#1. Mutual fund association approaches market regulator to clear KYC logjam
The Association of Mutual Funds in India has approached the Securities and Exchange Board of India to clear the logjam arising out of validation of investor KYC records, the Hindu Businessline reported. From April 1, the KYC status of all investors has been changed to ‘KYC Validated’, ‘KYC Registered’ or ‘KYC On Hold’ to comply with a regulatory directive issued on August 11 last year.
Why it’s important: The impasse could impact flows in April, particularly from NRIs and those living in the hinterland with limited access to the Internet or mutual fund point of sales.
#2. Tesla’s entry into India could be moving in slow lane after initial enthusiasm
Despite the central government’s ambitious rollout of a new electric vehicle policy aimed at attracting manufacturers such as Tesla, the Elon Musk-led carmaker has remained noncommittal about its plans to enter the country, the Mint reported. Tesla has not conducted any significant studies or got back to state governments with a proposal after initial discussions.
Why it’s important: US-based Tesla has reported a drastic decline in profits amid falling revenues in the March quarter, which could be drawing its entire attention for now. It will not be able to ignore the lure of the huge Indian market for long though.
#3. Advent International among investors looking to buy minority stake in Apollo 24/7
US private equity giant Advent International is among investors in talks to acquire a minority stake in Apollo 24/7, the digital healthcare platform of Apollo Hospitals, the Economic Times reported. The buyer is likely to invest about Rs 2,100 crore ($250 million), valuing Apollo 24/7 at about Rs 17,000 crore ($2 billion).
Why it’s important: The high cash burn of the 24/7 biz is on Apollo’s profitability but the pathway to profitability remains clear. Advent has invested heavily in the private healthcare sector and a stake in Apollo 24/7 will fatten its portfolio.
#4. Regulatory lens on small finance banks for forcing insurance products on borrowers
Cracking down on mis-selling of insurance products, the banking and insurance regulators are questioning the need to forcefully bundle life insurance products with loans offered by small finance banks, the Hindu Businessline reported. Both the Reserve Bank and the Insurance Regulatory and Development Authority of India are probing SFBs and insurers for making life insurance products mandatory along with such loans.
Why it’s important: It is now being reported that SFBs threaten to cancel sanctioned loans if a borrower declines to buy an insurance product. The regulators feel this cannot be allowed to continue.
#5. Baby care retailer FirstCry to withdraw $500 million IPO proposal after regulator raises questions
Indian retailer FirstCry is set to withdraw its papers for an $500 million IPO next week after the Securities and Exchange Board of India raised queries over key metrics it disclosed to investors, the Business Standard reported. FirstCry, backed by SoftBank, TPG and India's Mahindra and Mahindra, sells baby products. It is seeking to tap the market for new parents in the world's most populous country.
Why it’s important: The IPO would have been one of the country’s biggest this year. The regulator says it has not complied with regulations that mandate an IPO-bound firm must share all key business metrics with prospective investors in the past three years.
#6. India automotive industry could smoothen bumps for software services companies
Auto companies are increasingly reaching out to IT firms as they do not own the software know-how needed for their biggest transformation in a century from conventional to electric vehicles and self-driven or autonomous vehicles, the Mint reported. The contribution of automotive firms to revenue from manufacturing or ER&D services of IT firms is now 25-35 percent compared to 15-20 percent four years ago.
Why it’s important: Auto companies may yet smoothen the bumps for Indian IT services in 2023-24, a year that has so far been one of the worst in the $253 billion industry’s history.
#7. Demerger of Vedanta into six companies may get nod from key lenders by end of May
Key lenders are likely to give their approval for the revenue stream-wise demerger of Vedanta by the end of May, the Economic Times reported. “Right now, the file is with (market regulator) Sebi. The important step that remains is securing the lenders’ approval,” group chief financial officer Ajay Goel said.
Why it’s important: Vedanta needs to secure approval of 75 percent by value from lenders Nods from some lenders, including State Bank of India and Canara Bank, are still pending.
#8. India may get diamonds vetted within the country instead of Belgium to contain costs
India is scrambling to avert curbs on diamond exports to G7, which wants them tested in Belgium to ensure they did not come from Russia, the Mint reported. Instead, the country is proposing to vet them in Surat or Mumbai, India's diamond processing hubs.
Why it’s important: If an alternative is not found, Indian diamantaires will have to send their roughs to Belgium for verification, which would significantly raise costs. India has taken up the matter with the European Commission.
#9. Registrars keep heat on companies facing adjudication for violating companies law
Registrars of Companies are keeping up the momentum in enforcement action with 284 firms facing adjudication orders since January for alleged offences under the Companies Act, the Mint reported, citing corporate affairs ministry data. The number of orders issued so far in 2024 is in line with the tempo seen in 2023, when 926 adjudication orders were issued for alleged lapses by companies, the highest since 2019.
Why it’s important: The steady rise in adjudication orders coincides with the increased automation and the adoption of file and forget or straight-through process adopted in corporate filings. Most of the orders are therefore executed electronically.
#10. Demand for domestic travel is surging as country heads for 2024 general elections
As India enters the election season, there is a noticeable surge in travel activity across various modes of transportation and accommodation, the Hindu Businessline reported, citing industry executives. There are increased bookings for both air and bus travel, particularly from metro cities to smaller cities and towns.
Why it’s important: This spike in demand coincides with the anticipated travel of migrant workers back home to cast their ballots. Demand might not moderate as the holiday season will kick in after the polls are over.
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