Business news highlights: CEA V Anantha Nageswaran sees continued acceleration in GDP despite minor slowdown

• Here are top quotes from CEA V Anantha Nageswaran’s presser
• Pickup in rural demand. Two-wheeler sales in first four months is higher than last year. Modest rise in tractor sales. Rural consumption has stabilized. A good monsoon will give further filip in coming months
• Gross FDI has been on an uptrend. Net FDI reflected profitable exits in FY24. The decline in net FDI did not reflect loss of confidence in Indian economy. It should act as an inducement in future
• We have continued confidence from foreign portfolio investors. Domestic retail investors also showing resilience Crowding in effect for private sector

CEA V Anantha Nageswaran says slight slowdown in GDP was anticipated due to elections, it was well within anticipation. He also said that growth rate in agriculture is bottoming out. However, services has maintained growth rate. “Demand components have done well in terms of gross fixed capital formation, net exports,” Nageswaran added.

“Despite an unfavourable base effect, the core sector output grew 6.1% yoy in July 2024 better than the previous month (5.1% yoy). This was higher than India Ratings & Research’s (Ind-Ra) expectations (5.0% yoy). Overall, the growth in the infrastructure sectors remained modest at 6.1% yoy during 4MFY25 (4MFY24: 6.6% yoy),” says Ind-Ra economist Paras Jasrai

Capex utilisation remained lower at 16.3 percent of Budget estimates between April-July 2024, compared with 23.5 percent during a similar period in the previous fiscal.

Fiscal deficit narrows to 17.2% of the full year estimate for April-July 2024

• Mining growth at 7.2% versus 7% (YoY) and versus 4.2% (QoQ)
• Manufacturing growth at 7% versus 5% (YoY) & versus 8.9% (QoQ)
• Construction growth at 10.5% versus 8.6% (YoY) and versus 8.7% (QoQ)
• Public Admin & services growth at 9.5% versus 8.2% (YoY) and versus 7.8% (QoQ)
• Trade, hotels growth at 5.7% versus 9.7% (YoY) and versus 5.1% (QoQ)
• Electricity growth at 10.4% versus 3.2% (YoY) & versus 7.7% (QoQ)
• Fin & Real Estate growth at 7.1% versus 12.6% (YoY) and versus 7.6% (QoQ)

Construction grew in double digits at 10.5 percent. Share of private consumption rises to 56.3% from 55.9% in Q1FY24

Investment share of GDP in current prices declines marginally to 31.3% from 31.4% in the previous year's first quarter

GDP growth fell to five quarter low of 6.7 percent in the first quarter of FY25 compared with 7.8 percent in the previous quarter. (Read More)

Total reserves in the week ended August 23 up $7.02 billion at $681.69 billion. Similarly, foreign currency assets in week-ended August 23 up $5.98 billion at $597.55 billion

• July Coal Production At 6.8% versus 14.8% (MoM)
• July Crude Oil Production At -2.9% versus -2.6% (MoM)
• July Refinery Products Production At 6.6% versus -1.5% (MoM)
• July Cement Production At 5.5% versus 1.9% (MoM)
• July Electricity Production At 7% versus 8.6% (MoM)
• July Fertiliser Production At 5.3% versus 2.4% (MoM)
• July Natural Gas Production At -1.3% versus 3.3% (MoM)
• July Steel Production At 7.2% versus 6.7% (MoM)

Index of Eight Core Sector Industries measures the output of key sectors. These are coal, cement, electricity, crude oil, fertilisers, refinery products natural gas and steel. These sectors have a 40% weight in the Index of Industrial Production (IIP).

According to the official data, petroleum, fertilizer, steel and cement grew faster.

India’s core sector growth rose to 6.1 percent in July after it had eased to 5.1 percent in the previous month, according to data released by the government on August 30. The first four months of FY25 recorded 6.1 percent growth compared with 6.6 percent during similar period in the previous year. (Read More)

On the inflation front, the MC Poll median was in line with the RBI's Monetary Policy Committee estimate of 4.5 percent. Inflation eased to a 59-month low of 3.5 percent in July, compared with 5.1 percent in the previous month.

