Below is a shortlist of all the important articles from newspapers.
Indian start-ups raise $12 billion till June
Indian start-ups raised $12.1 billion from venture capitalists and private equity firms in the first six months this year, beating the last calendar year’s overall funding by $1 billion, The Economic Times reports sharing Venture Intelligence data.
Why it’s important: Fuelled by the increased adoption of digital technology across businesses following the Covid-19 pandemic, more funds have lined up to back young and evolved start-ups, venture capitalists, entrepreneurs.
The continued flow of funds at steep valuations helped catapult a record number of start-ups into the unicorn club of privately held companies with a valuation of $1 billion or more.
$100-million-plus deals: In the last six months there were more $100-million-plus funding rounds, where late-stage start-ups raised bigger rounds at headline-grabbing valuations.
There were in total 382 VC deals amounting to $12.1 billion in the six months ended June 30.
In comparison, 764 deals amounting to $11.1 billion were closed for the full year ending December 31, 2020.
Spillover Effect: Many believe that the latent demand created during the pandemic has spilled over into 2021.
In the past few years, funds were relatively cautious in cutting larger cheques, primarily because the pace of digital adoption was still slow.
The onset of the pandemic has, however, brought forward the need for adoption and enabled the rapid expansion of the digital ecosystem.
Airbnb surpasses 2019 gross booking levels in Q1 of 2021
Alternative accommodation major Airbnb has surpassed its 2019 levels for overall gross bookings in India in the first quarter of 2021, Amanpreet Bajaj, general manager at Airbnb for India, Southeast Asia, Hong Kong and Taiwan, said in an exclusive interview with The Economic Times.
Why it’s important: The early days of the third quarter look promising.
The main reasons are pent-up travel demand, new ways of travelling, long-term stays, and the blurring of lines between living, travelling and working.
He says, “Platforms like ours have benefitted from that shift in consumer behaviour.”
Sebi seeks info on trades by executives of big firms where promoters hiked stake
The Sebi has sought details of trades done by senior executives at large conglomerates with listed subsidiaries, The Economic Times report says.
Why it’s important: The capital markets regulator is probing whether these employees traded in shares of the group’s arms ahead of promoters or holding companies increasing stakes in them.
At least eight to ten listed entities are learnt to have received these queries from Sebi.
When promoters or large shareholders raise their holdings in a company, it is seen as a sign of confidence in the firm’s prospects.
Shares of such companies surge in this event. Amid the recent stock market rally, promoters of several companies have raised their stakes.
Centre may notify labour codes in four months
The labour ministry may notify the labour codes in the next three-four months, says The Economic Times report.
Why it’s important: It paves way for their implementation as it expects over 15 States to be ready with rules in their domain by that time.
The implementation, however, could be partial as some of the provisions like the national floor-level minimum wage and gratuity payout could kick in later.
It gives a breather to the employers to tide over the financial stress on their balance sheets due to the pandemic.
The provision of the statutory floor-level minimum wage would add to labour cost and would be binding on the employers.
Likewise, the provision of gratuity based on the new wage definition, which caps allowances at 50% of the wages, could result in a higher payout by employers at the time of gratuity settlement.
Jab teachers fast, open schools: Premji
Wipro’s billionaire promoter Azim Premji said schools in India should be opened after vaccinating all teachers quickly as the loss of the last one and a half years is too big to ignore for school-going children, says The Times of India.
What he says: “One needs time to recover the loss of learning. If you keep promoting children to the next class, you are creating an enormous deficit that cannot be filled up.”
Premji said that children should be exposed to the real world of India – inequitable distribution of income, injustice and indignity of millions – to help grow a sense of humanness within them.
“Go out and engage with the real world. Get your hands dirty, see the problems all live with, and that will move you to do whatever you can,” he said.
Giving back to society: The Wipro promoter added people needed to start giving back to society early.
“Just like you need to work on your physical fitness now rather than later, similarly, start work on your social fitness early. I wish I had started it much earlier.”
Banks worry as Future Group asset sale stalls
Lenders to Future Group are assessing the Kishore Biyani-led group’s ability to sustain operations after a loan moratorium ends in September, Mint report said.
Why it’s significant: The lenders are alarmed by Future Group’s delay in divesting any non-core assets.
As it is a crucial part of the loan restructuring process aimed at shoring up its capital base.
The ability of a recent debt recast to rescue Future Retail now solely depends on the company’s ability to sell assets and infuse funds even as the wait for a takeover by Reliance Industries grows longer, sources say.
The acquisition of Future Group by Reliance Industries is the only way out, in the long run, a senior banker said.
Bankers said that while Future Group still has some time left before the moratorium ends, it must act fast.
Flight cancellations leave flyers in the lurch
The flight cancellations by Indian carriers have risen sharply these past few months, says Mint.
