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5 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

Credit Growth Signals Robust Q3 for India Inc

Credit growth in India is indicating a strong performance for Indian companies in the third quarter. Lenders have released early business data just before the month-long earnings season commences. This data suggests that Indian corporations are continuing their trend of robust performance. This positive trend in credit growth is an important economic indicator, reflecting a healthy business environment and potentially leading to increased investment and hiring in various sectors.

DIAL Alternate No. for Airport Train Funds: Govt to GMR

The Indian government has rejected the Delhi airport’s request to impose an airport development fee (ADF) for funding a ₹3,500 crore project. This project involves constructing an elevated air train corridor that connects the airport’s three terminals. This denial means the airport must find alternative means of funding for this significant infrastructure development, which is crucial for improving connectivity and passenger convenience at one of India’s busiest airports.

For IT, a $16b Deal Feast on the Table

India’s leading software exporters are gearing up for a highly competitive period as they aim to secure a substantial portion of the estimated $16 billion worth of large global IT service deals. These deals are expected to be up for renewal in the next six months. This scenario presents a significant opportunity for Indian IT firms to expand their global footprint and revenue. They will be competing not only with local rivals but also with international players, highlighting the increasingly global nature of the IT services industry.

Cos Make Exit Doors a Tight Fit for CXOs

Indian companies are intensifying their efforts to retain top executives by making changes to employment contracts. These changes include stricter non-compete and non-solicitation clauses, making it more challenging for senior executives to leave for competitors. This trend reflects the intense competition for high-level talent in the corporate world and the importance of retaining experienced leaders. Such contractual changes are a response to the frequent poaching of C-suite executives, as companies strive to maintain their competitive edge by keeping their top leadership stable.

45 Companies in ET 500 List Earn More Profit in H1 Than in Entire FY23

Forty-five companies listed in the ET 500 have reported higher profits in the first half of the year than in the entire previous fiscal year. This performance highlights the strong growth potential of these companies. Investors are advised to look for businesses showing robust revenue growth and improved profitability, as these factors contribute to their soaring valuations and market performance.

SC Ruling to Decide Fate of TRCs, Tax Notices to Investors

The Supreme Court of India is set to make a crucial decision affecting foreign portfolio investors, offshore private equity houses, and others who have invested in Indian stocks through foreign direct investment. This ruling will determine the validity of their tax residency certificates (TRCs) and the legitimacy of tax notices they have received, potentially impacting their tax benefits in India.

SBI Raises $250m via Green Bonds

The State Bank of India (SBI) has successfully raised $250 million through the issuance of green bonds. This funding, facilitated through the bank’s London branch, represents SBI’s commitment to sustainable financing. Green bonds are used to fund environmentally friendly projects, reflecting the growing trend of eco-conscious investments in the global financial market.

Citi Alumni Plan Bitcoin Securities That Don’t Need SEC Nod

A group of former Citigroup executives is planning to offer securities backed by Bitcoin, claiming that these do not require approval from U.S. regulators. This move comes amid heightened anticipation regarding the approval of spot-Bitcoin ETFs. These securities represent a novel approach to integrating cryptocurrency into traditional financial products.

IndiGo Unlikely to Gain Share as Rivals’ Business Plans Take Off

InterGlobe Aviation, the owner of IndiGo, may face challenges in gaining market share in the medium term due to increasing competition. As rivals in the aviation industry ramp up their business plans, IndiGo’s dominant position in the market could be threatened, underscoring the intense competitiveness of the airline industry.

Allegations Against Adani Group, Sebi Probe and SC Order

The Securities and Exchange Board of India (Sebi) is set to be the primary regulator investigating the Adani Group following allegations of rule violations. This decision comes after the Supreme Court rejected requests for a special investigation team or a probe by the Central Bureau of Investigation into charges made by Hindenburg Research against the conglomerate.

Bank Clients Can Cheer, FDs Set to Pay Higher for Longer

Bank customers can expect higher interest rates on fixed deposits (FDs) for an extended period. This trend is driven by strong credit growth, tight liquidity, and stiff competition for funds. Both large and small banks have increased their term deposit rates in select tenures, as they seek to accumulate funds to meet credit demands.

