Here is a shortlist of all the important articles from newspapers on June 29.
MSCI warns India, others against restrictive policies
Global index provider MSCI has warned India and four other emerging markets (EMs) against restrictive policies, reports Business Standard.
Why it is important: It reiterated that any move that impedes overseas investment could lead to a downgrade.
“Low ratings continue to persist for the availability of investment instruments in the market accessibility criteria for Brazil, China (A shares), India, Korea, and Turkey.
Global market participants expect that stock exchanges should not directly or indirectly restrict the availability of investment instruments domestically or globally,” MSCI said in a release.
As a result, any change in the weighting of a country or stock results in millions of dollars of churn.
upGrad set to join unicorn club with $4 billion valuation
Temasek-backed ed-tech start-up upGrad is in talks with global private equity and venture capital investors to raise $400 million at a valuation of $4 billion, reports Business Standard citing sources.
Why it is important: This would mean almost a fivefold jump in the valuation of the start-up from the last fundraising round earlier this year.
The company is also planning to close two significant acquisitions, a global short-form course player and another in the executive education space, in the next two to three months.
Consumer has become an omnichannel shopper: Godrej Consumer Products CEO
Sunil Kataria, CEO (India & SAARC) of Godrej Consumer Products, explains the challenges arising out of the second wave, in an interview with Business Standard.
What he says: Godrej Consumer Products was quick to tap the emerging hygiene trend last year in the wake of the first wave, launching a series of products.
Also, the consumer has become an omnichannel shopper.
The mandate is to create digital-first products and tap emerging trends in the space.
From five per cent now, we SEE online sales touching eight per cent of total sales in three years.
In the next 10 months, for instance, five of our new product launches will be digital-first. If they click online, we may take it offline too.
The focus remains on volume growth rather than price-led growth.
Health, immunity and hygiene products are seeing a sharp comeback.
Discretionary products will see a gradual recovery.
If the monsoon stays its course this year, it would be a positive sign for the rural economy.
It could add to the overall momentum.
Tax cuts needed to boost economy: Experts
Direct economic stimulus measures such as tax cuts for individuals and industry would have helped prop up the economy which was hit hard by the lockdowns, reports Business Standard, quoting economists and corporate leaders.
What experts say: While the measures announced on Monday are focussed more on the supply side, these steps would take a lot of time to move the needle for the economy.
The loan guarantees may help businesses borrow on favourable terms but there are hardly any new projects by Indian companies, barring a few by top steel companies.
The direct relief measures are good as they help support the poor or farmers.
In the case of health, building facilities takes time and will benefit in the medium to long run.
Direct action through tax cuts would have propped the economy, but that has not been done.
There was no direct package for sectors such as airlines, airports, malls, offline retail and hotels, which saw a total collapse of their businesses.
Direct income or cash support is also required at this juncture, particularly for the urban poor.
‘We’re aiming for a profitable market share growth’
Ashok Leyland´s CEO and managing director Vipin Sondhi tells Business Standard in an interview that the company is looking for a profitable growth, and will launch more LCVs and step up exports to Africa and Middle East as part of its de-risking strategy.
Sondhi expects the overall market to improve quarter on quarter as the economy bounces back.
What he says: The one part that we are concerned about is the buses, which went down by 80 per cent last year.
It will take time to make a comeback.
We understand the state transport undertakings will be encouraged to buy the BSVI buses and that is expected to drive demand to some extent.
Over the last seven to eight years, Ashok Leyland has been focused on profitability.
It now wants to chase volumes and market share.
We are aiming for profitable market share growth.
Mars Wrigley readies rural push, healthier product line
US-headquartered multinational confectionery giant Mars Wrigley aims to transform itself into a treat & snacks company by launching a slew of products and smaller serve sizes, as consumers look for healthier alternatives, The Times of India reports.
Why it is important: The company’s strategy is in line with several global food and beverage majors such as McDonald’s, Nestle and Pepsi-Co.
They are rethinking their offerings to consumers in the wake of public outcry against products that lead to lifestyle-related health issues.
Kalpesh R Parmar, Country GM at Mars Wrigley India says: “As part of our pledge by 2022, Mars Wrigley along with others want to reduce levels of saturated fat in chocolates by 10-15%, limit treat pack size products to125 K calories or less, smaller portion sizes, like in India, we have a15-gram Snickers which is 74 K calories only, and front of pack calorie and GDA labelling.”
Identifying Bharat as the new growth area, Ritesh Gauba, sales director at Mars Wrigley India, says: “That is what is really helping us drive business, not only on the gums and mint side which comes at Rs 1 but we’re also seeing good traction for something like Snickers at Rs10 in rural.”
