20 January 2024 : Important Financial News in India


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

Hotels Set Table for the Big Fat Indian Wedding

The hospitality industry in India is gearing up to accommodate the increasing demand for wedding venues. This move aligns with the Indian Tourism Ministry’s initiative to promote India as a global wedding destination. The “Big Fat Indian Wedding” is a term that refers to lavish, grand-scale weddings typical in India, known for their opulence and extensive guest lists. The decision by hotel chains to expand their offerings for such weddings is significant. It not only caters to the domestic market but also aims to attract couples from all over the world to celebrate their weddings in India. This strategy could boost tourism and contribute to the hospitality sector’s growth. The campaign underscores India’s cultural appeal and the economic potential of the wedding industry, which is a substantial part of the country’s service sector.

Reliance Industries Q3 Net Profit up 11% to ₹19,641 cr

Reliance Industries Ltd (RIL), recognized as India’s largest company by market capitalization, has reported an impressive 11% increase in its consolidated net profit for the December quarter. This growth is attributed to the strong performance of its diverse business segments, including telecom, retail, and oil and gas. The net profit figure, amounting to ₹19,641 crore, highlights the company’s robust financial health and diversified business model. This significant profit increase reflects RIL’s operational efficiency and its ability to leverage its presence across multiple sectors in a challenging economic environment. The report is a positive indicator of the company’s growth trajectory and its impact on the Indian economy.

PSBs Want Fair Value Rule Eased for Recap Bonds

Public Sector Banks (PSBs) in India have approached the Reserve Bank of India (RBI) seeking a relaxation in the fair value rule for recapitalization bonds. These bonds are issued by the government to PSBs as part of capital infusion strategies. The current rule mandates banks to set aside capital if the fair value of these bonds drops below their acquisition cost. The PSBs’ request for easing this rule stems from the need to manage their capital requirements more efficiently. Fair value is the estimated worth of an asset in the open market. Relaxing this rule could help banks in maintaining adequate capital without the immediate need to raise additional funds, especially in a fluctuating market environment.

Stung by Surging Cost of Funds, Banks may Flag Tight Liquidity

Indian banks are experiencing a surge in the cost of funds, despite the Reserve Bank of India’s (RBI) policy rates remaining unchanged for almost a year. This increase in funding costs is attributed to sustained liquidity drainage in the banking system. As a result, banks are likely to appeal to the RBI for interventions to address this tight liquidity situation. Tight liquidity implies a shortage of available funds in the banking system, making it more expensive for banks to acquire the capital needed for lending and other operations. The banks’ concern and potential representations to the RBI indicate a need for regulatory measures to ensure adequate liquidity in the market, which is crucial for the smooth functioning of the financial system and economic stability.

National Quantum Mission to Take off Today

The National Quantum Mission in India is set to launch, marking a significant leap in the field of quantum technologies. This initiative involves over 150 researchers and 40 institutions across the country, demonstrating India’s commitment to advancing in this cutting-edge field. Quantum technologies encompass a range of scientific studies and applications based on quantum mechanics, including quantum computing, communications, and cryptography. These technologies promise to revolutionize various sectors by providing unprecedented computational power and secure communication. The establishment of Thematic Hubs (T-Hubs) under this mission will foster research and development, positioning India as a key player in the global quantum technology landscape. This move not only enhances scientific capabilities but also holds potential economic and strategic benefits.

Laser Device on NASA Spacecraft ‘Pings’ Chandrayaan-3’s Vikram Lander

In a groundbreaking achievement, a laser device onboard a NASA spacecraft successfully communicated with the Vikram lander of ISRO’s Chandrayaan-3 mission on the Moon. This marks the first instance of laser-based communication between a lunar lander and an orbiting spacecraft. The technology employed, involving the transmission and reflection of a laser beam, represents a significant advancement in space communication methods. This achievement demonstrates the potential for more reliable and higher-bandwidth communications between space assets. The collaboration between NASA and ISRO also highlights the growing importance of international partnerships in space exploration and technology development.

Govt to Discuss Mkt Access with Trade Allies

The Indian government is proactively addressing challenges in international trade by preparing to discuss market access and non-tariff barriers (NTBs) with its trade allies. NTBs are trade restrictions that result from prohibitions, conditions, or specific market requirements that make importation or exportation of products difficult and/or costly. This initiative is aimed at enhancing India’s goods and services exports by identifying and addressing barriers hindering trade. By engaging with trade partners, the government seeks to promote smoother and more profitable international trade relations, which could lead to a boost in the country’s economic growth and global trade presence.