Fin Services Remains Top FPI Pick in Dec

Financial services stocks have continued to be the favored choice for overseas fund managers in December. This preference follows record inflows in the first part of the month, highlighting the sector’s attractiveness to foreign portfolio investors.

SAT Now has Only 1 Member, Work ‘Could be Hit’

The Securities and Appellate Tribunal (SAT) is currently operating with only one member following the retirement of its presiding officer. This situation could impact the tribunal’s functionality, which is responsible for hearing appeals against orders from the capital markets regulator. SAT is supposed to have three judges according to its sanctioned strength.

IVCA Seeks More Time for Lenders to Comply with Sebi’s AIF Rules

The Indian Venture and Alternate Capital Association (IVCA) has requested an extension of six months for lenders to comply with the Securities and Exchange Board of India’s (Sebi) rules regarding Alternative Investment Funds (AIFs). This request is for lenders needing to liquidate investments in AIFs or furnish 100% of their exposure if unable to liquidate.

Deal-making Activities Plunge in 2023

In 2023, there was a significant decline in deal-making activities involving domestic firms, dropping by 51% to $83.8 billion. This decline is attributed to the global funding winter, a period marked by reduced investment and funding activities. The notable exception that somewhat mitigated this plunge was the mega-merger of HDFC twins, as reported by an industry analysis.

IndiGo Eliminates Fuel Charge

IndiGo, a major airline, has removed the fuel charge on its tickets. This decision, announced on a Thursday, is expected to decrease airfares by up to ₹1,000 on certain longer routes. This move could potentially make air travel more affordable and might influence the pricing strategies of other airlines.

Trent’s Expansion with Private Label-only Model

Trent, under Noel Tata’s leadership and comprising brands like Westside, Zudio, and Star Bazaar, is expanding its business based on a unique model centered around private labels (owned brands). The company’s CEO sees no reason to shift from this strategy, indicating a strong commitment to this business model for the Tata Group’s retail sector.

Realme Reinforces Indian Team

Following a series of high-profile departures, including that of its India CEO Madhav Sheth, Realme is reinforcing its team in India. The second-largest smartphone brand in the country, led by founder and CEO Sky Li, is taking steps to strengthen its presence and operations in India.

New Rules for 5G Leasing by Telcos

The Department of Telecommunications (DoT) is set to introduce regulations that will allow telecom operators to lease spectrum to private networks. This move is expected to open new revenue streams for telecom operators, particularly in the 5G sector, and could change the dynamics of the telecom industry.

COAI Suggests OTTs Contribute to Network Costs

The Cellular Operators Association of India (COAI) has proposed that large traffic-generating platforms, such as Over-The-Top (OTT) services, should share the costs of network usage. This suggestion arises from the concern that telecom operators alone bearing these costs is unsustainable and impractical.

Increased Hiring in AI and Data Science Anticipated in 2024

A survey by Foundit (formerly Monster) indicates a positive hiring trend in 2024, especially in the fields of artificial intelligence, machine learning, data science, and cybersecurity. This uptick in recruitment is expected after a previous decline, highlighting the growing demand for professionals in these technology sectors.

Grasim Sets Rights Issue Price

Grasim Industries Ltd has priced its rights issue at ₹1,812 per share, aiming to raise ₹3,999.80 crore. The rights issue will be open from January 17 to January 29, marking a significant financial move by the company.

NR Narayana Murthy Expresses Regret

Infosys co-founder NR Narayana Murthy has expressed regret over not allowing his family members, especially his wife Sudha Murty, to join the IT giant. This reflection sheds light on his personal and professional decisions during the early stages of Infosys.

Disney and Reliance’s Media Merger Progress

Reliance Industries and Walt Disney are advancing their media and entertainment merger plans in India. Both companies have engaged law firms for antitrust due diligence, indicating serious progression in this significant merger.

Adani Ports & SEZ’s Fundraising Plan

Adani Ports and Special Economic Zone (APSEZ) plans to raise up to ₹500 crore through non-convertible debentures (NCDs). This fundraising effort is part of the company’s broader financial strategy.

REC’s Green Bond Issuance

REC is preparing to issue its first yen-denominated green bonds, aiming to raise up to $500 million. With the involvement of several major banks, this marks an important step in the company’s financial and environmental initiatives.