Govt plans national stockpile of life-saving drugs
The government is in discussions with the pharma and medical devices industry to create a “national stockpile” of life-saving drugs, The Times of India reports.
Why it is important: It is vital equipment to combat the third Covid wave.
This could prevent the massive shortages of critical drugs like Remdesivir, Tocilizumab, key antibiotics, and devices like oxygenators and pulse oximeters, as witnessed during the brutal second wave with a huge daily case-load.
The stockpile will help companies to plan and manage inventory to strengthen supply chains and resolve glitches in the manufacturing of raw materials (active pharmaceutical ingredients), and finished formulations (drugs).
Mkt participation of FPIs, DIIs falls to a 15-year low
While the Sensex and Nifty are hovering near all-time highs, institutional participation in the Indian stock market has declined to a 15-year low, reports The Economic Times.
The reasons are: A drop in flows from foreign funds due to elevated share valuations have led to the decline.
That has been offset by a jump in activity by individual investors starved of other high-yielding investment avenues.
In June, market share of institutions in average daily turnover is at 30% while that of retail investors were at 70%
It was 59.38% in March last year when the share of individual investors started rising.
Why it is important: Declining institutional participation could add liquidity risk to the Indian markets, especially in mid and small-cap stocks.
Compliance vital, but challenges abound for firms: Nasscom’s Rekha Menon
Growth in Indian IT is being driven by a rising appetite for digital transformation, more focus on automation and industrialisation of artificial intelligence (AI), Nasscom chairperson Rekha Menon told The Economic Times in an interview.
What she says: Talking about the ongoing debate between the government and social media platforms, she said that while compliance is vital, there is a need to understand the challenges in the new rules or legislations and to decriminalise the offences.
The industry is on track to achieve its annual growth targets shared in February 2021.
The last quarter results of leading technology services companies also recorded a robust deal pipeline.
These are strong indicators of future growth potential.
New Sebi proposal may spark flurry of ‘take private’ M&As
India may see a flurry of corporate acquisitions ending in delisting if a regulatory proposal to smoothen the process goes through, Mint reports.
Why it is important: A Sebi discussion paper proposed a seamless process to attempt delisting when one acquires a significant stake under the takeover code.
This is expected to usher in so-called ‘take private’ mergers and acquisitions by private equity funds and foreign companies.
It will also end the existing practice where a delisting price is arrived at through reverse book-building.
Instead, it allows acquirers to set two prices — a takeover price and a separate delisting price, which may be at a premium to the takeover price.
Amazon, Flipkart to resist e-com norms
Amazon.com and Walmart Inc’s Flipkart unit plan to oppose the new draft e-commerce rules, reports Mint.
Why it is important: These companies believe it will be detrimental to Indian customers who are increasingly embracing online shopping and the industry’s growth.
The government’s move is expected to further tighten regulations on Amazon.com and Flipkart amid complaints by traders and small businesses that the two dominant e-commerce platforms are flouting local laws.
The proposed rules aim to further restrict how e-commerce companies function, including barring affiliated entities from selling on the platforms and restricting flash sales.
HUL firms up direct-to-consumer play
Hindustan Unilever Ltd is set to scale up the online reach of several premium brands through standalone branded sites as well as its multi-brand shopping platform UShop, reports Mint.
Why it is important: UShop, a store that allows shoppers to buy goods in the National Capital Region and Mumbai, is set to expand to eight cities soon.
Aneesh Chaudhry, chief data officer, Unilever South Asia says: “The digital infrastructure and the physical back-end of UShop will power all our digital-first and high socio-economic class brand to have a consumer experience like any other digital-first brand’s direct-to-consumer site.
For this, e-commerce-specialist warehousing partners and last-mile delivery partners carry out the fulfilment leg for us.”
The company is exploring both the options of launching mono-brand sites as well as listing more products and brands on its multi-brand site.
The move reflects how the pandemic has shifted shopper behaviour and how companies are responding.
Centre reinforces usage of GeM portal
Encouraged by the more than ₹1.11 trillion worth of business deals conducted through the Government e-Marketplace or GeM portal, the Union government has prohibited all its arms from citing “excuses” such as urgency, non-availability of internet connection or non-functioning of the portal to procure goods and services of common use from elsewhere, Hindustan Times reports.
Why it is important: The GeM Availability Report and Past Transaction Summary (GeMARPTS) ID is now mandatory for all government procurement outside the GeM portal.
A GeMARPTS ID ensures that genuine efforts are made by a government department in procuring goods and services from the GeM portal.
Earlier, some government agencies bypassed the GeM trading platform in favour of conventional tenders citing the technical exemptions.
The government’s e-commerce portal GeM has supported thousands of SMEs during the pandemic, and it is one of the Centre’s core policy initiatives to promote MSMEs.