1. Reliance to double its value in five years, Ambani formalises succession plan
Reliance Industries chairman Mukesh Ambani at the annual general meeting unveiled investment plans of more than Rs 2.75 lakh crore and outlined a succession plan for his three children, positioning the group for its next growth phase to double its value by 2027. The investments include Rs 2 lakh crore to roll out 5G services across India, Rs 75,000 crore in oils-to-chemicals, quicker investments in new energy and expansion into the FMCG sector.
Why it’s important: Reliance Industries is in the middle of what can be called its golden decade. A clear succession plan will help the conglomerate to achieve its ambitious aim to double its value.
2. Indian markets follow global peers, plummet on hawkish US Fed stance
India’s benchmark gauges dropped along with global peers as US Federal Reserve chairman Jerome Powell’s comments on keeping interest rates high rattled investors. The Sensex finished at 57,972 points, down 1.46 percent, the most since June 16. The Nifty plunged 1.40 percent to settle at 17,313 points. The rupee hit a new low of 80.13 against the dollar.
Why it’s important: The Fed’s latest stance has dashed hopes that the economic slowdown would lead to a less restrictive monetary policy. The fall in Indian markets, however, was less severe compared to the Friday selloff on Wall Street, where key gauges declined over 3 percent.
3. Reserve Bank supports rupee to recover losses from another record low
After weakening to yet another new low against the dollar, the rupee recouped most of its losses as the Reserve Bank of India intervened by selling dollars to arrest the depreciation in the domestic currency. The rupee touched a fresh low of 80.13 a dollar in early trade as hawkish comments by US Federal Reserve chairman to rate hikes strengthened the dollar globally.
Why it’s important: Since the Ukraine war started, the central bank has heavily spent from its reserves to shield the rupee from extreme volatility. The currency has depreciated 7 percent against the dollar this year and may fall further.
4. Market regulator probes Fairfax Holdings for alleged breach of crossholding rules
Fairfax Holdings, a Canadian investment firm promoted by billionaire Prem Watsa, is under the lens of the Securities and Exchange Board of India over alleged violation of crossholding norms for mutual funds. The rules prohibit entities from owning over 10 percent equity in more than one fund house. Fairfax has more than 10 percent shareholding and voting rights indirectly in IIFL and Quantum. It’s in the process of paring its stake in IIFL Wealth to comply with norms, Fairfax said.
Why it’s important: Sebi has the authority to continue the investigation and impose penalties on Fairfax even if the Canadian fund divests its stake in one of the entities to comply with norms.
5. High court sets aside $562.2 million award in favour of Devas Multimedia
The Delhi High Court has set aside an arbitral award of over $562.2 million in favor of Devas Multimedia over the sudden termination of its agreement with the Indian Space Research Organization’s commercial arm Antrix. The court held that the arbitral award on September 14, 2015, suffered from patent illegalities and fraud, and also conflicted with public policy of India.
Why it’s important: The court order offers relief to the government. It said Devas and its shareholders cannot be allowed to reap benefits of their fraudulent action as it would send a wrong message to society.
6. Lenders of IL&FS will receive over Rs 16,000 crore in fiscal third quarter
After a moratorium of over three years, IL&FS lenders will receive an estimated Rs 16,361 crore in the third quarter from the proceeds of the resolution of 191 special purpose vehicles. Alvarez & Marsal and Grant Thornton are advising IL&FS on the bank-wise distribution of the proceeds from the recoveries. The National Company Law Appellate Tribunal had approved the distribution of recoveries on May 31.
Why it’s important: When IL&FS imploded in October 2018, it had 347 firms with a total debt of Rs 94,246 crore. Debt worth Rs 50,000 crore would be resolved soon, it has said. The remaining recoveries are uncertain.
7. EPFO wants ceilings on wages and headcount to be removed
The Employees’ Provident Fund Organization has proposed that the wage ceiling and headcount restriction be removed. It is discussing the issue with stakeholders and has reached out to the states. Currently, there is a mandatory wage ceiling of Rs 15,000 for employees and only enterprises with 20 or more workers can join its schemes, including the Employees’ Provident Fund, which has over 55 million active subscribers.
Why it’s important: The lifting of the caps on wages and employee headcounts will allow all formal workers as well as the self-employed to enroll in EPFO’s retirement saving schemes.
8. Reserve Bank planning to establish fraud registry to prevent repeat swindles
The Reserve Bank of India is considering setting up a fraud registry with a database of fraudulent websites, phones, and various modus operandi for digital fraud. The mechanism is aimed at preventing fraudsters from using banking infrastructure. The banking regulator is talking to stakeholders and enforcement agencies to implement it.
Why it’s important: Fraudsters often open accounts in another bank after committing fraud in one bank. A system wide registry will prevent them from doing this. Blacklisting websites and phone numbers will also help.
9. Free trade talks with Canada gather pace, next round of negotiations in September
Talks to set up a free trade agreement with Canada have gathered pace with the two nations set to begin the fourth round of negotiations next month. New Delhi and Ottawa relaunched trade negotiations in March after a gap of nearly 10 years.
Why it’s important: Canada is India’s eleventh largest export market. A free trade pact will help local businesses to expand in the lucrative north American market.
10. Gautam Adani first Asian to be world’s third richest man
Gautam Adani has overtaken France’s Bernard Arnault to become the world’s third richest person, according to the Bloomberg Billionaires Index. It’s the first time an Asian has broken into the top three in the gauge. With a $137.4 billion fortune, Adani now trails Elon Musk and Jeff Bezos of the US in the ranking.Why it’s important: Few outside India had heard of Gautam Adani even 10 years ago. His rise in the wealth rankings have been nothing but spectacular.