22 December 2023 : Important Financial News in India


Source: Economic Times, “Today’s ePaper”

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Table of Contents

Flipkart Eyes $1b Funding, with $600m from Walmart

Flipkart, a leading e-commerce company in India, is negotiating to raise $1 billion. A significant portion of this funding, $600 million, is expected to come from Walmart, its parent company. This move marks Flipkart’s first major fundraising effort since 2021, when it secured $3.6 billion, reaching a valuation of $37.6 billion. This development indicates Flipkart’s ongoing growth and expansion plans in the competitive e-commerce sector.

Apex PE-VC Body Seeks Govt’s Help to Ease AIF Curbs

The Indian Venture and Alternate Capital Association (IVCA) is engaging with the government to relax restrictions on Alternative Investment Funds (AIFs). These restrictions were recently imposed by India’s banking regulator. IVCA’s efforts to ease these curbs highlight the challenges that private equity and venture capital firms face in India. Relaxing these regulations could potentially lead to more investments and growth in various sectors.

Sebi Probing Burmans’ Religare Offer

The Securities and Exchange Board of India (Sebi) is investigating an open offer made by the Burman family, the largest shareholder of Religare, to the public shareholders of the financial services company. This probe underlines Sebi’s role in overseeing and ensuring fairness in financial transactions, particularly in offers that could affect public shareholders’ interests.

FPIs’ India Assets Top $700 b With Robust Inflows in 2023

Foreign Portfolio Investors (FPIs) in India have reached a milestone with their assets exceeding $700 billion, indicating strong international confidence in the Indian market. This growth, reaching $723 billion, showcases India’s attractiveness as an investment destination, driven by its economic potential and stability. The substantial inflow of foreign capital reflects positive investor sentiment and expectations of profitable returns, highlighting India’s evolving role in the global financial landscape.

DRI Initiates Probe into Parts Imports by Wind Energy Cos

The Directorate of Revenue Intelligence (DRI) is investigating wind energy companies in India for possible misdeclaration and underpayment of customs duty on imported equipment. This probe signifies the government’s vigilance in ensuring fair trade practices and compliance with tax regulations. The scrutiny of these imports underscores the importance of transparency and adherence to financial regulations in the renewable energy sector, a critical area for India’s sustainable development goals.

Inox India Lists at 44% Premium

Inox India, specialising in industrial gases, made a strong debut on the National Stock Exchange, opening at a 44% premium over its initial public offering (IPO) price. This successful listing demonstrates robust investor confidence in the company and reflects the growing interest in India’s industrial sector. The premium listing of Inox India also indicates a healthy appetite in the market for new and promising stocks, signalling a positive environment for future IPOs in similar sectors.

Rupee Falls 9 P to Close at 83.27

The Indian Rupee experienced a decline, falling by 9 paise against the US dollar. This depreciation was influenced by the withdrawal of foreign funds and concerns over global trade disruptions. Such currency movements are critical as they affect the import-export balance, impact foreign investment flows, and reflect broader economic sentiments. The Rupee’s performance in the currency market is a key indicator of India’s economic health and its interactions with the global economy.

Piramal Enterprises to Provide for Over ₹3k-cr Investments

Piramal Enterprises announced plans to allocate more than ₹3,000 crore for investments in alternative investment funds (AIFs). These funds are primarily invested in companies with lending exposures from non-banking financial companies (NBFCs). This strategic move indicates Piramal’s focus on diversifying its investment portfolio and supporting sectors critical to India’s economic growth. It also reflects the company’s confidence in the potential of alternative investments and its commitment to contributing to the broader financial ecosystem.

Revival in IT Stocks Likely to Continue in New Year

The Indian information technology (IT) sector is expected to maintain its upward trajectory into the new year. This optimism is partly due to signals from the US Federal Reserve about potential interest rate cuts in 2024, which could ease concerns over high stock valuations. The IT sector’s resilience and growth prospects are seen as a positive sign for investors, suggesting that these stocks could offer attractive returns amid a generally favourable market environment.

