1. Contract manufacturer Foxconn considering plan to assemble Apple’s iPads in India
Foxconn is evaluating plans to assemble Apple’s flagship iPad computer tablets in India, expanding its operations focused on making iPhones, the Economic Times reported. The Taiwanese contract manufacturer may start assembling iPads at its Sriperumbudur factory in Tamil Nadu. India-based units of Foxconn and other global contract makers have only assembled Apple’s smartphones.
Why it’s important: The assembly of iconic iPads in India would be a show of confidence in the rapidly expanding supply chain in the country for Apple’s iconic products. The government’s incentive policy in this case has worked exceedingly well.
2. Top private equity firms look to buyout EuroSchool operator Lighthouse Learning
Private equity firms Carlyle, EQT and Partners Group and Canada Pension Plan Investment Board are conducting due diligence for a full buyout of EuroSchool chain operator Lighthouse Learning from KKR, the Mint reported. Lighthouse may change hands at a valuation of $700-900 million.
Why it’s important: Unlike test prep startups, Lighthouse operates in the regulated preschool and schooling segments. Deal activity in this space in rare and overseas investors would like a certain degree of comfort before going ahead despite ample headroom for growth.
3. Portfolio managers redrawing strategy after tax proposal on short-term capital gains
The 33 percent rise in short-term capital gains tax announced in the budget is likely to make it difficult for portfolio management services providers to compete with mutual funds and alternative investment funds, the Business Standard reported. There will be an impact of the tax hike on short-term positions and these companies may have to shift towards more deliberate long-term portfolio strategies.
Why it’s important: Although most strategies devised by portfolio managers focus on long-term investments, fund managers are used to short-term churn and agile sector rotations. Thoses days are nearing an end on the new tax regime.
4. Bajaj Auto to expand electric autorickshaw offering, to build Rs 800 crore factory
Pune-based Bajaj Auto is looking to expand its electric three-wheeler portfolio, which now constitute 10 percent of its three-wheeler business, the Hindu Businessline reported. The company sells its electric three-wheelers in 140 cities, mainly catering to northern and northeastern India.
Why it’s important: People who run e-rickshaws do migrate to e-autos, but the price differential is high, particularly in places where CNG is available. That leaves an opportunity in other parts of the country.
5. Mankind Pharms clinches deal to acquire Bharat Serums for Rs 14,000 crore
Mankind Pharma, India’s fourth largest drugs makers by market share, has entered into a definitive agreement to buy out Bharat Serums and Vaccines from Advent International for around Rs 14,000 crore ($1.67 billion), the Economic Times reported. The transaction is expected to close within three-four months pending regulatory approvals.
Why it’s important: The acquisition will be the largest by Mankind, which was listed just a year ago. The deal will make Mankind market leader in the fast-growing women's health segment with around 20 percent market share, edging past Emcure.
6. India Inc welcomes new skilling policy but seek more clarity on implementation detail
Corporate leaders have praised the internship scheme proposed in the federal budget but would like to have more clarity on how it will be implemented, the Business Standard reported. The proposed scheme is expected to help companies address the skill gap in employment.
Why it’s important: The private sector have always complained that employability of Indian graduates is extremely low. An internship program could help address it, but the devil is in the details as previous skilling initiatives have fallen rather flat.
7. Large firms start favoring yen over dollar debt on sharp depreciation of the Japanese currency
Large domestic companies as well as state governments are increasingly turning to the yen over the US dollar for raising overseas debt, the Mint reported. This trend is playing out after the currency sharply depreciated against the rupee over recent months, making it attractive to leverage for loans and bonds. The rupee has appreciated 18 percent against the yen since the beginning of 2023.
Why it’s important: The advantage of borrowing in a currency that is expected to depreciate is that the borrower has to repay that much less. To be sure, what matters is not how much it has moved in the past, but how it is expected to behave in the future.
8. High street banks need to focus on core business, finance minister Nirmala Sitharaman says
India’s commercial banks need to get back to their core business of mobilizing deposits and lending, finance minister Nirmala Sitharaman told the Economic Times in an interview. Bank deposits expanded 11.1 percent till June 28 compared with a year earlier, according to Reserve Bank data, slipping well below the 17.4 percent surge in credit, a situation which is clearly not sustainable.
Why it’s important: The finance minister has laid down a marker for banks amid concerns over slowing deposit growth. The mobilization drive could be challenging as local savers are increasingly turning to mutual the stock market for higher returns.
9. Startup ecosystem may see end of funding winter as government abolishes angel tax
The pipeline of funds for Indian startups should get better with abolition of the contentious angel tax, Department for Promotion of Industry and Internal Trade Secretary Rajesh Kumar Singh told the Business Standard in an interview. The government is also looking at ways to speed up the process of clearing foreign direct investment proposals, he said.
Why it’s important: Doing away with angel tax, though welcome, cannot alone open the funding floodgates. Investors have become cautious and are demanding a clear pathway to profitability before putting up money, favoring more mature startups as a result.
10. Cash-strapped Dunzo face second bankruptcy plea on failing repayment schedule
Invoice Discounters of Dunzo Digital, a creditor of on-demand delivery startup Dunzo, has filed an application seeking the start of insolvency proceedings against the cash-strapped firm, the Mint reported. It told the National Company Law Tribunal that the startup has only partially repaid its dues though there is no clarity on the exact amount Dunzo owes. The startup has Reliance Retail and Google as investors.
Why it’s important: Dunzo has been facing a liquidity crisis that over the past year forced it to change business models, delay salaries, rationalize staff and delay vendor payments. It is uncertain whether it will be able to stay afloat.
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