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

Morning Scan

#1. Adani and Torrent groups in talks to acquire controlling stake in Gujarat Titans cricket team

Private equity firm CVC Capital Partners is in talks with Adani Group and Torrent Group to sell a controlling stake in Indian Premier League franchise Gujarat Titans, the Economic Times reported. CVC would retain a minority holding. The three-year-old franchise could be valued at between $1 billion and $1.5 billion. CVC had bought the franchise in 2021 for Rs 5,625 crore.

Why it’s important: Both Adani and Torrent missed out on the opportunity to own the Ahmedabad franchise in 2021 and want to be back in the race. It is a good opportunity for CVC to monetize its stake.

#2. Tata Steel seeks to maintain pole position in auto sector by bolstering Odisha plant 

Tata Steel is strengthening its new cold rolling milling factory in Kalinganagar in Odisha to serve local and overseas markets and maintain its leadership position in automotive steel, the Business Standard reported. A large part of the steel from the Odisha complex, which has an annual capacity of 2.2 million tons and was commissioned in 2022-23, is meant for the automotive segment.

Why it’s important: Tata Steel already has around 50 percent market share in India’s auto grade steel market and is now collaborating with European counterparts to build global capacity.

#3. Crypto exchange WazirX stops withdrawals after $230 million heist in major hack

WazirX, India’s largest cryptocurrency exchange, has had a major security breach leading to siphoning off over $230 million, which was first reported by Web3 security firm Cyver that posted on X that its system had detected multiple suspicious transactions involving WazirX’s multi-signature wallet Safe Multisig, the Hindu Businessline reported. The crypto firm has pausing rupee and crypto withdrawals.

Why it’s important: The money lost from the wallet would be one of the biggest crypto thefts in recent years. It comes just a month after Japanese crypto exchange DMM Bitcoin lost over $300 million to a hack.

#4. Registrars of Companies increase heat on rules around corporate beneficial ownership 

The regulatory scrutiny on beneficial ownership of companies in India is increasing with the Registrars of Companies issuing adjudicatory orders on as many as 20 companies since the beginning of May, the Mint reported. If the orders issued since beginning of the year are accounted for, the number rises to 27. In all but three cases, penalties were imposed. In three cases, the submissions made by the firms were accepted.

Why it’s important: The increased notices clearly indicate that the authorities are getting stricter about disclosures of who is controlling corporate operations. Companies have no option but to come out clean.

#5. India needs new playbook of networked economies to realize potential, says McKinsey brass

India can become central to a network of interlinked economies, McKinsey global managing partner Bob Sternfels told the Economic Times in an interview, underscoring his belief in India’s Century, a catchphrase he coined in 2022. India can play a crucial role in rethinking and rebuilding resilient supply chains, becoming a major hub for manufacturing and logistics, the McKinsey brass said.

Why it’s important: There are many opportunities for India in the current world of geopolitical flux, but it faces challenges in generating employment and ensure that AI does not overly disrupt the cash-earning software services and consulting businesses.

#6. Deposit chase by commercial banks in India start have impact on lending rates 

Many state-run banks have started raising lending rates to make up for higher interest rates paid to depositors, with the State Bank of India increasing loan rates twice in the past two months, the Mint reported. SBI, Bank of Baroda, HDFC Bank, Yes Bank, Canara Bank, Punjab National Bank, Uco Bank and IDBI Bank have hiked their marginal cost of funds-based lending rate rates by 5-20 basis points since June. One basis point is a hundredth of a percentage point.

Why it’s important: Tn uptick in credit growth has banks shore up capital adequacy by chasing deposits from Indian savers who have shifted to mutual funds in a big way due to much higher returns. The impact on lending rates might not have a huge impact on the rising demand for corporate credit.

#7. Byju’s moves appellate tribunal to wrest back operational control of struggling startup 

Cash-strapped online tutor Byju’s has moved the National Company Law Appellate Tribunal against the recent order of National Company Law Tribunal that allowed Indian cricket board’s petition for initiating insolvency proceedings against the edtech company, the Business Standard reported. Byju’s want the plea to be heard immediately and the appellate tribunal may hear the case in the coming week.

Why it’s important: The company law tribunal has appointed an administrator, which means Byju Raveendran will lose operational control of the startup he founded, which many of the firm’s backers have been demanding. How the appellate tribunal leans could be pivotal on the way Byju’s is run.

#8. Reliance Industries may post robust growth in retail and Jio to offset weak fiscal first quarter

Reliance Industries is expected to report a 3.3 percent annual rise in net profit in the June quarter and 11.4 percent rise in revenue, driven by its consumer-facing businesses at a time when its dominant oil and refining business exerted a downward pressure on performance, the Hindu Businessline reported. Analysts have estimated net profit at Rs 16,543 crore and revenue at over Rs 2.3 lakh crore.

Why it’s important: Sustained growth in Jio Platforms and Reliance Retail is expected to offset the weak performance in the oil and chemicals in Reliance Industries, which contributes nearly 60 percent to consolidated revenue.

#9. Government mulls next phase of insurance sector reforms by easing leadership rules 

The central government is considering another phase of reforms for India’s insurance sector, including a proposal to do away with the mandatory requirement of resident Indian citizens to be on the boards and top management of entities with majority foreign investment, the Mint reported. The government is also discussing changes to rules on dividend payouts and board composition that apply to insurance companies with foreign investment exceeding 49 percent.

Why it’s important: The proposed tweaks are aimed at further liberalizing foreign investment rules for India’s insurance sector. It comes three years after an earlier attempt to attract more overseas capital to the sector saw a markedly tepid response.

#10. Beauty and fashion marketplaces up their delivery game to mere hours from a day or more 

Several firms, particularly beauty marketplaces Nykaa and Purplle, are piloting dense networks of micro-warehouses to fulfill orders within hours and improve margins, the Mint reported. This might enable them to stay competitive against quick commerce platforms like Swiggy Instamart, Blinkit and Zepto

Why it’s important: Quick commerce has become hypercompetitive in the race to increase market share. The latest development signals a strategic shift for e-commerce players who currently offer delivery timelines of a day or more.