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

A round-up of top newspaper stories to keep you ahead of others

#1. India’s central bank digital currency can fix international payment problems

India’s central bank digital currency instant-settlement feature could play an important role in addressing issues around high costs and low speed associated with cross-border payments, Reserve Bank of India governor Shaktikanta Das said. The central bank last year launched two CBDC pilot projects for retail and wholesale segments. It was expanding the pilot to more banks, cities, people, and use cases, Das said.

Why it’s important: Payments made through sovereign-backed digital currencies would be faster, cheaper, and more transparent, delivering benefits to a wider spectrum of users. Their use could become widespread as they gradually establish their credibility and convenience.

#2. Income-tax department sends half a million notices for low advance tax

The income tax department has issued notice to around 500,000 taxpayers between April and August over zero and lower advance tax payment. These intimations were sent after analysing significant transaction data for the previous financial year and the first quarter of the current financial year.

Why it’s important: Advance tax payment in the June quarter indicates taxpayers paid lower taxes compared with high-value spendings, indicating a mismatch. The move comes ahead of the second instalment of advance tax due on September 15.

#3. Plan of JSW Group to acquire MG Motor India likely in two months

JSW Group may announce the purchase of a stake in MG Motor India in two months if negotiations progress satisfactorily, and the first JSW electric car could roll out as early as next year. The deal, likely to value MG Motor India at $1.2-1.5 billion, involves initial purchase of a minority stake, with a plan to secure a majority stake in the automaker over time.

Why it’s important: JSW is looking to enter the electric vehicle segment to capitalize on a rising trend. India’s electric vehicle market, valued currently at $2 billion, is likely to triple in two years.

#4. Power generation firms seek to build pumped storage worth Rs 3.1 lakh crore

NHPC, Tata Power, Adani Green Energy and JSW Energy are among the power companies that have proposed to build pumped storage projects totalling a massive 39GW, potentially attracting investments worth as much as Rs 3.12 lakh. crore. These projects typically require an investment of Rs7-8 crore per MW.

Why it’s important: Pumped power storage, along with battery storage, would gain in importance as India relies more on renewable power as these will pick up the slack in electricity supply when the sun isn’t shining, or the wind isn’t blowing.

#5. Torrent Pharma leads race to acquire Cipla with 30 percent higher bid

Torrent Pharmaceuticals has emerged as a frontrunner to buy rival Cipla with a non-binding offer that’s more than 30 percent higher than Blackstone’s bid. The American private equity firm has offered about Rs 900 a share, but Torrent has made an all-cash offer at around Rs 1,200 a share, which is much closer to the current market price of Cipla. A deal is expected in 2-3 weeks.

Why it’s important: The acquisition would trigger an open offer, which would imply a deal size of around $6.7-7 billion, which would potentially be the largest deal in the pharmaceuticals industry in India.

#6. Bain Capital approaches Dr Reddy’s for joint bid to buyout Cipla promoters

US buyout group Bain Capital has approached Dr Reddy’s Laboratories to consider a joint bid to buy out the Hamied family, promoters of Cipla. Senior leadership from both firms met last week to discuss and formalize a strategy. Dr Reddy’s is believed to be evaluating the opportunity and countering the offer made by Torrent Pharma, which currently leads the race.

Why it’s important: The race to clinch the biggest M&A in the pharma sector seems to be heating up. The stakes are getting higher as the gains are projected to be higher.

#7. National infra fund among four looking to buy Macquarie’s Vibrant green platform

India’s National Investment and Infrastructure Fund and private equity firm Actis Llp are among four contenders vying to acquire Macquarie Asset Management’s Green Investment Group platform Vibrant Energy, which has a 1.5 GW portfolio in the commercial and industrial sector. JP Morgan is managing the transaction with four bidders shortlisted from the non-binding offers for the deal valued at $250 million.

Why it’s important: There is keen investor interest in the local commercial and industrial power sector as rules now permit large consumers to buy energy from the open market rather than the more costly grid.

#8. Government looks to revive the build, operate and transfer model for highway projects

The National Highways Authority of India may bid out a tenth of its road awards next financial year through the build, operate and transfer route, as roads minister Nitin Gadkari has highlighted the model for its efficiency. In these projects, private investors take the risk of financing, building and operating highway projects over a concession period of 20-30 years. The developer recoups investments through tolls.

Why it’s important: There has been weak private interest in the BOT model, which might change in the next financial year on increased project offers. The government’s infra push should garner sufficient interest.

#9. Electric scooter maker Ather to raise Rs 550 crore from Hero MotoCorp

Electric scooter maker Ather Energy is set to raise Rs 550 crore from its largest shareholder, motorcycle manufacturer Hero MotoCorp. In a filing with stock exchanges, Hero MotoCorp said its board has passed a resolution to invest the money in the rights issue of Ather Energy. The motorcycle maker already owns a 34.2 percent stake in Ather.

Why it’s important: India’s electric two-wheeler market seems to have crossed an inflexion point and demand is expected to rise rapidly. Additional investments seem to be par on course.

#10. Chinese President Xi Jinping will not attend the G20 Leaders' Summit in New Delhi

Chinese President Xi Jinping is set to skip the G20Leaders’ Summit in New Delhi later this week. China’s foreign ministry has announced that premier Li Qiang will attend the meet. Besides Xi, Russian President Vladimir Putin and Mexican President Andrés Manuel López Obrador have also announced their absence.

Why it’s important: Previously, only the 2021 summit in Rome saw more leaders remaining absent at the multilateral platform since the summit became an annual event in 2011. Visits by leaders are closely monitored due to their political significance. Relations between China and India are at a historic low.