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

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

Tamil Nadu-based Ramco Group is reworking its corporate structure to do away with crossholdings and increase its appeal for foreign investors, the Mint reported. At the end of a multi-year exercise, Ramco Industries will be the holding company. As a first step, Ramco Cements has sold its entire 16.23 percent promoter stake in Ramco Industries to promoter entities Rajapalayam Mills and Ramco Management.

Why it’s important: Streamlining promoter holdings that is aimed at enhancing shareholder value will help the Ramco Group not only in getting new investors but also boost its brand or image as a conglomerate.

Hero Electronix, backed by Suman Kant Munjal, is planning to sell 25-30 percent stake in Bengaluru-based semiconductor design and engineering company Tessolve, the Economic Times reported. Munjal is chairman of Rockman Industries, a Hero Group firm that makes auto parts. The company in the process of mandating an investment bank for the stake sale. Tessolve said it’s not engaged in fundraising talks.

Why it’s important: The Hero Group is aiming to cash in on the growing investor appetite in the semiconductor space. India’s semiconductor industry is projected to grow at 20 percent every year, reaching $80.3 billion by 2027-28, while the global market is expected to hit $1 lakh crore by 2030.

After forging a joint venture with MG Motors to enter the Indian auto sector, the Sajjan Jindal-led JSW Group is now in discussion Chinese company Haier Group for a venture into the electronics space, the Hindu Businessline reported. The investments of the Haier Group are covered under the government’s Press Note 3 of 2020 that restricts business activities.

Why it’s important: Haier has been unable to tap the ful potential of the Indian market due to delays in the state approvals on investments. A joint venture with JSW could potentially change that.

Noel Tata has been appointed to the board of Tata Sons, the holding company of the Tata Group, as a nominee of Tata Trusts, of which he was appointed chairman last month following the death of Ratan Tata, the Economic times reported. An online resolution was passed at a virtual Tata Sons meeting held on Diwali eve. With the inclusion, there are now three Tata Trusts nominee directors on the Tata Sons board.

Why it’s important: Noel Tata will be the first member of the Tata family since 2011 to serve on the boards of both the Tata Trusts and Tata Sons simultaneously.

With the induction of Noel Tata as the new chairman of Tata Trusts, the Shapoorji Pallonji Group is keen to push for a listing of Tata Sons although the Tata Group wants to keep it unlisted and privately owned, the Hindu Businessline reported. Noel Tata helming Tata Trusts is seen as changing the dynamics between the two groups, which had soured during the Cyrus Mistry tenure at Tata Sons.

Why it’s important: Shapoorji Pallonji has been struggling with servicing debt for a while and an opportunity to monetize its stake in Tata Sons through a public listing could solve much of its problems. The Tata Group is not expected to yield to the push though.

At a time when the government is considering Vodafone Idea’s request for a waiver of spectrum bank guarantees, Bharti Airtel has asked the telecom department to treat all such firms equally, irrespective of their financial health, the Economic Times reported. Airtel has said it supports the proposed waiver, but any regulatory reform must have a non-discriminatory framework across all telcos.

Why it’s important: In August, the Cellular Operators Association of India that represents all private telcos, too, sought to do away with the need of bank guarantees for auctions conducted before 2022. It is not known yet whether the government is considering such a move.

The shipping ministry is discussing a policy that will provide viability gap funding to make projects commercially feasible for domestic shipbuilding, the Mint reported. It also plans to introduce purchase preference so that any vessel seeking new registration for coastal cargo transport in India from 2030-31 would need to necessarily be built at a domestic shipyard.

Why it’s important: The government’s plan to finance and develop shipbuilding infrastructure to reduce reliance on foreign vessels and increase the country’s share in seaborne trade could provide a boost for domestic firms operating in the space.

After subdued earnings in the first half of the financial year, corporate India is taking a cautious approach on their capital expenditure for the second half ending March, although the Reserve Bank has said private corporate investment is gaining momentum, with seasonally adjusted capacity utilization improving in the March quarter and banks and corporates have healthy balance sheets, the Business Standard reported.

Why it’s important: Much of India’s growth momentum in recent years has been fueled by government spending and private capex has been lagging. Unless local demand shows and uptick, the scenario is unlikely to see significant change.

For the first time in two years, all four IT majors companies, which include Tata Consultancy Services, Cognizant, Infosys and Wipro, reported positive net employee hiring in the September quarter, the Hindu Businessline reported. TCS, Cognizant and Infosys are the major recruiters from campus, placement offices said. Staff utilisation level at IT companies has reached over 85 percent and attrition has been declining in the past few quarters, prompting the hiring

Why it’s important: It is a good sign that IT companies are back on the college campus for bulk hiring, thanks to employee utilization reaching high levels and project signing picking up.

Global corporations spanning quick service restaurant chains, airlines, hospitality and agriculture are establishing support service centers in India, the Economic Times reported. Among those setting up base are companies such as Yum Brands and Starbucks, Warner Bros and Discovery, Marriott International, Chevron and smaller firms such as Curriculum Associates.

Why it’s important: MNCs are stoking a new wave of expansion of global capacity centers in the country, and several firms are turning to smaller cities other than Bengaluru and Hyderabad to gain from robust talent pools and lower cost of operations. This augurs well for local employment.