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

Morning Scan

#1. Bain Capital in discussions to acquire controlling stake in Manappuram Finance  

Bain Capital is in talks to acquire a controlling stake in Manappuram Finance as the founding family of the Kerala-based non-bank lender and leading gold loan provider is said to be revisiting plans to exit partially or fully, the Economic Times reported. Bain has offered a premium of 20-25 percent to the current market price. At the present market value, a 47 percent stake would cost Rs 6,289.46 crore.

Why it’s important: This could be Bain’s big bet on India’s gold loan sector. Manappuram and others in the segment have been grappling with heightened regulatory scrutiny and falling valuations as mixed success in diversification has intensified near-term headwinds.

#2. Zepto looking to raise $250 million from wealthy individuals and wealth management firms

Quick commerce startup Zepto is looking to raise about $250 million from high networth individuals and wealth management firms, including Motilal Oswal, IIFL and InCred, at a near flat valuation of $5 billion, the Mint reported. If the deal goes through, it will be the startup’s third capital raise in six months.

Why it’s important: Zepto is gearing up for a public listing next year and would like to balance its cap table. This is a common exercise at several young startups as early investors sell partial stakes and return capital to their limited partners.

#3. Swiggy’s IPO to unlock Rs 9,000 crore of ESOPs, make nearly 500 staff crorepatis  

The listing of Swiggy’s shares is set to unlock Rs 9,000 crore worth of employee stock option plans and make nearly 500 employees into crorepatis, the Economic Times reported. The company has already delivered liquidity of over Rs 500 crore for its employees through a buyback of ESOPs earlier in July.

Why it’s important: An estimated 5,000 staffers of the food delivery firm stand to gain from one of the largest wealth creation exercises in India’s startup sector. Swiggy’s rival Zomato minted as many as 18 dollar millionaires through its Rs 9,375 crore IPO.

#4. NTPC Green Energy eyeing valuation of $12 billion in IPO, largest in renewables industry 

NTPC Green Energy is considering seeking a valuation of about $12 billion, the Mint reported. The clean energy unit of state-run NTPC has held discussions with advisers about pricing its IPO at more than Rs 100 a share. NTPC Green Energy may raise up to Rs 10,000 crore in the share sale.

Why it’s important: This could be one of India’s biggest initial public offering in the renewable energy industry. Investor interest is expected to be high as India’s energy transition gains momentum.

#5. India to be one of top markets for Germany’s Siemens in three years, senior executive says  

Siemens expects India to become the third or fourth largest market for the company in the next three years, overtaking France and Germany, Peter Koerte, chief technology and strategy officer, told Hindu Businessline. Currently India is fifth, after the US, China, Germany and France, in terms of revenue.

Why it’s important: Siemens has benefited by India’s recent surge in boosting infrastructure. It is also growing swiftly in the country in the industrial and mobility segments, securing large government orders.

#6. Maruti’s growth to be only 3-4 percent as pent-up demand has ended, company chairman says  

The pent-up demand for cars that emerged post-pandemic, combined with supply constraints like the non-availability of semiconductors affecting production, has now dissipated, R C Bhargava, chairman of Maruti Suzuki, told the Business Standard. Only the over-Rs 10 lakh segment is expanding. As a result, overall growth is muted, Bhargava said in an interview.

Why it’s important: India’s auto industry has seen a consumer shift towards premium cars. Maruti’s entry level offerings have suffered as a result, and the outlook of India’s largest carmaker is muted at best.

#7. Asset reconstruction companies may see shrinkage on declining availability of stressed assets 

Asset reconstruction companies could post a degrowth in their assets under management in 2024-25 due to a drop in the availability of big-ticket stressed or non-performing assets, the Hindu Businessline reported. The AUM of private ARCs, as measured by outstanding security receipts, could shrink by 7-10 percent, according to Crisil Ratings

Why it’s important: Asset reconstruction companies in India are going through a consolidation phase, with many firms reviewing business strategies, including building an infrastructure for handling retail bad loans.

#8. Britannia Industries sees slowing FMCG growth on higher rentals and moderating urban demand 

Metropolitan cities dragged the overall FMCG market in the previous quarter amid surging housing costs and lower wage growth, Britannia Industries executive vice-chairman and managing director Varun Berry told the Economic Times. Consumers in metros contribute about a third to the urban market for the FMCG sector, but accounted for 2.4 times to the slowdown, according to India’s biggest biscuit maker by value.

Why it’s important: The assessment by Britannia mirrors that of Hindustan Unilever, which has also said that the is a demand slowdown in cities as prices rises have outpaced increases in wages. There is also heightened competition in the FMCG sector that has hurt margins in the recent past.

#9. Market regulator simplifies registration rules for some foreign portfolio investors

The Securities and Exchange Board of India has announced simplification of the registration process for foreign portfolio investors through an abridged version of the application form for registration with certain fields auto populated for several categories of overseas investors, the Business Standard reported.

Why it’s important: The simplified rules will boost ease of doing business for foreign portfolio investors in India at a time the local stock markets show signs of maturing amid high volatility.

#10. Food safety regulator steps up scrutiny on online retailers over product shelf life

India’s food safety regulator has ordered ecommerce and quick commerce firms to ensure packaged food items delivered to consumers meet its guidelines on shelf life, the Economic Times reported. The order comes after a meeting the Food Safety and Standards Authority of India held with representatives of online food delivery companies, in which they were told to ensure products being delivered reach consumers with a minimum shelf life of 30 percent or 45 days before expiry.

Why it’s important: The authorities have received complaints through the national consumer helpline about quick commerce companies not following norms on disclosures like displaying expiry dates of packaged food items. This cannot be allowed to continue.