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21 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

Bulls Lassoed after Intraday Charge to Peaks 

Indian stock markets experienced a significant drop on Wednesday. This happened after they reached all-time highs earlier in the day. The reason for the decline was twofold: investors were worried about the market being overbought after a consistent upward trend, and there were renewed fears about Covid. Simply put, traders who were previously optimistic (bullish) decided to sell their stocks, leading to a drop in the market.

Lenders may Have to Set Aside More Cash, AIF Inflows to be Hit 

Some banks, which were actively investing in Alternative Investment Funds (AIFs), might now have to increase their cash reserves (provisioning). This change is due to new directives from the central bank. It also means that the money flowing into these funds, which are known for aggressive management, could decrease. Essentially, banks need to keep more money on hand, which could impact their investment activities.

Govt Mulls Regulator for Healthcare Sector 

The government is considering establishing a regulator for the healthcare sector. This body would also work towards making health insurance more affordable for all citizens. The idea is to create a more organised and fair healthcare system with better insurance coverage for everyone.

New Twist in Sony-Zee Merger Tale 

Sony Pictures Networks India (SPNI) and Zee Entertainment Enterprises Ltd (ZEEL) are discussing extending their merger deadline beyond December 21. They have agreed to negotiate in good faith. This means both companies are trying to find a mutually agreeable way to combine their businesses.

More Indians Now Young and Will-ing 

A growing trend among Indians, especially those who are upwardly mobile and in the middle class, is to write their wills at a younger age, around the late 30s or early 40s. This is unusual because estate planning is typically associated with older age groups. It reflects a shift in how younger generations are thinking about their assets and future.

AI.Con: A New Voice For Jamtara-Type Scammers 

Experts warn about a new technology that can clone a person’s voice with just three seconds of audio. This advancement is both exciting and concerning. It could be used maliciously, like by scammers in Jamtara, to deceive people. The technology is so advanced that the fake voice is nearly identical to the real one.

Single-day Covid Case Count at 7-month High of 614; 21 Infected with JN.1 Strain 

India reported 614 new Covid-19 cases on Wednesday, the highest in seven months. Although the cases have increased rapidly, they are mostly mild and don’t require hospitalisation. Additionally, 21 people have been infected with a new strain called JN.1. This indicates a potential rise in COVID cases, but with less severity compared to previous waves.

Auto Parts Sales Rise 6.5% in H1 as Buyers turn to Feature-rich Vehicles

In the first half of this financial year, sales of auto parts in India increased by 6.5%, reaching $36.1 billion. This growth is attributed to the increasing preference of Indian consumers for larger vehicles with more features. Additionally, efforts to increase local content in vehicles have also boosted the domestic auto parts market. This means that as people buy more advanced cars, the demand for sophisticated auto parts rises, benefiting local manufacturers.

IGX Plans to Offer LNG Trading

The Indian Gas Exchange (IGX) intends to introduce trading of liquefied natural gas (LNG) contracts. This move will primarily benefit buyers in regions not connected by gas pipelines, as per IGX CEO Rajesh Mediratta. This initiative could make LNG more accessible to various parts of the country, enhancing energy availability in areas lacking pipeline infrastructure.

PNGRB Invites Bids for 875km Pipeline between TN, Maha

The Petroleum and Natural Gas Regulatory Board (PNGRB) has called for bids to construct an 875 km natural gas pipeline between Ennore in Tamil Nadu and Barshi in Maharashtra. This project aims to improve the natural gas distribution network, potentially boosting energy supply and economic growth in these regions.

Towns Outpace Metros in White-Collar Jobs

In 2023, smaller cities and towns surpassed metropolitan areas in creating white-collar jobs, led by the manufacturing and financial services sectors. This trend, highlighted by a recruitment startup’s study, indicates a shift in job growth towards non-metro areas, possibly due to factors like lower living costs and decentralized business operations.