DGGI has no Special Power over State GST Officials: HC

The Jharkhand High Court has clarified the legal standing of the Directorate General of Goods and Services Tax Intelligence (DGGI) in relation to state GST authorities. The court ruled that the DGGI, a central agency, does not possess any special powers over state GST officials when investigating the same taxpayer for the same offence. This judgment is significant in defining the jurisdiction and authority of central and state tax bodies, ensuring clarity and fair practice in tax administration and enforcement within India’s federal structure.

Total Corpus under Pension Funds Crosses ₹11 L cr: PFRDA Chairman

Deepak Mohanty, the Chairman of the Pension Fund Regulatory and Development Authority (PFRDA), announced that the total corpus under the National Pension System and Atal Pension Yojana has surpassed ₹11 lakh crore. This milestone reflects the growing trust and participation of the Indian populace in these pension schemes, indicating a strengthening of the country’s pension system. The increasing corpus size also suggests a robust framework for securing the financial future of the aging population, playing a crucial role in the nation’s socio-economic stability.

MCA: Explanatory Note Must before Changing Co Laws

The Ministry of Corporate Affairs (MCA) in India has mandated that all proposed amendments to the principal rules and regulations under the Companies Act, including competition and insolvency laws, must be accompanied by explanatory notes. These notes should detail the reasons for the proposed changes and outline the manner and timelines for implementation. This requirement ensures transparency and clarity in the legislative process, allowing stakeholders to better understand and adapt to the changes. It also aids in informed decision-making and effective compliance by companies, thereby strengthening the regulatory framework.

Delhi Discoms, UP’s NPCL Top Performance Ratings

Delhi’s BSES Rajdhani Power Ltd, BSES Yamuna Power Ltd, Tata Power Delhi Distribution Company, and Noida Power Company Ltd (NPCL) have emerged as top performers in the power distribution sector in India for the financial year 2023. These companies have excelled in their performance ratings, reflecting their efficiency and reliability in electricity distribution. High performance in this sector is critical for ensuring stable power supply, customer satisfaction, and overall economic development. Such achievements also set benchmarks for other power distribution companies across the country.

Flaws in Measuring Housing Contribution Distorting Inflation Index: Experts

Economists have raised concerns about the accuracy of the Consumer Price Index (CPI) in India, particularly in its measurement of housing contributions. They point out that longer-duration rent agreements post-pandemic and the reliance on house rent allowances for government-owned dwellings as metrics may not accurately reflect the true market dynamics. This issue potentially distorts the CPI, an essential tool for measuring inflation. Accurate inflation measurement is crucial for economic policy-making and financial planning, both for the government and individuals. Addressing these flaws is essential to ensure the CPI remains a reliable indicator of the economic conditions.

Fresh Energy from Retail Consumers to Drive Value for RIL

Reliance Industries, India’s largest company by market value, has seen significant growth in its consumer-facing businesses. These businesses, including India’s biggest telecom and most extensive retail venture, have helped balance out the slower growth in its energy sectors during the third quarter. This shift indicates a strategic pivot for the conglomerate, moving from traditional energy sectors to more consumer-centric operations. Such a transition not only diversifies the company’s revenue streams but also potentially increases its appeal to investors looking for growth in digital and retail sectors. This change reflects the evolving Indian economy where consumer spending and digital services are becoming increasingly important.

Added Users, Data Boost Jio Platforms Net

Jio Platforms, a subsidiary of Reliance Industries that manages its telecom and digital ventures, reported a nearly 12% year-on-year increase in consolidated net profit for the December quarter. This growth is attributed to a significant rise in user numbers and data consumption, particularly during the Cricket World Cup. This development underlines Jio’s expanding market presence in India’s telecommunications sector and its ability to capitalize on major events to drive data usage. Such a trend is significant as it highlights the growing importance of digital connectivity and entertainment in India, along with Jio’s increasing dominance in this sector.

Rel Retail Posts 32% Growth in Q3 Profit

Reliance Retail, another arm of Reliance Industries, experienced a 32% increase in net profit during the fiscal third quarter, with a 23% rise in revenue. This growth was driven by unprecedented customer visits across all its retail store formats. The impressive performance of Reliance Retail demonstrates the robust health of India’s retail sector and the effectiveness of Reliance’s retail strategies. It also reflects the increasing consumer confidence and spending power in India, signaling a positive outlook for the retail industry.

