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23 January 2024 : 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

“Ram is Not Dispute, Ram is the Solution”

Prime Minister Narendra Modi recently made a significant statement regarding Lord Ram, emphasizing that he should be seen not as a symbol of dispute but as a solution. This comment came in the context of the ongoing construction of a temple in Ayodhya, a project that has historically been a source of considerable controversy and unrest in India. Ayodhya, being the legendary birthplace of Lord Ram, has been at the center of a long-standing and often contentious debate, primarily revolving around the religious significance and ownership of the land. Modi’s statement suggests a shift in narrative, urging a reevaluation among those who anticipate that the temple’s construction might incite further unrest. By positioning Lord Ram as a unifying figure rather than a divisive one, Modi appears to be advocating for a more harmonious approach to what has been a deeply polarizing issue in Indian politics and society.

Curtain Falls on Sony-Zee Merger Deal

The planned merger between Sony’s India operations and Zee Entertainment Enterprises Ltd (ZEEL) has unexpectedly fallen through. This deal, which was in progress for two years, was anticipated to reshape the media and entertainment landscape in India. The collapse of this merger, instigated by Sony’s Japanese parent company, marks a significant turn of events in the corporate world. This development is notable not just for the immediate impact on both companies but also for the broader implications it has for the media industry in India. A merger of this scale would have potentially created a media giant capable of dominating the market. Its cancellation suggests a shift in corporate strategy or possible underlying issues such as financial disagreements, regulatory hurdles, or differing visions for the future of the combined entity.

Two-wheelers Drive Back to the Future, the Electric Way

Indian two-wheeler manufacturers are embracing a retro trend with a modern twist, as they electrify iconic models from the 1970s. This movement is partly inspired by the successful electric reincarnation of the Bajaj Chetak, a popular scooter model from the past. The significant demand and growing market for electric two-wheelers in India have prompted these manufacturers to revisit and reinvent their classic models. This trend reflects a larger shift towards sustainable and eco-friendly transportation solutions in India. It also signifies a blending of nostalgia with innovation, as these companies seek to capitalize on the sentimental value of these vintage brands while meeting the modern consumer’s desire for environmentally friendly vehicles.

Bharti in Talks with SBI Life, Others to Sell Insurance Biz

Bharti Group is reportedly in advanced discussions with SBI Life and other insurance companies to sell its wholly owned life insurance venture, Bharti AXA Life Insurance. This news indicates a significant strategic move in the insurance sector, suggesting Bharti Group’s potential exit from the life insurance business. Such a sale could have considerable implications for the insurance industry, especially considering the scale and reach of Bharti AXA Life Insurance. The involvement of major players like SBI Life also points to the dynamic and competitive nature of the insurance market in India. This development is particularly noteworthy for stakeholders and customers of Bharti AXA, as it may lead to changes in management, operations, and possibly policy terms.

Adani, Jindal Power may Join Race for Hiranmaye

Adani Power and Jindal Power are reportedly considering a bid to acquire Hiranmaye Energy, a thermal power company recently admitted for corporate insolvency. This potential interest from two major power companies indicates the strategic value they see in Hiranmaye Energy, particularly in the context of India’s energy sector. The insolvency process typically involves the sale of a company’s assets to pay off creditors, and the entry of significant players like Adani and Jindal could lead to competitive bidding. This development is significant as it highlights the ongoing consolidation in the thermal power industry and the opportunities that major corporations see in acquiring distressed assets in the sector.

RIL Rides PLI Schemes to Close in on $1-1.5/kg Green H2 Target

Reliance Industries Ltd (RIL) is making strides toward achieving its ambitious goal of producing green hydrogen at a cost of $1-1.5 per kilogram. This progress is largely attributed to multiple product-linked incentives (PLIs) that RIL has secured in the green energy sector. Green hydrogen, produced using renewable energy sources, is considered crucial for reducing carbon emissions. RIL’s achievement in nearing this cost-effective production target could have significant implications for the energy industry, potentially making green hydrogen a viable alternative to fossil fuels. This development is particularly relevant in the context of global efforts to transition to cleaner energy sources.

Noida Airport-IGIA Rapid Rail to Cut Travel Time to 80 Mins

The Uttar Pradesh government has approved a Rs 16,000-crore project for a rapid rail corridor connecting the upcoming Noida Airport with Delhi’s Indira Gandhi International Airport (IGIA). This corridor, which aims to reduce travel time between the two airports to just 80 minutes, is a significant infrastructure development. It highlights the growing focus on enhancing connectivity and infrastructure in the National Capital Region. Such a project not only eases travel for passengers but also potentially boosts economic activity by improving accessibility to key locations.