Kalpataru Co Raises ₹525 cr to Complete 10 Mumbai Towers

A company within the Kalpataru group secured ₹525 crore from PAG, an international alternative investment firm. This funding, with a term of 3.5 years, will be used to complete the construction of 10 residential towers in a Mumbai suburb. This indicates a significant investment in real estate development in Mumbai, reflecting confidence in the city’s property market.

Flexi Staffing Industry Posts 5.9% Growth

India’s staffing industry saw a 5.9% increase in new jobs in the second quarter of the current fiscal year (July-September 2023). This growth, reported by the Indian Staffing Federation, indicates a strengthening of the flexi staffing sector, which provides temporary jobs. This trend may point to an evolving job market in India, with more companies opting for flexible staffing solutions.

NBFCs Tank 5-10% on Tighter AIF Norms

The Reserve Bank of India introduced new rules preventing non-banking finance companies (NBFCs) and banks from investing in alternative investment funds (AIFs) holding debt of companies they lent to. This led to a 5-10% drop in their shares, reflecting market concerns over the impact on their investment flexibility and potential conflicts of interest. The move aims to promote financial prudence but has short-term negative effects on the stock market.

NSE, MFs in a Spot After Morningstar Sustainalytics’ Exit

The exit of Morningstar Sustainalytics, an ESG rating provider, from India due to stringent capital market regulations, has put the National Stock Exchange (NSE) and mutual funds in a difficult position. This exit creates a gap in ESG evaluation, essential for investors focused on sustainable and ethical investing. The challenge now is for the NSE and mutual funds to find alternative ways to provide reliable ESG ratings.

Blackstone Sells ₹6,172-cr Stake in Embassy REIT

Blackstone, through its Special Purpose Vehicles (SPVs), sold a large stake in Embassy Office Parks REIT, valued at ₹6,172 crore. This major transaction, involving selling shares at a specific price point, indicates a significant shift in Blackstone’s investment strategy. It’s a substantial move in the real estate investment sector, likely impacting the market perception and valuation of Embassy REIT.

IndusInd Bank Sells 2.86% Stake in Nippon MF

IndusInd Bank divested a 2.86% stake in Nippon Life India Asset Management for ₹795 crore. This strategic move, involving a substantial transaction, reflects a reshaping of IndusInd Bank’s investment portfolio. The sale might indicate changes in the bank’s financial strategy or a realignment of its assets, with potential implications for its future investment direction.

Is Evergreening Evergreen?

This headline criticizes the Reserve Bank of India’s heavy-handed approach to addressing financial irregularities, specifically the practice of evergreening loans. It suggests the RBI reacted too aggressively, using a sledgehammer instead of a scalpel. The commentary implies a need for more thoughtful and nuanced regulatory measures rather than broad, sweeping actions that might have unintended negative consequences.

SAT Overturns Sebi Order in Karvy Case

The Securities Appellate Tribunal (SAT) reversed orders by the Securities and Exchange Board of India (Sebi) in the Karvy case. These orders had barred several banks from selling shares pledged by Karvy. The overturning of these orders is significant, impacting the banks involved and potentially influencing future regulatory decisions. It highlights the dynamic and sometimes contentious relationship between financial institutions and regulatory bodies.

Future Ent Lenders to Seek Bids for Insurance Biz

Lenders to Future Enterprises (FEL) are looking to auction the company’s insurance businesses separately, aiming for better recovery on FEL’s substantial ₹13,000 crore debt. This strategic move suggests that breaking down the sale of FEL’s assets into parts could fetch higher values and more effectively manage the company’s financial woes. It reflects a targeted approach to debt resolution, specifically in the context of large, debt-laden corporations.

Lower Rates Won’t Come Soon as Inflation Remains High: RBI Report

The Reserve Bank of India (RBI) reports that due to sustained high inflation, a reduction in interest rates is unlikely in the near future. High inflation negatively affects consumer and business spending, leading to cautious monetary policies. This situation indicates that borrowers and investors should not expect relief through lower borrowing costs anytime soon, emphasizing the RBI’s focus on controlling inflation over stimulating growth.