“Unless the global growth slowdown materialises, we have a sanguine view on India’s growth given the continued momentum in infrastructure thrust (barring a brief lull during election), rising private capex intentions, and continued real estate recovery cycle. Consumer demand is soft but improving at the margin. There has been a weak pick-up in global trade too, aided by inventory normalization in the West,” says SBI Mutual Fund’s Namrata Mittal.

“We expect GDP growth to decelerate to 7.1% in Q1 FY25 compared with Q4 FY24 (7.8%) and Q1 FY24 (8.2%). Slowing of manufacturing activity and lower government expenditure during the election period likely contributed to slowdown in output growth in the quarter. Robust growth in mining and utilities' production provided an offset to an extent. High growth in tax collections implies that the wedge between GDP and GVA remained,” Shreya Sodhani of Barclays

• “Q1 FY25 GDP is projected to grow by 6.9%, a deceleration from the 7.8% growth observed in Q4 FY24. GVA growth is projected at 6.6% in Q1. The agriculture sector will feel the pinch of lower reservoir level from last year’s poor monsoon and heatwaves affecting productivity. The rabi production is estimated at 155.2 million tons, slightly below the 157.8 million tons recorded the previous year,” CareEdge chief economist Rajani Sinha.
• “However, the annual growth of the sector would be aided by a favourable base of last year. Manufacturing growth is likely to moderate as also indicated by moderation in IIP data and corporate profitability.  Construction sector growth is likely to moderate as it feels the impact of election period. The services sector growth is expected to further accelerate led by Financial, Real Estate, and Professional Services. The services export has held up well despite overall global slowdown,” Sinha added.

“The underlying growth momentum remains strong as indicated by various high-frequency indicators. There is expected to be a pickup in yoy growth of trade, hotels and transport sector; financial services is also expected to register a strong growth. Both of them would be the key driving factors for growth in 1QFY25,” says Paras Jasrai, India Ratings and Research

“We expect growth to moderate to 6.7% yoy in 1QFY25, building in election-related impact which saw consolidated government spending slow in the period along with an uneven start to the monsoon and tepid commodity related gains,” says DBS Bank’s Executive Director and Senior Economist Radhika Rao. She also said that “after this soft start we expect growth to gain ground for rest of the year, taking the full year average to 7% in FY25.”

“We expect growth to have slowed in Q1, driven by a decline in company profits. On the expenditure side, the slowdown in government capital spending, likely linked to upcoming elections, has also contributed to this weakness,” said Yes Bank’s Chief Economist Indranil Pan. He further added that “while some of these factors may correct later in the fiscal year, overall GDP growth for FY25 is projected at 7%, down from 8.2% in the previous fiscal year. This contraction is partly due to the unlikely repeat of last year's high net tax growth.”

According to a Moneycontrol poll, India’s economic growth is expected to have slowed to a five-quarter low of 6.8 percent in the first quarter of FY25. This slowdown is attributed to a reduction in government spending due to upcoming elections and the impact of heatwaves on the manufacturing sector. The median estimate from a poll of 13 economists suggests that growth will decelerate to 6.8 percent from 7.8 percent in the fourth quarter of FY24, with individual forecasts ranging between 6 and 7.5 percent. (Read More)

India's economic growth has shown signs of slowing down in the April-June quarter, primarily due to reduced government spending during the national elections and a slowdown in consumer spending, a Reuters report said. According to a Reuters poll involving 52 economists, the projected GDP growth for this period is estimated to be 6.9% year-on-year. This figure is slightly below the Reserve Bank of India's (RBI) estimate of 7.1% and significantly lower than the 7.8% growth rate recorded in the previous quarter. The reduction in government spending, which often happens around election periods, can have a dampening effect on economic activity. Additionally, stalling consumption indicates that consumer confidence might be weakening, which could impact various sectors of the economy.

