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

India’s debt markets are expected to see a surge in foreign portfolio investors inflow surge in early 2024 ahead of Indian bond inclusion in global bond indices in June 2024. India is expected to see front loaded inflows in the debt segment from overseas investors in the first quarter of 2024, experts said. In 2024, Indian sovereign bonds will be included in J P Morgan’s EM Bond Index and Bloomberg Index, indicating additional inflows of about $40-50 billion in the domestic debt market.

Why it’s important: The anticipated inflow is expected to cushion India’s ability to comfortably finance the current account deficit, despite the risk of some widening. Foreign portfolio investors are already positioning themselves to ride the opportunity.

#3. Gentari, two others in race to acquire Macquarie’s solar assets in India

The Macquarie Group’s sale of 400 MW worth of solar power projects on its Stride platform has drawn interest from three entities, which include Gentari Sdn Bhd, a unit of Malaysia’s state-run Petronas, private equity firm Actis, and Sekura Energy backed by Edelweiss Infrastructure Yield Plus Fund. The potential deal would likely have an equity value of around $300 million. Bank of America is running the sale process.

Why it’s important: The keen interest shown by the three entities signal continued investor interest in India’s green energy sector as the country continues its push to increase renewables capacity.

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#4. Cricket TV rights worth $1.5 billion uncertain as new media rights cycle kicks off in January

The $1.5 billion International Cricket Council TV rights deal between Disney Star and Zee Entertainment Enterprises hangs in the balance, with the new media rights cycle set to kick off next month. The ICC TV deal, announced in August 2022, is yet to be concluded as Zee has not yet provided the required bank guarantees to Disney Star.

Why it’s important: The uncertainty will be a consideration during due diligence and valuation exercises between Walt Disney and Reliance Industries regarding the potential merger of Star India and Viacom18.

#5. Nusli Wadia blames Pratt & Whitney for the grounding of Go First airline

Wadia Group chairman Nusli Wadia has blamed Pratt & Whitney for the grounding of budget carrier Go First, which voluntarily sought insolvency in May. Wadia pegged the damage caused to the airline because of the US firm’s faulty engines at more than Rs 10,000 crore, based on the calculations of global experts.

Why it’s important: Wadi has a point as nearly 65 percent of the carrier’s aircraft were grounded, and lessors were sending notices to ground the remaining when it initiated the bankruptcy process on its own.

#6. L&T secures contract worth over Rs 5,000 crore for Saudi Arabia’s Amaala project

Larsen & Toubro has won bagged a turnkey engineering, procurement and construction contract worth more than Rs 5,000 crore to build various systems related to renewable energy generation and power utilities for an ultra-luxury tourism destination in the Red Sea region in Saudi Arabia. The value of the order was in the range of Rs 5,000 crore to Rs 10,000 crore, the company said.

Why it’s important: With the latest contract win, L&T continues its order-winning streak in West Asia, particularly Saudi Arabia. It had earlier noted new orders worth Rs 89,153 crore, of which two-thirds were from global markets and more than 80 percent from West Asia.

#7. Board of Finoflex Cables two directors as fallout of feud among promoters

Promoter tussle at Finolex Cables has led to the rejection of two directors. Over 93 percent of promoter votes were cast against the resolutions ratifying the appointment of two directors. Two opposing camps led by Prakash and his cousin Deepak Chhabria have been battling for more than seven years over control of the Rs 16,000 crore firm. They have been voting against proposals backed by their rival camps.

Why it’s important: Finoflex is the second listed firms in recent times, in addition to Hikal, where the Hiremath and Kalyani families are feuding, where discord led to the rejection of board members. These raise questions over interests of minority shareholders and concerns over corporate governance.

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#8. India’s commercial and shadow banks need to strengthen balance sheet, says Reserve Bank

India’s scheduled banks and non-bank lenders need to further bolster their balance sheets by following stronger governance and risk-management practices, the Reserve Bank of India said in a report, even as it lauded the industry’s performance across multiple metrics. These measures would help cater to growing aspirations of the Indian economy, the central bank said.

Why it’s important: India’s banking system is positioned to improve further, with better asset quality, high capital adequacy and robust profitability. The overseer’s suggestions are in the nature of abundant caution.

#9. Government may regulate all exports of farm commodities, may spark food security fears

Exports of all farm commodities from India may come under the government lens soon. The government plans to bring all agricultural commodities under its export review and minimum export price policy, an official said. Currently, an inter-ministerial committee, chaired by the department of commerce, is responsible for the seasonal review of onion exports.

Why it’s important: The move potential by the Indian government that aims to cool domestic prices could spark global food security concerns. Any potential curb will have to be temporary with a clear end date.

#10. Senior level attrition causes conflict between Cognizant and IT majors Infosys and Wipro

As migration across senior levels rises in India’s software industry, Infosys and Wipro are taking aim at global rival Cognizant. Wipro has filed a lawsuit in a Bengaluru civil court against Jatin Dalal, who quit as its CFO in September and joined as CFO at Cognizant. Infosys, too, has reportedly accused Cognizant of unethical poaching tactics and sent a communication after its senior executives moved to the company.

Why it’s important: Higher attrition at senior levels is a cause for concern in the IT sector but should not lead to tightened clauses that restricts competition and hampers healthy professional movement.