‘Low Risk of Stagflation in India’

According to a central bank research paper, India is at a low risk of experiencing stagflation, a scenario of stagnant growth combined with high inflation. The report attributes Indian inflation more to supply-side factors than to demand, offering a somewhat optimistic outlook for the economy. This analysis suggests that the Indian economy may avoid the severe economic downturn typically associated with stagflation.

Innova Captab may be a Good Buy After a Post-listing Review

Innova Captab, a pharmaceutical company, is launching an IPO worth ₹570 crore, partly for debt repayment and working capital. With the promoters diluting their stake, this move signals a significant transition for the company. Potential investors might find Innova Captab appealing after its market debut, especially considering its use of raised funds for financial strengthening and growth.

Impact of RBI Curbs on Sweetheart Deals Involving Lenders, Borrowers and AIFs

The Reserve Bank of India’s new regulations aim to prevent conflicts of interest and risky lending practices involving banks, NBFCs, and Alternative Investment Funds (AIFs). These curbs are designed to stop the practice of evergreening loans and ensure more transparent and prudent investment practices. This tightening of rules could lead to significant changes in how financial institutions engage with AIFs and manage their loan portfolios.

CCI Seeks Details from Religare on Burmans’ Merger, Role Plans

India’s competition watchdog, the CCI, is investigating Religare Enterprises regarding the Burman family’s potential merger plans and management roles. This inquiry reflects regulatory scrutiny over corporate actions that could impact market competition and governance. The CCI’s request for details suggests a proactive stance in ensuring fair business practices and preventing undue concentration of market power.

Single App in Works to Track Cargo Across Sea, Land & Air

India Inc is set to benefit from a new single app that will allow tracking of cargo movement across various transportation modes – land, rail, sea, and air. This development represents a significant step in streamlining logistics and supply chain management, offering real-time visibility of cargo movements. It could lead to increased efficiency, reduced transit times, and better coordination among different transportation sectors.

10 States/UTs Hold up Labour Codes Rollout

The implementation of four comprehensive labour codes in India is facing delays, as at least 10 states and union territories have not yet established regulations for two or more of these codes. These labour codes cover crucial areas like wages, social security, industrial relations, and worker safety. The delay in their rollout indicates a complex regulatory landscape and presents challenges in harmonizing labor laws across the country.

Parliament Watch

Under India’s G20 presidency, the World Bank Group has formed a task force to review the recommendations of the Independent Expert Group (IEG) on the reform of multilateral development banks. This initiative reflects a global effort towards improving the effectiveness and governance of these banks, which play a crucial role in international development and finance.

‘Elimination of Child Labour a Distant Goal’

A parliamentary panel in India has noted that the country is far from achieving its goal of eliminating child labour by 2025. The panel emphasizes the need for a unified definition of ‘child’ in various laws to effectively tackle this issue. This highlights the ongoing challenges in addressing child labor in India and underscores the need for cohesive legal and policy frameworks.

Formal Job Creation Under EPFO up 18% in Oct

The Employees’ Provident Fund Organisation (EPFO) in India reported an 18.2% year-on-year increase in formal job creation in October, with 1.53 million new subscribers. This growth indicates a positive trend in employment and suggests that more workers are entering the formal sector, which offers better job security and benefits.

NPS Subscribers can Now Deposit Money via UPI

The Pension Fund Regulatory and Development Authority (PFRDA) has enabled National Pension System (NPS) subscribers to make contributions using the Unified Payments Interface (UPI) QR code. This move enhances the convenience and accessibility of the pension system, making it easier for individuals to manage their retirement savings. The integration of UPI with NPS is a significant step towards digital financial inclusion.

Viacom Aims to Increase Revenue in Hindi and Kannada Viewership

Viacom18, owned by Reliance Industries, plans to boost its market share in Hindi and Kannada general entertainment categories due to increased prime-time viewership. They aim to capitalize on the combined ad revenues of over ₹9,000 crore generated annually from these regions. This suggests that Viacom18 is looking to make more money by focusing on popular TV content in these languages, which means they might create more shows, sell more advertising, or increase subscription fees for viewers. For example, they could produce hit shows in Hindi and Kannada that attract more advertisers and viewers.