Goldman Sachs Group has reduced its growth forecast for India by 20 basis points for both this year and the next, attributing the change to a decrease in central government spending, a Bloomberg report said. The bank now anticipates that India's economy will grow by 6.7% in 2024 and 6.4% in 2025. The downgrade for the current year takes into account a 35% year-on-year decline in government expenditure during the April-June quarter, which coincided with the period of the general election, according to a report released on Friday by the bank's economists, led by Santanu Sengupta.

Adani Ports has acquired 80 percent stake in global OSV operator Astro Offshore for $185 million, CNBC-TV 18 reports.

The Jio Financial Services Ltd (JFS) management said on August 30 that it is hopeful of getting regulatory approvals for business with US-based BlackRock Inc. In June 2023, the two companies had formed a 50:50 joint venture to launch asset management services in India and had pledged an initial investment of $150 million each, with hopes to democratise access to investment solutions for investors in the country. (Read More)

The Centre will release that GDP data today at 5:30 pm. According to several projections, India's GDP growth would be 7.2 percent in 2024, which is a marked increase from 6.8 per cent previously. For 2025, the GDP growth is pegged at 6.6 percent versus our earlier estimate of 6.4 per cent, Moody’s said ahead of the release of data.

Zee Entertainment withdraws application and rights to file claims before NCLT with respect to Sony India merger case, says exchange filing.

IndiGo will restart operations from Delhi Terminal 1 from September 2

Aluminium prices on Friday climbed 0.86 percent to Rs 229.25 per kilogram in futures trade as speculators built up fresh positions amid a positive trend in the spot market.

On the Multi Commodity Exchange, aluminium contracts for September delivery increased Rs 1.95 or 0.86 per cent to Rs 229.25 per kg in a business turnover of 3,461 lots.

Analysts said fresh positions created by traders amid demand from consuming industries supported aluminium prices in the futures market.

India’s largest private lender HDFC Bank Ltd. plans to sell as much as 100 billion rupees ($1.2 billion) of loan portfolios using a rare debt instrument, as it seeks to cut exposure to certain sectors amid challenges in raising deposits, according to people familiar with the matter.

The bank is in talks with local asset managers including ICICI Prudential AMC, Nippon Life India Asset Management Ltd. and SBI Funds Management Pvt. to issue so-called pass through certificates, a route that has not been used in a decade by the bank, the people said, asking not to be identified as the discussions are private.

The Central Water Commission (CWC) has said the current water storage levels has recorded an increase of 126 per cent compared to last year's corresponding period and 119 per cent of the 10-year average.

As of August 29, the total live storage in these reservoirs stands at 144.333 billion cubic metres (BCM), which is 80 per cent of their total capacity.

This marks an increase of 126 per cent compared to last year's corresponding period and 119 per cent of the 10-year average, referred to as Normal storage.

An Indian tax agency has found that British insurer Aviva breached local regulations capping commissions to sales agents with a system of fake invoices and clandestine cash payments, according to a notice seen by Reuters. In an attempt to grow operations, Aviva's India business paid about $26 million between 2017 and 2023 to entities who purportedly provided marketing and training services, according to the tax notice sent to Aviva, dated Aug. 3.But the vendors, who did not perform any work, were actually a front for channeling funds to Aviva's agents, said the Directorate General of GST Intelligence (DGGI), which is responsible for policing violations of indirect taxes. (Reuters)

BPCL held its annual general meeting today. Addressing the AGM, Bharat Petroleum CMD G Krishnakumar said, “Demand for major petchem production is expected to rise by 7-8 percent annually. This presents a strategic opportunity to expand refining capacity, alongside with the development of integrated petchem complexes. we aspire to become a dominant player in India's petchem growth story.”

