#1. Derivatives trading smashes record as retail investors flock to options despite warnings
Options volumes of the Nifty and Bank Nifty hit a record 5.65 billion contracts in May as Bank Nifty hit a new high and the Nifty traded near its record during the month. The jump in index options volumes drove total derivatives trading, including futures, to a record 5.75 billion contracts in May. Index options contributed 98 percent of derivatives volumes as individual investors bet heavily on these instruments.
Why it’s important: Retail investors have flocked to options despite regulatory warnings. Such investments are risky as option values decay and sellers charge a fee to cushion likely losses.
#2. Government to review production-linked incentives to smoothen teething problems
The central government for the first time will hold a review and seek feedback to resolve teething issues that beneficiaries of the production-linked incentive scheme are facing. A meeting chaired by trade minister Piyush Goyal will be held on June 27 that will have participants from all 14 ministries involved in rolling out the incentives, along with key beneficiaries of the scheme.
Why it’s important: The production-linked incentives to businesses aim to make India a manufacturing powerhouse. The scheme is facing implementation challenges that need to be smoothened.
#3. Lenders to Go First airline replace key bankruptcy resolution professionals
Lenders of bankrupt Go First are seeking to take full control of the airline’s resolution process at the National Company Law Tribunal by replacing key bankruptcy-related officials appointed by the company. The committee of creditors has replaced the firm-appointed interim resolution professional, process advisor and legal agency to control the country's biggest voluntary bankruptcy-protection case since the bankruptcy code came into force.
Why it’s important: The creditors were naturally apprehensive continuing with the professionals appointed by the bankrupt carrier as they would like to avoid any conflict of interest that might hurt their interests.
#4. State-backed infrastructure financier to introduce takeout funding and ease exits
The National Bank for Financing Infrastructure and Development, India’s newest state-backed infrastructure financier, plans to introduce takeout financing products to help fund projects and allow timely exits for commercial lenders. Takeout financing helps extend loan repayment periods as new lenders take over or refinance project loans, facilitating the removal of the assets from the books of financing banks within a prefixed period to avoid asset-liability mismatches.
Why it’s important: The infra financier does everything that a commercial bank does other than giving out long-tenure loans of up to 30 years. Innovative funding products will give it an extra edge for borrowers to avoid asset-liability mismatches.
#5. Sekhmet, Nirma lead race to buy Glenmark Life Sciences that makes raw material for drugs
Sekhmet Pharmaventures is competing with the Nirma Group to acquire Glenmark Life Sciences, an 82.85 percent subsidiary of Glenmark Pharmaceuticals as promoter Glenn Saldanha looks to deleverage. Sekhmet is an active pharma ingredient platform backed by private equity groups PAG, CX Partners and Samara Capital. GLS is also an API developer and manufacturer. ChrysCapital, another homegrown fund, is also evaluating the opportunity. Bindings bids are expected by end of June.
Why it’s important: India imports a third of its API requirements and is incentivizing businesses to reduce that dependence. The local market for the raw material that power medicines is expected to grow rapidly.
#6. Insurance regulator wants all cover seekers to have unique digital ABHA IDs
The Insurance Regulatory and Development Authority of India has directed insurers to create Ayushman Bharat Health Account (ABHA) IDs, the 14-digit unique Id numbers to be issued to all Indian citizens, for both new insurance seekers and existing policyholders. The insurance regulator
and the National Health Authority have been trying to hasten the creation of the IDs and have explored quicker claim processing by adopting the Ayushman Bharat Digital Mission framework.
Why it’s important: ABHA will enable citizens to authenticate, access, and manage health records digitally and facilitate hospital and doctor appointments, helping patients to avoid queues for registration.
#7. BAM Digital Realty to establish second data center campus in Mumbai
BAM Digital Realty, a joint venture of Digital Realty and Brookfield Infrastructure Partners, will build a data center campus in Mumbai. Its second data center will come up on a 2.15-acre plot in Chandivali. The company may invest Rs 2,000-2,500 crore to create a campus designed for 35-40 MW of energy.
Earlier this year, BAM announced its first facility in Chennai designed for a maximum capacity of 100 MW.
Why it’s important: As digitisation gathers pace in India, companies are pouring in billions of dollars to set up data centers. About 5,000 MW of data center capacity is expected to be added in the next six years that requires investments of nearly Rs 1.5 lakh crore.
#8. Value of smartphone exports doubles in 2022-23, now among top five items
Smartphones made in India have catapulted into the league of five most exported commodities by value, based on their harmonized system codes in 2022-23, up from the ninth rank in the preceding financial year. Exports of smartphones nearly doubled, hitting Rs 88,726 crore in the year ended March 31, caasording to commerce ministry data analyzed by the Indian Cellular & Electronics Association of India.
Why it’s important: India’s wants to replace Vietnam and become the second largest manufacturing exporter of mobile phones in the world after China. It has launched a production-linked incentive to achieve its target.
#9. Multinationals woo talent from local software firms to man offshore units in India
Global capability centers, or captives of large multinational firms, are expanding in India. They are chipping away at the market share and talent held by domestic IT services firms. Referred to as captives, these centers are offshore units of large multinationals that perform designated technology
operations. IT service providers commanded some 65 percent of the market with the rest held by these captive centers.
Why it’s important: The captive centers are increasingly capturing the outsourcing market, providing additional employment opportunities to professionals, and becoming a worry for local IT companies.
#10. Government plans to launch app to show real-time availability of EV charging points
The central government is planning a master app that will show real-time availability of electric vehicle charging slots nearby on a map. Niti Aayog, the government’s think tank, held a stakeholder meeting on June 7 with companies operating public EV chargers to discuss the app as well as possible plans for a beta version in the next few weeks. The project is being funded by the Asian Development Bank and the app will be owned and operated by the Indian government.
Why it’s important: The app would ease range anxiety and boost adoption of electric vehicles in India. Users can discover the nearest available charging station and book a slot in advance.
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