#1. Godrej Industries ready to expand businesses and capex after family partition
Godrej Industries Group will strategically allocate significant capital to businesses and scale them rapidly, Pirojsha Godrej told the Economic Times after the recent division of family assets, emphasizing that the exercise had been amicable. “GIG wants to move faster in the marketplace, and capital allocation and decision-making will not be a constraint since there will be less consensus building,” he said.
Why it’s important: The Godrej Group was split between two sets of cousins earlier this year. GIG is run by brothers Adi and Nadir Godrej, and Godrej Enterprises Group is run by siblings Jamshyd Godrej and Smita Crishna Godrej.
#2. Alpha Wave Global enters race to acquire 25 percent stake in VLCC Healthcare
US-based private equity investor Alpha Wave Global wants to acquire 25 percent stake in New Delhi-headquartered wellness company VLCC Healthcare majority owned by Carlyle, the Mint reported. The deal could see VLCC being valued at $600-700 million. Alpha Wave Global has submitted a binding bid.
Why it’s important: TPG was earlier in talks to pick up a stake in VLCC with other investors. The stake sale follows a trend of derisking by private equity firms in their portfolio firms where they hold majority stake.
#3. Revenue visibility from generative artificial intelligence long way off for IT companies
Revenue from GenAI or the deal pipeline in this segment in the June quarter was missing in the quarterly statements of large IT services firms other than Accenture and Tata Consultancy Services, the Business Standard reported. Many avoided even giving the number of proof-of-concepts they were working on in the fiscal first quarter.
Why it’s important: The overhyped imminent boom in GenAI is nowhere near the horizon. Most pilots are not making it to production and large enterprises fail to see significant productivity gains in most use cases.
#4. Bajaj Finance receives GST notice for alleged indirect tax evasion of Rs 341 crore
The Directorate General of Goods and Services Tax Intelligence has sent Bajaj Finance a notice over alleged tax evasion of Rs 341 crore, the Economic Times reported. The company faces a 100 percent penalty on the alleged Rs 341 crore tax evasion from June 2022 to March 2024, Rs 150 crore interest and daily interest of Rs 16 lakh until the payment is made.
Why it’s important: The federal agency that investigates GST evasion has been proactive in chasing evasion claims in the recent past. A few exemplary probes would encourage companies to boost compliance.
#5. Hero Electric dealers protest in front of headquarters, demand dues of Rs 500 crore
Around 200 dealers of Hero Electric have held a protest in front of its headquarters in Gurugram in Haryana, demanding the pending payment of around Rs 500 crore and stating that this has impacted around 50,000 customers, the Hindu Businessline reported. The dealers allege that Hero electric failed to provide vehicles and warranties for spare parts, resulting in Rs 100 crore worth of warranties pending.
Why it’s important: Hero Electric disputes these claims that are supposedly linked to the release of government subsidies to promote electric mobility. These disputes will not be easily resolved.
#6. Trouble boils over at technology company with links to disgraced Satyam founder Raju
Fifteen years after B Ramalinga Raju confessed to a $1.5 billion accounting fraud at Satyam Computer Services, a family business he mentored is in trouble over unpaid salaries, mass layoffs and delayed tax dues, the Mint reported. Brane Enterprises, which lists younger son Byrraju Rama Raju as a significant beneficial owner, recently laid off more than 1,500 employees and has delayed paying salaries for the past three months.
Why it’s important: The 2009 Satyam scandal remains one of the largest corporate frauds in India. Founder Raju stepped down as chairman, confessing to manipulating the company’s finances over several years.
#7. Ambani family tops inaugural Barclays-Haruun India list at Rs 25.75 lakh crore valuation
The Ambani family has topped the inaugural Barclays-Hurun India most valuable family businesses list, with a valuation of Rs 25.75 lakh crore, almost equivalent to one-tenth of India’s GDP, the Business Standard reported. It is followed by the Bajaj and Kumar Mangalam Birla families. The top three family business interests are valued at $460 billion, equivalent to the GDP of Singapore.
Why it’s important: Family businesses have traditionally done well in India, and some have even emerged as national champions. Family businesses now show strong balance sheets, underscoring a significant trend of deleveraging.
#8. Fiscal first quarter witnessed muted sales growth in everyday FMCG items
Daily household products and groceries are not selling as fast as they were last year, the Economic Times reported, citing latest Kantar and NielsenIQ data. The sales growth rate nearly halved by volume and fell two-thirds by value in the June quarter over the year-ago period. Volumes in the FMCG market increased 4.6 percent, down from the 8.2 percent expansion recorded last year, according to Kantar. NielsenIQ said the sector’s value growth was down to 4 percent.
Why it’s important: The moderation in growth came even as companies slashed prices and consumers cut back on packaged food purchases amid severe heatwave followed by deficit rainfall.
#9. Special tax unit set up to focus on steep rise in pending income-tax arrears
Driven by a very steep rise in pending income tax arrears, the Central Board of Direct Taxes has decided to create a special team to identify the top 5,000 cases by the end of September, the Business Standard reported. These cases, which would include unpaid personal income tax as well as corporate tax, constitute nearly 60 percent of all outstanding dues. As on April 1, income-tax arrears have increased to around Rs 43 lakh crore from about Rs 24 lakh crore a year earlier.
Why it’s important: Rapid digitization and improved systems have boosted tax compliance in India in recent years. Despite that, tax authorities remain vigilant in recovering dues, as it should be.
#10. Tech companies cagey as government yet to notify rules on new data privacy law
Technology companies in India are reaching out to the government to expedite rules under the Digital Personal Data Protection Act, the Mint reported. The government is yet to issue rules under the new law, preventing them from taking decisive calls on projects involving data localization and cross-border data transfer, and hiring compliance officer.
Why it’s important: It’s been a year since Parliament passed the new law to guard digital data of Indian citizens. It’s no wonder that tech firms are getting restless.
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