Jagrut Kotecha Appointed as CEO of PepsiCo India

PepsiCo India has announced Jagrut Kotecha as its new CEO, succeeding Ahmed El Sheikh who moves to lead PepsiCo’s Middle-East Business Unit. Kotecha, with his experience as the senior vice president and chief commercial officer for PepsiCo’s AMESA region, brings in-depth knowledge and expertise to his new role. This leadership change is crucial for PepsiCo India as it navigates the competitive food and beverage market in India, aiming to adapt to changing consumer preferences and market dynamics.

Tata Sons Matches Aditya Birla Group Bid, Bags IPL Title Rights

Tata Sons has successfully retained the title sponsorship rights for the Indian Premier League (IPL) for 2024-28, matching a bid from the Aditya Birla Group. This acquisition underscores Tata’s commitment to maintaining a high-profile presence in India’s lucrative sports marketing arena. The IPL, being a highly watched sporting event, offers Tata a significant platform for brand visibility and engagement with a vast audience, emphasizing the importance of sports sponsorships in corporate marketing strategies.

Halan Family Buys Flats in K Raheja’s SoBo Property for ₹104 crore

The Halan family, prominent stock market investors, have invested ₹104 crore in purchasing eight luxury sea-view apartments in South Mumbai’s Mahalaxmi area. This transaction, covering 16,000 sq ft, signifies the continued attractiveness of Mumbai’s real estate, especially in high-end segments. Such investments by affluent families reflect the confidence in the long-term value of premium real estate in India, despite market fluctuations.

A US Trip’s all the Rage Among Indian Tourists

The United States has witnessed a 20% increase in Indian tourists since 2019, reaching 1.7 million visitors in 2023. This number is projected to hit 2 million by 2027, according to Brand USA’s chief marketing officer, Staci Mellman. This trend highlights the growing interest of Indian tourists in international travel, especially to the US, indicating a significant market for tourism industries and the strengthening of cultural and economic ties between India and the US.

Pharma MSMEs can Get Govt Help to Upgrade Facilities

The Department of Pharmaceuticals in India is offering financial assistance to micro, small, and medium enterprises (MSMEs) in the pharmaceutical sector. This initiative aims to help these enterprises enhance their facilities, ensuring improved medicine quality. This government support is crucial for the growth and competitiveness of India’s pharma MSMEs, enabling them to meet higher standards and potentially expand their market reach.

‘Indian Carriers may Order 2,000 Aircraft by 2025’

Indian carriers are expected to order approximately 2,000 aircraft by March 2025, anticipating long-term growth in both domestic and international air traffic. This projection, highlighted in a recent report, underscores the rapid expansion and modernization of India’s aviation sector. It reflects the increasing demand for air travel in India, driven by economic growth and a burgeoning middle class, and indicates significant opportunities for aircraft manufacturers and related industries.

NSE & BSE to Have Normal Trading Today, but Monday to be a Holiday

The National Stock Exchange (NSE) and Bombay Stock Exchange (BSE) in India announced regular trading sessions for January 20th, with a trading holiday set for January 22nd. This update alters previous plans for special trading sessions intended for testing emergency response capabilities. This change in schedule reflects the bourses’ adaptability and the importance of regular trading days in maintaining market stability and investor confidence. Trading holidays, common in stock exchanges worldwide, are days when no trading activities occur, often aligned with national holidays or special events.

Sebi to Crack Down on Inflated IPO Subscriptions, says Puri

The Securities and Exchange Board of India (Sebi), led by Madhabi Puri Buch, is scrutinizing unusually high subscription numbers in initial public offerings (IPOs) due to suspected malpractices. This initiative signals Sebi’s commitment to ensuring fairness and transparency in India’s capital markets. Addressing inflated IPO subscriptions is crucial for maintaining investor trust and the integrity of the market, as such irregularities can lead to market distortions and disadvantage genuine investors.

Zee Asks Sony Group to Extend Merger Deadline

Zee Entertainment Enterprises has reached out to Culver Max Entertainment, part of Sony Group Corp, seeking an extension on their merger negotiations. The delay in response from Sony’s India subsidiary adds uncertainty to this high-profile media merger. This development is pivotal in the Indian media landscape, as the completion of this merger could significantly alter the competitive dynamics in the entertainment industry.

