23 December 2023 : Important Financial News in India


Source: Economic Times, “Today’s ePaper”

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Table of Contents

Ola Electric Hits the Road to IPO, Files Draft Papers

Ola Electric, an electric vehicle (EV) startup, has taken a significant step towards becoming a public company by filing its draft red herring prospectus (DRHP) with India’s Securities and Exchange Board (Sebi). This move marks Ola Electric as the first EV startup in this journey towards an Initial Public Offering (IPO). In simpler terms, they are preparing to offer their company shares to the public for the first time, a big step for any company, especially in the growing EV market.

Bollywood Plot Quickens; Brands Back post Interval

After a challenging period of over two years, the Bollywood film industry is experiencing a resurgence, thanks in part to several successful box office releases. This revival has reignited interest from brands in big endorsement deals with Bollywood. It means that as the film industry regains its popularity, more companies are looking to partner with Bollywood stars for advertising, hoping to capitalize on their renewed fame and audience appeal.

Surrender Fee: Insurers Propose Dual Structure

In response to a regulatory push for higher surrender values in non-participating insurance policies, the life insurance industry is suggesting a two-tiered approach. The surrender value is the amount an insurance policyholder gets when they choose to terminate their policy before its maturity. The proposal for a dual structure likely means offering different levels of surrender value based on certain criteria, providing more flexibility and possibly more benefits to policyholders.

OTT Not under Ambit of Telecom Bill: Vaishnaw

India’s Telecom Minister Ashwini Vaishnaw has clarified that over-the-top (OTT) platforms, like streaming services, will not be included under the new telecom bill. Instead, they will continue to be governed by the Information Technology Act of 2000. This decision is significant as it means OTT services will not face the same regulations as traditional telecom services, possibly allowing them more freedom in how they operate and provide content to users.

Awfis Space Solutions Files IPO Papers 

Awfis Space Solutions, an office-sharing startup, is making strides towards becoming a publicly traded company. By filing a draft red herring prospectus with India’s Securities and Exchange Board, Awfis is gearing up for its Initial Public Offering (IPO). This move signifies an important growth phase for the company, reflecting its ambition to expand and offer its shares to public investors, a significant development in the co-working space industry.

Kitchens@ Raises $65 M 

Kitchens@, a startup specializing in cloud kitchens, has successfully raised $65 million in funding. This financial boost, led by London-based Finnest, indicates robust market confidence in cloud kitchen models. These kitchens, designed for food delivery services without a traditional restaurant setting, are gaining traction. The funding will likely fuel Kitchens@’s expansion and innovation in this emerging sector, reflecting a growing trend in the food industry.

Agritech Co Fasal Raises $12 Million 

Fasal, an agritech startup, has raised $12 million, marking significant investor confidence in technology-driven agriculture. This funding, composed of debt and equity, led by TDK Ventures and British International Investment, will bolster Fasal’s mission to revolutionize farming with technology. It highlights the growing interest in agritech solutions that aim to enhance productivity and sustainability in agriculture, signaling a shift towards more innovative farming practices.

India Exports 43% More Diesel in Nov 

India experienced a significant 43% increase in diesel exports in November, a reflection of changing domestic and global energy dynamics. This surge, amidst a decline in local demand and high operational refinery capacities, indicates India’s growing role as a key diesel exporter. The shift suggests a potential change in India’s energy consumption patterns and its ability to meet international energy demands, positioning it as a significant player in the global energy market.

‘EV Sales in India may Moderate Next Year’ 

Electric Vehicle (EV) sales in India are expected to moderate in the coming year, according to Tata Motors’ MD Shailesh Chandra. This anticipated slowdown follows a period of rapid growth and high sales volumes, suggesting a market stabilization. Factors like market saturation, economic conditions, and the evolving EV infrastructure could influence this trend. This moderation reflects the evolving dynamics of India’s EV market, highlighting the challenges and opportunities in this fast-growing sector.

Telcos Unveil Special Packages for Premium Users 

Indian telecom companies are intensifying their competition for high-value customers by launching special packages. These packages, offering bundled over-the-top (OTT) entertainment benefits, aim to attract and retain premium users. This strategy, seen in Reliance Jio’s recent launch of costlier prepaid plans with additional OTT perks, is a direct challenge to rivals like Bharti Airtel and Vodafone Idea. This trend underscores the growing importance of value-added services in the telecom sector, especially in capturing the lucrative segment of high-revenue customers.

