27 December 2023 : Important Financial News in India


Source: Economic Times, “Today’s ePaper”

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Table of Contents

Sebi may Let AIFs Pledge Shares in Investee Firms 

The Securities and Exchange Board of India (Sebi) is considering a new policy that would allow Alternative Investment Funds (AIFs) to pledge their shares in companies they have invested in. This move would enable AIFs to use these shares as collateral to secure loans, providing them with more financial flexibility. It’s akin to homeowners mortgaging their property for a loan, giving AIFs a new way to access funds by leveraging their investments.

Startups Write a $1.5-billion Twist in Winter’s Tale 

December 2023 saw an unexpected surge in startup funding, with over $1.5 billion invested. This marks the busiest month of the year for risk capital investors. However, experts are cautious in declaring an end to the challenging period of reduced funding, known as the funding winter. This scenario is similar to a sudden, yet possibly temporary, improvement in a difficult situation, leaving the future still uncertain.

Promoters to Infuse ₹9,350 cr in Adani Green Via Warrants 

Gautam Adani intends to invest ₹9,350 crore in Adani Green Energy Limited (AGEL) through warrants. This investment aims to reduce the company’s debt and support its goal of producing 45 gigawatts of renewable energy by 2030. This move is similar to a significant reinvestment into a company to bolster its financial health and achieve ambitious growth targets, focusing on sustainable energy production.

ESMA Meets French, German Regulators over CCIL Issue 

The European Securities and Markets Authority (ESMA) recently held meetings with French and German regulators to address an issue concerning India’s primary bond clearing house. This collaboration signifies an international effort to resolve regulatory challenges, illustrating the importance of cross-border cooperation in financial market oversight. It reflects the complexities of global financial systems and the need for harmonized regulatory approaches.

Another Feather in India’s M-Cap 

India has reached a new milestone, achieving a record 3.8% share in global market capitalization, according to Bloomberg data. This growth positions India close to surpassing Hong Kong as the fifth-largest equity market globally. This achievement is akin to a rising sports star breaking into the top ranks, symbolizing India’s growing influence and stature in the global financial arena.

With Slew of New Launches, Auto Inc Set for a Happy New Year 

The automotive industry is set for an optimistic start to the new year, with plans to unveil or launch more than two dozen new car models, including electric vehicles. This flurry of activity comes after two successful years and signals a shift towards more sustainable, battery-powered transportation. It’s like a company capitalizing on recent successes to innovate and diversify its product line, aligning with evolving market trends.

Apple in Advanced Talks with Parts Cos Aequs, Rayprus 

Apple is in advanced discussions with component manufacturers such as India’s Aequs Group and Taiwan’s Rayprus Technologies. These talks are part of Apple’s strategic move to deepen its manufacturing presence in India, the world’s second-largest smartphone market. This initiative is akin to a major corporation expanding its supply chain to leverage local manufacturing capabilities, highlighting the importance of India in the global tech industry.

CAD Falls to 1% of GDP in Q2 

India’s current account deficit (CAD), which measures the difference between imports and exports, reduced to just 1% of its GDP. This happened because the gap between what India buys from and sells to other countries decreased. However, there’s a concern because foreign direct investments (FDIs) have gone down. This is because private equity investors are withdrawing their money after selling shares in Initial Public Offerings (IPOs). Think of it like a household that has managed to reduce its spending more than its income, but is seeing a decrease in its savings.

RBI Releases Draft Licensing Framework under FEMA, Aims to Ease Fx Transactions 

The Reserve Bank of India (RBI) has introduced a draft licensing framework under the Foreign Exchange Management Act (FEMA). This new system aims to make it easier to conduct foreign exchange transactions while also improving the way these transactions are regulated. It’s like updating the rules and tools for currency exchange to make it more user-friendly and secure.

Leadership Change Buzz Has Wipro Riding High 

Wipro’s stock prices have soared to their highest in over 18 months due to rumors that the company might get new leadership. This speculation has made Wipro’s performance in the market better than its competitors. It’s similar to a sports team whose value goes up due to rumors of a new star player joining.

‘Flexi-cap Schemes a Better Option than Large-caps’ 

There’s a growing opinion that instead of investing directly in large-cap funds, which are expected to perform well, it’s better to put money in flexi-cap schemes. These schemes mainly invest in large-cap stocks but provide more flexibility. It’s like choosing a versatile investment portfolio over one that’s specialized but less adaptable.

