#1. Foreign investors and monsoon optimism drive Indian equities to fresh highs
India’s equity benchmarks have smashed new records. The Nifty and the Sensex crossed the 19,000 and 64,000 marks, respectively, in intraday trades. The Nifty touched an all-time high of 19,011.25 points before closing at 18,972.10, up 0.82 percent. The Sensex surged to 64,050.44 points before
closing at 63,915.42, up 0.79 percent. Foreign portfolio investors bought stocks worth Rs 2,350 crore although local institutions booked profits and sold equities worth Rs 1,021 crore.
Why it’s important: The equity gauges have been rising steadily in recent times. Robust foreign fund inflows and the swift advance of the southwest monsoon have boosted investor sentiment.
#2. Government holds back tax collected at source on overseas credit card spending
Credit card spending abroad will not face tax collected at source as it will not be counted under the liberalised remittance scheme, the finance ministry has announced. Overseas transfers up to Rs 7 lakh under the scheme will also not come under the tax ambit. The government has indefinitely put off the implementation of the May 16 notification. It also deferred implementation of new increased rates of tax collected at source by three months to October 1.
Why it’s important: The government has listened to banks and card networks, who flagged concerns on capturing the data on overseas credit card spending. The ceiling of Rs 7 lakh will provide relief to most people travelling abroad.
#3. Capital market regulator cuts short time to list initial public offerings
The Securities and Exchange Board of India has approved a proposal to cut the time for listing of shares on exchanges after their initial public offerings from six days to three. The rule will enable investors to receive shares within three days of the issue’s closure from the current waiting period of
six days. Investors who did not receive allotments can also expect refunds within three days.
Why it’s important: India is one of the first major markets to cut down on the listing and settlement periods. This has been made possible by the universal digitisation of share transactions and is not expected to cause any disruption.
#4. Market regulator tightens disclosure rules for overseas investors to curb malpractices
The board of the Securities and Exchange Board of India has approved tighter disclosure rules for foreign portfolio investors. FPIs that hold more than half their Indian equity assets in a single group and those managing over Rs 25,000 crore in equities in the country must make additional granular disclosures, it said.
Why it’s important: The stricter disclosure norms for foreign portfolio investors is intended to contain the misuse of overseas investment routes and prevent violation of public shareholding regulations.
#5. Non-performing assets of India’s banks declines to decadal low of 3.9 percent
The asset quality of commercial banks has continued its improving trend, with gross non-performing asset ratio falling to its lowest in a decade and the net bad loans touching 1 percent, a decline not seen since March 2011, data released by Reserve Bank of India in its Financial Stability Report
showed. The capital adequacy ratio of banks is at a historical high.
Why it’s important: Indian banks have decisively gone past the bad loans crisis, placing the banking system on a firmer footing should the credit flows to sustain the economic growth momentum accelerate.
#6. Rajiv Jain’s GQG Partners buys additional $1 billion worth of shares in Adani Group firms
GQG Partners, led by Rajiv Jain, has acquired an additional $1 billion worth of shares in Adani Group from the promoters, boosting the US-based fund’s total investment to $3.4 billion. The investment firm, which holds stakes in four group companies, acquired an additional 18 million shares, or 1.58 percent of Adani Enterprises from the SB Adani Family Trust for Rs 4,140 crore at Rs 2,300 each. It acquired 46 million shares of Adani Green Energy, or 2.9 percent stake worth Rs 4,232 crore at Rs 920 apiece.
Why it’s important: The confidence shown by GQG Partners in the Adani Group despite a market rout earlier this year has led to a significant bounce back in the market capitalisation of the conglomerate.
#7. Religare in initial discussions to offload 6-7 percent of its health insurance business
Religare Enterprises is in early talks with private equity investors to sell 6-7 percent in its subsidiary Care Health Insurance to raise as much as Rs 1,200 crore. Care Health Insurance reported a 32 percent rise in annual gross direct premium to Rs 5,142 crore for the year to March. The firm’s net written premium has risen nearly 50 percent in a financial year.
Why it’s important: Religare is seeking high valuations for its stake, in line with the robust performance of health insurance businesses in India. Both market size and margins in the sector are currently galloping.
#8. Reserve Bank to continue to stick to tighter rules for financial companies
The Reserve Bank of India will keep on the path of tightening regulations for financial companies despite them turning stronger in the past few quarters. Both regulators and regulated entities need to stay the course with an unwavering commitment to ensuring a stable financial system, governor Shaktikanta Das has said in the Financial Stability Report. The banking regulator has been tightening the capital, inspection, and reporting requirements for banks and non-banking finance companies.
Why it’s important: The stance of the central bank makes for eminent sense as vulnerabilities in the financial system tend to build up during good times. India is most certainly going through a growth spurt.
#9. Passenger car sales in India race past record 2 million in first half of 2023
Sales of passenger cars in India are set to cross two million in the first half of the calendar year for the first time, driven by incremental volumes from newly introduced models, according to an analysis by the Economic times Intelligence Group. Half-yearly car dispatch volumes in Asia’s third-largest
economy are now equivalent to the full-year sales in countries such as Mexico, Australia, and Indonesia.
Why it’s important: Auto sales are a leading indicator of the economy’s health. The trend of higher sales of passenger vehicles would cheer carmakers as the growth in the segment has been muted in recent years.
#10. Indian regulators to frown upon personal use of family office money
Indian regulatory authorities are taking a stance that family offices floated by local business families in offshore jurisdictions or in financial centers like GIFT City should not be used to acquire overseas properties for personal use, or with the intention to permanently park money out of the country. Several business families are exploring setting up family offices in GIFT City, which is closer to home and less expensive than destinations such as Singapore and Dubai.
Why it’s important: There is an unstated concern among the authorities over the flight of capital and migration of the rich out of the country. It remains to be seen whether rules are framed to discourage this.
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