HC Quashes CIC Order Seeking Docs Filed by PM Cares Fund for Tax Exemption

The Delhi High Court has overturned a Central Information Commission (CIC) order that directed the income tax authorities to disclose information and documents submitted by the PM Cares Fund for income tax exemptions. The PM Cares Fund, a public charitable trust, has been a subject of public interest, especially regarding its transparency and accountability. The High Court’s decision to quash the CIC’s order is significant in the context of ongoing debates about the transparency of government-related financial entities and their operations in India.

Foreign Institutions Remain Bullish on Indian Real Estate

The Indian real estate sector continues to attract significant foreign institutional investment, with more than $5.8 billion invested across 53 deals last year, marking a 14% increase from 2022. This sustained investment, despite global macroeconomic uncertainty and geopolitical tensions, indicates a robust confidence in the Indian real estate market. Such investment levels are a positive sign for the sector, suggesting potential growth and development opportunities.

‘Gig Workers in Demand Across 8 Out of 10 Cos’

According to a survey by the National Association of Software and Services Companies (Nasscom) and Indeed, eight out of 10 organizations are exploring or open to adopting gig work models. This growing interest in gig workers reflects a significant shift in employment trends, where flexibility and specialized skill sets are increasingly valued. The gig economy, characterized by short-term contracts or freelance work, offers both companies and workers greater flexibility and often access to a wider talent pool. This trend suggests a potential transformation in traditional employment models, adapting to the evolving demands of the modern workforce.

Sebi Queries Ex-ZEEL Directors; Shareholders Weigh Options

The Securities and Exchange Board of India (Sebi) is intensifying its investigation into Zee Entertainment Enterprises Ltd (ZEEL) by questioning former directors about the protection of minority shareholder rights. This scrutiny, particularly targeting Managing Director and CEO Punit Goenka, signals a serious concern over corporate governance within the company. Minority shareholders, often holding smaller portions of equity, can be vulnerable in cases of corporate mismanagement or unfair practices. Sebi’s probe into how ZEEL’s leadership handled these rights underscores the regulator’s commitment to ensuring fair and transparent corporate operations.

End of Deal may Trigger a Spate of Legal Wranglings

The termination of the Sony-Zee deal, with Sony seeking a $90 million termination fee, is poised to lead to complex legal disputes between the two corporations. This expected legal battle underscores the intricacies and potential risks involved in major corporate mergers and acquisitions. Legal wranglings in multiple jurisdictions can be costly and time-consuming, affecting not just the companies involved but also their shareholders and potentially the market perception of these companies.

Zee Ent May Fall 15-20%, Analysts Caution Against Bottom Fishing

Analysts predict a significant decline in Zee Entertainment Enterprises’ share price following the collapse of the Sony merger deal. This expected drop of 15-20% highlights the market’s sensitivity to corporate developments, particularly those involving major strategic changes. Investors are cautioned against “bottom fishing,” a term used for buying stocks that have fallen sharply in the hope of a rebound. Such caution suggests the uncertainty and potential risk surrounding Zee’s future prospects in the short term.

Govt Panel to Look into 5G Deployment at Airports

The Indian government has formed a panel led by principal scientific adviser Ajay Kumar Sood to address the challenges of rolling out 5G services at airports. This initiative reflects the balancing act between embracing advanced technology and ensuring safety in sensitive areas like airports. The deployment of 5G has raised concerns globally due to potential interference with aircraft systems. India’s proactive approach in forming a dedicated panel signifies its commitment to safely integrating new technologies in critical infrastructures.

Wilson Racket Maker Seeks $1.8 B in US IPO

Amer Sports Inc., known for manufacturing Wilson tennis rackets and Salomon ski boots, is planning a significant initial public offering (IPO) in the US, aiming to raise up to $1.8 billion. This move, one of the major IPOs of the year, highlights the company’s growth ambitions and confidence in the market. An IPO of this scale can provide Amer Sports with substantial capital, enabling it to expand and innovate in the highly competitive sports equipment market. For investors, this presents a new opportunity to invest in a well-known brand in the sports industry.