France 24 signs distribution pact with Sun Direct in India, reports Bloomberg

According to a Bloomberg report, Bharat Petroleum is negotiating with lenders to obtain a Rs 32,000 crore loan, which could become the largest local-currency loan of the year. The State Bank of India will spearhead the transaction, with Punjab National Bank and Bank of Baroda among the other participating banks. This loan is intended to finance BPCL's ethylene cracker plant in Madhya Pradesh. (Read More)

Zydus Life has received the US FDA approval for Scopolamine Transdermal System, CNBC-TV 18 reports. According to the update, this Scopolamine Transdermal patch is usually used to prevent nausea and vomiting after administering Anesthesia to patients.

“India’s UPI has emerged as a global testament of India’s fintech prowess,” says PM Modi. Lauding the fintech, he said that “amid coronavirus pandemic too, India was among few nations where banking services were functioning smoothly.” (Read More)

In his address, PM Modi said, “digital banking or neo banking concept is in front of us. We are creating a product, which is local but its application is global.”

“Rs 27 trillion of credit disbursed through MUDRA loans and 70% beneficiaries are women,” says PM Modi. He also says that now “people are able to see the benefit of becoming part of formal economy .”

“In the last 10 years, investments of more than $31 billion have been done,” says PM Modi. He also said that “in the last 10 years, our fintech startups have seen 500% growth.” Talking about the Jandhan accounts, PM Modi said that “cheaper phones and data and zero balance Jan Dhan accounts have created wonders.”

“World is amazed to see our fintech diversity,” says PM Modi. He also said that our market is in festive mood. “India's FinTech revolution is improving financial inclusion as well as driving innovation,” the Prime Minister said.

PM Modi's address at GFF begins in Mumbai.

'India is on cusp of transformation,' says RBI Governor Shaktikanta Das ahead of PM Modi's address.

Prime Minister Narendra Modi has just arrived at the Jio World Convention Centre in Mumbai.PM Modi will address Global Fintech Fest shortly.

Vodafone Idea counsel Abhishek Manu Singhvi says that the case deserves to be heard in open court. Chief Justice DY Chadrachud says that will consult fellow judges in the bench.

"We are working on ease of doing business. I very often appeal to my industry friends, please help us, help you. I need more ideas, we need more ideas. Ideas on what we can do at the central government, ideas on what we can do with the states, the local bodies. Need your engagement, support and your guidance to support industry with ease of doing business," Union Minister Piyush Goyal said while speaking at a CEO roundtable organised by FICCI.

IT major Cognizant is mulling to sell its Chennai headquarters, a Times of India report says. As per the report, the 15-acre site is estimated to fetch around Rs 800 crore. The report said that the sale of Chennai headquarters is likely to be conclude by the end of this year. The sale process involves local developers and is being overseen by is JLL, the TOI report said.

Religare Ent on Friday said that market regulator Sebi issued show-cause notice to its executive chairperson Rashmi Saluja on July 27. It should be note that the show-cause notice is over insider trading allegations.

“We are delighted to share with you that Vistara and Air India are all set to take the next significant step in their integration journey. Starting 03 September 2024, customers will, progressively, no longer be able to make bookings with Vistara for travel on or after 12 November 2024. Vistara will continue to take bookings and operate flights, as usual, till 11 November 2024,” Vistara said in a statement on Friday. (Read More)

Prime Minister Narendra Modi took to X (erstwhile Twitter) and posted his thoughts ahead of attending the Global Fintech Fest. “In Mumbai, I will take part in the Global Fintech Fest 2024 at around 11 AM. This platform showcases India's strides in the world of Fintech and brings together key stakeholders of the sector,” he said in his post.

Launched in 2020, the Global Fintech Fest (GFF) has grown into the world's largest fintech conference and the leading thought leadership platform in the fintech sector by its fifth edition in 2024.

Apart from PM Modi’s address, other major session today at GFF will be ‘New Gen Finance: New Products, Behaviors and Dilemmas in the Social Media Age’ Key speakers for this session are Zerodha founder Nithin Kamath and Finology Ventures founder Pranjal Kamra.