Tata Motors Expects Record Passenger Vehicle Sales

Tata Motors, India’s third-largest passenger vehicle maker, anticipates a record-breaking year for sales in both calendar and fiscal terms. They plan to achieve this by launching new car models with both electrical and conventional powertrains. This indicates that Tata Motors is betting on innovative vehicle designs to attract more buyers, potentially disrupting the market. For instance, they might introduce electric SUVs with advanced features and competitive pricing.

Tata Motors SUVs Receive 5-Star Safety Rating

Tata Motors’ SUVs Safari and Harrier have earned a prestigious five-star rating for adult and child occupant protection from Bharat New Car Assessment Programme (Bharat-NCAP). This means these vehicles are considered highly safe for passengers, which can boost their sales and brand reputation. For example, families looking for safe cars may choose Tata Motors’ SUVs over competitors.

FMCG Companies Adopt Tech for Stock Management

Major FMCG companies like Nestle, ITC, and Coca-Cola are embracing real-time data exchange and demand forecasting to avoid stock shortages on online platforms like Zomato-owned Blinkit and Swiggy Instamart. This shift in strategy indicates that these companies are adapting to changing consumer behavior and relying on technology to optimize their supply chain. For example, they might use data to ensure that their products are always available for online customers.

Ban on Anti-Cold Medicine for Kids Under 4

The drug regulator has banned the use of fixed-dose combination (FDC) chlorpheniramine maleate and phenylephrine for children under four years old. This action aims to protect young children from potential health risks associated with the medicine. Parents and healthcare providers will need to be aware of this ban to ensure the safety of young children.

Proposed Law to Protect Doctors from Medical Negligence

Union home minister Amit Shah announced plans to amend the Criminal Law Bill to exempt doctors from criminal prosecution in cases of death due to medical negligence. This move could provide legal protection for doctors but also raises questions about patient safety and accountability.

Rise in GenAI Learning in India

A study by Coursera reveals that there is a significant increase in the enrollment of genAI content in India, with a fourfold growth in internet searches for GenAI content compared to the previous year. This trend indicates a growing interest in artificial intelligence education, which could lead to better job opportunities in the field.

Smartphones with On-Device AI Predicted to Grow

The smartphone industry is expected to see a substantial growth in smartphones with on-device GenAI capabilities, reaching 40% of the market by 2027. This implies that consumers are increasingly valuing AI features in their smartphones, which could drive innovation and competition in the industry.

Youth and Small-Town Consumers Boost Used Luxury Sales

Sales of used luxury items are on the rise in India, driven by the aspirations of young shoppers and consumers in tier-II and tier-III cities. This trend suggests that luxury brands have an untapped market in smaller towns and among younger buyers.

WSB Partners Investing in Warehousing

WSB Real Estate Partners is entering the warehousing sector in India, planning to invest over ₹1,200 crore to build its portfolio over the next two years. This investment highlights the growing importance of logistics and warehousing in India’s evolving economy.

Sachin Tendulkar’s Company Leases Flats

SRT Sports Management, owned by cricketer Sachin Tendulkar and his wife, has leased two apartments in Mumbai’s Bandra suburb. This suggests that high-profile individuals are making real estate investments in prime locations.

TVS Motor Aims for Premium Motorcycle Market Share

TVS Motor is targeting a larger share of the premium motorcycle segment. This indicates a strategic shift to cater to the higher-end motorcycle market, potentially introducing new models or upgrading existing ones to attract premium buyers.

Welspun One’s Logistics Hub Investment

Welspun One plans to invest around ₹700 crore in the development of an industrial and logistics hub at Jawaharlal Nehru Port’s Special Economic Zone. This investment underscores the significance of logistics infrastructure in India’s economic growth.

