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

The central government plans to significantly scale up interest-free loans given to states, leveraging a pandemic-era fix to help states drive reforms and capital expenditure, the Mint reported. The budget for 2024-25 due in July is expected to dial up the allocation.

Why it’s important: Beefing up the interest-free capex loans introduced during the pandemic crisis would be a welcome step that will monetize state treasuries and support provincial growth.

#3. Foreign investors with outsized exposures would have to make full disclosures of investors 

The Securities & Exchange Board of India has hardened the conditions under which foreign portfolio investors with outsized exposures would be spared from making full disclosure of the investors in the fund, the Economic Times reported. This was communicated to custodians of offshore funds, which are essentially banks and non-bank institutions holding cash and securities on behalf of overseas investors.

Why it’s important: The regulator asked for granular disclosures for foreign investors after a short seller attack on the Adani Group early last year. The portfolio managers will have to reveal by August the ultimate beneficial ownership of every fund investor down to the last natural persons in certain circumstances.

#4. Predetermined bankruptcy resolution packages find few takers on lower recoveries 

In the three years since its launch, the prepackaged insolvency resolution process has gotten off to slow start, with limited interest from micro, small, and medium enterprises and lower recoveries than the usual corporate insolvency resolution process, the Business Standard reported. Prepack resolution is a fast-track process that identifies a resolution plan before the admission by the National Company Law Tribunal.

Why it’s important: Meant to help smaller enterprises avoid insolvency, the pandemic era process needs a relook. The scheme did not attract takers due to lack of advocacy, awareness and too formal a structure.

#5. Big electoral bond buyer Megha Engineering to offload city gas business 

Hyderabad-based Megha Engineering and Infrastructures, the second-biggest buyer of electoral bonds at Rs 966 crore, has put its city gas distribution business on the block, the Economic Times reported. Megha City Gas Distribution has decided to consolidate operations and reached out to state-run firms.

Why it’s important: Many companies have been unable to meet targets in city gas distribution despite aggressive bids. This could lead to consolidation of a sector that is expected to see much growth in the coming years as demand for piped gas increases.

#6. Government expects to garner Rs 10,000 crore by monetizing state-owned ports in 2024-25

To increase the share of public-private partnership in ports, the Union government will look to monetize assets worth Rs 10,000 crore in 2024-25, the Business Standard reported. The ports ministry has submitted a monetization pipeline consisting of five to seven projects to NITI Aayog, the government’s think tank.

Why it’s important: The government has been looking to increase the share of private partnerships at state-run ports to 80 percent by the end of the decade. Rightly done, this should not be too difficult given the recent interest in the ports and logistics sector.

#7. Reliance Industries unit to offer 5G shared network infra solutions in Africa 

A unit of Reliance Industries is set to offer a range of 5G shared network infrastructure solutions in Africa with a local company backed by Ghana, the Economic Times reported. Radisys, owned by Jio Platforms, along with Tech Mahindra and Finland’s Nokia, is partnering with Next-Gen Infrastructure Company, in which the Ghanaian government, Ascend Digital and K-Net hold equity, for the foray.

Why it’s important: The venture marks the Reliance’s entry into the league of global telecom tech and equipment vendors. Chairman Mukesh Ambani had earlier said Reliance intends to become a telecom technology vendor with homegrown technology solutions.

#8. Former Cognizant staffers seek damages on moderation work done for Facebook 

At least 14 former staffers have separately sued Cognizant in a Florida court this year, accusing the Nasdaq-listed technology services company of willfully concealing the mental health harm from content moderation work for Facebook, the Mint reported. All employees have sought a jury trial and damages of over $75,000 each.

Why it’s important: The ghost of content moderation is back to haunt Cognizant three years after it ended its contract with Meta that owns Facebook. The lawsuits that could cause refutational damage come at a time when Cognizant is trailing its peers in expanding its business.

#9. Burman family threatens legal action against Care Health Insurance on Esops to Rashmi Saluja 

The Burman family has warned of legal action against the board of Care Health Insurance if it does not prevent its chairperson Rashmi Saluja from cashing out her employee stock options, the Mint reported. Cash-rich Care Health is the largest subsidiary of Religare, for which the Burmans announced an open offer last year.

Why it’s important: The takeover battle for Religare by the Dabur promoters has turned ugly on resistance by the company management led by Saluja. A resolution is not yet in sight with the adversaries hardening their stances.

#10. Leading property developers set sights on larger, ultra luxury residences 

Buoyed by robust sales of homes priced at Rs 2-4 crore, top real estate developers are laying the next big foundation of super-luxury residences costing Rs 10 crore and above, the Mint reported. These homes, aimed at the superrich, offer larger and more exclusive residences, with five to six bedrooms or more, balconies with each room and top-of-the-line clubhouses.

Why it’s important: There has been a resurgence in India’s luxury residential real estate in recent years, even as development of budget homes is facing a challenge. Realty developers are now planning to take advantage of the increasing demand for upgraded homes for the ultra-wealthy.