India to Insist on WTO Taking Its Decisions via Consensus, Not Votes

India is set to advocate for consensus-based decision-making at the World Trade Organization (WTO), emphasizing the importance of a member-driven organization that provides special treatment for developing countries. This stance underscores India’s commitment to maintaining the WTO’s foundational principles, particularly in safeguarding the interests of developing nations. The approach of consensus over voting reflects a desire for more inclusive and equitable decision-making processes in international trade policies.

Coffee Prices Rise at Faster Pace on Growing Demand, Unseasonal Rains

Coffee prices are experiencing a rapid increase due to a combination of unseasonal rainfall, labor shortages, and a surge in demand, particularly among urban youth post-Covid-19. This trend in the coffee market highlights the impact of climatic changes and market dynamics on agricultural commodities. The rising prices can affect both consumers and businesses, indicating a shift in the global coffee supply chain.

Rural Jobs Scheme may Get 47% Higher Outlay of ₹88k crore

The Indian government is likely to significantly increase the budget allocation for its rural employment guarantee scheme, with a proposed outlay of about ₹88,000 crore. This 47% increase in funding reflects the government’s focus on strengthening rural employment, especially in the wake of economic challenges. The scheme plays a crucial role in providing livelihood security in rural areas, demonstrating the government’s commitment to addressing rural poverty and unemployment.

Scope of Financial Services Taken Up at IFSC Widened

The finance ministry has expanded the range of financial services permitted at the International Financial Services Centre (IFSC). This broadened scope now includes book-keeping, accounting, taxation services, and financial crime services related to anti-money laundering compliance. This development marks a significant step in enhancing the IFSC’s role as a global financial hub, potentially attracting more international business and investment.

Nifty on a Strong Base, to Maintain Bullish Trend

The Nifty, a major stock market index in India, has demonstrated resilience and a bullish trend, reaching a lifetime high of 22,124 before experiencing a slight dip. The index found substantial support at the 21,350-21,400 range, coinciding with the 26-day exponential moving average. In stock market terms, the exponential moving average (EMA) is a type of moving average that places a greater weight and significance on the most recent data points. The fact that Nifty’s dip halted around the EMA level suggests strong underlying market momentum and investor confidence. This level is now seen as a crucial support, indicating that if the index falls to this range, it is likely to rebound, continuing its upward trend. The implication of this pattern is a sustained positive outlook among investors, signaling robust market conditions and potentially more gains for those invested in Indian equities.

Funds from Ireland, Luxembourg, Norway and Japan Raise Bets on Indian Equities

Contrary to the common perception of American dominance in the Indian stock market, investors from Ireland, Norway, Luxembourg, and Japan have significantly increased their investments in Indian equities. This diversification of international investment sources into India’s “risk assets” — a term typically used for equities due to their potential for higher returns accompanied by higher risk — indicates growing global confidence in the Indian market. The influx of funds from these countries into the Indian equity market implies a broadening of the investor base and increased foreign capital inflows, which can stimulate market growth and potentially lead to higher valuations of Indian stocks.

Sebi Firm on FPI Ownership Norms as Deadline Looms

The Securities and Exchange Board of India (Sebi) remains steadfast in implementing stricter ultimate beneficial ownership (UBO) norms for Foreign Portfolio Investors (FPIs), effective from February 1. UBO refers to individuals who ultimately own or control an investment entity. Sebi’s move to tighten these norms aims to enhance transparency and prevent misuse of financial assets. Despite pushback from foreign banks and some offshore fund managers, Sebi’s firm stance on these regulations reflects its commitment to safeguarding the integrity of Indian financial markets. The implementation of these norms could have implications for foreign investors in terms of compliance requirements and may impact the ease of foreign investments in India.

Oil Prices Rise as Geopolitics Counters Demand Concerns

Oil prices experienced an increase, with Brent crude reaching $79.46 a barrel, influenced by geopolitical tensions in the Middle East and Ukraine. These conflicts have raised concerns about potential disruptions in oil supply, leading to higher prices. Traders are balancing these supply fears against the economic challenges that could dampen global oil demand. Geopolitical factors often play a significant role in the oil market as they can lead to supply chain disruptions or changes in production levels. The rising oil prices amid such geopolitical uncertainties suggest a volatile global energy market, impacting economies worldwide, particularly those heavily reliant on oil imports.

PM Aims to Power Up Homes with Solar Rooftop Systems

Prime Minister Narendra Modi has announced the launch of the Pradhan Mantri Suryodaya Yojana, aimed at installing rooftop solar projects in 1 crore households. This initiative signifies the government’s push towards sustainable energy solutions and reducing dependency on non-renewable energy sources. The program aligns with India’s broader goals of promoting renewable energy and addressing climate change.