Wall St Rises, Bond Yields Soften

Wall Street experienced a recovery with stocks rising, and bond yields showing a softening trend. This shift in the market was influenced by data suggesting that borrowing costs might decrease in the coming year. The performance of Wall Street often serves as a barometer for global financial markets, and such trends can impact investor sentiment and economic outlooks worldwide. The recovery indicates a return of investor confidence and expectations of a more favourable economic environment.

Credo Brands, RBZ Jewellers and Happy Forgings’ Initial Offers Fully Subscribed

The initial public offerings (IPOs) of Credo Brands, RBZ Jewellers, and Happy Forgings were met with strong investor interest, achieving full subscription on the final day of bidding. This enthusiastic response highlights the robust market demand for new equity offerings, particularly in diverse sectors like fashion, jewellery, and manufacturing. The overwhelming subscription rates, especially for Happy Forgings, demonstrate market confidence in these companies’ growth potential and business models.

Swan Gets One More Year to Pay Second Tranche for RNEL

Swan Energy received a one-year extension from the National Company Law Tribunal to make a second tranche payment of Rs312 crore for acquiring Reliance Naval and Engineering (RNEL). This extension reflects the flexibility and ongoing negotiations in corporate acquisitions, particularly in high-value deals. It also signifies the challenges and strategic considerations involved in such transactions, emphasizing the importance of financial planning and regulatory compliance in the corporate sector.

NIFF to Invest Rs675 cr in GMR Visakhapatnam Airport

The National Investment and Infrastructure Fund (NIFF) plans to invest Rs675 crore in GMR Visakhapatnam International Airport. This investment aims to develop and operate the Bhogapuram International Airport in Andhra Pradesh, signifying a commitment to enhancing India’s aviation infrastructure. The investment by NIFF, a major player in infrastructure funding, underscores the importance of developing regional connectivity and modernizing airport facilities to support economic growth and tourism.

Pre-provisioning Operating Profits of Banks up 13.2% in Q2

Indian banks reported a 13.2% year-on-year increase in their pre-provisioning operating profits in the September quarter. This growth is attributed to higher interest income, treasury gains, and controlled operating expenses. The increase in profits indicates a strong performance by the banking sector, which is essential for economic stability and growth. It reflects the banks’ ability to generate sustainable revenues and manage costs effectively, ensuring their readiness to support economic activities and withstand financial challenges.

Midair Gap Between Aircraft to Halve from Jan 1 

Starting January 1, India will enhance its air traffic control capabilities by implementing more advanced surveillance technology. This upgrade, facilitated by the Airports Authority of India (AAI), will allow air traffic controllers to reduce the lateral distance between aircraft in flight. This reduction in separation will lead to more efficient use of airspace, potentially increasing the number of flights that can be safely managed and reducing flight delays. This technological advancement demonstrates a significant step in modernising India’s aviation infrastructure.

Mumbai & Suburbs, Bengaluru and Delhi-NCR Most Searched for Properties on Magicbricks 

In 2023, the Mumbai Metropolitan Region (MMR), Bengaluru, and the National Capital Region (NCR) were the most searched areas for property on Magicbricks. This trend indicates a high demand for real estate in these regions, reflecting their economic growth and attractiveness for residential and commercial investment. The popularity of these areas may be due to factors like job opportunities, infrastructure development, and quality of life, making them preferred destinations for potential homebuyers and investors.

Waiver Provisions Scrapped, New Telecom Bill may Derail Voda Idea Recovery: Experts 

The Telecommunications Bill of 2023 has removed provisions for waiving license fees, penalties, and charges, which experts believe could hinder the recovery of Vodafone Idea (Vi). This telecom operator, already struggling financially, might face additional challenges in raising funds due to this legislative change. This development could have significant implications for the competitive landscape of India’s telecom sector and Vi’s ability to maintain its market position.

Rights Bodies and Activists Call for Withdrawal of Bill 

Over 50 organizations and digital rights activists have urged the Indian government to withdraw the Telecommunications Bill of 2023. This coalition, including international and domestic groups like Signal Foundation and Access Now, raises concerns about the bill’s impact on digital rights and freedoms. Their collective action underscores the importance of considering civil liberties and public opinion in the formulation of telecommunications policy.