FM: ₹900 Cr Given to TN before Cyclone 

India’s Finance Minister Nirmala Sitharaman announced the release of ₹900 crore to Tamil Nadu in preparation for managing the impact of an impending cyclone. This proactive financial aid, distributed in two instalments, is aimed at mitigating the effects of extreme weather and aiding in disaster management. It reflects the government’s commitment to responsive and preemptive measures in dealing with natural calamities, emphasizing the importance of readiness in disaster-prone areas.

NCLAT Junks JKC Plea Challenging Sale of Jet Planes 

The National Company Law Appellate Tribunal (NCLAT) dismissed an appeal by Jalan Kalrock Consortium (JKC) challenging the sale of Jet Airways’ aircraft. This decision underscores the complexities in the restructuring and revival of the beleaguered airline. JKC’s appeal against the sale of three Jet Airways planes to Ace Aviation VIII Limited highlights the ongoing legal and financial challenges in the aviation sector, particularly in managing assets during corporate insolvency processes.

Tesla to Recall Over 120k Cars in US 

Tesla is set to recall over 120,000 vehicles in the United States due to safety concerns. This recall, prompted by the risk of cabin doors unlocking during a crash, was announced by the U.S. road safety regulator. This move underscores the ongoing challenges faced by automakers, especially in the electric vehicle sector, to maintain high safety standards. The recall represents a significant effort by Tesla to address potential safety issues, reflecting the importance of consumer safety in the rapidly evolving automotive industry.

AI’s 1st A350 Aircraft to Arrive Today 

Air India is set to welcome its first Airbus A350-900 aircraft, a significant addition to its fleet. This modern, wide-body aircraft represents a major step in Air India’s fleet modernization and expansion plans. Initially, the A350-900 will be used on short-haul routes, as announced by the airline’s chief, Campbell Wilson. This acquisition signals Air India’s commitment to enhancing its service quality and competitiveness in the aviation market, showcasing its intention to upgrade passenger experience and operational efficiency.

Peak Power Demand to Touch 3.5 L MW by 2030-31 

India’s peak electricity demand is projected to reach 3,50,670 MW by 2030-31, according to Union Minister R K Singh. This anticipated growth underscores the increasing energy needs of the country and the government’s efforts to meet this demand. The projection reflects the expanding economic and industrial activities in India, necessitating robust and scalable power infrastructure. This anticipated rise in power demand highlights the challenges and opportunities in India’s energy sector, including the need for sustainable and reliable energy sources.

Denmark’s Topsoe to Help Essar Oil UK Capture Industrial Carbon 

Essar Oil UK has partnered with Denmark-based Topsoe to implement carbon capture technology at its Stanlow facility in north-west England. This collaboration marks a significant step in reducing industrial carbon emissions, a critical aspect of combating climate change. Topsoe will provide the technology licensing for this carbon capture initiative, highlighting the growing importance of eco-friendly practices in the industrial sector and the cross-border collaboration in environmental sustainability efforts.

Plan in Works to Recognise Skill Certification of MNCs, Top Cos 

The government is working on a plan to standardize and recognize skill certifications provided by leading corporations, including multinationals. This initiative aims to assign credits to the training received by employees and benchmark it to international standards. Such recognition would help in validating the skills and training employees receive in the corporate sector, aligning them with global competencies and potentially enhancing their employability and mobility.

Policymakers Open to Looking into AIF Circular Concerns 

Indian policymakers are considering addressing concerns raised by the industry regarding the Reserve Bank of India’s recent circular. This circular, issued on December 19, placed restrictions on investments in Alternative Investment Funds (AIFs) by banks and non-banking finance companies (NBFCs). The openness to review these concerns indicates a collaborative approach between the government and the financial sector to ensure balanced and effective regulatory measures.

CCI Proposes Changes to Norms Defining Turnover or Income 

The Competition Commission of India (CCI) is proposing amendments to the criteria used to define turnover or income for imposing penalties in cases of regulatory violations. This move could lead to changes in how businesses are assessed for penalties, potentially impacting a wide range of industries. The proposal suggests a shift towards more precise and possibly fairer methods of determining financial penalties.