Goldman’s Painful Lesson on China Forces Rethink of EMs 

Goldman Sachs had a tough lesson in 2023 due to a wrong prediction about China’s market post-pandemic. Their head of global currency and emerging markets strategy admitted two key learnings from this experience. This situation is akin to a seasoned investor acknowledging mistakes and rethinking their approach to emerging markets.

Motisons Jewellers Lists at 98% Premium 

Shares of Motisons Jewellers, based in Rajasthan, made a remarkable debut on the National Stock Exchange (NSE) by listing at a 98% premium over its issue price. The shares opened much higher than the initial price and remained strong throughout the day. It’s like a new player entering a game and scoring almost double the expected points right away.

Innova Captab IPO Subscribed 55.26 Times 

Innova Captab, a pharmaceutical company, saw its Initial Public Offering (IPO) receive overwhelming interest, with subscriptions 55.26 times higher than available shares. Especially noteworthy was the strong interest from institutional and high-net-worth investors. This is similar to a new product release receiving far more orders than the number of products available.

Muthoot Microfinance Debuts at a Discount 

Muthoot Microfinance’s shares started trading on the Bombay Stock Exchange (BSE) at a price lower than its IPO price, marking a somewhat disappointing debut. The shares opened and closed below their initial offering price, indicating less investor confidence than expected. It’s like a new store opening with prices lower than anticipated due to less customer interest.

Suraj Estate Shares List 5.89% Below IPO Price 

Shares of Suraj Estate Developers, a city-based real estate company, were listed on the NSE at a price lower than its IPO rate, indicating a lukewarm reception from the market. This listing below the expected price suggests a cautious approach from investors towards the company. It’s akin to a performer’s first show tickets selling for less than the anticipated price.

Crude Rises on Middle East Woes, US Rate Cut Hopes 

Oil prices surged by 3% to reach their highest level this month, driven by two major factors. First, ongoing tensions in the Middle East, particularly attacks on ships in the Red Sea, have raised concerns about possible disruptions in oil shipping routes. Second, there’s optimism about potential interest rate cuts by the US, which could stimulate economic growth and increase demand for oil. Brent crude and U.S. West Texas Intermediate crude both saw significant price jumps. This situation is akin to prices of a popular product rising due to supply fears and increased demand expectations.

As India Connects to UPI, NEFT and Debit Card Usage Takes a Hit 

The increasing popularity of India’s Unified Payments Interface (UPI) as a payment method has led to a decline in the use of two other payment systems: National Electronic Fund Transfer (NEFT) and debit cards. UPI’s success highlights a shift in consumer preferences towards more convenient digital payment solutions, somewhat similar to how online streaming services have reduced the demand for traditional cable TV.

Hybrid Funds Can Help You with Debt Allocations 

With the 10-year benchmark trading above 7%, financial experts suggest that investing in hybrid funds, which combine stocks and bonds, could be beneficial. These funds offer a chance to earn a real rate of return from fixed-income investments, making them an attractive option for debt allocation. It’s similar to choosing a balanced diet that includes a mix of nutrients rather than just one type of food.

Surging Corporate Profits To Help Ease Reserve Bank’s Inflation Fight 

India’s consumer price index has been persistently high for 50 months, straying from the targeted range. However, rising corporate profits could aid the Reserve Bank in its efforts to control inflation. This situation can be likened to a company finding unexpected financial resources to solve a persistent problem.

Gold Rises On Weaker Dollar and Lower Treasury Yields 

Gold prices have been rising, benefiting from a weaker US dollar and lower Treasury yields, as traders anticipate potential US interest rate cuts in early 2024. Spot gold reached a near two-week high. This trend is similar to an alternative investment gaining value as traditional investment options become less attractive.

Muthoot Fin Raises Rs200 cr via Bond Sale 

Muthoot FinCorp has successfully raised Rs200 crore through a private bond sale to the State Bank of India. These bonds, with a 9.75% interest rate paid every six months, have a five-year term. This move is like a company securing a substantial loan for its operations at a fixed interest rate, ensuring financial stability for the near future.

NBCC Sells 5,000 Amrapali Flats for ₹2,872 Cr 

The state-run NBCC has successfully sold approximately 5,000 units of Amrapali property, accounting for nearly 90% of its available inventory, and raised ₹2,872 crore. This significant amount of money will be used to fund the construction of projects that were previously stalled. This is akin to a company selling a large portion of its stock to fund its core business operations.