UltraTech’s Q3 Net Surges 68% Helped by Lower Costs

UltraTech Cement reported a substantial 68% year-on-year increase in net profit for the October-December quarter, primarily due to improved operational efficiency and a 6% growth in volumes. This performance highlights the company’s robust market position and operational prowess, especially in managing costs effectively. Such financial results are significant indicators of the health of the construction and infrastructure sectors, as cement is a key material in these industries.

Tata Consumer to Raise ₹3,500 cr to Fund Acquisitions

Tata Consumer Products plans to raise ₹3,500 crore in debt to finance its acquisitions of Capital Foods and Organic India. This move indicates Tata’s strategic expansion in the food and beverage sector, leveraging brand acquisitions to diversify and strengthen its portfolio. The investment in brands like Ching’s Secret and Smith & Jones reflects the growing consumer demand for diverse and quality food products in India.

Money Markets to Remain Shut on Monday: RBI

The Reserve Bank of India (RBI) announced that various financial markets, including government securities, foreign exchange, and money markets, will remain closed on January 22nd due to a public holiday in Maharashtra. This closure, a routine practice in financial markets, signifies the importance of synchronizing market activities with public holidays to ensure smooth functioning and avoid disruptions in trading.

HZL Expects ‘Positive Feedback’ from Govt on Rejig by Next Quarter

Hindustan Zinc (HZL) anticipates a favorable response from the government on its business restructuring proposal to divide into three separate entities. This planned reorganization by HZL, a major player in the zinc industry, is crucial for enhancing operational efficiency and market competitiveness. The company’s strategic move highlights the evolving dynamics in the metals and mining sector, requiring firms to adapt for sustained growth.

Anant Raj Raises ₹500 cr via QIP Route

Anant Raj, a listed real estate developer, has raised ₹500 crore through a Qualified Institutions Placement (QIP). This capital will be used to reduce debt and for working capital needs. This fundraising illustrates the company’s proactive approach to managing its finances and indicates the real estate sector’s ongoing need for capital for expansion and debt management.

RBI Paper Backs Use of DTI Ratio with Other Norms

Researchers at the Reserve Bank of India recommend incorporating the debt-to-income (DTI) ratio as an additional criterion for assessing retail loan applicants’ creditworthiness. This suggestion aims to enhance the evaluation process for lending, ensuring a more comprehensive understanding of borrowers’ financial capabilities. Implementing such measures can contribute to a more robust and responsible lending environment.

NCLT Clears ICICI Bank-ISec Merger; EGM Set for Mar 27

The National Company Law Tribunal approved the merger plan between ICICI Bank and ICICI Securities, setting March 27 for an extraordinary general meeting (EGM) for shareholder approval. This merger marks a significant step in the consolidation and streamlining of operations within the ICICI group, indicative of strategic alignment and operational synergy in the financial services sector.

NHPC Offer for Sale Subscribed 3.9 Times

NHPC’s offer for sale was oversubscribed by 3.9 times, reflecting strong investor interest. The public sector hydropower company’s successful offering indicates investor confidence in its growth prospects and the broader potential of India’s renewable energy sector.

Nova Agri Raises Rs43.14 cr from Anchors

Nova Agritech, an agricultural input manufacturer, secured Rs43.14 crore from anchor investors ahead of its IPO. This successful pre-IPO funding round signifies investor confidence in the agricultural sector’s growth potential, particularly in companies innovating in this space.

Central Bank of India’s Net Surges 57%

Central Bank of India’s net profit soared by 57% year-on-year, driven by growth in other income and steady loan growth. This impressive financial performance underscores the bank’s solid operational footing and resilience in India’s competitive banking landscape.

CreditAccess Net Rises 64% on Strong Growth

CreditAccess Grameen reported a 64% year-on-year increase in net profit, fueled by robust business expansion and interest earnings. This financial success reflects the growing demand for microfinance services in India and the company’s ability to capitalize on this market opportunity.

$153 B: FDI into China Drops to Three-Year Low After ’22 Record

Foreign Direct Investment (FDI) into China decreased to $153 billion last year, marking the lowest level in three years. This decline reflects a reduced willingness from companies in Hong Kong and overseas to invest in mainland China. FDI is a critical indicator of international business confidence and economic integration. The reduction suggests possible challenges or shifts in the global economic landscape, such as changing geopolitical relations, trade tensions, or internal market dynamics in China. A decrease in FDI can impact China’s economic growth, technological advancements, and global trade relations, potentially leading to broader implications for the global economy.

