#1. Profit surges, revenue growth declines for corporate India in first quarter
Revenue growth for Indian companies fell sharply on year in the June quarter while net profit growth was robust, according to an analysis by Economic Times. In a sample of 3,901 companies, revenue rose by 6.2 percent, the weakest in nine quarters. Net profit rose 39 percent, the highest in six quarters. A year ago, revenue and profit grew by 38.4 percent and 26.3 percent, respectively.
Why it’s important: The growth in profits was helped by easing input costs. An excellent performance by the financial sector supported total earnings. Rising crude oil prices, softening exports and elections in the coming quarters could pose risks to the earnings trend.
#2. Government to boost measures to tame inflation, finance secretary says
The central government is taking medium-term view on price rise but is intensifying efforts to reduce the inflationary burden, finance secretary T V Somanathan has said. It will avoid any knee-jerk reaction to transitory price rises, he said. The Consumer Price Index touched a 15-month high of 7.44 percent in July.
Why it’s important: Retail inflation has surged unexpectedly due to higher food prices. Policy measures to cool cereal, pulses and vegetable prices are needed urgently to reduce stress in household budgets.
#3. Union cabinet of ministers approves raft of projects worth Rs 1.18 lakh crore
The Union cabinet has cleared a slew of programs from electric mobility to digital infrastructure that total Rs 1.18 lakh crore. Railways bagged the biggest chunk of Rs 32,500 crore, followed by expansion of Digital India that will see an outlay of Rs 14,903 crore. All projects will be fully funded by
the Centre.
Why it’s important: The central government is continuing to spend heavily to provide a push to India’s economic growth momentum ahead of general elections to be held in May next year.
#4. Market regulator increases scrutiny of promoter classification on firms planning IPOs
The Securities and Exchange Board of India is looking harder at promoter classification of companies looking to go public, prompting at least six firms in the past three months to include individuals or entities as promoters. Questions have been recently raised on founders of money-losing startups continuing to retain control although they classified themselves as public shareholders.
Why it’s important: The reasoning behind this is simple, as pointed out by lawyers and proxy advisory firms. If a person has control over a company, then he or she should be classified as a promoter and not a promoter group. This will improve corporate governance standards.
#5. NSE asks brokers for info on derivatives trades between January 2020 and March 2022
The National Stock Exchange has asked more than 15 brokers for data to track locations where equity derivative orders were placed between January 2020 and March 2022. The brokers have been directed to share KYC details and ledgers of their clients, ID of devices used to put the trade orders, IP addresses as well as the media access control addresses.
Why it’s important: The stock market is looking into the unusual surge in futures and options trade volumes and on-boarding of new clients by most brokerages during the pandemic.
#6. Foxconn begins preparing to manufacture latest iPhone in India
Foxconn, contract manufacturer to Apple, has begun the process to make the next version of the iPhone 15 in India. The latest iPhone to be launched globally next month will be manufactured in Foxconn’s Sriperumbudur factory in Tamil Nadu just a few weeks after production starts in China, where a majority of Apple’s products are made.
Why it’s important: The latest development underlines that India is playing an increasingly important part in Apple’s strategy to diversify its manufacturing operations from out of China.
#7. Adani Power promoters sell 8 percent holding worth $1.1 billion to GQG Partners
Two promoter entities of Adani Power have sold shares worth more than Rs 8,710 crore to US-based investment firm GQG Partners, its co-investors, and others in block deals. Worldwide Emerging Market Holding and Afro Asia Trade and Investments, the promoter entities, sold 312 million shares translating to an 8.1 percent stake.
Why it's important: GQG Partners, led by Rajiv Jain, continues to invest heavily in Adani Group firms. The block deal was the highest ever between a single buyer and a single seller in the Indian market.
#8. Dubai WTO meeting to focus on increasing protectionism across the world
A record number of WTO members have raised concerns about rising protectionist moves in global trade, which will take centerstage at the 13th WTO Ministerial Conference in Abu Dhabi in February. Many developing nations, including India, are opposing the EU’s carbon border adjustment
mechanism. The EU is also expected to file a complaint against the US’s Inflation Reduction Act.
Why it’s important: A crisis and repeated delays at the WTO’s dispute resolution body is leading to trade tensions worldwide. Many countries are signing bilateral pacts to bypass the WTO.
#9. Explorers of critical minerals may get share of revenues for 50 years
Miners discovering critical and deep-seated minerals may be allowed a revenue share from the block over the entire 50-year lease period. They may also be given the right to carve out as many mineral blocks from the prospected areas that would be auctioned for mining lease later, ensuring recurring returns for the standalone mining entity over the life of different mines with varied mineral deposits.
Why it’s important: As energy transition gathers pace in India and elsewhere, the search for critical minerals is expected to intensify. Incentives to local miners have to be seen in that context.
#10. Real estate projects near historical monuments to face increased lender scrutiny
The central government has asked banks to conduct strict due diligence before lending to projects adjacent to heritage sites. The development comes after the National Monument Authority wrote a letter to the government. Lenders have been directed to blacklist developers that encroach on land near monuments, report them as fraudulent and facilitate strict action against them by the relevant authorities.
Why it’s important: There are rising complaints of real estate construction around protected monuments. This trend needs to be completely halted if the country wants to preserve its historical heritage.
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