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

A round-up of top newspaper stories.

#1. Bull run continues in India’s equities markets, Sensex closes above 67,000 for first time

India’s equity benchmarks have risen to fresh highs, helping domestic shares extend gains for the fifth straight trading session aided by sustained foreign fund inflows. Gains in Reliance Industries ahead of the demerger of the financial services arm, ITC, financial heavyweights, cement, and consumer durables helped the Sensex close above 67,000 for the first time. The gauge topped 67,171 points and closed at 67,097, up 0.45 percent. The Nifty scaled a new high of 19,851 points.

Why it’s important: The bull run is expected to continue in the short term but there are concerns in some sections because that valuations are running above their historical averages.

#2. India has 3-5-year window as companies seek alternatives to China, says World Bank president

World Bank president Ajay Banga has said India has a 3-5-year window of opportunity as companies seek alternative manufacturing sites to diversify supply chains from China. India has proven more resilient and emerged from the pandemic relatively stronger than others, Banga said, expressing optimism that the country is focusing on growth and jobs, two things crucial to reducing poverty.

Why it’s important: India could be the best alternative to China as companies seek to diversify their supply chains to reduce dependence on the east Asian nation, providing a further boost to local economic growth.

#3. Tata Sons to invest $5.2 billion to build electric car battery plant in the UK

Tata Sons has announced a plan to invest £4 billion ($5.2 billion) in an electric car battery factory with an initial annual output of 40 Gwh in the UK. It will be the first factory for EV batteries by Tata outside India and one of the largest ever investments in the UK automotive sector. Jaguar Land Rover and Tata Motors would be the anchor customers.

Why it’s important: The British government is offering a slew of incentives to Tata to build the factory. The conglomerate is making a pivot to electric cars and the battery factory would provide cost efficiencies.

#4. Vedanta makes new attempt to sell ESL Steel after buying bankrupt firm for Rs 5,320 crore

Vedanta Ltd is trying to sell ESL Steel, formerly known as Electrosteel Steels, after acquiring the asset for Rs 5,320 crore through a bankruptcy resolution process five years ago. A previous attempt to sell the plant in December failed as approvals, including environmental clearance and expansion plan, were still pending, turning prospective buyers cautious.

Why it’s important: Vedanta wants to focus on its core business of non-ferrous metals. It also needs large amounts of funding to meet repayment commitments.

#5. Go First relaunch only after the distressed carrier signs new aircraft leases

Go First must sign fresh lease agreements for 30-35 aircraft since lessors have already terminated the previous ones following its insolvency filing. Go First filed for insolvency in May and suspended operations. Its lessors terminated leases and sought to regain control of the planes. The airline is already in talks with lessors on this.

Why it’s important: The negotiations for fresh leases are likely to delay the low-fare airline’s plans for a quick return to operations. It could relaunch services in a couple of months if the leases come through.

#6. Government may soon announce plans of building several semiconductor facilities

India will soon announce a 40 nm semiconductor fabrication unit and multiple compound fab proposals under the modified semiconductor investment scheme, junior electronics and IT minister Rajeev Chandrasekhar has said. The new proposals come after the government modified its $10 billion financial incentive scheme to support the building of semiconductor, packaging, testing and allied fabrication units in India, accepting proposals for mature nodes, or above 40nm, without a deadline.

Why it’s important: Much would depend on the success of the modified incentive scheme for India to become a hub for semiconductor manufacturing. Initial hiccups are not unusual.

#7. US company to manufacture solar panels in India without any China inputs

First Solar of the US will invest billions of dollars for solar panel production in India that will not source materials from China, US energy secretary Jennifer Granholm has said in an interview. She also indicated that Tesla is in discussions for investing in India. “India brings in the notion of scale, and the US’ contribution is laboratories and efforts we are making to incentivize production. That combination helps both to achieve their goals,” Granholm said.

Why it’s important: First Solar’s entry into India to make panels would be a huge step to ramp up domestic production of renewable energy equipment that will help in the ongoing energy transition.

#8. Need for electric vehicle subsidies to decline as manufacturing gains scale

At a time when incentive schemes for the electric vehicle sector have come under the spotlight, transport minister Nitin Gadkari said he is open to a rethink on subsidies. Once manufacturing has gained scale, the sector will not need a subsidy, he said, although the government is still supporting the sector.

Why it’s important: It is crucial to build a resilient ecosystem to promote the adoption of electric vehicles in India. The sales of electric two-wheelers, for instance, may have already crossed an inflection point.

#9. State Bank of India likely to raise Rs 10,000 crore through infrastructure bonds

The State Bank of India is likely to carry out a sale of infrastructure bonds worth up to Rs 10,000 crore around the end of this month. The bank is likely to issue 15-year infrastructure bonds with a base size of Rs 5,000 crore and a green shoe option of Rs 5,000 crore, sources close to the development said. It has in January issued infrastructure bonds with a 15-year maturity, the first time that a local lender had sold such bonds in that maturity bracket.

Why it’s important: India’s largest bank is seeking to raise long-term capital amid healthy demand for domestic credit. It would also lead to better price discovery in the infrastructure space.

#10. Government disallows market borrowing for National highways Authority of India

The government will cut market access for debt-laden National Highway Authority of India although the agency is racing to meet stiff road-building targets. The authority has been observing a moratorium on market borrowings for the past two financial years. The highway developer will continue on the same path for at least the next few years while the government funds its entire capital spending.

Why it’s important: At a time when the private sector has been reluctant to deploy capex, the government has done the heavy lifting in capital spending, particularly in infrastructure.