Prime Minister Narendra Modi is scheduled to address at the Global Fintech Fest held at the Jio World Convention Centre in Mumbai today. Apart from addressing GFF, he will also lay the foundation stone for the Vadhvan Port project, as well as several other initiatives in Palghar.

The allotment for the Jay Bee Laminations IPO will be finalised today. Investors can check the allotment status on the IPO registrar's website. The initial public offering for Jay Bee Laminations Ltd., which opened on Tuesday, August 27, has a total issue size of Rs 88.96 crores. This includes a fresh issue of 45.7 lakh shares worth Rs 66.72 crores and an offer for sale of 15.23 lakh shares valued at Rs 22.24 crores.

First you need to select issue type as 'Equity' and later check issue name of 'Premier Energies Limited'. Next, you will be prompted to submit 'Application number'. If you don’t have that readily available, please submit your 'PAN number'. Finally, check the box that says ‘I am not a robot’ and enter 'search' tab.

Premier Energies' IPO has attracted significant interest in the grey market ahead of its listing next week, as the trading premium in the unofficial market has risen sharply, potentially indicating strong listing gains. The Rs 2,830-crore initial public offering was subscribed 74 times over three days, from August 27 to 29, with the majority of demand coming from qualified institutional buyers. According to exchange subscription data, investors bid for 330.3 crore equity shares, compared to the offer size of 4.46 crore shares.

Founded in 1998, Indian Phosphate Limited produces LABSA 90%, a crucial ingredient in the manufacturing of washing powders, toilet cleaners, and liquid detergents. The company also produces Single Super Phosphate (SSP) and Granules Single Super Phosphate (GSSP), which are fertilizers enhanced with Zinc and Boron.

The Indian Phosphate IPO opened on August 26 and it closed on August. While the Basis of Allotment is today August 30, the initiation of refunds has been scheduled for September 2. The credit of shares to demat will be on September 2, whereas the Indian Phosphate IPO will debut on September 3 next month.

The initial public offering of Indian Phosphate Limited received an overwhelming response from investors, with the issue being subscribed more than 267 times on its fourth and final day, Thursday, driven by strong demand from non-institutional investors. The 4-day bidding period for this SME issue saw it being subscribed 12.10 times on Day 1, 37.75 times on Day 2, and 82.07 times on Day 3. The Indian Phosphate IPO allotment will be finalised today. Investors who participated in the issue can check the allotment status on the IPO registrar's website.

Market sources indicate that the latest grey market premium (GMP) for the Baazar Style Retail IPO is Rs 130. Based on the upper price band of Rs 389, the estimated listing price for Baazar Style Retail is Rs 519, reflecting a premium of 33.42% over the issue price. The GMP of an IPO reflects investors' positive sentiments towards the offering.

The price band for the Baazar Style Retail IPO has been set between Rs 370 and Rs 389 per share. The minimum lot size for an application is 38 shares, requiring a minimum investment of Rs 14,782 from retail investors. Retail investors can place bids for up to 13 lots, totaling Rs 1,92,166.

The subscription period for the Baazar Style issue will begin today, August 30, and will remain open until Tuesday, September 3. The share allotment is expected to be finalised on Wednesday, September 4, and the shares are likely to debut on the BSE and NSE on Friday, September 6.

The book-running lead managers for the issue are Axis Capital, Intensive Fiscal Services Private Limited, and JM Financial Limited. Link Intime India Private Ltd will serve as the registrar for the issue.

Baazar Style Retail will open its initial public offering (IPO) for subscription on Friday, August 30, and it will remain open until Tuesday, September 3. The company intends to raise ₹834.68 crore through this book-built issue, which includes a fresh issue of 38 lakh shares worth Rs 148 crore and an offer for sale (OFS) of 1.8 crore shares amounting to Rs 686.68 crore.

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