Morning Scan: All the big stories to get you started for the day

A round-up of top newspaper stories

#1. Corporate capex slows down in first half of fiscal year on moderating revenue growth

India’s top listed companies are going slow on fresh investment in capacity expansion as there’s a deceleration in their revenue growth. The ratio between turnover, or net sales or revenue, to assets for 725 companies in a Business Standard sample declined to 0.437 in the six months to March from 0.446 and 0.442 in the first half of 2023-24.

Why it’s important: The government has boosted capital spending in recent years, expecting the private sector to follow, which does not seem to be happening. Companies are focused on expanding margins and profits rather than investing in growth, mainly due to subdued consumer demand.

#2. Tesla ready to invest $2 billion to build factory but wants concessions on imported vehicles

Tesla is willing to invest up to $2 billion to establish a factory in India if the government approves a concessional duty of 15 percent on imported vehicles during its first two years of operations in India. The electric carmaker is willing to invest up to $500 million if the government extends concessional tariff for 12,000 vehicles and can increase this up to $2 billion if the reduced duty is approved for 30,000 vehicles.

Why it’s important: The government is said to be considering the upper range of Tesla’s proposal although it has earlier indicated reluctance to provide any duty concessions on imported vehicles.

#3. Company registrars step up action on violations after decriminalisation regime kicks in

India’s various registrars of companies have stepped up action after the 2019 decriminalisation of various company law violations, resulting in a near fivefold jump in orders in just four years. These orders entail a penalty but no prosecution. The registrars under the corporate affairs ministry issued 157 such orders in 2019, a number that jumped to 765 in 2023 till November 22, official data showed.

Why it’s important: The decriminalisation regime has evidently eased the load on the judicial system, as was expected, and has freed up companies to focus on their business.

#4. B2B marketplace OfBusiness looks to raise $200 million at $6 billion valuation

Business-to-business marketplace OfBusiness has approached sovereign wealth funds, and private equity and crossover funds to raise $150-200 million in fresh investment, seeking a valuation of $6 billion. It was last valued at $5 billion in 2021 when it raised $325 million. OfBusiness has raised nearly $900 million in 11 funding rounds, of which $802 million came in 2021.

Why it’s important: The B2B unicorn is already profitable, raising hopes that it might secure the desired funding in a market environment where liquidity has dried up for the larger start-up ecosystem.

#5. Control exuberant lending, finance minister asks NDFCs and small finance banks

Finance minister Nirmala Sitharaman has reiterated the Reserve Bank of India’s caution to lenders to avoid downside risks, while focusing on their core business. Sitharaman warned non-banking financial companies and small finance banks to avoid risks from over-lending. The central bank last week increases the risk weights on consumer loans and loans to NBFCs to slow down the pace of unsecured credit growth.

Why it’s important: The finance minister’s caution comes a day after Reserve Bank governor sounded a similar note of caution on risky lending to minimize risks to stability of the financial ecosystem.

#6. Infrastructure financiers rush to bond market to raise Rs 30,000 crore

Financiers in the country are approaching bond markets to raise capital for infrastructure projects, with big names such as the National Bank for Financing Infrastructure and Development and large public sector banks eyeing fund raises worth close to Rs 30,000 crore. NABFID is eyeing a bond sale worth Rs 10,000 crore, while the Delhi-Mumbai Expressway aims to garner Rs 3,000 crore. Bank of Baroda and Canara Bank are looking to raise Rs 10,000 crore and Rs 5,000 crore.

Why it’s important: The huge bond pipeline comes ahead of the crucial parliamentary elections in 2024 and is taking place at a time when sovereign bond yields have eased significantly from the highs in October.

#7. Discounted deals make a comeback for sales on Black Friday and Cyber Monday

Local companies have started discounts, both online and offline, for Black Friday on November 24 and Cyber Monday soon after, with e-commerce firms, retailers and marquee brands wooing customers with lucrative deals. While Diwali purchases are mostly for gifting, industry experts said Black Friday is more about making those purchases that consumers have on their wish lists

Why it’s important: Black Friday typically signals the start of Christmas shopping in Western markets but is increasingly becoming an integral part of the retail calendar in the country.

#8. Distressed airline Go First gets 90 more days to ready revival plan

The National Company Law Tribunal has extended the moratorium period for Go First airline by an additional 90 days till February 4 under the insolvency resolution process. Failure to complete the corporate insolvency resolution process within the extended timeline might force initiation of a liquidation process, the tribunal said.

Why it’s important: This extension provides a breather to Go First, which is facing legal challenges from lessors and the government order allowing them to reclaim aircraft and engines.

#9. New finance commission to give high weightage to human development index

The central government is likely to ask the next Finance Commission to consider a higher weight for the human development index and sustainable development goals while recommending the distribution of resources among states. It may also ask the commission to weave in climate goals in its formula.

Why it’s important: The recalibration of the finance commission’s goals is in tune with changed local realities. Its decisions are vital for the redistribution of government revenues.

#10. Visibility of women rises in boardrooms as they play key role in corporate feuds
Women are playing key roles in several ongoing boardroom conflicts or family disputes that may extend into the boardroom. Rashmi Saluja-led Religare Enterprises is embroiled in a conflict with the Burmans of Dabur. Baba Kalyani of Bharat Forge has an ongoing dispute with his sister, Sugandha Hiremath of Hikal. There’s a rift between Gopichand Hinduja and his nieces, as well as between the late Gopal Raheja’s son and two daughters over his construction group’s assets.

Why it’s important: This is a clear break from the past as more women take up senior leadership roles in India’s corporate arena. They have now reached positions where they can have their say.