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

The Securities and Exchange Board of India has demanded an explanation from the National Stock Exchange over an allegation that some high-frequency traders manipulated its software to fire thousands of orders without being detected and crowding out other users from the system. The alleged misuse was detected four years later by income tax authorities during an investigation into the co-location scandal, where former NSE chief executives Chitra Ramkrishna and Ravi Narain are among the accused.

Why it’s important: Traders manipulated trading access points through special software to bypass the system and skipped paying transaction fees. It was a serious violation and needs stringent action.

#3. Reserve Bank panel suggests ways to make the rupee global, reduce dependency on the dollar

An interdepartmental group of the Reserve Bank of India, established to examine internationalizing the rupee, has suggested steps for transactions in the domestic currency popular in other countries, thus reducing dependence on the dollar. The measures include liberalizing the capital account, promoting international usage of the domestic currency, and strengthening financial markets.

Why it’s important: The Western sanctions after the Ukraine conflict has shown the pitfalls of depending too much on the dollar. India has been pushing for trade settlement in rupees with limited success so far.

#4. Cabinet approves draft data protection bill with provisions for hefty fines

The Union Cabinet has approved the long-awaited Digital Personal Data Protection Bill. The draft legislation includes provisions to penalize private and government entities up to Rs 250 crore per instance for data breaches, which can go up to Rs 500 crore by the Data Protection Board that will be constituted as an appellate body. The bill is likely to be tabled in Parliament during the monsoon session.

Why it’s important: The draft law seeks to decriminalize data breaches and relies on voluntary disclosure mechanisms. It’s uncertain whether such a system would be strong enough to ensure data privacy.

#5. Byju’s shareholders demand clarity on fund utilization at an emergency meeting

Angry shareholders have grilled the founders and management of edtech unicorn Byju’s at an emergency meeting, seeking explanations on funds utilization, with some demanding that founder Byju Raveendran step down to make room for an interim CEO. Shareholders have pressed the leadership for pro-forma financials at the extraordinary general meeting following the exit of its auditor and three external directors amid delay in financials and lawsuits in the US.

Why it’s important: Once an inspiration to the start-up ecosystem in India, there are now too many question marks on how Byju’s operates and utilizes the enormous amounts of funds it has raised.

#6. Go First may soon resume operations as Pratt & Whitney promises to service engines

Go First may soon return to skies with US-based Pratt & Whitney committing to providing and servicing jet engines and the low-fare airline agreeing to meet two key conditions set by India’s aviation regulator. The Directorate General of Civil Aviation has asked the airline to compensate those who had booked tickets but couldn’t fly and ensure adequate infrastructure and crew requirements before taking off again.

Why it’s important: Refunding paying customers would be a first step before Go First restarts stalled operations. Its troubles won’t go away, but continued services would bring it much-needed earnings.

#7. Adani promoters likely to slash additional stake in group companies

The promoters of the Adani Group led by Gautam Adani will continue to pare holdings in group companies in the coming months to create a liquidity buffer that can be used to fund new opportunities and infuse equity in various units. The promoters have so far sold stakes to US-based GQG Partners and are in discussions with other global investors to potentially divest more.

Why it’s important: The Adani Group has scrambled to prepay loans and restore credibility after being hit by a report by a short seller that led to a market rout. It has been raising funds by diluting promoter stakes.

#8. PharmEasy plans Rs 2,400 crore rights issue at 90 percent discount to repay loan

PharmEasy has informed its board and investors that it plans to raise around Rs 2,400 crore ($291.5 million) through a rights issue at a 90 percent discount to its peak stock price to repay a loan from Goldman Sachs. The unlisted PharmEasy’s parent, API Holdings, will issue new stock at Rs 5 per share. It raised funds at Rs 50 per share in 2021. The Mumbai-based company, which also owns diagnostics firm Thyrocare, is expected to be valued at $500-600 million, down from the high of $5.6 billion two years ago.

Why it’s important: This is quite a climbdown for the online pharmacy and is indicative of the brush with the reality that many top start-ups are facing. They will have to clean up their acts to remain viable businesses.

#9. Bombay Dyeing looks to sell Worli land parcel at a valuation of Rs 5,000 crore

Bombay Dyeing, a Wadia group firm, is in talks to sell a part of its land parcel in central Mumbai’s Worli at a valuation of Rs 5,000 crore. A Japanese conglomerate is leading the race to acquire the land, which has a development potential of 2 million sq ft for commercial purposes. Bombay Dyeing will use the proceeds to reduce debt and corporate expenditure.

Why it’s important: Real estate prices have recovered in Mumbai after a few years of lackluster valuations. Demand for land in Mumbai remains high since supply is so limited.

#10. Indian middle class to nearly double to 61 percent of the population by 2047

The size of India’s middle class will nearly double to 61 percent of its total population by 2047 from 31 percent in 2020-21, as political stability and economic reforms with an annual growth rate in excess of 6 percent over the next two and a half decades will make the country one of the largest markets in the world, according to a report by the People Research on India’s Consumer Economy and India’s Citizen Environment, an independent think tank.

Why it’s important: As the number of middle-class households rises, there will be increased demand for quality healthcare, education, housing, and consumer goods, among other things. That presents an enormous opportunity for entrepreneurs and businesses.