Why it’s so: Airlines attributed commercial reasons to more than two-thirds of the flight cancellations.
Other factors were weather (17%), operational (7.6%), miscellaneous (6.4%) and technical (1%).
The culprits: Cancellations of scheduled flights climbed to 7.43% of total flights in May from 2.62% in the previous month, says DGCA data.
National carrier Air India led the tally cancelling 16.34% of total flights in May.
Followed by Vistara at 9.29%, IndiGo (3.51%), FlyBig (3.57%), SpiceJet (1.81%), TruJet (1.64%), StarAir (0.90%) and GoAir (0.16%).
Air taxi operators, meanwhile, cancelled as many as 61% of their flights during May.
Why it’s important: In many situations, airlines inform about cancellations just days before the flight, leaving fliers scrambling to find last-minute alternatives.
Flight cancellations complicate the travel plans of passengers as air travel amid the pandemic requires passengers to do mandatory RT-PCR tests within 48 hours of a journey.
Lenders woo India’s vaccine developers
Large financial institutions are wooing Indian vaccine makers to expand their lending base, says Mint.
Why it’s important: It’s driven by the promise of successful vaccine candidates and rising global demand for covid-19 jabs.
Earlier this week, officials from Exim Bank and the Japanese Bank of International Cooperation (JBIC) met with executives of Indian vaccine developers to explore funding structures and assistance.
Post-covid potential growth may have fallen by 50 bps
India’s potential growth may have dipped, says Mint report citing rating agencies S&P and Moody’s.
Why it’s so: It is because of the coronavirus pandemic, amid growing inequality and structural inefficiencies such as a weak financial system.
The pandemic will not derail India’s medium-run growth, but the costs associated with it reduce this growth by about 50 basis points annually.
S&P: Balance sheets in the economy are scarred.
Households have dipped into their savings, firms have closed down or taken on debt, and public sector balance sheets have weakened.
As a result, over the medium run, some resources that would otherwise contribute towards growth will be diverted into balance sheet repair.
Moody’s Investors Service: The pandemic will leave new economic scars and deepen pre-pandemic constraints.
Structural inefficiencies continue to constrain growth potential and limit resilience to shocks.
If implemented effectively, government reforms that target these challenges would be credit positive.
India business to account for 75% revenue: Tata Steel
Tata Steel seeks to increase its annual capacity in India from the existing 34 million tonnes per annum (mtpa) to 55 million tonnes, or 73% of its global production, by 2030, the Mint report says.
Why it’s important: The India business will also account for 75% of its revenues by 2030.
The company also plans to invest in businesses that are less dependent on the steel cycle, such as services and solutions, new materials, and commercial mining.
Tata Steel India has set an annual capex plan of ₹10,000-12,000 crore over five years, excluding potential acquisitions.
It will target over $2 billion reductions in gross debt during the current financial year, while prioritizing off-shore debt pre-payment.
T V Narendran, CEO and MD, Tata Steel, says: “The India business continues to increase its share in the overall portfolio. This has made Tata Steel structurally stronger and is one of the most profitable businesses for us.”
Bajaj Group market cap hits $100 bn
Bajaj Group on Tuesday joined the list of family-promoted business houses that have hit a market cap of $100 billion, the fourth to do so, says Business Standard.
The Club: The others in the club include the Tatas, Reliance, and an entrant this year, the Adanis.
In the pecking order, Bajaj Group on July 6 replaced the Adanis from the third spot.
The Tatas continue to be on top of the list, followed by Reliance.
The only other nonfamily promoted business group that continues to have a market cap of over $100 billion is HDFC Group.
Why it’s important: Bajaj Group reached the figure briefly on June 25 but shrank from that owing to the markets falling and the appreciation of the US dollar.
On July 6 the market cap of eight of its listed companies hit $100.6 billion.
On June 25, it had hit $100.5 billion.
Bajaj Group’s market cap hit the magic number primarily because of three listed entities - two financial services companies, Bajaj Finance and Bajaj Finserv, and two-wheeler major Bajaj Auto, which is the flagship company of the tent.
The three constitute over 91.7 per cent of its market cap.
‘Rise in inflation may hit liquidity flow to equities’
The market rally has been fuelled by liquidity, which has found its way into financial assets, says Anirudha Taparia, joint CEO, IIFL Wealth, in an interview with Business Standard.
What he says: With a low-interest rate and low inflation scenario, the party in equities is likely to continue.
The market rally has been fuelled by liquidity, which has found its way into financial assets.
Inflation is a key risk to watch out for, since it could threaten the low-interest rate regime and, consequently, have a degree of impact on the liquidity that flows into equities.
Investors should not get swept away by market momentum.
Instead, look to find deep value by identifying robust long-term themes available at compelling valuations.
Themes that can play out well include capex-related turnaround stories and tech businesses.
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