Tax Demand on Shree Cement

The Income Tax Department has levied a substantial tax demand of ₹4,000 crore on Shree Cement. This action follows a survey which revealed that the company had inappropriately claimed certain deductions, leading to this significant financial implication.

No New PLI Sops for Toy Manufacturing

The Department for Promotion of Industry and Internal Trade (DPIIT) Secretary, Rajesh Kumar Singh, has stated that there will be no new Production Linked Incentive (PLI) sops for the toy manufacturing sector. Instead, the Centre will continue to support the industry through other measures like import duties and quality control orders.

NFRA Imposes Fine for Professional Misconduct

The National Financial Reporting Authority (NFRA) has imposed a heavy fine of ₹50 lakh on a chartered accountant for professional misconduct. This fine, one of the highest in recent years, was levied due to the accountant’s role in enabling Quess Corp to claim an undue income tax deduction of almost ₹971 crore over three years.

Understanding the Centre’s GDP Advance Estimate

The government is set to release the first advance estimate of the gross domestic product (GDP) for FY24. This initial estimate is part of a series of six releases spread over three years, each incorporating more data to refine the calculation of the economy’s total value of goods and services.

India’s Potential in Gems & Jewellery Export

Commerce and Industry Minister Piyush Goyal, at the India International Jewellery Show, highlighted India’s potential to become the world’s largest exporter in the gems and jewellery sector. This aspiration is based on India’s capabilities and the global market dynamics.

African Crude Replaces Russian Oil Imports

India has increased its oil imports from Africa, compensating for the 18% month-on-month decline in imports from Russia in December. This strategic shift in sourcing oil is an adaptation to changing international trade and political landscapes.

Maize Imports from Myanmar for Ethanol Production

In light of the government’s decision to curb the use of sugarcane for ethanol production, traders are exploring importing maize from Myanmar. This move is aimed at meeting the fuel blending target set by the government and reflects a shift in raw material sourcing for ethanol production.

Surge in Limited Liability Partnerships

There has been a remarkable 54% year-on-year surge in the incorporation of Limited Liability Partnerships (LLPs) in the first three quarters of FY24. This increase substantially outpaces the growth in company registrations, indicating a shift in the preferred business structure for new enterprises in India.

Gold Demand Dips Despite Wedding Season

Despite the onset of the wedding season, demand for gold jewellery has dropped by up to 25%. This decline is expected to continue through the peak wedding season due to the high prices of gold, which have surpassed ₹63,500 per 10 grams. This situation reflects the sensitivity of gold demand to price fluctuations.

Non-US Multinationals Eyeing India for GCC Expansion

Experts indicate a surge in interest from large non-American multinational companies to establish global capability centres (GCC) in India. This trend marks a significant shift in the landscape of multinational investments in India, reflecting the country’s growing prominence as a global hub for business operations and talent.

India’s Data Centre Capacity Skyrocketing

By 2024, India’s data center capacity in its top seven cities is expected to surpass one gigawatt, nearly tripling in just four years. This substantial growth is a testament to India’s increasing digital consumption and data needs, highlighting the country’s expanding role in the global digital economy.

Zomato’s Strategic Pause on Blinkit Integration

Zomato has decided to put the integration with Blinkit on hold to focus on building ‘super brands’. This strategy stems from the understanding that the concept of super apps, successful in China, might not resonate as well in India. Instead, the emphasis is on creating strong, individual brand identities.

AI’s Rising Influence in Startups

According to a Nasscom report, about 70% of startups are now leveraging artificial intelligence (AI) to enhance their products and improve internal efficiencies. This widespread adoption of AI technology signifies a shift towards more sophisticated and efficient business practices in the startup ecosystem.

ONDC Hits Record Transactions in December

The Open Network for Digital Commerce (ONDC), supported by the government, recorded over 5.5 million transactions in December, its highest monthly total since inception. This surge in transactions demonstrates the growing acceptance and usage of ONDC’s platform.

Cashfree Records Significant Revenue Growth

Payment gateway Cashfree witnessed a 75% increase in its operational revenue, reaching ₹614 crore in FY23. Despite this financial growth, the company also reported a significant rise in losses, indicating a phase of aggressive expansion and investment.