IIT Delhi’s Class of 2024 Bags 1,000+ Job Offers in Phase 1 Placement 

The 2024 batch of the Indian Institute of Technology (IIT) Delhi secured over 1,000 job offers, including pre-placement offers (PPOs), in the first phase of campus placements. This achievement highlights the institute’s academic excellence and the high employability of its graduates. It also reflects the strong demand for skilled professionals in various industries, showcasing the robustness of India’s job market, particularly in technology and engineering sectors.

Some Small Banks’ Returns on Savings A/Cs Top FD Rates of Bigger Peers

Small banks in India, often with limited branch networks, are offering higher returns on savings accounts compared to the fixed deposit (FD) rates of larger banks. This trend indicates a competitive strategy by smaller banks to attract more deposits, especially in a financial environment where credit growth is outpacing deposit accumulation. By offering higher savings rates, these smaller banks are appealing to depositors who might typically choose larger, more established banks, thereby diversifying their customer base and enhancing their financial footing.

LRS Outflows Fall Sharply in Oct After TCS Regime Takes Effect

After the implementation of enhanced tax deductions at source (TCS) on foreign remittances, there was a significant 37% drop in outward remittances by resident Indians in October. This decrease, as reported by the Reserve Bank of India (RBI), suggests that stricter tax rules can influence individuals’ decisions on sending money abroad, impacting the volume of foreign currency outflows from the country.

‘AMFI’s Methodology to Classify Small Caps May Face Challenges’

The Association of Mutual Funds in India (AMFI) may encounter difficulties with its small-cap stock classification formula in the upcoming semi-annual reclassification. Challenges arise due to the recent surge in stock prices and the introduction of new companies into the market, which could disrupt the current categorization framework and impact investment strategies.

LIC Gets 10 Yrs to Meet Public Holding Norm

Life Insurance Corporation of India (LIC) has been granted a ten-year period, starting from its listing date, to comply with the 25% minimum public shareholding (MPS) norms set by the Securities and Exchange Board of India (Sebi). This extended timeframe until May 2032 allows LIC to gradually increase its public shareholding, aligning with regulatory requirements while managing market dynamics.

RBI’s Forward Book Slides Into Negative Zone After Three Years

The Reserve Bank of India’s (RBI) foreign exchange reserves have seen one component, the forward book, drop into negative territory for the first time in three years. This shift indicates RBI’s balancing act between maintaining sufficient external buffers and managing liquidity in a banking system that is currently facing cash constraints.

Self-regulatory Bodies Must Help Boost Compliance, Not Just Lobby: RBI

The RBI emphasizes that self-regulatory organizations (SROs) should focus on enhancing compliance, protecting stakeholder interests, and identifying early warning signs in their respective sectors. This directive moves beyond the traditional perception of SROs as merely lobbying entities, highlighting their role in ensuring regulatory adherence and risk management within the financial system.

Does IMF View On Exchange Rate Policy Matter to India?

The International Monetary Fund (IMF) reclassified India’s exchange rate regime from ‘floating’ to ‘stable’, a move the RBI disagrees with. This reclassification raises questions about its implications for future RBI policies, particularly in managing the exchange rate in a way that reflects both domestic economic stability and responsiveness to global financial trends.

Day Trading Guide

A recent analysis of market trends shows that despite the stock index recording multiple highs, it failed to sustain these levels, leading to a sharp correction. This fluctuation, marked by a disparity between price and average, suggests a cautious approach for day traders and underlines the volatility inherent in the stock market, emphasizing the need for informed, strategic trading decisions.

Parliament Watch

The Ministry of Road Transport and Highways in India has embarked on a significant project, undertaking 321 national highway projects totaling about 8,544 km, at a cost of Rs1,49,758 crore. Union Minister Nitin Gadkari highlighted this in the Lok Sabha, emphasizing the focus on improving connectivity to key tourist and religious sites. This initiative is a major step in enhancing India’s infrastructure, potentially boosting tourism and facilitating smoother transportation across the country.

Iron Ore Pricing Mechanism Under Revision

The Indian government plans to revise the iron ore pricing mechanism. This could involve linking the prices of domestically produced iron ore to global indices and establishing a national benchmark. The aim is to address grade misclassifications and ensure pricing transparency and efficiency. Such a change would align India’s iron ore market more closely with international standards and could impact both domestic and global iron ore trade.