Power Grid Acquires 2 SPVs to Implement Transmission Projects 

The state-owned Power Grid Corporation announced its acquisition of two special purpose vehicles (SPVs), Vataman Transmission and Koppal II Gadag II Transmission, from PFC Consulting. This move is intended to facilitate the implementation of power transmission projects, similar to a company acquiring smaller entities to expand its operational capabilities.

AstraZeneca to Buy China’s Gracell Bio for up to $1.2 Billion 

AstraZeneca, an Anglo-Swedish pharmaceutical giant, plans to acquire China’s Gracell Biotechnologies for up to $1.2 billion. This acquisition aims to expand AstraZeneca’s cell therapy operations and strengthen its presence in China, the world’s second-largest pharmaceutical market. This is comparable to a major player in an industry buying a specialized company to enhance its product line and market reach.

ED Custody of Three Vivo India Execs Extended by Two Days 

A Delhi court extended the Enforcement Directorate’s custody of three top Vivo India executives by two days in a money laundering investigation against the Chinese smartphone brand. This indicates ongoing legal scrutiny and underscores the seriousness of the investigation.

Telcos Call for Auction of Waves for Direct-to-Mobile Services 

Indian mobile phone operators are urging the government to auction spectrum for direct-to-mobile (D2M) services in a technology-neutral manner. This is like companies bidding for essential resources needed to provide advanced services to customers.

Modi First Global Leader to have 20 M Subscribers for his YouTube Channel 

Prime Minister Narendra Modi has become the first global leader to reach 20 million subscribers on his personal YouTube channel, as reported by Viennese startup Tubics. This milestone highlights the growing influence of digital media in politics and diplomacy.

Regulatory Sandboxes Spur Innovation 

The Telecommunications Act, 2023, has proposed the introduction of regulatory sandboxes (RSs) to test new communications technologies and encourage innovation. This concept is similar to creating a controlled environment to experiment with new ideas without widespread risks.

Bengaluru Retains Top Spot in Hiring Charts 

According to the Randstad Talent Insights Report 2023, Bengaluru has maintained its position as the leading city for hiring across various industries and experience levels. This reaffirms Bengaluru’s status as a major employment hub, comparable to Silicon Valley’s role in the US.

PLIs Brought in Investments of ₹95,000 cr till Nov: DPIIT 

The Indian government reported that over ₹95,000 crore of investment was made under various production-linked incentive (PLI) schemes until November 2023. These investments led to production or sales worth ₹7.8 lakh crore and generated over 640,000 jobs, reflecting the schemes’ effectiveness in boosting economic activity and employment.

0.3M Trained Under Skills Scheme Ph4 

The Ministry of Skills Development and Entrepreneurship trained 0.34 million candidates under the Pradhan Mantri Kaushal Vikas Yojana (PMKVY) 4.0, even as the scheme awaits cabinet approval. Since its inception in 2015, the scheme has trained a total of 14 million candidates, emphasizing the government’s commitment to skill development.

India Becomes 2nd-Largest Importer of Russian Fuels 

India has emerged as the second-largest importer of Russian fuels, accounting for a third of Russia’s crude oil exports and a fifth of its coal in the past year. This shift makes India a key player in the global energy market and highlights its strategic energy sourcing.

US NGO Sues WhiteHat Jr Over Dues 

US-based NGO sued Byju’s coding-for-kids business WhiteHat Jr for breach of contract, allegedly due to non-payment for a content licensing agreement. This legal action underscores the importance of contractual obligations and the potential repercussions of disputes in business partnerships.

EPFO Retires Covid Advance Facility 

The Employees’ Provident Fund Organisation (EPFO) has ended a special facility that allowed members to withdraw part of their retirement savings early due to COVID-19. This decision follows seven months after the World Health Organisation declared the end of COVID-19 as a public health emergency. It’s like a temporary financial aid program being phased out as the situation that necessitated it improves.

FM Likely to Meet PSU Bank Chiefs this Week 

Finance Minister Nirmala Sitharaman is expected to meet with the heads of state-run banks soon. The agenda will likely include assessing the banks’ performance in government schemes and addressing the issue of non-performing assets or bad loans. This meeting can be likened to a performance review in a company, focusing on both achievements and areas needing improvement.