Excitement Over Starlink’s Direct-to-cell Technology

SpaceX, under Elon Musk, is planning to launch satellite communication services in India with Starlink satellites featuring direct-to-cell capability. This development is generating significant interest due to its potential impact on communication technologies.

Bellatrix Aerospace’s Propulsion Technology Commercialization

Space tech startup Bellatrix Aerospace announced plans to commercialize its proprietary propulsion systems. These systems are designed to assist satellite companies with orbit transfer and stabilization, representing a significant advancement in space technology.

Microsoft Integrates AI Chatbot Activation Key

Microsoft is set to revolutionize the next generation of keyboards by incorporating a key specifically designed to summon artificial intelligence agents. This innovation reflects Microsoft’s influence in shaping computer industry trends.

Apple Withdraws iOS 17.3 Beta 2 Due to Bug

Apple has retracted the second beta versions of iOS 17.3 and iPadOS 17.3 shortly after release due to a critical boot loop issue. This swift response highlights the tech giant’s commitment to software quality and user experience.

Boom in India Sales for Global Fashion Retailers

Global apparel and fast fashion brands have experienced a significant sales increase in India, with growth rates between 40-60% in FY23. This surge contrasts the general trend of slowing demand for discretionary products, highlighting the strong appeal of these brands among India’s young consumers.

Quadria Capital Eyes Stake in NephroPlus

Quadria Capital, an Asia-focused healthcare private equity fund, is in advanced talks to acquire a substantial minority stake in NephroPlus, India’s largest dialysis chain. The deal values NephroPlus at about ₹2,000 crore ($250 million), marking a significant investment in India’s healthcare sector.

Evolution of India’s Cocktail Bars

India’s pub and bar scene is evolving beyond traditional offerings like Pina Coladas, reflecting the country’s growing aspirations and global influences. This trend is increasingly evident in smaller towns, where niche cocktail bar concepts are gaining popularity.

Hansoge Enterprises Sells Bengaluru Hotel

Hansoge Enterprises has sold its under-construction hotel in Bengaluru, spanning 150,000 square feet, to a private individual for an estimated ₹150 crore. This deal signifies a notable transaction in the real estate and hospitality sector of the city.

Aris Infra’s Ambitious Revenue Target

Aris Infra, a technology-driven platform for construction material procurement, aims to achieve an annual revenue of ₹5,000 crore by March 2027. This target follows its impressive cumulative revenue of ₹1,600 crore within the first two years of operation.

JN.1 Variant Dominates Covid Cases in India

The JN.1 subvariant of Covid-19 has become the dominant strain in India, accounting for over 60% of coronavirus cases. This development underscores the ever-evolving nature of the virus and the continuous need for vigilance in public health.

Gender Bias in Indian Recruitment

A recent incident highlights the persistent issue of gender bias in Indian recruitment rooms. A female job seeker was reportedly asked to commit to not getting pregnant for the next 2-3 years during an interview with a large asset management company, shedding light on discriminatory practices in the workplace.

Tata Motors’ Innovative Demand Forecasting

Tata Motors, India’s third-largest passenger vehicle maker, is adopting a new strategy for sales planning and demand forecasting based on vehicle registration data. This approach, a first in the mass market, signifies a significant shift in automotive sales strategies.

Lodha’s Acquisition of Goel Ganga Ventures

Realty developer Lodha, also known as Macrotech Developers, has entered into an agreement to acquire a 100% equity stake in Pune-based Goel Ganga Ventures India. The completion of this transaction is expected by January 15, marking a key development in the real estate sector.

Coffee Day’s Financial Defaults

Coffee Day Enterprises reported a total default of Rs433.9 crore on payments of interest and principal amount on loans for the December quarter. This financial challenge indicates significant stress in the company’s operations and debt management.

Increase in Retail Space Supply in Malls

The supply of new retail space in shopping malls across eight major cities increased by 72% last year, totaling 59.48 lakh square feet. This growth is in response to rising demand from retailers, signaling a recovery and expansion in the retail sector.

United Spirits Challenges Defence Ministry’s Claim

United Spirits (USL) has approached the Mumbai High Court to challenge a Rs365.33 crore claim made by the Canteen Stores Department under the Ministry of Defence. This legal move represents a significant dispute involving one of the leading spirits makers in the country.

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