Disruption: Startups & Tech 

Razorpay and Cashfree are strategizing to regain market share lost due to earlier RBI restrictions. With the RBI now granting them the payment aggregator license, these fintech companies are actively seeking to attract merchants they couldn’t previously onboard. Their efforts include forming dedicated teams and collaborating with banks, highlighting their commitment to expanding their customer base and strengthening their position in the competitive financial technology sector.

The Headlong Rush for a Payment Aggregator Licence 

The RBI’s recent issuance of payment aggregator licenses sparked intense competition among firms like Razorpay, Cashfree, Open Financial Technologies, Enkash, and Google Pay. These licenses are crucial for these companies to process online payments, marking a significant milestone in their growth and operations. The licensing event signifies the RBI’s role in regulating and empowering the digital payments ecosystem, with these companies now poised to expand their services.

In Third Layoff this year, ShareChat Fires 200 Staffers 

ShareChat, a regional social media platform, announced a significant staff reduction, laying off 15% of its workforce. This move, aimed at cost-cutting and achieving profitability within 4-6 quarters, marks the company’s third round of layoffs this year. It reflects the broader challenges tech companies face in balancing growth with financial sustainability, especially in a market as diverse and competitive as India’s.

SoftBank India Operating Partner Vikas Agnihotri Quits 

Vikas Agnihotri, SoftBank India’s first operating partner, has left the company. His departure is notable as he played a key role in Paytm’s public listing and other major projects. Agnihotri’s exit could signal a shift in SoftBank India’s strategy or leadership, potentially impacting its future investments and operations in the tech sector.

Govt may Release Personal Data Bill Rules in a Fortnight 

The Indian government is poised to unveil the Digital Personal Data Protection (DPDP) Bill’s administrative rules soon, with a final version expected by January 2024. This legislation will significantly impact how personal data is managed, affecting both consumers’ privacy and businesses’ operational protocols. The bill’s introduction is a critical step in establishing a comprehensive data protection framework in India.

Euler Motors’ FY23 Loss Widens to ₹175cr 

Euler Motors, an electric vehicle manufacturer, reported a substantial increase in its fiscal year 2023 losses, totaling ₹175 crore compared to ₹36 crore the previous year. This steep rise in losses highlights the financial challenges facing the company as it navigates the competitive and evolving electric vehicle market, despite the growing demand for sustainable transportation solutions.

Modi Taps Bhashini AI Platform to Bridge the Language Divide 

Prime Minister Narendra Modi utilized Bhashini, an AI-powered language platform, in public events to bridge language barriers, particularly for audiences in southern India. Bhashini exemplifies the Indian government’s commitment to leveraging technology for inclusivity, enabling diverse linguistic groups to access and engage with governmental communications effectively.

Feeling Lonely? Chat up with an AI Girlfriend 

Digi AI Romance, a new AI chatbot app, offers users a digital companion to alleviate loneliness. Users can personalize their AI ‘girlfriend’s’ appearance, voice, and interests, providing an innovative solution for those seeking emotional interaction. This app reflects the growing trend of AI in personal and social applications, offering a unique blend of technology and companionship.

Pilgrim’s Revenue Up Four-fold to ₹76.5 cr 

Pilgrim, a direct-to-consumer personal care brand, reported a significant revenue increase, quadrupling to ₹76.5 crore. However, the company also experienced a substantial rise in net losses due to escalating expenses. This scenario illustrates the challenges of scaling up in the D2C market, where growing revenues can be accompanied by increasing operational costs.

‘India Saw 761 eThreats a Minute’ 

India experienced a staggering rate of cyber threats in 2023, with an average of 761 threats detected per minute. This high frequency underscores the critical importance of robust cybersecurity measures in the country. The data highlights the pervasive nature of cyber threats in today’s digital landscape and the need for continuous vigilance and advanced security solutions.

Swedish Co Qlik Buys Mozaic Data 

Swedish data analytics company Qlik acquired Mozaic Data, an AI-driven data management provider, expanding its portfolio and capabilities. This acquisition demonstrates the ongoing global trend of consolidation in the tech industry, particularly in data analytics and AI sectors, and highlights the value of innovative data management solutions in today’s data-driven business environment.

 

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