NFRA Points Out Deficiencies in Audit Affiliates of Big Four 

The National Financial Reporting Authority (NFRA) has released a report highlighting deficiencies in the audit processes of the Big Four firms’ affiliates. This first-of-its-kind assessment underscores the need for higher audit quality and transparency in major accounting firms, signalling increased scrutiny and potential reforms in audit practices.

India on Path of Fiscal Consolidation, says FinMin 

India is reportedly on a trajectory of fiscal consolidation, with expectations of a substantial decline in general government debt in the medium to long term. This statement from the finance ministry indicates a focus on reducing the fiscal deficit and managing public debt, aiming for a more sustainable financial future for the country.

US to Target Banks Helping Russia in War 

The United States has announced plans to sanction foreign banks that are supporting Russia’s military actions in Ukraine. This move represents an escalation in economic pressure against Moscow, showing the U.S.’s commitment to using financial tools in response to geopolitical conflicts, particularly regarding Russia’s war efforts.

PSB Brass Told to Review Top 20 Insolvency Cases Monthly 

Indian state-run banks’ chief executives have been instructed to conduct monthly reviews of the top 20 insolvency cases under the Insolvency and Bankruptcy Code (IBC). This directive aims to ensure prompt resolution of these cases, reflecting a focused effort to tackle high-profile insolvencies and improve the efficiency of the bankruptcy resolution process.

New Subscribers to 3 Social Security Schemes Fall in Oct 

There was a decline in new subscribers to the government’s three social security schemes in October, indicating stress in the formal job market. This data suggests a potential slowdown in employment in the formal sector, highlighting the ongoing challenges in job creation and stability.

Lower Import Duty on Edible oils till March 31, 2025 

The Indian government has extended the reduced import duty regime for edible oils until March 31, 2025. Initially implemented in June to combat rising oil prices, this extension aims to continue curbing food inflation. The reduction of duty from 17.5% to 12.5% on key edible oils reflects the government’s efforts to manage inflationary pressures.

Road Ministry to Seek Technical Help from IITs 

India’s Ministry of Road Transport and Highways plans to collaborate with Indian Institutes of Technology (IITs) for expert advice and technical guidance. This initiative will focus on new development areas in the road sector and seek scientific solutions to practical challenges in highway construction and maintenance, indicating a drive towards innovation and quality enhancement in infrastructure projects.

Tata Steel to Bring in Cost Efficiencies at Neelachal Ispat 

Tata Steel plans to reduce costs by up to 10% in the next two quarters at Neelachal Ispat Nigam (NINL), a company it acquired in July 2022. This strategy aims to enhance the operational efficiency and profitability of NINL, reflecting Tata Steel’s commitment to optimizing its new acquisition. Cost reduction measures could involve streamlining processes, adopting new technologies, or renegotiating supply contracts, ultimately contributing to the company’s competitiveness in the steel industry.

The Great Holiday Rush 

The travel and hospitality sector is anticipating a highly successful quarter from October to December, surpassing the momentum of 2019. This surge suggests a robust recovery and a potential return to pre-pandemic levels of business, indicating a significant boost in consumer confidence and spending in travel and leisure activities. This trend could lead to increased revenues for companies in this sector and possibly drive further investment and employment opportunities.

Uneasy’s the Search for a Head to Place the CXO Crown 

Finding CEOs and other C-suite executives is taking longer than usual, now extending up to 6-9 months, compared to the previous 3-4 months. This delay is partly due to candidates withdrawing late in the process, causing challenges for companies and search firms. The trend suggests a more dynamic job market for top executives, with candidates possibly weighing multiple offers or reconsidering career decisions in a changing corporate landscape.

IITK Class of ’24 Gets 989 Offers in 1st Round of Placements 

The 2024 graduating class of the Indian Institute of Technology (IIT) Kanpur received 989 job offers, including 22 international ones, in the first phase of placements. This high number of offers reflects the strong demand for IIT graduates, known for their technical and professional skills. It underscores the institute’s reputation and the value employers place on its graduates in various industries, both in India and internationally.