Moody’s Downgrades China’s Bad Banks

Moody’s Investors Service downgraded the ratings of China’s largest bad-debt managers, including China Huarong Asset Management, to junk status. This decision is driven by concerns regarding the ongoing property crisis in China. Bad-debt managers are institutions that deal with non-performing assets, and their downgrade indicates increasing risk and uncertainty in the financial sector, particularly in real estate. Such downgrades can affect investor confidence, increase borrowing costs for these entities, and signal deeper issues in the economic system, possibly affecting the broader financial stability in China.

Tata Steel to Shut Down Two Blast Furnaces at Port Talbot

Tata Steel plans to shut down two blast furnaces and other heavy assets at Port Talbot in the UK by December end. This closure is expected to result in the loss of approximately 2,800 jobs over three years. The shutdown of these furnaces, integral to steel production, indicates a major shift in Tata Steel’s operations and strategy in the UK. It could be influenced by various factors like economic viability, environmental concerns, or market demand. The job losses highlight the social and economic impact of such industrial changes, affecting workers and the local economy. This move also reflects broader trends in the global steel industry, possibly linked to technological changes, environmental regulations, or shifts in global demand for steel.

Weak Demand Flattens HUL’s Q3 Top, Bottom Lines

Hindustan Unilever (HUL), India’s leading consumer goods company, has faced a stagnation in its financial performance due to weak demand. However, the company anticipates growth through moderate price increases and volume gains, contingent on stable commodity prices. This scenario reflects the challenges faced by major consumer goods firms in navigating market volatility and consumer behavior. HUL’s strategy to spur growth, despite these challenges, indicates its resilience and adaptability in a dynamic market environment. The company’s performance is a crucial indicator of consumer spending trends and economic health in India.

15% of India’s Pilots are Women, Three Times More than Global Average: Modi

Prime Minister Narendra Modi highlighted that 15% of India’s pilots are women, tripling the global average. This statistic showcases India’s progress in gender equality in a traditionally male-dominated field. It reflects the broader efforts towards women’s empowerment and inclusion in various professional sectors in India. This achievement not only enhances diversity in the aviation industry but also serves as an inspiration for women aspiring to enter this and other traditionally male-dominated professions.

CEAT to Make Steel Radials for 2-Wheelers

CEAT, a prominent tyre manufacturer, is venturing into the production of steel radial tyres for two-wheelers. This move aims to strengthen its leadership in the two-wheeler tyre segment and elevate its brand prestige. The introduction of steel radials, known for their durability and performance, could revolutionize the two-wheeler tyre market in India. CEAT’s expansion into this niche indicates innovation and adaptation to changing market demands and technological advancements in the tyre industry.

Paytm Losses Come Down by 43% in Q3

One97 Communications, the parent company of digital payment giant Paytm, reported a 43% reduction in its net loss for the fiscal third quarter. This significant decrease in losses indicates improving financial health and efficiency in Paytm’s operations. It reflects the growing adoption of digital payments in India and Paytm’s ability to capitalize on this trend while managing its expenses effectively. This development is crucial for investor confidence and the company’s long-term sustainability.

Vi Says Customers won’t be Hit as Tata Com Ends Service Contract

Vodafone Idea (Vi) reassured that their customers would not face any service disruptions despite Tata Communications terminating a service contract. Vi plans to insource the work covered by this contract. This situation underscores the agility and adaptability of telecom companies in maintaining service continuity amidst changing business partnerships. It also highlights the competitive and dynamic nature of the telecom industry, where service quality and customer experience are paramount.

Oil PSUs Achieve 84% of Capex Target in First 9 mths of FY24

State-run oil companies in India achieved 84% of their capital expenditure (Capex) target in the first nine months of the fiscal year. This expenditure, amounting to ₹89,000 crore, is focused on enhancing new production and distribution facilities. Achieving such a high percentage of the Capex target reflects the aggressive investment strategies of these companies, aimed at expanding and modernizing India’s oil infrastructure. This investment is crucial for meeting the country’s energy needs and fostering economic growth.

Dream11 Revenue Up 66%; Auditor Flags Impact of GST Dues

Dream11, a fantasy sports platform, reported a 66% increase in operating revenue and a 32% rise in net profit for fiscal 2023. However, its auditor flagged the potential impact of outstanding Goods and Services Tax (GST) dues. The significant revenue growth signifies the increasing popularity of fantasy sports in India. At the same time, the concern over GST dues highlights the regulatory and financial challenges faced by emerging digital entertainment platforms. This scenario presents a complex picture of high growth potential tempered by regulatory compliance issues.

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