Twenty Cos Begin Operations from Del-Mum Industrial Corridor Cities 

Around 20 companies, including Inox Air Products, Haier Appliances, and Torrent Power, have commenced operations in four smart industrial townships under the Delhi Mumbai Industrial Corridor project. This development marks a significant step in industrial expansion, akin to businesses opening new branches in a promising commercial hub.

I-T Advisory over Mismatch in ITR, TDS/TCS Deductions 

The Income Tax department issued advisories to certain taxpayers about discrepancies between their Income Tax Returns and the information provided by reporting entities. It’s similar to a financial audit where inconsistencies in records are flagged for clarification.

CCI Chief: Plan to Boost Manpower for Tighter Oversight 

The Competition Commission of India (CCI) plans to increase its staff to enforce the 2023 competition law more effectively. This law broadens the scope of regulation, necessitating more manpower for oversight. It’s like a police department hiring more officers to enforce new, more comprehensive laws.

Mines Min Moots Cap on Upfront Amount, Performance Security 

The Ministry of Mines proposed limiting the performance security and upfront payments to make mining blocks for critical and strategic minerals more appealing to companies. This move is akin to a landlord reducing the deposit requirement to attract more tenants to a high-demand property.

Insacog Meet on Friday to Take Stock of Rising Covid Cases 

Insacog, a network of labs monitoring the coronavirus’s genomic variations in India, is set to meet on Friday due to a rise in COVID-19 cases. This meeting is crucial for strategizing and responding to the evolving pandemic situation, similar to an emergency response team gathering to plan for a natural disaster.

Mitsui, VDL Groep to Pick Up Stakes in EKA Mobility 

Japanese Mitsui & Co and Netherlands-based VDL Groep have entered a strategic partnership with Pune-based EKA Mobility. This collaboration focuses on manufacturing electric buses and light commercial vehicles in India, much like a multinational alliance to promote sustainable transportation.

India Inc Sets Up Transformation Offices to Guide Complex Projects 

Indian companies are increasingly establishing dedicated transformation offices to manage large-scale, complex projects involving multiple consulting firms. This trend reflects the growing need for specialized teams to handle the intricacies of modern business projects, similar to a task force formed to oversee a major corporate overhaul.

BofA Leases 1.1 m sq ft Office Space in Chennai 

Bank of America (BofA) has leased a massive 1.1 million square feet of office space in Chennai. This expansion indicates a significant investment in the region, akin to a major corporation setting up a new regional headquarters.

MahaRERA Recovers ₹140crore as Homebuyers’ Compensation 

The Maharashtra Real Estate Regulatory Authority (MahaRERA) has reclaimed over ₹140 crore this year from developers who failed to deliver apartments. This action highlights the authority’s role in protecting consumer rights, similar to a regulatory body ensuring fair trade practices.

Coca-Cola Extends Partnership with ICC for Eight Years 

Coca-Cola and the International Cricket Council (ICC) have extended their global partnership for another eight years, encompassing major cricket events. This long-term deal is akin to a major sponsorship agreement in the sports industry, ensuring mutual benefits for both parties.

Household Staple Prices Continue to Pinch the Pocket 

While edible oil prices have dropped 13-30% post-COVID, the cost of other daily necessities like rice, soaps, and detergents remains high. This ongoing price pressure on household staples is similar to a persistent increase in living costs affecting everyday consumers.

Air Passengers’ Complaint List Gets Longer 

A survey of about 13,000 air passengers revealed that 90% feel airlines in India have compromised comfort and cut corners in the past two years. This feedback suggests a decline in service quality, comparable to customer dissatisfaction in a service industry.

TaMo Wins UP Order for over 1k Bus Chassis 

Tata Motors, India’s largest commercial vehicle manufacturer, has secured an order from the Uttar Pradesh State Road Transport Corporation for 1,350 diesel bus chassis. This order represents a significant achievement for Tata Motors, similar to a leading manufacturer winning a major government contract.

Zydus Healthcare Gets Rs285cr I-T Notice 

Zydus Lifesciences announced that its subsidiary, Zydus Healthcare, has received an income tax demand notice for Rs284.6 crore for the assessment year 2023-2024. This notice indicates a substantial tax obligation, akin to a company facing a major financial audit and consequent tax adjustment.

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