Upfront Payment for Extraction of Minerals Capped at ₹500 crore

The Indian government has amended mineral auction rules, capping the upfront payment for mineral extraction at ₹500 crore and preventing affiliates from bidding for the same block. These changes are intended to streamline the mining sector, making it more transparent and competitive. The cap on upfront payments could make mineral extraction more financially accessible for a wider range of companies.

Prosus may Get Promoter Tag in Swiggy’s $1-b IPO

Prosus, the largest shareholder in Swiggy, is likely to be designated as a promoter in the food and grocery delivery company’s anticipated $1 billion initial public offering (IPO). This move, where existing investors are the primary sellers, signifies Prosus’s substantial influence and stake in Swiggy. The promoter tag for an IPO is significant, as it implies a higher level of responsibility and disclosure requirements for Prosus. It also reflects the confidence and commitment of major investors in the company’s growth and future prospects.

Gaming Firms Offer to Pick up Tax Bill to Keep Players Hooked

Online gaming companies, including Dream11, Mobile Premier League, and Games24X7, are adopting new strategies to retain players amid increased tax liabilities. By offering to cover the tax bill, these companies aim to maintain player engagement and counteract any potential downturn in participation due to higher costs. This approach highlights the competitive nature of the online gaming industry and the lengths to which companies will go to retain their user base.

Revenue-linked Financiers Bet Big on SaaS Cos

Revenue-based financing is gaining traction in India, especially among early-stage Software as a Service (SaaS) startups. As equity funding becomes more costly and investment criteria tighten, financiers see an opportunity in lending based on cash flow. This trend indicates a shift in startup financing, with more emphasis on sustainable revenue generation rather than traditional equity-based investments.

Udaan CFO Pande Quits, Co Goes for Top-level Rejig

Aditya Pande, CFO of B2B e-commerce firm Udaan, has resigned to join InterGlobe Enterprises as group CEO. Udaan’s top-level reshuffling, prompted by Pande’s departure, could indicate strategic changes or a new phase of growth for the company. Such high-level executive changes often signal significant corporate developments or shifts in business strategy.

Alphabet’s Moonshot X Lab Cuts Staff

Alphabet Inc.’s Moonshot X Lab, known for its innovative technology projects, is laying off a number of employees. This downsizing suggests a strategic reevaluation of the lab’s projects, possibly focusing on more viable or promising ventures. It also reflects the broader trend of tech companies adjusting their operations and investments in response to market conditions.

Yellow.ai Deploys 30% of Global Generative AI Bots Domestically

Yellow.ai, a conversational AI company, has deployed about 30% of its 120 global GenAI bots in India. This indicates a growing domestic adoption of generative AI for customer engagement. The deployment in India highlights the increasing relevance and application of AI in enhancing customer interactions and business operations.

TechM Names Ex-TCS CMO Rajashree as CGO Americas

Tech Mahindra has appointed former Tata Consultancy Services CMO Rajashree R as its Chief Growth Officer (CGO) for strategic verticals in the Americas. This strategic appointment is aimed at driving growth in key markets, underscoring the importance of the Americas region for Tech Mahindra and the focus on expanding its market presence there.

Eleven Labs Gets Unicorn Status

AI startup ElevenLabs has achieved unicorn status following its latest fundraising round, amid a surge in investor interest in generative AI technology. This milestone reflects the growing market value and potential of AI startups, particularly those specializing in generative AI, which is increasingly sought after by investors.

NBFC Namdev Finvest Gets $15m in Equity Funding

Non-banking finance company Namdev Finvest has raised $15 million in an equity funding round. This infusion of capital, led by British International Investment and other investors, signifies confidence in the company’s business model and growth prospects, particularly in the non-banking financial sector.

Coforge Net Up 4.3%, Maintains Revenue Guidance for FY24

IT services company Coforge reported a 4.3% year-on-year increase in net profit for the third quarter. The company’s positive financial performance and maintained revenue guidance for FY24 indicate stability and optimism in its business operations and future outlook.

MIT: Humans Cheaper in Most Jobs

A study by the Massachusetts Institute of Technology (MIT) found that artificial intelligence is not yet a cost-effective replacement for humans in most jobs. This research addresses concerns about AI replacing human labor across various industries, suggesting that, for now, human workers remain more economically viable in many roles.

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