Credit Rating Mechanism Reform Advocated

The Chief Economic Adviser’s office is advocating for a reform in the credit rating mechanism used for developing economies. The current system, often based on subjective judgments, should shift towards well-defined, measurable principles. This change is crucial for a more accurate and fair assessment of economies, impacting their access to international finance and investment.

Resilience of India’s Exports to Global Demand Shifts

According to the Chief Economic Adviser, India’s exports are becoming increasingly resilient to global demand shifts and price changes. This development suggests a diversifying export base and an economy less dependent on external factors, indicating a more stable and robust economic environment.

Expanding Policy Focus Beyond ‘Roti, Kapda, Makaan’

The office of the Chief Economic Adviser suggests that the Indian government should broaden its policy focus beyond basic needs like food, clothing, and housing. While these are essential, focusing on broader issues can sustain economic growth. This approach includes ensuring equality of opportunity and universal access to basic amenities, crucial for maintaining dignity and social stability.

Red Sea Conflict’s Impact on Basmati Rice Exports

The ongoing conflict in the Red Sea could increase the cost of India’s basmati rice exports to Egypt and Europe by 15-20%. If the conflict persists, India may need to reroute shipments via Africa, leading to higher transportation costs and impacting the competitiveness of Indian basmati rice in international markets.

Tur and Urad Prices Experience Significant Drop

The prices of pulses like tur dal and urad have dropped significantly, up to 25%, due to increased imports and the onset of domestic harvesting. This price reduction is expected to continue with the start of winter, which traditionally sees a slowdown in demand. Consumers can anticipate further relief in pulse prices, benefiting household budgets.

NCLAT Allows Sterlite and Three Other Companies’ Plea

The National Company Law Appellate Tribunal (NCLAT) in Chennai has allowed an appeal by Sterlite Ports Limited and three other companies. This ruling sets aside a previous order by the National Company Law Tribunal (NCLT) in Chennai, approving the effective date of October 1, 2022, for their amalgamation scheme with Sesa Mining Corporation Limited. This decision paves the way for the consolidation of these companies, potentially impacting the business dynamics in their respective sectors.

Bigger, Stronger, Better

India’s corporate sector is witnessing growth with increasing revenues and stronger balance sheets. New-age companies using innovative technologies are transforming traditional business practices, contributing to a robust stock market. This trend reflects a thriving business environment, showcasing the potential of technology-driven growth and investor confidence in the evolving Indian market.

A Street Show Wired to India’s Growth Story

Investors are actively seeking opportunities in sectors related to electric vehicles (EVs), renewable energy, infrastructure, and affordable housing. With limited direct options available, they are turning to related industries, indicative of a strategic shift towards sustainable and future-oriented investments.

Follow the Sun, Track Clouds, too

The renewable energy sector, especially solar power, is emerging as a significant investment opportunity in India. However, only companies with solid financials are likely to succeed. India’s goal to achieve 500 GW of renewable power by 2030 is driving growth in this sector, highlighting its potential for substantial investment and innovation.

SIPs Are Adding Up Big

Systematic Investment Plans (SIPs) are gaining popularity in India, reflecting a trend of long-term wealth creation among investors. Despite short-term market fluctuations, the increasing use of SIPs demonstrates a growing retail participation and a disciplined investment approach in the stock market.

Series A to IPO, to Series of Returns

New-age companies, particularly unicorns, have received enthusiastic responses from the stock market during their initial public offerings (IPOs). The focus is now on these companies to demonstrate profitability and growth potential, signifying a shift from startup to established market players.

Public Sector Cos Ride Aatmanirbhar Wave to D-Street Stardom

Public sector companies in India are benefiting from government policies promoting domestic manufacturing and self-reliance, especially in defense and green energy sectors. These policies have positively influenced the stock performance of these companies, reflecting a successful integration of government initiatives with corporate growth.

Sovereign Funds Moving Early into Next Gold Rush

Global sovereign wealth funds (SWFs) have increasingly invested in Indian equities, reflecting confidence in the Indian economy’s long-term prospects. This trend indicates a positive global outlook towards India as a promising and stable investment destination.


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