1. Indian equities rise nearly 1 per cent on healthy tax, credit and deficit data
Local stocks rose for a fourth straight day, unaffected by the weakness in global markets. The Sensex ended almost 1 per cent up due to encouraging credit, tax, and deficit data and ahead of the Reserve Bank of India’s policy decision on interest rates; the 50-share Nifty rose 0.91 per cent. The markets are not expecting any surprises from the monetary policy committee meeting, analysts said. Declining fiscal and current account deficits, as well as deposit and loan growth, are seen as positive indications for growth.
Why it’s important: The stock market is showing resilience as a further interest rate hike has already been priced in. However, there’s a long way to go before market volatility subsides.
2. Reserve Bank needs to prioritize taming inflation rather than boost growth
The Reserve Bank of India should prioritize bringing inflation down within the mandated range of 2-6 per cent even if economic growth is adversely impacted in the process, finance ministry officers said. The comments came ahead of the bi-monthly monetary policy review. Most economists and analysts expect the monetary policy committee to lift policy rate by another 0.25 percentage point to 6.75 per cent before hitting a pause. Retail inflation eased marginally in February to 6.44 per cent from 6.52 per cent in January.
Why it’s important: Retail inflation has been hovering around the upper limit of the Reserve Bank’s tolerance band for nearly two years. Higher prices and poor earnings in most households has begun hurting consumption demand, the main driver of growth of the Indian economy. Inflation has to be tamed.
3. New project investments touch Rs 12.3 lakh crore in March quarter on large orders
Large investment plans in some industrial sectors might have driven a record surge in new projects in the March quarter of 2022-23. The value of new projects soared in the three months ended March to Rs 12.3 lakh crore, or more than the previous two quarters combined, according to data from capex numbers from Centre for Monitoring Indian Economy, a project tracker. New projects rose 42.6 per cent on year from Rs 8.64 lakh crore and 78 per cent sequentially.
Why it’s important: Despite the surge, new project investments could moderate in the coming quarters on slowing global growth. Much of the investment was due to the capex boost provided by the government.
4. Shapoorji Pallonji looks to raise $1.75 billion by pledging remaining Tata stake
The Shapoorji Pallonji Group, the single largest shareholder of Tata Sons, is in talks to raise $1.75 billion by pledging the remaining half of its stake in the unlisted holding company of the Tata Group. It has already pledged close to 9 per cent of its 18.37 per cent stake in Tata Sons. After the latest transaction, the entire stake, valued at close to Rs 94,000 crore, will be pledged to lenders, including two foreign banks and several overseas hedge and credit funds.
Why it’s important: The total value of the loans raised by Mistry family held entities against shares of Tata Sons will exceed $3 billion. The group will retire part of its debts and pour cash into operations.
5. Embattled Adani Group target paring debt burden, boosting operating income
The Adani Group aims to boost operating earnings by nearly 50 per cent to around Rs 91,000 crore over the next two financial years, helping lower its leverage ratios and calming investor and creditor concerns, whom it owes around $23 billion. The conglomerates debt stood at Rs 2.27 lakh crore at the end pf 2022-23. In recent meetings with creditors, Adani executives have outlined plans to lower the group’s leverage ratio from 4.2 times now to 3.1 by the end of 2023-24, mainly by increasing earnings rather than reducing debt.
Why it’s important: The Hindenburg report accusing Adani Group of accounting fraud and stock manipulation has dealt a huge blow to the market capitalization of the group despite its denials. The group is doing all it can to restore business confidence.
6. British government offers to sweeten Tata Steel UK package to decarbonize operations
The UK government has offered to revise the offer made in January to Tata Steel UK, which has been seeking a financial package to execute its decarbonization plans for the Port Talbot plant. It has sought fiscal support to replace the two blast furnaces at its factory. Tata Sons chairman N Chandrasekaran and Tata Steel MD TV Narendran have held talks with UK Prime Minister Rishi Sunak over the issue.
Why it’s important: The Tata Group has conveyed its stand to the UK that it cannot continue with its British growth plans based on the earlier offer. Its Port Talbot factory is hampered by structural disadvantages like high energy costs, lack of a captive pellet plant and insufficient coking oven capacity.
7. India readies offer to support green hydrogen growth at initial Rs 50 per kilo
The central government plans to provide incentives worth Rs 13,050 crore out of the Rs 19,744 crore support under the National Green Hydrogen Mission. It plans to provide incentives worth Rs 17,490 crore to produce green hydrogen and electrolyzers. Of this, Rs 4,440 crore will be allocated to make electrolyzers. For green hydrogen, it would provide an incentive of up to Rs 50 per kg in the first year, to be brought down and capped at Rs 30 per kg in the third year.
Why it’s important: The government is pouring huge sums to transition to greener energy. It expects to enable production of 5 million tons of green hydrogen a year by 2030, with the potential to reach 10 million tons per annum with expansion of export markets.
8. Quick commerce start-up secures $75 million in funding through convertible notes
Reliance Retail-backed quick commerce startup Dunzo has secured funding of $75 million through convertible notes. It will also lay off about 30 per cent of its staff, besides planning a shift in the business model, employees were told at a town hall meeting. About $50 million would come from Google and Reliance Retail, while other existing investors would put in the rest.
Why it’s important: Quick commerce is a rapidly expanding business segment, particularly in the bigger cities. The funds would help Dunzo to beef up its infrastructure and grab more market share.
9. Regulator directs insurers to cut operating costs, pass on gains to customers
India’s insurance regulator has asked insurers to slash expenses and pass on savings to their customers. The Insurance Regulatory and Development Authority of India in its latest guidelines has directed insurance companies to draw up plans to reduce expenses and transfer those savings to policyholders in the form of lower premiums. It has sought a well-documented policy outlining the manner in which benefits arising from cost reductions and directly sourced business will be transferred to customers.
Why it’s important: The fresh move could potentially help in lowering policy costs in one of the world’s less penetrated but rapidly expanding markets.
10. Mumbai to get first Apple store, Tim Cook may fly to India for April launch
Tim Cook, chief executive of Apple, is likely to visit India in April for the launch of its first company-owned store in the country and hold discussions with key ministers on strategic issues such as manufacturing expansion and exports from India. If the visit takes place, it could possibly include a meeting with Prime Minister Narendra Modi. Cook had met Modi on his previous visit to India in 2016.
Why it’s important: Opening the Apple store will be another milestone for Apple’s India operations. The tech giant has significantly boosted its manufacturing capacity in the country in recent times to diversify supply chains and reduce dependence on China.
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