As Year Ends, Apparel Retailers Flash Sale Signs to Lure Buyers 

Apparel retailers are facing a subdued demand in the last quarter of 2023, despite the festive season. To attract buyers, they are resorting to sales and discounts. This situation indicates a disconnect between retailers’ expectations of high festive season sales and the actual consumer spending behaviour, possibly due to economic factors or shifting consumer priorities, impacting the retail sector’s performance.

Intas Inks Pact with Spain’s mAbxience to Sell Biosimilars 

Intas Pharmaceuticals has entered a licensing agreement with Spanish biopharma company mAbxience to market and distribute biosimilar Etanercept in over 150 countries, including Europe and the US. This partnership allows Intas to expand its global footprint and access new markets, reflecting the growing importance of biosimilars in the pharmaceutical industry and the company’s strategy to strengthen its position in this sector.

Mask Up, say Doctors as Covid Cases Show a Rise 

India’s active Covid-19 cases have risen to 2,997, with the emergence of the sub-variant JN.1. Medical professionals are urging the public to wear masks again, indicating a potential resurgence of the virus. This increase in cases highlights the ongoing challenges in managing the pandemic and the need for continued vigilance and public health measures to prevent further spread.

CXOs Much Wanted; Demand Likely to Exceed Supply in ’24 

Corporate India is ramping up its recruitment for leadership roles, even as entry-level hiring slows down. Search firms anticipate a shortage of senior executives in 2024 to meet this growing demand. This trend points to a dynamic job market for high-level executives, with companies possibly facing challenges in finding suitable candidates for key leadership positions, underscoring the value of experienced and skilled leaders in driving business growth and adaptation in a changing corporate environment.

RBI Flags Volatile Food Prices, Strong Demand Conditions as Inflation Risks 

The Reserve Bank of India (RBI) has identified volatile food prices and strong demand as major risks to inflation. During the Monetary Policy Committee meeting on December 6-8, RBI Governor Shaktikanta Das highlighted the danger of shifting away from the current anti-inflation stance. This emphasis suggests that the RBI is closely monitoring these factors to maintain economic stability. If food prices fluctuate significantly or demand continues to grow strongly, it could lead to higher inflation, impacting everything from household spending to broader economic policies.

Sebi Proposes Option of T+0, Instantaneous Settlement for Equity Cash Segment 

The Securities and Exchange Board of India (Sebi) is proposing an optional same-day (T+0) and real-time settlement of equity trades. This move would enable investors to complete their stock market transactions within the same day, enhancing the efficiency and flexibility of trading. Such a system could attract more investors by providing faster access to funds and potentially increasing market liquidity.

Oaktree Cap Provides ₹3,400cr Debt Facilities to Vedanta 

Oaktree Capital has offered a debt facility of ₹3,400 crore to Vedanta Ltd at a 12% interest rate for an 18-month term. This funding indicates Oaktree’s confidence in Vedanta’s financial health and business plans. It also reflects the broader trend of corporates seeking alternative funding sources beyond traditional bank loans.

Forex Reserves Touch 22-Week High at $615.9 B 

India’s foreign exchange reserves have reached a 22-week high, standing at $615.9 billion. This increase, as reported by the Reserve Bank of India, bolsters the country’s financial buffer, enhancing its ability to manage external shocks and currency volatility. It also reflects the strength of India’s economic recovery post-pandemic.

ICICI Direct Sets Nifty Target at 24,200 

ICICI Direct projects the Nifty to reach 24,200 in 2024, driven primarily by large-cap stocks in sectors like BFSI, auto, cement, and healthcare. The retail brokerage expects persistent market volatility in the first half of the next year and suggests a ‘buy on dips’ investment strategy. This outlook implies confidence in the Indian market’s growth prospects, particularly in these key sectors.

Adani Green Plans to Raise $2 Billion via Debt Next Year 

Adani Green, part of Billionaire Gautam Adani’s group, intends to raise at least $2 billion in mostly new debt next year. This plan is in line with the company’s ambitious expansion goals and shows creditors’ renewed confidence in its projects. This funding could significantly bolster Adani Green’s capabilities in the renewable energy sector, underlining the company’s commitment to growth and sustainability.

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