#1. Sales of sovereign gold bonds hit record Rs 4,600 crore in June
Indians bought the largest quantity of sovereign gold bonds at 7.77 tons worth Rs 4,604 crore in the first series of this fiscal year. June’s purchases at Rs 5,926 per gram, the highest issue price since the inception of these bonds, imply an increase of almost 10 percent from the December 2022 series, which had an issue price of Rs 5,409 per gram. Against this, the Nifty generated a 6 percent return in the year through June.
Why it’s important: The record purchase of gold bonds underline a preference for an asset that acts as a hedge against inflation and is a safe haven at times of global uncertainty.
#2. Air India writes off about Rs 7,000 crore in 2022-23, turns profitable at operating level
Tata Group owned Air India wrote off an estimated Rs 7,000 crore in 2022-23 as part of impairments stemming from the carrier’s faulty aircraft and engines as well as low-cost airline AirAsia India. Losses shrank and the carrier was positive at earnings before interest, taxes, depreciation, amortization and restructuring or rent costs, or profitable at an operating level.
Why it’s important: The new management is focusing on operational efficiencies and costs savings. The Tata Group is also in the process of consolidating its aviation businesses.
#3. India’s proposal for global digital public infrastructure faces pushback
India´s proposal to formalize an interoperable global digital public infrastructure framework in the G20 leaders’ communique is facing pushback from some developed countries, which argue the move may impede the growth of global private payment processors. The development comes even as more countries are accepting the United Payments Interface developed by the National Payments Corporation.
Why it’s important: The loss of market share by Visa and Mastercard to UPI could be a cause of concern for lobby groups in the wealthy nations in view of India’s global payments infrastructure proposal.
#4. Personal data of Indians in public domain to be shielded from artificial intelligence
Generative artificial intelligence platforms such as ChatGPT or Google’s Bard may not be able to process the personal data of Indians available in the public domain, according to the latest draft of the Digital Personal Data Protection (DPDP) Bill, 2023, which was approved by the cabinet earlier this month. The draft of the final bill is not public as yet and experts are relying on a leaked version of a draft that’s circulating in legal and policy circles to make this analysis.
Why it’s important: While the intention of shielding in laudable, it is unclear how the authorities would enforce the ring fence. Legal remedies often find it difficult to keep pace with the rapid innovations in tech.
#5. Central government may pick up equity in semiconductor design firms
The government has started discussing a proposal to support domestic Indian semiconductor chip design companies by taking equity stake as a key element of the second phase of the design-linked incentive scheme. The broader vision is to offer equity support to those local semiconductor chip design companies that have reached a certain maturity and have the potential to go to the next level or scale.
Why it’s important: The aim of this proposed move would be to ensure India can build a few domestic fabless firms and a chip design ecosystem in the country.
#6. Bain Capital in advanced talks to buy Adani Capital for Rs 1,500 crore
Bain Capital is in advanced negotiations to close the acquisition of Adani Capital, edging past Carlyle. Adani Capital’s management, led by Gaurav Gupta, owns around 10 percent of the company. Gautam Adani owns nearly 90 percent of the firm, which has been up for grabs for the past few months. The company had Rs 3,977 crore of assets under management at the end of March.
Why it’s important: Gautam Adani has been looking to realign his business interests and focus on core infrastructure by conserving cash after a damaging market rout earlier in the year that dented business credibility.
#7. Retail borrowers and small businesses bear brunt of interest rate hikes
The interest rate hike cycle in India has hit retail borrowers and small businesses harder than large companies, with over half of all floating rate loans now linked to external benchmarks, enabling faster transmission of interest rate changes. Corporate loans are yet to be fully repriced, which will happen as per loan reset dates.
Why it’s important: The higher passthrough of lending rates has not materially deterred retail borrowers whose outstanding loans have been growing in double digits. Corporates, on the other hand, still seem reluctant to borrow.
#8. Jindal Steel and Power in early talks to raise up to $3 billion
Promoters of Jindal Steel and Power led by industrialist Naveen Jindal are in exploratory talks with large global private credit funds and foreign banks to raise up to $3 billion, which would potentially be used to increase promoter holdings. The talks with lenders are at an early stage with no certainty of a transaction. The promoter Jindal family owns a 61.2 percent stake and has increased holdings by 0.8 percentage point since the June quarter last year.
Why it’s important: The company’s steelmaking and power generation businesses are doing quite well, and shareholders have cheered the growth in recent years. It could now be looking at faster expansion.
#9. Centre may take legal action against EV makers if they don’t return incentives
The central government will take legal action against electric vehicle (EV) makers that don’t refund incentives wrongfully claimed under its Faster Adoption and Manufacturing of Electric Vehicles II scheme. They will also be restricted from participating in the program’s updated version. The government earmarked Rs 10,000 crore to accelerate the shift to EVs under FAME in five years to March 2024. The corpus and structure of the third leg of the incentive scheme is being worked out.
Why it’s important: There has been large-scale irregularities in claiming incentives without meeting norms meant to increase investments and employment. Nothing should be allowed to hurt faster adoption of electric vehicles in the country.
#10. Gaming companies look to meet government officials to ward off existential crisis
Faced with an existential threat after the GST Council decided to levy a 28 percent tax on online gaming, real-money gaming companies are making a beeline to New Delhi to meet government officials this week as they feel the decision will significantly shrink the size of the industry. The Indian gaming industry is estimated to be worth $2.8-3 billion at the end of 2022-23 and is expected to grow rapidly.
Why it’s important: The high tax on gaming transactions was expected. Although it might discourage real-money gamers, the government is not expected to relent in the short term.
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