in India. This surge in spice prices is comparable to the rising cost of essential ingredients in a recipe, affecting the overall expense of cooking a meal and indicating broader economic pressures.

Centre Examines SEZ Common Area Benefit Requests

The Indian government is assessing industry requests regarding benefits for areas within Special Economic Zones (SEZs). This review is similar to a landlord considering additional privileges for tenants, aiming to clarify and potentially enhance the benefits for businesses operating in these designated zones.

India-UK Free Trade Agreement Talks to Continue

India and the UK will continue negotiations for a free trade agreement, with the next round of talks focusing on resolving outstanding issues. This process is like two neighbors discussing terms for sharing resources, aiming to mutually benefit both countries by easing trade restrictions and enhancing economic cooperation.

UK’s Carbon Tax Could Affect Indian Exports

The UK’s plan to implement a carbon border adjustment mechanism could impose a tax of 14-24% on certain Indian exports. This tax, effective from 2027, is like an environmental levy on products based on their carbon footprint, potentially impacting India’s trade by making its exports more expensive and less competitive in the UK market.

India’s Direct Tax Collections Surge by 21%

India’s direct tax collections have seen a significant increase of 21%, indicating robust economic activity and revenue generation. This rise is akin to a business experiencing a surge in sales, reflecting a healthy financial state and effective tax administration.

Google Removes Over 2,500 Fraudulent Loan Apps

Google has removed over 2,500 fraudulent loan applications from its Play Store in an effort to combat digital fraud. This action is similar to a bank tightening security measures to protect its customers from financial scams, reflecting a commitment to user safety and integrity in digital financial services.

Parliament Watch: Tax Exemption Denial for BCCI

The Income Tax department has denied a tax exemption to the Board of Control for Cricket in India (BCCI). The matter, currently in court, is like a high-profile audit of a major sports organization’s finances, emphasizing the scrutiny of financial practices in sports bodies.

NHAI Surpasses Monetisation Target with TOT Projects

The National Highways Authority of India (NHAI) has exceeded its monetization target through the toll, operate, and transfer (TOT) model. This achievement is akin to a company surpassing its annual revenue goals, demonstrating effective management and financial strategy in leveraging infrastructure assets for revenue generation.

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